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Krafczik v. Morris

April 13, 2009

JOSEPH KRAFCZIK, JR., ADMINISTRATOR OF THE ESTATE OF ALLAN H. KRAFCZIK, APPELLANT (PLAINTIFF),
v.
TANAYA MOON MORRIS, APPELLEE (DEFENDANT).



Appeal from the District Court of Albany County The Honorable Jeffrey A. Donnell, Judge.

The opinion of the court was delivered by: Burke, Justice.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

[¶1] In 2004, Allan Krafczik executed a Warranty Deed conveying to Tanaya Morris an interest in a rental property he owned in Laramie, Wyoming. The Warranty Deed established Mr. Krafczik and Ms. Morris as owners of undivided one-half interests as joint tenants with rights of survivorship. In late 2004, Mr. Krafczik's cousin, Joseph Krafczik, and his wife, Christine Krafczik, were appointed as guardians of Mr. Krafczik. The Krafcziks*fn1 filed suit on behalf of Mr. Krafczik against Ms. Morris, claiming that she had obtained the property interest through undue influence. After a bench trial, the district court ruled in favor of Ms. Morris. The Krafcziks appealed.

[¶2] While the litigation against Ms. Morris was pending, the Krafcziks executed a Quitclaim Deed on behalf of Mr. Krafczik, purporting to convey his joint tenancy in the property in exchange for a tenancy in common, with the express purpose of terminating rights of survivorship. The Krafcziks filed, in the conservatorship case, a motion for approval of that conveyance. Upon Mr. Krafczik's death, the district court dismissed their motion. The Krafcziks also appealed that decision, and the appeals were consolidated before this Court. We will affirm the district court in both cases.

ISSUES

[¶3] In the appeal of the adverse judgment on their claim of undue influence, the Krafcziks state these issues for our consideration:

1. On a claim of undue influence concerning an elderly landlord with Alzheimer's disease who deeds his family home to the renter of the property, did the trial court abuse its discretion in failing to find a confidential relationship between the parties?

2. Whether the trial court then abused its discretion in determining after trial that a confidential relationship did not exist between landlord and renter, where at the close of Plaintiffs' case the court had held that such relationship existed, and where Defendant presented no evidence to rebut the court's initial finding.

In the appeal in the conservatorship matter, the parties suggest a number of different issues. This one, somewhat reworded, is dispositive:

3. Whether a conservator requires court approval to convey the real property of the ward in order to sever a joint tenancy and eliminate rights of survivorship.

FACTS

[¶4] Allan Krafczik and his wife Kathy lived in Laramie, Wyoming, for many years. They had no children or other close family, but they were active in their community and had many friends and acquaintances. They owned their home, and also a rental property in Laramie, referred to as the Bradley Street Property. Located on the Bradley Street Property was a house that had been built by Mr. Krafczik's father, along with a smaller apartment that connected to the main house through a common utility room. In 1998, the main house on the Bradley Street Property was leased to Tanaya Morris and her sister Lay-nah,*fn2 who were both students at the university.

[¶5] After his wife passed away in early 1999, Mr. Krafczik developed a closer friendship with the Morris sisters. Tanaya Morris testified that she and Mr. Krafczik would talk often, see each other at least once a week, occasionally have meals together, and exchange holiday gifts. Near the end of 2003, Mr. Krafczik began asking Ms. Morris about her long-term plans, and in particular whether she intended to stay in Laramie. She told him that she expected to stay in Laramie at least until she completed her graduate degree, but was uncertain what she would do after that. In early 2004, Mr. Krafczik asked Ms. Morris if she would be "willing to take responsibility" for the Bradley Street Property "at some point in time." She said no, apparently in part because she was not certain what he meant.

[¶6] In May of 2004, Mr. Krafczik went to Ms. Morris's office and asked for her help in preparing a document he called a "Lease to Own Purchase Agreement." In general terms, the agreement provided that Ms. Morris would continue to rent the Bradley Street Property until Mr. Krafczik's death, and after that she would own the Bradley Street Property. She was surprised, and initially objected. He assured her that he appreciated the way she took care of his father's house, and liked the fact that she had left some of his mother's pictures in place. She agreed to prepare the document as he requested. It was signed by Mr. Krafczik and Ms. Morris on May 28, 2004.

