Kiddie v. Copeland et al

Filing 200

OPINION AND ORDER that Defendants should have judgment on Plaintiffs claim for declaratory relief challenging George Woodburys capacity to execute a trust in November 2010 and December 2010. Plaintiff is directed to file Show Cause Response by 6/6/2017 as to why Defendants should not have judgment on her remaining claims. Signed by Honorable P. K. Holmes, III on May 16, 2017. (src)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HARRISON DIVISION
CHERIESE KIDDIE
v.

PLAINTIFF
No. 3:13-CV-03030

JOHNNIE COPELAND; MERIDEE
KAISER; and ADRIAN WOODBURY, as
administrator for the estate of George Kipp
Woodbury

DEFENDANTS

OPINION AND ORDER
On April 4, 2017, the Court held a bench trial on this matter in Fayetteville, Arkansas. All
parties were present. The bench trial was held for the purpose of determining the capacity of
George Woodbury, deceased, to execute a trust in November 2010 and to amend that trust in
December of 2010. Plaintiff Cheriese Kiddie alleges that George was incompetent at that time as
a symptom of Alzheimer’s disease or other dementia, and her complaint raises several claims for
relief on this basis. All parties but Defendant Meridee Kaiser have filed updated answers to the
most recent amended complaint. Because that complaint was filed for the purpose of clarifying
Kiddies’s claims, and because Kaiser had previously answered, the Court will consider her to have
answered the amended complaint with a general denial. For the reasons set forth below, judgment
will be entered for Defendants on Kiddie’s declaratory judgment action.
I.

Facts 1
In 1978, George and his wife, Carolyn Woodbury (Kiddie’s grandmother), executed a trust,

which was amended at various times prior to November 2010. Carolyn died a few years after the
1978 trust was executed, and George remarried to Leona Woodbury (Kaiser’s deceased husband’s

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Pursuant to Federal Rule of Civil Procedure 52(a), the Court finds the following facts to
be established by a preponderance of the evidence, unless otherwise noted.
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grandmother). As they aged, Leona began to exhibit symptoms of Alzheimer’s. In 2007, Kiddie
moved from California to live in a guest cottage on George’s property. 2 With assistance from
Kaiser, Kiddie provided care and assistance to George and Leona. Kiddie also sought, and
apparently received, George’s approval and funding to make various improvements to the
property. Kiddie also assisted with farm operations. In 2009, Leona died, and George approved
and funded various renovations to the guest cottage, but the contractor hired walked off the job
before completion.
In August or September of 2009, George began to fall with some frequency, and began to
experience issues with memory. In December 2009, George began to take Aricept, 3 but was off
of it by March 2010. Medical records from March 2010 indicate that there was at least some
possibility that George was suffering from dementia, though no diagnosis was made. By early
2010, he appeared to Kiddie to be having “good days and bad days” with respect to his awareness
of what was occurring around him. In April 2010, George amended the 1978 trust to leave certain

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Kiddie’s breach of contract action is premised on this move constituting performance of
her obligations under an oral contract with George Woodbury, whereby Kiddie would move to
Arkansas and take care of George and Leona Woodbury, and in exchange would receive certain
property upon George’s death. The Court specifically declines to make factual findings with
respect to whether the parties made such an oral agreement.
3
At the close of evidence, the Court directed the parties to submit deposition designations
and briefs on whether it should take judicial notice of commonly-known effects of Alzheimer’s
and the prescriptive purpose of Aricept. The parties’ submissions also include a substantial amount
of argument and issues unrelated to this matter. The Court will direct the Clerk to docket those
submissions as an exhibit to the minutes.
Ignoring the superfluous matters in the submissions, the Court now takes judicial notice of
Aricept’s purpose. Aricept is a drug approved by the FDA for treatment of moderate to severe
dementia of the Alzheimer’s type. U.S. Food & Drug Admin., Ctr. for Drug Eval. and Research,
Approval
Letter,
Application
Number:
022568,
available
at
https://www.accessdata.fda.gov/drugsatfda_docs/nda/ 2010/022568Orig1s000Approv.pdf (last
accessed May 3, 2017). The Court also takes judicial notice that Alzheimer’s is a type of dementia
which can impair the memory and mental capacity of those whom it afflicts, in some instances to
the extent that those suffering from Alzheimer’s may lack the necessary capacity under Arkansas
law to execute wills, trusts, or other documents.
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property to Kiddie. In June 2010, George fell and was hospitalized for a period of time. In the
fall of 2010, Kiddie and George discovered that Kipp Woodbury (George’s son, Kiddie’s uncle,
and Defendant Adrian Woodbury’s 4 father) sold bank stock belonging to George. Defendant
Johnnie Copeland was then hired to revoke powers of attorney George had bestowed on Kipp.
Around the same time, Copeland raised with George the possibility of updating his 1978 trust in
order to simplify it and resolve any issues stemming from George’s frequent prior amendments to
a trust that, by its terms, was intended to be irrevocable. In October 2010, Kiddie hired a contractor
with George’s approval and funding to complete the renovation work on the guest cottage. George
understood then the scope and cost of the work to be completed. In November 2010, Kiddie was
excluded from George’s house. Also in November 2010, at First National Bank of Mountain
Home, Arkansas, George executed a new trust, still leaving certain property to Kiddie. Witnesses
to the event believed he was capable of understanding what he was doing. In December 2010,
George executed an amendment to the November 2010 trust, substituting Kaiser for Kiddie. In
March 2011, an employee of the Arkansas Department of Human Services, Adult Protective
Services, visited George to investigate a report of exploitation, conducted a Mini-Mental State
Examination,5 and found George to be alert and oriented.
George Woodbury died on February 18, 2012.
II.

