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Cich v. McLeish

Court of Appeals of Iowa

March 6, 2019

LYNDA CICH, EXECUTOR OF ESTATE OF JUNE McLEISH, LYNDA CICH, HEIDILYN LEAVITT, and HEATHERLYN LAMBERT, Plaintiffs-Appellees,
v.
MARK McLEISH, Defendant-Appellant.

          Appeal from the Iowa District Court for Bremer County, Colleen D. Weiland, Judge.

         Mark McLeish appeals the probate of June McLeish's will. AFFIRMED AND REMANDED.

          Christopher F. O'Donohoe of Elwood, O'Donohoe, Braun & White, LLP, New Hampton, for appellant.

          James J. Burns of Miller, Pearson, Gloe, Burns, Beatty & Parrish, PLC, Decorah, for appellees.

          Heard by Vogel, C.J., Vaitheswaran, J., and Gamble, S.J. [*]

          VAITHESWARAN, JUDGE.

         June McLeish executed a will under which one of her sons, Mark, would receive land known as the Hawkeye farm and her three daughters would receive land known as the Maynard farm. June transferred the Hawkeye farm to Mark during her lifetime.

         June's health deteriorated, and she eventually entered a nursing home. She gave Mark power of attorney over her affairs, including power "[t]o transfer, assign, convey, and deliver any real or personal property." The document she executed stated Mark would "be liable for willful misconduct or breach of good faith in the performance of any of the" document's provisions.

         Mark sold the Maynard farm for $862, 500 and deposited the net proceeds of $782, 917.90 into an investment account he opened at a firm where his daughter-in-law worked. Shortly thereafter, Mark presented June with a "transfer on death beneficiary designation form." June designated Mark the "100%" beneficiary of the account.

         The sisters learned of the sale at their mother's funeral. One of the sisters, Lynda Cich, who served as executor of June's estate, sued Mark in her capacity as executor and in her individual capacity.[1] Her two sisters, Heidilyn Leavitt and Heatherlyn Lambert, also were named plaintiffs in the lawsuit. The sisters alleged (1) Mark breached his fiduciary duty "by selling the [Maynard farm] for substantially less than its fair market value" of $1, 061, 000; (2) Mark used his confidential relationship with June "to wrongfully benefit himself to the exclusion of others"; and (3) Mark intentionally interfered with receipt of their inheritance.

         Following trial, the district court entered judgment of $1, 029, 344 in favor of the executor, "for distribution to the three plaintiffs, individually, pursuant to the last will and testament of June McLeish."

         On appeal, Mark challenges the district court's determinations that (1) he had a confidential relationship with June, (2) he breached a fiduciary duty under the terms of the power of attorney, (3) he intentionally interfered with the sisters' inheritance, and (4) the sisters were entitled to damages under the doctrine of ademption.

         I. Confidential Relationship

         A confidential relationship exists "whenever a continuous trust is reposed by one person in the skill and integrity of another." Mendenhall v. Judy,671 N.W.2d 452, 455 (Iowa 2003). "A transfer to a grantee standing in a confidential or a fiduciary relationship to the grantor is presumptively fraudulent." Id. at 454. To rebut the presumption, the fund recipient must "prove by clear, satisfactory, and convincing evidence that the grantee acted in good faith throughout the transaction and the ...


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