In In re Estate of Klutts, a son held his mother’s power of attorney when he assisted in securing a new 2008 will, which enhanced his share of the estate. No. 02-18-00356-CV, 2019 Tex. App. LEXIS 11063 (Tex. App.—Fort Worth December 19, 2019, no pet. history). Siblings attempted to probate an earlier will and alleged that the new will was the product of undue influence. The son filed a traditional and no-evidence motion for summary judgment on the undue influence claim, which the trial court granted. The siblings appealed.
The court of appeals held that the son’s fiduciary status shifted the burden to him to overcome the resulting presumption of unfairness. The court stated:
The person challenging the validity of an instrument generally bears the burden of proving the elements of undue influence by a preponderance of the evidence. This general rule applies to transfers from parent to child. Such transfers, standing alone, do not give rise to a presumption of undue influence, leaving the burden with the party challenging the transaction’s validity. This is because “nothing is more common or natural than for a [parent] to bestow gifts upon his [or her] children.” However, in cases involving fiduciary relationships, a presumption of undue influence may arise, requiring the person receiving the benefit to prove the fairness of the transaction. And “a power of attorney creates an agency relationship, which is a fiduciary relationship as a matter of law.” Thus, an attorney in fact, as a fiduciary, carries the burden of proof to overcome the presumption of unfairness that arises in self-dealing transactions… [I]n situations involving self-dealing in fiduciary or confidential relationships, a presumption of unfairness arises that shifts both the burden of production and the burden of persuasion to the fiduciary seeking to uphold the transaction.
The court held that because the burden of proof shifted to the son, the trial court was precluded from granting his no-evidence motion on that basis:
It is undisputed that Michael held his mother’s power of attorney when he assisted in securing the 2008 will, which enhanced his share of the estate and upon which he relies in attempting to show that she revoked the 2007 will. As the holder of his mother’s power of attorney, Michael was her fiduciary. Thus, Michael’s fiduciary status shifted the burden to him to overcome the resulting presumption of unfairness. Because the burden of proof shifted to Michael, the trial court was precluded from granting his no-evidence motion on that basis.
Id. (citing Estate of Danford, 550 S.W.3d 275, 282 (Tex. App.—Houston [14th Dist.] 2018, no pet.) and distinguishing Fielding v. Tullos, No. 09-17-00203-CV, 2018 Tex. App. LEXIS 7136, 2018 WL 4138971, at *7 (Tex. App.—Beaumont Aug. 20, 2018, no pet.)).
The court of appeals also reversed the trial court’s grant of a traditional summary judgment for the son. The court held that the son’s proof did not fall within the category of conclusive proof that allowed only one logical inference:
To discharge his summary judgment burden, Michael offered four witnesses—Donald Barley, Sandra Barley, Marti Luttrall, and Linda Solomon—who each attested to Wynell’s capacity at the time the 2008 Will was executed. However, because a factfinder was not bound to believe Michael’s four witnesses, his proof does not fall within the category of conclusive proof that allows only one logical inference. Nor does any admission as to Wynell’s testamentary capacity appear in this record. Because Michael failed to present conclusive proof of Wynell’s testamentary capacity, he fell short of the legal standard that would entitle him to a traditional summary judgment, and the burden never shifted to Jan, Donna, and Paula to produce any evidence at all. Accordingly, the trial court erred when it granted Michael’s motion for traditional summary judgment, and we sustain Jan, Donna, and Paula’s third issue.
Interesting Note: This case raised a very interesting procedural question concerning a defendant’s ability to file a no-evidence motion for summary judgment on a breach of fiduciary duty claim arising from a self-interested transaction. Such a transaction shifts the burden of production to the defendant to prove that the transaction was fair. The court held that the defendant could not file a no-evidence motion on such a claim because the initial burden of proof was on the defendant. Historically, a plaintiff could not file a traditional motion for summary judgment on a self-interested transaction based on a presumption of unfairness because courts held that a traditional summary judgment non-movant never had the initial burden to produce evidence. Those historical cases, however, were decided before Texas created a no-evidence motion in 1997. Presumably, a plaintiff could now file a no-evidence motion on such a claim because the initial burden would be on the defendant, which is allowed under such a motion.
This case also posed an interesting issue under the new statutes dealing with powers of attorneys. The son argued that the 2017 Durable Power of Attorney Act made “case authority cited by his siblings arising under the former statute” (former Texas Probate Code § 489B(a), now Estates Code Section 751.101) no longer applicable. He conceded on appeal, however, that the statutory amendment “applies only to [powers of attorney] executed after the effective date” of September 1, 2017 and did not apply to the power of attorney document at issue in the case, which was executed under the older statute. Notwithstanding, the siblings argued that the 2017 Act would impose on the son the duty to preserve the principal’s estate plan.