Pepper Meeks & Whitaker Obtains $3.5 Million Jury Verdict in a Case of Will Contest, Undue Influence, and Financial Exploitation
After a six-day jury trial, a twelve-person jury in Williamson County rendered a judgment of $3,495,000 in favor of the Plaintiffs who were represented at trial by attorneys Ross Pepper and Dan Whitaker of Pepper, Meeks & Whitaker (“PMW”). The Plaintiffs were two daughters and three grandsons of the deceased. The Defendant was the son of the deceased, his mother. On behalf of the Plaintiffs, PMW asserted claims contesting the validity of a will, a codicil to the will, and a trust of the Defendant’s mother—all on the grounds of undue influence and fraud. In addition to contesting the validity of the testamentary instruments, PMW alleged that the Defendant was individually liable for financially exploiting his mother, an elderly and vulnerable adult. Specifically, PMW alleged that the Defendant used undue influence and fraud to cause his mother to make transfers to him and for his benefit during her lifetime.
In addition to a number of fact witnesses, PMW called at trial two experts it had retained on behalf of the Plaintiffs. The first was a forensic accountant who testified to the amounts received by the Defendant from his mother. In total, the forensic accountant was able to track more than two million dollars of the mother’s assets which had been used for the benefit of the Defendant son. That amount included loans which the mother made to the Defendant, but which were forgiven in her will (which was found to be invalid). While the Defendant purported not to know how much his mother had loaned him, Plaintiffs’ forensic accountant was able to calculate that amount by using the Defendant’s mother’s tax returns, which reflected payments to her from the Defendant for interest, and then applying the IRS’s Applicable Federal Rate.
The Plaintiffs’ forensic accountant also established that the Defendant son had overcharged his mother, by almost $300,000, for managing several commercial rental properties. The Defendant son claimed that his charges were reasonable. However, by relying on industry information regarding prevailing rates for management fees, Plaintiffs’ expert persuasively established that the Defendant overcharged his mother. Plaintiffs’ forensic expert also analyzed the Defendant’s mother’s credit card charges, thereby proving that many, if not most, of the nearly $200,000 in charges over a five-year period were for the benefit of Defendant.
Prior to trial, PMW had obtained a summary judgment ruling that the Defendant had, legally speaking, a “confidential relationship” with his mother (as opposed to a mere familial confidential relationship with her). The effect of this pretrial ruling was to shift the burden to Defendant to rebut the presumption that the testamentary documents at issue—as well as the transfers made by Defendant’s mother to him and for his benefit during her lifetime—were the result of undue influence. Under the law, Defendant could only rebut this presumption by clear and convincing evidence. One way Defendant could have rebutted that presumption was by establishing that his mother had received independent legal advice from the lawyer who drafted mother’s trust. However, PMW’s second testifying expert was a well-respected attorney and former chairman of the Tennessee Board of Professional Responsibility with an extensive background, not only in will and trust litigation, but also in ethics and professionalism. That expert persuasively testified that Defendant’s mother did not receive independent legal advice before she executed the trust at issue, even though the lawyer who had prepared the trust testified to his own belief that the Defendant had not unduly influenced his mother to sign it.
In addition to an award of compensatory damages of nearly $3.5 million, the jury determined that the Plaintiffs were entitled to an award of attorneys’ fees. The jury also determined that the mother’s trust, for which Defendant was the only beneficiary, was the result of the fraud and undue influence of the Defendant. The jury’s verdict thus invalidated the trust and, as a result, the trust’s $2.5 million+ real estate holdings are now assets of the mother’s estate of which Plaintiffs are beneficiaries.
