Tim J. Fruit v. Bonnie J. Fruit

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
November 25, 2020
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2019AP1890 Cir. Ct. No. 2018CV110

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV

TIM J. FRUIT AND JILL A. MARIN,

PLAINTIFFS-APPELLANTS,

V.

BONNIE J. FRUIT,

DEFENDANT-RESPONDENT.

APPEAL from an order of the circuit court for Grant County:
CRAIG R. DAY, Judge. Reversed and cause remanded.

Before Fitzpatrick, P.J., Kloppenburg, and Nashold, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Siblings Tim Fruit and Jill Marin appeal a
summary judgment in favor of their step-mother, Bonnie Fruit. Gerald Fruit, now
No. 2019AP1890

deceased, was the father of Tim and Jill from a prior marriage.1 Tim and Jill
contend that lawsuit settlement proceeds for personal injuries Gerald sustained are
part of Gerald’s probate estate and should be distributed to them pursuant to the
terms of Gerald’s will.2 Those settlement proceeds were not part of Gerald’s
probate estate because, in the four months between payment of the settlement
proceeds and Gerald’s death, Bonnie, while acting as Gerald’s attorney-in-fact
under a durable power of attorney (“POA”), deposited the vast majority of the
settlement proceeds into a money market account in which she had the
survivorship interest upon Gerald’s death and certificates of deposit held either in
her name alone or jointly with Gerald. We will generally refer to that account and
the certificates of deposits (“CDs”) collectively as “the disputed accounts.” As a
result, upon Gerald’s death, the funds in the disputed accounts passed solely to
Bonnie outside of probate.

¶2 In a motion for summary judgment, Bonnie argued, and the circuit
court agreed, that she had the authority as Gerald’s attorney-in-fact to deposit the
settlement proceeds in the disputed accounts. The court also denied Tim and Jill’s
motion for partial summary judgment in which they argued that Bonnie breached
her fiduciary duty to Gerald. We reverse the orders of the circuit court, grant
partial summary judgment to Tim and Jill on some issues, conclude that there are
genuine issues of fact on other issues, and remand for further proceedings
consistent with this opinion.

1
Because many of the persons involved in this case share the same last name, we will
refer to each by their first name.
2
We will generally refer to the net amount received from that lawsuit as the “settlement
proceeds.”

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BACKGROUND

¶3 For purposes of summary judgment, we conclude that there is no
dispute regarding the following material facts, unless otherwise noted.

¶4 Bonnie was married to Gerald from 1992 until Gerald’s death in
December 2016. Gerald had two children from a prior marriage, Tim and Jill.

¶5 In February 2009, Gerald executed his last will and testament. In his
will, Gerald named Tim to be his personal representative. Gerald left all probate
assets to Tim and Jill in equal shares. The will also stated: “Because Bonnie and I
have maintained the assets we brought into our marriage as individual property of
each of us and have planned to have such assets distributed to our respective
families, she is hereby excluded from receiving any distribution from the residue
of my estate.” Tim, Jill, and Bonnie knew the contents of Gerald’s will.

¶6 At the time he executed his will, and until his death, Gerald was the
sole owner of a money market account at American Bank & Trust (the “money
market account”). One week before Gerald executed his will in 2009, Bonnie was
designated by Gerald as the payable on death (“POD”) beneficiary for the money
market account.

¶7 In an affidavit filed in this action, Gerald’s attorney who drafted the
will alleged that, at the time Gerald executed his will, Gerald “understood which
assets would pass outside of probate and which assets would be distributed
through his Estate plan.”3

3
In her respondent’s brief, Bonnie asserts that, at the time of Gerald’s death and except
for one Edward Jones account, all of Gerald’s accounts were payable on death, transferrable on
(continued)

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¶8 In January 2013, Gerald was injured during a medical procedure.
After that, Gerald mostly lived in nursing homes. Gerald, Bonnie, Tim, and Jill
were named as plaintiffs in a lawsuit against Gerald’s doctor who performed the
procedure. That medical malpractice lawsuit was brought in federal court in Iowa,
apparently because the procedure took place in Iowa.

¶9 In September 2014, Gerald executed a POA naming Bonnie as his
attorney-in-fact for financial matters with Tim as the alternate agent.4 Specific
provisions of the POA are set forth later in this opinion.

¶10 On August 25, 2016, the parties to the medical malpractice lawsuit
reached an agreement in which Gerald, Bonnie, Tim, and Jill agreed to release
Gerald’s doctor from all claims in exchange for payment of a specified amount.5

death, or jointly owned with Bonnie. However, the cites to the record given by Bonnie do not
support the assertion about the Edward Jones account.

We also note that Bonnie’s brief has a reference to a respondent’s appendix. However,
Bonnie, as the respondent, did not file an appendix in this court.
4
We observe that there is no statement under oath in the record which would support an
assertion that Gerald’s POA found in the record is a complete and authentic copy of that
instrument. Gerald’s POA was drafted by the attorney who represented Bonnie in the circuit
court and represents Bonnie in this court. That attorney’s motion for summary judgment filed in
the circuit court attached Gerald’s POA to the motion without an affidavit. A portion of a
response to a request for production of documents in the record mentions Gerald’s POA, but that
pleading does not have Gerald’s POA attached to it. Nonetheless, the briefing in this court from
Tim and Jill does not dispute that the copy of Gerald’s POA in the record is authentic.

In addition, Tim and Jill do not point to any evidence in the summary judgment record
that Gerald lacked capacity to execute the POA or that his execution of the POA was the result of
undue influence by Bonnie. Nor have Tim and Jill asked that the POA be declared invalid.
5
As part of that settlement agreement, the parties agreed to keep the terms confidential.
The terms of the settlement, including the total settlement amount, were sealed by order of the
circuit court. The amounts of that settlement distributed to, or by, the parties to this action
mentioned in this opinion do not implicate the confidentiality terms of the settlement agreement.

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No. 2019AP1890

Pertinent to this appeal, Bonnie, Tim, Jill, and Gerald (with Bonnie signing for
Gerald) signed a Release and Indemnity Agreement in which they agreed that a
specified portion of the settlement amount would be paid to Medicare, and the
balance of the settlement amount would be paid by a check made out to “Gerald
and Bonnie Fruit” and their attorney. Also on August 25, 2016, after attorney fees
and costs were deducted, the settlement proceeds were disbursed in a check made
out to “Gerald and Bonnie Fruit” in the amount of $553,524.63.6

¶11 While acting as Gerald’s POA, Bonnie distributed the settlement
proceeds to Tim or Jill, and into various accounts that we now describe. The
transactions and amounts we next describe are disputed in some respects by the
parties, but the disputes are not material to our analysis that follows.

¶12 The amount of $27,500 was given to Tim,7 and $25,000 was given to
Jill. The record is unclear as to the account from which those funds were
withdrawn, although the parties appear to agree that the checks to Tim and Jill
were drawn from the money market account, or the date of the payments. Bonnie
contends that Gerald instructed her to make these distributions from the settlement
proceeds to Tim and Jill, and Tim and Jill do not dispute that fact.

6
An “Accounting Breakdown” was prepared on August 25, 2016, by the law firm that
represented the plaintiffs. That “Breakdown” stated that the “NET AMOUNT TO BE
DISBURSED to Gerald and Bonnie Fruit” was $553,524.63. A check was issued by the law firm
to “Gerald and Bonnie Fruit” on that same date in the amount of $503,524.63. It is unclear from
the summary judgment record when the remaining $50,000 of the settlement proceeds were paid,
but the parties seem to assume that the $50,000 amount was paid. While we observe that
discrepancy, it is not material to our analysis.
7
According to Bonnie, Tim received a slightly larger amount than Jill because Tim paid
an initial fee to the attorney in Iowa for that attorney to investigate whether Gerald had a viable
medical malpractice claim.

