Baun v. Estate of Kramlich, 22379.

• Decision Date: 23 July 2003
• Docket Number: No. 22379.,22379.
• Citation: 667 N.W.2d 672,2003 SD 89
• Parties: LoiS BAUN, Jerry Baun and Daniel Baun, Petitioners and Appellants, v. ESTATE OF Lila KRAMLICH and Evelyn M. Nelson, Trustee of the Lila Kramlich Living Trust, Respondents and Appellees.
• Court: South Dakota Supreme Court

667 N.W.2d 672

2003 SD 89

LoiS BAUN, Jerry Baun and Daniel Baun, Petitioners and Appellants, v. ESTATE OF Lila KRAMLICH and Evelyn M. Nelson, Trustee of the Lila Kramlich Living Trust, Respondents and Appellees.

No. 22379.

Supreme Court of South Dakota.

Argued March 24, 2003.

Decided July 23, 2003.

H.I. King of Tonner, Tobin & King, Aberdeen, South Dakota, Attorneys for petitioners and appellants.

Kennith L. Gosch of Bantz, Gosch, Cremer, Peterson & Sommers, Aberdeen, South Dakota, Attorneys for respondents and appellees.

KONENKAMP, Justice.

[¶ 1.] This is an appeal brought by the unsuccessful contestants to the will and trust of Lila Kramlich. In trial, the contestants alleged that Lila (1) was under undue influence; (2) was not of sound mind when she executed the documents; and (3) omitted the contestants from her trust and will by mistake. The trial court held that Lila was competent when she signed the instruments. Because we conclude that the court was not clearly erroneous, we affirm.

Background

[¶ 2.] Lila Kramlich was born on March 28, 1918. She had two siblings, a brother, Maurice Schultz, and a sister, Lois Baun. While Lila had a warm relationship with Maurice, she purportedly bore hard feelings toward Lois. Lila came of working age during the Great Depression. When she was still quite young, she had to leave home to earn her own living. According to some family members, Lila resented that she had to go to work while her younger sister, Lois, obtained her education.

[¶ 3.] Lila married Jacob Kramlich in 1962, when she was forty-four. They had no children, but Jacob had two children from a prior marriage: Otto Kramlich and Elizabeth (Kramlich) Swanson. In 1976 Jacob passed away. In 1977, Otto, Lila's stepson, died. Lila's parents both died in 1981, and her brother, Maurice, died in 1990.

[¶ 4.] Lila was a businessperson. She lived in Eureka, South Dakota, most of her adult life. She owned drug stores in Eureka and Leola. Her brother, Maurice, was a farmer. He lived on the family farm near Revillo, South Dakota. Lila's sister, Lois, resided in Arizona, where she has lived for many years. Lila maintained a close relationship with her brother and his family. After Maurice's death, she continued a close relationship with his wife, Doreen Schultz, and her children, Quentin, Brad, and Nancy.

[¶ 5.] As the years passed, the division between Lila and Lois widened. They seldom saw each other and Lila almost never saw Lois's children or grandchild. Friction worsened from their joint ownership of farmland their parents bequeathed to them in Grant County. As tenants in common, the sisters became openly antagonistic over the renting of this land. In 1997, to end the difficulty, Lila deeded her interest to Maurice's sons, Quentin and Brad.

[¶ 6.] Lois believes that Lila intentionally "dumped" her children, Gerald and Edward Baun, and excluded her grandchild, Daniel, to torment her. At trial, Lois testified that initially she felt that Quentin and Brad should have the opportunity to own all the Grant County land, but she would no longer agree to sell them her interest "due to [Lila's] manipulations and attitude." Lois feels that Quentin and Brad should sell their interest in the land to her for one-half the value of their interest, to "prevent Lila from having a complete win with her cruel action" against Lois. Despite these conflicts between the sisters, over the years Lila nonetheless executed several wills bequeathing her property to the sons and daughters of both her brother and sister.

[¶ 7.] In 1996, Lila began to experience health problems that required her to have dialysis. In 1997, she consulted her attorney, Max Gruenwald, about making some changes in her bequests. In April or May of 1998, she sent hand written instructions to Gruenwald to create a new pour over will and trust, effectively cutting out Lois's children as beneficiaries.¹ After two telephone conversations with Lila on May 28, 1998, concerning the details, Gruenwald drafted her new will and trust.

