MSC To Examine What Is ‘Sufficient Evidence’ To Trigger‘ Fiduciary Or Confidential Relationship’ In Undue Influence Cases

The Michigan Supreme Court is set to hear arguments in a dispute over the title to funds in a decedent’s credit union account, ordering the parties in In re Sherrod Estate to address “what constitutes sufficient evidence of a fiduciary or confidential relationship.”

After the death of her father, the plaintiff in the case, Dedra McBurrows-Sherrod, filed a motion in the Oakland County Probate Court seeking to prevent the defendant, Michael Sherrod, her father’s brother, from withdrawing funds from the decedent’s Diversified Members Credit Union (DMCU) account. The probate court granted the plaintiff’s motion and held that she 1) presented sufficient evidence to establish a presumption of undue influence and 2) established by a preponderance of the evidence that the defendant had unduly influenced the decedent to name him as beneficiary of the DMCU account.

The defendant appealed that ruling and, in March 2025, the Michigan Court of Appeals reversed the probate court’s decision (Docket No. 369863). “We conclude that [the plaintiff] failed to present sufficient evidence to establish a fiduciary or confidential relationship between [the defendant] and decedent, which means that [the plaintiff] failed to establish a presumption of undue influence,” the Court of Appeals said.

After the Court of Appeals denied the plaintiff’s motion for reconsideration, she appealed to the Michigan Supreme Court.

In its order directing that arguments be scheduled in the case (Docket No. 168598), the Michigan Supreme Court specifically cited In re Jennings’ Estate, 335 Mich 241 (1952), and In re Wood’s Estate, 374 Mich 278 (1965), overruled in part on other grounds by Widmayer v Leonard, 422 Mich 280 (1985).

The justices also invited the State Bar of Michigan Probate and Estate Planning Section and the State Bar of Michigan Elder Law & Disability Rights Section to file amicus curiae briefs. “Other persons or groups interested in the determination of the issue presented in this case who are not exempt from the motion requirement under MCR 7.312(H) may move the Court for permission to file briefs amicus curiae.”

Background

The decedent suffered from cardiac issues and had been in-and-out of the hospital over a period of several months in 2022. The decedent was eventually diagnosed with episodic memory loss and dangerously low blood pressure. Ultimately, he was discharged to a nursing home, where he stayed until July 7, 2022.

On July 2, 2022, the defendant first visited the decedent. He had not visited the decedent at any time before that date, although he knew the decedent had been in-and-out of the hospital. The defendant explained his absence by stating that he visited the decedent when the decedent would “call him,” which was in July 2022. Despite not seeing each other, the defendant asserted that he had a close relationship with the decedent. Other people, however, testified that the brothers “generally disliked each other.”

The defendant explained that he visited the decedent in the nursing home on July 2, 2022, after the decedent had called him. He also indicated that after the decedent was discharged from the nursing home, he would “occasionally” pick up the decedent from his home and take him to lunch. The defendant also indicated that, on July 11, 2022, he drove the decedent to the police station, where the decedent filed a report alleging the plaintiff was “mismanaging his money and failed to take care of him.” (According to the Court of Appeals opinion, “[t]here was and still is no evidence to support this accusation.”)

Then on July 13, 2022, believing the plaintiff was mishandling his money, the decedent asked the defendant to take him to DMCU so he could take the plaintiff off his account. The defendant drove the decedent to DMCU and accompanied the decedent into the branch manager’s office while the decedent “conducted his business.” However, the defendant “stayed mostly silent.” The decedent asked the branch manager to remove the plaintiff’s power of attorney and to revoke her access to his account, noting his concern about the plaintiff’s handling of his finances. The branch manager suggested the decedent simply open a new account, which the decedent did. The decedent transferred the funds from his old account to the new account, and named the defendant as the beneficiary on the new account.

The defendant did not tell the plaintiff or other family members about taking the decedent to DMCU or the police station. The defendant explained that “he felt that he needed to keep the trips a secret because [the] decedent told [him] that he was the only person that [the] decedent could trust.”

The defendant also took the decedent to DMCU one other time, so the decedent could provide the bank with a valid driver’s license for establishing the new account. On this second visit, the defendant did not accompany the decedent into the bank.

On July 17, 2022 – four days after establishing the new DMCU account – the decedent was readmitted to the hospital. Records indicated that the decedent’s memory was impaired. The decedent’s treating physician said the cognitive issues were likely caused by a lack of oxygen to the brain. The doctor explained that, when the decedent was discharged in early July, “he was given at-home treatment instructions to ensure proper blood flow (like wrapping his legs), but if decedent did not comply with his treatment plan, the result was a lack of oxygen to decedent’s brain, affecting his cognitive abilities.”

