Montana Court Orders Return of Kansas Woman’s Accounts

APRIL 26, 1999 VOLUME 6, NUMBER 43

Clara Mowrer lived in her Kansas home until, three months short of her 101st birthday, she fell and broke her hip. After two months of hospitalization, she was ready to be released. Her niece, Peggy Eddie, and Ms. Eddie’s husband Maurice arrived from Montana to help take care of her.

Within a few days of Ms. Eddie’s arrival in Kansas, Ms. Mowrer had signed a durable power of attorney giving Ms. Eddie power to handle all her financial affairs. On the same day that the power of attorney was signed, several of Ms. Mowrer’s bank accounts were transferred into the Eddies’ names.

After staying in Kansas with Ms. Mowrer for about a month, the Eddies decided to take her back to their home in Kalispell, Montana. In addition to Ms. Mowrer, the Eddies moved a substantial amount of money. In fact, within four months of Ms. Mowrer’s arrival in Montana the Eddies had used their power of attorney to transfer over $800,000 into their own names. They also arranged for her to visit their own attorney, and a will was executed leaving all her estate to Mr. and Mrs. Eddie.

Ms. Mowrer continued to live with the Eddies for a little over a year, and then was admitted to a nursing home in Montana. A few months later, Ms. Mowrer hired a local attorney, who immediately prepared a revocation of her power of attorney and demanded that the Eddies account for all the property they had transferred. The Eddies responded by filing a petition for appointment as Ms. Mowrer’s guardian and conservator.

At trial, the Eddies argued that Ms. Mowrer had made gifts to them of substantially all her assets, and that she was now incapacitated. Ms. Mowrer, through her attorney, argued that she was able to make her own decisions and handle her own affairs, and that the Eddies had taken advantage of her physical illness when they took her money.

After seven days of trial, the Montana court found that Ms. Mowrer was competent, did not need a guardian or conservator, and had not made gifts to the Eddies. Finding that the transfers were the result of undue influence exercised by the Eddies, the judge ordered them to repay $807,582.44 to Ms. Mowrer and froze some real property in the Eddies’ names. The Eddies appealed to the Montana Supreme Court.

Although most of the transfers occurred in Kansas, the Justices decided that Montana law could be used to determine whether the Eddies had acted properly. This was true, said the court, because the Eddies’ actions amounted to undue influence under both states’ laws. The Eddies had also argued that the lawyer representing Ms. Mowrer had a conflict of interest; given Ms. Mowrer’s age (104) and the minimal nature of the conflict, the court declined to order a retrial on that basis.

On the merits of Ms. Mowrer’s claim, the Montana Supreme Court agreed with the trial judge. The evidence of undue influence was substantial: Ms. Mowrer was physically weak when the Eddies moved into her home to care for her; they moved her far away from friends and family, and kept her isolated (even changing their telephone number); visitors were discouraged, and always monitored by the Eddies. Matter of Mower [sic], April 9, 1999.

Arizona law is very similar to Montana in cases of exploitation of the elderly. In similar facts, Arizona courts should be expected to rule the same way as the Montana courts.

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