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Day v. Hupp

Court of Appeals of Missouri, Eastern District, Fifth Division

May 16, 2017

LEAH E. DAY and MARIAH L. DAY, Appellants,
PAMELA HUPP and MARK HUPP, Respondents.

         Appeal from the Circuit Court St. Charles County Honorable Ted House


         The plaintiffs, Leah and Mariah Day, appeal the judgment of the Circuit Court of St. Charles County entered in favor of the defendants, Pamela and Mark Hupp, following a bench trial. Our standard of review compels us to defer to the trial court's credibility determinations. These credibility determinations led the trial court to conclude that Pamela Hupp made no enforceable promise to the plaintiffs' late mother and that the plaintiffs failed to carry their burden of proof to establish either constructive fraud or unjust enrichment. Consequently, we must affirm the trial court's judgment.

         Factual and Procedural Background

         The plaintiffs are sisters Leah and Mariah Day, the only children of the late Betsy Faria. The defendants are Pamela Hupp, a friend of Betsy Faria, and Hupp's husband, Mark Hupp. Late in 2011, Betsy Faria suffered from stage-IV breast cancer, had received a terminal diagnosis, and was undergoing chemotherapy. On December 23, 2011, Betsy Faria changed the beneficiary designation on her State Farm life-insurance policy for $150, 000 from her husband, Russell Faria, to Pamela Hupp.[1] Faria was murdered in her home four days later, on December 27, 2011. Leah Day was then 21 years old, and Mariah Day was 17. Faria died intestate.

         The Lincoln County Prosecutor charged Faria's husband with her murder, and a jury convicted him in November 2013. Excluded at Russell Faria's criminal trial was evidence that Betsy Faria had named Hupp the beneficiary on her life-insurance policy just four days before her murder. Russell Faria sought to introduce this as evidence that there was an alternate suspect in Betsy Faria's murder.[2] During an offer of proof in the criminal trial, Hupp testified about establishing a trust for the Days. During the pendency of the appeal of Russell Faria's criminal conviction to this Court, he filed a motion to remand for new trial due to newly discovered evidence. The newly discovered evidence consisted of Hupp's 2014 deposition testimony in this case that contradicted her testimony at Russell Faria's criminal trial about Betsy Faria's plans for the life-insurance proceeds and the reasons that Hupp established a trust for the Days. This Court granted Russell Faria's motion for remand.[3] On remand, Russell Faria was granted a new trial, and was acquitted of his wife's murder in November 2015.

         In the meantime, the Day sisters sued Pamela and Mark Hupp for the proceeds of their mother's $150, 000 State Farm life-insurance policy, alleging constructive fraud and unjust enrichment. The Days asserted that Faria changed the beneficiary on her life-insurance policy to Pamela Hupp in reliance on Hupp's promise and resulting agreement with Faria to use the insurance proceeds for the benefit of the Days.

         The record reveals the following evidence adduced during the bench trial of the Days' claims. On December 23, 2011, Faria and Hupp went to the Winghaven branch of the St. Charles City-County Library where librarian Lauren Manganelli witnessed Faria's execution of the change-of-beneficiary form. Manganelli testified at trial that she spoke with both Hupp and Faria. She believed it was Hupp who said that Faria was divorcing and changing the beneficiary on her life-insurance policy so that Faria's children could be included. After her initial testimony, Manganelli read from her 2014 deposition in which she had stated that she did not remember Hupp and Faria specifically talking about spending the money. In her deposition, Manganelli stated she believed it was Faria who mentioned the divorce and changing her insurance to her children. In a portion of her deposition read at trial, Manganelli had further stated that the implication for her was that the life-insurance proceeds were to take care of Faria's children.

         Faria underwent a chemotherapy treatment on December 27, 2011, four days after changing the beneficiary of her State Farm life-insurance policy. A longtime family friend, Bobbi Warm, accompanied Faria. Wann testified via deposition that Faria had told her no one else planned to attend Faria's chemotherapy treatment that day. Wann said that Faria seemed surprised when Hupp arrived. Wann testified that Faria stated in Hupp's presence that she- Faria-had removed her husband from her insurance policy because she wanted the girls-Leah and Mariah Day-to receive the insurance proceeds. According to Wann, Hupp then stated that she would make sure the girls received the money. Wann explained that she had no discussion, nor did she overhear any discussion, about why Faria named Hupp the beneficiary if Faria wanted her daughters to have the life-insurance proceeds. Wann never heard Faria say that the girls should receive the funds immediately. Wann did not ask Faria why she did not name a family member as her beneficiary.

