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Netherton v. Netherton

Court of Appeals of Missouri, Western District, Fourth Division

December 31, 2019

SEAN M. NETHERTON, Appellant, TRAVIS PERRY, Respondent.


          Before Karen King Mitchell, Chief Judge, Presiding, Lisa White Hardwick and Cynthia L. Martin, Judges.

          Lisa White Hardwick, Judge.

         Sean Netherton ("Sean")[1] appeals from the circuit court's judgment finding that the first and second amendments to his grandmother's trust, her new will, and change of beneficiary forms for her Prudential and Lincoln Financial accounts, all of which named as beneficiaries him and his cousin, Travis Perry ("Travis"), were null and void because they were executed at a time when she lacked sufficient mental capacity and were procured as a result of Sean's undue influence. The court further found that his grandmother's original trust, will, and beneficiary designations on her accounts, all of which named as beneficiaries her children, Randy Netherton, Michael Netherton, and Sheryl Perry (collectively, "Respondents"), were valid. On appeal, Sean contends the circuit court erred in not allowing him to argue, during closing argument, that a settlement offer that Respondents' counsel made to his grandmother's counsel in a different case constituted an admission of his grandmother's competency to execute the disputed documents. He argues that the court further erred in giving instructions that required him to prove his grandmother had the requisite mental capacity when she executed the trust amendments and change of beneficiary forms. For reasons explained herein, we find no error and affirm.

         Factual and Procedural History

         In 2011, Osta Ann Netherton ("Ann") and her husband, Morris Netherton ("Morris"), executed estate planning documents designating how they wanted their estates divided, who the beneficiaries would be, and who would make decisions if they were unable to do so themselves. In the Ann Netherton Trust Agreement, dated June 20, 2011, Ann named Respondents as equal beneficiaries. Ann named herself trustee and Respondents as successor co-trustees in the event of her death, resignation, adjudication to be incompetent, or inability to serve as trustee. At the same time, Ann executed a durable power of attorney appointing Sheryl as her agent. If, for some reason, Sheryl could not serve as Ann's agent, the durable power of attorney appointed Randy as her successor agent. In December 2011, Ann and Morris executed the Morris and Ann Netherton Trust, which provided that, upon the death of the last of them, Respondents would receive the trust assets. Ann also executed a will, which provided that all of the property of her probate estate would be distributed to Respondents as trustees of the Morris and Ann Netherton Trust. Thus, Respondents were Ann's beneficiaries under all of the estate planning documents that Ann executed in 2011.

         Morris died in November 2012. Ann was capable of managing her affairs until late summer 2015, when she had three mini strokes. Ann was approximately eighty years old at the time. Randy left his home in Colorado to live with and care for Ann in her Gladstone home until December 2015, when Ann was discharged from rehabilitation. Ann had another stroke in June 2016. Randy and Sheryl took care of Ann while she was hospitalized following this stroke. The second stroke was "fairly significant," and Ann's doctors noted that, after this stroke, she exhibited functional decline and poor insight. On August 28, 2016, Dr. Nancy Russell, Ann's primary care physician for over thirty years, found that Ann was "mentally confused, not able to make good decisions for her safety and not taking her medications properly." Therefore, Dr. Russell concluded that Ann was "mentally incompetent and not able to make her own decisions regarding her health and financial matters."

         In December 2016, Dr. Eric Ecklund-Johnson, a psychologist, performed a neuropsychological evaluation of Ann. Dr. Ecklund-Johnson noted Ann's previously- diagnosed conditions of bipolar disorder, stroke, obstructive sleep apnea, intracranial hemorrhage, coronary artery disease, carotid artery stenosis, hypertension, hyperlipidemia, diabetes, and tremor. Dr. Ecklund-Johnson's impressions of Ann were:

Neuropsychological findings were significant for evidence of deficits in several areas including complex attention, processing speed, executive functions, memory (primarily efficiency of initial encoding), and visuospatial processing. Although she reported few problems with daily functioning, [Ann]'s cognitive profile was consistent with a mild dementia syndrome and was suggestive of diffuse/multifocal brain dysfunction, likely due to cerebrovascular disease to a significant extent given her medical history.

         Dr. Ecklund-Johnson's recommendations included the statement: "Most individuals with similar neuropsychological profiles experience significant difficulty with complex activities of daily living, such as managing finances and medications."

