Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Mardigian Estate

Supreme Court of Michigan

June 21, 2018

In re MARDIGIAN ESTATE.
v.
MELISSA GOLDBERG, SUSAN V. LUCKEN, NANCY VARBEDIAN, EDWARD MARDIGIAN, GRANT MARDIGIAN, and MATTHEW MARDIGIAN, Appellants, MARK S. PAPAZIAN, Executor for the Estate of ROBERT DOUGLAS MARDIGIAN, Appellee, and JP MORGAN CHASE BANK, NA, Appellee.

          Argued December 6, 2017

          Chief Justice: Stephen J. Markman Justices: Brian K. Zahra Bridget M. McCormack David F. Viviano Richard H. Bernstein Kurtis T. Wilder Elizabeth T. Clement

         SYLLABUS

         Attorney Mark S. Papazian submitted in the Charlevoix County Probate Court the will and trust he had drafted for the decedent, Robert D. Mardigian, who was an unrelated friend. Melissa Goldberg, Susan Lucken, and others contested the documents on the ground that Papazian had drafted them in violation of the Michigan Rules of Professional Conduct (MRPC) because they made Papazian and his children the recipients of the bulk of the decedent's estate in contravention of public policy and MRPC 1.8(c), which generally prohibits an attorney from preparing an instrument that gives the attorney or his or her close family a substantial gift. The court, Frederick R. Mulhauser, J., granted partial summary disposition in favor of the challengers, and Papazian appealed, arguing that Michigan did not recognize a per se bar on testamentary gifts to unrelated attorneys and that a breach of MRPC 1.8(c) supplied a basis only for invoking the attorney disciplinary process, not for automatically voiding a trust or will. The Court of Appeals, Wilder, P.J., and Stephens, J. (Servitto, J., dissenting), reversed, holding that, under In re Powers Estate, 375 Mich. 150 (1965), the documents were not necessarily invalid, but Papazian was required to overcome a presumption of undue influence arising from the attorney-client relationship in order to enforce them. 312 Mich.App. 553 (2015). The challengers applied for leave to appeal in the Supreme Court, which ordered and heard oral argument on whether to grant the application or take other peremptory action. 499 Mich. 973 (2016). After hearing oral argument, the Supreme Court granted the application for leave to appeal. 500 Mich. 1030 (2017).

         The judgment of the Court of Appeals was affirmed by equal division.

         Chief Justice Markman, joined by Justices Zahra and Clement, writing for affirmance, stated that, under the applicable provisions of the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq., and the underlying principles of probate law, the rebuttable presumption of undue influence articulated in Powers should apply to these circumstances. A new per se rule that would prohibit an attorney from drafting an instrument that names himself or herself as a beneficiary would not only be contrary to the fundamental principles of probate law and longstanding precedents of this state, but would also run afoul of EPIC, whose underlying purposes and policies include the discernment and effectuation of the decedent's intentions in the distribution of his or her property and whose express provisions require the contestant to bear the burden of establishing undue influence. The adoption of MRPC 1.8(c) had no effect on this conclusion because a breach of this rule only triggers the invocation of the attorney disciplinary process; it does not breach EPIC. Chief Justice Markman would have affirmed the judgment of the Court of Appeals for these reasons.

         Justice McCormack, joined by Justices Viviano and Bernstein, writing for reversal, would have overturned Powers to the extent that it held that courts should apply a mere presumption of undue influence to a will contest in which an attorney drafted a testamentary document that names himself or herself as a beneficiary and would instead have adopted a per se rule of undue influence that voids substantial testamentary gifts to attorney-drafters. Justice McCormack stated that a per se rule would reflect updates to the relevant ethics rules, probate law, and evidentiary presumptions and would ensure that a testator's intent is effectuated by eliminating the possibility that the testamentary instrument was the product of undue influence, noting that the contrary approach would leave clients vulnerable, reward unscrupulous attorneys, and encourage costly litigation. Accordingly, Justice McCormack would have reversed the Court of Appeals.

         Affirmed by equal division.

