Sarah Hodnett v. Timothy Hodnett
Sarah Hodnett v. Timothy Hodnett
Opinion
¶ 1. Tim Hodnett sued his sister, Sarah Hodnett, to set aside a deed to the family farm from their mother to a revocable trust. The trust named Sarah as the sole beneficiary upon her mother's death. The chancery court found that Sarah, who had acted as her parents' attorney for many years and had prepared all of the various instruments involved in these transactions, had been in a confidential relationship with her mother when the deed was executed, raising the presumption that it was the product of undue influence. Sarah failed to rebut that presumption by clear and convincing evidence, and thus the chancellor set aside the deed.
¶ 2. On appeal, Sarah contends that Tim lacked standing to challenge the deed, that the statute of limitations had run at the time this suit was filed, and that the chancery court employed an incorrect legal standard in reaching its finding of a confidential relationship. The Bank of Anguilla also appeals, challenging the trial court's conclusion that Tim's claim had priority over some of the Bank's security interests in the deeded property, which were acquired by the Bank after a lis pendens was filed. We affirm the chancery court's judgment in its entirety.
STANDARD OF REVIEW
¶ 3. A chancellor's factual findings will not be reversed unless they are manifestly wrong or clearly erroneous.
Paw Paw Island Land Co. v. Issaquena & Warren Ctys. Land Co.
,
DISCUSSION
1. Standing
¶ 4. Sarah contends that Tim lacks an interest in the deeded property and therefore does not have standing to pursue any claims relating to its disposition.
¶ 5. "In Mississippi, parties have standing to sue when they assert a colorable interest in the subject matter of the litigation or experience an adverse effect from the conduct of the defendant, or as otherwise provided by law."
In re City of Biloxi
,
¶ 6. It is undisputed that Tim is one of his mother's heirs at law.
See
2. Statute of Limitations
¶ 7. Tim filed suit shortly after his mother's death, but Sarah and the Bank point out that this was more than three years after the deed transferring the property to the Trust was executed. Both assert that the three-year "catch all" statute of limitations bars this suit, though they offer little argument as to why.
¶ 8. It is apparent to us that the applicable statute of limitations is actually ten years under Mississippi Code Annotated sections 15-1-7 (Rev. 2012) and 15-1-9 (Rev. 2012), for actions to recover land.
See
In re Estate of Reid
,
¶ 9. The statute of limitations does not bar this suit.
3. Laches
¶ 10. Sarah also contends that Tim's claim should be barred by laches, but laches is precluded by our prior decision on the statute of limitations issue. "A delay short of the statutory period of limitations does not bar recovery."
Greenlee v. Mitchell
,
4. Venue
¶ 11. Next, we address Sarah's contention that the only proper venue for this suit was in Humphreys County, where the farm is located. She points to Mississippi Code Annotated section 11-5-1 (Rev. 2014), which provides in relevant part that "[s]uits 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."
¶ 12. Sarah concedes, however, the venue issue was never pursued to a ruling in the chancery court. This operates as a waiver of the issue except in those rare cases where venue is also jurisdictional. "It is an appellant's duty to secure a ruling on a motion before the failure to grant it can be contested on appeal."
Ford v. Magnolia Franchise Holdings Inc.
,
¶ 13. Aware of the potential waiver, Sarah contends that the particular defect she alleges is jurisdictional and therefore can be raised for the first time on appeal. She cites
Donald v. Amoco Production Company
,
¶ 14. Sarah also cites
Belk v. State Department of Public Welfare
,
¶ 15. In
Ravesies v. Martin
,
¶ 16. We conclude that venue was not jurisdictional in this case, and Sarah waived any objection to the suit being heard in Sharkey County.
5. Presumption of Undue Influence
¶ 17. Finally, Sarah challenges the chancery court's finding that there was a presumption of undue influence in various transfers related to the property because of a confidential relationship between Sarah and her mother and father.
See generally
Madden v. Rhodes
,
¶ 18. Sarah's argument on appeal is based on the Mississippi Rules of Professional Conduct, specifically Rule 1.8(c), which states that "[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." She points out that the chancellor, when announcing his decision from the bench, was very critical of Sarah's drafting the instruments that ultimately transferred her parents' property to her and appeared to assume her actions were a violation of the Rules of Professional Conduct.
