James W. St Clair                                            W. Stephen Flesher
St Clair & Levine                                              Flesher & Lewis
Huntington, West Virginia                             Huntington, West Virginia
Attorney for the Appellants                          Attorney for the Appellees

The Opinion of the Court was delivered PER CURIAM.

        1.    “In reviewing challenges to the findings and conclusions [found by a special commissioner that were adopted by the circuit court], a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review.” Syllabus point 1, Public Citizen, Inc. v. First National Bank in Fairmont, 198 W. Va. 329, 480 S.E.2d 538 (1996).

        2.    “Where a fiduciary relationship exists and there is an indication of fraud a presumption of fraud arises and the burden of going forward with the evidence rests upon the fiduciary to establish the honesty of the transaction.” Syllabus point 10, Work v. Rogerson, 152 W. Va. 169, 160 S.E.2d 159 (1968).

Per Curiam:

        This appeal was filed by B.R. Compton, appellant/respondent below, (hereinafter referred to as “B.R.”), from an order of the Circuit Court of Cabell County requiring certain monies and property be placed in a constructive trust for the benefit of the estate of Tivis Compton, deceased/respondent below (hereinafter referred to as “Tivis”). The beneficiaries of the estate of Tivis Compton are Donna J. Napier, Anna Lee Trautwein and Jack Compton, appellees/petitioners below (hereinafter referred to as “the Napiers”) and B.R. Compton. Even though B.R. asserts numerous assignments of error before this Court, we deem it necessary to address only one issue: Tivis' competency when he conveyed certain assets. After reviewing the record and listening to the argument of the parties, we reverse the circuit court's decision and conclude that the Napiers failed to prove that the conveyances made by Tivis were invalid.

        On January 10, 1994, Tivis executed an instrument giving his son B.R. a general power of attorney over his affairs.See footnote 1 ¹ Thereafter, on March 7, 1994, Tivis executed a deed conveying two parcels of real property, situate in Cabell County, to B.R. On February 13, 1995, Tivis executed a deed conveying several parcels of real property, situate in Cabell County, to Jack. In August of that same year, four annuities that had previously been purchased by Tivis, and which named each of his children as beneficiaries, were changed, and B.R. became the sole beneficiary of all four annuities. Subsequently, in late April and May of 1996, the four annuity contracts were surrendered. The proceeds thereof, $52,168.72, “were paid to Tivis or B.R. Compton.” Additionally, by letter dated August 8, 1995, Tivis requested that the beneficiary for two additional annuities be changed from all four children to B.R.See footnote 2 ² Also in 1995, title to Tivis' 1993 Toyota Corolla was transferred to B.R. and his wife. On September 4, 1996, B.R. cashed two certificates of deposit, worth approximately $92,000 that were titled in the name of Tivis and Ella.See footnote 3 ³

        On October 23, 1997, the Napiers filed a petition seeking an accounting of Tivis' property. On November 11, 1997, while the case was pending, Tivis died testate.See footnote 4 ⁴ Tivis named Jack as the executor of his estate.See footnote 5 ⁵ The circuit court, by order entered February 17, 1998, referred the case to a Fiduciary Commissioner for a hearing on the merits and a final report. After a period of discovery, evidentiary hearings were held. At the conclusion of the hearings, the Commissioner submitted a report and recommended decision on March 21, 2000. The Commissioner recommended “that B.R. Compton and Jack Compton hold the real and personal property transferred to them from the assets of Tivis Compton, subsequent to the death of Ella Compton, as constructive trustees for the benefit of the estate of Tivis Compton[.]”See footnote 6 ⁶ By order entered August 15, 2000, the circuit court adopted the report and recommended decision of the Commissioner. It is from this order that B.R. now appeals.

            In reviewing challenges to the findings and conclusions [found by a special commissioner that were adopted by the circuit court], a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review.

Syl. pt. 1, Public Citizen, Inc. v. First Nat'l. Bank in Fairmont, 198 W. Va. 329, 480 S.E.2d 538 (1996). Accord Province v. Province, 196 W. Va. 473, 481, 473 S.E.2d 894, 902 (1996) (“Rulings of a special commissioner involving a mixture of law and fact are reviewed under an abuse of discretion standard. Ordinarily, this would include the rulings excluding evidence. However, the extent to which the ruling turns on materiality or interpretation of our law, the standard of appellate review is plenary.” (citations omitted). See also Gottlieb v. Barry, 43 F.3d 474, 486-87 (10th Cir. 1994) (discussing standard of review applicable to report of special master); Williams v. Lane, 851 F.2d 867, 884-85 (7th Cir. 1988) (same).

        Our decision in Kanawha Valley Bank v. Friend, 162 W. Va. 925, 253 S.E.2d 528 (1979), provides the proper context in which the facts of this case are to be viewed. In Friend, the defendant held a general power of attorney for the decedent, Manassah Judy. While Mr. Judy was alive, the defendant opened joint checking and savings accounts, with rights of survivorship, for the defendant and Mr. Judy. Shortly after opening the accounts, the defendant placed $30,000 of Mr. Judy's money in the accounts. After Mr. Judy died, the bank holding the accounts filed a declaratory judgment action seeking to determine whether to pay the money in the accounts to the defendant or to Mr. Judy's estate. The trial court ruled that the money should go to the defendant because the accounts were created with survivorship rights. Beneficiaries under Mr. Judy's will filed an appeal with this Court. We reversed the trial court. In doing so, we set out the principles that are applicable when a person has a power of attorney for another.

