Cisneros v. Graham

294 Neb. 83

881 N.W.2d 878

Elaine Cisneros, appellee and cross-appellant,

v.Gregory G. Graham, appellant and cross-appellee.

No. S–15–392

Supreme Court of Nebraska.

Filed July 8, 2016

Norman Denenberg, Omaha, for appellant.

Edward W. Hasenjager for appellee.

Heavican, C.J., Wright, Connolly, Miller–Lerman, Cassel, and Kelch, JJ.

Miller–Lerman, J.

NATURE OF CASE

In this case, we must determine the propriety of the actions of an agent whose power of attorney is subject to the Nebraska Uniform Power of Attorney Act, Neb.Rev.Stat. § 30–4001 et seq. (Cum. Supp. 2014) (Nebraska UPOAA). On summary judgment, the district court for Douglas County found that the agent, Gregory G. Graham (Graham), whose principal was his aunt Hilda Graham (Hilda), committed constructive fraud. The district court entered judgment in favor of Elaine Cisneros in an amount she would have received as beneficiary under a certain certificate of deposit and granted other relief. The district court later denied Graham's motion to alter or amend the judgment. We affirm.

STATEMENT OF FACTS

In June 2013, Hilda was diagnosed with terminal pancreatic cancer and “was given only a few months to live.” Hilda was the owner of a certificate of deposit (CD) in the amount of $59,665.27 which she opened on December 22, 2008. From the time Hilda opened the CD until it was cashed out, Hilda changed the payable-on-death beneficiary a number of times. On July 25, 2013, Hilda changed the beneficiary to Cisneros, and Cisneros was the named beneficiary when the CD was subsequently cashed, as explained below.

On July 16, 2013, Hilda appointed Graham as her power of attorney. Graham was the nephew of Hilda's deceased husband. The power of attorney provided:

A. POWER OF ATTO[R]NEY FOR HANDLING PRINCIPAL'S BUSINESS AFFAIRS AND MANAGING PRINCIPAL'S ASSETS: Without in any way limiting or restricting the generality of the foregoing, but in furtherance thereof, and in partial enumeration only, of the powers thereby vested in my said Attorney–in–Fact, I hereby give and grant unto my said Attorney–in–Fact full power and authority, from time to time, for me and in my name, place and stead, and for my use, and in my said Attorney–in–Fact's sole discretion:

....

4. To deposit or withdraw any money or credits in any bank or savings and loan company or any depository or investment or financial business of any kind, and to sign, endorse, execute or renew any checks, withdrawals, deposits, promissory notes, bonds, bills of exchange or evidences of indebtedness and to waive notice of demand and protest and to transact and perform any and all other banking or financial business and affairs of any kind whatsoever; including the power to change the beneficiaries of any financial investments.

....

6. To purchase, sell, transfer, assign, hypothecate, redeem, exchange, waive priority, or deal in any way with any notes, mortgages, stocks, bonds or securities or investments of any kind or nature whatsoever, and to receive and receipt for any and all income or dividends therefrom and to vote or to execute proxies for voting any and all stock.

While she was alive, Hilda had a checking account, and on August 12, 2013, Graham and Hilda signed an account agreement which designated Graham as the co-owner of that account with a right of survivorship. On August 19, the checking account had a balance of $20,858.95. On August 22, Graham used the power of attorney to cash the CD and deposit the proceeds into the checking account. On August 22, the checking account had a balance of $80,524.22. Cisneros was the named beneficiary of the CD when it was cashed. On September 5, Hilda died at home. When Hilda died, the balance in the checking account became Graham's by operation of law.

On January 15, 2014, Cisneros filed her complaint alleging that Graham's actions of cashing the CD and depositing the proceeds into the checking account “were unlawful” and that he “converted the proceeds of the CD to his own use and benefit causing damage to [Cisneros] in the amount of $60,000.00 with interest payable under the CD.” Cisneros sought damages, interest, attorney fees, and costs. On July 8, Cisneros filed a motion for summary judgment. A hearing was held at which evidence was received. The parties proceeded on a theory of constructive fraud.

