The Indiana Court of Appeals affirmed that a woman improperly spent her friend’s money on repairs to a property he conveyed to her but found the trial court miscalculated how much she owes.
Eunice McKibben and Jeff Hughes have had a friendship or romantic relationship since 1991. In 2009, Hughes inherited a house and property from his father after his death. That same year, Hughes was treated for bipolar disorder and depression. McKibben later helped him qualify for Social Security benefits, opened a bank account in both of their names and deposited his money into the account. McKibben introduced Hughes to her lawyer friend, David Rosselot, to help with various legal issues including deeding the property to McKibben.
Hughes and his mother, who was appointed his power of attorney, later sued McKibben, alleging she procured the deed by fraud. He also sought the return of all the money McKibben withdrew from the bank account to pay for bills, repairs, rent or other items for the house. He also sought return of the $17,800 in cash he gave her to hold for safekeeping.
The trial court determined McKibben improperly withdrew from Hughes’ account and was liable to him for $14,879.55. The court also denied Hughes’ request to rescind the deed.
In Eunice McKibben v. Jeff Hughes, b/n/f Joyce Hughes, 34A02-1311-PL-988, the judges found that Hughes and McKibben had a confidential relationship. Hughes relied on her and trusted her to handle his affairs in good faith, to the point she had influence in their relationship. But he didn’t prove the second element of constructive fraud – that McKibben made a representation or omission in violation of that duty.
Hughes and Rosselot testified that the deed was transferred so that Hughes could receive Medicaid benefits; McKibben claimed she thought the reason for the transfer was to keep Hughes’ family from getting the property. The appeals court declined to reweigh the evidence.
McKibben challenged the judgment against her, claiming she was entitled to receive rent checks made out to her on Hughes’ account because she was his landlord and there’s no evidence that she used his money to pay for the repairs. But the COA agreed she is liable for the checks written from Hughes’ account as that was his money.
The trial court, however, miscalculated how much she owed. The appeals court found that she was liable for $800 more, so it remanded for the judgment to be entered as owed, $15,679.55.