Declaratory Judgment Analysis, Mental Incapacity
The issue before the Court in this declaratory judgment action is whether George had the

mental capacity necessary to create a trust in November 2010 and to amend it in December 2010.

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Adrian Woodbury was substituted as a Defendant in his capacity as administrator for
Kipp Woodbury’s estate after Kipp died in September 2016.
5
This examination is used in multiple clinical and research settings to evaluate and score
the degree of a subject’s cognitive impairment or dementia.
3

An instrument executed by a party who lacks sufficient mental capacity is void. See Phillips v.
Jones, 179 Ark. 877, 879–80 (1929) (explaining that without mental capacity, there is no free
agency, and without free agency, an act is void). The burden to prove mental incapacity by a
preponderance of the evidence lies on the party challenging the instrument. Thompson v. Orr’s
Estate, 252 Ark. 377, 381 (1972).
The law regarding mental capacity in the execution of a will is also applicable to
the execution of a deed and the creation of a trust. If the maker of a deed, will, or
other instrument has sufficient mental capacity to retain in his memory, without
promptings, the extent and condition of his property, and to comprehend how he is
disposing of it, and to whom, and upon what consideration, then he possesses
sufficient mental capacity to execute such instrument.
Rose v. Dunn, 284 Ark. 42, 46 (1984). Evidence of mental capacity or incapacity before or after
the time an instrument is executed may be relevant as an indicator of mental capacity or incapacity
at the time of execution. Daley v. Boroughs, 310 Ark. 274, 284 (1992).
Kiddie has failed to carry her burden on this issue. Every witness present when George
executed the November 2010 trust or the December 2010 amendment testified that he appeared to
have the capacity to execute the documents. Against this testimony, Kiddie introduced evidence
that George had been prescribed the Alzheimer’s drug Aricept. She pointed to medical records
that raised the possibility that George was suffering from dementia at the time the documents were
executed. She reiterated several times that George did not inquire about or take issue with the
specific terms of the trust. All of this evidence tends to show George’s mental faculties were in
decline during the relevant time period. This is not enough to demonstrate incapacity, however.
See Matter of Estate of Davidson, 310 Ark. 639, 644 (1992) (“[T]he fact that [the testatrix] was
suffering ideation relative to her house and incipient dementia does not, in itself, establish an
impairment of testamentary capacity.”).
The test of George’s mental capacity is not whether he understood or was capable of
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understanding the detailed terms of the trust document. 6 Nor is the test whether George was
suffering from Alzheimer’s or other dementia (whether diagnosed or undiagnosed). The test is
whether, at the time he executed the trust documents, George knew what property he had, to whom
he wanted to leave it, and that the trust was the means by which he was effecting that transfer.
Based on the evidence, Kiddie cannot meet her burden to show that George was unaware
of the extent of his property. Kiddie herself admitted early in her cross examination that she
believed George understood what property he had and where he wanted it to go. She also testified
that George understood what work needed to be done around the farm, and what property was in
need of repairs, but that he was not capable of following the details of contracts for those repairs.
She argued that the frequency with which he changed his mind regarding distribution of his
property showed incapacity, but this is not the law. See Matter of Estate of Davidson, 310 Ark.
639, 644 (1992) (“So long as [a testatrix] has the capacity to make a will, she may be unfair,
eccentric, injudicious, or capricious in making distribution.” (emphasis added)). George could
change his mind as frequently as he liked, even based on a factually incorrect belief, without
impugning his capacity to execute a trust. See Thompson v. Orr’s Estate, 252 Ark. 377, 381 (1972)
(“The general rule is that a will is valid even though made by reason of a mistake of fact.”
(quotation omitted)).
Kiddie also cannot meet her burden to show that George was unaware of to whom he was
leaving his property. Kiddie testified on cross examination that George knew Meridee Kaiser, had
a good relationship with her, and considered her to be family. This weakens any attack on capacity

