Articles
November 19, 2018

Andre Bouffard Wins Supreme Court Appeal for Niece Found Liable to Competent Uncle’s Estate

Andre Bouffard Wins Vermont Supreme Court Appeal

Taylor Glaze thought she was doing a good thing when she took her 91-year-old Uncle Emil Kuhling into her Vermont home when he found caring for himself and his deteriorating New York City home too much to handle. Her good will was later called into question by the executor of his estate, but vindicated by an important decision of the Vermont Supreme Court. DRM’s Andre Bouffard argued the successful appeal, resulting in reversal of a judgment against her for $1.8 million, and dismissal of the case.

Emil was a retired New York City fire fighter and life-long bachelor with no children of his own. Taylor and siblings Richard Kuhling and Suzan Hardin were his only heirs. Although Emil was elderly, he was entirely competent, and financially independent. 

After moving in with Taylor and her family in 2006, Emil considered several options for his vacant New York City home, which could not be rented due to its poor condition. Believing the property to be worth between $600,000 and $800,000, he asked Taylor to help him sell it. She agreed. After Emil decided against a third party sale, Taylor informed Emil and the other family members of her interest in acquiring the property. Richard told Taylor he thought a formal professional appraisal should be obtained by Emil before any transfer to her, but Emil decided against that. 

Emil consulted with an attorney about his plan to transfer the property to Taylor while retaining a life estate, which gave him formal legal control of the property during his lifetime. Emil and Taylor agreed  that she would pay $600,000 for the property, some of which ($300,000) was in cash to be set aside in a bank account for Emil’s two other heirs to receive on his death, some in the form of an advance to Taylor on her inheritance ($200,000), and some a credit against the expected cost of Emil’s housing and care ($100,000). Emil felt this was a fair and equitable arrangement for all his heirs, whom he wished to treat equally. Emil’s attorney drew up the legal papers, and Emil transferred the property to Taylor in 2007, subject to a life estate. This pleased Emil because it allowed him to remain a “New Yorker” in name, but Taylor would assume full financial responsibility for the property during his lifetime.

Neither of Taylor’s siblings ever talked with Emil about the 2007 property transaction before he died, although Taylor encouraged them to do so when they shared concerns about the transaction with her. When Emil died in 2013, Richard and Susan received the funds set aside for them, and Taylor obtained complete title to the property, ultimately re-selling it in 2014 for $720,000.

Unfortunately for Taylor, this was not the end of the story. Richard was appointed fiduciary for Emil’s estate, and filed suit against Taylor on behalf of the estate for breaching her alleged duties to Emil in connection with the 2007 property transfer. The estate asserted that Taylor had assumed the role of Emil’s agent by agreeing to help him sell the property, giving her the legal duties of a fiduciary. The estate also asserted that the property had a value of $1.15 million in 2007, based upon the opinion of an expert hired for purposes of the suit, who testified that, in her opinion, the property could have been sold for that much in 2007 for re-development purposes.  The estate claimed that Taylor breached her duties to Emil by acquiring the property without obtaining and giving Emil a contemporaneous appraisal in 2007, and suffered damages of $850,000, the difference between what the estate claimed the property was worth in 2007, and the cash amount paid by Taylor at that time. 

The 2017 trial before the Superior Court judge (not a jury) resulted in a judgment against Taylor of $850,000 plus more than $1,000,000 in interest. The trial judge concluded Taylor was Emil’s agent, and breached her fiduciary duties to him by accepting a transfer of the property without first obtaining and providing to Emil a contemporaneous appraisal. 

Andre Bouffard was retained to handle the appeal to the Vermont Supreme Court.

“Decisions by a trial judge (or a jury) are very difficult to overturn based on a judge or jury’s determination of the facts,” Bouffard explained. “That is because an appeals court does not re-hear the evidence and decide for itself who presents the more credible evidence. Rather, an appeals court takes the facts as found by the trial judge or jury, and must accept them unless they are simply not supported by any of the evidence. An appeals court has much more leeway in reviewing a trial court judgment based on legal error, such as improper admission or exclusion of evidence, or incorrect application of the law to the facts of the case. Convincing an appeals court that a legal error occurred is the most effective way to overturn a judgment on appeal.”

Bouffard’s arguments on appeal focused on the weakest parts of the trial court’s legal analysis and conclusions. The arguments focused on two flawed legal rulings by the trial court: that Taylor acted as Emil’s agent and fiduciary, and that she breached her fiduciary duties to Emil, despite the fact that he was a competent person who decided for himself he did not need another appraisal to make his decisions in 2007.

“Because Taylor clearly had some self-interest in the 2007 transaction, and the law imposes on fiduciaries strict limitations on their conduct in self-interested transactions with the person they act for,” Bouffard said, “it was necessary to  argue that Emil’s wishes and decisions should be honored by the court, despite Taylor’s self-interest.”

This strategy was successful. On July 27, 2018, the Supreme Court ruled that it did not need to decide if there was a fiduciary relationship because there was clearly no breach of fiduciary duty based on the facts found by the trial court. According to the Supreme Court, even a self-interest fiduciary in an intra-family transaction cannot be held liable if they take steps to make sure the principal (here Emil) has enough knowledge of the facts to be on “equal footing” with the alleged fiduciary. Looking at all the information Emil had obtained, his clear desires and actions in shaping the transaction, and his legal representation in the transaction, the Supreme Court concluded that Taylor did not breach any duty owed to him. Significantly, the Court observed that neither Emil nor Taylor had the benefit of any contemporaneous appraisal in 2007, and that Emil had discussed with his attorney whether to obtain one, but decided against it. It ordered that judgment be entered in favor of Taylor.

The trial lawyer who referred the appeal to Bouffard had this to say about the case and Bouffard’s appellate work:

“After a loss in a court trial, a longtime client of our firm was in shell shock.  The judgment including pre-judgment interest was about $1.8 million.  My advice was to appeal, and in the face of understandable questions from our client, asking how the Court could have decided the case the way it did and what I had failed to do, I suggested that the client should seek counsel with another attorney to handle the appeal.  I recommended Andre Bouffard. After interviewing Andre, he and his firm were hired to handle the appeal. 

Andre quickly reviewed the record of the case, that had spanned three years of litigation, grasped the issues, framed the arguments and filed the Appellant’s Brief, attacking the lower court’s application of the law to the facts.  It was a masterful presentation, as was Andre’s oral argument.  The Supreme Court reversed the award of damages and remanded the case back to the trial court to enter judgment in our client’s favor. 

Needless to say, the client was very pleased and quite happy that I had suggested Andre handle the appeal.  Andre really did snatch victory from the jaws of defeat, and restored my client’s faith in our firm.”

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