SOL No Bar in an Egregious Undue Influence and Fraud Case

March 24, 2014 § Leave a comment

We talked here recently about the statute of limitations (SOL) applicable in an action to recover land procured by fraud. A 2002 MSSC case sheds further light on when that statute begins to run, and some other related aspects.

In 1979, 24-year-old Michael Cupit appeared uninvited at the home of Mary Lea Reid, a 78-year-old widow living in Liberty, MS. Cupit, who lived some 40-miles distant in Brookhaven, attributed the visit to his interest in antebellum homes and that some of his relatives had sharecropped on Reid’s land decades earlier. From that visit, Cupit contiinued to visit Reid, and he developed a strong relationship with her, despite his departure to commence law school that fall.

The relationship became intimate, according to witnesses and letters exchanged between the two, although Cupit contended that it was a mother-son relationship.

Cupit testified that he had had conversations with fellow law students about how to obtain Reid’s property.

In 1982, Cupit took Reid to a Brookhaven law firm with the intention of being adopted by Reid so as to cut off claims of any of her heirs. After the lawyer met with Reid, he suggested that an adoption was not necessary. Cupit then asked the lawyer to prepare a deed by which Reid conveyed her real property to Cupit reserving a life estate, which was done, and the deed was recorded.

The next day, Cupit assisted Reid in preparing a holographic will devising all of her property to him. As of the date when this was done, apparently, Cupit had been admitted to the bar. The chancellor found that Cupit, not Reid, was the client of the Brookhaven attorney, and that Reid was Cupit’s client.

In 1983, Reid again visited the Brookhaven law firm accompanied by Cupit, this time meeting with a different attorney. The attorney met separately with Reid and took steps to satisfy himself of her independent will and competence. The product of this meeting was a will essentially identical in substance to the holographic will.

In 1986, Reid adopted Cupit.

In 1995, Cupit had Reid’s power of attorney transferred to himself.

Through the years, Cupit alienated Reid from her family and friends, and restricted their access to her.

Reid died in 1997, and Thomas Pluskat filed for administration of the estate. He was appointed administrator, and initiated an action to set aside the will, the deed, adoption, and power of attorney.

At trial, the chancellor found that Cupit had exercised undue influence over Reid, and that the will, deed, adoption and power of attorney should all be set aside. His opinion stated:

The Court finds that the evidence regarding Michael Cupit’s efforts to exclude most, if not all of the family members and some long-time friends of Mary Reid from her, together with Mary Reid’s strong desire to have a child which she had never had, coupled with the engaging and unique personality  and tendencies of Michael Cupit, as observed by the court in the evidence as well as personal observations of Mr. Cupit throughout the course of the trial, combined so as to put Mr. Cupit in a position with Mary Reid that Mr. Cupit could and did over-reach and influence Mary Reid to his advantage and her ultimate disadvantage. Mr. Cupit’s influence, subtle and undetected by some of Mary Reid’s friends, was used in order to gain advantage of Mary Reid and to obtain her property consisting of approximately 205 acres of land, an antebellum home that had been in her family for about 140 or so years and substantial and unique family heirlooms located within the home as well as significant amounts of money from the time of Mr. Cupit’s law school days through the time of Mary Reid’s death. During a portion of this time, subsequent to Mr. Cupit’s beginning of the practice of law, he occupied a dual fiduciary role in that he was her attorney and counselor at law.

* * *

The Court finds as a matter of fact and law that the deed, will, adoption, and subsequent power of attorney granted by Mary Reid and /or pursued by Mary Reid and Michael Cupit were the direct result of Mr. Cupit’s efforts to obtain the property of Mary Reid to his own advantage and to her ultimate harm and disadvantage. Therefore, the Court finds that the deed and will were procured as a result of undue influence, overreaching, breach of a fiduciary relationship, breach of an attorney-client relationship, breach of a position of trust that Michael Cupit had gained with and over Mary Reid notwithstanding the fact that she was “strong-willed.”

Michael appealed.