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No. 2019AP1890

¶13 On August 31, 2016, a deposit was made to the money market
account that was in Gerald’s name only with Bonnie as POD on that account as
mentioned earlier. The deposit was in the amount of $348,014.63. The record is
unclear if the funds used to purchase the CDs, as discussed below, came out of the
money market account, but the parties appear to implicitly agree to that fact.

¶14 On August 31, 2016, Bonnie deposited $50,000 in a CD at American
Bank & Trust with a maturity date six months after issuance. Gerald and Bonnie
were listed as joint owners of that CD. This CD was taken out using only
Bonnie’s signature.8

¶15 On October 5, 2016, a total of $50,000 was deposited in two CDs at
Livingston State Bank.9 Bonnie signed the CDs in her own name and as agent for
Gerald. The first CD was in the amount of $10,000 with a maturity date six
months after the date of issuance. The second CD was in the amount of $40,000
with a maturity date one year after the date of issuance. Each of those CDs listed
“Bonnie [] Fruit or Gerald [] Fruit” as the owners of the CD with a right of
survivorship.

¶16 A total of $60,000 was deposited by Bonnie in two CDs at People’s
State Bank. Each CD was in the amount of $30,000, and both CDs were owned
by Bonnie in her name alone. The record does not indicate when these CDs were

8
In her respondent’s brief, Bonnie incorrectly asserts that this CD was solely in her
name.
9
In her respondent’s brief, Bonnie incorrectly asserts that there was only one CD at
Livingston State Bank.

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No. 2019AP1890

opened or when they matured, but the parties appear to agree that these CDs were
opened with the settlement proceeds and before Gerald’s death.

¶17 Gerald’s money market account with Bonnie as the POD beneficiary
had a balance of $273,019.98 on the date of Gerald’s death, December 10, 2016.

¶18 To sum up, it is undisputed that, during the approximately four
months from receipt of the settlement proceeds until Gerald’s death, Bonnie,
acting as Gerald’s attorney-in-fact, transferred over $433,000 of the settlement
proceeds into the disputed accounts that she owned individually or jointly with
Gerald before his death, or that she became sole owner of at Gerald’s death by
operation of law.

¶19 In January 2017, Bonnie executed a transfer by affidavit
representing that the gross value of Gerald’s estate subject to administration was
$20,398.42.10 Bonnie issued cashier checks in the amount of $10,000 to both Tim
and Jill.11 Tim filed a Petition for Formal Administration of Gerald’s estate.
Bonnie objected to formal administration of Gerald’s estate and asserted in her
response that only $20,398.42 of Gerald’s estate was subject to administration.

¶20 Tim and Jill brought an action against Bonnie claiming that the
settlement proceeds were Gerald’s individual assets subject to administration in

10
In her respondent’s brief, Bonnie asserts that the $20,398.42 was the amount
remaining in an account at Edward Jones. However, Bonnie’s cite to the record for this assertion
does not support her allegation.
11
Bonnie alleges that she used the other $398.42 to “pay taxes,” and Tim and Jill do not
dispute the point.

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No. 2019AP1890

Gerald’s estate. Tim and Jill make the following allegations in their first cause of
action for declaratory relief that are pertinent to this appeal:

 The settlement proceeds were Gerald’s sole and individual property under
WIS. STAT. §§ 854.17, 861.01(3m), and 766.31(7)(f) (2017-18).12

 Bonnie transferred the settlement proceeds while acting as Gerald’s POA.

 Bonnie deposited the settlement proceeds to the disputed accounts as
discussed above.

 Bonnie’s transfer of those funds to the disputed accounts, and her later
receipt of those funds, violated Bonnie’s fiduciary duties as Gerald’s
attorney-in-fact.

¶21 Tim and Jill also state a cause of action against Bonnie for tortious
interference with an expected inheritance and request monetary damages against
Bonnie for that interference. Germane to that claim, Tim and Jill allege:

 Tim and Jill were Gerald’s sole beneficiaries under Gerald’s will.

 Prior to Gerald’s death, Bonnie “exercised control of Gerald’s assets,”
“deposited or transferred some of Gerald’s assets … into an[] account or
accounts that were titled [solely] in Bonnie’s name” and “deposited or
transferred some of Gerald’s assets … into an account or accounts that were
jointly titled with Gerald, with survivorship rights to Bonnie,” “with

12
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise
noted.

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No. 2019AP1890

payable on death designations to Bonnie,” and the assets remained in those
accounts at the time of Gerald’s death.

 In making such deposits or transfers, “Bonnie intended to retain the
transferred or deposited property for herself, to the exclusion of [Tim and
Jill].”

 Bonnie “had no authority to transfer Gerald’s assets … other than under
authority granted to her as the attorney-in-fact under Gerald’s” POA, and
those deposits and transfers “were contrary to Bonnie’s fiduciary duties and
responsibilities.”

 But for “Bonnie’s tortious breach of her fiduciary duties and
responsibilities” as Gerald’s attorney-in-fact, Tim and Jill would have
received an inheritance from Gerald comprised of the deposits and transfers
in the disputed accounts.

¶22 Bonnie moved for summary judgment requesting dismissal of each
of the claims made by Tim and Jill. Tim and Jill moved for partial summary
judgment on the breach of fiduciary duty element of their cause of action that
Bonnie tortiously interfered with their expected inheritance. The circuit court
granted summary judgment in favor of Bonnie and denied Tim and Jill’s motion
for partial summary judgment. The court then entered an order dismissing each of
Tim and Jill’s claims with prejudice. Tim and Jill appeal.

¶23 We set forth additional material facts in our discussion below.

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No. 2019AP1890

DISCUSSION

I. Standard of Review, Summary Judgment, and Governing Principles.

¶24 This court reviews a grant or denial of summary judgment de novo,
using the same methodology employed by the circuit court. Bank of N.Y. Mellon
v. Klomsten, 2018 WI App 25, ¶31, 381 Wis. 2d 218, 911 N.W.2d 364. Summary
judgment is proper, and the moving party is entitled to judgment as a matter of
law, “if the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as a matter of
law.” WIS. STAT. § 802.08(2); see Bank of N.Y. Mellon, 381 Wis. 2d 218, ¶31.
This court views the summary judgment materials “in the light most favorable to
the party opposing summary judgment.” United Concrete & Constr., Inc. v. Red-
D-Mix Concrete, Inc., 2013 WI 72, ¶12, 349 Wis. 2d 587, 836 N.W.2d 807. “[I]f
more than one reasonable inference can be drawn from the undisputed facts,
summary judgment is not appropriate.” Schmidt v. Northern States Power Co.,
2007 WI 136, ¶47, 305 Wis. 2d 538, 742 N.W.2d 294.

¶25 This appeal requires us to interpret Gerald’s POA. A “power of
attorney is simply [a] written document authorizing the person to whom it is
granted to act as the agent or attorney-in-fact for the principal [(the person
granting the power of attorney)]. It is evidence that the holder of the power of
attorney may act as the agent for the principal to the extent set forth therein.”
Alexopoulos v. Dakouras, 48 Wis. 2d 32, 39-40, 179 N.W.2d 836 (1970); see also
WIS. STAT. § 244.02(9) (“‘Power of attorney’ means a writing or other record that
grants authority to an agent to act in the place of the principal, whether or not the
term power of attorney is used.”), (1) (“‘Agent’ means a person granted authority

10
No. 2019AP1890

to act for a principal under a power of attorney, whether denominated an agent,
attorney-in-fact, or otherwise.”), and (11) (“‘Principal’ means an individual who
grants authority to an agent in a power of attorney.”).