         On February 13, 2017, Ann fell at her home and suffered an acute compression fracture of her back as a result of the fall. On February 17, 2017, four days after she fell but before she went to the hospital, Ann signed a first amendment to her trust that deleted her original trust's provision naming Respondents as successor trustees and replaced it with a provision naming Sean as the sole successor trustee. Ann was admitted to the hospital for intractable pain due to her spinal fracture on February 24, 2017.

         On February 27, 2017, Sean arranged for Ann's financial advisor to come to Ann's bedside in the hospital so that Ann could sign change of beneficiary forms naming Sean as 75% beneficiary and Travis as 25% beneficiary of her Prudential and Lincoln Financial accounts. At the time the financial advisor presented the documents for Ann to sign, he was aware of Dr. Russell's letter finding Ann incompetent, and he did not disagree with that finding.

         The day after Ann signed the change of beneficiary forms on her Prudential and Lincoln National accounts, a doctor at the hospital found Ann's speech was "unintelligible at times," that she "had difficulty recalling the date" and that barriers to her discharge from the hospital included her "[d]ecreased insight, cognitive impairment, [and] risk for falls." Shortly thereafter, on March 5, 2017, Dr. Patrick J. Murray, a psychologist, evaluated Ann and noted that she "presented with depressive symptoms, history of treatment for bipolar disorder, cognitive deficits, mild anxiety, and adjustment concerns." Dr. Murray further observed that she had confusion and memory loss and that a mental examination showed that she had "limited to poor insight."

         On April 3, 2017, Randy filed an application for appointment of a guardian and conservator for Ann. In his petition, Randy alleged that a guardianship was necessary because Ann was unable to receive and evaluate information or communicate decisions to such an extent that she lacked the capacity to meet essential requirements for food, clothing, shelter, safety, or other care such that serious physical injury, illness, or disease was likely to occur because of her physical or mental condition, which he described in detail. Randy further alleged that a conservatorship was necessary because Ann was unable to receive and evaluate information or to communicate decision to such an extent that she lacked the ability to manage her financial resources because of her physical or mental condition. Ann, who was represented by counsel, contested the guardianship and conservatorship.

         On May 18, 2017, while Ann was a patient at Liberty Health and Wellness nursing home, she signed a second amendment to her trust and a new will, both of which made Sean a 75% beneficiary and Travis a 25% beneficiary of her assets. That same day, Dr. Dennis Drews, Ann's physician who had been treating her since March 2017, examined her and determined that she was suffering from dementia and, likely, Alzheimer's disease. Ann was taking medication for dementia, along with medications for Parkinson's disease, delusions, hallucinations, and bipolar disorder. Dr. Drews noted that Ann was unable to answer questions and was incapable of making medical and financial decisions. In Dr. Drews's medical opinion, Ann did not have the capacity to be able to read, appreciate, and understand the second amendment to her trust and the new will she signed that day.

         Stephanie Ramirez, Ann's speech therapist, provided cognitive and speech/language therapy to Ann and interacted regularly with her between May 9, 2017, and May 22, 2017. When Ramirez initially examined Ann on May 9, 2017, she found Ann's cognition to be severely impaired. On May 18, 2017, the day Ann signed the second amendment to her trust and the new will, Ramirez noted that Ann's attention span was less than one minute and that she was "very distracted." Ramirez ultimately discharged Ann from therapy on May 22, 2017, due to Ann's non-compliance, decreased participation, and poor progress with the skilled therapy program. In Ramirez's "Analysis of Functional Outcome/Clinical Impression," she stated:

[Ann] continues to demonstrate poor judgment and limited insight into disease process. She often closes eyes throughout treatment session and requires up to 20 redirections throughout the session. She continues to present with severe cognitive deficits characterized by decreased memory. Poor sustained attention. Decreased problem-solving and variable levels of orientation alertness. No carryover of learning noted.

         In Ramirez's opinion, over the course of the two weeks that she treated Ann, Ann demonstrated severe cognitive decline.

         Meanwhile, in the guardianship and conservatorship proceeding, Ann's counsel and Randy's counsel entered into a stipulation on July 21, 2017, agreeing that an emergency existed that required the appointment of a temporary guardian and conservator. The parties stipulated to the court's appointing the Clay County Public Administrator as Ann's temporary guardian and conservator. Three days later, on July 24, 2017, the court entered a judgment finding that Ann was ...

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