Law of Wills, 2016A

the Fiduciaries [Sewell and Judkins] intentionally used the power of attorney to
benefit themselves by gifting the proceeds from the sale of the disputed property
to themselves. Moreover, the Fiduciaries’ actions exposed Mrs. Stewart to
various liabilities for potential fraud upon the Medicaid and Tenn Care programs.
Such actions constitute serious violations of the Fiduciaries’ duties to exercise the
utmost good faith, loyalty and honesty toward Mrs. Stewart. Thus, we hold that
the Fiduciaries, Demple Sewell and Robert Judkins violated their confidential
relationship and breached their fiduciary duties owing to Mrs. Stewart when they
established the certificates of deposit.
We disagree with the Court of Appeals’ conclusion that Sewell and Judkins exposed their mother to
allegations of Medicaid and Tenn Care fraud. The Court of Appeals may have been influenced by
Sewell’s admission that, when asked by the nursing home for a list of Clara’s assets other than her
home, an automobile, and $2,000, Sewell and Judkins declined to provide the list because they “were
trying to save some portion.” However, the evidence in the record establishes that all of Clara’s
expenses during her sixteen months at the nursing home, and all of her pharmacy expenses, were
paid for with her own assets, including the proceeds from the sale of the Undeveloped Tract. There
is no evidence that Tenn Care/Medicaid was defrauded into providing for Clara’s healthcare.
E. Purchase Price for Undeveloped Tract
The Court of Appeals found “questionable” and “suspicious” the fact that Sewell and Judkins,
without the assistance of a real estate agent and without offering it for sale to the general public, sold
the Undeveloped Tract to one of their children, her spouse, and friends, at a price 30% below the
appraised value and at a time when there was no pressing need to liquidate Clara’s assets because she
had “ample cash assets” to pay for her needs, including nursing home expenses. As noted above,
however, the assumptions made by the Court of Appeals are not supported by a preponderance of
the evidence. The discrepancy between the appraisal and the actual purchase price was reasonably
explained at trial. Stewart was offered the first right to purchase the property. He, too, presumably
could have made a counter-offer if he believed the initial price suggested was too high.
F. Absence of Total Ademption
Although the Court of Appeals acknowledged that Sewell and Judkins did not sell the entire parcel
of property on Tim’s Ford Lake, the intermediate appellate court seems to have underestimated the
significance of that fact. If Sewell and Judkins had had any improper motive in selling the property,
or wanted to maximize the benefit to themselves, they simply could have sold the entire property,
thereby preventing Stewart from inheriting any of it. Instead, they took steps to sell first only the
undeveloped portion, thereby preserving the family house and approximately one acre of property
which Stewart did ultimately receive by devise.
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