DEBBIE ALLEN V. JOE A. CHAPMAN, ADMINISTRATOR OF THE ESTATE OF J.G. CHAPMAN, DECEASED.
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RENDERED : MAY 18, 2006
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2003-SC-0281-DG
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LUCILLE HILSMEIER
APPELLANT
ON REVIEW FROM COURT OF APPEALS
2000-CA-1457-MR
WARREN CIRCUIT COURT NO . 1998-CI-0664
V.
JOE A. CHAPMAN, ADMINISTRATOR OF THE
ESTATE OF J . G . CHAPMAN, DECEASED
APPELLEE
AND
2003-SC-0303-DG
DEBBIE ALLEN
APPELLANT
ON REVIEW FROM COURT OF APPEALS
. 2000-CA-1457-MR
WARREN CIRCUIT COURT NO. 1998-CI-0664
JOE A. CHAPMAN, ADMINISTRATOR OF THE
ESTATE OF J . G. CHAPMAN, DECEASED
APPELLEE
OPINION OF THE COURT BY JUSTICE JOHNSTONE
REVERSING AND REMANDING
These cases arise from a judgment of the Warren Circuit Court in favor of
Appellee, Joe A . Chapman, Administrator of the Estate of J. G . Chapman . In an action
against Lucille Hilsmeier and Debbie Allen, Joe A. Chapman (hereinafter Appellee)
alleged that Allen and Hilsmeier had procured an inter vivos gift from J. G. Chapman
(hereinafter Chapman) as a result of either their own undue influence or, alternatively,
Chapman's unsound mind.
Following a trial, the jury returned a verdict in favor of the
estate . The Court of Appeals affirmed the judgment. For the reasons set forth herein,
we reverse .
Allen was a financial advisor employed by A. G. Edwards from 1992 to 1998.
During this period, Allen developed a business relationship with Chapman, which later
developed into a personal friendship . In February 1996 and again in April 1996, after
Chapman was no longer a client of A. G. Edwards, Allen assisted Chapman in placing a
large sum of money in an account with Putnam Investments of Providence, Rhode
Island . This account is the subject of the present actions .
In 1995, Chapman's wife passed away and, soon thereafter, Chapman himself
was hospitalized due to a hernia . During this period, Chapman's children - Joe
Chapman, James Chapman, and Margaret Chapman Adams - sought appointment of
a guardian for their father in Warren District Court . It is undisputed that Chapman was
very distressed by this action, and his relationship with his children consequently
became strained .
A jury trial concerning the guardianship was conducted in May 1995. A Warren
District Court jury ultimately found that Chapman was competent to handle his own
financial affairs, but believed that he should not be driving an automobile . Chapman's
children agreed that Allen could serve as a limited guardian for purposes of ensuring
that he did not drive .
After the competency hearing, Chapman began liquidating a substantial portion
of his assets. He deposited significant sums of money into various accounts between
1995 and 1997, and also sold a valuable farm. Following a bad fall in March 1997,
Chapman passed away. He died intestate, and Appellee was appointed administrator
of his father's estate .
Following his appointment, Appellee learned that his father had transferred
$198,593 .36 into an account owned by Allen's mother, Lucille Hilsmeier, and held with
Putnam Investments . By letter dated April 29, 1996, Chapman had directed Putnam to
transfer this sum from his own account into Hilsmeier's . (Chapman had opened his
Putnam account a few months prior.) According to Hilsmeier's testimony, Chapman
had attempted on several occasions to give money directly to Allen as a gift, but she
declined . He confided to Hilsmeier that he was going to put money into an account in
her name, with the intention that she pass it on to Allen. Thereafter, by a series of
transfers conducted by Hilsmeier, the funds were eventually moved into accounts held
solely by Allen .
Appellee initiated a lawsuit against Hilsmeier and Allen on behalf of the estate,
alleging that Chapman lacked the requisite mental capacity to open the Putnam
account, and that Allen had exerted undue influence upon Chapman causing him to
open the account and causing him to transfer the funds into Hilsmeier's account . A
Warren Circuit Court jury returned a verdict in the estate's favor and judgment was
entered accordingly . Allen and Hilsmeier appealed, claiming that the trial court
improperly received evidence, that they were entitled to a directed verdict, and that the
jury was improperly instructed. The Court of Appeals affirmed, and this Court thereafter
granted Allen's and Hilsmeier's motions for discretionary review.
