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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Shears v. Myers (7/20/2012) sp-6692

Shears v. Myers (7/20/2012) sp-6692

        Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER . 

        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 

        303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email 

        corrections@appellate.courts.state.ak.us. 



                 THE SUPREME COURT OF THE STATE OF ALASKA 



GEORGIANNE SHEARS,                                  ) 

                                                    )   Supreme Court No. S-14056 

                        Appellant,                  ) 

                                                    )   Superior Court No. 3AN-08-09153 CI 

        v.                                          ) 

                                                    )   O P I N I O N 

DEE ANN MYERS, as Trustee of the                    ) 

Jack Donald Bollinger Revocable Trust               )   No. 6692 - July 20, 2012 

Agreement dated March 29, 2008,                     ) 

                                                    ) 

                        Appellee.                   ) 

                                                    ) 



                Appeal from the Superior Court of the State of Alaska, Third 

                Judicial   District,   Anchorage,   Craig   F.   Stowers,   Judge   pro 

                tem. 



                Appearances:       James   Alan   Wendt,   Law   Offices   of   James 

                Alan Wendt, Anchorage, for Appellant.  Timothy R. Byrnes, 

                Hughes       Gorski     Seedorf     Odsen     &    Tervooren,      LLC, 

                Anchorage, for Appellee. 



                Before:     Carpeneti,   Chief   Justice,   and   Fabe   and   Winfree, 

                Justices.  [Christen and Stowers, Justices, not participating.] 



                WINFREE, Justice. 



I.      INTRODUCTION 



                Two nieces, acting as co-guardians for their elderly uncle, sued their uncle's 



former     caregiver    for   misuse    and   misappropriation       of  his   assets;  the   caregiver 



counterclaimed for compensation for services rendered.  After a bench trial, the superior 


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court:  (1) determined the caregiver had committed fraud and breached fiduciary duties; 



(2) awarded damages against the caregiver for her misuse and misappropriation of the 



uncle's assets; (3) awarded the caregiver some compensation for her services in quantum 



meruit; and (4) ordered the caregiver's name removed from title to the uncle's house. 



The caregiver appeals.   Because the superior court's findings of fact are well supported, 



its conclusions of law are sound, and its application of equitable considerations was well 



within its discretion, we affirm its decision. 



II.     FACTS AND PROCEEDINGS 



        A.      Facts 



                Jack Bollinger lived most of his adult life in Alaska but had no family living 



in the state.  Bollinger had significant assets and "relatively low expenses."  Bollinger's 



health declined and in 2003, at age 76, he was diagnosed with senile dementia.                  In late 



2004 he suffered a stroke.       Bollinger subsequently worked with speech, physical, and 



occupational therapists. 



                Bollinger was friendly with Georgianne Shears's mother and family. After 



Bollinger's   stroke   Shears   began   giving   him   rides   to   pick   up   his   mail   and   shop   for 



groceries.     She also assisted him by cleaning, cooking, helping him exercise, bathing 



him, and taking him to appointments.   Bollinger said he paid Shears $1,000 a month for 



her help. 



                Shears   took    Bollinger    to  the  bank   each   month,   where    he  cashed    his 



retirement and Social Security checks and gave the money to Shears because "[s]he said 



she needed it."     Shears acknowledged Bollinger gave her money, explaining that she 



would accept it but remind him it was not part of her wages.               Shears failed to provide 



Bollinger receipts for food and household purchases she made with his money.  Shears 



was unable to identify whether approximately $130,000 in purchases she made were for 



Bollinger, herself, or both of them; nor did she know whether another approximately 



                                                  -2-                                            6692
 


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$180,000 in payments she made were on behalf of Bollinger, herself, or both of them. 



                In February 2005 Bollinger signed a power of attorney allowing Shears to 



act for him but with a restriction as to certain financial transactions.           Two days later 



Bollinger executed a will bequeathing $100,000 to Shears and other significant assets to 



her family members.   In March Bollinger added Shears's name to his checking account. 



                Bollinger had never owned a house, but in July 2005 Shears selected a 



house and Bollinger purchased it for about $300,000.  Bollinger testified it was Shears's 



idea to move and buy the house.          Shears asserted that Bollinger's speech therapist had 



told her Bollinger's physician was plotting to put him in a "convalescent home" and had 



suggested Shears and Bollinger find a house together.  The speech therapist denied there 



was such a plot and denied suggesting Bollinger would have to move to a "convalescent 



home" unless he and Shears bought a house. 



