A Strong Offense
A Stronger Defense
We’ll start and end the week here at BryanCaveFiduciaryLitigation.com with powers of attorney. In order to abuse a power of attorney, there actually has to be one. In Kubek v. Jones, the United States District Court for the Middle District of Alabama recently determined that a decedent’s daughter forged a power of attorney so she could convert her father’s retirement benefits and life insurance policy to the exclusion of her stepmother. And, as if the forgery wasn’t enough, she also exercised undue influence over her father.
Our story starts once again with a remarriage. Risoleta M. Kubek sued her step-daughter, Nora Kubek Jones, claiming that Nora converted Risoleta’s ex-husband’s retirement and life insurance policies. More specifically, Risoleta claimed that Nora forged a limited power of attorney and notice of survivor benefits cancellation forms and exercised undue influence over the ex-husband.
The federal court found that Nora engaged in forgery and undue influence with respect to the ex-husband’s retirement and life insurance policies:
Retirement Policy: Under the retirement policy and Alabama law, the ex-husband could not change the beneficiary, but he could cancel the survivor’s allowance. When Nora forged the notice of survivor benefits cancellation form, Nora received a pro-rata survivor benefit for the ten days that her father was alive in June 2003.
Risoleta claimed that Nora used a fraudulently acquired power of attorney to cancel the survivor benefits. The power of attorney and notice of survivorship benefits cancellation contained the notary seal of Tina Carter. Carter, however, submitted an affidavit testifying that she did not notarize the documents. Thus, the court concluded that the documents lacked authenticity.
There were also some bizarre indications that the forms were authored by Nora. For example, there was some handwriting on the power of attorney that referred to the ex-husband in the third person.
Life Insurance Policy: Risoleta was named as the beneficiary of the ex-husband’s life insurance policy. Risoleta claimed that Nora exercised undue influence to remove Risoleta and name Nora as beneficiary.
If you’re going to exercise undue influence over another, you probably shouldn’t tell people how incapacitated the person is whom you’re going to unduly influence. The court found that the ex-husband was in failing mental and physical health based on a letter from Nora to Risoleta detailing the ex-husband’s health. Nora had described the ex-husband’s inability to care for himself, do his own laundry, clean his home, and follow a proper diet. Additionally, the ex-husband’s death certificate noted he suffered from dementia.
With respect to inter vivos transfers, Alabama law provides that, where the parties stand in a confidential relationship, and the evidence tends to show that the beneficiary is the dominant party, the law raises a presumption of undue influence and casts upon the beneficiary the burden of repelling such presumption when the transaction is assailed.
Here, Nora and the ex-husband had a confidential relationship because they were parent and child. Thus, the first prong was met.
The second prong, that Nora was the dominant party, was also met. The ex-husband was in poor health, suffering from dementia, and Nora was his caregiver. Furthermore, the correspondence that initiated the change-of-beneficiary process used “hand-written fax cover sheets depicting a dog and cartoon characters.” When the ex-husband corresponded with the insurance carrier, he had used type-written letters. This change “raise[d] the specter that [Nora] controlled the change-in-beneficiary process.”