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Succession of Dean

Court of Appeals of Louisiana, First Circuit

March 29, 2018

SUCCESSION OF NETTIE LOIS DEAN

          On Appeal from The 32nd Judicial District Court, Parish of Terrebonne, State of Louisiana Trial Court No. 20739 The Honorable Randall L. Bethancourt, Judge Presiding

          Christopher H. Riviere Todd M. Magee Thibodaux, Louisiana Attorneys for Plaintiff/Appellee, Gerardo Perez, Independent Executor of the Succession of Lenda Dean

          Stanwood R. Duval C. Berwick Duval II Kathryn W. Richard Houma, Louisiana Attorneys for Defendants/ Appellants, Ken Serigne, Walter Cure IV, and Kristina Henderson

          Ronald W. Morrison Jr. Metairie, Louisiana Attorney for Intervenor/Appellee, Cherry Dean, Independent Executrix Of Succession of Nettie Lois Dean

          John D. Schoonenter, Houma, Louisiana Melanie M. Mulcahy Metairie, Louisiana Attorney for Defendants/ Appellees, Shawn Nettles and Alicia Nettles Attorney for Defendant/Appellee, Elevating Boats, L.L.C.

          Sharon M. Williams Gregory W. Rome Chalmette, Louisiana Attorneys for Defendants/ Appellees, Shawn Nettles Jr., Vivian Nettles, and Margo Carambat.

          BEFORE: GUIDRY, PETTIGREW, McDONALD, McCLENDON, WELCH, HIGGINBOTHAM, CRAIN, THERIOT, HOLDRIDGE, CHUTZ, AND PENZATO, JJ. [1]

          CRAIN, J.

         This litigation arises out of a will dispute. After a trial on the merits, the trial court found the testator had testamentary capacity; however, finding undue influence, the trial court invalidated certain bequests in the will. The legatees of the voided bequests appeal the judgment and also seek review of two interlocutory rulings, namely, the denial of both an exception of no right of action and a motion to remove the independent executrix. After en banc consideration, we affirm the judgment on the merits, affirm the denial of the motion to remove the independent executrix, and reverse the denial of the exception of no right of action.

         FACTS AND PROCEDURAL HISTORY

         Nettie Dean died on August 26, 2010, at the age of 62. She was survived by two sisters, Cherry Dean and Lenda Dean Perez; one brother, Douglas Dean; her parents, Lynn Dean and Jacquelyn Dean; and several nieces and nephews. The bulk of her estate consists of units of ownership in Elevating Boats, L.L.C. (EBI), a predominantly family-owned business started by her father where Nettie worked for many years as the chief financial officer and secretary. The disposition of Nettie's units of ownership in EBI is the crux of the dispute in this litigation.

         Ownership of the company is divided into two classes of units: "Class A" units, which carry all voting power, and "Class B" units, which have no voting power. Ten thousand Class A units were created, all of which were donated to Nettie by her parents in 2006. Nettie also owned over 25, 000 Class B units, representing slightly more than six percent of the total Class B units. On February 1, 2007, without the knowledge of her family, Nettie donated 1, 000 Class A units to Ken Serigne, the chief executive officer of EBI, and 1, 000 Class A units to Walter Cure, the company's vice-president. Her remaining 8, 000 Class A units, as well as all of her Class B units, were still owned by Nettie at the time of her death.

          Nettie executed three wills. The first, an olographic will, was signed on March 7, 2007, and bequeathed her Class A units as follows: 2, 000 units to each of three nephews, Troy Dean, Luke Dean, and Cy Dean, and 1, 000 units each to Serigne and Cure. Her Class B units are not mentioned in that will. Other beneficiaries and their respective legacies include a friend, Janet Kaleher ($50, 000), a nature conservancy (land in Arkansas), her sisters Cherry and Lenda (sterling silver), her brother Douglas (a vehicle, a storage trailer, and an RV travel trailer), and a small cash legacy to the caretaker of her pets.

         The second will, also in olographic form, was executed on March 29, 2010, and bequeathed all of Nettie's Class A units to her nephew Troy. Her Class B units were left to EBI to be administered by Serigne and Cure to reward EBI employees, except for a small number left to Troy's son, Jax Dean. This will also bequeathed her house and vehicle to Cherry, and a truck to EBI. Other than those changes, the remaining bequests were the same as the 2007 will.

