Take-Away: Undue influence does not have to be the result of an intentional act.

Background: We normally think of undue influence as a situation where one individual intentionally imposes his/her will over another individual, which is often the case. However, undue influence can be achieved without an intentional act according to Michigan courts.

Definition: Undue influence is most often described as-

“To establish undue influence it must be shown that the grantor [ a term that includes a testator or settlor] was subject to threats, misrepresentations, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against the grantor’s inclination and free will.” In re Erickson, 202 Mich App 329, 331 (1993.)

The above quote was relied upon in a recent Michigan Court of Appeals decision when it noted that “undue influence can be shown through unintentional (i.e. negligent) acts such as misrepresentation or undue flattery as well as through intentional acts such as threats, or physical or moral coercion.Hanover Insurance Co. Inc. v Lubrenski, #346942 (March 24, 2020.)

Lubrenski: Briefly, the Lubrenski case dealt with an professional liability insurer that had refused to tender a defense to an attorney. The attorney was a beneficiary and co-trustee of a trust that he had drafted. The attorney was accused of exercising undue influence over the trust’s settlor. The attorney demanded that his malpractice insurer defend him. The malpractice insurer claimed that its policy only covered an attorney’s negligence, whereas undue influence requires an intentional act, and accordingly it was not required under the policy to tender a defense to the underlying legal malpractice claim. This is when the Court responded that undue influence can also arise due to negligent acts, and the underlying legal malpractice claim against the attorney did not assert that the attorney had acted intentionally, concluding that the malpractice claim could be based on negligence. To conclude, the insurance company was ordered to tender a defense to its insured, the attorney accused of exercising undue influence over his client.

Affirmative Evidence: Proving undue influence is difficult. The party who asserts that there was undue influence must present affirmative evidence that undue influence was exercised. Motive, opportunity, or ability to control the grantor is not, in itself, sufficient to satisfy the affirmative evidence standard. In re Gerald L. Pollack Trust, 309 Mich App. 125 (2015).

Presumption of Undue Influence: As has been covered in the past, a presumption of undue influence can occur when evidence is introduced that would establish:

1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary; and

2) the fiduciary or an interest that is represented by the fiduciary benefits from a transaction; and

   3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction.

However, even when the presumption of undue influence established, the ultimate burden of proof of undue influence rests with the party who asserts it to persuade a judge or jury.

Conclusion: It is hard to imagine undue influence arising from an act of negligence, such as undue flattery of a testator or settlor. The common law is clear that merely trying to persuade a testator or settlor to benefit oneself is not, by itself, undue influence. The hard question is when does persuasion cross the line and become undue influence? Normally we think of misrepresentation as intentionally misleading another individual, but apparently, according to the court, someone can negligently mislead another as well, leading to undue influence which might cause a beneficiary to forfeit their interest in a Will or trust. In sum, the whole area of law with regard to undue influence in Michigan is pretty fuzzy these days, making Will and trust challenges something of a game of Russian Roulette.