On appeal, Hilsmeier and Allen again raise three issues, all of which were
considered by the Court of Appeals : (1) that the trial court improperly received
evidence concerning Chapman's mental capacity, (2) that the trial court erred in
denying their motion for a directed verdict, and (3) that the trial court erred in instructing
the jury . Because we conclude that the jury was improperly instructed, we reverse .
Furthermore, as this issue is determinative of the matter, we address only the jury
instructions .
The issue is preserved by counsels' objections to the tendered instructions,
which were made before the trial court instructed the jury. CR 51(3). The jury was
instructed, in relevant part, as follows :
(1) You will find for Joe A . Chapman, Administrator of the Estate of J. G.
Chapman, Deceased (the J. G. Chapman Estate) and award the
estate the sum of $198,593.36, less any amounts that you believe
from the evidence that were returned to J . G . Chapman prior to his
death, unless you believe from the evidence that J . G . Chapman, on
May 7, 1996, transferred an interest in his Putnam High Yield Trust
Account, valued at $198,593.36 to Lucille Hilsmeier's (Hilsmeier)
Putnam High Yield Trust Account with the intention of giving it to
Debbie Allen (Allen) and Hilsmeier, in which event you will find for
Allen and Hilsmeier.
(2) Even though you might otherwise believe the transaction to be a gift, if
you further believe from the evidence that J . G . Chapman was of
unsound mind at the time of the transaction or that the gift of the
Putnam Investment Account was obtained under undue influence by
Allen and/or Hilsmeier, in both or either of which events, you will find
for the J. G . Chapman Estate .
The remaining instructions defined the terms "sound mind" and "undue influence."
Allen and Hilsmeier correctly argue that these instructions are erroneous for two
reasons. First, subsection (2) of the instructions fails to provide the jury the opportunity
to specify whether its findings of liability were based on undue influence, unsound mind,
or both .
Because the jury ultimately ruled in favor of Chapman, it presumably believed
that the transfer was not a valid gift, though even this conclusion is tenuous as the
instructions neither defined the term "gift" nor provided the jury an opportunity to
specifically state that it rejected the gift theory. Nevertheless, even assuming that the
jury did not find a valid gift, it is unclear whether it believed that the invalid gift was the
result of undue influence, unsound mind, or both . Moreover, if the jury had determined
that the gift was the result of undue influence, it is impossible to distinguish exactly
which defendant is liable, as the instructions only required that the jury believe that
Hilsmeier "and/or"Allen exerted undue influence .
The fundamental function of jury instructions is to set forth what the jury must
believe from the evidence in order to return a verdict in favor of the party bearing the
burden of proof. Webster v. Commonwealth , 508 S .W.2d 33, 36 (Ky. 1974). We
acknowledge Kentucky has long employed the use of "bare bones" jury instructions that
avoid an abundance of detail, providing only a framework of the applicable legal
principles. Olfice, Inc. v. Wilkey, 173 S.W .3d 226 (Ky. 2005).
However, instructions
may not be so vague or diluted as to obscure the jury's findings. Indeed, to ensure a
fair trial and avoid unnecessary appellate procedure, they must be sufficiently clear to
reveal precisely the jury's conclusions : "An instruction should be free of ambiguity and
not open to various interpretations by the jury." Coe v. Adwell, 244 S.W.2d 737, 740
(Ky. 1951) . Here, we cannot discern what the jury believed because all three theories
propounded at trial - valid gift, undue influence, and unsound mind - are combined in a
single instruction with only two subsections : "Blending separate and distinct legal
propositions in the same instruction is bad form and it is much better practice to
incorporate each proposition in a separate instruction ." H & S Theatres Co. v.
Hampton , 190 S.W.2d 39, 40 (Ky. 1945). See also Hodges v. Yarbro, 374 S.W.2d 845,
847 (Ky. 1964). ("We do not approve of the instruction offered by the plaintiff since it
. . . attempts to put all of the law of the case in one instruction .")
Furthermore, the instructions in this case were flawed because they did not
accurately reflect Kentucky law. The trial court erred in failing to instruct the jury to
apportion liability between Hilsmeier and Allen. Kentucky's comparative fault statute,
KRS 411 .182, requires allocation of fault "in all tort actions." KRS 411 .182(1).