¶26 In interpreting a power of attorney, we apply contract interpretation
principles. See Schmitz v. Firstar Bank Milwaukee, 2003 WI 21, ¶22, 260 Wis.
2d 24, 658 N.W.2d 442 (“Agency agreements are generally subject to the same
rules of interpretation as other contracts.”). When we interpret a contract, our goal
is to give effect to the parties’ intentions. See Town Bank v. City Real Estate
Dev., LLC, 2010 WI 134, ¶33, 330 Wis. 2d 340, 793 N.W.2d 476. “[T]he best
indication of the parties’ intent is the language of the contract itself.” Id. “In the
guise of construing a contract, courts cannot insert what has been omitted or
rewrite a contract made by the parties.” Levy v. Levy, 130 Wis. 2d 523, 533, 388
N.W.2d 170 (1986). The interpretation of a power of attorney presents a question
of law that this court determines independently of the circuit court. Schmitz, 260
Wis. 2d 24, ¶32.

¶27 This appeal also requires this court to interpret statutes. The
interpretation of a statute is a question of law that we determine independently of
the circuit court. Pasko v. City of Milwaukee, 2002 WI 33, ¶23, 252 Wis. 2d 1,
643 N.W.2d 72. “[T]he purpose of statutory interpretation is to determine what
the statute means so that it may be given its full, proper, and intended effect.”
State ex rel. Kalal v. Circuit Ct. for Dane Cnty., 2004 WI 58, ¶44, 271 Wis. 2d
633, 681 N.W.2d 110. “We assume that the legislature’s intent is expressed in the
statutory language.” Id. Accordingly, “statutory interpretation ‘begins with the
language of the statute.’” Id., ¶45 (quoted source omitted). “If the meaning of the
statute is plain, we ordinarily stop the inquiry.” Id. (quoted source omitted). Our
supreme court further notes:

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No. 2019AP1890

Context is important to meaning. So, too, is the
structure of the statute in which the operative language
appears. Therefore, statutory language is interpreted in the
context in which it is used; not in isolation but as part of a
whole; in relation to the language of surrounding or
closely-related statutes; and reasonably, to avoid absurd or
unreasonable results.

Id., ¶46.

II. Were the Settlement Proceeds Gerald’s Individual Property?

¶28 We begin our analysis with the parties’ dispute regarding whether or
not the settlement proceeds are marital property, because that determination
affects the analysis of other disputes that the parties raise. Bonnie argues that
there is no genuine issue of material fact that the settlement proceeds are marital
property. From that premise, Bonnie contends that a maximum of one-half of the
settlement proceeds could be distributed through Gerald’s estate whether or not
Bonnie had the authority to transfer the funds into the disputed accounts. Tim and
Jill argue that the settlement proceeds are Gerald’s “individual property” under
Wisconsin law.

A. Additional Governing Principles.

¶29 If the facts are undisputed, application of the provisions of WIS.
STAT. ch. 766 to facts concerning the classification of property owned by spouses
is a question of law that we review de novo. Estate of Kobylski v. Hellstern, 178
Wis. 2d 158, 168, 503 N.W.2d 369 (Ct. App. 1993); Lloyd v. Lloyd, 170 Wis. 2d
240, 252, 487 N.W.2d 647 (Ct. App. 1992).

¶30 A decedent who is married may freely dispose of the whole of his or
her individual property, but may dispose of only his or her one-half of the marital
property. Estate of Kobylski, 178 Wis. 2d at 168; Lloyd, 170 Wis. 2d at 252; see

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WIS. STAT. § 861.01. All property of spouses is presumed to be marital property
unless that property is classified otherwise by, as examples, the exceptions listed
in WIS. STAT. § 766.31(3)-(7). Sec. 766.31(1)-(7); Lloyd, 170 Wis. 2d at 253-54.
The parties (here, Tim and Jill) challenging the marital property presumption have
“the burden to establish that the property at issue is not marital.” Estate of
Kobylski, 178 Wis. 2d at 170.

¶31 Pertinent here is WIS. STAT. § 766.31(7)(f). That statutory subpart
provides in relevant part:

Property acquired by a spouse during marriage and
after the determination date13 is individual property if
acquired … [a]s a recovery for personal injury … except
for the amount attributable to loss of income during
marriage.

Id. (emphasis added).

B. Analysis.

¶32 The summary judgment materials establish the following undisputed
facts.

¶33 In 2013, Gerald sustained personal injuries during a medical
procedure. The record does not show that Gerald, age seventy-six at the time the
injuries occurred, lost any income because of those injuries, and Bonnie does not
make that argument. The medical malpractice lawsuit against Gerald’s doctor was
resolved by a settlement agreement in which an insurer agreed to pay a specified
sum in exchange for a release from liability for any claims based on Gerald’s

The “determination date” in this context is the date of Gerald and Bonnie’s marriage in
13

1992. See WIS. STAT. § 766.01(5).

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No. 2019AP1890

personal injuries. The only reasonable conclusion from those undisputed facts is
that the settlement proceeds were, in the verbiage of WIS. STAT. § 766.31(7)(f), a
“recovery” for Gerald’s “personal injury,” and none of those funds were
“attributable” to a loss of income. Those undisputed facts, standing alone, support
a summary judgment determination that the settlement proceeds are Gerald’s
individual property.

¶34 But, Bonnie’s sole assertion that the settlement proceeds are not all
Gerald’s individual property is that she had a “loss of consortium claim which was
part of the [medical malpractice] lawsuit.”14 Bonnie gives no citation to the record
to support this assertion, such as a pleading from the medical malpractice lawsuit.
However, Bonnie was a party to the medical malpractice lawsuit, and that is some
evidence that she may have made a claim in that action. In addition, our own
review of the record shows that the release that was executed as part of the
settlement of the medical malpractice lawsuit was signed by Bonnie (and by
Bonnie on behalf of Gerald), and that document states that the persons signing the
release are releasing “[a]ny consortium claims by the parties.” 15 However, the
language in the release does not by itself answer the question of whether Bonnie
actually made, or was compensated for, a loss of consortium claim in the medical
malpractice lawsuit because the language of the release makes clear that the
parties to that agreement are releasing claims that may not have been expressly
made in the lawsuit:

14
Bonnie does not argue that any portion of the settlement proceeds are her individual
property under WIS. STAT. ch. 766.
15
Tim and Jill also signed the release, but they make no assertion that any loss of
consortium claim they had as the adult children of Gerald had any monetary value in the
settlement of the medical malpractice lawsuit.

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In consideration of theses [sic] payment we release, acquit
and forever discharge [the released parties] from any and
all liability whatsoever, including all claims, demands and
causes of action of every nature affecting us, which we may
have or ever claim ….

In addition, Bonnie concedes that there is no “breakdown of what and/or whom
the settlement money was compensating.”

¶35 Bonnie contends that it is relevant that her name was on the check
for the settlement proceeds along with Gerald’s name. However, that fact is not
dispositive, and Bonnie does not contend that it is. “Title functions principally to
establish management and control rights. Consistent with this principle, the right
to manage and control property neither determines classification nor rebuts the
presumption favorable to marital property.”16 Lloyd, 170 Wis. 2d at 255.

¶36 There is disputed evidence in the record that Bonnie may have made
a loss of consortium claim in the medical malpractice lawsuit, but there is
insufficient evidence to conclude, based on this record, that Bonnie actually made
a loss of consortium claim in the medical malpractice lawsuit, that she was
compensated for such a claim in the settlement of that suit, or the percentage of the
settlement proceeds attributable to her loss of consortium claim as opposed to the
amount attributable to Gerald’s personal injuries.