                Both Bollinger and Shears were listed as owners on the deed.              Bollinger 



paid the entire down payment of approximately $150,000.                Shears asserted Bollinger 



contributed her portion of the down payment in lieu of wages he owed her.  In October 



Shears began paying about half the loan payment each month.                 Bollinger lived in the 



house's first floor but due to his physical limitations could not access the second floor 



- the main part of the house - that had been previously remodeled and was in better 



condition than the first floor. 



                In   August    2005   Bollinger    signed   a  second   will,  increasing   Shears's 



financial interests.    This will left the house to Shears and provided that any house debt 



be paid from Bollinger's estate in addition to the $100,000 bequest to Shears.  In 2006, 



while Bollinger was hospitalized, Shears exercised her power of attorney to transfer 



$100,000      from   his   savings   account   to  his   checking  account.   In   November   2006 



Bollinger   signed   another   power   of   attorney,   removing   the   previous   restrictions   on 



Shears's authority over certain financial transactions. 



                                                 -3-                                           6692
 


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               In November 2007 approximately $67,000 of Bollinger's money was used 



to purchase a Cadillac Escalade for Shears. Shears had previously sold Bollinger's older 



Toyota for $10,000 and had kept the money. 



               In late 2007 Bollinger's dentist spoke with Bollinger's niece, Dee Ann 



Myers, expressing concern about Bollinger and Shears's relationship. Shortly thereafter 



another niece, Jana Smitley, contacted the State of Alaska, Department of Health and 



Social Services, Adult Protective Services (APS), which started an investigation. Myers 



and Smitley petitioned for guardianship of Bollinger and traveled to Alaska in February 



2008.  When Myers, Smitley, and Bollinger met with APS investigators, Bollinger was 



asked if he had felt pressured to buy the house and car.       He replied, "you don't say no 



to [Shears]." 



       B.      Proceedings 



                Myers and Smitley were appointed Bollinger's co-guardians, and he moved 



to Missouri to live with Smitley.  In July 2008 the co-guardians sued Shears for breach 



of fiduciary duties and exertion of undue influence over Bollinger to benefit herself. 



They    sought:   (1)  an  accounting    of   all   transactions  Shears  had  made  with  or  on 



Bollinger's behalf; and (2) declaratory relief quieting title to the house to Bollinger and 



removing Shears from the title, or in the alternative, a court order to sell the house.  They 



estimated Bollinger was owed about $215,000 due to Shears's financial mismanagement. 



               Shears    counterclaimed,    asserting  that  she  had  an  oral  contract  with 



Bollinger to provide personal care, which set her hourly rate at $25.00, and that Bollinger 



breached the contract by failing to pay her full salary.  She claimed Bollinger owed her 



$477,625.    In the alternative, Shears asserted she should recover in quantum meruit. 



               The superior court held a five-day bench trial in September and October 



2009.   The court rejected Shears's assertion that she had an oral contract or any other 



agreement to provide Bollinger personal care attendant services.        It found Shears "was 



                                              -4-                                         6692
 


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not a credible witness," her testimony "was often rambling, evasive, and argumentative," 



and her explanations regarding alleged conversations with Bollinger and demands for 



wages were "frankly unbelievable." 



                The superior court determined Shears owed Bollinger fiduciary duties and 



therefore had the burden to account for all his assets and financial transactions made on 



his behalf.   The court found that Shears "utterly failed to properly or reasonably account 



for her management and use of Bollinger's funds and finances."                The court determined 



Shears   breached   her   fiduciary   duties   and   committed   fraud   in   her   use   of   Bollinger's 



assets.   It   also   determined   Shears,   "with   intent   and   using   undue   influence,"   acted 



fraudulently and in "gross" breach of her fiduciary duties by inducing Bollinger to buy 



the house, pay the down payment, and put her on the title. 



                The superior court adopted the co-guardians' accounting of Bollinger's 



assets. Based on this accounting, the court determined Shears owed Bollinger $215,590, 



but Shears was owed $95,800 in quantum meruit for assisting Bollinger, including a 

weekly allowance for purchasing Bollinger's personal items.1  The court also awarded 



Bollinger title to the house. 



                Before the superior court issued the final judgment and decree, Bollinger 



died.  Myers, as trustee of Bollinger's revocable trust agreement, was substituted as the 



plaintiff. 



                Shears appeals. 



III.    STANDARD OF REVIEW 



                "We   review      the   trial   court's   findings   of   fact,  including   those   on  the 



        1       The co-guardians conceded Shears was owed $95,800 for her services and 



expenses.    The superior court indicated that, but for the co-guardians' concession, the 

court would have been inclined to award Shears nothing. 



