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Hunsinger v. Graham

Court of Appeals of Oregon

October 11, 2017

William HUNSINGER, Personal Representative of the Estate of Virginia Goodrich, Deceased, and as sole benefciary of her Estate, Plaintiff-Appellant,
v.
Lisa R. GRAHAM and Jacqueline Whitten, Defendants, and Michael AUTIO, Defendant-Respondent.

          Argued and submitted March 1, 2016.

         Clatsop County Circuit Court 132149; Philip L. Nelson, Judge.

          Christine N. Moore argued the cause for appellant. With her on the briefs were Thane W. Tienson, P.C., and Landye Bennett Blumstein LLP.

          Michael T. Stone argued the cause and fled the briefs for respondent.

          Before DeVore, Presiding Judge, and Lagesen, Judge, and Powers, Judge.[*]

         [288 Or.App. 170] Case Summary:

         Plaintiff appeals from a limited judgment after the trial court entered an order on summary judgment to dismiss his claims against an attorney for elder abuse and breach of a fiduciary duty. Plaintiff assigns error to the dismissal of the elder abuse claim against the attorney on the ground that the trial court used the wrong standard of liability for a third-party who permits elder abuse and that, by the right standard, plaintiff presented a question of fact. In his second assignment of error, plaintiff contends that the trial court erred in granting summary judgment against his claim of breach of fiduciary duty because there was a genuine issue of material fact when he should reasonably have discovered his claim for purposes of the statute of limitations.

         Held:

         The trial court did not err in granting summary judgment against plaintiff's claims of elder abuse and breach of a fiduciary duty. Given the correct standard for third-party liability, plaintiff's evidence did not present a genuine issue of material fact on the requirement for the attorney's constructive knowledge of financial abuse. The trial court also did not err in ruling that plaintiff's claim for breach of a fiduciary duty was not commenced within the two-year period permitted by statute.

         Affirmed.

         [288 Or.App. 171] DeVORE, P. J.

         Plaintiff appeals from a limited judgment after the trial court entered an order on summary judgment to dismiss his claims against an attorney for elder abuse and breach of a fiduciary duty. Plaintiff is the son and personal representative of the elderly person, Goodrich, now deceased. Defendant Autio is the attorney who provided a power-of-attorney form, a promissory note, and a deed for the conveyance of Goodrich's property to Graham, who is plaintiff's daughter and Goodrich's granddaughter.

         The trial court dismissed the elder abuse claim because plaintiff failed to offer evidence from which a factfinder could find that Autio knowingly acted or failed to act under circumstances in which a reasonable person knew or should have known of financial abuse of the sort alleged. ORS 124.100(5). The court dismissed the claim of breach of fiduciary duty because plaintiff failed to commence the action within the two-year period limited by statute, ORS 12.110(1). Plaintiff assigns error to both rulings. Autio cross-assigns error, contending that the trial court erred in ruling that plaintiff's elder abuse claim was not barred by a seven-year statute of limitations, ORS 124.130, or by a one-year tolling statute, ORS 12.190(1). We do not need to reach Autio's cross-assignments, because we reject plaintiff's assignments of error. We affirm.

         FACTS

         We take the facts from the summary judgment record, viewing the facts and all reasonable inferences that may be drawn from them in the light most favorable to plaintiff as the nonmoving party. Oregon Steel Mills, Inc. v. Coopers & Lvbrand. LLP. 336 Or. 329, 332, 83 P.3d 322 (2004); see also ORCP 47 C (record viewed most favorable to the adverse party). The initial facts are uncontested.

         Goodrich assumed care for her granddaughter, Graham, after plaintiff and Graham's mother separated and were unable to care for Graham. Goodrich raised Graham in her years from elementary school through college. Plaintiff had three sons with his second wife. In 1988, Goodrich gifted a 21-acre property, known as "the Olney Property, " to [288 Or.App. 172] Graham. No dispute is raised regarding Goodrich's intent to give Graham the property then. In 1996, however, Goodrich was faced with a timber trespass claim, and she employed attorney Autio to prepare a deed to return the property to Goodrich.

         Over twenty years before, Goodrich had executed a will that, upon the death of her husband, made plaintiff, her only child, the beneficiary of her estate. In 1996, Autio was an associate in the firm that had prepared the will. He left the firm for business work and engaged in a part-time law practice.

         In August, and again in November 2005, Goodrich fell and fractured her hip. When released from the hospital, she resided at a convalescent center for a number of months. Without remembering the dates, plaintiff recalled his mother "seeing people on the walls." On October 31, 2005, a staff member noted that the family reported that Goodrich had hallucinations of parties outside her door and that the family asked for a review of medications and a reduction in Vicodin.

         About two months later, on December 28, 2005, Autio met with Goodrich and Graham at the convalescent center to learn what Goodrich wished to do. Autio's sister was a friend of Graham; but, neither Graham nor Autio remember who asked for the appointment. Autio says that it was not unusual for him to meet with clients at the convalescent center. Autio understood that Goodrich was 82 years old and was at the convalescent center because she had had hip surgery and pneumonia. He did not know the state of her health, nor inquire of her doctors, but, if she suffered from complications, they were not apparent to him. In a deposition, Autio recounted:

"A. When I spoke with Mrs. Goodrich and she told me why I was there, what she wanted me to do, it made sense to me why [Graham] was there.
"Q. Okay. And what is it that Mrs. Goodrich told you she wanted you to do? "A. I was told by [Mrs.] Goodrich that she wanted to put that property back in [Graham's] name.
[288 Or.App. 173] "Q. That property, the Jewell property? The Olney property?
"A. Right."