16
Further, Bonnie may be attempting to make a separate argument that the settlement
proceeds were “mix[ed] … enough” that the settlement proceeds became marital property.
However, this potential attempt at an argument is not developed by Bonnie in any discernable
way. State v. Pettit, 171 Wis. 2d 627, 646-47, 492 N.W.2d 633 (Ct. App. 1992) (declining to
address undeveloped arguments). In any case, as will be seen below, Bonnie contends that the
settlement proceeds were initially placed in an account that was solely in Gerald’s name, and that
undercuts any “mix[ing]”.

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No. 2019AP1890

¶37 There are genuine issues of material fact as to whether the settlement
proceeds are Gerald’s individual property, whether a portion are marital property,
and the amount in each category. Accordingly, we conclude that Bonnie has not
met her burden to establish on summary judgment that any of the settlement
proceeds are marital property, and we remand this issue to the circuit court for
further proceedings.

¶38 We now turn to other issues, the resolution of which will assist the
circuit court on remand.

III. Did Bonnie Breach Her Fiduciary Duty?

¶39 Bonnie contends that the undisputed facts establish that she did not
breach her fiduciary duty to Gerald in making the deposits into the disputed
accounts through which she received the funds before, or at, the time of Gerald’s
death. From that, Bonnie argues that the funds were properly not part of Gerald’s
probate estate and Tim and Jill’s claims fail as a matter of law.

¶40 In their partial summary judgment motion, Tim and Jill argue that
Bonnie breached her fiduciary duties to Gerald as Gerald’s attorney-in-fact
because Bonnie was barred from “self-dealing” and from “mak[ing] gratuitous
transfers of [Gerald’s] assets to anyone,” including Bonnie herself, “unless
[Gerald’s POA] … expressly grant[ed] [Bonnie] the authority to make such
transfers” or to engage in self-dealing.17

17
Tim and Jill’s motion for partial summary judgment concerned Bonnie’s alleged
breach of fiduciary duty in regard to their tortious interference with inheritance cause of action.
However, Bonnie’s arguments in response to that partial summary judgment motion are identical
to the arguments she makes regarding her alleged breach of fiduciary duty regarding Tim and
Jill’s cause of action which requested declaratory relief and also alleges that Bonnie breached her
(continued)

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No. 2019AP1890

A. Additional Governing Principles Regarding a POA.

¶41 The relationship between the holder of a power of attorney and the
principal is that of a fiduciary. See Praefke v. American Enter. Life Ins. Co.,
2002 WI App 235, ¶9, 257 Wis. 2d 637, 655 N.W.2d 456; see also Alexopoulos,
48 Wis. 2d at 40. “The agent’s duty is to act solely for the benefit of the principal
in all matters connected with the agency, even at the expense of the agent’s own
interest.” Praefke, 257 Wis. 2d 637, ¶9. WISCONSIN STAT. § 244.14(2) states in
pertinent part:

Except as otherwise provided in the power of
attorney, an agent who has accepted an appointment shall
do all of the following:

(a) Act loyally for the principal’s benefit.

(b) Act so as not to create a conflict of interest that
impairs the agent’s ability to act impartially in the
principal’s best interest.

(c) Act with the care, competence, and diligence
ordinarily exercised by agents in similar circumstances.18

fiduciary duty. We agree with Bonnie that the issues regarding breach of fiduciary duty are
identical in each cause of action and see no reason not to decide any breach of fiduciary duty
issues identically for each of Tim and Jill’s causes of action.
18
The Uniform Power of Attorney for Finances and Property Act, WIS. STAT. ch. 244,
was enacted in May 2010, after Praefke v. American Enter. Life Ins. Co., 2002 WI App 235, 257
Wis. 2d 637, 655 N.W.2d 456 and Alexopoulos v. Dakouras, 48 Wis. 2d 32, 179 N.W.2d 836
(1970) were decided. See 2009 Wis. Act 319; WIS. STAT. § 244.01; see also State v. Bryzek,
2016 WI App 48, ¶14, 370 Wis. 2d 237, 882 N.W.2d 483 (noting that Praefke was decided
before the adoption of WIS. STAT. ch. 244).

The provisions of WIS. STAT. ch. 244 coexist with those case law holdings mentioned in
this section of the opinion because the case law holdings are consistent with the applicable
provisions of ch. 244. See Fuchsgruber v. Custom Accessories, Inc., 2001 WI 81, ¶25, 244 Wis.
2d 758, 628 N.W.2d 833 (“It is axiomatic that a statute does not abrogate a rule of common law
unless the abrogation is clearly expressed and leaves no doubt of the legislature’s intent…. To
accomplish a change in the common law, the language of the statute must be clear, unambiguous,
and peremptory.”).

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No. 2019AP1890

¶42 We have interpreted our supreme court’s opinion in Alexopoulos as
establishing a “bright-line rule” that, “unless the power of attorney specifically
allows the agent to gift property to himself or herself, or contains an ‘unlimited or
unbridled’ gifting power, the agent lacks authority to make gratuitous transfers.”
Praefke, 257 Wis. 2d 637, ¶¶10, 16 (analyzing and quoting Alexopoulos, 48 Wis.
2d at 40-41). Put another way, the general rule is that an attorney-in-fact is not
“allowed to feather his or her own nest,” “self-dealing” is not allowed by the
agent, and “gratuitous transfers of a principal’s assets” may not be made by the
agent. Id., ¶¶12, 20. There is an exception to that general rule if the POA
“specifically allows such conduct,” “that power [is] … specifically authorized in
the instrument,” and the POA “expressly and unambiguously grants the authority
to do so.” Id.; see also Russ v. Russ, 2007 WI 83, ¶32, 302 Wis. 2d 264, 734
N.W.2d 874 (stating that a fiduciary, such as a POA agent, “has an obligation not
to engage in self-dealing”).

¶43 These holdings that an agent’s authority to give the agent a gift or to
self-deal must be specifically set forth in the POA are codified in WIS. STAT.
§ 244.07(2), which states that “[u]nless specifically stated, a power of attorney
does not authorize gifting, self-dealing, or oral amendment of the power of
attorney, and any such specific authority shall be strictly construed,” and WIS.
STAT. § 244.41(1)(b), which states:

An agent under a power of attorney may do any of
the following on behalf of the principal or with the
principal’s property only if the power of attorney expressly
grants the agent the authority and the exercise of that
authority is not otherwise prohibited by another agreement
or instrument to which the authority or property is subject:

….

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No. 2019AP1890

(b) Make a gift.

(Emphasis added.)

¶44 Further, “[w]hen a POA agent, for the agent’s own use, transfers
funds deposited by the principal, without written authority in the POA document
to do so, a presumption of fraud is created, regardless of whether the funds were
deposited before or after the execution of the POA.” Russ, 302 Wis. 2d 264, ¶32.

B. Pertinent Provisions of Gerald’s POA.

¶45 With those governing principles as context, we now set forth the
pertinent provisions of Gerald’s POA:

I grant my agent … authority to act for me with
[sic] as defined in the Uniform Power of Attorney for
Finances and Property Act in chapter 244 of the Wisconsin
[S]tatutes:

I want to include the following in agent’s general
authority:

.…

Banks and other financial institutions[.] To
deposit and withdraw funds, including social security
checks, in or from any financial institution….