Graham testified in his deposition that Hilda had orally instructed him to cash the CD and deposit the proceeds into the joint checking account in case more money was needed to pay for her care outside the home. The evidence showed that Hilda's hospice care was paid for by Medicare or supplemental insurance. A home care business began caring for Hilda at her home in the latter part of August 2013 for the several last days of Hilda's life. The services provided by the home care business were not paid for by Medicare, but instead had to be paid for by Hilda. On September 15, Graham paid $1,464 from the checking account to the home care business. None of the proceeds from the CD were needed to pay Hilda's bills.

In an affidavit that was received into evidence, Graham stated that on the same day that he deposited the proceeds of the CD into the joint checking account, Graham went to Hilda's house, told her about the transaction, and gave her the receipt for the transaction. Graham's affidavit stated that “[a]fter Hilda ... knew the transaction was completed, she was more calm, and less frustrated and agitated.” Graham's affidavit further stated that the deposit of the proceeds of the CD was recorded in Hilda's check register in Hilda's handwriting. Although Graham offered the check register as an exhibit, it was not received into evidence at the hearing on the motion for summary judgment.

On January 29, 2015, the district court filed an order in which it granted Cisneros' motion for summary judgment. The court noted that the Nebraska UPOAA became effective on January 1, 2013, and that because the power of attorney was executed on July 16, the Nebraska UPOAA applied to this case. The court determined that relevant pre–2013 case law, such as Archbold v. Reifenrath, 274 Neb. 894, 744 N.W.2d 701 (2008), and Crosby v. Luehrs, 266 Neb. 827, 669 N.W.2d 635 (2003), was still good law because their principles were consistent with the Nebraska UPOAA.

The district court determined that § 30–4024(2) applied. Section 30–4024(2) provides:

Notwithstanding a grant of authority to do an act described in subsection (1) of this section, unless the power of attorney otherwise provides, an agent that is not an ancestor, spouse, or issue of the principal, may not exercise authority under a power of attorney to create in the agent, or in an individual to whom the agent owes a legal obligation of support, an interest in the principal's property, whether by gift, right of survivorship, beneficiary designation, disclaimer, or otherwise.

The court stated that because Graham was the nephew or step-nephew of Hilda, he was not an “ ‘ancestor, spouse, or issue’ ” of Hilda, and that therefore, pursuant to § 30–4024(2), Graham was required to have express authority under the power of attorney to give himself an interest in Hilda's property. The court determined that the power of attorney did not contain such express authority. Accordingly, the court determined that Graham's actions were fraudulent under a theory of constructive fraud, and it granted Cisneros' motion for summary judgment. The court awarded Cisneros $59,665.27, prejudgment interest, and costs, but it denied Cisneros' request for attorney fees.

On February 2, 2015, Graham filed a “Motion for New Trial,” which the district court treated as a motion to alter or amend judgment. Finding no error in its summary judgment ruling, the court denied Graham's motion on April 8.

Graham appeals. Cisneros cross-appeals.

ASSIGNMENTS OF ERROR

Graham generally claims, restated, that the district court erred when it granted summary judgment in favor of Cisneros and denied his motion to alter or amend the judgment. Graham specifically claims that the court erred when it (1) failed to determine that Graham had express authority granted in the power of attorney to cash the CD and deposit the proceeds into the checking account he co-owned with Hilda, (2) failed to determine that § 30–4014(4) allowed a benefit to himself as agent, and (3) failed to determine that his actions were ratified by Hilda, which ratification made the deposit transaction legal and binding.

On cross-appeal, Cisneros claims that the district court erred when it did not award attorney fees to her under § 30–4017.

STANDARDS OF REVIEW

An appellate court reviews a denial of a motion for new trial or, in the alternative, to alter or amend the judgment, for an abuse of discretion. Hike v. State, 288 Neb. 60, 846 N.W.2d 205 (2014).

An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. Sulu v. Magana, 293 Neb. 148, 879 N.W.2d 674 (2016). In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted and gives that party the benefit of all reasonable inferences deducible from the evidence. Id.

Statutory interpretation is a question of law that an appellate court resolves independently of the trial court. In re Interest of Isabel P. et al., 293 Neb. 62, 875 N.W.2d 848 (2016).

On appeal, a trial court's decision awarding or denying attorney fees will be upheld absent an abuse of discretion. White v. Kohout, 286 Neb. 700, 839 N.W.2d 252 (2013).

ANALYSIS

Graham appeals from the district court's ruling denying his motion to alter or amend the judgment. Because our decision ultimately depends on the correctness of the district court's grant of the underlying summary judgment, we discuss the case...