         As was his standard practice, Autio asked Graham to leave the room so he could discuss privately with Goodrich what she wanted to do. With other clients, Autio had engaged an expert to provide a competency evaluation, but he did not feel that was necessary with Goodrich. He asked questions about her property, family, and what would happen to her property on her death, in order to indicate to him whether she was thinking clearly.

         Goodrich and Autio "discussed her intent to put this property back in [Graham's] name." Autio recalled that Goodrich was aware that plaintiff, her son, wanted the property, and she did not want plaintiff to know about the transfer. She wanted to give the property to Graham and did not want any money for the property. Autio was concerned that the transaction needed to be done in a way to preserve her prospect for Medicaid eligibility. There was also some discussion that, because Goodrich was not at home so was unable to pay bills, she would provide Graham with power of attorney. Autio carried a laptop computer and made contemporaneous notes referring to the 21-acre property, indicating Goodrich "wants" Graham "to have it, " positing a "transfer or sale of property" to Graham, and an issue of Medicaid eligibility.

         The next day, December 29, 2005, Goodrich felt a "pop" and felt severe pain in her knee. She was treated in a hospital emergency room and released with a prescription for Oxycodone and a warning about side effects that included impaired mental alertness.

         Graham told plaintiff about the plan to arrange a power of attorney and a meeting at the convalescent center on December 30, 2005. Plaintiff agreed with the plan for a power of attorney because he was frequently out of town. When plaintiff arrived at the convalescent center that day, he found Goodrich tired, worn out, not paying attention, and medicated for pain. Plaintiff had no objection to [288 Or.App. 174] Graham receiving the power of attorney.[1] After plaintiff left, Goodrich signed the power of attorney form.

         At the December 30 meeting, nothing was mentioned about the Olney property in plaintiff's presence, according to Autio, because Goodrich did not want it discussed in plaintiff's presence. In plaintiff's absence, discussion then followed about what to do with the property. Autio advised that the transaction should be set up as a sale with a trust deed and a promissory note that would be forgiven if Goodrich died before a certain date. Graham recalled that Autio had advised to structure the transfer "on paper" as if it were a sale in order to avoid the appearance of a gift that could hinder Goodrich in receiving Medicaid if that ever became necessary for her care. Autio recalled that Goodrich agreed it was a good idea to try to arrange her affairs to qualify for Medicaid.[2]

         Although disputed by Autio, Graham later testified that, at the December 30 meeting, she told Goodrich and Autio that she did not have the money to make the payments on the property.[3] According to Graham, Goodrich said that she could give Graham the money, and Autio advised that there was a certain amount of money that Goodrich could give family members to pay for the property. On that same date, Graham wrote a check drawn on Goodrich's account for $20, 000. That sum represented $10, 000 to herself and $10, 000 to her daughter, Whitten.

         On January 4, 2006, Autio responded to Graham with an email message that indicated that he was preparing a deed, trust deed, and promissory note. He contemplated a price of $90, 000, just above the assessed value, an interest [288 Or.App. 175] rate of 6.675 percent, monthly payments of $500, and a debt to be forgiven if Goodrich died within 10 years. He added that "if you are going to do this, you need to get a title insurance policy, to protect you in case your dad does try to sue or something later." Although Autio did not believe that title insurance would cover plaintiff's unhappiness over not getting the property, he was concerned about leases, liens, and whether the Olney property and plaintiff's property, which were adjacent, could be interrelated.

         On January 24, 2006, Goodrich signed a bargain and sale deed to convey the Olney property to her granddaughter Graham and great-granddaughter Whitten, and they signed a deed of trust and promissory note payable to Goodrich. When plaintiff was later asked if he had any information about Goodrich's mental capacity on that date, plaintiff replied, "None."

         In March 2006, Goodrich left the convalescent center, spent a month living with plaintiff, and then returned to her home. After her return, plaintiff recalled discussing with Goodrich plans for managing the property. He understood he would inherit the property, and he suggested that Graham and his son Otis Hunsinger would be more or less in charge. Otis recalled that, between 2004 and 2006, Goodrich had told him that the Olney property would "belong to all of you kids someday." Again, he recalled that, in 2008 Or. 2009, Goodrich had said that the property would go to the grandchildren after she and plaintiff died. In July 2009, Goodrich received a call from a legal assistant at the firm that had prepared her will, and she told the caller that the will was still valid.

         About four years after leaving the convalescent center, on March 18, 2010, Goodrich died. A few days later, Graham told plaintiff about the property transfer. On June 8, 2010, Graham testified in a probate hearing about the property transfer and the $20, 000 sum from Goodrich which Graham used to make "payments" on the property. In 2012, an accountant who was retained by plaintiff, acting as the personal representative, reported on the Goodrich, Graham, and Whitten bank accounts. He reported that, because Graham owed the debt represented [288 Or.App. 176] by the promissory note, there was "no benefit" to the estate from Graham's removal of the $20, 000 ...


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