                                                  -5-                                               6692 


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credibility of witnesses, for clear error."2     Clear error is found if, after a thorough review 



of the record, we are left with a "definite and firm conviction that a mistake has been 

made."3    Factual findings are reviewed in the light most favorable to the prevailing party 



below.4   "We grant particular deference to the trial court's factual findings when they are 



based primarily on oral testimony, because the trial court, not this court, performs the 

function of judging the credibility of witnesses and weighing conflicting evidence."5  We 



review conclusions of law de novo and will adopt the "rule of law that is most persuasive 

in light of precedent, reason, and policy."6          "[W]e review a trial court's decision on 



equitable relief for abuse of discretion."7   "An abuse of discretion occurs when, after a 



review of the entire record, we are left with a definite and firm conviction that the trial 

court has erred in its ruling."8 



IV.     DISCUSSION 



                Shears argues the superior court erred by:         (1) recognizing the defense of 



unclean     hands    to  her  wage    claim;   (2)  miscalculating     the   weekly    allowance     for 



        2       Safar   v.   Wells   Fargo   Bank,   N.A.,   254   P.3d   1112,   1117   (Alaska   2011) 



(citing Romero v. Cox , 166 P.3d 4, 7-8 (Alaska 2007)). 



        3       Id. (quoting Romero , 166 P.3d at 8). 



        4       Id. (citing Romero , 166 P.3d at 8). 



        5       Id. (quoting Wee v. Eggener, 225 P.3d 1120, 1124 (Alaska 2010)) (internal 



quotation marks omitted). 



        6       Kalenka v. Infinity Ins. Cos. , 262 P.3d 602, 607 (Alaska 2011) (quoting 



Gilbert M. v. State, 139 P.3d 581, 586 (Alaska 2006)). 



        7       Cook v. Cook, 249 P.3d 1070, 1082-83 (Alaska 2011) (citing In re Estate 



of Fields, 219 P.3d 995, 1002 (Alaska 2009)). 



        8       Id. at 1077 (quoting Ford v. Ford , 68 P.3d 1258, 1263 (Alaska 2003)) 



(internal quotation marks omitted). 



                                                  -6-                                            6692
 


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reimbursable expenses; (3) applying a three-year statute of limitations to her wage and 



weekly   allowance   awards;   and   (4)   awarding   the   house   solely   to   Bollinger   without 



awarding her any equity in it.  Shears also contends the weight of the evidence is against 



the court's judgment. 



                We start with Shears's argument that the superior court's decisions are 



against the weight of the evidence.            The superior court issued extensive preliminary 



findings of fact and conclusions of law, a portion of which is set out below: 



                        With   intent   and   using   undue   influence,   in   January 

                2005   Shears   persuaded   Bollinger   to   rely   on   her,   and   she 

                became his agent under a power of attorney.             This created a 

                fiduciary   relationship   that   entailed,   among   other   things,   a 

                duty to keep complete, accurate, and contemporary records of 

                all financial transactions she was involved in that pertained to 

                her    use  of  Bollinger's     funds,   and   that  pertained    to  her 

                oversight and management of Bollinger's financial affairs. 



                        With     intent    and   using    undue     influence,    Shears 

                persuaded      Bollinger    to  buy   a  large,  two-story    house    on 

                Joseph Street in Anchorage, for which he was induced to pay 

                $150,000 down; she persuaded him to put her name as co- 

                owner on the house's title.  Shears lived upstairs, which was 

                in excellent condition, having recently been remodeled with 

                fine appointments; Bollinger lived downstairs in a much more 

                spartan living area. . . . 



                        Within weeks of closing on the house, with intent and 

                undue influence, Shears persuaded Bollinger to make her the 

                personal representative under his will, and the beneficiary of 

                significant   bequests.     She   arranged   to   have   him   leave   the 

                Joseph Street house to her upon his death, and to pay off the 

                remaining   mortgage   balance   from   the   assets   of   his   estate. 

                She arranged that the will bequeathed her $100,000, as well 

                as large bequests to her family members. 



                        With     intent    and   using    undue     influence,    Shears 

                obtained   authority   as   co-signer   over   Bollinger's   checking 



                                                   -7-                                             6692
 


----------------------- Page 8-----------------------

account in March 2005, and she wrote all of his checks.  She 

transferred money from his saving account to his checking 

account, giving her access to his money.   She took him to the 

bank monthly, where he would cash his monthly retirement 

and/or     social   security   checks,   and   with   intent   and   using 

undue influence, she then persuaded him to give her the cash 

(usually in the approximate amount of $3,000 per month). 

