Succession of Flood v. Flood

SUCCESSION OF JOAN TRICHE FLOOD v. OLANDO FLOOD, LINDA S. MELANCON

2012 CA 0561

STAIR OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT

Judgment Rendered: May 10, 2013

NOT DESIGNATED FOR PUBLICATION

APPEALED FROM NIL TWENTY-THIRD JUDICIAL DISTRICT

COURT IN AND FOR THE PARISH OF ASSUMPTION

STATE OF LOUISIANA

DOCKET NUMBER 6523

HONORABLE RALPH TUREAU, JUDGE

Barbara Lane Irwin

Matthew W, Pryor

Gonzales, Louisiana

Attorneys for Plaintiffs/Appellants

Olanda Flood and Estate of Joseph

Michael Flood

Glen R. Galbraith

Joshua P. Melder

Hammond, Louisiana

Attorneys for Defendant/Appellee

Dr. Herbert Flood, II

BEFORE: KUHN, PETTIGREW, AND McDONALD, JJ.

MCDONALD, J.

This is a sad case. It contests the validity of a sale and assignment of interest in the succession of .loan Triche Flood (the succession), a Louisiana resident who died on August 4, 2007. Joan Triche Flood (the decedent) was survived by five children: Dr. Herbert Flood, II (Dr. Flood, the testamentary executor of the succession and the defendant in this case), John M. Flood, Heloise L.F. Simmons (Ms. Simmons). Peter J. Flood, and Joseph M. Flood.

BACKGROUND INFORMATION: THE SUCCESSION CASE

A petition for probate of statutory testament was filed by Dr. Flood on August 24, 2007. Nearly two years later, on June 2, 2009, a sworn detailed descriptive list and a tableau of distribution were filed by Dr. Flood, along with a judgment of partial possession.

On June 9, 2009, Ms. Simmons filed an opposition to the first tableau of distribution.¹ Ms. Simmons asserted that Dr. Flood had failed to perform the duty imposed upon him by La. C.C.P. art. 3331 to render an account annually, and she maintained that the first tableau of distribution lacked substantiation and explanation of items listed for payment. Ms. Simmons asked that Dr. Flood be removed as executor and also that he be ordered to render an account for his administration.

On July 9, 2009, Ms. Simmons filed an opposition to Dr. Flood's interim account for the period of August 4, 2007 through December 31, 2008, and maintained that she opposed the account due in part to a lack of substantiation, explanation, and. opportunity for review.

On July 24, 2009, Ms. Simmons filed a motion to compel discovery, asserting that the decedent, who was widowed and elderly, suffered from Alzheimer's disease and had diminished capacity for a number of years prior to her death. Ms. Simmons maintained that Dr. Flood had. power of attorney for the decedent and handled all of her financial affairs, but never rendered an account of his service and repeatedly refused to do so.

Ms. Simmons noted that while in a nursing home facility, the decedent was raped, and as a result of that incident, Dr. Flood recovered approximately $500,000 for the decedent's damages and $150,000 for his loss of consortium. Ms. Simmons maintained that Dr. Flood invested the $500,000 in an annuity with himself designated as the beneficiary upon decedent's death. She asserted that Dr. Flood had received the cash value in the annuity, $553,780.36, to the exclusion of the decedent's other children and residuary legatees.

Ms. Simmons also maintained that Dr. Flood made substantial transfers to himself and his wife and children from decedent's assets, which exceeded $60,000 just two days after decedent's death, which was contrary to decedent's will as it excluded her other children and residuary legatees. Ms. Simmons asked that Dr. Flood be compelled to respond to her discovery requests.

On March 17, 2009, after a hearing, Dr. Flood resigned as executor without discharge or release. The parties stipulated that Linda S. Melancon was appointed dative testamentary executrix and that Dr. Flood would immediately deliver all documents and assets of the succession to Ms. Melancon.

On October 28, 2009, after a hearing, the parties stipulated to a judgment providing that Dr. Flood would respond to requests for production by Ms. Simmons, provide financial statements to Ms. Simmons, provide files from thelawsuit filed on the decedent's behalf regarding the nursing home incident, and identify all gifts he made for the decedent, and other matters.

THE PRESENT CASE

In July 2009, Joseph M. Flood died following a motor vehicle accident in Hawaii. Joseph. M. Flood resided in Hawaii with his wife, Olanda Flood (Mrs. Flood), the plaintiff in this case.