[¶7] A few days later, Mr. Krafczik invited Ms. Morris to his home one evening. When she got there, he gave her a pad of paper, and asked her to walk through the house with him and take notes about what he wanted done with his personal property after his death. Ms. Morris suggested that it would be better if Mr. Krafczik engaged a lawyer to prepare his will. He asked if she knew one, and she suggested a lawyer in Cheyenne who had once been her college roommate.

[¶8] Ms. Morris was at Mr. Krafczik's home again the following week, when he mentioned a collection of photographs that he wanted to donate to a museum upon his death. Ms. Morris again suggested that he needed a lawyer to help him accomplish that, and he agreed to get the lawyer on the telephone. Ms. Morris spoke to the lawyer first to introduce Mr. Krafczik. Ms. Morris then left the room, went into the kitchen, and busied herself by washing up some dishes. She did not hear any of the conversation between Mr. Krafczik and the lawyer.

[¶9] A short time later, Ms. Morris received a fax from the lawyer, which included copies of a will, a living will, and two warranty deeds.*fn3 The will had been drafted to devise and bequeath Mr. Krafczik's entire estate to Ms. Morris. The living will had been drafted to designate Ms. Morris to make medical treatment decisions for Mr. Krafczik if he became incapacitated. The two warranty deeds had been drafted to convey Mr. Krafczik's home and the Bradley Street Property to Mr. Krafczik and Ms. Morris as joint tenants with rights of survivorship. Ms. Morris was surprised by these documents, and "very uncomfortable" with them. After work, she went to Mr. Krafczik's home to talk to him about the documents. He confirmed that he had asked the lawyer to draft the documents for his consideration, but noted that he could choose whether to sign them or not.

[¶10] On June 22, 2004, Mr. Krafczik called Ms. Morris at work and asked her to go to lunch. Over lunch, Mr. Krafczik showed her the Warranty Deed for the Bradley Street Property, and said "We're going to do this today." After some discussion, she insisted that the least she could do was to pay the attorney's fees for preparing the documents. Eventually, Mr. Krafczik asked if she knew where to get the Warranty Deed notarized, and Ms. Morris said there was a notary at the university police station. She took him there, where he signed the warranty deed, had it notarized, and gave it to Ms. Morris.

Ms. Morris filed the deed with the County Clerk's office on July 7, 2004.

[¶11] When Ms. Morris tried to pay rent to Mr. Krafczik after he had signed the Warranty Deed, he refused her offer of payment. He said, "We're done with that. We took care of that." She later made some payments they called "rent," but which she intended as reimbursements to Mr. Krafczik for taxes and insurance on the Bradley Street Property.

[¶12] Mr. Krafczik had a cousin, Joseph Krafczik, who lived in Laramie with his wife Christine Krafczik. The Krafcziks' relationship with Mr. Krafczik was cordial but not close. In October of 2004, the Krafcziks received a call from John Henberg, a long-time acquaintance of Mr. Krafczik. Mr. Henberg had gone to Mr. Krafczik's home to borrow a camera. He found the house uncharacteristically cluttered, and thought Mr. Krafczik seemed confused and forgetful. Mr. Henberg had experience with members of his own family who had suffered dementia, and he became concerned for Mr. Krafczik. He called the Krafcziks to express his concern.

[¶13] The Krafcziks went to Mr. Krafczik's house that same night, and found the house "really in disarray," with "papers and bills and newspapers and things just spread all over." They found unpaid bills and overdue notices. When they offered assistance in bringing the bills up to date, Mr. Krafczik agreed that he could use some help. With the advice of a lawyer in Laramie, they set up a voluntary conservatorship, with the Krafcziks acting as conservators for Mr. Krafczik. In addition to helping Mr. Krafczik with his bills, the Krafcziks helped him with medical matters. In late 2004, Mr. Krafczik was diagnosed as suffering from Alzheimer's disease.

