ILNews

COA: No presumption of undue influence

Back to TopE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Oh my lordy Therapist Oniha of the winexbackspell@gmail.com I GOT Briggs BACK. Im so excited, It only took 2days for him to come home. bless divinity and bless god. i must be dreaming as i never thoughts he would be back to me after all this time. I am so much shock and just cant believe my eyes. thank you thank you thank you from the bottom of my heart,he always kiss and hug me now at all times,am so happy my heart is back to me with your help Therapist Oniha.

  2. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  3. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  4. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  5. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

ADVERTISEMENT