         BEFORE THE ENTIRE BENCH (EXCEPT WILDER, J.)

          OPINION

          MARKMAN, C. JUDGE

         At issue is whether the rebuttable presumption of undue influence is applicable when the decedent's attorney breaches Michigan Rule of Professional Conduct (MRPC) 1.8(c), which generally prohibits an attorney from preparing an instrument giving the attorney or his or her close family a substantial gift. Appellants argue that a breach of MRPC 1.8(c) automatically renders an instrument void, while the appellee attorney argues that, rather than an invalidation of the instrument, a rebuttable presumption of undue influence arises in these circumstances. After considering the applicable provisions of the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq., and the underlying principles of probate law, it becomes clear to us that a rebuttable presumption applies to these circumstances. And, as we will explain, creating a new per se rule as appellants advocate would not only be contrary to the fundamental principles of probate law and longstanding precedents of this state but would also run afoul of EPIC. Moreover, the adoption of MRPC 1.8(c) has no effect on this conclusion because a breach of this rule, like breaches of other professional conduct rules, only triggers the invocation of the attorney disciplinary process; it does not breach the statutory law of EPIC. For these reasons, we conclude the Court of Appeals correctly held that, in the instant circumstances, existing statutes and caselaw give rise only to a rebuttable presumption of undue influence.

         I. FACTS AND HISTORY

         On August 13, 2010, the decedent, Robert Mardigian, executed an amended trust that was prepared by appellee Mark Papazian, and on June 8, 2011, the decedent executed a will prepared by Papazian. The amended trust and will operated to leave the bulk of the decedent's estate to Papazian, who was a close friend of the decedent, and to Papazian's children. On January 12, 2012, the decedent died.

         Following the decedent's death, Papazian filed an action in the probate court and sought to introduce the amended trust and will. Appellants, who consist of the decedent's brother, two nephews, two nieces, and girlfriend, challenged the introduction of these documents, moving for summary disposition and requesting that the probate court void all gifts to Papazian and his children as a matter of law. Specifically, they argued that the gifts were contrary to public policy under MRPC 1.8(c).[1] The probate court eventually granted summary disposition in favor of the appellants and declined to admit the amended trust and will, explaining that it was "disinclined to enforce" documents that were prepared contrary to the MRPC.

         Papazian appealed, arguing that Michigan did not recognize a per se bar on testamentary gifts to unrelated attorneys and that a breach of MRPC 1.8(c) supplied a basis only for invoking the attorney disciplinary process, not for automatically voiding a trust or will. In a split decision, the Court of Appeals reversed the probate court's order granting summary disposition in favor of appellants. Relying on this Court's decision in In re Powers Estate, 375 Mich. 150; 134 N.W.2d 148 (1965), the majority held that it was "required to remand for further proceedings, in which [Papazian] will be required to overcome the presumption of undue influence arising from the attorney-client relationship in order for the devises left to him and his family to be enforced." In re Mardigian Estate, 312 Mich.App. 553, 559; 879 N.W.2d 313 (2015). Pointing to the fact that Powers had been decided before this Court adopted MRPC 1.8(c), Judge Servitto dissented and would have affirmed the probate court's ruling that the gifts to Papazian and his family were void as against public policy. Id. at 570 (Servitto, J., dissenting).

         Thereafter, appellants sought leave to appeal in this Court. We ordered oral argument on whether to grant the application or take other action and directed the parties to address whether this Court should overrule Powers. In re Mardigian Estate, 499 Mich. 973 (2016). Subsequently, we granted the application for leave to appeal and directed the parties to address whether the rebuttable presumption set forth in Powers sufficiently protected a decedent and what role this Court's later adoption of MRPC 1.8(c) should play in the consideration of the issue. In re Mardigian Estate, 500 Mich. 1030 (2017).

         II. STANDARD OF REVIEW

         A trial court's decision regarding a motion for summary disposition is reviewed de novo. Haksluoto v Mt Clemens Regional Med Ctr, 500 Mich. 304, 309; 901 N.W.2d 577 (2017). In addition, the resolution of this case requires the interpretation of statutes, which we also review de novo. Id.

