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Estate of Reed

Court of Chancery of Delaware

April 17, 2015

ESTATE OF GEORGE M. REED, JR., by and through George M. Reed, III as executor of the Estate,
v.
LISA GRANDELLI, Respondent. and GEORGE M. REED III, as trustee of the GEORGE M. REED JR. TRUST U/A DTD 04/16/12, and GEORGE M. REED, III and DAVID S. REED, SR., as beneficiaries of the GEORGE M. REED, JR. TRUST, Petitioners,

Submitted: January 23, 2015

David J. Weidman, of SERGOVIC, CARMEAN & WEIDMAN, P.A., Georgetown, Delaware, Attorney for Petitioners.

Dean A. Campbell, of LAW OFFICE OF DEAN A. CAMPBELL, LLC, Georgetown, Delaware, Attorney for Respondent.

MEMORANDUM OPINION

GLASSCOCK, Vice Chancellor

Since the time of King David and Abishag-and, surely, before-certain old men have pursued an interest in certain young women.[1] Sometimes, as in that case, the relationship is one of a powerful man and an exploited woman. Sometimes, it represents, no doubt, a May-December mutual romance, or at least a mercenary exchange of value for value. In other cases, however, it involves exploitation of an elderly and vulnerable benefactor. This case involves a relationship that quickly arose between a moderately well-to-do recent widower in his mid-eighties and a diner waitress of an age to be his granddaughter. The Petitioners-the old man's heirs, trust and estate-allege the relationship is of the third variety described above; the Respondent contends it belongs in the second category.

During a fourteen-month relationship, George Reed, Jr. ("George Jr.")[2]lavished gifts on the Respondent, Lisa Grandelli, ranging from a few hundred dollars to a pickup truck costing over $30, 000. He also paid cash-nearly a quarter-million dollars-for a condominium in Rehoboth Beach, titled jointly with Lisa with right of survivorship. The Petitioners, George Jr.'s estate, his trust and the beneficiaries of his will, seek, principally through imposition of equitable remedies, to recoup the value of these gifts.

Individuals are presumed competent unless proven otherwise, and are free to deploy their assets, wisely or foolishly, as they see fit. Equity may act in appropriate cases to remedy breaches of fiduciary duty or oppression, or to carry out the true intent of parties. If, however, equity were empowered to remedy every improvident expenditure in aid of unrequited love or misplaced desire, Delaware would need a Chancery Courthouse on every corner.

I. FACTS AND STAGE OF THE PROCEEDINGS

As of the beginning of 2011, George Jr. was an elderly man with various medical problems but still able to make financial decisions and drive and live alone, with basic assistance. His physician testified that he was able to make his own personal decisions up until the time of a second stroke in April 2012-that is, at all times pertinent-and testimony suggests that George Jr. was a strong-willed individual throughout his life.

After his wife of over 50 years passed away in January 2011, George Jr. was, understandably, saddened, but there is no evidence that he became clinically depressed. He kept up with social interactions with his friends and family, including weekly attendance at a veterans' social organization, kept in regular contact with his sons, and had lunch daily at his former business, the family-operated Dairy Queen in Camden. During his working life, George Jr. was a successful businessman, and there is no indication that he remained other than assertive and strong-willed.

At some time in January or February of 2011, George Jr. had lunch with his son Scott at Hall's Restaurant ("Hall's") in Wyoming, [3] where he first met Lisa, who was his waitress. He took a shine to her and called her "Brown Eyes." George Jr. made frequent return visits to Hall's and asked for Lisa as his waitress.

Over the next several months, George Jr. would visit Hall's to see Lisa frequently, often asking her to come over to his home. She first obliged around June 2011, and began to see George Jr. outside of Hall's after that. Their relationship became physical, and George Jr. considered Lisa his girlfriend. He began to make cash gifts to her, and to loan her money. When her car was "condemned" as a result of a factory recall, George Jr. bought her a new truck for over $30, 000.

At some point in the late summer or early fall of 2011, George Jr. asked Lisa to move in with him. She refused. When he asked to move in with her, she also refused. But the two began to look at property they could purchase together, first around the Dover area and then in Rehoboth Beach. They ultimately decided to purchase a condominium in Rehoboth Beach for $220, 000. According to Lisa, George Jr. intended that the property be listed in her name alone, but then at her direction, it was changed to a joint tenancy with right of survivorship in Lisa and George Jr.'s names. George Jr. went to the closing. Testimony from Hal Dukes, Esquire, the real-estate attorney involved in that transaction, was that George Jr. was aware of what he was doing and the estate that would be created, and that such remained his wish, even after Mr. Dukes explained the implications of a joint tenancy with right of survivorship, as opposed to tenancy in common. The exact purpose of the condominium purchase is unclear-whether it was an investment, a trysting place, or both; testimony at trial supported all three possibilities.

At the same time, evidence also supports the fact that, throughout the time she knew George Jr. and was receiving money and property from him, Lisa was still seeing non-party Anthony Tharp, [4] her sometimes live-in boyfriend. In fact, in December 2011, George Jr. paid for Lisa to take a trip to Key West, Florida. The evidence indicates that Lisa told George Jr. the trip would include Lisa, her brother and his wife, and Lisa's son, but this ...


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