Some time after her husband's death, Mrs. Flood contacted Dr. Flood to ask for a loan. Mrs. Flood was living in necessitous circumstances, subsisting on S744 per month in Social Security disability payments. Mrs. Flood had a seventh grade education, suffered from depression, and was unemployed. She did not have a telephone, and had to be contacted by mail.

Dr. Flood declined Mrs. Flood's request for a loan. Later, Dr. Flood contacted Mrs. Flood through her daughter, seeking to buy her late husband's interest in the succession for $10,000. Dr. Flood knew that Mrs. Flood was represented by counsel in Hawaii in regard to her husband's fatal accident. Dr. Flood was represented by counsel in Louisiana in regard to the succession.

Dr. Flood had his counsel in Louisiana draft an agreement for the sale of Mrs. Flood's interest in the succession. Dr. Flood's attorney drafted the agreement and submitted it to Dr. Flood for his approval. Dr. Flood sent the document directly to Mrs. Flood in Hawaii without giving it back to his attorney. On August 13, 2010, Mrs. Flood signed the document without consulting her attorney. She sent it back to Dr. Flood, and Dr. Flood sent her a check for $10,000.

On July 20, 2011, Mrs. Flood filed a motion to contest the validity of the sale and assignment of interest in the succession to Dr. Flood, based upon the vice of consent, specifically error and fraud. She asked that the court rescind the sale and assignment of interest, declare it null, and declare that a 20% interest in thesuccession of Joan Triche flood was a part of the patrimony of Joseph M. Flood and his estate,

Mrs. Flood asserted in her motion that Dr. Flood knew that she was in necessitous circumstances and took advantage of her limited financial stability and her limited ability to understand the consequences of her actions by circumventing her counsel and enticing her with a cash payment. Dr. Flood filed an answer generally denying the assertions. In the alternative, and in the event the court granted a rescission of the sale and assignment of interest, he asserted a reconventional demand for repayment of $10,000.

A hearing was held on the matter. Thereafter, the district court ruled in favor of Dr. Flood, finding that the sale and assignment of interest was a valid and enforceable contract, and denying Mrs. Flood's motion to rescind the sale and assignment of interest. The district court noted that "[i]f this Court were a court of equity and not a court of law, a different result would be reached."

Mrs. Flood is appealing that judgment, and makes the following assignments of error.

1. The Trial Court committed legal error when it failed to find fraud under the clear circumstances presented into evidence, flatly ignoring uncontradicted evidence as well as equity.

2. The Trial Court committed legal error in concluding that Hawaii law applied, as opposed to Louisiana law, with regard to the application of fraud defined in the Louisiana Civil Code.

3. The Trial Court erred when it conceded that principles of equity dictate a different result since Louisiana courts are courts of both equity and law and should consider all facts and evidence; when equity will not abrogate the law, it should not only be considered, it should be followed.

ASSIGNMENT OF ERROR NO. 2:

THE (HOICK OF LAW ISSUE

The district court determined that Hawaii law applied to this case. Determining the proper choice-of-law law to be applied to an issue is a question of law for which this court has the plenary and unlimited constitutional power and authority to review novo. Wooley v. Lucksinger, 2006-11.40 (La. App. 1 Cir. 12/30/08), 14 So.3d 311, 358-359, reversed in part (on other grounds), 2009-0571 (La. 4/1/11), 61 So.3d507.

Louisiana Civil Code article 35 i 5 provides:

Except as otherwise provided in this Book, an issue in a case having contacts with other states is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.

That state is determined by evaluating the strength and pertinence of the relevant policies of all involved states in the light of: (1) the relationship of each state to the parties and the dispute; and (2) the policies and needs of the interstate and international systems, including the policies of upholding the justified expectations of parties and of minimizing the adverse consequences that might follow from subjecting a party to the law of more than one state.

Louisiana Civil Code article 3542 provides:

Except as otherwise provided in this Title, an issue of delictual or quasi-delictual obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.

That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the events giving rise to the dispute, including the place of conduct and injury, the domicile, habitual residence, or place of business of the parties, and the state in which the relationship, if any, between the parties was centered; and (2) the policies referred to in Article 3515, as well as the policies of deterring wrongful conduct and of repairing the consequences of injurious acts.

An examination of the record shows that Mrs. Flood was domiciled in Hawaii and entered into the contract negotiations while in H awaii. Mrs. Flood wasin Hawaii when she decided to enter into the contract, she signed the contract in Hawaii, and the agreement was notarized by a notary public in Hawaii. Under the facts of this case, we...