         III. ANALYSIS

         For the reasons that follow, both the historical framework under which we have analyzed gifts to attorneys and the current statutory framework, which codified the historical framework, require us to uphold Powers and its rebuttable presumption of undue influence, notwithstanding the later adoption of MRPC 1.8(c).

         A. HISTORICAL FRAMEWORK

         One of the underlying purposes and policies of EPIC is "[t]o discover and make effective a decedent's intent in distribution of the decedent's property," MCL 700.1201(b) (emphasis added), but this purpose long predates EPIC and is entrenched deeply within the history of this state's probate law. Discovering and giving effect to this intent has been viewed as the foundational standard of probate law for centuries. See, e.g., In re Blodgett's Estate, 197 Mich. 455, 461; 163 N.W. 907 (1917) (citing seventeenth-century jurist Lord Coke for the proposition that a testator's intent constitutes " 'the polar star to guide judges in their determination' "). See also id. at 461, quoting 4 Kent, Commentaries on American Law (14th ed), p 534 (" 'The intention of the testator is the first and great object of inquiry; and to this object technical rules are, to a certain extent, made subservient.' "); Palms v Palms, 68 Mich. 355, 378; 36 N.W. 419 (1888) (opinion by Champlin, J.) ("In construing wills, it is well settled that the intent of the testator must be ascertained and carried into effect so far as it legally can be done."); In re Churchill's Estate, 230 Mich. 148, 155; 203 N.W. 118 (1925) ("In the construction of wills the cardinal canon, the guiding polar star, is that the intent of the testator must govern . . . .").

         At the same time, however," '[u]ndue influence' exercised upon one who executes a will may become the basis for finding the will invalid if that influence took from the testator his right to freely exercise his discretion in disposing of his property." In re Sprenger's Estate, 337 Mich. 514, 521-522; 60 N.W.2d 436 (1953) (emphasis added).[2] This is because undue influence is "something which destroys the free agency of the testator at the time when the instrument is made, and which, in effect, substitutes the will of another for that of the testator." In re Williams' Estate, 185 Mich. 97, 120; 151 N.W. 731 (1915) (quotation marks and citation omitted). The burden of establishing undue influence has historically reposed with the party asserting it. In re Sprenger's Estate, 337 Mich. at 522 (stating that undue influence "must be proved by the person seeking to have the will declared invalid"). And as this Court has explained:

To establish undue influence it must be shown that the grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against his inclination and free will. Motive, opportunity, or even ability to control, in the absence of affirmative evidence that it was exercised, are not sufficient. [In re Karmey Estate, 468 Mich. 68, 75; 658 N.W.2d 796 (2003) (quotation marks and citation omitted).]

         Additionally, there are occasions in which a rebuttable presumption of undue influence can arise:

The presumption of undue influence is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor's decision in that transaction. [Id. at 73 (quotation marks and citation omitted).]

         This rebuttable presumption has been said to apply to cases in which "a patient makes a will in favor of his physician, a client in favor of his lawyer, or a sick person in favor of a priest or spiritual adviser, whether for his own personal advantage, or for the advantage of some interest of which he is a representative." In re Hartlerode's Estate, 183 Mich. 51, 60; 148 N.W. 774 (1914). For well over a century, this rebuttable presumption has been applied to circumstances in which an attorney drafts a will providing that attorney with a gift from a client. See, e.g., In re Bromley's Estate, 113 Mich. 53, 54; 71 N.W. 523 (1897) ("[A] bequest in favor of an attorney who draws a will is a circumstance arousing suspicion, and raises a presumption more or less strong that undue influence has been exerted . . . .").

