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Davis v. Davis

Supreme Court of Virginia

December 5, 2019

RAE LEE DAVIS
v.
J. GARNETT DAVIS, JR., ET AL.

          FROM THE CIRCUIT COURT OF WYTHE COUNTY Josiah T. Showalter, Jr., Judge

          OPINION

          S. BERNARD GOODWYN, JUSTICE

         In this appeal, we consider whether a power of attorney document provided an attorney-in-fact with the authority to gift a principal's real and personal property.

         I. Background

         Samuel Dickey Davis (Dickey) trained horses for most of his life at his family's farm in Wytheville, Virginia. In 1993, when he was in his late forties, Dickey suffered an accident that left him a quadriplegic.

         After the accident, on September 25, 1993, Dickey signed a durable power of attorney document giving his mother, Agnes Davis (Agnes), the power to

transact for [Dickey], in [his] name, place and stead, all business for [Dickey] that [he] could do if acting personally; to endorse checks, write checks, make deposits in banks or other financial institutions . . . to receive any monies due [to Dickey] and receipt for the same, to renew any savings account, certificate of deposit or other time deposit; to sell and convey any and all personal property and all real property [Dickey] may own and execute and deliver an instrument for the same; . . . and to execute and perform all and every act or acts, thing or things in law needful and necessary to be done in and about [Dickey's] affairs, as fully, largely and amply, and to all intents and purposes whatsoever as [Dickey] might or could do if acting personally . . . .

(Emphases added.)

         Agnes subsequently added an addition to her house to accommodate Dickey. After returning from the hospital, Dickey moved into the addition, and Agnes, along with Susan Goforth (Susan) who is Agnes' daughter and Dickey's sister, began tending to Dickey's physical and medical needs on a daily basis. Rae Lee Mills (Rae), [1] who had been working on the family farm as an employee, also eventually began to help take care of Dickey.

         On April 21, 2005, Dickey executed a will that named Garnett Davis (Garnett), who is Dickey's brother, as executor. Under the terms of his will, Dickey bequeathed to Agnes all of his household furnishings and gave Garnett the proceeds of the sale of "the property which I inherited from the J. Garnet Davis Estate." He also gave the sale proceeds from one of his houses to the Wytheville Presbyterian Church, and left Rae several parcels of his real estate, his horse equipment, his trucks, and all money and bank deposits he held on the day of his death.[2]He left the residue of his estate to Garnett. Rae, Agnes, Garnett, and Susan were unaware of the will at the time of its execution.

         In August 2010, Rae moved into Dickey's home in order to continue tending to him. In May 2013, Dickey fell ill. He was hospitalized and subsequently moved to Greystone Healthcare Center (Greystone), which is a nursing facility in Tennessee. Between August and October 2013, Dickey suffered brief periods of confusion because of his illness.

         During the period that Dickey was at Greystone, Rae and Dickey contemplated marriage. Without contacting Agnes and without any of the Davis family present, Dickey and Rae got married on October 1, 2013, in a closed-door ceremony conducted in Dickey's room at Greystone. On October 15, 2013, Agnes learned of the marriage from a friend who noticed that Rae had changed her last name from Mills to Davis on a popular social media website.

         Later in October, Dickey's medical condition worsened and he was transferred to a hospital. On October 25, 2013, Dickey triggered a "code blue," which indicated that he was incapacitated and in jeopardy of dying. The hospital staff informed Dickey's family members, including Agnes, of Dickey's condition.

         On October 31, 2013, using the power of attorney Dickey had given her, Agnes transferred the vast majority of Dickey's personal property to herself. She also executed three deeds of gift transferring all of Dickey's real property to Susan and Garnett. The value of the property subject to these transfers was over $2 million. Agnes did not inform Dickey of these transfers. Dickey subsequently passed away on November 15, 2013.

         On February 10, 2016, Garnett, in his capacity as executor of Dickey's will, filed a complaint in the Circuit Court of Wythe County on behalf of Dickey's estate (Estate). The complaint requests the circuit court's aid and direction regarding the validity of Agnes' transfers of Dickey's property just prior to his death and the interpretation of Dickey's will; more particularly it requested interpretation of the phrase "property which I inherited from the J. Garnet Davis Estate" used in the will. Susan, Agnes, Garnett in his individual capacity (collectively, the Family), Rae, and Wytheville Presbyterian Church are named as defendants in the lawsuit.

         The circuit court held a bench trial in February 2017 to determine whether Agnes' transfers of Dickey's property were validly authorized by the power of attorney document Dickey signed. At trial, the Family submitted a November 19, 2015 deposition of Agnes into evidence. In the deposition, Agnes testified that she learned of Dickey's will in 2008, but she did not know of its contents. She stated the will surprised her because Dickey "wasn't in the mood of giving [his property] to anybody" and Dickey had previously told her that he wanted his property to go to the Davis family. She testified that she executed the transfers of Dickey's property to protect it for Dickey and to have it in "safer hands" until things cleared up with his health.

         The Family also called Burt Honaker (Burt), Rae's son from a prior marriage, who testified that Dickey gave him a 90-year lease on one of Dickey's properties in 2008. Burt made a one-time payment of $1, 000 for the lease, and testified that he is responsible for and has paid taxes on the leased property. Burt also testified that, when he sought a loan to build a barn on the leased property, Dickey allowed the leased property to be used as collateral for the loan.

         Garnett also testified on behalf of the Family, stating that he remembered that Dickey wrote him a check once for $10, 000 as a gift some time "between 1990 and forward." He recalled that it "might have been before [Dickey] got hurt." Garnett admitted that Dickey had never transferred or given any other property to him.

         At the conclusion of the evidence, the circuit court directed the parties to submit their closing arguments in written briefs. In her closing argument brief, Rae contended that Dickey's power of attorney did not authorize Agnes' transfers. She argued that Agnes' authority to "sell and convey" Dickey's property does not include the power to make gifts. Rae further contended that, even if the power of attorney authorized Agnes' transfers, Code § 64.2-1638(B) limits such gifts to $14, 000 per person per year, and the value of the property in Agnes' transfers grossly exceeded that amount. The Family submitted a brief arguing that Agnes' transfers were valid under the power of attorney document's grant of authority to Agnes to "sell and convey" Dickey's property.

         On July 13, 2017, the circuit court sent the parties a letter opinion holding that the property transfers made by Agnes were valid. It concluded that Agnes was authorized by the language in the power of attorney to "sell and convey" Dickey's property, which allowed her to gift Dickey's property. Additionally, the circuit court concluded the power of attorney document and Code § 64.2-1622(H) gave Agnes authority to make gifts in accordance with Dickey's donative history. The circuit court found that Dickey "had a personal history of making lifetime gifts," which included the 90-year lease to Burt for "little to no consideration," the collateral he offered to support Burt's loan, and the $10, 000 Dickey gave Garnett, and the court found Agnes' transfers of Dickey's real and personal property were in accordance with that personal history of lifetime gifts. The circuit court ruled that the gift-giving limit in Code § 64.2-1638(B)(1) did not apply to Agnes' Code § 64.2-1622(H) authority.

         Additionally, the circuit court found that Dickey's will was valid. It concluded that Agnes was aware of the will's existence as of 2008, but did not know its contents.

         On November 21, 2017, the circuit court entered an order awarding judgment in accordance with its letter opinion. The circuit court also held that, in light of its rulings, the issue as to the meaning of the phrase "property which I inherited from the J. Garnet Davis Estate" and any other remaining issues concerning ...


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