Chapman argues that comparative fault principles are not applicable to intentional torts,
noting that this is the majority rule. See 18 ALR 5th 525 (1994). Though Appellee is
correct that this is an issue of first impression in Kentucky, we need not evaluate the
purpose or theory underlying this common law principle . The General Assembly has
answered the question of whether comparative fault principles apply equally to
negligent and intentional torts in the affirmative . By its own language, KRS 411 .182
applies to "all tort actions." Cf. Seiben v. Seiben , 646 P.2d 1036, 1041 (Kan . 1982) .
(Holding that apportionment of fault does not apply in intentional tort cases, in part,
because "our comparative fault statute . . . has done nothing to change the common
law rule of joint and several liability for defendants in intentional tort actions.") Bell v.
Mickelsen , 710 F .2d 611, 617 (10th Cir. 1983) (declining to apply comparative fault
principles to intentional tort action because Wyoming's comparative fault statute
applies, by its own language, to actions for negligence) . This language is
unambiguous; when the language of a statute is clear, this Court will interpret it
according to its plain meaning . Therefore, the trial court was required to instruct the
jury concerning apportionment .
This flaw in the instructions is further compounded by the fact that they did not
elicit separate findings of culpability as to Hilsmeier and Allen . Chapman argues that it
was impossible to separate fault in this case, rendering separate instructions and/or
apportionment unnecessary. The evidence presented at trial belies this assertion,
however. Hilsmeier testified that Chapman expressed his desire to gift money to Allen
despite her previous refusals, and that he subsequently transferred the disputed sum to
Hilsmeier's account as a means of eventually giving it to Allen. It is uncontroverted that
the entirety of the disputed funds was later transferred out of Hilsmeier's account; in
fact one of the transferring instruments was even signed by both Hilsmeier and
Chapman . Based on the evidence, the jury could have reasonably believed that
Hilsmeier did not exert any undue influence upon Chapman, but simply followed the
directions of both him and Allen by signing documents that moved the money in and out
of her Putnam account. If this was, in fact, the jury's conclusion, the instructions
nevertheless required a verdict against both Hilsmeier and Allen .
For the reasons set forth above, the instructions in this case were fundamentally
flawed and prevented a reliable verdict. Upon retrial and if the jury does not believe a
valid gift occurred, it should be instructed not only to make separate and specific
findings of liability as to Hilsmeier and Allen, but also to apportion damages between
the two . Accordingly, we reverse the Court of Appeals and remand the matter to the
Warren Circuit Court for further proceedings consistent with this opinion .
Because such issues may reoccur upon remand, we briefly address the two
remaining arguments raised by the Appellants . Both Hilsmeier and Allen argue that the
trial court erred in denying their motions for directed verdicts. "[A] trial judge cannot
enter a directed verdict unless there is a complete absence of proof on a material issue
or if no disputed issues of fact exist upon which reasonable minds could differ."
Bierman y. Klapheke , 967 S.W .2d 16, 18-19 (Ky. 1998) . Without a detailed recitation of
the facts, suffice it to say that the testimony of Chapman's children established an
adequate basis upon which the jury could have found against both Hilsmeier and Allen,
under either a theory that the transfer was not a valid gift or a theory of undue influence .
Furthermore, we find no error with respect to the admission of evidence
concerning Chapman's mental capacity prior to the 1995 competency hearing in the
Warren Circuit Court . This evidence was objected to on grounds of relevancy, and that
its prejudicial effect outweighed any probative value . KRE 401 ; KRE 403. We find no
abuse of discretion in the trial court's admission of the evidence over this stated
objection . Commonwealth v. English , 993 S .W .2d 941, 945 (Ky. 1999). We decline to
address any other theories under which this evidence might have been excluded at trial,
as such claims were not presented to the trial court and therefore are not preserved for
review by this Court . Kennedy v. Commonwealth , 544 S.W .2d 219, 222 (Ky. 1976).
All concur.
COUNSEL FOR APPELLANT,
LUCILLE HILSMEIER :
Thomas A. Noe, III
J. Gail Guiling
Noe & Guiling
P. O . Box 608
Russellville, KY 42276
COUNSEL FOR APPELLANT,
DEBBIE ALLEN :
David Thomas Sparks
1700 Destiny Lane
Bowling Green, KY 42104
COUNSEL FOR APPELLEE:
Lee Huddleston
Huddleston & Huddleston
P. O. Box 2130
1032 College Street
Bowling Green, KY 42102-2130
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