        We noted in Friend that “[a] power of attorney creates an agency and this establishes the fiduciary relationship which exists between a principal and agent.” Friend, 162 W. Va. at 928, 253 S.E.2d at 530.See footnote 8 ⁸ Friend further stated:

            A corollary to the fiduciary principle is the rule that a presumption of fraud arises where the fiduciary is shown to have obtained any benefit from the fiduciary relationship, as stated in 37 Am. Jur. 2d Fraud and Deceits § 441:

            “Thus, if in a transaction between parties who stand in a relationship of trust and confidence, the party in whom the confidence is reposed obtains an apparent advantage over the other, he is presumed to have obtained that advantage fraudulently; and if he seeks to support the transaction, he must assume the burden of proof that he has taken no advantage of his influence or knowledge and that the arrangement is fair and conscientious. . . .

Friend, 162 W. Va. at 929, 253 S.E.2d at 530 (additional citations omitted). We concluded in Friend that because of the fiduciary relationship between the defendant and Mr. Judy, a presumption of fraud arose with respect to placing Mr. Judy's money in the joint accounts, and that the defendant failed to prove that the money was a bona fide gift.

        Pursuant to Friend, the proper context in which to view the asset conveyances is that of a fiduciary relationship between B.R. and Tivis. B.R. held a general power of attorney for Tivis and, therefore, under Friend a fiduciary relationship existed. “The fiduciary duty is '[a] duty to act for someone else's benefit, while subordinating one's personal interests to that of the other person. It is the highest standard of duty implied by law[.]'” Elmore v. State Farm Mut. Auto. Ins. Co., 202 W. Va. 430, 435, 504 S.E.2d 893, 898 (1998) (quoting Black's Law Dictionary 625 (6th ed.1990)).

        The evidence at the hearing below established that during the fiduciary relationship, B.R. obtained from Tivis property worth approximately $300,000.00, a 1993 Toyota Corolla automobile, proceeds from certificates of deposit of approximately $100,000.00, and annuity proceeds of $146,671.65. Pursuant to Friend, this evidence raises a presumption of fraud. Thus, the burden shifts to B.R. to present evidence to overcome the presumption.See footnote 9 ⁹ See Syl. pt. 10, Work v. Rogerson, 152 W. Va. 169, 160 S.E.2d 159 (1968) (“Where a fiduciary relationship exists and there is an indication of fraud a presumption of fraud arises and the burden of going forward with the evidence rests upon the fiduciary to establish the honesty of the transaction.”); Syl. pt. 2, in part, Atkinson v. Jones, 110 W. Va. 463, 158 S.E. 650 (1931) (“[I]n a case where a fiduciary relationship exists and an inference of fraud arises, the burden of proof is then on the alleged feasor to establish the honesty of the transaction.”). See also Marshall v. Marshall, 166 W. Va. 304, 307, 273 S.E.2d 360, 362 (1980) (“[T]he law requires that one who receives property from another with whom he has a confidential relationship has the burden of showing that the transfer was fair and made with the utmost good faith.”). In our review of the evidence we find that B.R. met his burden of rebutting the presumption of fraud.

        For example, the most compelling rebuttal of fraud is the specific finding made by the Commissioner that “[t]here appear to have been no significant formal actions taken by B.R., as attorney-in-fact for decedent, acting under the power of attorney executed by decedent on January 10, 1994.” This finding was critical. It demonstrated that the evidence established that B.R. did nothing improper in causing Tivis to convey monies and property to him. Once this finding was made by the Commissioner, the Napiers were required to show by a preponderance of the evidence that B.R. somehow unlawfully obtained the monies and property from Tivis as “the burden of persuasion never shifts from the complainant to the [defendant].” Shepherdstown Volunteer Fire Dep't. v. State ex rel. State of West Virginia Human Rights Comm'n, 172 W. Va. 627, 637, 309 S.E.2d 342, 352 (1983).

        The Napiers presented evidence to show that during the period Tivis conveyed the assets, 1994 to 1996, he periodically demonstrated signs of mental impairment due to age. There was evidence that in January of 1996, Tivis' physician prescribed a drug for him called Cognex. Cognex is used to treat senility and degenerative dementia. However, this evidence, without more, was insufficient to set aside the conveyances. The Napiers presented no evidence proving that Tivis was totally or even partially incompetent during the period in question. Tivis' physician, whose deposition was presented to the Commissioner, would not opine that Tivis was incompetent during the critical time period. At best, the doctor's deposition testimony concluded that Tivis had occasional forgetfulness. Forgetfulness does not equal mental incompetence. Moreover, our case law does not support setting aside conveyances because of occasional forgetfulness.

        From the assets of decedent Jack received real property worth approximately $300,000.00 and a $12,000.00 certificate of deposit. B.R. received property worth approximately $300,000.00, a 1993 Toyota Corolla automobile, proceeds from certificates of deposit of approximately $100,000.00 . . . , and annuity proceeds of $146,671.65.