His first issue on appeal was whether the administrator’s action to set aside the deed was barred  by the SOL. In its decision in the case of Estate of Mary L. Reid: Cupit v. Pluskat, handed down May 30, 2002, The MSSC addressed it this way:

¶17. This Court has held that statutes of limitation in actions to recover land begin to run as soon as a cause of action exists. Aultman v. Kelly, 236 Miss. 1, 5, 109 So.2d 344, 346 (1959). However, § 15-1-7 has been construed to require possession by the defendants claiming its protection. Greenlee v. Mitchell, 607 So.2d 97,110 (Miss. 1992); Bowen v. Bianchi, 359 So.2d 758, 760 (Miss.1978); Trigg v. Trigg, 233 Miss. 84, 99, 101 So.2d 507, 514 (1958).

¶18. In Greenlee this Court held that the ten-year statute of limitations on action to recover land did not commence to run as soon as a cause of action existed, upon execution of deed pursuant to undue influence, but only when plaintiffs, the grantor’s heirs, had notice of the existence of an attempted deed, where the defendants had not taken possession in the interim. 607 So.2d at 110.

¶19. Here Cupit did not gain possession with the recording of the 1982 deed. Reid retained a life estate and remained in possession until her death. The only person who could have contested the deed during this period was Reid herself, who was in possession. Therefore, the statute of limitations did not begin to run against Thomas Pluskat until 1997 when Reid died.

¶20. As this suit was commenced well within ten years after Reid died and the defendant was not in possession during her lifetime, Cupit’s claim that the statute had run is without merit.

Cupit also argued that Pluskat had no standing to challenge the adoption, but the MSSC rejected that argument on the basis that it was a fraud on the court, and was part of a long-term scheme by Cupit to take advantage of Reid by fraud and overreaching. The court did conclude, however, that its findings as to the adoption “are specific to the facts of this case.”

Both the will and the deed were found by the chancellor to have been products of undue influence. The MSSC affirmed, saying:

¶25. Cupit argues that the chancellor erred in finding that Reid’s will is void because Reid was competent to make a will and there was no confidential relationship between the two of them.

¶26. As previously discussed, the chancellor found that a confidential relationship and an attorney/client or fiduciary relationship existed between Reid and Cupit. This finding is based on substantial evidence.

¶27. Once a confidential relationship is found, the beneficiary must disprove the presumption of undue influence by clear and convincing evidence. In re Estate of Dabney, 740 So.2d at 921; In re Estate of Smith, 543 So.2d 1155, 1161 (Miss. 1989).

¶28. To overcome the presumption of undue influence, the proponents must show (a) good faith on the part of the beneficiary, (b) the grantor’s full knowledge and deliberation of the consequences of her actions, and (c) the grantor’s independent consent and action. Mullins [v. Ratcliff], 515 So.2d [1183,] at 1193.

¶29. For many of the same reasons he found that the deed was a product of undue influence, the chancellor also found that Reid’s will was a product of undue influence. The attested will was an almost exact copy of the holographic will which Cupit helped Reid prepare. As discussed previously, the chancellor found that Cupit did not act in good faith in any part of his dealings with Reid. The chancellor also found that Reid did not receive independent counsel in the making of her will. We find that the attorney who prepared the will acted as a mere scrivener and that Reid did not receive independent counsel concerning her will. In re Estate of Moses, 227 So. 2d 829, 833 (Miss. 1969). We affirm the chancellor’s decision to set aside the will.

I commend the decision to your reading both as an object lesson in unethical, dishonest and rapacious conduct by an attorney, and as an exposition on the particular points of law in this case.

An interesting sidelight: two of the attorneys in the case have judicial experience. Current District 14 Circuit Court Judge Mike Taylor was one of the attorneys representing Pluskat. Former Mississippi Supreme Court Justice James Robertson was one of the attorneys representing Cupit.

The Power to Bind the Client

July 30, 2013 § 5 Comments

When you accept the responsibility to represent a client and enter an appearance or otherwise hold yourself out as representing a party, the court will presume that you have the authority to speak for and bind that party.

That principle came into play in the COA case of Williams v. Homecomings Financial Network, Inc., handed down July 23, 2013.

