The Montana Supreme Court affirmed in part and reversed and remanded in part a decision when it ruled that the district court did not err in its admitting bank subscriber notes as a business exception to the hearsay rule and did not err in ruling that the defendant converted funds in her late husband’s bank account but did err when it denied the defendant’s request for a constructive trust. In re. the Estate of Robert Brenden (Mont., No. DA 24-0086, December 17, 2024).
After being in a relationship for about 10 years, Jill and Robert Brenden married in 2010. In 2006, they purchased a home together (New Holland Home). In 2014, Mr. Brenden quitclaimed a parcel within a larger property he had inherited to himself and Ms. Brenden. They built a home on this parcel (Red Rock Home).
During the construction of the Red Rock Home, Mr. Brenden was diagnosed with cancer. Mr. Brenden got treatment for the cancer and it went into remission. However, it returned in 2016.
On March 9, 2017, the couple sold their New Holland Home. On March 13, Ms. Brenden picked up the check for the purchase price of the property, which was $206,099.23 and made out to Robert and Jill Brenden. Ms. Brenden thought that since Mr. Brenden had not signed the check that she could only deposit it into his bank account. Unbeknownst to Ms. Brenden, Mr. Brenden had designated his sister, Barbara Jensen, as the payable on death (POD) beneficiary for that account.
Mr. Brenden’s advancing cancer forced him to go to the hospital on March 22, 2017. His condition deteriorated rapidly and by March 25 he was in excruciating pain and was unable to speak. He died later that day at about 9:35 p.m.
Ms. Brenden testified that on the morning of Mr. Brenden’s death, he told her to transfer the funds in his bank account, including the proceeds from the sale of the New Holland Home, to her account. After accessing Mr. Brenden’s account online, Ms. Brenden’s first attempt to transfer $254,000 from his account to hers was unsuccessful. She was eventually able to make five transfers, totally $254,000. She claimed that she did not recall receiving any activation codes or having to answer any security questions. She also claimed that she couldn’t remember when she made the transfers, but that she made them before Mr. Brenden died.
Testimony from Mr. Brenden’s sons and medical records contradict Ms. Brenden’s testimony. Her testimony was also contradicted by an electronic banking department manager at Big Sky Western Bank (BSWB) where Mr. Brenden had his account.
According to BSWB records, five security questions were successfully answered between 1:29 a.m. and 1:31 a.m. on March 26, 2017, a few hours after Mr. Brenden died. These “subscriber notes” recorded the five payments from Mr. Brenden’s account to Ms. Brenden on March 27. According to Ms. Brenden’s bank account records, these five payments were deposited to her bank account on March 28.
Ms. Jensen intervened in the probate process, filing a third-party complaint against Ms. Brenden for wrongful conversion of the POD account proceeds and deceit. Ms. Brenden counterclaimed, alleging unjust enrichment and seeking a constructive trust over her share of the proceeds from the sale of the New Holland Home.
On January 11, 2024, the district court ruled in favor of Ms. Jensen and awarded her the $254,000 that was transferred out of Mr. Brenden’s account.
On appeal, Ms. Brenden argues that the district court erred by admitting the BSWB account records as business records and by finding that she had converted the BSWB account. She requests the court impose a constructive trust on a portion of the account, arguing that Ms. Jensen was unjustly enriched by receiving her share of the proceeds from the sale of the home she owned with Mr. Brenden.
The court finds that since the bank subscriber notes are considered reliable business records, they are not considered hearsay and are admissible in court. The district court acted within its boundaries when it allowed these records to be admitted.
As POD beneficiary of Mr. Brenden’s BSWB account, Ms. Jensen became the owner of the assets in the account upon Mr. Brenden’s death at 9:35 p.m. on March 25, 2017. Other than three subscriber notes on March 25 that were not related to transferring funds, there was no activity on Mr. Brenden’s account on that day. The court finds that the district court weighed this evidence and the testimony fairly and accurately and ruled appropriately; therefore, it did not err in ruling that Ms. Brenden unlawfully converted funds that were in Mr. Brenden’s account.
Ms. Brenden argues that she is entitled to her share of the proceeds from the sale of the New Holland Home ($103,049.62) because they were held in a resulting trust for her in Mr. Brenden’s account. Ms. Brenden presented testimony asserting that she had never intended to gift her share of the proceeds to Mr. Brenden. The court finds that the district court erred when it held that Ms. Brenden had not presented sufficient evidence to overcome the gift presumption.
The court finds that the district court acted properly when it admitted the BSWB subscriber notes as a business record exception to the hearsay rule. The court also finds that the district court did not err in concluding that Ms. Brenden converted Mr. Brenden’s account after he died and Ms. Jensen had become the POD beneficiary. The court finds that the district court did, however, err when it denied Ms. Brenden’s request for a constructive trust over half the deposited proceeds from the sale of the New Holland Home. Therefore, the court affirms in part and reverses and remands in part.
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