The Arizona Court of Appeals discussed the state of Arizona law dealing with undue influence and what it takes to prove it in the recent case of Rosenberg v. Sanders 1 CA-CV 21-0246 (Ariz. Ct. App. May 31, 2022). Rosenburg sued Sanders claiming that she unduly influenced the decedent, Mr. Brandt, to sign a beneficiary deed in favor of Sanders. Summary Judgement was granted against Rosenberg in the trial court and she appealed.

The court noted that a beneficiary deed is voidable if executed under undue influence. Arizona law presumes that a person is not under undue influence and Plaintiff normally has the burden of proving that the instrument is invalid because “the defendant beneficiary made the grantor’s desires conform to her own by exercising power over the grantors’ mind and overmastering his volition”. ARS 12-2712.

Since there is usually no eyewitness or other direct evidence of undue influence, these cases often turn on circumstantial evidence.

The Arizona Supreme Court has identified eight non-exclusive factors as “significant indicia” of undue influence.  These are:

1. Whether the person benefited by the deed made any fraudulent representations to the grantor;
2. Whether the deed was hastily executed;
3. Whether the execution was concealed from others;
4. Whether the person benefitted by the deed was active in securing its drafting and execution;
5. Whether the deed as drawn was consistent with prior declarations of the grantor;
6. Whether the deed was reasonable rather than unnatural in view of the grantor’s circumstances, attitudes and family;
7. Whether the grantor was a person susceptible to undue influence; and
8. Whether the grantor and the beneficiary were in a confidential relationship.  See In Re McCauley’s Estate 101 Ariz. 8, 10, 11 (1966).

The Rosenberg court expanded this list of factors by determining that a broad range of other evidence might be considered, such as the grantor’s statements or other circumstances occurring before or after the execution of the instruments.

Interestingly, the Rosenberg Court also mentioned that, in some cases, there is an inverse presumption of undue influence that can arise where a person had a confidential relationship to the Grantor, was active in procuring the creation and execution of the instrument and is a principal beneficiary of the instrument; or where the person prepared the instrument and is the principal beneficiary of the instrument. ARS 14-2712 (E). In such cases, the beneficiary must overcome the presumption of undue influence by a preponderance (more than 50%) of the evidence. Rosenberg argued that this inverse presumption applied but the Court found that it was not applicable.  Nevertheless, Rosenberg prevailed on appeal and the case was sent back to the Superior Court for Trial.

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