.…

Make gifts[.] To transfer without consideration
any or all of the assets belonging to me which may be
advisable for the purpose of estate planning, avoiding
probate, or preserving my assets within my family. I direct,
however, that the person holding this power shall make
said transfers only to those persons and in such
proportions as provided in my will or trust, or if I have no
will or trust, as my probate estate would be distributed
under Wisconsin law. I authorize my attorney at law to
disclose the terms of my last will and testament to the
person holding this power. I further direct that my agent
may be an eligible donee if he obtains the consent in
writing of any other donee.

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No. 2019AP1890

….

LIMITATION ON AGENT’S AUTHORITY

An agent who is not my spouse or domestic partner
MAY NOT use my property to benefit the agent or a
person to whom the agent owes an obligation of support
unless I have included that authority in the special
instructions.

(Emphasis added.)

C. Interpretation of Gerald’s POA.

¶46 Tim and Jill argue that Bonnie breached her fiduciary duty to Gerald
by depositing the settlement proceeds into the disputed accounts because Gerald’s
POA did not expressly and unambiguously grant Bonnie authority to make
transfers without consideration of Gerald’s individual property through a gift to
herself or by self-dealing. Bonnie does not dispute that, in order for her as
Gerald’s attorney-in-fact to have authority to make gifts to herself or to engage in
self-dealing, such authority must be clearly authorized in the POA. Bonnie argues
that Gerald’s POA “specifically authorized Bonnie” to do so. We disagree for the
following reasons.

¶47 Prior to continuing our analysis, we summarize Bonnie’s actions to
give context to our discussion. Bonnie knew at the time of the settlement of the
medical malpractice lawsuit that Gerald’s will required that all of his assets subject
to probate would go to Tim and Jill in equal shares with none of his probate assets
going to her. In the less than four months between receipt of the settlement
proceeds from the medical malpractice litigation and the time of Gerald’s death,
Bonnie placed approximately $433,000 in accounts that caused her to be owner of
those funds either before Gerald died or at the time of Gerald’s death by operation
of law and outside probate. Those actions included depositing $100,000 in CDs

20
No. 2019AP1890

jointly held by Bonnie and Gerald, depositing $60,000 in CDs owned solely by
Bonnie, and by depositing and leaving approximately $273,000 in the money
market account that existed before the receipt of the settlement proceeds and was
solely in Gerald’s name but with Bonnie as the POD on that account.

¶48 We focus our discussion on the “Make gifts” paragraph of Gerald’s
POA because it expresses his intent on the subject of the gifting authority of his
agent.19 That provision directs that Bonnie was authorized to “transfer” Gerald’s
“assets” “without consideration,” but only under circumstances specified in that
paragraph which we now consider.20

¶49 Bonnie had such authority when “advisable” for only three purposes:
(1) “estate planning”; (2) “avoiding probate”; or (3) “preserving [Gerald’s] assets
within my family.” Bonnie does not contend that her deposits in the disputed
accounts were “advisable” in light of those three purposes or that her actions were
meant to accomplish any of these purposes. Indeed, Bonnie’s arguments in this
court fail to engage with the language of the “Make gifts” provision of the POA.
Regardless of Bonnie’s intent, we observe that her deposits into the disputed
accounts certainly had the effect of avoiding probate for the $433,000 amount
described above.

19
WISCONSIN STAT. ch. 244 includes a form durable power of attorney prepared by the
Department of Health Services. See WIS. STAT. §§ 244.61 and 244.63. The wording of the
“Make gifts” provision of Gerald’s POA is not drawn from that statutory form. See § 244.61.
20
Bonnie does not dispute that her deposits into the disputed accounts were “transfers
without consideration.” As will be seen later in this opinion, Bonnie contends that some of those
deposits were not “gifts” to herself.

21
No. 2019AP1890

¶50 If such a transfer is advisable for one of those three purposes, the
second sentence of that provision mandates another requirement. Bonnie may
make transfers without consideration “only to those persons and in such
proportions as provided in my will.” In his will, Gerald bequeathed all probate
assets to Tim and Jill. Bonnie does not, and cannot, argue that her transfers of
money into the disputed accounts were done in compliance with this requirement
of Gerald’s POA.21

¶51 In short, nothing in the plain language of the “Make gifts” provision
of Gerald’s POA expressly and unambiguously specified that Bonnie had authority
to deposit the settlement proceeds in the disputed accounts as she did. The
undisputed facts establish that Bonnie’s actions violated the “Make gifts”
provision of the POA.

D. “Limitation on Agent’s Authority” Provision of the POA.

¶52 Bonnie argues that, in spite of Gerald’s intentions expressed in the
“Make gifts” provision of the POA, her transfers into the disputed accounts were
proper based on language in another paragraph of the POA. More specifically,
Bonnie asserts that the following language in Gerald’s POA “specifically
authorized” her to make gifts to herself and engage in self-dealing:

An agent who is not my spouse or domestic partner
MAY NOT use my property to benefit the agent or a
person to whom the agent owes an obligation of support

21
The “Make gifts” provision of Gerald’s POA adds another requirement and states that
Gerald’s agent “may be an eligible donee” of a gift if the agent “obtains the consent in writing of
any other donee.” Because we conclude that Bonnie violated another requirement of this
provision, we need not consider this condition.

22
No. 2019AP1890

unless I have included that authority in the special
instructions.22

Because the heading for that paragraph is “Limitation on Agent’s Authority,” we
will refer to this provision as the “limiting language.”

¶53 Bonnie argues that, because the limiting language contains a double
negative, the sentence must be read as though the negatives, and the final clause,
are omitted from the sentence. Under Bonnie’s interpretation, the limiting
language should be read as follows (with strikes shown as advocated by Bonnie
and the inapplicable “domestic partner” phrase deleted entirely): “An agent who
is not my spouse or domestic partner MAY NOT use my property to benefit the
agent unless I have included that authority in the special instructions.” We reject
Bonnie’s interpretation of the limiting language for the following reasons.

¶54 First, Bonnie contends that her reading of the limiting language is
“established in case law.” Bonnie points only to Adams v. State Livestock
Facilities Siting Review Board, 2010 WI App 88, 327 Wis. 2d 676, 787 N.W.2d
941 (Ct. App. 2010) in support of that contention. In Adams, this court stated that
“[t]he double negative” in the statutory phrase “‘may not disapprove or prohibit’
… necessarily means ‘must approve.’” Id., ¶19 (quoting WIS. STAT. § 93.90(3)(a)

22
On the durable power of attorney form in WIS. STAT. ch. 244, there is a space for
“special instructions.” See WIS. STAT. § 244.61 (capitalization omitted). Our supreme court has
stated:

One way to avoid future uncertainty about the intentions of
parties to a POA would be to have the principal write clearly his
or her intentions into the POA document. The Wisconsin Basic
Power of Attorney for Finances and Property form has blank
lines at the end of the form that could be used for such a purpose.

Russ v. Russ, 2007 WI 83, ¶30, 302 Wis. 2d 264, 734 N.W.2d 874. It is undisputed that there
were no such “special instructions” from Gerald in the POA.

23
No. 2019AP1890

(2007-08)). The concept of a “double negative” was discussed in Adams in only
the one sentence just mentioned.23

¶55 The statement in Adams is correct in the context of the specific
statutory subpart at issue in that case. However, Wisconsin case law does not
“establish” the expansive contention Bonnie makes regarding the use of double
negatives in all writings. Bonnie does not cite, and we have not found, a
Wisconsin opinion which interprets an instrument such as a power of attorney that
uses a double negative. In fact, in Hedger v. State, 144 Wis. 279, 128 N.W. 80
(1910), our supreme court addressed whether a jury instruction was misleading
and, relevant to this appeal, stated that “double negatives” are not always
understood by ordinary people as an affirmative expression. Id. 128 N.W. at 92.

