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Kiddie v. Copeland

United States District Court, W.D. Arkansas, Harrison Division

May 16, 2017

JOHNNIE COPELAND; MERIDEE KAISER; and ADRIAN WOODBURY, as administrator for the estate of George Kipp Woodbury DEFENDANTS



         On April 4, 2017, the Court held a bench trial on this matter in Fayetteville, Arkansas. All parties were present. The bench trial was held for the purpose of determining the capacity of George Woodbury, deceased, to execute a trust in November 2010 and to amend that trust in December of 2010. Plaintiff Cheriese Kiddie alleges that George was incompetent at that time as a symptom of Alzheimer's disease or other dementia, and her complaint raises several claims for relief on this basis. All parties but Defendant Meridee Kaiser have filed updated answers to the most recent amended complaint. Because that complaint was filed for the purpose of clarifying Kiddies's claims, and because Kaiser had previously answered, the Court will consider her to have answered the amended complaint with a general denial. For the reasons set forth below, judgment will be entered for Defendants on Kiddie's declaratory judgment action.

         I. Facts[1]

         In 1978, George and his wife, Carolyn Woodbury (Kiddie's grandmother), executed a trust, which was amended at various times prior to November 2010. Carolyn died a few years after the 1978 trust was executed, and George remarried to Leona Woodbury (Kaiser's deceased husband's grandmother). As they aged, Leona began to exhibit symptoms of Alzheimer's. In 2007, Kiddie moved from California to live in a guest cottage on George's property.[2] With assistance from Kaiser, Kiddie provided care and assistance to George and Leona. Kiddie also sought, and apparently received, George's approval and funding to make various improvements to the property. Kiddie also assisted with farm operations. In 2009, Leona died, and George approved and funded various renovations to the guest cottage, but the contractor hired walked off the job before completion.

         In August or September of 2009, George began to fall with some frequency, and began to experience issues with memory. In December 2009, George began to take Aricept, [3] but was off of it by March 2010. Medical records from March 2010 indicate that there was at least some possibility that George was suffering from dementia, though no diagnosis was made. By early 2010, he appeared to Kiddie to be having “good days and bad days” with respect to his awareness of what was occurring around him. In April 2010, George amended the 1978 trust to leave certain property to Kiddie. In June 2010, George fell and was hospitalized for a period of time. In the fall of 2010, Kiddie and George discovered that Kipp Woodbury (George's son, Kiddie's uncle, and Defendant Adrian Woodbury's[4] father) sold bank stock belonging to George. Defendant Johnnie Copeland was then hired to revoke powers of attorney George had bestowed on Kipp. Around the same time, Copeland raised with George the possibility of updating his 1978 trust in order to simplify it and resolve any issues stemming from George's frequent prior amendments to a trust that, by its terms, was intended to be irrevocable. In October 2010, Kiddie hired a contractor with George's approval and funding to complete the renovation work on the guest cottage. George understood then the scope and cost of the work to be completed. In November 2010, Kiddie was excluded from George's house. Also in November 2010, at First National Bank of Mountain Home, Arkansas, George executed a new trust, still leaving certain property to Kiddie. Witnesses to the event believed he was capable of understanding what he was doing. In December 2010, George executed an amendment to the November 2010 trust, substituting Kaiser for Kiddie. In March 2011, an employee of the Arkansas Department of Human Services, Adult Protective Services, visited George to investigate a report of exploitation, conducted a Mini-Mental State Examination, [5] and found George to be alert and oriented.

         George Woodbury died on February 18, 2012.

         II. Declaratory Judgment Analysis, Mental Incapacity

         The issue before the Court in this declaratory judgment action is whether George had the mental capacity necessary to create a trust in November 2010 and to amend it in December 2010. An instrument executed by a party who lacks sufficient mental capacity is void. See Phillips v. Jones, 179 Ark. 877, 879-80 (1929) (explaining that without mental capacity, there is no free agency, and without free agency, an act is void). The burden to prove mental incapacity by a preponderance of the evidence lies on the party challenging the instrument. Thompson v. Orr's Estate, 252 Ark. 377, 381 (1972).

The law regarding mental capacity in the execution of a will is also applicable to the execution of a deed and the creation of a trust. If the maker of a deed, will, or other instrument has sufficient mental capacity to retain in his memory, without promptings, the extent and condition of his property, and to comprehend how he is disposing of it, and to whom, and upon what consideration, then he possesses sufficient mental capacity to execute such instrument.

Rose v. Dunn, 284 Ark. 42, 46 (1984). Evidence of mental capacity or incapacity before or after the time an instrument is executed may be relevant as an indicator of mental capacity or incapacity at the time of execution. Daley v. Boroughs, 310 Ark. 274, 284 (1992).

         Kiddie has failed to carry her burden on this issue. Every witness present when George executed the November 2010 trust or the December 2010 amendment testified that he appeared to have the capacity to execute the documents. Against this testimony, Kiddie introduced evidence that George had been prescribed the Alzheimer's drug Aricept. She pointed to medical records that raised the possibility that George was suffering from dementia at the time the documents were executed. She reiterated several times that George did not inquire about or take issue with the specific terms of the trust. All of this evidence tends to show George's mental faculties were in decline during the relevant time period. This is not enough to demonstrate incapacity, however. See Matter of Estate of Davidson, 310 Ark. 639, 644 (1992) (“[T]he fact that [the testatrix] was suffering ideation relative to her house and incipient dementia does not, in itself, establish an impairment of testamentary capacity.”).

         The test of George's mental capacity is not whether he understood or was capable of understanding the detailed terms of the trust document.[6] Nor is the test whether George was suffering from Alzheimer's or other dementia (whether diagnosed or undiagnosed). The test is whether, at the time he executed the trust documents, George knew what property he had, to whom he wanted to leave it, and that the trust was the means by which he was effecting that transfer.

         Based on the evidence, Kiddie cannot meet her burden to show that George was unaware of the extent of his property. Kiddie herself admitted early in her cross examination that she believed George understood what property he had and where he wanted it to go. She also testified that George understood what work needed to be done around the farm, and what property was in need of repairs, but that he was not capable of following the details of contracts for those repairs. She argued that the frequency with which he changed his mind regarding distribution of his property showed incapacity, but this is not the law. See Matter of Estate of Davidson, 310 Ark. 639, 644 (1992) (“So long as [a testatrix] has the capacity to make a will, she may be unfair, eccentric, injudicious, or capricious in making distribution.” (emphasis added)). George could change his mind as frequently as he liked, even based on a factually incorrect belief, without impugning his capacity to execute a trust. See Thompson v. Orr's Estate, 252 Ark. 377, 381 (1972) (“The general rule is that a will is valid even though made by reason of a mistake of fact.” (quotation omitted)).

         Kiddie also cannot meet her burden to show that George was unaware of to whom he was leaving his property. Kiddie testified on cross examination that George knew Meridee Kaiser, had a good relationship with her, and considered her to be family. This weakens any attack on capacity that might be raised if the disposition of property had been “unnatural.” Cf. Brown v. Emerson, 205 Ark. 735, 737-38 (1943) (explaining that when, without explanation, a testator bequeaths property to ...

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