Justia South Dakota Supreme Court Opinion Summaries

Two members of a seven-member trust succession committee petitioned the circuit court for court supervision of the trust. Marvin M. Schwan owned and operated Schwan’s Sales Enterprises (a.k.a. The Schwan Food Company) until his death in 1993. In 1992, Marvin had created the Marvin M. Schwan Charitable Foundation. The Trust Instrument named seven beneficiaries: Wisconsin Evangelical Lutheran Synod, The Lutheran Church, Missouri Synod, Wisconsin Lutheran College Conference, Inc., Evangelical Lutheran Synod, Bethany Lutheran College, Inc., International Lutheran Laymen’s League, and Wisconsin Lutheran Synod Kingdom Workers, Inc. After Marvin’s death, the Trustees redeemed all Marvin’s stock in the company and funded the Foundation with assets valuing nearly $1 billion. The parties did not dispute that certain investments made by the Trustees over several years caused approximately $600 million in losses to the Foundation. These losses reduced the value of the Foundation’s assets and reduced the Foundation’s distributions to the Beneficiaries. According to Committee members Paul and Mark Schwan, the Trustees did not inform the Committee until 2013 that the Foundation had experienced such significant losses from the investments. In June 2014, Mark and Paul petitioned the circuit court for instruction and supervision under SDCL 21-22-9. Paul and Mark asked the court to address whether the Committee had a duty under the Trust Instrument to request an accounting from the Trustees related to the Trustees’ investment losses, whether a majority vote of the Committee was required in order to request an accounting, whether the Committee members that were also Trustees had a conflict of interest, whether the Committee had a fiduciary duty to request an accounting, and whether Paul and Mark as individual Committee members could request an accounting. After a hearing, the circuit court dismissed the petition because it concluded that the two members did not meet the classifications of persons able to petition the circuit court for supervision. After its review of the trial court’s decision, the Supreme Court reversed and remanded. The Supreme Court found the trial court did not conclude that the Trustees, Attorney General, or Beneficiaries established good cause to the contrary related to the merits of Paul and Mark’s petition. The court did not hold a hearing on the merits of Paul and Mark’s petition, noting that it would not address arguments raised by the Trustees or Paul and Mark because it concluded that Paul and Mark did not meet any classification entitled to seek court supervision. The Supreme Court remanded to the trial court to "fix a time and place for a hearing thereon, . . . and upon such hearing, enter an order assuming supervision unless good cause to the contrary is shown." View "Schwan v. Burgdorf" on Justia Law

Three individuals (the Conservators) were appointed guardians and conservators of Mary Novotny. The Conservators established the Mary D. Novotny Trust. Catherine Novotny was a beneficiary of the Trust, and the conservators were the trustees. When a dispute over the Trust arose between the trustees and Catherine, the circuit court granted reimbursement of expenses to the trustees. The circuit court granted summary judgment in favor of the Conservators and awarded them reimbursement and future expenses. Catherine appealed. The Supreme Court remanded, holding that there was no evidence in the record that supported the basis for reimbursement under S.D. Codified Laws 55-3-13, and therefore, the circuit court erred in granting the Conservators’ motions for expenses. View "In re Guardianship of Novotny" on Justia Law

In this lengthy estate dispute, Testator’s daughter (Daughter) appealed several rulings of the circuit court, including the circuit court’s denial of her request for relief from an order under S.D. Codified Laws 15-6-60(b). The Supreme Court affirmed, holding that the circuit court (1) did not err in denying Daughter relief under section 15-6-60(b); (2) did not err when it considered extrinsic evidence to interpret Testator’s last will and testament and subsequent codicil; (3) properly approved the personal representative’s proposed distribution of Testator’s assets; (4) did not err in reforming the will and codicil; and (5) did not abuse its discretion in awarding attorney’s fees to Testator’s grandson. View "In re Estate of Bickel" on Justia Law

In 1989, Decedent opened a savings account. In 2007, Decedent included her son (Son) and daughter as additional account owners. Decedent died in 2012. The next year, Son withdrew $17,554 from the account and placed the funds in a certificate of deposit in his name. In doing so, Son relied on S.D. Codified Laws 29A-6-104, which provides that the proceeds of a joint account automatically pass to the surviving account holder. Decedent’s Estate brought suit against Son requesting a judgment for $17,554, asserting that Son converted the funds for his personal use. Son responded that, as joint owner of the account, he could not convert the funds for his own use. The trial court granted judgment in favor of the Estate, concluding that the Estate met its burden of proof that Decedent did not intend to establish a joint tenancy with right of survivorship, and therefore, the Estate rebutted the presumption under section 29A-6-104 that the proceeds automatically pass to the surviving account holder. The Supreme Court affirmed, holding that the trial court did not err when it determined that Decedent did not intend to create a joint account with right of survivorship in 2007. View "Estate of Card v. Card" on Justia Law