¶56 Second, Tim and Jill argue that the limiting language is substantially
different from the statutory subpart at issue in Adams. More specifically, Tim and
Jill contend that in Adams, the double negatives “involved only verb structure,”
whereas the first of the double negatives in the limiting language “relates to the
subject of the sentence – the Agent.” They contend that, unlike the statutory
subpart that was interpreted in Adams, “cancelling out” the negatives in the
limiting language cannot be the proper interpretation. We agree that Bonnie’s
interpretation is based on too slim a reed. To confirm the point, for the limiting
language in Gerald’s POA to have the meaning that Bonnie suggests, not only
must the “not[s]” be eliminated, so too must the phrase “unless I have included

23
Regrettably, neither Bonnie nor Tim and Jill inform us that the Adams case was
appealed to our supreme court. See Adams v. State Livestock Facilities Siting Rev. Bd., 2012 WI
85, ¶40-46, 342 Wis. 2d 444, 820 N.W.2d 404. In that opinion, the court interpreted the meaning
of the statutory subpart at issue without mentioning the double negative.

24
No. 2019AP1890

that authority in the special instructions.” Stated another way, the limiting
language cannot be understood as stating that a spouse may use Gerald’s property
to benefit the spouse simply by cancelling out the two “not[s]” in the provision,
and Bonnie suggests no basis to eliminate the verbiage about “special
instructions.”

¶57 Third, Bonnie’s argument requires that the word “benefit” in the
limiting language’s phrase “benefit the agent” means a “gift” or “self-dealing.”
However, Bonnie does not attempt to support that interpretation with any
reasoning. The “Make gifts” paragraph of the POA uses the terms “gifts” and
“transfer without consideration.” The use of the term “benefit” is a very unlikely
way for Gerald to attempt to negate the language in the “Make gifts” paragraph as
Bonnie contends.

¶58 To summarize, WIS. STAT. ch. 244 and case law require express and
unambiguous language for an agent to properly make a gift to the agent or self-
deal the principal’s assets.24 The “Make gifts” paragraph in the POA expresses
Gerald’s intent that his agent may make “gifts” or “transfers without
consideration” of his assets in specified circumstances only. The limiting
language is not express and unambiguous on this point. For that reason, the
limiting language does not negate the explicit terms in the “Make gifts” paragraph,
or establish that Bonnie as Gerald’s agent may make gifts to herself or engage in
self-dealing. Accordingly, we conclude that there is no genuine issue of material

24
An example of such clear and unambiguous language is that used in the power of
attorney at issue in Bryzek, 370 Wis. 2d 237, ¶15: “The plain language of E.B.’s POA
specifically granted Bryzek the authority to ‘[m]ake gifts of any kind, including gifts’ to himself.”

25
No. 2019AP1890

fact that, under the terms of Gerald’s POA, Bonnie breached her fiduciary duty to
Gerald in placing the settlement proceeds in the disputed accounts.

¶59 Bonnie argues that there are other reasons, outside the language of
the POA, why we should conclude that she did not breach her fiduciary duty to
Gerald, and we discuss those arguments next.

E. Bonnie May Argue That She Had Specific Authority Under
WIS. STAT. § 244.41(2).

¶60 The argument is difficult to discern, but Bonnie appears to argue
that, pursuant to WIS. STAT. § 244.41(2), she was permitted to deposit the
settlement proceeds in the disputed accounts. Section 244.41(2) provides in
pertinent part:

Notwithstanding a grant of authority to do an act
described in sub. (1), unless the power of attorney
otherwise provides, an agent who is not a spouse … may
not do any of the following:

(a) Exercise authority under a power of attorney to
create in the agent an interest in the principal’s property,
whether by gift, right of survivorship, beneficiary
designation, disclaimer, or otherwise.

With no discernable explanation, Bonnie appears to contend that the legislature
authorized her, as Gerald’s spouse, to make gifts to herself and self-deal regardless
of Gerald’s contrary intentions expressed in the POA or any fiduciary duty she
owes to Gerald as his agent. We are not persuaded and reject that absurd result.
See Kalal, 271 Wis. 2d 633, ¶46 (stating we must construe statutes to avoid absurd
results).

¶61 Two provisions of WIS. STAT. ch. 244 suffice to establish that the
language of the POA controls in these circumstances. We repeat the pertinent

26
No. 2019AP1890

language in WIS. STAT. § 244.41(1) which sets forth those powers an agent may
undertake on behalf of the principal provided that the agent is given a specific
grant of authority to do so in the POA:

An agent under a power of attorney may do any of
the following on behalf of the principal or with the
principal’s property only if the power of attorney expressly
grants the agent the authority and the exercise of that
authority …:

….

(b) Make a gift.

Id. (emphasis added). To confirm this point, we also repeat the language in WIS.
STAT. § 244.07(2) which states that “[u]nless specifically stated, a power of
attorney does not authorize gifting [or] self-dealing ….”25

¶62 Applying these statutes here, in order for Bonnie to properly make a
gift to herself or self-deal, Gerald’s POA must expressly and unambiguously give
Bonnie authority to do so. Gerald’s POA authorized Bonnie to “gift” or make a
“transfer without consideration” of Gerald’s assets only under specific
circumstances. As explained above, Bonnie’s gifts or transfers into the disputed
accounts do not come within any of the circumstances Gerald specified in the
POA. Simply stated, Bonnie did not have authority under the express terms of
Gerald’s POA to make the transfers to the disputed accounts. Bonnie’s reliance on
WIS. STAT. § 244.41(2) is, thus, unavailing.

25
No party cites, or relies on, WIS. STAT. § 244.57 regarding gifts. Accordingly, we also
ignore that statute.

27
No. 2019AP1890

F. Bonnie Argues That She Had Authority Under a Separate Document.

¶63 Next, Bonnie argues that she did not need specific authority under
Gerald’s POA to deposit, or withdraw, the settlement proceeds to or from the
money market account because, in 2009, Gerald designated her as his agent with
that bank for that account. Specifically, Gerald executed a document entitled
“Agent (Power of Attorney Designation For account Entitled Gerald L. Fruit”
(uppercase omitted) in which Bonnie is identified as Gerald’s agent and is granted
the authority to deposit, or withdraw, funds.26 We disagree with Bonnie.

¶64 Bonnie’s argument ignores the fact that, years later, she became
Gerald’s fiduciary and agreed to handle Gerald’s assets as Gerald mandated in his
POA. As a result, while the 2009 instrument signed by Gerald and Gerald’s POA
gave Bonnie authority to deposit, or withdraw, funds to and from Gerald’s
financial institution accounts, the POA instructs Bonnie on whether she can make
such deposits or withdrawals consistent with Gerald’s intentions expressed in his
POA. Bonnie does not attempt to explain why her agency on Gerald’s financial
institution accounts relieved her of her fiduciary duty to act within the scope of
Gerald’s POA when transferring Gerald’s assets. We decline an attempt to make
such an argument for her. See Associates Fin. Servs. Co. of Wis., Inc. v. Brown,
2002 WI App 300, ¶4 n.3, 258 Wis. 2d 915, 656 N.W.2d 56.

26
There is no statement under oath stating that this document is authentic. Rather,
Bonnie simply attached it to her summary judgment motion.

28
No. 2019AP1890

G. Bonnie Argues That She Did Not “Gift” the Settlement Proceeds.

¶65 Bonnie argues that she did not give herself a “gift” when she
deposited the settlement funds in the money market account that was in Gerald’s
name only (albeit with Bonnie as POD on that account) and, therefore, that action
was not contrary to the “Make gifts” provision of Gerald’s POA.27 Tim and Jill
argue that the undisputed material facts establish that Bonnie’s deposit into that
account breached the fiduciary duty Bonnie owed to Gerald.