In that case, Samuel and Carolyn Williams retained a law firm to sue their mortgage company for fraud. They were two of a group of 16 plaintiffs with similar claims. Their attorney, Martin, signed the complaint initiating the suit, holding herself out as counsel for the Williamses. Another attorney in the firm, Nelson, participated. 

Terms of settlement were reached, and the attorney signed an agreed judgment of dismissal without prejudice. All of the plaintiff signed the settlement documents except Samuel and Carolyn Williams, who refused to sign. Their attorney withdrew from representation.

Homecomings filed suit to enforce the settlement agreement, and the chancellor ruled in favor of the mortgage company, whereupon the Williamses appealed.

The main point raised by Samuel and Carolyn on appeal was the admission into evidence of the deposition of their former attorney, which they argued contained inadmissible hearsay. For our purposes, though, it’s the authority of counsel and the power to bind the client that concerns us. Here are some points from Judge Carlton’s COA opinion, which affirmed the chancellor:

  • ¶13. [From the chancellor’s opinion] “There is a long-standing principle in [the] law that settlements are contracts which are enforceable according to their terms. An attorney is presumed to have the authority to speak for and bind his client. Parmley v. 84 Lumber [Co.], 911 So. 2d 569 (Miss. Ct. App. 2005). Whether or not an attorney has agreed to a settlement on behalf of his client is a question of fact. Id.
  • ¶17. In this case, as previously noted, Martin expressed on the record through deposition testimony that he had the authority to bind the Williamses to the terms of the settlement upon learning from Nelson of the Williamses’ alleged acceptance of the proposed settlement. As also previously noted, the record reflects that Martin signed the complaint against Homecomings on behalf of the Williamses. We thus find that the record provides substantial evidence supporting Martin’s authority as counsel of record to bind the Williamses to the agreement. We also find substantial evidence exists to support the chancellor’s order enforcing the settlement agreement. See Parmley, 911 So. 2d at 573 (¶19). Furthermore, Martin’s testimony that he possessed authority as the Williamses’ attorney to accept the settlement terms, coupled with Martin signing the complaint on behalf of the Williamses, demonstrates that Martin indeed possessed the authority to enter into a settlement and bind the Williamses to the terms of any such agreement with Homecomings. Fairchild, 254 Miss. at 265, 179 So. at 187.

In other words, when you sign the pleadings and act like a lawyer with authority to act in a case, the court is going to presume that you have that authority.

And what are the evidentiary implications of that presumption when the court is called upon to make that finding of fact? Here is what the COA said as to the issues in this particular case:

  • ¶16. Mississippi Rule of Evidence 801(d)(2)(C) provides that a statement is not hearsay if “[t]he statement is offered against a party and is . . . a statement by a person authorized by him to make a statement concerning the subject[.]” Our supreme court has held that “[a]n attorney is presumed to have the authority to speak for and bind his client.” Parmley, 911 So. 2d at 573 (¶19); see also Pace v. Fin. Sec. Life of Miss., 608 So. 2d 1135, 1138 (Miss. 1992); Fairchild v. Gen. Motors Acceptance Corp., 254 Miss. 261, 265, 179 So. 2d 185, 187 (1965). Additionally, we recognize the determination of “[w]hether or not the attorney has agreed to a settlement on behalf of the client is a question of fact.” Parmley, 911 So. 2d at 573 (¶19).

So, when you speak on behalf of the client under color of the client’s authority, your statements will be admissible as non-hearsay. Attorney-client privilege obviously restrains the scope of admissibility, but does not proscribe it.

You can help avoid factual disputes over the scope of your authority by using representation agreements that clearly define it. As the case progresses, document key discussions with your client via followup letters. Get your client to sign off on orders and agreements that will affect the outcome of the case.

DEALING WITH CRAZY CLIENTS

December 7, 2010 § 6 Comments

The issues that bring people to Chancery Court are some of the very issues that stretch ordinary people to the breaking point.  And it’s the lawyer who most often becomes the shock absorber, taking calls from worried clients in the wee hours, receiving hundreds of repetitive or accustory e-mails, being accused of all manner of things, having your judgment questioned at every turn, and even being threatened.  Like we have said, some clients can make you ashamed to be a human being.   