         Faria was murdered in her home later that day. The day after Faria's death, family members gathered at the apartment of Faria's mother. Several witnesses testified that Hupp was also present. Faria's sister, Pamela Welker, testified that the day after Faria's murder, Hupp volunteered to her that Faria had requested the change in beneficiary in order to make sure her children were taken care of. Welker stated Hupp was very clear that Faria intended the money for Leah and Mariah Day although Hupp provided no specifics about when and how much each of her daughters was to receive. Welker testified that Hupp said she intended to give the insurance money to the girls as requested. Welker had no knowledge of any specific terms concerning the Days' receipt of the money. Wann also testified in her deposition that she heard Hupp tell Faria's mother at this time that the insurance money was for the girls.

         Janet Meyer, Faria's mother, testified that Hupp came to visit her in January 2012. Meyer reported asking Hupp whether she remembered that the insurance money was for the girls. Meyer testified that Hupp "shook" her head as if she agreed with what Meyer said. Meyer had trusted Hupp to give the money to Faria's daughters.

         Another of Faria's sisters, Julie Swaney, testified that Hupp and Faria had met through work in the insurance business and had been friends for several years. She knew that Faria had other life-insurance policies in addition to the State Farm policy in question, and to her knowledge, Hupp was not named beneficiary on those policies. Swaney did not know why Faria named Hupp as her beneficiary. She also testified that Faria died intestate, and as far as she knew, Faria had never established a trust or a guardianship for her daughters. Swaney stated she telephoned Hupp in March 2012 to ask about Hupp's plans for the life-insurance proceeds. Swaney reported that Hupp said she had given all the money to charity. Swaney described telephoning Hupp again two to three weeks later, and at that time Hupp talked about establishing a trust for the girls. Swaney testified that Faria had problems with her daughters' behavior, including possible drug use, stealing, and irresponsibility. She stated, however, that Leah and Mariah Day "were always [Faria's] top concern."

         Rita Wolf had been friends with Faria since high school. Wolf believed that Faria was "somewhat" competent at her job selling insurance, that Faria "flew by the seat of her pants, " and "asked for a lot of help off and on." Wolf testified that in October 2011, Faria asked her to be the beneficiary on Faria's life-insurance policy. Wolf explained that she declined to be the beneficiary, and suggested more than once that Faria name one of her sisters instead. Wolf explained that Faria asked her what she knew about trusts because Faria wanted something of that nature for her daughters. Wolf then described how she and Faria discussed in detail when and how much the girls would receive. Wolf described a further discussion with Faria between Thanksgiving and Christmas 2011 when they talked about money for the girls' achievement of certain milestones, including a wedding for each daughter, Leah's attainment of her cosmetology license, and Marian's high-school graduation, purchase of a car, and college attendance. Wolf stated that Faria made notes of the points they discussed and took the notes with her after the discussion. Wolf testified that she and Faria "went through pretty much with a fine[-]tooth comb where [Faria] wanted every dollar to go, " and that all of it was to go to Faria's daughters.

         Ryan McCarrick was a detective sergeant with the Lincoln County Sheriffs Department at the time of Faria's murder. He interviewed Hupp in June 2012, prior to Russell Faria's first trial. Detective McCarrick testified that Hupp told him during this interview that Faria wanted Hupp to be the beneficiary in order to get the money to Faria's daughters. Detective McCarrick explained that Hupp had originally made a statement of this nature to two other investigators shortly after the murder.[4] Hupp did not tell Detective McCarrick that she planned to use the money for herself or that Faria intended the money for Hupp personally. Detective McCarrick testified that he did not pressure Hupp to create a trust for the Days, but that he did tell her the lack of a trust was a "problem" with Faria's family. He also explained that he told Hupp that the Lincoln County Prosecutor wanted to know Hupp's intentions for the money so that the prosecutor could prepare the criminal case against Russell Faria. Detective McCarrick testified that he said to Hupp something to the effect that it would help if she set up a trust before Russell Faria1 s trial. He characterized that discussion with Hupp as one in which he explained that Russell Faria's defense might raise this issue in the murder trial. Detective McCarrick affirmed that he did not discuss with Hupp when, where, how, or how much money the Days were to receive.

