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AYERS v. MOSBY


AYERS v. MOSBY


September 18, 1998
Record No. 972356

CLAUDE A. AYERS, ET AL.

v.

GARLAND E. MOSBY

OPINION BY JUSTICE A. CHRISTIAN COMPTON
FROM THE CIRCUIT COURT OF HENRICO COUNTY
George F. Tidey, Judge

Present: All the Justices

In this chancery suit, there is an effort to rescind a deed upon
the grounds of mutual mistake of fact or coercion. On appeal, we
consider whether the chancellor erred in sustaining defendant’s
motion to strike the evidence following presentation of the
plaintiffs’ case-in-chief during an ore tenus hearing.
The facts are virtually undisputed; the controversy is over the
inferences to be drawn from the facts. The chronology is
important, as is the identity of the players in this narrative.
The ownership of residential property located in Henrico County
is at issue. Warner M. Mosby and Mary M. Mosby, his wife, had
acquired the property in 1968 and resided there.
In 1990, the Mosbys executed mutual wills. Each will devised the
property "in equal shares" to William Wray Matthews and
appellee Garland Eugeen Mosby, if they survived the testators.
Matthews is Mary Mosby’s son and has suffered from many health
problems all his life. Mosby, the defendant below, is her
stepson. The wills nominated defendant as executor.
Warner Mosby died in November 1994 and fee simple title to the
property vested in his widow. In January 1995, the widow executed
the instrument in question. By "Deed of Gift," she
conveyed the property in fee simple to defendant.
In September 1995, Mary Mosby executed another will. She
purported to devise a life estate in the property to her son, if
he survived her, with remainder to Sidney Alvis Matthews, her
brother, and his wife. She nominated her brother as executor of
this will.
In August 1996, Mary Mosby executed yet another will. She
purported to devise the property "fifty percent
. . . in fee simple absolute" to her son and
"the remaining fifty percent . . . in equal shares
and in fee simple absolute" to appellants Claude A. Ayers,
Jr., and Rebecca P. Ayers. She nominated the Ayerses, who were
her neighbors, as executors of this will.
In October 1996, Mary Mosby died at age 73. The Ayerses qualified
as executors of the decedent’s estate, and filed the present suit
in their representative capacity against defendant.
In a bill of complaint, the plaintiffs alleged decedent
"discovered" prior to her death "that a Deed of
Gift bearing her signature," and "ostensibly"
conveying the fee simple interest in her property to defendant,
had been recorded. They asserted that the alleged conveyance
"was the result of the Defendant’s coercion" and that
the deed was executed "by mistake." The plaintiffs
sought rescission of the deed, reconveyance of the property,
attorney’s fees, and costs. Answering the bill of complaint,
defendant filed a general denial that plaintiffs were entitled to
the relief sought.
Following discovery, the ore tenus hearing was held in May 1997,
at which the plaintiffs’ case-in-chief consisted of testimony by
an attorney who drew the decedent’s second will and by decedent’s
brother. The plaintiffs also presented defendant’s answers to
interrogatories, defendant’s responses to requests for
admissions, and excerpts from defendant’s March 1997 discovery
deposition.
At the conclusion of this evidence, the chancellor sustained
defendant’s motion to strike. The court ruled plaintiffs failed
to establish by clear and convincing evidence they were entitled
to rescission of the deed. We awarded plaintiffs an appeal from
the August 1997 final decree dismissing the bill of complaint.
Summarized in the light most favorable to the plaintiffs, their
evidence showed that during Warner Mosby’s 1994 "final
illness," when he was hospitalized in the Richmond area, a
question arose whether he could remain in the hospital for
necessary treatment because the federal Medicare program would no
longer fund the hospitalization. "[F]earing the worst,"
a hospital administrator "arranged a meeting between Mary
Mosby and a social worker to discuss the pros and cons of [a] nursing home alternative." The decedent asked defendant to
attend the meeting.
Upon defendant’s arrival at the hospital from his Urbanna home,
decedent advised him she already had met with the social worker.
The decedent had learned, according to the evidence, that the
Medicare program would fund only a small portion of nursing home
charges and that a patient could become eligible for substantial
funding under the federal Medicaid program only after the
patient’s assets had been "exhausted."
The decedent then asked defendant "to transfer the
house," which "was her single largest asset," and
a certificate of deposit to his "name" so that