The decedent passed away on October 3, 2022. The DMCU branch manager testified that the defendant called her on October 4, 2022, to inform her of the decedent’s death, asked her to close the decedent’s account and requested the funds be sent to him as the beneficiary.

Subsequently, the plaintiff, as personal representative of the decedent’s estate, challenged the defendant’s title to the DMCU account funds. She asserted undue influence on the defendant’s part. The probate court held a bench trial to determine whether the defendant unduly influenced the decedent to name him the account beneficiary. The probate court ruled the plaintiff established a presumption of undue influence and the defendant’s rebuttal evidence was “much weaker evidence than the evidence offered to support the presumption of undue influence.” Therefore, the probate court found, by a preponderance of the evidence, that the defendant unduly influenced the decedent to name him the beneficiary of the DMCU account.

The defendant appealed.

Court Of Appeals Reversal

On appeal, the defendant argued the probate court erroneously held that the plaintiff established a presumption of undue influence that vitiated the instrument – that is, the decedent naming him as beneficiary on the new DMCU account.

“We agree,” the Court of Appeals said in an unpublished opinion joined by Judges Adrienne N. Young, Colleen A. O’Brien and Brock A. Swartzle.

Moreover, certain circumstances “are so suggestive of undue influence that, if those circumstances are established, it will give rise to a presumption of undue influence,” the Court of Appeals said. “The presumption of undue influence is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction.”

The Court of Appeals then turned to the relationship between the decedent and the defendant, observing the decedent “clearly” did not have a “traditional fiduciary relationship like attorney-client or physician-patient .…” However, “that is not necessarily fatal,” the appeals court observed. “A confidential or fiduciary relationship is a ‘broad’ term, encompassing any relationship ‘in which there is confidence reposed on one side, and the resulting superiority and influence on the other.’ … In this way, the term ‘has a focused view toward relationships of inequality.’”

In addition, “[t]rust alone is not sufficient to establish a confidential or fiduciary relationship,” the Court of Appeals pointed out. “Rather, a confidential or fiduciary relationship requires ‘a reposing of faith, confidence and trust and the placing of reliance by one upon the judgment and advice of another.’”

Here, the probate court determined that when the decedent named the defendant as beneficiary of the new account, “a confidential or fiduciary relationship existed between them,” the Court of Appeals explained. “Despite finding that [the defendant] generally lacked credibility, the [probate] court opined that ‘a lot of what [the defendant] testified about supports the theory about a fiduciary relationship regarding this particular transaction and banking transaction.’ Specifically, the [probate] court opined that its finding of a confidential or fiduciary relationship between decedent and [the defendant] was supported by [the defendant’s] testimony that (1) decedent ‘needed Michael Sherrod to help him’ by driving him to the bank after he became ‘very suspicious of’ [the plaintiff], (2) decedent told the defendant ‘you’re the only person I can trust,’ and (3) decedent ‘redirected all his mail to – to Michael’s house with regard to financial issues.’”

This evidence, however, was insufficient to support the finding of a confidential or fiduciary relationship, the Court of Appeals said. “That decedent trusted [the defendant] is necessary for finding that a confidential or fiduciary relationship existed between them, but trust alone is not enough. … Rather, to establish that a confidential or fiduciary relationship existed …, there needed to be evidence that decedent demonstrated his trust in [the defendant] by placing reliance on [his] judgment or advice, … and there is no such evidence in the record.”

For example, nothing in the record suggested the decedent gave the defendant any control over the decedent’s finances, such that the decedent would have to trust the defendant’s judgment, the Court of Appeals noted. “Indeed, decedent did not even give [the defendant] access to the funds in his DMCU account while decedent was alive – decedent only made [the defendant] the beneficiary on his DMCU account. And while [the defendant] drove decedent to DMCU in a trip that resulted in decedent naming [him] the beneficiary of decedent’s account, this supports only that [the defendant] had the opportunity to influence decedent; it does not support that a confidential or fiduciary relationship existed between them.”

Citing In re Jennings’ Estate, the Court of Appeals emphasized that a confidential or fiduciary relationship “is established when one places reliance on another’s judgment or advice.” In the present case, “there is no evidence that decedent relied on [the defendant’s] judgment or advice.”

Therefore, “we conclude that the trial court’s finding that a confidential or fiduciary relationship existed between [the defendant] and decedent was clearly erroneous,” the Court of Appeals held. “Without that finding, [the plaintiff] cannot establish a presumption of undue influence. [She] has never argued that she presented sufficient evidence to establish undue influence absent a presumption, so our conclusion that [she] failed to establish the presumption of undue influence resolves this case.”

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