The Virginia Supreme Court recently considered whether a power of attorney document provided an attorney-in-fact with the authority to gift a principal’s real and personal property. The case began after the 2013 death of Samuel “Dickey” Davis, a successful trainer and breeder of American Saddlebred horses in Wytheville, Virginia. Although active in the horse world until his death at age 69, Dickey had suffered an accident in 1993 that left him a quadriplegic. Shortly after that accident, Dickey signed a durable power of attorney document (the “1993 POA”) that gave his mother, Agnes, the power to
transact for [Dickey], in [his] name, place and stead, all business for [Dickey] that [he] could do if acting personally [including the powers] to sell and convey any and all personal property and all real property [Dickey] may own and execute and deliver an instrument for the same; … and to execute and perform all and every act or acts, thing or things in law needful and necessary to be done in and about [Dickey’s] affairs, as fully, largely and amply, and to all intents and purposes whatsoever as [Dickey] might or could do if acting personally … .
By all accounts, Dickey lived a pretty full life after his accident and remained very active in the horse world. He lived during those years in an addition built onto his mother’s home that was designed to accommodate his needs, and his mother, sister Susan and, later, one of his farm employees, Rae, tended to his physical and medical needs on a daily basis.
In 2005, Dickey executed a will that named his brother, Garnett, as his executor and divided his considerable estate primarily among Agnes, Garnett, Rae and his church, with Rae to receive several parcels of his real estate, his horse equipment, his trucks and all of his money and bank deposits he held on the day of his death. Garnett, Agnes, Rae and Susan were unaware of the will at the time of its execution.
In 2010, Rae moved into Dickey’s home to continue to tend to his needs. In May 2013, Dickey fell ill and ultimately was moved to a nursing facility in Tennessee. On October 1, 2013, in a private ceremony at the nursing facility, Rae and Dickey were married. Agnes and others in the family only learned of the marriage two weeks later after Rae changed her last name to “Davis” on a social media website.
Later in October, Dickey’s condition worsened, and he had to be transferred to a hospital. On October 25, 2013, Dickey triggered a “code blue,” indicating that he was incapacitated and in jeopardy of dying. The hospital immediately notified Agnes of Dickey’s condition.
On October 31, 2013, Agnes, as Dickey’s attorney-in-fact under the 1993 POA, transferred the vast majority of Dickey’s personal property to herself and transferred by deeds of gift all of Dickey’s real property to Susan and Garnett. Even though the value of the property she gave to herself and to her other children totaled more than $2 million, Agnes never told Dickey that she had made the gifts. Dickey died on November 15, 2013.
Garnett, as his brother’s executor, later filed a complaint in the Circuit Court of Wythe County on behalf of Dickey’s estate, seeking aid and direction on the validity of Agnes’ gifts of Dickey’s property. At trial, Rae contended that Dickey’s power of attorney did not authorize Agnes’s gifts, while the rest of Dickey’s family argued otherwise, pointing to the “sell and convey” power given to Agnes in the 1993 POA. The Circuit Court ultimately concluded that Agnes was authorized by the language in the 1993 POA to give away Dickey’s property as she had done.
Rae appealed the decision to the Virginia Supreme Court, which reversed the Circuit Court in lengthy and well written opinion issued in December 2019. [Davis v. Davis, 835 S.E.2d 888 (Va. 2019]. The Court first noted that, under Virginia law, “[a] power of attorney document must expressly grant the authority to make gifts.” The Supreme Court then found that the 1993 POA did not contain such an express grant. The Court ruled that while the “sell and convey” language in the 1993 POA, which is language found in most POA documents, granted Agnes the authority to sell and then convey her son’s property, it did not grant her the authority to give away the principal’s property as she had done. The opinion is notable for the fact that while its holding may seem just consistent with both, the fact that Dickey remained in control of his own life until the very end and a policy that he should be able to leave his property as he wishes, the Court reached its conclusion by examining the question presented primarily from a legal perspective, using a dictionary to analyze the true meaning of the words actually used in the 1993 POA, and then concluding that “sell and convey” implied a transaction in which the transferor received something in return, and did not mean “give away for free.” This ruling is just another reminder that in the legal and business worlds, words do matter.