Some clients can be downright dangerous. 

Mark Bennett is a Texas criminal defense lawyer who has a blog named Defending People: The Tao of Criminal Defense Trial Lawyering.  He came up with a practical guide to dealing with crazy clients that he titled 10 Practical Rules for Dealing with the Borderline Personality.  Here are his guidelines:

10 Practical Rules for Dealing with the Borderline Personality

  1. If you don’t have to deal with a crazy person, don’t.
  2. You can’t outsmart crazy.  You also can’t fix crazy. (You could outcrazy it, but that makes you crazy too.)
  3. When you get in a contest of wills with a crazy person, you’ve already lost.
  4. The crazy person doesn’t have as much to lose as you.
  5. Your desired outcome is to get away from the crazy person.
  6. You have no idea what the crazy person’s desired outcome is.
  7. The crazy person sees anything you have done as justification for what she’s about to do.
  8. Anything nice you do for the crazy person, she will use as ammunition later.
  9. The crazy person sees any outcome as vindication.
  10. When you start caring what the crazy person thinks, you’re joining her in her craziness.

 

Crazy Joe Davola threatens to "put the kibosh" on Jerry Seinfeld

MANAGING CLIENT EXPECTATIONS

October 18, 2010 § 4 Comments

One of the challenges of being a Chancery practitioner is keeping your clients’ expectations realistic.  And I’m not talking only about expections regarding outcome.  I’m talking expectations about you, your firm, the court and the legal process itself. 

The Pincus Family Law firm in Columbia, South Carolina has a page on its web site that may just be a home run in addressing client expectations.  You may find something useful here.  I’ve copied and pasted the text for you:

  

CLIENT EXPECTATIONS (REALISTIC OR UNREALISTIC)

ABOUT US: 

We do not work on the weekends and do not provide emergency numbers for the weekends.  There are times we may look at and answer your email over the weekend, but this is generally the exception and not to be relied upon by you that we are accessible on weekends.

Do not think we are perfect.  We make mistakes.  We are competent attorneys and paralegals, but we make mistakes.  We will correct a mistake if we find it or if you point it out.  Please do not yell at us, accuse us of not doing our job, or insult us over a mistake.

We will return phone calls in the order they are received and based on the priority of the situation.  If you leave a message, your message will be passed on to the attorney.  Calling three or four or multiple times in a day will not get your call answered any faster.  Email is the quickest way to get a response from an attorney.

Attorneys work by appointments only.  Please do not show up at our offices to speak with an attorney without an appointment. 

Please utilize our paralegals to answer your questions and give you status reports.  Our paralegals are very experienced and can, most of the time, respond to your request.  We bill our paralegal time at less than 50% than what the attorneys charge so take advantage of their experience and knowledge.

ABOUT OTHERS:

You may not get any consideration from your spouse for anything you have done or will do because you are nice.  You are encouraged to be nice, be cooperative, but don’t expect to get anything favorable in return for it.

Most of the research you do about your case online or the advice you get from friends will be incorrect or not applicable to your case so you should not compare what is happening on your case to what you find online or what friends or family may tell you.  As your attorneys, we are the only reliable source of information regarding the process and status of your case.

The opposing attorney may be very aggravating and frustrating to you because he or she may accuse you of things you have not done, may be litigious (wanting to fight about everything), may drag his or her feet with moving the case forward, or may be non-responsive to requests from this office.  It is unrealistic to expect that we can control how an opposing attorney handles his or her file or practices law.

The legal pleadings (Complaint, Answer, Counterclaim, etc.) are legal documents filled with allegations that must be pled (and some that are merely made to posture for a client).  Do not expend any emotional energy (get angry or upset) on the text of legal pleadings drafted on your behalf or your spouse’s behalf.  It is not worth it.

We cannot control the court’s schedule or docket.   The courts schedule cases as they are processed and in line with the thousands of other cases filed.   You will not be happy with the time it takes your case to get through the system.  There are thousands of family law cases filed in Lexington and Richland counties each year and most contested cases take several months, sometimes more than one year, to finish.