         The last will Nettie executed is in notarial form and was signed by her on August 20, 2010, a few days before her death. Terminally ill from cancer and confined to a mattress on the floor, Nettie signed the will while several legatees named in the will stood nearby and observed, including Serigne and Cure. In this will, Nettie bequeathed her remaining 8, 000 Class A units to Serigne, Cure, Luke, Troy, and Cy, to be divided equally. Those same individuals were bequeathed Nettie's Class B units, except for separate bequests of 840 units, each, to Serigne's daughter, Kristina Henderson, and to Troy's son, Jax. Most of the remaining bequests are similar to the prior wills, except Nettie's house and a travel trailer were left to Alicia and Shawn Nettles (Douglas' daughter and son-in-law), and the funds in a certain brokerage account were to be placed in trust for Alicia and Shawn's children.[2] Nettie died six days later.

         Lenda filed a petition seeking to probate the March 29, 2010 will (March will) and challenging the validity of the August 20, 2010 will (August will), alleging Nettie did not have testamentary capacity when she signed the August will. Lenda further alleged that Cure, in violation of a relationship of trust, exerted undue influence on Nettie and caused her to sign the August will, which, when coupled with the previously undisclosed donations, resulted in Cure and Serigne acquiring a majority of the Class A units in EBI. Cherry, who was named executrix in both the March will and the August will, intervened in the proceeding and filed the originals of both wills with the court; however, she did not vouch for the authenticity of the August will and reserved her right to contest its validity. Per her request, Cherry was appointed independent executrix of Nettie's estate. Cherry later amended her petition of intervention to allege the August will was invalid due to Nettie's lack of testamentary capacity and was the subject of undue influence by Cure and Serigne. In the same proceeding, Cure, Serigne, and Henderson filed a petition to probate the August will. After all issues were joined, the competing claims proceeded to a five-day bench trial.

         The evidence at trial established that Nettie was extremely ill in the final weeks of her life. Diagnosed with cancer that metastasized to her brain, Nettie underwent brain surgery on April 7, 2010, followed by unsuccessful radiation. A CT scan on August 13, 2010, showed significant progression of the cancer and swelling of her brain. She was discharged home on August 17, 2010, under hospice care.

          Nettie's primary caretaker throughout her illness was her sister Cherry, with whom she had a close relationship. Nettie first mentioned the possibility of making changes to her will while she and Cherry were going to the hospital for the August admission. Nettie confided that she was considering giving her house to Alicia and Shawn, her niece and nephew-in-law. Cherry supported the idea and reassured Nettie that an attorney could help her prepare a will.

         The day after being discharged home, Nettie had a meeting at her house with Serigne, Cure, and their spouses. Sitting in a wheelchair, Nettie told the two EBI executives that she was thinking about leaving the rest of her Class A units to her nephew, Troy. Serigne, who Lynn Dean had once considered the most important person to the success of EBI, expressed reservations about working for Troy and said he would talk to Troy about the situation. Over the next two days, Serigne, Cure, and Troy had extensive discussions to, as described by Serigne, "come to a working arrangement ... [as to] how Nettie would ultimately distribute her Class A voting units." During their final meeting, which took place at EBI, the three "came up with a plan on how the A [units] would be left." During these discussions, Serigne and Cure never disclosed to Troy that Nettie had already donated 1, 000 of the Class A units to each of them.

         This final meeting was interrupted when someone informed them Nettie needed a notary at her house. Serigne, Cure, and Troy went directly to Nettie's house. The testimony is conflicting about whether Serigne and Cure were invited to the house-they testified they were told to get a notary and get to the house, while Cherry testified she specifically told them not to come to the house.

         They arrived to find Nettie lying on a mattress on her living room floor. In addition to Cure, Serigne, and Troy, several other people were in the house that morning, including Cherry; Alicia; Lynn Dean, who was suffering from severe dementia; Jacquelyn Dean, who was approximately 84 years old; Carl Heck Jr., a notary who previously had done work for the Dean family; and Gregory Schwab, Heck's nephew and an attorney with experience in preparing wills. Serigne had contacted Heck, who in turn called Schwab.

         At some point Cure said, "All right, let's get started" and began asking Nettie what she wanted in her will, taking notes while she spoke. The nature of Cure's interaction with Nettie is disputed; Cure testified he was merely ensuring Nettie's will would reflect her wishes, while Cherry testified that Cure was "standing over" Nettie and "feeding numbers to her, " which prompted Cherry to ask him to stop.