         Most significantly, in Powers, this Court specifically discussed the rebuttable presumption of undue influence as it arises when an attorney drafts a will in his or her own favor. The will in Powers had been drafted by an attorney who was married to the decedent's close friend, and it left substantial portions of the decedent's estate to both the attorney and the close friend (i.e., the attorney's wife). In re Powers' Estate, 375 Mich. at 155-157. Powers began by recognizing the inherent ethical misconduct of the attorney: "If any prizes were to be awarded for dismal professional judgment, the proponent here would be in a fair way to be signally recognized." Id. at 157.[3] However, Powers proceeded to explain that the conduct of the attorney was not what was at issue; rather, the issue was whether the will itself was valid. Id. In light of this understanding, the attorney-client relationship was only relevant insofar as it tainted the validity of the will:

The issue of the relationship of the attorney and his client, and the attorney and his wife as beneficiaries, is an additional element in the broader concept of undue influence. Essentially it goes to degree of proof necessary to establish prima facie the opportunity for the exercise of undue influence and the ultimate consideration of that question by the trier of the facts . . . .
* * *
This will contest is on no different legal and factual basis than any other in our past jurisprudence and we caution court and counsel if the case is retried to confine the testimony to the issues:
(1) The well-defined, well-recognized test of the testatrix' competency to execute the testamentary instrument . . .;
(2) The equally well-defined and well-recognized issue of the exercise of fraud or undue influence in the execution thereof, including any presumption created by the fact that proponent was deceased's attorney and the fact that he drew the instrument . . . . [Id. at 157-158, 179 (emphasis added).]

         As Powers recognized, the focus of the will contest is to determine the decedent's intention and not to judge and discipline the attorney's conduct. Id. at 178 ("The forum in which to test unprofessional conduct of an attorney in this State is adequately supplied in the State Bar grievance procedure. The forum in which not to test it is a jury trial determining testamentary capacity and undue influence."). Thus, that an attorney drafted a will giving a gift in his or her own favor only affects the will contest insofar as that is relevant to the rebuttable presumption of undue influence and the determination by the fact-finder whether such influence had been exerted.

         In addition, our longstanding caselaw indicates that even when the rebuttable presumption of undue influence arises, "the burden does not rest upon the [proponent of the will] to show that the transaction was free from undue influence." Hill v Hairston, 299 Mich. 672, 679; 1 N.W.2d 34 (1941). That is, the presumption historically did not shift the ultimate burden of proof to show undue influence. In re Bailey's Estate, 186 Mich. 677, 692, 694; 153 N.W. 39 (1915) ("It is true that a presumption is raised that calls for an explanation, but the burden of proof to show undue influence is not thereby shifted. . . . [T]he burden of proof to show undue influence rest[s] upon the contestant, and not the proponent. Such, we think, is the settled law in this State."). See also In re Jennings' Estate, 335 Mich. 241, 244; 55 N.W.2d 812 (1952) (stating that "there is no shifting of the burden of proof under the presumption" and "while it establishes a prima facie case in the absence of testimony on the subject, [the presumption itself] has no weight as evidence, is rebuttable, and cannot be weighed against evidence").[4]

         In summary, even when a rebuttable presumption of undue influence has arisen, this Court has held that it does not shift the ultimate burden of proof; rather, that burden always remains with the contestant. This historical framework remains in place today but has now been incorporated through statute rather than existing exclusively in caselaw.

         B. EPIC FRAMEWORK

         In 1998, the Michigan Legislature enacted EPIC, which became effective April 1, 2000. 1998 PA 386. As part of EPIC, the Legislature codified the applicable burdens of proof in will disputes in MCL 700.3407(1), which provides in pertinent part:

All of the following apply in a contested case:
* * *
(c) A contestant of a will has the burden of establishing lack of testamentary intent or capacity, undue influence, fraud, duress, mistake, or revocation.
(d)A party has the ultimate burden of persuasion as to a matter with respect to which the party has the initial burden of proof.[5]

As MCL 700.3407(1) shows, the contestant bears the burden of establishing undue influence and this burden of persuasion remains throughout with the contestant. Notably, there are no exceptions in this regard. Accordingly, even where a rebuttable presumption of undue influence has arisen, EPIC still requires that the contestant establish undue influence and that the ultimate burden of persuasion remain with the contestant.[6] These requirements of EPIC are consistent with the historical framework discussed earlier, and the enactment of MCL 700.3407(1) remains in this regard a codification of existing law.[7]

         Because EPIC and our rules of evidence each require that a will or trust contestant establish undue influence and that the ultimate burden of persuasion remains with the contestant despite any presumption that may arise, we see no basis to revisit the merits of Powers. Indeed, it may largely be immaterial whether Powers was correctly decided--although we believe that it was-- because the Legislature itself subsequently adopted the same historical framework in its enactment of EPIC, which we are bound to follow.

