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DANNY L. LOWREY v. IN THE MATTER OF THE LAST WILL AND TESTAMENT OF LOIS ELIZABETH VINSON SMITH

MARCH 29, 1989

DANNY L. LOWREY
v.
IN THE MATTER OF THE LAST WILL AND TESTAMENT OF LOIS ELIZABETH VINSON SMITH, DECEASED



BEFORE HAWKINS, P.J., PRATHER AND ROBERTSON, JJ.

HAWKINS, PRESIDING JUSTICE, FOR THE COURT:

This is an appeal from a decree of the chancery court of Lafayette County entered on December 23, 1986, finding that

Danny L. Lowrey (Lowrey), attorney, breached a fiduciary relationship with David Carter Smith and Lois Elizabeth Vinson Smith (David and Lois) and failed to overcome the presumption of undue influence thereby necessitating the return of funds taken by Lowrey taken from a checking account on which the names of David Smith, Lois Smith and Danny Lowrey were all listed with right of survivorship. The estate of Lois Smith through M. B. Spencer, administrator de bonis non, cross-appeals a separate judgment entered on January 26, 1987, finding the estate owed Lowrey $6,666.66 on an unpaid claim for attorney's fees.

 The issues we address on direct appeal are whether the chancellor erred in denying Lowrey's defense of wrong venue, and that venue should have been changed from Lafayette County to Alcorn County, the county of Lowrey's residence; and in holding the presumption of undue influence required that Lowrey restore the funds he removed for his personal use from the joint checking account. We find no error on the direct appeal and affirm.

 On the cross-appeal we likewise affirm.

 FACTS

 Between 1976 and 1979 Lowrey attended the University of Mississippi Law School in Oxford. He, his wife Mary Ann and six-month-old son lived in a duplex in Oxford. Living in the other section of the duplex were Katie Bell and Eleanor Lindenburger, elderly aunts of Lois. During visits with these aunts by David and Lois, Lowrey and Mary Ann became acquainted with and eventually became close friends of David and Lois.

 Following graduation from law school in 1979, Lowrey and his family moved to Alcorn County. However, they kept in frequent and close contact with the Smiths. Additionally, Lowrey performed legal services for the Smiths including advising the Smiths on their wills and preparing codicils thereto in November, 1979; opening an estate of which Lois was executrix in February, 1980, and closing the same in August, 1980; preparing new wills for the Smiths in April, 1981; representing the estate of David following his death in July, 1985, with Lois as executrix; and representing Lois on an insurance claim in July, 1985. Lowrey was paid for all of these services, with the exception of the insurance claim, discussed infra.

 According to Lowrey, in early 1985 Lois had become concerned that either she or David, who had Alzheimer's disease, might become incapacitated and be unable to care for

 themselves. Consequently, she approached Lowrey about agreeing to care and provide for the Smith should something happen to one or the other of them. Lowrey suggested to Mrs. Smith that she have a conservatorship set up; however, when Lois asked Lowrey could she be guaranteed that he would act as conservator, Lowrey advised her that there was no guarantee of this and that a family member might be chosen over him. Consequently, Lois chose not to have a conservatorship set up. Instead she invited Lowrey and Mary Ann to her house on February 25, 1985, and then presented Lowrey with a signature card on the Smith's joint checking account at the First National Bank (the Bank) in Oxford, #33-369-7. Lowrey signed the signature card giving him right of survivorship so, as he testified, that he could take money out of the checking account to care for Lois and David should they either or both become incapacitated. Specifically, according to Lowrey, if one of the Smiths died and the other was unable to care for himself or herself, then Lowrey was to write checks on the account to provide the welfare and upkeep of the survivor, and further, if any money remained in the account following both of the Smiths' deaths, Lois told Lowrey it would belong to him. Lowrey stated he did not know or ask how much money was in the account when he signed the signature card. Lowrey testified that on the day he signed the signature card, February 25, 1985, both Lois and David were aware of what they were doing and what they were asking Lowrey to do, and both agreed that they wanted Lowrey's name signed on the account with right of survivorship.

 Subsequently on July 22, 1985, David died of a gunshot wound to the chest. He was alone in his bedroom at the time of the shooting and there was a question as to whether or not the wound was self-inflicted. Lowrey agreed to represent the estate and Lois as executrix of David's estate, and for this, he was paid a $300 retainer fee. Thereafter, on July 31, 1985, while at Lois's home, Lowrey was presented with a life insurance policy from Allstate Insurance Company (Allstate) on David in the amount of $20,000. Lois, noting a suicide exclusion clause, questioned Lowrey as to whether or not she would be able to make a claim from Allstate. Lowrey, stating that he knew the law in Mississippi regarding suicide exclusion clauses, told Lois that he believed that he could get a payment from Allstate. However, believing that the proceeds from this policy were separate from David's estate and consequently would pass out of the will, he felt a separate fee arrangement should be set up for this service. Consequently, on this day, July 31, 1985, according to Lowrey, Lois agreed to an oral contract of a one-third contingency fee of any amount which Allstate might agree to pay on the insurance policy. Thereafter, between July and November,