defendant could "look out for her needs in the event she
should be confined to a nursing home later in life."
Defendant, a partner in a firm "which manages medical
practices," advised decedent, who was in "bad
health," to arrange for her son, William Matthews, to
"move in with her" to reduce the living expenses of
both.
The week following Warner Mosby’s funeral, defendant had the deed
of gift drawn by a Saluda attorney. During the first week of
January 1995, defendant accompanied the decedent to a
Richmond-area bank. There, the certificate of deposit was
transferred to defendant and the deed that decedent had executed
was acknowledged before a notary public. On February 7, 1995,
defendant recorded the deed.
Defendant’s "understanding of the transfer that took
place" was that he "was care taker of those assets to
take care [of] Mary, and once she was gone that I would divide
those equally with Billy," decedent’s son. Defendant stated
he would decide at decedent’s death "what to do with the
property" by referring to the 1990 mutual will.
The decedent continued to live in the home on the property. Her
brother, a North Carolina resident, furnished her with financial
advice. Even though defendant was executor of his father’s
estate, the decedent "kept herself busy attending to the
settlement of [Warner Mosby's] affairs," advising defendant
frequently "as to where things stood."
In July 1995, decedent had a "heat stroke," followed
later by "ministrokes," which caused her to be
"confused" at times. In September 1995, the brother
accompanied the decedent to the office of an attorney to draw a
will that omitted defendant as a beneficiary. When asked why she
was "deleting" defendant from her will, she told her
brother that defendant "doesn’t do a damn thing for me
. . . I can’t get him on the phone." Other
evidence offered by the plaintiffs showed decedent told defendant
during the Fall of 1995 that "you don’t have to visit me.
You have your mother in the nursing home, you live in Urbanna
now."
Following execution of this second will, decedent asked her
brother to "look through my papers" to determine if
they "are in order." Among the documents, the brother
found the deed in question. According to the brother, "I
asked her when did she give away her house. She said, I haven’t
given away my house. I said, well, this paper here says you have.
I said, that would make all these Wills void and null." The
brother notified the attorney who had drawn the second will of
discovery of the deed.
In January 1996, the attorney prepared and filed a bill of
complaint styled "Mary M. Mosby vs. Garland E. Mosby"
alleging fraud, misrepresentation, failure of consideration, and
unjust enrichment. The subpoena in chancery never was served.
Counsel testified that during discussions with his client, she
"confirmed" the signature on the deed was hers,
although "she never remembered signing the deed," and
told him she "never had any intention of transferring her
property."
In awarding this appeal, the Court framed the issue to be
debated. It is whether the trial court erred in finding
plaintiffs failed to present clear and convincing evidence that
decedent signed the deed as the result of mutual mistake of fact
or coercion. Arguing the affirmative, plaintiffs contend the
"heart" of their appeal is that the evidence clearly
established decedent did not intend to transfer fee simple
ownership of the property to defendant. Plaintiffs point out that
"at every significant point in the course of this lawsuit,
the Defendant himself admits that he was not the fee simple owner
of the Property and that it was not his stepmother’s intent to
transfer fee simple ownership of her home."
Elaborating, plaintiffs say their allegation of mistake was
established by the following evidence: The deed was prepared by
defendant’s attorney; the decedent never had possession of the
deed until after defendant recorded it; the decedent continued to
pay the home mortgage, real estate taxes, and insurance on the
property; the decedent remained in possession of the property;
she continued to devise the property as part of her estate
planning; and decedent, upon learning of the deed’s existence,
not only denied "giving" the property to defendant, but
also filed suit during her lifetime to have the deed rescinded.
This evidence, coupled with defendant’s testimony that he was
only a "care taker" of the property, shows, according
to plaintiffs, there was no present intent when the deed was
executed to transfer fee simple ownership to defendant. They say:
"The deed of gift, by Defendant’s own sworn testimony,
therefore, contains a mistake."
In support of their charge that defendant coerced decedent to
sign the deed, plaintiffs argue defendant acted in a fiduciary
