Appeals from the Appellate Division, District Court of the Virgin Islands (St. Croix), Civil No. 88-00337.
Sloviter, Stapleton and Hutchinson, Circuit Judges.
Plaintiffs, Gasper Alvira Cruz, Jr., Teresa Bravo, Mary Berrios, Irene Alvira, Humberto Alvira, Jr. and Mariela Alvira, filed this action in the Territorial Court of the Virgin Islands to set aside a deed executed by Bonifacia Rucci on October 29, 1981, transferring all of her real property to her daughter, defendant Luz Esther Melendez. Plaintiffs Bravo, Berrios and Irene Alvira were children of Rucci, who died on September 6, 1982; Cruz was the grandchild of Rucci; Mariela and Humberto Alvira were Rucci's great-grandchildren. In their complaint, plaintiffs alleged that Rucci had been unduly influenced by Melendez in the conveyance of certain real property to the defendant. Trial was held on March 4 and 5, 1985.
Evidence was presented at trial that during the latter years of her life, Rucci suffered from diabetes and arthritis, and that in 1978 she was diagnosed as having breast cancer. She travelled to Puerto Rico for medical treatment, which included a mastectomy and chemotherapy. Thereafter, Rucci returned to her home in St. Croix and continued chemotherapy treatment.
In March 1981, Rucci rented out her properties and moved in with her daughter, Luz Melendez. Melendez testified that Rucci moved because of her state of deteriorating health, exacerbated by the death of Rucci's grandson the previous month. Melendez attended to her mother's daily needs while the two shared a home.
Throughout her illness, Rucci received medical assistance from the government. In July 1981, Rucci's eligibility for this assistance was called into question because of her ownership of property and the rental income which it was producing. Melendez testified that her sister, Mary Berrios, told her mother to transfer ownership of the property to all of her children to insure that the government assistance would continue, but that Rucci refused, insisting that she wanted Melendez "to have a larger share." App. at 283.
In October 1981, Rucci returned to Puerto Rico for a medical examination and it was determined that the cancer had reoccurred and spread to her skeletal system. She again received chemotherapy and other related treatment, and returned to St. Croix. Melendez testified that Rucci, anxious to arrange her final affairs, decided to deed her all of her real property. Melendez stated that she resisted being the sole grantee of the property, fearing familial discord, but her mother remained insistent. Therefore, Melendez proposed that she would give the remaining family members money from her own personal savings as an exchange, and Rucci agreed, except that she protested any gift to her grandson, Cruz, whom she characterized as a "bad son" (to her son) and whom she intended to exclude from her benevolence.
At the request of her mother, Melendez telephoned attorney Frank Padilla, Rucci's lawyer, to obtain assistance in the deed transfer. Padilla came to Melendez's home on October 26, 1981, accompanied by an English/Spanish translator, Aurea Stamatakis, whose presence was necessary because Rucci spoke no English. Padilla discussed with Rucci, in the presence of Stamatakis, the proposed transfer and its possible ramifications. Padilla testified he fully explained to Rucci the terms of the new deed, reminded her that the instrument would exclude her other children, and informed her of alternative options available, such as the creation of a life estate. Rucci told him that she understood that Melendez would receive the property to the exclusion of the remainder of the family, stated that this arrangement was what she wanted, and told him that she had given instructions to Melendez regarding the care of the remaining family members. Padilla excluded Melendez from the room "to be sure there [was] no coercion." App. at 190. He specifically asked Rucci if she was doing this freely. Id. Rucci then signed the deed by placing an "X" in the appropriate space.
Thereafter, in December 1981, Melendez gave Mary Berrios a check for $12,000; Irene Alvira a check for $11,800 and $200 cash; and Teresa Bravo a check for $7,000.*fn1 Additionally, Melendez gave $2,000 in savings bonds each to Iraide Alvira and Betzaida Alvira, two of Rucci's grandchildren. Pursuant to Rucci's wish, nothing was given to Cruz.
Based on the testimony presented and his credibility determinations in favor of Melendez in the face of conflicting evidence, the trial judge entered judgment in favor of defendant. The court held that the presumption of undue influence, enunciated in Joseph v. Eastman, 344 F.2d 9, 12 (3d Cir. 1965), did not arise in this case. The court found that although Rucci was advanced in age and physically infirm at the time of the execution of the deed, and that a relationship of trust had existed between Rucci and Melendez, the evidence did not establish that Melendez exerted influence over Rucci. The court held that the Joseph presumption did not arise because Rucci was mentally competent at the time she executed the deed, to the extent that she fully understood the nature of her act and realized the consequences thereof, and because consideration had been given for the transfer of the property in the form of Melendez's gifts to her relatives.
On appeal, the Appellate Division of the District Court of the Virgin Islands vacated the judgment of the trial court. The court held that the trial court had misinterpreted Joseph. It held that because Rucci was aged and infirm at the time of the deed's execution, and because she had maintained a relationship of trust with Melendez, a rebuttable presumption of undue influence had arisen as a matter of law.*fn2 The case was remanded to ...