 1985, Lowrey investigated the death of David by going to the Oxford Police Department, speaking with investigating officers, looking at and receiving reports on David's death and talking with Lois about the day of the shooting and events thereto. He also contacted Allstate and made a claim under the life insurance policy. On November 8, 1985, Lowrey received a telephone call from an Allstate representative stating that Allstate would pay the full $20,000 claim. The next day, November 9, 1985, Lois, who was then in a hospital in Memphis died. On November 11, 1985, Lowrey received written confirmation from Allstate that they had agreed to pay the $20,000 claim.

 On November 19, 1985, Lowrey probated Lois's will. Under the terms of the will, Lowrey's wife Mary Ann acted as executrix. On November 20, 1985, Lowrey went by the Bank in Oxford, MS, and had the checking account #33-369-7, which had $12,012.05 in it, changed solely to his name.

 Following Lois's death, Lowrey wrote five checks covering expenses such as funeral bills and medical bills on Lois. Also, during November and December, 1985, Lowrey made two separate withdrawals from the account in the amounts of $7,000 and $4,700, which he transferred to his own account in a bank in Alcorn County. Lowrey stated these two withdrawals were for his personal use. *fn1

 Sometime following the probating of Lois's will, the residuary legatees began calling Lowrey and complaining because he had taken money out of the checking account and because Mary Ann was executrix. *fn2 Accordingly, on December 27, 1985, Lowrey and Mary Ann petitioned the chancery court to withdraw as counsel and executrix respectively. Thereafter, on December 30, 1985, M. B. Spencer, brother-in-law of David Smith, was made administrator d.b.n.

 The Administrator filed a complaint to require Lowrey to give an accounting of the funds in the joint checking account.

 Lowrey also probated a claim against the estate for $5,000 under his contract with Lois, later amended to $6,666. In his answer to the complaint, Larry raised the defense of wrong venue. The chancellor reserved ruling on the venue question.

 At the hearing in chancery court held on November 5, 1985, Mrs. M. B. Spencer (Lucille Smith Spencer), a residuary legatee and sister of David, testified that in February, 1985, Lois had asked her to put her name on a joint bank account in case either she or David became incapacitated.

 However, a few days later, Lois told Mrs. Spencer that Lowrey had agreed to do it. Mrs. Spencer further stated that David was not always competent around the time of his death as he was suffering from Alzheimer's disease. Frances Hilbun, Judge L. Breland Hilbun and Frank S. Smith, Jr., also testified and stated that following the funeral of Lois, her heirs were called by Lowrey to meet at the funeral home. At this meeting Lowrey explained that he owned the funds in the bank account as his name was on the account with right of survivorship and, further, that his wife Mary Ann was acting executrix of the estate. These witnesses also testified that at this meeting Lowrey stated that the bank account contained $4,000, when actually there was over $12,000. At trial, however, Lowrey explained this $4,000 figure came from a telephone call from Frank Smith subsequent to the funeral during which Lowrey told Smith $4,000 remained in the account, as by this time Lowrey had already withdrawn $7,000 and transferred that to Alcorn County.

 He also told the heirs about the life insurance policy on David, his one-third contingency fee contract with Lois, and that the insurance company was paying the claim of $20,000.

 Following the hearing on November 5, 1986, the chancellor found that Lowrey, although not committing any civil or criminal wrong, had acted unwisely, had breached a fiduciary relationship with David and Lois Smith, and had failed to overcome the presumption of undue influence thereby necessitating the return of the $11,700 which he had transferred to Alcorn County from the bank account in Oxford.

 The chancellor found that Lowrey had waived his right to have the venue changed from Alcorn County by failure to timely make a motion to change the venue.

 Finally, the chancellor found that Lois and Lowrey had entered into a valid oral contract whereby Lois obligated herself to pay unto Lowrey one-third of all funds received under the insurance policy, and allowed his claim for $6,666.

 LAW

 I. VENUE QUESTION

 In Mississippi venue is controlled by statute. Specifically, venue in chancery courts is controlled by MCA 11-5-1 (1972) which states the following:

 11-5-1. Venue of Suits.

 Suits to confirm title to real estate, and suits to cancel clouds or remove doubts therefrom, shall be brought in the county where the land, or some part thereof, is situated; suits against executors, administrators, and guardians, touching the performance of their official duties, and suits for an account and settlement by them, and suits for the distribution of personalty of decedents among the heirs and distributee, and suit for the payment of legacies, shall be brought in the chancery court in which the will was admitted to probate, or letters of administration were granted, or the guardian was appointed; other suits respecting real or personal property may be brought in the chancery court of the county in which the property, or some portion thereof, may be; and all cases not otherwise provided for may be brought in the chancery court of any county ...


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