¶66 The following factors must be proven to establish an inter vivos gift:
“(1) Intention to give on the part of the donor; (2) delivery, actual or constructive,
to the donee; (3) termination of the donor’s dominion over the subject of the gift;
and (4) dominion in the donee.” Schreiber v. Kellogg-Citizens Nat’l Bank, 68
Wis. 2d 135, 145, 227 N.W.2d 917 (1975). Bonnie contends that the second
(delivery to the donee) and fourth (dominion in the donee) factors are not present.
Bonnie’s theory is that the settlement proceeds placed in the money market
account were not delivered to her and that she did not exercise dominion over
those funds because:

1. The money market account was in Gerald’s name alone up until his death,
so only Gerald owned those funds during his lifetime, see WIS. STAT.
§ 705.03(2) (stating “[a] P.O.D. account belongs to the original payee

27
In this section of Bonnie’s brief in this court, Bonnie does not contend that the portion
of the settlement proceeds that were in her name only or in her name jointly with Gerald were not
“gifts.” See Fischer v. Wisconsin Patients Comp. Fund, 2002 WI App 192, ¶1 n.1, 256 Wis. 2d
848, 650 N.W.2d 75 (argument asserted by the appellant and not disputed by the respondent may
be taken as admitted).

29
No. 2019AP1890

during the original payee’s lifetime and not to the P.O.D. beneficiary or
beneficiaries”); and as a result,

2. Gerald, not Bonnie, maintained control and dominion over the money in
that account because Gerald could have spent that money at any time.

¶67 We reject Bonnie’s argument because, whether this particular act of
Bonnie’s was a “gift” to herself is not dispositive. The issue, as properly framed
by Tim and Jill, is whether Bonnie breached her fiduciary duty to Gerald by
transferring settlement proceeds into the money market account.

¶68 In Praefke the agent, under her authority as POA, changed POD
beneficiary designations in which she had no ownership interest so that she was
the only POD beneficiary for those accounts. Praefke, 257 Wis. 2d 637, ¶¶3, 15.
We determined that those actions were “self-dealing” and, therefore, were a
breach of the agent’s fiduciary duty to the principal. See id., ¶¶6, 8; see also WIS.
STAT. §§ 244.07(2); 244.14(2); Russ, 302 Wis. 2d 264, ¶28 (recognizing a
prohibition against “self-dealing” by an agent “unless the power to self-deal is
written in the POA document”).

¶69 For those reasons, whether Bonnie’s transfer of settlement proceeds
into the money market account was a “gift” to herself is not dispositive. Instead,
the undisputed material facts establish that Bonnie breached her fiduciary duty to
Gerald by her acts of self-dealing in transferring the settlement proceeds into the
money market account which only she, rather than Tim and Jill, would receive on
Gerald’s death and outside of probate.

30
No. 2019AP1890

H. Bonnie Argues That There is a Presumption of Donative Intent.

¶70 Bonnie contends that Gerald’s designation of her as the POD
beneficiary for the money market account in 2009, years prior to the execution of
his POA, creates a presumption of Gerald’s donative intent to make a gift to
Bonnie of any funds deposited in that account. For this, Bonnie relies on Russ in
which the supreme court concluded that a joint checking account established under
WIS. STAT. § 705.03(1) between a principal and an agent prior to the execution of
a power of attorney creates a presumption of donative intent from the principal to
the agent. Russ, 302 Wis. 2d 264, ¶31.

¶71 Bonnie concedes, as she must, that the money market account was
owned solely by Gerald during his lifetime. Regardless, Bonnie’s sole attempt to
argue around that fact is to pronounce in a conclusory fashion that “[i]t is not a
stretch to infer … that when a [payable on death] designation is created prior to an
executed Durable Power of Attorney[,] it creates a presumption of donative
intent.” We are not persuaded.

¶72 As Tim and Jill point out, joint checking accounts and POD accounts
solely in one person’s name are different species in ways that matter here. A joint
checking account “belongs, during the lifetime of all parties, to the parties without
regard to the proportion of their respective contributions to the sums on deposit.”
See WIS. STAT. § 705.03(1). In contrast, and as noted, a POD account “belongs to
the original payee during the original payee’s lifetime and not to the [payable on
death] beneficiary or beneficiaries.” See § 705.03(2). Bonnie fails to explain why
the material differences between joint checking accounts and POD accounts are
not determinative on the question of Gerald’s donative intent, and we decline an
attempt to develop Bonnie’s argument for her. See State v. Pettit, 171 Wis. 2d

31
No. 2019AP1890

627, 646-47, 492 N.W.2d 633 (Ct. App. 1992) (stating that an appellate court may
decline to address issues that are inadequately brief).

I. Bonnie Argues that Gerald Directed Her to Transfer $170,000 to
Herself and She Acted in Good Faith.

¶73 To this point in our analysis, there is no genuine issue of material
fact that Bonnie breached her fiduciary duty owed to Gerald as his agent by
transferring funds to the disputed accounts. However, we conclude that there are
factual disputes that must be resolved on remand as to whether Bonnie’s alleged
“good faith” may lead to a determination that Bonnie did not breach her fiduciary
duty owed to Gerald regarding $170,000 of the settlement proceeds Bonnie
transferred into CDs. The disputed material facts mentioned in this section of this
opinion must be resolved by the circuit court on remand concerning Bonnie’s
alleged breach of her fiduciary duty as to the transfers of $170,000.

¶74 Bonnie argues that her transfers to CDs of $170,000 of the
settlement proceeds were proper because Gerald directed her to transfer those
amounts to herself, and she did so in good faith based on Gerald’s directions and
her purported lack of understanding about POD accounts.28 We first address
whether there is a genuine issue of material fact that Gerald directed Bonnie to
transfer those settlement proceeds to herself.

28
Neither party makes a developed argument based on Bonnie’s alleged lack of
understanding about POD accounts and how that may affect her argument regarding good faith.
On remand, any evidence on this allegation is to be considered along with other issues mentioned
in this section of the opinion.

32
No. 2019AP1890

¶75 To establish that there is no genuine issue of fact regarding the
$170,000 transferred to the CDs, Bonnie asserts only that Tim and Jill, “by the
filing of [their] partial summary judgment [motion], ... stipulated to the fact that
Gerald wanted Bonnie to have $170,000.00 in her sole name.” Tim and Jill argue
that a factual dispute bars Bonnie’s summary judgment motion as it concerns the
alleged directions from Gerald to Bonnie. Unfortunately, the parties’ record on
this point is less than clear.

¶76 In a filing in the circuit court, Tim and Jill may have stated, but it is
not entirely clear, that they do not dispute that Gerald directed Bonnie to transfer
to herself $50,000 from the settlement proceeds. Tim and Jill may also be
agreeing to the same point in this court when in briefing they state: “However,
after Bonnie distributed the settlement funds as directed by Gerald to herself
($50,000), Tim ($27,500), and Jill ($25,000), Bonnie deposited the remainder into
accounts in which she was the payable on death beneficiary.” Nonetheless, in
other parts of their briefing in this court, Tim and Jill appear to take the position
that none of the $170,000 Bonnie put in the CDs was directed by Gerald, and there
is a material dispute of fact on that issue. Bonnie’s briefing recognizes Tim and
Jill’s contention that this is a factual dispute: “Although Tim and Jill admit Gerald
directed these transfers [the $25,000 to Jill and $27,500 to Tim], they state there
are issues of material fact as to the remainder of the transfers described above [the
$170,000 Bonnie ultimately received through the CDs].”

