Filed: Mar. 09, 2015
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals For the Eighth Circuit _ No. 13-3066 _ Estate of Nell G. Pepper, by the administrator for both Estates, Norma Deeble; Estate of Sterling Gary Pepper, by the administrator for both Estates, Norma Deeble lllllllllllllllllllll Plaintiffs - Appellants v. Nancy Pease Whitehead; Pease Family Partnership lllllllllllllllllllll Defendants - Appellees _ Appeal from United States District Court for the Southern District of Iowa - Des Moines _ Submitted: December 10, 2014 File
Summary: United States Court of Appeals For the Eighth Circuit _ No. 13-3066 _ Estate of Nell G. Pepper, by the administrator for both Estates, Norma Deeble; Estate of Sterling Gary Pepper, by the administrator for both Estates, Norma Deeble lllllllllllllllllllll Plaintiffs - Appellants v. Nancy Pease Whitehead; Pease Family Partnership lllllllllllllllllllll Defendants - Appellees _ Appeal from United States District Court for the Southern District of Iowa - Des Moines _ Submitted: December 10, 2014 Filed..
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 13-3066
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Estate of Nell G. Pepper, by the administrator for both Estates, Norma Deeble;
Estate of Sterling Gary Pepper, by the administrator for both Estates, Norma Deeble
lllllllllllllllllllll Plaintiffs - Appellants
v.
Nancy Pease Whitehead; Pease Family Partnership
lllllllllllllllllllll Defendants - Appellees
____________
Appeal from United States District Court
for the Southern District of Iowa - Des Moines
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Submitted: December 10, 2014
Filed: March 9, 2015
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Before WOLLMAN, COLLOTON, and BENTON, Circuit Judges.
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WOLLMAN, Circuit Judge.
Before us once again is the controversy regarding the ownership of the
collection of Elvis Presley memorabilia amassed by the late Sterling Gary Pepper, Jr.
In Estate of Pepper v. Whitehead, 686 F.3d 658 (8th Cir. 2012), we set forth at
length the factual and procedural background of this litigation, reversed the district
court’s grant of summary judgment, and remanded the case for further proceedings.
What follows here is a summary of the factual and procedural history set forth in our
earlier opinion and an account of the evidence presented at the trial that was held on
remand.
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Sterling Gary Pepper, Jr. (Gary) owned an extensive collection of Elvis Presley
(Elvis) memorabilia. When he moved into a nursing home in 1978, he told Nancy
Pease Whitehead (Nancy) to “keep it.” Gary died two years later. Nancy and her
sister maintained the collection until 2009, when the Pease Family Partnership (the
Partnership) put it up for auction, at which it sold on October 19, 2009, for more than
$250,000.
The Estate of Nell G. Pepper and the Estate of Sterling Gary Pepper (the
Estates) filed suit, alleging that Gary retained ownership of the collection and that his
ownership interest passed to his heirs upon his death. Following a four-day trial, a
jury found that Gary had made a conditional gift to Nancy. Accordingly, when Gary
died, Nancy’s ownership interest was no longer subject to Gary’s reversionary
interest, thus entitling the Partnership to the proceeds of the auction. The Estates
appeal, arguing that the evidence did not establish a conditional gift and that the
district court1 should have granted their motion for judgment as a matter of law or,
alternatively, their motion for a new trial. We affirm.
I.
We state the facts in the light most favorable to the verdict. Structural Polymer
Grp., Ltd. v. Zoltek Corp., 543 F.3d 987, 991 (8th Cir. 2008) (standard of review).
1
The Honorable James E. Gritzner, United States District Judge for the Southern
District of Iowa.
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Gary was born on May 5, 1931. He lived in a modest two-bedroom bungalow
with his parents in Memphis, Tennessee. Gary suffered from cerebral palsy and
needed assistance with everyday tasks, including eating and walking. His mother,
Nell Lucas Pepper (Nell), cared for Gary during his younger years. By all accounts,
Gary was an ambitious person. He started a newspaper-clipping service when he was
a teenager and later served as president of an Elvis fan club and as a correspondent to
other Elvis fan clubs.
Through his clipping service, Gary met Elvis, and the two became friends.
