Moulton v. Moulton, corrected 8-11-98
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MAINE SUPREME JUDICIAL COURTReporter of Decisions
Decision:1998 ME 31
Docket:Cum-97-155
Argued:	December 1, 1997
Decided:	February 13, 1998


Panel:WATHEN, C.J., and ROBERTS, CLIFFORD, RUDMAN, DANA, LIPEZ, and
SAUFLEY, JJ.

AMILE MOULTON

v.

GENE MOULTON, et al.

WATHEN, C.J.


	[¶1] Defendants Gene and Thomas Moulton,{1} the son and nephew
respectively of plaintiff Amile Moulton, appeal from the judgments entered
in favor of plaintiff Amile Moulton in the Superior Court (Cumberland
County, Mills, J.).  The judgments were based on a jury verdict finding that
defendants breached their fiduciary duty, intentionally inflicted emotional
distress, and trespassed.  Defendants also appeal from the court's
subsequent judgments reforming their warranty deed and imposing a
constructive trust on the real estate in question.  They argue inter alia that
there was no evidence to support the jury verdict.  They contend that they
were not in a confidential relationship with Amile and, therefore, they were
not subject to any fiduciary duty.  We agree and vacate the judgments.
	[¶2] The facts may be summarized as follows: The case involves a
dispute over the family home.  Amile is more than eighty years old and has
lived in the family home for over fifty years.  He and his wife, Margaret,
raised their two children, twins named John and Gene, in the house and
Amile currently lives there alone.  In 1982 as Margaret's health
deteriorated, they decided to move her into a nearby nursing home.  Amile
testified that before Margaret entered the nursing home, they decided to
convey their home to their adult sons "so that the nursing home wouldn't
get it." This decision was made in spite of the fact that Amile's relationship
with his son Gene was acrimonious.  At the time of the transfer, the sons
were not consulted, Amile was represented by counsel, and no money
changed hands.  Amile testified that the deed was a gift from him and his
wife to his sons.  He testified that even though he had conveyed his home
outright, it was his understanding that he could live there for as long as he
wanted.   There was no evidence of any basis for his understanding at the
time of the transfer.  Both defendants acknowledged that they understood
that the purpose of the transfer was to keep the State from taking the house. 
Margaret died in 1984.
	[¶3] Although the relationship between the parties has been difficult,
Amile has lived in the house ever since title was transferred in 1982.  John
Moulton died in 1993 and his interest in the house passed to his wife,
Glenna Moulton.  Later, she conveyed her interest to her son, Thomas
Moulton.  In 1995, a dispute developed concerning the payment of taxes and
insurance premiums.  According to defendant Gene Moulton, his brother
John and Amile had a verbal agreement that plaintiff could live in the house
as long as he was able to take care of himself and pay the taxes and
insurance.  Although it is unclear whether Amile ever actually refused to
make those payments, defendants made written demands on him, first for
taxes and then for rent.  One month later, defendants sent him a notice of
eviction. 
	[¶4] Amile responded with a nineteen count complaint, and eventually
three issues were submitted to the jury:   whether defendants abused a
confidential relationship and breached their fiduciary duties, whether they
intentionally inflicted emotional distress, and whether Thomas trespassed
on Amile's land.  The jury found for plaintiff on all issues and awarded a total
of $84,000 in compensatory damages and $10,000 in punitive damages. 
Relying on the jury's findings, the court ordered reformation of the deed to
grant Amile a life estate and imposed a constructive trust.  Defendants'
motion for judgment as a matter of law on the issues submitted to the jury
was denied.  This appeal followed.  

I.

	[¶5]  At trial, Amile's principal theory of recovery was his claim that
defendants abused the confidential relationship that existed between them
and breached their fiduciary duties.  As we recently noted in Estate of Mary
Campbell, "[t]he salient elements of a confidential relationship are the actual
placing of trust and confidence in fact by one party in another and a great
disparity of position and influence between the parties to the relation."
Estate of Mary Campbell, 1997 ME 212, ¶ 8,    A.2d    .  The fact that the
parties are family members will not, without more, establish a confidential
relationship.  Id.  Thus, in order to recover, Amile was required to prove by
a preponderance of evidence that he placed his trust in his sons and that
they were capable of exercising influence over him at the time he signed the
deed to his home.
	[¶6] Reviewing the record, we find insufficient evidence to support
the verdict.  Amile testified that he "never trusted [his son] Gene," and
specifically did not trust Gene at the time he transferred his home. He
confirmed that he never discussed his plans with Gene before the deed was
signed.  Although Amile's health has deteriorated over the years, there was
no evidence that his health rendered him vulnerable or placed him in an
inferior position to his sons in 1982.  Simply put, the record reveals that
Amile, represented by counsel and in the complete absence of any influence
of his sons, conveyed his home to them in an effort to protect it from
serving as a source of payment for medical bills.  He now invokes the
protection of the courts to avoid the legal consequences of that transfer.  In
the absence of any evidence of a confidential relationship, a court is without
authority to shield him from the legal effect of his own deed.  
	[¶7] Because there is insufficient evidence to support the finding that
defendants abused a confidential relationship and breached a fiduciary duty,
we must vacate the damage award on all counts.  Even though Amile's claims
of intentional infliction of emotional distress and trespass could
independently support a damage award, the jury's erroneous finding taints
the entire award.  The erroneous conclusion that there was a confidential
relationship could have influenced the jury's consideration of defendants'
conduct.  The trespass action was secondary to all other claims and could
not independently support damages in the amount awarded.