6

To be sure, these sorts of documents may be too complicated for any layperson to draft
or understand, or the drafting or comprehension of details may require more time and effort than
a layperson wants to spend on the matter, which is why many people hire lawyers for estate
planning.
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that might be raised if the disposition of property had been “unnatural.” Cf. Brown v. Emerson,
205 Ark. 735, 737–38 (1943) (explaining that when, without explanation, a testator bequeaths
property to unrelated persons contrary to “the natural instinct of the heart,” such circumstances
may call mental capacity into question).
Finally, Kiddie cannot meet her burden to show that George did not understand that the
trust he was executing was the means by which he was distributing his property. The argument
Kiddie offered that most approached this issue was that the trust documents were too vague,
ambiguous, and confusing for George to understand what they were intended to do. However,
Copeland testified that she raised with George the issue of modernizing his trust, that she drafted
the November 2010 trust and the December 2010 amendment at his direction, and that she went
over each of those documents with him. Kiddie has offered no evidence sufficient to show that,
despite Copeland’s testimony, George did not understand that he was executing a trust through
which he intended to effect a property distribution in accordance with his desires.
Although Kiddie testified that George had good days and bad days, she testified that at
least into October 2010 she believed he had the mental capacity necessary to approve final
renovations to the guest cottage on the farm, and Nathan Leuck, a disinterested witness, testified
that in March 2011, George was alert and oriented. In light of the evidence that both before and
after the November 2010 and December 2010 amendment were executed, George did not
constantly exhibit symptoms of any dementia from which he might suffer, the Court will not infer
that George lacked the necessary mental capacity at the time he executed those documents.
Because Kiddie did not meet her burden, the Court will enter judgment against her on her
declaratory judgment action with respect to George’s mental capacity to execute the November
2010 trust and December 2010 amendment.

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III.

Remaining Claims and Issues
In addition to seeking a declaration that George did not have the necessary mental capacity

to execute the November 2010 trust or the December 2010 amendment, Kiddie is pursuing a litany
of other claims for relief. The Court will order her to show cause why Defendants should not have
summary judgment on those claims for the following reasons.
Kiddie seeks a declaration that Copeland was grossly negligent with respect to her conduct
in preparing the November 2010 trust and December 2010 amendment (that is, that Copeland
committed legal malpractice). “The plain language of Ark. Code Ann. § 16-22-310 [the lawyer
immunity statute] requires the plaintiff to have direct privity of contract with ‘the person,
partnership, or corporation’ he or she is suing for legal malpractice. . . . [The Arkansas Supreme
Court has] narrowly construed the privity requirement to require direct privity between the plaintiff
and the attorney or entity to be held liable for legal malpractice.” McDonald v. Pettus, 337 Ark.
265, 271–72 (1999). Indirect privity of heirs to a lawyer for the decedent will not suffice. Id. at
272. Heirs cannot sue for malpractice as third-party beneficiaries of a contract between a decedent
and a lawyer. Id. at 273. While no privity is required to bring an action for fraud or intentional
misrepresentation against an attorney, the evidence submitted during the bench trial does not
support even an inference that fraud or intentional misrepresentation occurred.
Kiddie seeks a declaration voiding the November 2010 trust as an incomprehensible and
misleading instrument. The Court heard ample testimony on this matter at the bench trial, and to
the extent that any ambiguity in the November 2010 trust made that trust defective, the December
2010 amendments corrected the issue. Either the December 2010 amendments along with the
documents executed in November 2010 in fact create the 2010 trust that Kiddie now attacks, or
they provide clear and convincing evidence of the intended terms of the November 2010 trust and