During an October 1960 interview, Elvis said, “When I’m back in Memphis, Gary is
with me almost every night. We go out and see the town and have a big old time. He
was the first one to greet me at the train when I got back from the Army.” A
photograph accompanying the article shows Elvis, who was dressed in costume for
his movie Flaming Star, standing next to Gary, who was seated in a wheelchair and
grinning broadly. Gary also attended Elvis and Priscilla Presley’s wedding reception
and later greeted the couple’s newborn daughter at Graceland. Along with paying
Gary a salary for his work with the fans, Elvis often gave him gifts. Over time, Gary
amassed a large collection of Elvis memorabilia.
Gary’s father died in 1971. Nell suffered from depression and gradually became
unable to care for Gary. Elvis asked Carl Nichols (Carl) to look after Gary and Nell’s
well-being. During the summer of 1975, Carl approached Nancy, who was then a
young nurse, and asked whether she would care for Gary and Nell. Nancy, a devoted
fan of Elvis, had moved to Memphis from Cedar Rapids, Iowa, in 1974 and spent
evenings at Graceland’s front gate. When Carl brought her to the Peppers’ home,
Nancy went to work immediately and eventually moved in with Gary and Nell. After
Nancy’s mother moved from Iowa to Memphis to help care for the Peppers, the four
moved into a larger house that was closer to Graceland and to Elvis’s father’s home.
Nancy testified, “Our back fence abutted the fence of Graceland, so we could look
over the fence and see Elvis’s horses and his backyard.” Nancy and her mother were
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not compensated for their services. Nancy’s mother, Gary, and Nell received social
security income, which was supplemented by the salary Elvis paid Gary.
Gary described Nancy as his “nurse, housekeeper, cook, assistant, friend and
secretary.” Nancy dressed, bathed, and fed Gary. She helped him complete physical
therapy, attended his doctor’s appointments, and was able to wean him off certain
medications. She also cleaned and cooked meals for Gary and Nell. Nancy and Gary
spent their free time together, too, attending church three times a week and traveling
to places like Tupelo, Mississippi; Las Vegas, Nevada; and Long Beach, California.
Above all, Nancy and Gary shared a love of Elvis. They made daily
“pilgrimages,” as Nancy called them, to Graceland. They attended Elvis concerts
together. Nancy helped Gary with his columns for fan-club newsletters. In an
undated note, Gary wrote, “Dearest Nancy, Thanks so much for what you [have] done
for me and my dear mom this past year. I won’t be able to repay you in a million
years. Please know I appreciate it. May God always keep you forever . . . I will
always love you.”
Elvis died on August 16, 1977. Nancy and Gary attended the funeral, and
Elvis’s father gave them two white roses from the casket. Nancy testified that
Memphis “changed within a few days” and that “[i]t was like a different world.”
Although she wanted to leave Memphis after Elvis’s death, she “never wanted to lose
Gary and Nell.”
Times were hard after Elvis died. Gary underwent a surgery that had shown
promise of lessening the symptoms of cerebral palsy. Although Nancy described the
surgery as “very much a success,” it took a toll on her relationship with Gary. Then,
Elvis’s estate ended payments to Gary. Nancy and her mother decided to return to
Iowa, and they invited Gary and Nell to join them. In April 1978, after Gary had
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recovered, the four moved together to Cedar Rapids, bringing with them Gary’s
collection of Elvis memorabilia.
The Peppers lived with Nancy and her family until the summer of 1978, when
Gary and Nell entered a Cedar Rapids nursing home. Nancy visited Gary and Nell at
the nursing home daily and fed Gary every evening. At Gary’s request, Nancy
brought certain items of Elvis memorabilia to the nursing home. The remainder of the
collection stayed at Nancy’s family’s home. Gary told Nancy to “keep it.”
In the fall of 1978, Gary’s relatives from California moved Gary and Nell from
the Cedar Rapids nursing home to Long Beach, California. Gary took with him the
memorabilia that Nancy had brought to the nursing home, which consisted of a 14-
karat gold bracelet given to Gary by Elvis inscribed “From E.P. 12/25/65”; two gold
rings; a Rolex Oyster watch given to Gary by Elvis; autographed record covers; Sun
Studios records; a home video of Priscilla Presley’s baby shower; a “G.I. Blues”
album cover autographed by Elvis and his manager, “The Colonel”; photographs of
Elvis, Gary, and Nell; and a letter and envelope from Elvis to Gary sent from
Germany.
Nancy did not learn of the move until she stopped by the nursing home to feed
Gary, only to discover that he and Nell were gone. Gary and Nell remained in
California until their respective deaths on March 29, 1980, and December 29, 1982.
