ILNews

Man wasn't competent to sign contract

Jennifer Nelson
July 28, 2009
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The Indiana Court of Appeals affirmed a neighbor of a mentally ill man shouldn't have been able to purchase the man's farm because the man was incompetent when he signed the sales contract.

In James Nichols v. Estate of Ernest M Tyler,  No. 45A04-0811-CV-640, the appellate court determined the trial court didn't err when it concluded Ernest Tyler was incompetent in February 2005 to convey his farm nor did it err by determining James Nichols failed to rebut the presumption of undue influence over Tyler with regard to the real property transfer.

Tyler had a history of mental illness and was in and out of hospitals his entire life. He could answer simple questions but never carried on a conversation. Tyler lived with a brother on a farm near Nichols. Once the brother died, Tyler's family asked Nichols to look after him.

As a result of a check scam, Nichols brought Tyler to Nichols' attorney and had Tyler sign a durable power of attorney appointing Nichols as his attorney in fact, which allowed Nichols to deal with the bank directly regarding the scam. The attorney also helped Tyler form a revocable living trust and transferred the farm and farmhouse to the trust. Nichols was the trustee. Tyler then signed a contract, which sold the property in the trust to Nichols. Nichols agreed to pay Tyler $200 a month until Tyler's death. Tyler's family knew nothing about the check scam, trust, or real estate sale. The attorney was unaware of Tyler's mental health history.

The family became concerned after they discovered Nichols held the only key to Tyler's home, Tyler lived in filth, and Nichols controlled Tyler's mail and phone line. He prevented family members from visiting unannounced and videotaped their meetings with Tyler. A doctor evaluated Tyler and found he had Alzheimer's disease, but couldn't say whether he was competent when he signed the contract. Family members eventually gained guardianship over Tyler, who died several months later.

At the trial challenging the contract of sale, the court found Tyler was incompetent at all times, he had an extensive history of mental illness, the doctor who examined him testified Tyler was incompetent at the time he entered into the agreements at issue, and Nichols' undue influence resulted in Tyler deeding his property to a trust and selling it to Nichols.

The trial court didn't err in finding Tyler was mentally incompetent when he signed the contract of sale, wrote Judge Elaine Brown. The Court of Appeals refused to reweigh the evidence as to the doctor's testimony. The trial court found the doctor's expert opinion was sound, she wrote. The Court of Appeals also rejected Nichols' argument that Tyler's competency should be compared to the standards for competency to stand trial in criminal cases because the standard to be used in the instant case is like that in making a will, she wrote. The evidence shows prior to and after making the contract, Tyler had a lack of mental capacity based on his history of hospitalization and his poor living conditions and hygiene.

Nichols also failed to rebut the presumption of undue influence of Tyler. Undue influence can be proven by circumstantial evidence, which there was enough of in the instant case for the trial court to find he unduly influenced Tyler into selling his property for inadequate consideration. Nichols isn't a credible witness and many of his arguments were merely an invitation to reweigh the evidence, which the appellate court cannot do, wrote the judge.

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  1. He TIL team,please zap this comment too since it was merely marking a scammer and not reflecting on the story. Thanks, happy Monday, keep up the fine work.

  2. You just need my social security number sent to your Gmail account to process then loan, right? Beware scammers indeed.

  3. The appellate court just said doctors can be sued for reporting child abuse. The most dangerous form of child abuse with the highest mortality rate of any form of child abuse (between 6% and 9% according to the below listed studies). Now doctors will be far less likely to report this form of dangerous child abuse in Indiana. If you want to know what this is, google the names Lacey Spears, Julie Conley (and look at what happened when uninformed judges returned that child against medical advice), Hope Ybarra, and Dixie Blanchard. Here is some really good reporting on what this allegation was: http://media.star-telegram.com/Munchausenmoms/ Here are the two research papers: http://www.sciencedirect.com/science/article/pii/0145213487900810 http://www.sciencedirect.com/science/article/pii/S0145213403000309 25% of sibling are dead in that second study. 25%!!! Unbelievable ruling. Chilling. Wrong.

  4. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  5. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

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