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the Court would reform the trust to give effect to those terms. Kiddie also seeks invalidation of
the December 2010 amendment on the basis of material misrepresentations and duress. There has
been no evidence submitted of duress or material misrepresentation.
Kiddie seeks a declaration that George could not transfer assets out of the 1978 trust he
and Carolyn created. Kiddie has standing to contest this transfer only to the extent that a favorable
judgment could redress her injury. Ultimately, summary judgment appears to be proper for
Defendants on this issue for alternative reasons: either the assets she claims should be hers from
the 1978 trust were held in a revocable trust, with George as the settlor, in which case George
retained legal authority to change the terms of that trust; or the assets that she claims should be
hers from the 1978 trust were held in an irrevocable trust, which means George could not amend
that trust in April 2010 to give Kiddie the assets she now seeks. Because in either case a declaration
along these lines would not entitle Kiddie to any relief, judgment against her appears to be proper.
Kiddie asks the Court to adjudge that Defendants Adrian Woodbury, as successor to Kip
Woodbury, and Meridee Kaiser return all assets to the trust, and that Defendant Johnnie Copeland
return any fees related to her preparation of trust documents and actions as trustee. In light of the
Court’s findings on the issue of capacity and in light of the fact that summary judgment appears to
be proper on the remaining claims for relief, there appears to be no basis for these claims to relief.
Kiddie asks for a finding that title to a vehicle or vehicles previously owned by her and
George should be held solely by her now that George is dead. Resolution of this matter appears
to directly involve a Court finding on proper distribution of property of a deceased, and as such
the matter is be excepted from the Court’s subject matter jurisdiction. Markham v. Allen, 326 U.S.
490, 494 (1946) (“[A] federal court has no jurisdiction to probate a will or administer an estate.”
(emphasis added)).

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Kiddie is also pursuing a breach of contract action premised on George’s alleged contract
with her. The terms of the allegedly-breached oral contract were that, if Kiddie were to move to
the guest cottage on George’s property and care for Leona and him for at least three years, then
after that time George would convey ownership of the house and surrounding 40 acres to Kiddie.
(Doc. 181, ¶ 6). Kiddie’s allegations make clear that the terms of the contract were later modified
to her satisfaction:
In 2009, Leona was in the last stages of Alzheimer’s disease. [George], then 89
years old and fearing for his own mental and physical health advised Plaintiff that
he would fulfill his obligation for the services she was performing pursuant to their
2007 agreement by amending a trust he and Plaintiff’s grandmother had formed
decades earlier, to give her the main house and 40 acres upon his death. In the
interim, she would continue to live in the cottage (which was in the process of
substantial renovation), and operate the farm. While this did not technically fully
comply with the original terms, it was acceptable to Plaintiff.
(Doc. 181, ¶ 13). By mutual assent, parties to a contract may modify its terms. Van Camp v. Van
Camp, 333 Ark. 320, 323 (1998). Assuming George had the authority to unilaterally amend the
trust he and Carolyn had executed, his promise to place his property in trust to be distributed to
Kiddie upon his death—effectively a promise about the means (testate or intestate) by which his
property was to be divided following his death—was required to be in writing in order to be an
enforceable contract. Ark. Code Ann. § 28-24-101(b). Assuming George did not have that
authority, see Ark. Code Ann. § 28-73-411, his promise was illusory and no valid contract could
be formed. In either case, in the absence of a contract there can be no recovery for breach. Kiddie
also raises a claim for intentional interference with contractual relationship against Kipp
Woodbury. If no contract existed to interfere with, no tort can lie for interference.
Kiddie claims relief for violation of a state court order and improper eviction procedures.
Kiddie identifies no independent action for violation of a state court order imposing a stay, and
whether or not Defendants’ actions constitute contempt of that order is not for this Court to say.
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Similarly, it is not clear that the Court should exercise jurisdiction over any improper eviction
action, both because the matter is before this Court on supplemental jurisdiction and the causes of
action over which the Court may exercise original jurisdiction are likely to be dismissed, and
because resolving the parties’ rights to real property would require interference with the
administration of an estate.
Kiddie will be ordered to show cause by June 6, 2017 why Defendants should not have
judgment as a matter of law on the claims remaining in this lawsuit.
IV.

Conclusion
IT IS THEREFORE ORDERED that Defendants should have judgment on Plaintiff’s

claim for declaratory relief challenging George Woodbury’s capacity to execute a trust in
November 2010 and December 2010.
IT IS FURTHER ORDERED that Plaintiff show cause by June 6, 2017 why Defendants
should not have judgment on her remaining claims. Plaintiff may show cause by filing a brief in
response to this order, as well as any necessary properly-supported statement of facts. Defendants
shall have 14 days after the filing to file a reply, along with any response to a statement of facts.
No additional briefing will be permitted without leave of Court.
IT IS SO ORDERED this 16th day of May, 2017.

/s/P. K. Holmes, III
P.K. HOLMES, III
CHIEF U.S. DISTRICT JUDGE

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