Gary and Nell did not contact Nancy after they moved, and Nancy made no attempt
to contact them.
Nancy kept the collection of Elvis memorabilia until 1982 or 1983, when she
gave it to her sister, Janet “Jenny” Jorgensen (Jenny), who then maintained the
collection until 2009, when she decided to sell it. Jenny created the Partnership—an
Iowa general partnership composed of Nancy, Jenny, and their brother—to which
Jenny transferred the collection. The Partnership then transferred the collection to an
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auction house in Chicago, Illinois, where it was entitled the “Gary Pepper Collection
of Elvis Presley Memorabilia” (the Collection) and, as set forth above, sold at auction.
The auction catalogue showed the items that Nancy and her sister had
maintained for more than thirty years. The auction resulted in a total sale price of
$250,465.00, including $28,000 for a red ultrasuede shirt worn by Elvis; $15,000 for
a large quantity of Elvis’s hair that was cut for his Army tour of duty; $6,000 for an
original 1954 record of Elvis’s first single, “That’s All Right”; $4,000 for original
photographs and negatives from Elvis and Priscilla’s wedding reception; $600 for a
set of Elvis’s concert-used handkerchiefs; and $1,400 for the two dried white roses
from Elvis’s funeral. The auction house deducted $25,046.50 for fees and $7,500 for
legal expenses.
As recounted in our earlier opinion, this lawsuit was filed on October 15, 2009,
and the proceeds from the auction were ordered to be maintained in escrow pending
resolution of the case. The Estates alleged claims for conversion, fraud, mislaid or
lost property, and failure of bailee to return property. In their answer, Nancy and the
Partnership responded that Gary had “made a gift conditional of personal property in
which he retained a reversionary interest.” That gift, according to Nancy and the
Partnership, became irrevocable upon his death.
Before the case was submitted to the jury, the Estates moved for judgment as
a matter of law, which was denied. The district court instructed the jury that to find
a conditional gift:
[Nancy and the Partnership] must prove by clear, convincing, and
satisfactory evidence that Gary delivered his Collection to Nancy with
the intention that Nancy acquire an ownership interest in his Collection
that terminated Gary’s interest after the passage of some specified period
of time or on the occurrence or nonoccurrence of some event or
condition and that Nancy accepted Gary’s Collection.
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Jury Instruction 13. The jury returned a verdict in favor of Nancy and the Partnership.
The district court denied the Estates’ renewed motion for judgment as a matter of law
and their motion for a new trial.2
II.
At issue in this appeal is whether sufficient evidence supported the jury’s
finding that Gary had given the Collection to Nancy as a conditional gift. We review
de novo the district court’s denial of the Estates’ motion for judgment as a matter of
law. See Structural Polymer Grp., 543 F.3d at 991. We view the evidence in the light
most favorable to the verdict and affirm unless no reasonable juror could have reached
the same conclusion.
Id. We review the denial of the Estates’ motion for a new trial
for abuse of discretion.
Id. “A new trial motion premised on a dispute about the
strength of the supporting proof should be granted only ‘if the verdict is against the
weight of the evidence and allowing it to stand would result in a miscarriage of
justice.’”
Id. (quoting The Shaw Grp., Inc. v. Marcum,
516 F.3d 1061, 1067 (8th Cir.
2008)). The parties agree that Iowa law applies in this diversity case.
A gift is property “which is voluntarily transferred by one person to another
without compensation.” Kirchner v. Lenz, 87 N.W. 497, 498 (Iowa 1901) (citation
omitted). To show that the transfer of property was a gift, the donee must establish
donative intent, delivery, and acceptance. Gray v. Roth,
438 N.W.2d 25, 29 (Iowa Ct.
App. 1989); see also Runnels v. Anderson,
173 N.W. 91, 94 (Iowa 1919). The intent
of the donor is the controlling element.
Gray, 438 N.W.2d at 29.
2
The parties agree that Jury Instruction 13 was based on section 31.2 of the
Restatement (Second) of Property: Donative Transfers (1992), Gift of Personal
Property in Which the Donor Retains Reversionary Interest. The Estates do not argue
that the jury instruction was erroneous or that the district court erred by applying
section 31.2 in ruling on the post-trial motions.