¶ 19. First of all, it is not clear that Sarah complied with Rule 1.8(c). On its face, the rule does not prohibit an attorney from preparing an instrument effecting a gift from a client to the attorney when the attorney and client are related, but the comment to the rule notes the caveat that such gifts are permissible only "if the transaction meets general standards of fairness." The Supreme Court of South Dakota, considering a similar case, held that "Rule 1.8(c) cannot be used to excuse substantial gifts which are facially disproportionate to gifts made to other relatives in the same class."
In re Discipline of Mattson
,
¶ 20. We also note that Rule 1.8(c) is part of the Mississippi Rules of Professional Conduct, not substantive law. It is well established in Mississippi that an attorney-client relationship is a per se confidential one.
See
Hitt v. Terry
,
[T]he law declares that when there is a fiduciary or confidential relation, and there is a gift or conveyance of dubious consideration from the subservient to the dominant party, it is presumed void. This is not because it is certain the transaction was unfair; to the contrary, it is because the Court cannot be certain it was fair . As stated in Meek v. Perry ,36 Miss. at 246 , "if the court does not watch these transactions with a jealousy almost invincible, in a great majority of cases, it will lend its assistance to fraud." Further, this is a "policy of the law, founded on the safety and convenience of mankind ... preventing acts of bounty." And, the Court will not permit such a transaction to stand, "... though the transaction may be not only free from fraud, but the most moral in its nature."Id. at 247 . "The rule of law in these cases is not a rule of inference, from testimony, but a rule of protection, as expedient for the general good."Id. at 244 .
Id. at 737 (emphasis omitted in part).
¶ 21. The challenged transfers are inter vivos, and for inter vivos gifts where there is a confidential relationship between the donor and the donee, a presumption of undue influence arises even without a showing that the recipient played an active part in the preparation or execution of the instrument.
See
In re Will of Moses
,
¶ 22. We are aware of no Mississippi authority making an exception to this general rule for an attorney who is a relative of the grantor, but we recognize that there are solid reasons for such an exception to exist, and other states have allowed attorneys to prepare wills and deeds for family members to the attorney's benefit without an automatic presumption of undue influence.
See, e.g.
,
Krischbaum v. Dillon
,
¶ 23. The nature of Sarah's relationship with her parents clearly supports the chancellor's finding of a confidential relationship, even if there was no per se rule based on her status as their attorney. While there was little evidence of incapacity or physical dependency of her parents, a confidential relationship can be founded on trust just as it can upon physical weakness or dependence.
See, e.g.
,
Norris v. Norris
,
¶ 24. Attorneys should be held to a higher standard than laymen, to protect both the general good and integrity and reputation of the legal profession.
See
Estate of McRae
,
6. Priority of Liens
¶ 25. Finally, the Bank contends that the chancellor erred in finding that the Bank's liens acquired after the filing of the lis pendens in this suit did not have priority over Tim's claim. The Bank points to the former Mississippi Code Annotated section 91-9-115 (2013), since repealed, which was in effect at the relevant time and provided:
With respect to a third person dealing with a trustee or assisting a trustee in the conduct of a transaction, the existence of trust powers and their proper exercise by the trustee may be assumed without inquiry. The third person is not bound to inquire whether the trustee has power to act or is properly exercising the power; and a third person, without actual knowledge that the trustee is exceeding his powers or improperly exercising them, is fully protected in dealing with the trustee as if the trustee possessed and properly exercised the powers he purports to exercise. A third person is not bound to assure the proper application of trust assets paid or delivered to the trustee.
¶ 26. We find no merit to this contention. The statute spoke to a third party's reliance on the "existence of trust power[s] and their proper exercise by the trustee"; it "abolish[ed] the common law broad duty of inquiry of third parties dealing with a trustee."
Franklin Credit Mgmt. Corp. v. Hanney
,
¶ 27. AFFIRMED.
LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, CARLTON, WILSON, GREENLEE, WESTBROOKS AND TINDELL, JJ., CONCUR.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.