¶77 For those reasons, we reject Bonnie’s argument that Tim and Jill
have “stipulated” that Gerald directed her to make those transfers to herself. We
conclude that there is a genuine issue of material fact as to what directions, if any,
Gerald gave to Bonnie about the $170,000 of transfers she made to the CDs from
the settlement proceeds.

33
No. 2019AP1890

¶78 Next, Tim and Jill assert that, regardless of Bonnie’s allegations
about Gerald’s purported directions, any such directions are not admissible in
evidence. Evidence that Gerald directed Bonnie to give herself $170,000 is
extrinsic evidence. This court held in Praefke that evidence extrinsic to the power
of attorney is not admissible to show that an agent was authorized to make gifts to
himself or herself. Praefke, 257 Wis. 2d 637, ¶¶15-18, 20.

¶79 However, in Russ, our supreme court created an exception to that
extrinsic evidence exclusion. See Russ, 302 Wis. 2d 264, ¶36. The supreme court
recognized in Russ that the prohibition against the admissibility of extrinsic
evidence set forth in Praefke may not always apply to prohibit evidence of
donative intent. See id., ¶36. Bonnie argues that, as in Russ, this court may look
to extrinsic facts to determine Gerald’s donative intent. The briefing from the
parties in this court is insufficient to determine if Bonnie’s proffered evidence of
Gerald’s direction is inadmissible.

¶80 Bonnie asserts that the evidence of Gerald’s directions to her is
relevant and will show that her transfer of the $170,000 settlement proceeds into
the CDs was proper because she acted in “good faith” based on Gerald’s
directions.

¶81 WISCONSIN STAT. § 244.14(1) and (2) sets forth the duties (unless
otherwise provided in the POA) of a person who accepts appointment under a
POA. Among the duties listed in § 244.14(1) is the duty to “[a]ct only within the
scope of authority granted in the power of attorney.” See § 244.14(1)(c). Among
the duties listed in § 244.14(2) is the duty to “[a]ttempt to preserve the principal’s
estate plan, to the extent actually known by the agent, if preserving the plan is
consistent with the principal’s best interest based on all relevant factors ….”

34
No. 2019AP1890

Sec. 244.14(2)(f). But, § 244.14(3) states: “An agent who acts in good faith is not
liable to any beneficiary of the principal’s estate plan for failure to preserve the
plan.” “‘Good faith’ means honesty in fact.” WIS. STAT. § 244.02(6). Whether a
party to a contract acted in good faith is usually a question of fact. Wisconsin Nat.
Gas Co. v. Gabe’s Constr. Co., 220 Wis. 2d 14, 24 n.6, 582 N.W.2d 118 (Ct. App.
1998) (recognizing that “it is ordinarily a question of fact whether a party to a
contract has breached its obligations of good faith and fair dealing”).

¶82 At this point, we do not decide whether evidence about Gerald’s
directions to Bonnie is admissible or whether Gerald gave Bonnie any such
directions. However, if the circuit court concludes that evidence of those alleged
directions from Gerald to Bonnie is admissible, then for the reasons we are about
to discuss, any such directions may be relevant to Bonnie’s “good faith” in not
preserving Gerald’s estate plan.

¶83 Tim and Jill, as noted, take the position that the entire amount of the
settlement proceeds was Gerald’s individual property. As well, Tim and Jill
concede that Gerald owned the money market account in his name and,
accordingly, had the right to transfer the money into that account as he wished
before he died or direct gifts from that account.

¶84 As already discussed, Bonnie’s transfers without consideration must
be consistent with the “Make gifts” provision of the POA, and that provision
required any such transfers without consideration to be made in the “proportions”
stated in Gerald’s will. But these transfers to Tim and Jill were not consistent with
Gerald’s estate plan. Indeed, Tim and Jill agree that Gerald told Bonnie to give
$25,000 of the settlement proceeds to Jill several months before his death and that
$27,500 be paid to Tim at the same time. If, as Tim and Jill contend, Bonnie must

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No. 2019AP1890

make gifts that are consistent with the “Make gifts” provision of the POA, these
gifts to Jill and Tim were not completely consistent with Gerald’s estate plan (as
required by the POA). His will required that Tim and Jill receive exactly the same
amounts, and Tim and Jill did not receive identical amounts consistent with
Gerald’s will. As a result, Tim and Jill necessarily agree that Gerald could direct
Bonnie to make transfers without consideration from the money market account
which contained the settlement proceeds that were not consistent with the specific
intentions stated in Gerald’s will and his POA.

¶85 Accordingly, there are issues that must be resolved on remand.
Those questions include the following. If Bonnie as Gerald’s agent can make
transfers without consideration from the money market account to Tim and Jill at
Gerald’s express direction in violation of the terms of Gerald’s POA, and Tim and
Jill do not contend that those actions by Bonnie were improper, was Bonnie barred
from taking similar actions to transfer funds from the money market account at
Gerald’s purported direction, or is the analysis different legally and factually in
light of the amounts transferred to Bonnie and/or her status as Gerald’s agent?

¶86 Because of the factual dispute, and because the parties have not
clarified the law in this area sufficiently, we cannot state that there is no genuine
issue of material fact, or that Tim and Jill are entitled to judgment as a matter of
law, on the question of whether Bonnie’s purported “good faith” regarding the
$170,000 of transfers to the CDs is a complete defense concerning a breach of
fiduciary duty she owed to Gerald regarding that $170,000. In addition, the circuit
court may need to resolve other factual issues regarding Tim and Jill’s request for
declaratory relief that are not determined by this opinion.

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No. 2019AP1890

IV. Tim and Jill’s Claim That Bonnie Tortiously Interfered With
Their Expected Inheritance.

¶87 Bonnie makes no argument regarding Tim and Jill’s cause of action
concerning Bonnie’s alleged tortious interference with their expected inheritance
that is separate from her arguments concerning Till and Jill’s request for
declaratory relief. The disputed facts described above must be resolved in the
context of this cause of action also, and other elements regarding this cause of
action must also be resolved on remand. Accordingly, we reverse the circuit
court’s summary judgment order on this claim and remand for further proceedings.

V. Tim and Jill Stated Valid Causes of Action.

¶88 Separate from Bonnie’s other arguments, Bonnie asserts that Tim
and Jill have failed to state valid causes of action because their requests for relief
were filed after Gerald died. Bonnie asserts that any challenge of her conduct
must be brought during Gerald’s life.

¶89 In support of her argument, Bonnie relies on WIS. STAT. § 244.16(1)
which provides in pertinent part: “The following persons may petition the circuit
court of the county where the principal is present or of the county of the
principal’s legal residence to construe a power of attorney or review the agent’s
conduct, and grant appropriate relief….” Bonnie argues that § 244.16(1) requires
that the principal be alive when a claim is filed under that subpart because, once a
principal dies, he or she is no longer “present” in a county and no longer has a
“legal residence” there. Bonnie also relies on WIS. STAT. § 244.10(1)(a) which
states that a power of attorney terminates when the principal dies. See id.

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No. 2019AP1890

¶90 Bonnie’s argument fails. Those statutes set forth the venue of a
dispute regarding an agent’s action while the principal is alive. The statutes do not
require that beneficiaries’ claims against an agent must be initiated while the
principal is alive.

CONCLUSION

¶91 For the foregoing reasons, the order of the circuit court is reversed
and the cause is remanded for further proceedings consistent with this opinion.

By the Court.—Order reversed and cause remanded.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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