[¶14] Among Mr. Krafczik's papers, the Krafcziks discovered the "Lease to Own Purchase Agreement" for the Bradley Street Property. When they asked Mr. Krafczik what it was, he told them he did not know, and denied that he had signed the document. The Krafcziks later discovered the Warranty Deed conveying the Bradley Street Property to Mr. Krafczik and Ms. Morris as joint tenants with rights of survivorship. Mr. Krafczik also said he had not signed that document. The Krafcziks also acquired copies of the will, the living will, and the Warranty Deed for Mr. Krafczik's home. These three documents were, apparently, unsigned.

[¶15] On June 9, 2005, the Krafcziks, as Mr. Krafczik's conservators, filed suit against Ms. Morris, claiming that she had obtained her interest in the Bradley Street Property through undue influence. A three-day bench trial began on August 20, 2007. The district court ruled in favor of Ms. Morris, entering its judgment on October 3, 2007. The Krafcziks appealed from that judgment, bringing the first of these two consolidated cases before us.

[¶16] While the litigation was pending before the district court, the Krafcziks continued acting as Mr. Krafczik's conservators. On September 6, 2005, the Krafcziks executed a Quitclaim Deed on behalf of Mr. Krafczik purporting to convey his joint tenancy interest in the Bradley Street Property back to himself as a tenancy in common. The document stated that the conveyance was "for the express purpose of terminating any joint tenancy with right of survivorship which may exist with regard to the property." Put another way, they meant to terminate Ms. Morris's right of survivorship so that, in the event of Mr. Krafczik's death, his half interest in the property would pass to his estate rather than to Ms. Morris.

[¶17] On July 21, 2006, the Krafcziks filed in the separate conservatorship matter a petition seeking the court's approval of the Quitclaim Deed and its transformation of Mr. Krafczik's joint tenancy into a tenancy in common. Ms. Morris filed an objection. The district court took no action on this petition, but the Krafcziks filed a subsequent motion on December 21, 2007. Ms. Morris again objected. The district court held a hearing on the matter on February 5, 2008. Mr. Krafczik died on February 16, 2008, before the district court issued a decision in the matter. The district court then dismissed the motion as moot, further stating in its order that the death of Mr. Krafczik "caused the vesting of Ms. Morris' joint tenancy with rights of survivorship." In other words, the district court determined that Ms. Morris, as the survivor, was the sole owner of the Bradley Street Property. The Krafcziks appealed from that decision, bringing the second of the two consolidated cases for our review.

STANDARD OF REVIEW

[¶18] "We review findings of fact made by the district court after a bench trial using a clearly erroneous standard." Campbell County School Dist. v. State, 2008 WY 2, ¶ 10, 181 P.3d 43, 49 (Wyo. 2008). A district court's findings are not entitled to the same degree of deference afforded a jury verdict. Accordingly, we do not limit our review solely to the evidence favoring the prevailing party, but instead consider all of the admissible evidence contained in the record. Still, a district court's findings are presumed correct, and we give due regard to the fact that the district court had an opportunity to assess the credibility of the witnesses and to weigh the disputed evidence. We set aside a district court's findings only if they are clearly erroneous. Addison v. Dallarosa-Handrich, 2007 WY 110, ¶ 8, 161 P.3d 1089, 1091 (Wyo. 2007). "A finding is clearly erroneous when, even though substantial evidence supports it, the reviewing court is left with the definite and firm conviction that a mistake was made." Campbell County, ¶ 10, 181 P.3d at 49.

[¶19] The dispositive issue in the Krafcziks' appeal in the conservatorship matter is whether Wyo. Stat. Ann. § 3-3-607(a) (LexisNexis 2007) required the Krafcziks to obtain the district court's approval for the conveyance of Mr. Krafczik's joint tenancy in exchange for a tenancy in common. "Statutory interpretation is a question of law, so our review is de ...


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