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Graham v. Underwood

Court of Appeals of Arkansas, Division II

October 4, 2017

LAURA L. GRAHAM, INDIVIDUALLY AND AS BENEFICIARY OF THE SAMUEL R. LUDINGTON, JR., REVOCABLE LIVING TRUST AGREEMENT U/D DECEMBER 8, 2006APPELLANT
v.
LANA LOUISE UNDERWOOD, TRUSTEE AND BENEFICIARY OF THE SAMUEL R. LUDINGTON, JR., REVOCABLE LIVING TRUST AGREEMENT U/D DECEMBER 8, 2006APPELLEE

         APPEAL FROM THE SEBASTIAN COUNTY CIRCUIT COURT, FORT SMITH DISTRICT [NO. 66FCV-15-409] HONORABLE JAMES O. COX, JUDGE

          Richard F. Hatfield, P.A., by: Richard F. Hatfield, for appellant.

          Jones, Jackson & Moll, PLC, by: Mark Moll and Kathryn A. Stocks, for appellee.

          Gladwin and Brown, JJ., agree.

          BART F. VIRDEN, JUDGE

         Appellant Laura Graham filed a complaint against her sister, appellee Lana Underwood, to cancel amendments their now deceased father, Samuel R. Ludington, made to a trust agreement. Graham alleged that the amendments were the product of undue influence by Underwood. Underwood filed a motion for summary judgment. Following a hearing, the Sebastian County Circuit Court granted summary judgment to Underwood and granted Underwood's motion to strike affidavits that were untimely submitted by Graham. Graham argues that the trial court abused its discretion in not allowing further evidence and that summary judgment was inappropriate. We affirm.

         I. Background and Procedural History

         Samuel (Sam) and Elizabeth Ludington have two children, Graham and Underwood. On December 8, 2006, Sam executed a revocable living trust agreement, which provided that, if Elizabeth predeceased him, the daughters would receive equal shares of his estate. On July 31, 2013, Sam amended the trust to make a specific devise of all his stock in Eastern Tank Services, Inc., and Johnson County Disposal Well Services, Inc., to Underwood. Elizabeth died suddenly on August 22, 2013.

         Sam made a second amendment to the trust on December 19, 2013, to direct that his Sandalwood Apartments property be sold and the proceeds distributed in the following manner: one-half to Underwood "outright and free of trust"; one-sixth to the trustee of the Laura Lynn Graham Trust; and one-sixth to the trustees of trusts set up for each of Graham's two daughters.[1] Sam died on April 3, 2014.

         Graham filed a complaint against Underwood on May 1, 2015, alleging that Underwood had exercised undue influence over Sam to amend the trust agreement. Specifically, she alleged that she and Sam had a good relationship, that Sam was greatly affected by his wife's death and was influenced by Underwood to execute amendments changing the distribution "basically all to [Underwood], " that Underwood was "very forceful, and Sam was in deep distress over his wife's death, as they were very close, " and that Underwood "constantly misrepresented Laura's actions to Sam and harassed him to execute the Trust Amendments." Underwood answered the complaint, generally denying the allegations, pointing out that Elizabeth was still living at the time Sam made the first amendment, and asserting that it was well known that Sam did not approve of Graham's "lifestyle and some of her life choices."

         Underwood then moved for summary judgment and attached to her motion deposition testimony of Graham and Polly Lawson, Sam's business partner. In her response to Underwood's motion, Graham submitted exhibits including, among other things, deposition testimony from her, Underwood, Underwood's husband Delbert, and Lawson; affidavits from Don and Debbie Bradshaw; and memos and handwritten notes from attorney Randy McGinnis, who had assisted Sam with his estate planning. On May 4, 2016, a hearing was held on Underwood's motion.

         II. Evidence Supporting and Opposing Summary Judgment

         In Graham's deposition, she said that Underwood had been very forceful and controlling all of her life, that Underwood had harassed their parents her whole life to get what she wanted, that she nagged and bullied their parents, and that she would yell, throw fits, and threaten to make their parents' lives miserable.

         Graham conceded that Sam had told her that he wanted Underwood to take over as the owner of Eastern Tank when he died and that she knew why. She explained, "I have a master's degree in English and I like to teach college. I like to write books. He knows that. He understood my passion. She wanted to run his company, Eastern Tank."

         Graham testified that she was not aware of any of the amendments to Sam's trust at the time they were made. Graham said that, although her mother had told her that Underwood was trying to persuade Sam to change his will, she had no personal knowledge that Underwood had unduly influenced their father. Graham was asked,

Q: So you never saw [Underwood] do anything that you would consider to be-to have unduly influenced [Sam] to sign the first, second or third Amendment?
A: All I know is her behavior our whole lives. I don't see why her behavior would have ...

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