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Blair v. Richardson - 2016 OK 96, 381 P.3d 717

Rule:

The lack of capacity can be established in three ways. On or after June 3, 1977, lack of capacity must be established (1) in a mental health case filed prior to that date, (2) in a civil action or (3) in a guardianship proceeding. The specification of items in a list implies the exclusion of all others. The word "must" is an affirmative command. So, lack of capacity to convey property can only be established by a mental health case filed before 1977, a civil action, or a guardianship proceeding.

Undue influence occurs when a person in a position of confidence or authority uses that confidence or authority to obtain an unfair advantage over another. Okla. Stat. tit. 15, § 61 (2011). To void a conveyance, the influence must destroy the grantor's free agency and substitute the will of another for that of the grantor. Mere suspicion or the possibility of undue influence cannot defeat an otherwise valid conveyance, and the burden of demonstrating undue influence rests with the party alleging it. However, that burden can be shifted, and a rebuttable presumption of undue influence arises if the contesting party can establish that (a) a confidential relationship existed between the grantor and another, stronger party; and (b) the stronger party actively assisted in the preparation of the deed.

Facts:

Plaintiff Pat Blair and defendant Gayle Richardson are sisters. Their mother (mother) was the only child of Mabel, their grandmother (grandmother). The mother and grandmother initially owned the real property as joint tenants with rights of survivorship. After their mother’s death, defendant Richardson helped care for Mabel, who was previously admitted to hospital for treatment and care in 1966. In 1987, Mabel conveyed the property to herself and defendant Richardson as joint tenants with rights of survivorship. The law in effect at the time of the grandmother's admittance in the facility in 1966 rendered her legally incompetent without a separate proceeding, while the law in effect at the time of the conveyance in 1987 required a separate proceeding to render her legally incompetent. After Mabel's death, defendant Richardson sold the property and invested the funds in shares of stock. Plaintiff Blair filed suit and alleged that the 1987 deed was void and requested that a constructive trust be imposed on the stock. Plaintiff Blair argued that Mabel lacked the legal capacity to convey the property, and that the deed conveying the property was tainted by undue influence. The trial court found in favor of defendant Richardson. Plaintiff Blair appealed to the Court of Civil Appeals, which reversed the decision based on a lack of capacity, and remanded the case, but the appellate court did not address the issue of undue influence. A petition for certiorari was filed to the Supreme Court of Oklahoma.

Issue:

1) Was the lack of capacity of the grandmother to convey the property established by operation of statutory law?

2) Did the existence of a confidential relationship, and assistance in the preparation of deed, raise the presumption of undue influence in the constitution of deed?

Answer:

1) No. 2) No.

Conclusion:

1) The Court held that grandmother was legally competent at the time of the conveyance because of the enactment of Okla. Stat. tit. 43A, § 1-105, and lack of capacity to convey property could not be established by operation of statutory law. The application of the statute, which automatically declared the grandmother legally incompetent without a separate proceeding, disregards the Legislature's goal of according due process to persons allegedly in need of treatment. The Court added that the grandmother's incapacity was not established by a mental health case filed before 1977, a civil action, or a guardianship proceeding, as a procedure required by law.

2) The Court held that the grandmother and defendant Richardson were not in a confidential relationship, and defendant Richardson did not actively assist in the preparation of the deed. Defendant Richardson had no control over the grandmother's financial or legal affairs, and Mabel never lived with defendant Richardson. The Court added that while defendant Richardson may have participated in the preparation of the deed, which included asking about deeds at a courthouse, obtaining a copy of a deed at an office supply store, and driving the grandmother to the abstract company where the deed was filled out, she did not actively participate in the preparation. The Court reversed the Civil Appeals’ opinion and affirmed the decision of the trial court.

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