         Schwab, who was also involved in the discussions with Nettie, returned to his office with Heck and prepared drafts of the August will. When they returned to Nettie's house, they were met on the front porch by Cure, who reviewed the drafts of the will and made some corrections. Schwab proceeded to review the will with Nettie, with the following people present: Serigne, Cure, Troy, Alicia Nettles, Mr. and Mrs. Dean, and Heck, and Nicole LeBeouf, the Human Resources Manager for EBI, who was called by Serigne to be a witness to Nettie's will. Cherry was not present in the room. After being awake most of the night with Nettie, Cherry had fallen asleep in a back bedroom. Nettie asked for Cherry but was told she was asleep. When Schwab finished, he asked Nettie if the instrument correctly reflected her last wishes, and Nettie said yes. With her mother's help, Nettie signed the will.

         After hearing testimony from numerous witnesses, including several experts, the trial court found Nettie had testamentary capacity when she executed the August will, but the legacies to Serigne, Cure, and Serigne's daughter, Kristina Henderson, were the subject of undue influence and were void. A judgment was signed on November 7, 2016, declaring the legacies to Serigne, Cure, and Henderson to be null and void. Serigne, Cure, and Henderson appeal, assigning as error the trial court's (1) finding of undue influence and the annulment of the involved legacies, (2) denial of an exception of no right of action filed in response to Cherry's petition of intervention, (3) denial of a motion to remove Cherry as independent executrix, and (4) assessment of all costs to appellants.

         DISCUSSION

         Undue Influence

         Pursuant to Louisiana Civil Code article 1479, a donation inter vivos or mortis causa shall be declared null upon proof "that it is the product of influence by the donee or another person that so impaired the volition of the donor as to substitute the volition of the donee or other person for the volition of the donor." Such undue influence can result from physical coercion and duress, or more subtle influences such as creating resentment toward a natural object of a testator's bounty by false statements. See La. Civ. Code art. 1479, Revision Comment (b); In re Succession of Fisher, 06-2493 (La.App. 1 Cir. 9/19/07), 970 So.2d 1048, 1056. Mere advice, persuasion, or kindness and assistance should not constitute influence that would destroy the free agency of a donor and substitute someone else's volition for his own. See La. Civ. Code art. 1479, Revision Comment (b); Succession of Fisher, 970 So.2d at 1056.

         The influence may be exerted by the donee himself or by a third person, even under circumstances where the donee takes no part in the activities and may be unaware of them, as long as some person exercises control over the donor, presumably one who is interested in the fortunes of the donee. See La. Civ. Code art. 1479, Revision Comment (c); Succession of Himel v. Todd, 11-1638, 2012WL2921495, p. 4 (La.App. 1 Cir. 7/17/12), writ denied, 12-1878 (La. 11/9/12), 100 So.3d 839. While the influence must be operative at the time of the execution of the donation or testament, it is not necessary the acts themselves be done at that time, or the person exercising the pressure be present then. See La. Civ. Code art. 1479, Revision Comment (d); Succession of Himel, 2012WL2921495 at p. 4. When a donation is declared null because of undue influence, it is not necessary that the entire act of donation or testament be nullified. If any provision contained in it is not the product of such means, that provision shall be given effect, unless it is otherwise invalid. See La. Civ. Code art. 1480.

         Generally, a person who challenges a donation because of fraud, duress, or undue influence must prove it by clear and convincing evidence. However, if at the time the donation was made or the testament executed, a relationship of confidence existed between the donor and the alleged wrongdoer and the alleged wrongdoer was not then related to the donor by affinity, consanguinity or adoption, the person who challenges the donation need only prove the fraud, duress, or undue influence by a preponderance of the evidence. See La. Civ. Code art. 1483; Succession of Fisher, 970 So.2d at 1056. Here, Serigne and Cure do not contest they had a relationship of confidence with Nettie, arising out of many years of working together as executives for EBI, and they are not related to Nettie. Thus, the burden of persuasion for proving undue influence in this case is a preponderance of the evidence. See La. Civ. Code art. 1483.