She spent or converted much if not most of his retirement and 

social security monthly income. 



. . . . 



        In December 2006, when Bollinger was hospitalized 

with pneumonia, Shears moved $100,000 from his savings 

account to his checking account, where she could access it. 



. . . . 



        The court finds that Shears utterly failed to properly or 

reasonably       account     for   her   management         and   use    of 

Bollinger's funds and finances under any burden of proof.  In 

essence, Shears presented a large bag of receipts that were 

incomplete,   unorganized,   incomprehensible   in            large   part, 

inaccurate,      and    totally   unsuitable     for   purposes     of   an 

accounting.      She also failed utterly to keep any reasonable 

records of the time and services she performed while working 

as his care attendant. 



        While the Co-Guardians did not have the burden of 

production or proof to perform the accounting, they did so, 

and the court finds their accounting to be credible, accurate 

as   far   as   they   were   able,   and   fair. The   court   accepts   and 

adopts the accounting of the Co-Guardians. 



        The court finds that Shears was not a credible witness. 

Her      testimony       was     often    rambling,       evasive,     and 

argumentative.  The explanations she provided regarding her 

alleged discussions with Bollinger and her demands for her 

earnings [were] frankly unbelievable.             The court finds that 

with specific intent and undue influence she overbore the will 

of    Bollinger,     who    was    particularly     vulnerable     to   her 



                                    -8-                                              6692
 


----------------------- Page 9-----------------------

instigations, demands, and efforts to frighten him or bully 

him or persuade him to do things he would never have agreed 

to do in his earlier years (say, when Shears' mother was still 

alive). Shears preyed upon and took advantage of Bollinger's 

close relationship with her mother.   Shears occasionally held 

herself out as Bollinger's relative.          Shears' testimony was 

inconsistent at times, and always self-serving.  Her financial 

decisions     in   the  use   of  Bollinger's     funds    were    selfish, 

fraudulent, and deceptive, and in every respect breached her 

trust   and   fiduciary   duties   to   Bollinger.    The   court   rejects 

Shears' testimony and claim that she and Bollinger entered 

into an oral or other agreement with respect to the purchase 

and ownership of the Joseph Street house, and with respect to 

her claim that Bollinger hired her to be a 24/7 in-home care 

giver at the rate of $25 per hour (or for any period, at any 

rate).   There was no legally valid contract between Shears 

and   Bollinger.     Necessarily,   there   was   no   breach   of   any 

contract   by    Bollinger    or  his   Co-Guardians.        But   for  the 

willingness of the Co-Guardians to be fair to Shears under a 

quantum   meruit   theory   (because   it   [was]   undisputed   that 

Shears did provide some minimum and basic care services to 

Bollinger), the court would award nothing to Shears for any 

of the services she performed, the reason being that all of her 

efforts   to   "care"   for   Bollinger   were   simply   a   part   of   her 

illegal and fraudulent scheme and plan to control and benefit 

from use of his property, money, and other resources. 



        The   court   finds   that   Bollinger's   testimony,   though 

limited by his physical infirmities, was clear on basic points. 

For example, he credibly explained that he couldn't say "no" 

to Shears. 



        The court finds that the testimony of the Co-Guardians 

was credible and fair.  Indeed, the court cannot recall another 

case where a party made such an obvious effort to be fair to 

the adverse party where the adverse party did   not deserve 

such   solicitude.     Time   and   again,   the   Co-Guardians   were 

willing    to  give   Shears    credits   even   though    the  evidence 

would   not   have   compelled   such   credits   to   be   given.     For 



                                    -9-                                              6692
 


----------------------- Page 10-----------------------

                example,      the   Co-Guardians       contend    that,  in  fairness   to 

                Shears, Shears should be   given quantum meruit credit for 

                some of the time that she spent providing some limited care 

                and service to Bollinger.  Because this is a case in equity, and 

                because   the   court   finds   that   Shears   grossly   breached   her 

                fiduciary   duties   to   Bollinger   and   came   to   the   court   with 

                unclean hands, the court would have been inclined to award 

                Shears no quantum meruit credits. 



                The     superior    court   later   issued   supplemental       findings    of  fact   and 



conclusions of law supporting and complementing its earlier preliminary findings of fact 



and conclusions of law.  Shears does not contend any specific finding of fact underlying 



the superior court's judgment is clearly erroneous, and in our independent view the 



superior court's factual findings overwhelmingly support its legal conclusions. 