         Wolf further testified that she spoke to Hupp at Russell Faria's first trial, telling Hupp that Betsy Faria really wanted her daughters taken care of. Wolf reported that Hupp said they would be taken care of because Hupp had established a trust.

         Hupp testified at Russell Faria's first trial in November 2013. Portions of that testimony were admitted into evidence in the trial of the present case, and are included in the record before us. At the time of Russell Faria's first trial, Hupp explained that Betsy Faria changed her life-insurance policies multiple times, depending on whom she was angry with at the time. Hupp stated that Faria did not have a lot of discretionary money, and had applied for food stamps shortly before her death. She conceded that the change of beneficiary was an easy way for Faria to guarantee that the insurance proceeds went to her daughters instead of to her husband. Hupp explained in Russell Faria's first criminal trial that she placed $100, 000 in trust for Betsy Faria's daughters, and that she was trying to use the other $50, 000 to help the child of another friend who had recently died of breast cancer.

         The plaintiffs introduced Hupp's videotaped deposition at trial, the plaintiffs then called Hupp to testify, and finally the defense called Hupp as a witness. In her 2014 deposition played for the court during trial, Hupp testified that she had no memory problems although she was on disability because of issues with her neck, back, and legs. Hupp considered Faria one of her best friends. Hupp explained that Faria viewed her as rich, she never asked Faria for money, Faria never said that she wanted to help Hupp financially, and she did not need Faria's financial help. Hupp stated in her deposition that she first learned that Faria was naming Hupp as her beneficiary "[w]hen I was sitting in the library and she pulled out the form."

         According to Hupp's deposition testimony, Faria did "not really" tell her why Faria wanted Hupp as beneficiary. Hupp repeatedly stated "absolutely not" when asked if Faria told her that she wanted Hupp to use the insurance proceeds for Faria's daughters or that Faria said she wanted Hupp to hold the money for their benefit until the girls were older. Hupp explained that Faria said she did not want her husband, her daughters, her mother, or her sisters to have the money. Hupp initially stated that she "never even talked to anybody about the policy." Then she confirmed that she told police and Faria's family about the policy although she could not remember what she said to them. The police interviewed Hupp at her home the day after Faria's murder. Hupp testified repeatedly in her deposition that she did not remember whether she told the police that Faria told her to give money to Faria's daughters. She denied telling Faria's family that she would use the money for Faria's daughters. Hupp admitted she lied to Swaney about donating the money to charity in an effort to make Swaney stop calling her. She denied telling Manganelli, the librarian, that Faria was changing her life-insurance beneficiary because Faria wanted her daughters to receive the money instead of her husband. Hupp denied having any discussion with Warm about the life-insurance policy or being present when Faria discussed it with Wann.

         At the time of her deposition in 2014, Hupp stated "[t]oday, I intend on doing nothing with that money." On the next question, when asked if she planned to spend the money, Hupp replied "I do." She then stated that she had invested the money in the housing market. Hupp's deposition testimony and related exhibits revealed that Hupp established a trust for Faria's daughters in June 2013, primarily because she "felt pressured into it" by the police, the prosecutor, and Faria's family. Hupp funded the trust with $100, 000 in November 2013, near the time of Russell Faria? s first trial. Hupp stated that she did not place the full $150, 000 in trust for the girls because her own mother was suffering from Alzheimer's, and she was trying to guess what some of her mother's medical expenses would be. Hupp acknowledged that she withdrew $99, 700 from the trust in December 2013, stating that "[she] do[es] that with all [her] accounts." She stated that she revoked the trust entirely a few days before her July 2014 deposition because the Days said hurtful things about her in their depositions.