         A trial court's finding of undue influence is fact intensive and cannot be disturbed on appeal in the absence of manifest error. See In re Succession of Alexander, 15-0722, 2015WL6951416, p. 4 (La.App. 1 Cir. 11/9/15); Succession of Himel, 2012WL2921495 at p. 6. Under the manifest error standard of review, a reviewing court may not merely decide if it would have found the facts of the case differently. Hayes Fund for First United Methodist Church of Welsh, LLC v. Kerr-McGee Rocky Mountain, LLC, 14-2592 (La. 12/8/15), 193 So.3d 1110, 1115. Rather, to reverse a trial court's factual conclusion, the appellate court must satisfy a two-step process based on the record as a whole: there must be no reasonable factual basis for the trial court's conclusion, and the finding must be clearly wrong. Hayes, 193 So.3d at 1115-16; Stobart v. State through Department of Transportation and Development, 617 So.2d 880, 882 (La. 1993). This test requires a reviewing court to do more than simply review the record for some evidence that supports or controverts the trial court's findings. The court must review the entire record to determine whether the trial court's finding was clearly wrong or manifestly erroneous.[3] Hayes, 193 So.3d at 1116; Stobart, 617 So.2d at 882.

         The trial court received testimony from eighteen witnesses, including four experts. The testimony covered a wide spectrum of information, including the formation, structure, and control of EBI; Nettie's involvement in the company and her respective relationships with the subject parties; Nettie's health and interactions with the parties in the last days of her life; and the actual drafting and execution of the August will.

         Some facts are not in dispute. The dire state of Nettie's health in the last two weeks of her life was uncontroverted. She had metastatic cancer that had spread to her brain, which was very swollen. According to her treating neurosurgeon, Nettie's brain was functional but not functional in a normal way; the disease likely impaired her judgment and memory. When she returned home from her final hospital admission on August 17, 2010, she was unable to walk into her house and fell on the front steps. Her condition deteriorated rapidly between August 17th and August 20th. Although she could answer questions and converse, Nettie was having trouble with hearing, following commands, and understanding numbers. She was frequently disoriented, would lose her train of thought, and hallucinated on one occasion. To make matters worse, Nettie had painful shingles on her face and scalp. After falling out of bed during the night of August 19th and being moved to a mattress on her living room floor, Nettie woke the next morning and told Cherry she did not think she would live through the day. By that time, Nettie, according to her mom, was "pretty helpless" and "was not our Nettie." Medical experts called by both sides agreed Nettie's condition made her susceptible to undue influence.

         It is also undisputed that Serigne and Cure, the CEO and vice-president, respectively, for EBI, met with Nettie at her house, at her invitation, on Wednesday, August 19, 2010, at which time Nettie informed them she was considering leaving her Class A units to her nephew, Troy. Serigne readily conceded at trial that he did not want Troy to get Nettie's remaining Class A units. Serigne's desire to control operations of EBI was well known and established. In 2005, Serigne informed Lynn Dean he would remain with the company only if he had total control and an ownership interest. As a result, Serigne was promoted from chief engineer to CEO, replacing Mrs. Dean's son, Douglas, as the company's top executive. Believing control of the company depended on the disposition of Nettie's units, Serigne responded to Nettie's announcement by expressing reservations about working for Troy, stating, "I don't know if I'm ready to work under Troy or anyone else in the family." Serigne said he would talk to Troy about the situation.

          After the meeting with Nettie, Serigne called Troy and had a lengthy conversation about the matter. That conversation was followed by a second telephone conversation and two meetings with Troy, all for the purpose, as confirmed by Serigne, "to come to a working arrangement... as to how . . . Nettie would ultimately distribute her Class A voting units." Cure similarly confirmed that he and Serigne "wanted a different disposition" of the Class A units; so Serigne, Cure, and Troy "came up with a plan on how the A shares would be left." Throughout these discussions, Troy erroneously believed they were talking about a division of all of the Class A units; at no time did Serigne or Cure ever disclose that Nettie had already donated 2, 000 of the units to them.

         A meeting was arranged with Nettie on Friday, August 20, 2010; however, prior to that meeting, Serigne, Cure, and Troy were meeting at EBI to discuss the matter, when they were informed Nettie needed a notary at her house. At this point, the testimony becomes conflicting.

         Cure and Serigne testified Cherry came to EBI to communicate this information and instructed them to get a notary. Troy testified someone, he could not remember who said Nettie was going to die and wanted to write a will. Cherry unequivocally denied leaving Nettie's house that morning and said she spoke to Cure by telephone, informing him that a business meeting that day, apparently scheduled at Nettie's house, was canceled. Cherry further testified she told them, "Please ...


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