                We next address the unclean hands doctrine because it is dispositive of 



Shears's arguments that the superior court wrongly:   (1) applied the doctrine; (2) barred 



her claim for compensation; (3) applied a three-year statute of limitations to her contract 



claim for compensation; and (4) calculated the weekly allowance she was entitled to 



receive from Bollinger.        The unclean hands doctrine is an equitable defense barring a 

party from claims in equity.9        To successfully raise an unclean hands defense, a party 



must show:      "(1) that the [other party] perpetrated some wrongdoing; and (2) that the 

wrongful act related to the action being litigated."10            "[T]he wrongful act must be 'so 



closely related to the matter in litigation . . . as to affect the equitable relation of the 

parties to the suit.' "11   The doctrine will not apply if the party asserting it fails to show 



        9       Id. at 1082. 



        10      Id. (quoting Knaebel v. Heiner , 663 P.2d 551, 554 (Alaska 1983)). 



        11      Id. (quoting Knaebel , 663 P.2d at 554). 



                                                   -10-                                               6692 


----------------------- Page 11-----------------------

that harm resulted from the alleged wrongful conduct.12 



                 Shears argues the superior court erroneously applied the doctrine to her 



contract claim for compensation and the doctrine should not apply in any event because 



the   court's   finding   -   that   she   exercised   undue   influence   over   Bollinger   to   obtain 



material   and   financial   gain   -   was   unrelated   to   the   work   she   did   for   him   or   to   fair 



compensation for that work.  Myers argues the court did not actually apply the doctrine 



because it allowed Shears a recovery.            We disagree with both parties. 



                 Shears fails to acknowledge that the superior court completely rejected her 



contract claim for wages and that she did not appeal that decision.  The superior court's 



award was based not on Shears's legal claim but rather on her alternative equitable claim 



in   quantum   meruit,   and   because   the   superior   court   found        Shears's   unclean      hands 



otherwise barred her from equitable relief, it limited any recovery in equity to the amount 



proposed by the co-guardians. 



                 Here the record overwhelmingly supports the superior court's findings that 



Shears perpetrated fraud and breached her fiduciary duties.                  Shears repeatedly exerted 



influence   over   Bollinger   for   her   personal   gain   by:      (1)   using   his   money   to   make 



numerous   purchases   for   herself   and   to   make   other   purchases   for   which   she   cannot 



account; (2) selling   his car and   keeping   the proceeds; (3) purchasing   a car with   his 



money; and (4) inducing him to buy a house and to include her on the house's deed. 



Contrary to Shears's argument, these wrongful acts were directly related to Shears's 



work as Bollinger's caregiver, as she used her position to obtain material financial gains. 



For instance, she used her position to gain access to Bollinger's checking account, to 



become a significant beneficiary in Bollinger's will, and to arrange the house purchase. 



Bollinger suffered significant financial losses as a result of Shears's conduct. 



         12      Id. (citing 27A AM . JUR . 2D Equity  105). 



                                                    -11-                                                 6692 


----------------------- Page 12-----------------------

                This case therefore presents a well-warranted application of the unclean 



hands   doctrine,   and   we   conclude   the   superior   court   did   not   abuse   its   discretion   in 



applying the doctrine to Shears's equitable claim beyond that which the co-guardians 



conceded.  Indeed, the superior court would have been well within its discretion to deny 

Shears equitable relief entirely,13 as it said it would have done in the absence of the co- 



guardians' generosity. 



                Lastly, we conclude the superior court did not err in awarding the house 



title solely to Bollinger.  Because the co-guardians acknowledged Shears contributed to 



the loan payments, Shears argues "she was deprived of her fair share of the home's 



equity."   But Shears fails to realize that - according to the co-guardians' accounting 



which the superior court adopted and Shears failed to specifically challenge as clear error 



- there was no equity in the house and Bollinger suffered a net loss of about $20,000. 



Because Shears "[w]ith intent and using undue influence" induced Bollinger to purchase 



the house, Bollinger was properly given sole title, without credit to Shears, to prevent 

further prejudice to his rights and interests.14 



V.      CONCLUSION 



                We AFFIRM the superior court's judgment. 



        13      Id. (stating unclean hands defense allows court to entirely bar a party's 



equity claim). 



        14      Cf. AS 09.45.590: 



                When it appears that partition cannot be made equal between 

                the   parties   according    to  their  respective    rights,  without 

                prejudice to the rights and interests of some of them, and a 

                partition is ordered, the court may adjudge compensation to 

                be made by one party to another on account of the inequality. 



                                                 -12-                                              6692 

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