capacity to his stepmother. Thus, according to plaintiffs, the
very nature of the transaction furnishes the most satisfactory
proof of "fraud" and outweighs evidence to the
contrary. Plaintiffs exclaim: "It simply defies rational
explanation that the Decedent would convey her single largest
asset solely to a step-son and not provide at all for her own
natural son, especially when the decedent’s estate planning
evidenced a consistent intent to provide for her natural
son."
We reject plaintiffs’ contentions. In order to withstand a motion
to strike, the plaintiffs had the burden of establishing prima
facie by clear and convincing evidence that the decedent
executed the deed as a result of mutual mistake of fact or
coercion. See Langman v. Alumni Ass’n of the
Univ. of Virginia
, 247 Va. 491, 502-04, 442 S.E.2d 669,
676-77 (1994); Carter v. Carter, 223 Va. 505, 509,
291 S.E.2d 218, 221 (1982).
As pertinent here, the rule is that a trial court under its
equitable jurisdiction may give relief on the ground of mistake
in connection with a written instrument if "there has been
an innocent omission or insertion of a material stipulation,
contrary to the intention of both parties, and under a mutual
mistake." Wilkinson v. Dorsey, 112 Va. 859,
869, 72 S.E. 676, 680 (1911).
In the present case, there has been no mutual mistake warranting
rescission of the deed. To carry out her plan to dispose of her
assets in order to qualify for Medicaid funding, the decedent
intentionally transferred the fee simple interest in her real
property to defendant so that he could "take care" of
her. There was no mistake on her part; she accomplished just what
she intended, that is, to liquidate her assets but have them
remain available for support during her life. The defendant took
delivery of the deed and recorded it, acting upon his
understanding that he would be "care taker" of the
property. There was no mistake on his part; he accomplished just
what he intended, that is, to hold title to the property in trust
for her life. Thus, paraphrasing Wilkinson, there was no
omission or insertion, innocent or otherwise, of a material
stipulation contrary to the intention of the parties under a
mutual mistake.
Decedent’s statements made months after the deed was executed
that she did not intend to transfer fee simple ownership to
defendant are belied by her execution, acknowledgement, and
delivery of the instrument. In the absence of fraud, duress, or
mutual mistake, a person having the capacity to understand a
written instrument who reads it, or without reading it or having
it read to her, signs it, is bound by her signature. Metro
Realty of Tidewater, Inc.
v. Woolard, 223 Va. 92, 99,
286 S.E.2d 197, 200 (1982). See Ashby v. Dumouchelle,
185 Va. 724, 733, 40 S.E.2d 493, 497 (1946). Thus, her personal
representatives cannot now successfully rely on her oral
statements to nullify the deed’s provisions and to support
rescission of the written instrument.
Parenthetically, we note that on brief and at the bar during
argument of the appeal, counsel for defendant stated that while
the foregoing facts "do not support voiding of the
deed," nonetheless the facts "may" be the basis
for enforcement of a "trust created by parol" or the
basis for otherwise reforming the deed to reflect the intent
expressed in the mutual will, that is, to benefit the decedent
for life, and defendant and William Matthews thereafter. See
Hanson v. Harding, 245 Va. 424, 427-28, 429 S.E.2d
20, 22 (1993); Malbon v. Davis, 185 Va. 748, 757,
40 S.E.2d 183, 188 (1946). This type of relief cannot be
accomplished in the present suit, however, because beneficiary
William Matthews is not a party.
Finally, there is not even a hint that defendant coerced decedent
into executing the deed. There is no evidence of duress or
conduct by defendant that destroyed decedent’s free agency. See
Martin v. Phillips, 235 Va. 523, 527, 369 S.E.2d
397, 399 (1988). Under these facts, defendant did not stand in a
fiduciary capacity to his stepmother. See Nuckols
v. Nuckols, 228 Va. 25, 36-37, 320 S.E.2d 734, 740 (1984).
Indeed, she initiated his involvement in her plan to assure
eligibility for Medicaid funding and cooperated with its
fulfillment by voluntarily accompanying him for the signing and
acknowledgement of the deed. These events transpired when
decedent had the capacity to understand the instrument and before
she began having a series of strokes, which commenced six months
after she executed the deed, rendering her "confused"
at times.
Consequently, we hold the chancellor did not err in sustaining
defendant’s motion to strike the plaintiffs’ evidence and in
entering summary judgment for the defendant. Thus, the final
decree dismissing the bill of complaint will be
Affirmed.

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