         As mentioned, Russell Faria was granted a new trial, and ultimately acquitted in November 2015 of his wife's murder. Lincoln County Prosecutor Leah Askey testified at the trial of the present case that she had several conversations with Hupp in the fall of 2015. She described one instance when Hupp showed her a bag of money, purportedly to show that Hupp still had the insurance proceeds in dispute in this case. Hupp never told Askey that she intended to use the money for her personal benefit although she explained that she still had the money because she was in the middle of the present lawsuit.

         In addition to her testimony at Russell Faria's first trial and in her deposition, Hupp testified twice during trial in the present case. When called as a plaintiffs' witness, Hupp affirmed that she testified honestly under oath in Russell Faria's 2013 criminal trial. She also affirmed that she spoke with law enforcement numerous times after Faria's death, that she believed it was important to be honest and forthright with law enforcement, and that she was truthful with law enforcement and with Askey, the prosecutor. Hupp affirmed that she had been honest in her deposition testimony as well. Hupp explained that she had suffered traumatic brain injury and concussion syndrome from multiple accidents, and that is the reason she was on disability. She testified that she did not think she had memory problems at the time of her deposition, and that she is unaware of having memory problems when speaking but "obviously" does so.

         In her first round of trial testimony, Hupp affirmed four times that she did, in fact, tell police the day after Faria's murder that Faria told her to make sure the girls received some money. Hupp then acknowledged multiple times that she told police she and Faria had the following exchange: "She said, I'm going to make you the beneficiary. If you could, when my daughters are older, give them some money. I said okay." Hupp testified that she told law enforcement something to the effect "that [Faria] would have liked her daughters to have some money." She stated her initial intention was "[t]o give them some money. Could be for a boat, could be for this. . . . Could be for all kinds of things." Hupp testified that she lied to Swaney about the insurance proceeds and to "[a]nybody that would bug me and bug me and bug me and bug me" but not to police because she did, in fact, establish a trust for the Days.

         Hupp testified that she no longer had the insurance proceeds because she had used the money to purchase a house at auction. She then stated that she did not consider those same funds to be the life-insurance proceeds because the proceeds have "always been commingled with my own money. ... I couldn't tell you what directly came out of that check. I used the $150, 000 that I showed Leah Askey."

         In his May 2015 deposition, Mark Hupp testified about his and Hupp's finances. He stated that Hupp never told him why Faria had named Hupp as beneficiary, that he was not aware whether she ever told him she intended to use the money for her mother's medical bills, and that he could not recall whether she ever told him that she used $50, 000 of the insurance proceeds to help the family of a friend with breast cancer. Mark Hupp further testified that he and Hupp had been married for 32 years, that she had back problems, that he was not aware she was ever diagnosed with memory issues, and that she did not suffer from dementia or any condition of that nature. Mark Hupp also testified at trial about his and Hupp's finances and their various house purchases since receiving the life-insurance proceeds.

         Later, Hupp was called to testify at trial as a witness for the defense. Hupp explained how she and Faria went through training and licensure to sell life insurance, and how they worked together in life insurance and annuities for about ten years. Hupp described two discussions she had with Faria in early December 2011 about changing the beneficiary on Faria's life-insurance policy. Hupp explained that Faria wanted her husband off of her insurance; that "[s]he was questioning people on who should be beneficiaries of her money[;]" that Faria used Hupp "as a sound board on what to do with [the insurance proceeds] in our first conversation in the beginning of December[;]" and that Faria mentioned her mother, sisters, and daughters themselves as potential beneficiaries. Hupp testified that Faria was "adamant" about not naming the girls themselves as beneficiaries because Faria was concerned about their disrespectful and irresponsible behavior. Hupp stated that Faria planned to change the beneficiary on another life- insurance policy she owned to one of her cousins. When confronted with her deposition testimony-in which Hupp stated that she only learned of the change at the library-Hupp explained that she only learned that she was to be "officially the beneficiary" when she and Faria were at the library.

         Hupp testified that Faria told her about two weeks before making the change that Faria wanted to name Hupp as her beneficiary. Hupp stated that she was not comfortable with it, but eventually she agreed. She explained that Faria "just kept saying it, " until Hupp agreed, and that Faria said "if you could, when they get older, if you could give them some money or help them out, to that effect." Hupp stated that Faria said nothing else about use of the proceeds. Hupp denied that she said anything to Faria1 s family about the ...

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