Undue influence found in case involving gifting of two cars before death

A recent decision from the Indiana Court of Appeals outlines the approach courts in that state take when it comes to undue influence. The full decision is found here.

The matter was originally before the Grant Superior Court in Indiana. At issue were gifts made by Thomas R. Garrison while he was on his deathbed. Thomas was diagnosed with terminal lung cancer on July 27, 2015. He died a short time after on August 9, 2015. In dispute were two cars which were allegedly gifted to one of his sons, Jay Garrison, shortly before Thomas passed away.

According to Court documents, Thomas held title to a 2013 Chevrolet Corvette Z06 and a 2006 Ford Explorer XLT until July 30, 2015 when they were transferred to Jay. Thomas’ wife of 28 years, Pamela Garrison sought to challenge these gifts. On August 11, 2015, two days before Thomas’ funeral, Jay came to Pamela’s house accompanied by police officers to take possession of the two cars.

On August 18, 2015 an unsupervised estate was opened. Pamela filed a petition to recover assets seeking to nullify the inter vivos gifts of the cars to Jay. She contested the gifts and sought to have them returned to the estate by disputing Thomas’ competency.

Jay challenged Pamela’s petition. The Grant Superior Court ruled in Pamela’s favor finding that Thomas was not competent to make the gifts. The two cars were to be returned to the Estate. Jay appealed this decision.

Evidence of Thomas’ behavior prior to death was considered

Pamela and Thomas were married for 28 years before his death. They had no children together, but each had children from prior relationships. Testimony at the contested hearing revealed that Thomas smoked cigarettes and consumed alcohol in increasingly large quantities before his death. Most witnesses testified that after his diagnosis Thomas was sad and in considerable physical pain. Some witnesses testified that Thomas’ behavior leading up to his death was consistent with his usual behavior in previous years. Pamela testified that beginning in June of 2015, Thomas’ behavior changed drastically.

He would go outdoors wearing only a winter coat and a racing helmet. He would also crawl on the living room floor searching for a missing air pump under a couch. Pamela’s daughter Carla Thompson testified that she had observed him fall often, lose his balance, become weaker and thinner and completely incontinent.

The trial Judge had concluded that evidence of Thomas’ competency was evenly spit. As a result, the cars were ordered to be returned to the estate.

Undue influence presumption was not set aside

The Indiana Court of Appeal analyzed the nature of inter vivos and causa mortis gifts and also the mental capacity required to make these gifts. The Court found that the mental capacity required to make a valid inter vivos gift is the same as the capacity required to execute a Will. Consequently, the Court found that the same is true for a gift causa mortis where the donor “must possess sufficient mental capacity to make the gift, that is, must be mentally competent or of sound mind.”

The Court of Appeal found that certain transfers are viewed differently based on the relationship of the donor and the donee. The Court acknowledged that in certain relationships such as a parent and child, there is a presumption that the questioned transaction was the result of undue influence exerted by the dominant party. The burden of proof shifts to the dominant party to demonstrate that the transaction was conducted at arm’s length and was valid. Evidence of the donor/subordinate party’s competence is relevant to consideration of the validity of such gift.

With respect to Thomas and Jay, the presumption of undue influence arose with respect to the transfer. The trial Court found that the evidence of competency was evenly split. As a result, Jay failed to rebut the presumption of undue influence. The Indiana Court of Appeal affirmed the decision of the trial Court.

The above scenario illustrates how cases of undue influence are approached in the state of Indiana. It will be interesting to see if there will be a further appeal in this case.