What you can expect during a Trial (Contested Case)

COURT APPEARANCES—Bonnie and Monet generally work files together although one attorney may be your “lead” attorney.  Therefore, at court appearances, it may be necessary for one to cover a court appearance for the other.  We will try to give you advance notice if your “lead” attorney will not be attending a court appearance, but sometimes the scheduling decision is made at the last minute.

SUBPOENAS—the other party can send a subpoena to any third party that MAY have information about you, your spouse, your business dealings, your employment, your education, your children and the like.  Banks, lenders, business partners, educational facilities, stock brokers, teachers, churches, etc. can all be issued subpoenas for any records they may have regarding you.  We can do the same.  There is very little we can do to stop this so be prepared to deal with the frustration you may experience.  If there is a legitimate reason to try and stop the subpoena, which there rarely is, we can file a motion to do so.  Unless the information is privileged in some fashion, the third party will have to disclose the information requested.

DEPOSITIONS—the other party can issue a notice of deposition to any third party witness.  This means that a third party can be required to give testimony under oath usually in one of our offices.  The purpose of depositions is to find out information and to find out ahead of time what a person may testify to in court.  You and your spouse could each be deposed for the same reason.  We can issue notices of depositions as well.  A fact witness is entitled to a fee of $25 to appear and professionals (doctors, psychiatrists, etc) are entitled to have their time paid for to appear (by the party that deposes them).  A court reporter must be present and is paid to attend as well.  The attorneys are paid to attend as well.  Depositions are costly.

NOTHING HAPPENS QUICKLY—generally, contested cases take several months to move through the court system.  A complicated custody or equitable division case can take one, sometimes two, years to complete.  The courts are always full and there are several steps that have to be taken before a trial will be set, for instance, mediation, a guardian ad litem investigation, discovery, depositions, pre-trial hearings and motion hearings.  It takes a long time to move a contested case through the court system and this will likely be your number one frustration.  We will do all we can to move the case forward, but you will still be frustrated with the time it takes to finish a case.  Please prepare yourself ahead of time and please do not take this frustration out on us or my staff.  We are doing everything we can to move the case along.

DISCOVERY—this is the “formal” name for exchanging information through subpoenas, written questions (interrogatories) and request for documents.  Discovery has its own set of rules and deadlines which we will inform you about during the process.

CHILDREN—Marital problems are terribly difficult for children.  Do your children a favor and do not “poison” the minds of your children against their other parent.  Do not speak about their parent’s faults to children.  Do not complain to your children about how much child support you are paying or how little child support you are receiving.  Visitation with parents is NOT a bargaining chip or game.  Each parent is entitled to visitation privileges with their children.  Children are not your property.  They are not your pawns.  They are absolutely not your messenger.  They are innocent individual human beings that need both of their parents, not just the “best” parent.

ADULTERY—Do not become romantically involved with someone other than your spouse if you are still legally married (even if you are separated)! During marital litigation you should behave as though a detective and camera crew were following you and recording you and your conversations at all times.

CHILD CUSTODY CASES—You should behave as though a detective and camera crew were following you and recording you and your conversations at all times.  Do not do anything that you would not perfectly happy with a Family Court Judge seeing, hearing or finding out about when the Judge is deciding your custody case.

ATTORNEY’S FEES—in a child custody case, you could spend the price of a car in attorney’s fees.  Most contested custody cases run upwards of 10-20 thousand in fees paid out over the course of the case.  This usually includes attorney’s fees, guardian fees, psychological fees and expert witness fees.  In a complicated equitable division case, the cost can be significant and sometimes more than a custody case depending on how much property there is to value and the difficulty of valuing assets.  Even a very small business can run $2,500-$5,000 to value if there is a dispute as to the value.  A small equitable division case (which means there is a home, retirement, credit card debt, and other property or debts to divide) can run $5,000-6,000 in attorney’s fees over the life of the case.  The most expensive part of the case is going to be trial preparation and attendance costs.  That is why a trial retainer (an “up front” payment) is required in all contested cases.  You will see this in your fee agreement and we reiterate here that a trial retainer is required for continued representation.

Thanks to the LegalEthicsForum.com for this.

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