The Court of Appeals of Tennessee addressed the case of Charles Smith, Executor of the Estate of Ethel Rogers Smith v. Jerry Smith, focusing on whether the trial court improperly denied the plaintiff's motion for relief from judgment under Tennessee Rule of Civil Procedure 60.02. The plaintiff sought to set aside a judgment favoring the defendant based on newly discovered evidence provided by a third party after a bench trial. The plaintiff also invoked equitable and judicial estoppel in support of the motion. The trial court denied the motion, leading to this appeal. Upon review, the appellate court determined that the trial court misapplied the law regarding the Rule 60.02 motion, resulting in the court vacating the previous judgment and remanding the case.
The background reveals this case marks its third appearance before the appellate court, with prior findings establishing that Ethel Rogers Smith's will intended her property to go to her husband or, if he predeceased her, to be divided between her sons, Charles and Jerry. After Ethel's husband passed away, Jerry was named attorney-in-fact in a Durable Power of Attorney that never became operative but was treated as such by both parties. Following Ethel's death in 2000, a significant amount of her funds was held in a joint account with Jerry at SunTrust. Charles contested the legitimacy of this account, alleging undue influence by Jerry, which, if proven, would allow the funds to revert to Ethel's estate for distribution per her will instead of passing directly to Jerry. The appellate court's first ruling established that a confidential relationship existed between Ethel and Jerry, creating a presumption of undue influence, which the trial court later found Jerry failed to rebut, primarily due to Ethel's lack of independent financial advice before establishing the joint account.
Independent advice is identified as a means to counter the presumption of undue influence. The appellate court determined that clear and convincing evidence demonstrated the fairness of transactions to Ethel, affirming her mental competence and active participation in financial decisions that benefited her. The court reversed the trial court's decision, ordering the release of funds from the SunTrust account to Jerry. Following this ruling, the Estate filed a motion for relief under Tenn. R. App. P. 60.02, citing newly discovered evidence from an Agreed Discovery Order, which revealed documents regarding a joint account that Jerry held with Ethel. Notably, a letter from Jerry, along with an application to transfer account assets to his name alone, was produced, contradicting Jerry's earlier claims about the account's status during the litigation. The trial court issued a stay on the judgment and allowed limited discovery regarding these documents. After an evidentiary hearing, the trial court denied the Estate's motion for relief, allowing the proceeds to remain with Jerry. The Estate subsequently appealed, questioning the trial court's discretion in denying the motion for relief under Tenn. R. Civ. P. 60.02. The appellate court noted that a trial court has broad discretion in such matters, and its decisions can only be overturned if an abuse of discretion is shown, such as applying an incorrect legal standard or reaching an illogical conclusion. The Estate claimed entitlement to relief based on evidence of mistake, fraud, or other misconduct as outlined in Rule 60.02.
The trial court denied the Estate's Rule 60.02 motion, asserting that SunTrust Securities and SunTrust Bank were not parties in the case and that any mistakes or excusable neglect by them did not warrant relief from the judgment under T.R.C.P. 60.02(1). Furthermore, the Plaintiff failed to demonstrate any mistake or excusable neglect by the Defendant that would justify relief. The ruling referenced Jerkins v. McKinney, where the Tennessee Supreme Court held that Rule 60.02 could apply to mistakes by non-parties. It was determined that the trial court abused its discretion by misapplying Tennessee law, as mistakes by SunTrust could potentially justify relief, although not all mistakes qualify. Relief under Rule 60.02 is warranted only if newly discovered evidence could alter the case outcome. The court emphasized that evidence merely impeaching a witness is insufficient for a new trial unless it is compelling enough to change the result. Given the importance of Jerry's credibility in the case, the appellate court remanded the matter for the trial court to reconsider the Estate's motion in light of the correct legal standards. The appellate court vacated the trial court's judgment and ordered further proceedings, with all appeal costs charged to the Appellee, Jerry Smith.
