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COA: No presumption of undue influence

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A 2005 amendment to Indiana Code sets aside the common law presumption of undue influence with respect to certain transactions benefiting an attorney in fact, the Indiana Court of Appeals ruled today on an issue of first impression.

The appellate judges had to decide in Gregory D. Compton, et al. v. First National Bank of Monterey, as personal representative of the estate of Stephen Craig Compton, et al., No. 66A03-0906-CV-249, if in light of a 2005 amendment to Indiana Code Section 30-5-9-2(b), the common law presumption of undue influence doesn't apply to a transaction where the principal takes action, the power of attorney is unused, and the attorney in fact benefits.

Stephen Compton's will in 2005 provided for his six children in varying degrees. His son Gregory was going to get 150 acres of his farmland. His power of attorney named his son Scott as his attorney in fact.

In 2008, Stephen became ill and was hospitalized with end-stage renal disease. He entered into a contract with Scott and his wife to buy the 150 acres willed to Gregory. Stephen also executed a contract to purchase Scott's home and put the house in his name. The sales hadn't been completed because of Stephen's death.

Monterey Bank asked the trial court to allow it to complete the contracts, which the trial court approved. Stephen's children Gregory, Sara, and Megan had objected and appealed the order.

The children argued the trial court should have applied the common law presumption of undue influence on the transactions, and that if applied, Scott failed to rebut it. Scott and the bank argued the 2005 amendment to I.C. 30-5-9-2(b) ended the common law presumption of undue influence.

There is scant caselaw on the statute in general and none on the issue since the amendment took effect. The Court of Appeals relied on Henry's Indiana Probate Law and Practice, which said 2(b) does abrogate the common law presumption of undue influence.

"A presumption of undue influence is now conditioned upon the attorney in fact's actual use of the power of attorney to effect the questioned transaction for his or her benefit," wrote Judge Nancy Vaidik. "The benefiting attorney in fact is freed from the presumption of undue influence so long as the power of attorney is unused in the questioned transaction."

The appellate court also found Stephen, as the principal, took action in the case by signing the contracts, previously inquiring into selling his farmland before he was hospitalized, and asking a bank to value the farm real estate. The children also failed to show undue influence on Scott's part by showing the imposition of his power to deprive his father of the exercise of free will, the judge continued. The evidence supports Stephen acted under his free will, so the appellate court affirmed the grant of the bank's petition for completion of the contracts.

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  1. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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