         C. PER SE APPROACH

         Appellants now ask us to disregard this historical framework and adopt a per se rule of undue influence under which a testamentary gift to a drafting attorney is automatically void when there has been a breach of MRPC 1.8(c). However, we believe that such an approach is inappropriate for several reasons.

         First, a per se approach would wholly ignore any genuine consideration of the decedent's intentions, which as noted would violate both a foundational principle of probate law in general and one of EPIC's expressly stated policies. See In re Kremlick Estate, 417 Mich. 237, 240; 331 N.W.2d 228 (1983) ("A fundamental precept which governs the judicial review of wills is that the intent of the testator is to be carried out as nearly as possible."); In re Churchill's Estate, 230 Mich. at 155 ("In the construction of wills the cardinal canon, the guiding polar star, is that the intent of the testator must govern . . . ."); MCL 700.1201(b) (one of the underlying purposes of EPIC is "[t]o discover and make effective a decedent's intent in distribution of the decedent's property"); MCL 700.8201(2)(c) (one of the underlying purposes and policies of the Michigan Trust Code (MTC), which is set forth as Article VII of EPIC, is "[t]o foster certainty in the law so that settlors of trusts will have confidence that their instructions will be carried out as expressed in the terms of the trust"). Under a per se rule of undue influence, any attempt to discern the genuine and bona fide intention of the testator is subordinated at an early juncture to consideration of the attorney's conduct. And thus the "guiding polar star" that is the decedent's intention comes to be diminished in favor of an assessment of the behavior of his or her legal representative.[8]

         Second, the per se approach is contrary to both MCL 700.3407(1)(c) and MCL 700.3407(1)(d), which respectively provide that a will contestant bears the burden of establishing undue influence and that the ultimate burden of persuasion remains with the party who had the initial burden of proof, i.e., the contestant. A per se rule of undue influence would altogether nullify these requirements by relieving the contestant of the burden to establish undue influence in circumstances in which the gift has been made to an attorney. For this same reason, the per se approach in the context of a trust challenge would improperly shift the burden of persuasion, contrary to MRE 301.

         The opinion in support of reversal asserts that a per se rule of undue influence would not abrogate the contestant's burden to show undue influence because "[t]he contestant would have to show that the attorney violated MRPC 1.8(c), which requires showing (1) the attorney drafted the provision leaving himself a gift, (2) the gift was 'substantial,' and (3) the attorney and client were not related." We disagree. Such a showing does not establish undue influence in any meaningful sense; rather, it merely shows that there has been a breach of MRPC 1.8(c). As noted earlier, the precise nature of the "undue influence" necessary to invalidate a will is "something which destroys the free agency of the testator at the time when the instrument is made, and which, in effect, substitutes the will of another for that of the testator." In re Williams' Estate, 185 Mich. at 120 (quotation marks and citation omitted). See also In re Sprenger's Estate, 337 Mich. at 521-522 (" 'Undue influence' exercised upon one who executes a will may become the basis for finding the will invalid if that influence took from the testator his right to freely exercise his discretion in disposing of his property.") Whether there has been a breach of MRPC 1.8(c) does not address whether the decedent's free agency has been destroyed; it addresses only and obviously whether there has been a breach of MRPC 1.8(c).