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To give a conditional gift, the donor must “deliver[] the personal property to the
donee . . . with the manifested intention that the donee acquire an ownership that
terminates—(1) after the passage of some specified period of time; or (2) on the
occurrence or nonoccurrence of some event or condition.” Restatement (Second) of
Prop.: Donative Transfers § 31.2 (1992). The donor of a conditional gift thus gives
less than his entire ownership interest in the property and retains for himself a
reversionary interest. Id. § 31.2 cmt. a. In the case of a gift that may be terminated
at any time by the donor, “the donor’s right to terminate automatically expires at the
death of the donor.”
Id. § 31.2 cmt. b. This concept is explained by the following
illustration:
O is the owner of a watch. O delivers the watch to his son, S, with the
comment, “You may use this watch until I want it back.” Legally
admissible evidence is available to prove that O made the quoted
comment. S is entitled to wear the watch until O requests its return. If
O dies without requesting the return of the watch, the conclusion is
justified that S is entitled to keep the watch.
Id. § 31.2 cmt. b. illus. 1.
The Estates argue that there was insufficient evidence to allow the jury to find
(1) that Gary delivered the Collection to Nancy with the intention that she acquire an
ownership interest and (2) that Gary placed any conditions on the gift. They contend
that Nancy’s testimony is consistent only with a bailment relationship, in which Gary
intended to retain ownership of the Collection and delivered the Collection to Nancy
only for safekeeping. We disagree with the Estates’ characterization of the evidence.
Nancy testified at trial that Gary did not give her specific instructions about the
Collection: “Gary never said anything except keep it.” According to Nancy, the
Collection “always has been Gary’s and it always will be Gary’s.” She said that if
Gary had asked her to return it to him, she would have done so. Similarly, if Gary’s
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family had asked for the Collection before she gave it to her sister, she would have
given it to them.
Q: You didn’t believe that you owned any of those items, is that
correct?
A: As long as Gary was alive, I was keeping it for him.
Q: And you never understood the collection as a gift to you, is that
correct?
A: No.
When asked whether she owned the property, Nancy replied, “I believe I owned the
responsibility for the collection after he passed away.”
Nancy’s subjective belief whether she owned the Collection does not establish
whether Gary manifested the intention that she acquire an ownership interest. Stated
differently, Nancy’s testimony is not conclusive as to Gary’s intent. That she always
would consider the Collection to be Gary’s is a statement born of sentiment. That she
would have returned it to the family shortly after Gary’s death did not impose upon
her an enforceable obligation to do so. Similarly, although her testimony could mean
that she did not understand delivery of the Collection to be a gift, it does not establish
that Gary intended to create only a bailment relationship. And whatever Nancy meant
by “own[ing] the responsibility for the collection” is not for this court to decide.
Gary told Nancy to “keep it,” a phrase that can have different meanings,
depending on the circumstances in which it is used. Whether Gary intended to
effectuate a conditional gift—i.e., “keep it unless I ask for it back”—or whether he
intended to create a bailment relationship—i.e., “keep it safe for me”—was a question
for the jury. There is no direct evidence that Gary intended for Nancy to keep the
Collection until he wanted it back; similarly, there is no direct evidence that Gary
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intended for Nancy merely to hold it for safekeeping. He simply said, “Keep it.” A
reasonable jury could infer either a conditional gift or a bailment, and despite the
Estates’ argument to the contrary, a reasonable jury could find that Gary implied a
condition that the Collection be returned upon his request.
The evidence of Gary and Nancy’s relationship also supports the jury’s finding
of a conditional gift. Gary and Nancy shared a passion for Elvis, and Gary considered
Nancy to be his nurse and his friend. The jurors heard testimony about the care Nancy
had provided, read notes that Gary had written to Nancy, and saw photographs of the
two spending time together. Nancy explained how important the Collection was to
Gary and how he asked Nancy to bring certain cherished items to him at the nursing
home. Gary left the remainder of the Collection in Nancy’s care and never asked her
to return it. Gary’s relatives, who lived in California and were not Elvis fans, testified
that Gary did not even tell them about the Collection. During trial, Nancy explained
that “[Gary] made it quite clear to me that he did not want his relatives in California
to be entrusted with [the Collection].” Given this evidence, a reasonable jury could
find that Gary wanted the Collection to be owned and maintained by a friend who
shared his love of Elvis, who had taken care of him and his mother for years, who
recognized the significance of the Collection, and who would keep the Collection
unless and until he asked her to return it.
III.
The judgment is affirmed.
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