II.

	[¶8] Following the jury verdict, the court imposed a constructive trust
on the property.  It is correct that an abuse of a confidential relationship
resulting in a benefit to the wrongdoer may give rise to a constructive trust
so that "equity may lay its hands on the very thing and wrest it from the
possession of the wrongdoer." Ruebsamen v. Maddocks, 340 A.2d 31, 37-8
(Me. 1975).  Because we have concluded that there was no confidential
relationship between the parties, that basis for imposing a constructive trust
disappears. 
	[¶9] In the absence of fraud or any undue influence, the only basis for
the court's order reforming the deed to impose a life estate is mutual
mistake of fact.  Bryan v. Breyer, 665 A.2d 1020, 1022 (Me. 1995).  A mutual
mistake of fact must be shown by clear and convincing evidence.   Lietz v.
Berry, 543 A.2d 367 (Me. 1988).  "A mistake of fact is said to exist when
some fact which really exists is unknown, or some nonexistent fact is
supposed to exist." Blue Rock Indus. v. Raymond Int'l, Inc., 325 A.2d 66, 77
(Me. 1974)
	[¶10] There is no evidence in the record before us that the parties
suffered from any mutual mistake of fact.  All parties understood the motive
for the transfer, but beyond that there was no mutual understanding other
than that which is reflected in the deed.  If Amile was mistaken, his mistake
was one of law, i.e, he misunderstood the legal effect of an outright and
unconditional transfer of his home.
	[¶11] Finally, we reject Amile's argument that gratuitous conveyances
may be set aside on the basis of a unilateral mistake of fact or law, even in
the absence of any inequitable conduct on the part of the grantee.  Brinker v.
Wobaco Trust Ltd., 610 S.W.2d 160 (Tex. Civ. App. 1980); Tyler v. Larson,
235 P.2d 39, 41 (Cal. Ct. App. 1951); Westcott v. Westcott, 259 N.W. 2D 545,
548 (Iowa Ct. App. 1977).  We adopt the reasoning of the Supreme Court of
Virginia  and conclude that a deed of gift may not be reformed due to the
grantor's unilateral mistake in understanding the legal effect of the deed
unless the grantor can demonstrate inequitable conduct on the part of the
grantee.  Hill v. Brooks, 482 S.E.2d 816 (Va. 1997).  See also Poling v.
Northup, 652 A.2d 1114, 1116 (Me. 1995), Lietz v. Berry, 543 A.2d 367,
368 (Me. 1988) (ruling that when only one party misunderstands the effect
of a deed, reformation is not available); c.f. Weeks v. Weeks, 650 A.2d 945,
947 (Me. 1994); Lalime v. Lalime, 629 A.2d 59, 60-61 (Me. 1993) (grantor's
motive for transferring property to wife in joint tenancy does not overcome
the presumption of a gift to the martial estate created by the deed).  We
decline to subject every deed of gift to a claim that the grantor
misunderstood the significance of a fee simple conveyance by warranty deed. 
On this record, the court erred in reforming plaintiff's deed to reserve a life
estate.
	The entry is:
Judgment vacated.  Remanded to the Superior Court
for entry of judgment in favor of defendants with
respect to claims for breach of fiduciary duty, deed
reformation, and constructive trust.  The claims for
intentional infliction of emotional stress and trespass
are remanded for further proceedings consistent
with the opinion herein.
Attorney for plaintiff:

John G. Connor, Esq., (orally)
415 Congress Street, Suite 204
Portland, ME 04101

Attorney for defendants: 

Timothy E. Robbins, Esq., (orally)
470 Forest Avenue, Suite 300
Portland, ME 04101