In re Estate of Chavez.
2022 COA 89. No. 20CA1125. Power of Attorney—Civil Theft—Breach of Fiduciary Duty—Unjust Enrichment—Promissory Estoppel—Treble Damages.
August 4, 2022
Marie Chavez lived on a 10-acre ranch and supported herself with monthly pension payments from her husband’s estate. She executed (1) a will that devised the ranch to her son Gilbert and his wife, and (2) a general durable power of attorney and a medical durable power of attorney designating Gilbert as her agent. Marie was placed in a rehabilitation and retirement facility, and Gilbert managed her finances and maintained the ranch. He expressed concerns to his sister Teresa and Marie’s attorney about Marie’s financial stability and her generosity to Gilbert’s sisters. Thereafter, at Marie’s request, Gilbert drafted and recorded a quitclaim deed transferring the ranch to Gilbert and his wife without consideration. He kept the transfer a secret from the rest of the family and did not reveal the transfer to Marie’s attorney until approximately 10 months after recording the quitclaim deed. Gilbert also changed the locks at the ranch and donated most of Marie’s personal property inside the house. He continued to use Marie’s money to maintain the ranch and later changed his status on Marie’s bank account from agent to joint owner. Teresa ultimately learned about the deed transferring the ranch to Gilbert. Marie asked to return to the ranch, but Gilbert refused the request, and when Marie’s attorney asked Gilbert to allow her to return to the ranch, Gilbert again refused. Marie later executed a general durable power of attorney and medical durable power of attorney naming Teresa as her agent. Teresa asked Gilbert for Marie’s bank records, which he refused to provide. Teresa then obtained the records from the bank and discovered that Gilbert had transferred more than $59,000 from Marie’s account into his commercial bank account. Teresa was subsequently appointed as special conservator for Marie and demanded return of funds that were used for expenses associated with the ranch and transferred from Marie’s bank account into Gilbert’s commercial bank account. Gilbert complied with the demand and paid Teresa’s attorney $70,901.17. The court later ordered Gilbert to allow Teresa access to the ranch to inventory Marie’s personal property, but when Teresa arrived, she was unable to locate any personal property because Gilbert had already donated most of it.
Teresa, as Marie’s conservator and personal representative to her estate, filed a petition to void the quitclaim deed and brought claims against Gilbert for breach of fiduciary duty, unjust enrichment, and civil theft related to the transfer of the ranch and the money transfers from Marie’s bank account. Gilbert asserted a cross-claim of promissory estoppel for the quitclaim deed. A jury returned verdicts for the estate on the breach of fiduciary duty and unjust enrichment claims. It also returned a verdict for the estate on the civil theft claim, but only for the money transferred out of Marie’s account. The jury returned a verdict in Gilbert’s favor on the promissory estoppel claim and declined to rescind or void the quitclaim deed. The court entered an order for the estate for breach of fiduciary duty and civil theft, awarding the estate $775,000 in damages. It then entered an order for Gilbert on the promissory estoppel claim and ruled that he could retain title to the ranch. The court declined to enter an order in the estate’s favor on the unjust enrichment claim and found that the award duplicated the awards on the breach of fiduciary duty and civil theft claims. The court further found that the estate and Teresa, as special conservator, were entitled to surcharges and awarded them attorney fees and costs on their successful claims. The court denied Gilbert’s request for attorney fees and costs.
On appeal, Gilbert argued that the trial court precluded him from presenting his theory of the case by erroneously rejecting his jury instructions on (1) undue influence, (2) capacity, (3) knowledge of an agent imputable to the principal, and (4) acknowledged deeds. However, any error in rejecting the proposed instructions was harmless because the jury found for Gilbert on the promissory estoppel claim, and he did not explain how the lack of these instructions prejudiced him. Further, undue influence and capacity are not elements of civil theft, and Gilbert was not precluded from arguing that he moved money from Marie’s account to his own account to protect it. None of the proposed instructions were relevant to the elements of breach of fiduciary duty and unjust enrichment. In addition, the jury agreed with Gilbert’s theory of the case that the quitclaim deed transferring the ranch to Gilbert was valid, and the trial court gave effect to the jury’s verdicts when it found that Marie intended to transfer the ranch to Gilbert by signing the quitclaim deed and that title to the ranch remained with Gilbert. Lastly, to the extent Gilbert contended that the jury should have decided all the claims asserted against him, any verdict on the equitable claims would have been advisory and thus not binding on the trial court. Therefore, the trial court did not abuse its discretion in rejecting the jury instructions.
Gilbert also contended that the jury’s verdicts in the estate’s favor on the breach of fiduciary duty, unjust enrichment, and civil theft claims were inconsistent with its verdict in his favor on the promissory estoppel claim. However, Gilbert’s counsel failed to object to the general verdicts before the jury was discharged, so he waived the inconsistent verdicts issue for purposes of appeal.
Gilbert also challenged the sufficiency of the evidence to support the breach of fiduciary duty, unjust enrichment, and civil theft verdicts. However, the record contains sufficient evidence that Gilbert (1) breached his fiduciary duty when he retained title to the ranch by way of the quitclaim deed, (2) was unjustly enriched by the transfer of the ranch without consideration and by the money transfers out of Marie’s account, and (3) obtained $70,901.17 of Marie’s funds with the intent to deprive her of those funds.
Lastly, Gilbert contended that, as the prevailing party on appeal, the trial court’s award of attorney fees and costs to the estate should be reversed. However, there was no error in the trial court’s order in the estate’s favor.
The estate contended that the trial court erred by deducting the returned funds from the jury’s damages award before trebling the damages. To be awarded treble damages, a plaintiff need only prove that the defendant committed acts constituting the statutory crime of theft. If a plaintiff proves the elements of civil theft by a preponderance of the evidence, the trial court lacks discretion to decline to award treble damages. Here, the court erred by deducting the $70,901.17 repaid to the estate from the jury’s damages verdict before trebling the actual damages; it should have first trebled the amount of actual damages and then subtracted the $70,901.17 repaid.
The award on the civil theft claim was reversed in part and the case was remanded to award the estate $212,703.51 in treble damages on that claim. The order was otherwise affirmed.