During his lifetime, Joseph Baumgart created a trust that had been court supervised for thirty-five years. Petitioners, income beneficiaries of the trust with one exception, filed suit against Trustees seeking to reopen previous accountings, remove Trustees, and appoint an independent third-party trustee on grounds of fraud, misrepresentation, trust mismanagement, material omission, self-dealing, and other breaches of fiduciary duties. The circuit court entered judgment in favor of Trustees. The Supreme Court affirmed, holding that the circuit court (1) did not err when it determined that one trustee’s relationship to the party who leased trust property did not support a charge of self-dealing; (2) did not abuse its discretion when it denied Petitioners’ request to replace Trustees with a neutral, third party trustee; and (3) did not err when it ruled that there were no material omissions in the accountings. View "In re Trust of Baumgart" on Justia Law

Delbert Deutsch died in 2012. Deutsch’s widow, Marcelina, and her son found a copy of a 2011 will on top of Delbert’s desk but, after a careful and exhaustive search, could not find an original will. Delbert’s nephews filed a petition for formal probate of the copy of the will and for determination of heirs. After a trial, the circuit court concluded that the lost will was not revoked by Delbert and admitted the copy of the will to probate. Marcelina appealed, arguing that the circuit court erred by admitting the copy of the will to probate. The nephews also appealed, contending that the court erred by denying their request for reimbursement of attorney’s fees. The Supreme Court affirmed, holding that the circuit court (1) did not clearly err in determining that the will had not been revoked; and (2) did not abuse its discretion in denying the nephews’ petition for attorney’s fees. View "In re Estate of Deutsch" on Justia Law

Dorothy McLean invested in a certificate of deposit (CD) with Black Hills Federal Credit Union (BHFCU). McLean subsequently changed the CD’s payable-on-death beneficiary from Ronald Studt, her son, to David Sholes, her second cousin. Thereafter, McLean executed a general, durable power of attorney naming Studt as her attorney-in-fact. Studt then sent an email to BHFCU requesting the beneficiary on the CD to be changed to him. After McLean died, Studt filed a declaratory judgment action against BHFCU and Sholes to determine the rightful beneficiary of the CD. During a hearing, Studt argued that the language of the power of attorney granted him broad powers to make gifts to himself. BHFCU and Sholes argued, in the contrary, that the power of attorney did not grant Studt the power to self-deal. The circuit court found that the language in the power of attorney was too broad and general and did not specifically authorize self-dealing. The Supreme Court affirmed, holding that the circuit court did not err when it found that the power of attorney did not permit Studt to engage in self-dealing. View "Studt v. Black Hills Fed. Credit Union" on Justia Law

Before he died, the Decedent transferred two quarter sections of Indian trust land located in Tripp County, South Dakota, to his son. The Decedent’s estate (the Estate) filed this action arguing that the Decedent lacked the requisite mental capacity or was unduly influenced by his son when he transferred the land. Specifically, the Estate requested that the court compel the Decedent’s son to make application to the Secretary of the Interior for the transfer of the Indian trust property to the Estate. The circuit court denied the Estate’s request and dismissed the action, determining that it lacked subject matter jurisdiction over the parcels held in trust by the United States. The Supreme Court affirmed, holding that the circuit court did not have jurisdiction over the subject matter of this case. View "Ducheneaux v. Ducheneaux" on Justia Law

Sister and Brother were co-trustees of a family Trust established by the siblings' parents. Before their mother died, she entered into a contract for deed with Brother for the sale of 480 acres of trust farmland. After the mother died, the siblings stipulated for court supervision of the Trust. Within the Trust action, Sister sued Brother and his wife for undue influence on his contract for deed with their mother. The circuit court granted summary judgment for Brother, concluding that Sister’s claim of undue influence was barred by the statute of limitations and that any oral agreement associated with the contract for deed was barred by the statute of frauds. The Supreme Court affirmed, holding (1) because Sister did not timely bring her claim for undue influence, the circuit court correctly ruled that the claim was barred by the statute of limitations; and (2) because Sister sought to enforce her asserted interest in the sale of real estate, the circuit court correctly ruled that any oral agreement regarding the real estate was barred by the statute of frauds. View "In re Matheny Family Trust" on Justia Law

Before his death in 2011, Donald Hyde executed a will and then a revocable trust that he funded with real estate and a brokerage account containing stock. Under the trust, the stock was to be distributed to charities upon Hyde’s death. However, in a post-trust codicil, Hyde bequeathed the stock to his siblings. Before his death, Hyde also deeded trust real estate to siblings and loaned his sister money that he obtained from the trust brokerage account. After the circuit court supervising the trust made its findings and determinations, and charities and Hyde’s sister appealed. The Supreme Court affirmed, holding that the circuit court did not err in determining (1) the post-trust codicil did not modify the trust; (2) the trust should not be reformed to distribute the stock to the siblings; (3) the loan to the sister should be repaid to Hyde’s estate rather than his trust; (4) the deeds conveying property to Hyde’s siblings were validly delivered before Hyde’s death; and (5) the charities failed to meet their burden of proving that some of Hyde’s dispositions were the result of undue influence. View "In re Donald Hyde Trust" on Justia Law