         Third, the issue whether a per se rule of undue influence is appropriate simply boils down, in our judgment, to enacting substantive public policy, which is the responsibility of the Legislature, not this Court. The opinion in support of reversal maintains that the instant opinion "leaves clients vulnerable, rewards unscrupulous attorneys, [and] encourages costly litigation"; however, we believe that the instant opinion best accords both with the law and with longstanding practice under that law, in particular, with its dominant focus on ascertaining the genuine intentions of the testator.[9] In place of that focus, the opinion in support of reversal would introduce an irrebuttable legal presumption under which such intentions would simply be of no consequence in cases in which the presumption applied.

         Whether the current probate framework is sufficient to protect a decedent requires difficult policy determinations that involve balancing the decedent's intentions with policies sanctioning unethical attorney conduct. And as this Court has explained:

As a general rule, making social policy is a job for the Legislature, not the courts. This is especially true when the determination or resolution requires placing a premium on one societal interest at the expense of another: The responsibility for drawing lines in a society as complex as ours-of identifying priorities, weighing the relevant considerations and choosing between competing alternatives-is the Legislature's, not the judiciary's. [Terrien v Zwit, 467 Mich. 56, 67; 648 N.W.2d 602 (2002) (quotation marks and citation omitted).]

         If the current policy framework is insufficient to protect a decedent when MRPC 1.8(c) has been breached, and any further inquiry into the decedent's intentions should be compromised or foreclosed, it is the Legislature that ought to make this determination and provide for an appropriate limiting rule. See, e.g., Agee v Brown, 73 So.3d 882, 886 (Fla App, 2011) ("The best way to protect the public from unethical attorneys in the drafting of wills . . . is entirely within the province of the Florida Legislature."); Sandford v Metcalfe, 110 Conn.App. 162, 169-170; 954 A.2d 188 (2008) ("[I]t is ill-advised, as a matter of public policy, for an attorney to draft a will in which she is to receive a bequest"; "[t]here is, however, no statute barring an attorney who drafted a testamentary instrument from inheriting by the instrument she drafted"; and "[i]f the law is to be changed to make provision for the situation at hand, it is for the legislature to make the change, not the court.").

         Fourth, in specific circumstances in which the Legislature has deemed a disposition inappropriate without regard to the decedent's intent, it has invariably provided for an explicit rule that revokes the ordinary disposition. For example, MCL 700.2803(2)(a)(i) provides, "The felonious and intentional killing or the conviction of the felon for the abuse, neglect, or exploitation of the decedent . . . [r]evokes . . . [a] [d]isposition or appointment of property made by the decedent to the killer or felon in a governing instrument." See also MCL 700.2807(1)(a)(i) ("Except as provided by the express terms of a governing instrument, court order, or contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage . . . [r]evokes . . . [a] disposition or appointment of property made by a divorced individual to his or her former spouse in a governing instrument . . . ."). EPIC provides no such rule for circumstances in which an attorney has drafted a will or trust in his or her own favor, and it would be improper for this Court to adopt such a substantive rule on its own initiative. Paselli v Utley, 286 Mich. 638, 643; 282 N.W. 849 (1938) ("This court cannot write into the statutes provisions that the legislature has not seen fit to enact.").

         For these reasons, we conclude that a per se rule of undue influence is untenable and incompatible with the longstanding policies of this state, and it would be inappropriate for this Court sua sponte to adopt such a rule.

         D. MRPC 1.8

         Despite the clear statutory requirements and fundamental concepts of probate law in Michigan, appellants contend that the later adoption of MRPC 1.8(c) favors the implementation of the per se rule. Once again, MRPC 1.8(c) states, "A lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee." There are several reasons why the adoption of this rule does not warrant a change in current law or the overruling of our longstanding precedents in regard to the present controversy.

         First, MRPC 1.8(c) became effective in 1988, which antedated Powers but predated the Legislature's decision to codify the requirements in EPIC that a contestant establish undue influence and that the burden of persuasion remain always with the contestant. That is, our Legislature chose to codify the requirements in EPIC despite the fact that MRPC 1.8(c) already was in place and provided that "[a] lawyer shall not prepare an instrument giving the lawyer . . . any substantial gift from a client . . . ." Therefore, even if it could be explained how the MRPC could alter ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.