By Cyril Tuohy
Legal analysts have made much of the fact that the challenge to health care reform in the King v. Burwell case now before the U.S. Supreme Court hinged on four words: “established by the State.”
An appeals court, however, recently upheld a jury’s findings in a case that hinged on half as many words: “Keep it.”
In the grand scheme of estate disputes, the question of donative intent may warrant a mere footnote. But as an aging nation forges friendships with nurses and long-term caregivers, Pepper v. Whitehead may help clarify intent in the face of future squabbles.
In Estate of Pepper v. Whitehead, the 8th U.S. Circuit Court of Appeals upheld the jury’s finding of “donative intent.”
Writing for the appeals panel, U.S. Circuit Judge Roger L. Wollman said, “The intent of the donor is the controlling element.”
At issue was what Sterling Gary Pepper Jr., owner of an extensive collection of Elvis Presley memorabilia, intended when, in 1978, two years before his death, he turned to his “nurse, housekeeper, cook, assistant, friend and secretary,” Nancy Pease Whitehead, and said, “Keep it.”
Whitehead cared for Pepper, who suffered from multiple sclerosis, and for Pepper’s aging mother, Nell.
She also happened to be a Presley devotee. Her friendship with Pepper included daily pilgrimages to Graceland in Memphis, Tenn., and attending Presley concerts.
Pepper, who was on Presley’s payroll for a time, was instrumental in communicating with and building up Presley’s fan club. Pepper had amassed a sizeable collection of clothes, recordings, prints and negatives by the time the rock star died in 1977.
Pepper died in 1980 and his mother died in 1982, and the collection remained under Whitehead’s care and responsibility.
When the collection was sold in 2009 for more than $250,000 at auction by a partnership consisting of Whitehead, her sister and her brother, the estate of Nell G. Pepper and the estate of Sterling Gary Pepper sued for fraud and for failure to return property.
The estates argued the jury lacked sufficient evidence to find that Pepper had transferred ownership interest to Whitehead. The estates also argued that the jury did not have enough evidence to show that Pepper had placed any conditions on the gift.
“We disagree with the Estates’ characterization of the evidence,” the court found.
Whitehead testified at trial that she believed it was her responsibility to maintain the collection after Pepper’s death, and would have returned the collection to Pepper if asked.
Even if she had been willing to return the items, she was under no obligation to do so, the court found.
“That she would have returned it to the family shortly after Gary’s death did not impose upon her an enforceable obligation to do so,” Wollman wrote, noting that Pepper’s family were not Presley fans and that Whitehead told the jury that Pepper didn’t want his family to be entrusted with the collection.
“There is no direct evidence that Gary intended for Nancy to keep the collection until he wanted it back; similarly, there is no direct evidence that Gary intended for Nancy merely to hold it for safekeeping,” the court wrote. “He simply said, ‘Keep it.’ ”
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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