Raise It or Waive It?: The Virginia Supreme Court Weighs in on When Parties in Estate Litigation Must Raise (or Waive) Testamentary Capacity/Undue Influence Claims

Imagine your aging, widowed mother (“Mother”) has dementia and moves into assisted living.  You live about four hours away from Mother.  Your sibling (“Sibling”) lives about five (5) minutes away from Mother.  Sibling becomes increasingly involved in Mother’s affairs.  One day Sibling provides you with a copy of Mother’s recently changed will.  The new will leaves everything to Sibling.  Given Mother’s dementia, you are highly concerned because you don’t think Mother had the capacity to make the new will.  You ask Sibling about the new will.  Sibling says “It’s what Mother wants.”

Later, Sibling files a lawsuit seeking to be appointed Mother’s guardian (a person in control of Mother’s medical and residential decisions) and conservator (a person in control of Mother’s finances).  Sibling has never held a job and seems to be motivated by Mother’s money.  You don’t think Sibling is a responsible caretaker.  You file papers with the court asking the Judge to appoint you guardian and conservator instead.

Question: Must you raise your claims, in this guardianship/conservatorship case, that Mother lacked testamentary capacity (and/or Sibling unduly influenced Mother to make the new will) to make the new will?  In other words, if you fail to raise these claims in the guardianship/conservatorship case, do you lose them?

The Virginia Supreme Court (the “Appellate Court”) addressed this issue in its review of a similar case, D’Ambrosio v. Wolf.

The facts were straightforward: In June 2012, Nancy, a widow, suffered a stroke, which resulted in the need for her to have constant in-home care. In September 2013, Nancy signed a document making her son, James, her attorney-in-fact.  In February 2014, Nancy executed a will which divided the estate between Nancy’s two daughters (“Daughters”). In May, Nancy executed a durable medical power of attorney appointing James as agent.

The relationship between Daughters and James deteriorated.  In 2014, Daughters petitioned the local circuit court to declare, among other things, that Nancy was incapacitated, and that her powers of attorney (naming James as agent) were invalid (the “First Suit”).  Daughters also asked the Trial Court to appoint guardians and a conservator for Nancy.  James countered that Nancy’s power of attorney was valid and also sought the appointment of a guardian and conservator for Nancy.  In James’s pleadings, he alleged that Daughters procured Nancy’s new will and such acts constituted “unclean hands” (an equitable defense relating to a party’s unscrupulous conduct). The Fairfax Circuit Court (“Trial Court”) invalided the powers of attorney and found that Nancy was “completely and permanently incapacitated”.

Nancy died after the Trial Court’s decision in the First Suit in 2015. When Nancy’s will was admitted to probate, James filed a complaint seeking to impeach Nancy’s will for lack of testamentary capacity and undue influence (the “Will Contest”). Daughters filed motions to dismiss and asserted that claim preclusion, issue preclusion, and judicial estoppel barred James from bringing the Will Contest. James argued that those doctrines didn’t apply since Nancy had not passed away at the time of First Suit and therefore he could not have challenged her will during such suit.  The Trial Court found for the Daughters and dismissed James’s Will Contest, holding that claim preclusion, issue preclusion, and judicial estoppel prevented his Will Contest.  The Trial Court held that James could have brought these claims in the First Suit, and that James in the First Suit already argued that Nancy had capacity.  Moreover, the Trial Court held that James had to raise these undue influence and testamentary capacity claims relating to the will in the First Suit.

On appeal, the Appellate Court reversed the Trial Court’s decision as to the Will Contest.  The Appellate Court held that neither the doctrines of claim preclusion, issue preclusion, or judicial estoppel prevented James’s Will Contest.

Claim Preclusion

Rule 1:6 of the Rules of the Supreme Court of Virginia provides that claim preclusion bars a party to a previous suit from bringing a successive civil action when (i) a party’s previous claim for relief was decided on the merits, (ii) the previous claim was decided by a final judgment, and (iii) the previous claim arose from the same conduct, transaction or occurrence.

The point of this doctrine is to prevent the re-litigation of the same cause of action, or any part which could have been litigated in the previous action. However, claim preclusion does not bar claims that were not ripe at the time of the previous litigation concerning the underlying conduct.

The Appellate Court pointed out that Nancy was still alive during the First Suit.  At that time, Nancy had not divested any interest of her estate to any beneficiary.  Each beneficiary only had a bare expectation.  James’s bare expectation was not a sufficient injury to have brought a cause of action concerning the will’s validity at the time of the First Suit.

The Appellate Court rejected the Daughters’ claim that a declaratory judgment could have been brought to challenge the validity of the will in the First Suit. The Appellate Court concluded that James’s claim had not accrued at the time of the First Suit because Nancy was still alive and James had suffered no injury.

Issue Preclusion

Issue preclusion bars re-litigation of common factual issues between the same or related parties.  The factual issue must have been actually litigated and essential to a valid and final personal judgment in the first action.

The Trial Court order that ended the First Suit found that Nancy was “completely and permanently incapacitated,” but did not rule on her mental capacity at the specific time she executed the will.  Accordingly, Nancy’s mental capacity at the time she created the will was not actually litigated and decided for the purposes of issue preclusion in the First Suit.  The issue of Nancy’s mental capacity was only decided at the time when she executed the powers of attorney.  Under Virginia law, it is well-established that capacity can come and go.  Moreover, testators, in making wills, can have “moments of lucidity” allowing them to execute wills.

Accordingly, the Appellate Court rejected the application of issue preclusion in the Will Contest to the validity of Nancy’s will.

Judicial Estoppel

The doctrine of judicial estoppel prevents a party to an action from adopting a position of fact that is inconsistent with a stance taken in a prior litigation.  This principle prevents a party from saying one thing (the traffic light was red) in one suit and a different thing (the traffic light was green) in another suit.  To apply this doctrine, the parties to the proceedings must be the same, and the inconsistent position must have been relied upon by the court or prior court in rendering its decision.

James argued in the First Suit that Nancy had mental capacity at the time she executed the powers of attorney.  The Appellate Court noted, however, that this stance was not inconsistent with the position that Nancy had mental capacity at the time Nancy made the will because the signing of the documents occurred at two different periods of time, and moreover because mental capacity can come and go.  Moreover, the Appellate Court pointed out that the Trial Court did not rely on James’s positions in rendering its decision.  Accordingly, the Appellate Court rejected the application of the judicial estoppel doctrine to the Will Contest.

In summary, the Appellate Court reversed the Trial Court’s decision and remanded the Will Contest back to the Fairfax Circuit Court for further proceedings.

This case illustrates the subtle yet critical nuances involved in estate  litigation.  Estate dispute litigation involves making crucial tactical decisions both procedurally and substantively.  If you find yourself in an estate dispute, it would be wise to seek the assistance of an experienced estate litigator.

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