Facts

Louis Silveira Jr. suffered a heart attack when he was 17 years old that left him totally incapacitated. Six years later, on April 20, 2007, he died from complications. The Chico Unified School District settled a lawsuit brought on behalf of the decedent by his biological mother, Betty Crick, and his two half-brothers, who had witnessed the heart attack. The settlement provided $1 million to Crick, $50,000 to each half-brother, and $9.9 million paid through annuities into a Special Needs Trust to take care of the decedent's medical and financial needs for the rest of his life. These annuities were paid approximately $34,000 per month, increased three percent per year, guaranteed for 20 years.

Eventually, the decedent was released into Crick's care and custody, and Crick received $10,000 per month plus other expenses from the SNT for Louis's care. Payments after the decedent's death were to go to his "heirs at law." After learning that she and her husband could not be the sole beneficiaries of the annuities without a disclaimer signed by the decedent's biological father, Louis Silveira, Crick presented a disclaimer to him less than 40 days after the decedent's death. Silveira signed the disclaimer and it was faxed to the Cricks' attorney.

Subsequently, the attorney for the trustee, Wells Fargo, rejected the disclaimer because it failed to fully disclose the money being renounced. Another, more detailed, disclaimer was drafted with the specific amounts each annuity paid and for how long. In September, the Cricks presented Silveira with the new disclaimer and told him that the document had been modified to include certain numbers. Silveira then went to the law offices of Lauren E. Jones and, after learning he was signing away a half interest in approximately $8 million, he refused to sign.

PLAINTIFF'S CONTENTIONS:
Crick contended that she told Silveira he was signing away the annuities, including informing him of their monthly and total worth. She also alleged that Silveira agreed to sign the first disclaimer because he had never been involved in the decedent's life.

DEFENDANT'S CONTENTIONS:
Silveira stated that he did not know what the first disclaimer was and did not understand the document presented to him. He also testified that Crick told him it was needed to transfer the decedent's body to a cemetery. Silveira alleged that the first disclaimer was inadequate as a matter of law, failing to adequately describe the items and interests being relinquished. He also claimed the document was obtained through fraud. A neuropsychologist testified at trial that Silveira had severe dyslexia, reading at a third-grade level, and opined that he could not have read or understood the disclaimer's terms.

Damages

The sum in controversy was $8.4 million in annuities.

Result

The court found that the first disclaimer was insufficient and held that, even if the disclaimer was found adequate, it was invalid as being obtained through fraud and misrepresentation. Crick and Silveira were granted equal shares in their son's estate.

Other Information

Betty Crick was represented by previous counsel, who drafted the original disclaimer. Harris, Sanford & Hamman, P.C. did not come into the case until after the trustee had already refused to accept the original disclaimer.