Uleman v. Gaffney (In re Estate of Lahr)

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In re Estate of Dianna K. Lahr, deceased.

Rhonda R. Uleman, appellee, v. Rebecca J. Gaffney, appellant.

No. A-22-766

Court of Appeals of Nebraska

November 28, 2023

THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

Appeal from the County Court for Douglas County: Thomas K. Harmon Judge. Affirmed.

Alton E. Mitchell, of Alton E. Mitchell Attorney at Law, L.L.C. for appellant.

Kelly Henry Turner and Andrew J. McElmeel, of Goosmann Law Firm P.L.C., for appellee.

Riedmann, Bishop, and Welch, Judges.

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

Riedmann, Judge.

INTRODUCTION

Rebecca J. Gaffney appeals from the order of the county court for Douglas County, which found that she had violated her duties as the personal representative of Dianna K. Lahr's estate and removed her as personal representative. On appeal, Gaffney assigns that the county court erred in ordering her to repay to the successor personal representative of the estate the sum of $114,677.07, in concluding she had breached any fiduciary duties as power of attorney or personal representative of the estate, in removing her as personal representative, and in not allowing her to close the estate. After our review, we affirm the order of the county court.

BACKGROUND

Gaffney served as the personal representative for the estate of her mother, Lahr, who died in July 2020. The inventory and tax determination worksheet Gaffney filed in this matter showed that the estate was to be divided evenly between Gaffney and her sister, Rhonda R. Uleman, the appellee. The filings showed each sister was to receive $114,677.07. In February 2022, Uleman filed a motion to remove Gaffney as personal representative of the estate, as well as an objection to the informal closing of the estate.

Gaffney filed a response in which she acknowledged that the total inheritance tax owed had erroneously been divided equally. Gaffney filed a request for an order nunc pro tunc which would reflect the proper division based upon a distribution of the estate to Uleman of $1,392.90. A trial was held on Gaffney's motion to close the estate, Uleman's objection thereto, and Uleman's motion to remove Gaffney as personal representative. The following evidence was adduced.

Lahr was the mother of Gaffney and Uleman. Gaffney and Uleman stopped speaking to each other sometime in 2009. In September 2010, Lahr executed a will which provided for an equal distribution of her assets between Gaffney and Uleman. Gaffney was nominated as personal representative of her mother's estate. Gaffney had been named Lahr's power of attorney in a document signed in 2010, and again in a document signed in 2020. The 2020 power of attorney specifically stated that

Except as otherwise authorized by the Power of Personal and Family Maintenance, an agent MAY NOT use my property to benefit the agent or a person to whom the agent owes an obligation of support unless I have included that authority in the Special Instructions or the Grant of Specific Authority.

(Emphasis in original.) There were no special instructions listed in the document, nor was there any grant of specific authority.

In July 2019, Lahr fell and had surgery. Following her rehabilitation, she was transferred to a long-term care facility. Lahr realized she would not be returning to live in her home and sold it in February 2020.

After March 7, 2020, the facility where Lahr was living would no longer allow outside visitors due to COVID-19, so when Gaffney or Uleman wanted to visit, they would go to the window outside of Lahr's room and call her on the phone. Upon receiving the check for the proceeds from the sale of the house, Gaffney took it to her mother and showed it to her through the window. Gaffney testified that Lahr told her to sign the check and give the proceeds to Dale Christensen, Lahr's financial advisor at UBS Financial Services, and he would know "what to do" with it. Gaffney endorsed the check, deposited it into Lahr's separate checking account, and then wrote another check to UBS. Gaffney testified that she signed Lahr's name on the checks acting as Lahr's power of attorney, although she did not designate on the checks that she was signing in that capacity. According to Gaffney, the only direction she gave Christensen was that the money needed to be available so Gaffney could pay Lahr's bills. She was unaware of whether Lahr had any conversations with Christensen regarding this account.