[¶ 8.] On June 6, 1998, Lila passed out at her home and was taken to the Eureka Hospital. The problem was caused by the clotting of her dialysis graft. Because of her need for dialysis, Lila was transferred to MedCenter One Hospital in Bismarck, North Dakota, under the care of Dr. Abel Tello. On June 12, 1998, Lila was diagnosed with a stroke. Although she suffered some cognitive deficits as a result, with treatment and rehabilitation her condition improved enough that she was transferred from the acute unit to the subacute unit (rehabilitation unit) on June 17, 1998. Significant to the later court contest, during the time of Lila's stay at Med-Center, the nurses would routinely ask her simple orientation questions. Many of the nursing notes recorded that she was disoriented and confused. By July 15, 1998, Lila's condition had improved to the point that she was discharged from the hospital to an assisted living home.

[¶ 9.] According to Dr. Tello, Lila's condition improved following her stroke. Still, she had good days and bad days, times when she was lucid and times when she was not. Her bad days occurred when she had dialysis. Lila underwent dialysis on July 13 and July 15, but not on July 14, the day she executed her will and trust. Dr. Tello recommended that Lila be transferred to assisted living because of her stroke and because he did not believe she should be traveling from Eureka to Bismarck every other day for dialysis. In deposition testimony, Dr. Tello was unable to offer an opinion on Lila's competency on July 14. He was not there on that day and his notes did not record her cognitive functioning during that time. In his opinion, the best people to testify to Lila's competency on July 14, 1998, would be those who saw her, like Marvel Harter. Dr. Tello believed that there was no medical reason to conclude that Lila would not be able to discuss the contents of her will with Delores Sieler and to know her family and the money and property she owned.

[¶ 10.] When Lila broke her arm in 1994, her good friend and neighbor, Delores Sieler, began to assist her with housework. In 1996, Sieler traveled with Lila to Bismarck for her dialysis. While Lila was hospitalized in Bismarck, Lila's neighbor, Kenneth Serr, cared for Lila's property. Lila wanted Sieler to be in charge of her property, so she contacted Gruenwald and had him prepare a durable power of attorney, naming Sieler as her attorney-in-fact. On June 29, 1998, Lila signed the power of attorney in Bismarck.

[¶ 11.] On June 30, 1998, Gruenwald mailed Lila a will and living trust drafted consistent with her written instructions and his conversations with her on May 28, 1998. The letter was sent to Lila's Eureka address and was eventually taken by Sieler to Lila in Bismarck on July 13, 1998. On the day that the will and trust were signed, July 14, Gruenwald had three telephone conversations with Lila. From those conversations, Gruenwald concluded that she knew what the will and trust were, knew that she requested them, and knew that she had to transfer assets to the trust to make it effective. Gruenwald believed Lila was "in good mental condition and was competent to sign legal documents, including a will."

[¶ 12.] Gruenwald asked Marvel Harter, Lila's social worker, to coordinate the signing of Lila's will and trust.² On July 14, 1998, Harter noticed a large envelope from Gruenwald in Lila's room. The envelope had been opened. Harter read the enclosed letter of instruction from Gruenwald. After she read the will and trust to Lila and Lila indicated that they were fine and did not want to make any changes, Harter arranged for another witness and a notary public to come to Lila's room. Then the will and trust were executed according to Gruenwald's written instructions. The documents were signed around 1:00 or 2:00 p.m. Other than the witnesses and the notary, no one else was present when Lila signed these documents.

[¶ 13.] The Trust allowed beneficiaries to borrow from the trust but required that the funds be paid back over a number of years. Gruenwald did not know how many years Lila wanted to allow, so he left the number of years blank. Lila chose four years and in her own handwriting inserted the number four in the trust document. She also dated and signed both the will and the trust.

[¶ 14.] Harter testified that MedCenter's policy was to consult with a psychiatrist if there were any questions of competency before they would allow a patient to sign a durable power of attorney. No such consultation was requested for Lila before she signed her power of attorney, will, or trust. After visiting with Lila, Harter believed that Lila knew and understood that she was signing her will and trust.

[¶ 15.] On July 15, 1998, when Lila was discharged from the hospital and admitted to The Chateau, an assisted living home, she noticed that her admission form incorrectly listed her marital status as single. She crossed this out and wrote "widow." She then signed and dated the form. On that same day, she was required to sign a release allowing her medical records to be sent from the hospital to the assisted living home. A nurse testified that the hospital did not allow patients to sign releases of medical information unless the administration believed that the patient was competent.

[¶ 16.] Lila's Chateau admission records show that she did well. She was alert, oriented to place and person, tried different interests, socialized with other residents and staff, and enjoyed bingo and Bible study. Between July 15 and November 3, 1998, Lila and Sieler had several conversations about her trust and will. During these conversations, Lila would exclaim, "When they find out what I did, the dust will fly." Lila also told Sieler that "She left $10,000 to the Reformed Church and $5000 to SPURS." After her stroke, Lila asked Sieler whether she was taking care of her property. She reviewed bil...