The signature page for the UBS account required both Gaffney's and Lahr's signature. It includes the account number, as well as a designation that the account is "Joint Ten W/Rights Surv." Gaffney stated she did not review the whole document very well prior to signing it. Gaffney believed that both she and Lahr were listed on the account because Gaffney needed to be able to write checks out of it; however, she denied knowing that she would benefit from the account itself. She confirmed that she did not contribute any money into the account.

Emails between various employees at UBS were entered into evidence; the emails were dated between March 27 and April 2, 2020, and were marked as being associated with a separate retirement account Lahr had at UBS. The emails reveal that the employees were attempting to determine where Lahr was living, and in them, an employee referenced that she believed Christensen had spoken to Lahr "a few weeks ago," and that the employee had spoken with Gaffney "yesterday." That employee noted that "[Christensen] had me open a joint account [on March 26, 2020] with [Gaffney]." At trial, however, Christensen had no recollection of receiving a request to open a joint account with Lahr and Gaffney.

Lahr died in July 2020. Gaffney filed an application for informal probate of the will and, pursuant to its provisions, requested to be appointed personal representative, which was granted. On February 15, 2021, Gaffney filed an inventory, which listed five accounts Lahr had at the time of her death, including the UBS joint account, although no designation appeared on the inventory to designate that this account was jointly held. The total value of the estate was $260,816.89. The inheritance tax worksheet Gaffney filed on April 15 showed that Gaffney and Uleman would each receive $114,677.07 from the estate and divided the estate tax equally between the two. An August 17 check to Uleman, written from the estate bank account, notes that it is the final distribution to Uleman in the amount of $1,392.90.

Uleman testified that pursuant to her mother's will, the estate was to be equally divided between her and Gaffney; therefore, she was very surprised when she received the check for approximately $1,000. She stated that when she reviewed the inventory that had been filed reflecting an estate value of $260,816.89, she believed it to be accurate based on her knowledge of her mother's assets. Uleman confirmed her anticipated distribution, based on the inheritance tax worksheet, was $114,677, but that she never received that amount. Uleman stated when she called the attorney for the estate and asked about the discrepancy, she was told that she was not entitled to it.

Uleman testified that she had never received anything from Gaffney regarding the amount of time Gaffney had spent on the estate, nor did she receive anything from the attorney regarding his time spent. Uleman testified that despite requests for financial information about the estate, she never received anything. Gaffney confirmed that she did not provide Uleman with the documents filed with the court, nor did she provide her with an itemization of expenses. Gaffney stated she believed her attorney would have provided this information to Uleman.

Gaffney confirmed that after the inheritance tax had been paid, she thought the estate was being wound up, but that Uleman did not want to close the account, was "questioning everything," and had an attorney. Gaffney testified that she gathered the accounting and information about the estate to give them to Uleman's attorney. She gave the information to her attorney, and believed her attorney gave the information to Uleman's attorney. Gaffney testified that the check that had been written to Uleman was half of what had been left in Lahr's estate account after paying all of Lahr's outstanding bills; Gaffney distributed the same amount to herself from that account.

The county court specifically found that Uleman was generally credible, but that Gaffney was not credible on several issues. The county court found that Gaffney breached her fiduciary duties by overstepping the bounds of the power of attorney entrusted to her. It determined that Uleman provided sufficient evidence to prove that removal would be in the best interest of the estate and that Gaffney had made material and substantive misrepresentations regarding her management of the estate and its assets and failed to perform certain duties of her office. It found that Gaffney was not suitable to continue to serve as personal representative and appointed a successor personal representative. Gaffney was ordered to repay the successor trustee the sum of $114,677.07 to be held in a constructive trust. Gaffney appeals.

ASSIGNMENTS OF ERROR

Restated and renumbered, Gaffney assigns that the county court erred in (1) finding that she had breached the powers given to her by the power of attorney in her handling of the proceeds from the sale of the house and in ordering her to pay $114,677.07 in a constructive trust, and (2) finding that Gaffney breached her duties as the personal representative by failing to provide documentation to Uleman and in removing her as personal representative.

STANDARD OF...