Estate of Borsch, Matter of, 14226

• Decision Date: 20 January 1984
• Docket Number: No. 14226,14226
• Citation: 353 N.W.2d 346
• Parties: In the Matter of the ESTATE OF Frederick G. BORSCH, Deceased. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 346

353 N.W.2d 346

In the Matter of the ESTATE OF Frederick G. BORSCH, Deceased.

No. 14226.

Supreme Court of South Dakota.

Considered on Briefs Jan. 20, 1984.

Decided Aug. 1, 1984.

A.P. Fuller of Amundson & Fuller, Lead, for Alan and Liselotta Herbert, intervenors and appellants.

Jon Mattson of Driscoll, Mattson, Rachetto & Christensen, Deadwood, for Jeraldine Fahrni, Rose Borsch, and Chester Borsch, Jr., contestants and appellees.

HENDERSON, Justice.

This is a civil appeal arising from a judgment declaring two wills invalid. We affirm.

In January of 1980, Frederick G. Borsch had written a will dividing his property among several friends and his niece, Jeraldine Fahrni. Upon being shown this will, Alan Herbert, a close friend, advised Borsch that it "won't stand up for thirty seconds." On March 20, 1981, Borsch executed another will, leaving virtually all of his property to Alan and Liselotta Herbert, intervenors-appellants. After the March will was executed, it was ascertained by Alan Herbert that paragraph III thereof was a repetition of other portions of the will, and that there were certain clerical errors in the drafting of the will. A subsequent will deleting the duplicative paragraph and correcting certain of the typographical errors was executed July 8, 1981.

Borsch died on November 2, 1981, at the age of 81 years. He left no surviving spouse, brothers, sisters, nor did he leave any children surviving him. The nearest relatives at the time of his death were his niece, Jeraldine, and a nephew, Chester Borsch, Jr. (contestants-appellees). Petition for probate of the July 8, 1981 will was filed by the administrator named therein on December 2, 1981.

Prior to hearing on this petition, a petition contesting probate was filed on January 7, 1982. Contestants, Jeraldine Fahrni, Chester Borsch, Jr., and Rose Borsch, devisees, legatees, and heirs at law of Frederick Borsch objected to probate of the will because 1) decedent was incompetent to make a will and 2) the will was a result of undue influence upon decedent by Alan and Liselotta Herbert. On February 17, 1982, a Motion to Intervene was filed on behalf of the Herberts to protect their interest in Borsch's estate.

Judgment was rendered on April 29, 1983, declaring Borsch's July 8, 1981 will to be invalid as a result of undue influence upon decedent by the Herberts. Though never admitted to probate, the will dated March 20, 1981 was also declared invalid. This will was substantially similar to the July 8, 1981 will and was considered to stem from the same undue influence.

Intervenors-appellants request reversal of the circuit court's judgment. Several issues, raised on appeal, are: 1) Did a confidential relationship exist between Borsch and the Herberts, thereby raising a presumption of undue influence, 2) was the existence of undue influence established, and 3) did the trial court err in declaring Borsch's March 20, 1981 will invalid? The competency of Borsch was not raised on appeal.

"This Court, by statute, is bound to apply the clearly erroneous test." In re Estate of Pierce, 299 N.W.2d 816, 818 (S.D.1980); SDCL 15-6-52(a).

In reviewing this matter, we must give due regard to the opportunity of the trial court to judge the credibility of the witnesses.... In addition, we must review the facts in the light most favorable to the findings of the trial court and all conflicts in the evidence must be resolved in its favor.

In re Estate of Jones, 320 N.W.2d 167, 169 (S.D.1982).

"A confidential relationship exists whenever a decedent has placed trust and confidence in the integrity and fidelity of another." In re Estate of Weickum, 317 N.W.2d 142, 145 (S.D.1982). The mere existence of such a relationship does not automatically raise a presumption of undue influence, however, "unless the beneficiary actively participated in the preparation and execution of the will and unduly profited therein." Id. (citing In re Estate of Anders, 88 S.D. 631, 226 N.W.2d 170 (1975) and others). Further,

[e]ven though the existence of a confidential relationship, in and of itself, does not create a presumption of undue influence, it may demand that the relationship be examined with close judicial scrutiny so as to insure that the transactions which transpired in conjunction with the confidential relationship are fair and aboveboard.

In re Heer's Estate, 316 N.W.2d 806, 810 (S.D.1982).

There can be no question that a confidential relationship existed between Borsch and Alan Herbert. Their friendship spanned approximately 25 years. They saw each other on a daily basis and frequently ate meals together. Borsch gave gifts to the Herberts on many occasions. Alan Herbert testified that Borsch would ask his advice on business topics and "on just about anything that came along." Others testified that Borsch consulted the Herberts on all his business and personal matters. Borsch's reliance on Alan Herbert as an advisor extended to the making of a will, under which Herberts received virtually all of Borsch's estate.

It was in January of 1981 that Borsch showed his friend a will he had written the year before and was immediately advised that it would not stand up. Alan Herbert suggested seeing an attorney. On the occasions of both the March 1981 and the July 1981 wills, Herbert accompanied Borsch to the attorney's office. He did not sit in on the conferences concerning the will, nor was he present at the execution of either will. However, he did help Borsch prepare an inventory of his holdings which had been requested by the attorneys. Herbert also accompanied Borsch to the bank and sorted through stock certificates and other items in a safety deposit box.

It was Herbert who gave the attorneys a small notebook containing a listing of Borsch's properties. In addition, a list of properties with the particular percentages allotted to various individuals was given to the attorneys. They testified the list was presumed to have been made by Borsch. At no time during the period from March to July, nor during deposition previous to trial, nor on being first examined at trial, did Alan Herbert mention it was his handwriting on the list. He testified he "forgot" all about it. Herbert later testified during trial that Borsch had asked him to prepare a list of mining claims and a list of division of these claims by percentage. Both lists were made at the same time and were made on Herbert's memo paper. Upon being asked why it was he had written the list, he stated Borsch "frequently asked me to do things like that for him, to write letters, make notes, whatever he happened to have that needed writing."

Thus, Herbert's own testimony reveals that Borsch depended on him for his help and advice. And, though it is clear he did not actively participate in drawing the will or in its execution, Herbert did guide Borsch through a great many steps in the process. "Where [such] facts exist the transaction should be 'scrutinized closely and condemned unless shown to be fair and above board.' " In re Metz' Estate, 78 S.D. 212, 222, 100 N.W.2d 393, 398 (1960). The trial court did not err in finding that a confidential relationship existed. Once this had been established, "the burden of 'going forward with the evidence' shifts to the beneficiary to show that he took no unfair advantage of his dominant position." Id.

[A] will procured by undue influence may be declared void. To establish the existence of undue influence, contestants must prove by a preponderance of the evidence four essential elements: (1) decedent's susceptibility to undue influence, (2) opportunity to exert such influence and effect the wrongful purpose, (3) a disposition to do so for an improper purpose and (4) a result showing the effects of such influence.

In re Estate of Weickum, 317 N.W.2d at 145.

A) SUSCEPTIBILITY TO UNDUE INFLUENCE

There is substantial evidence that Borsch was mentally competent to make a will, both in March and in July. He knew the property he owned, where he wanted it to go, and the contents of his will. However, mental competence is not dispositive of this issue. "Susceptibility to influence does not mean mental or testamentary incapacity. In fact, the application of undue influence presupposes mental competency." In re Metz' Estate, 78 S.D. at 221, 100 N.W.2d at 398.

At the time in question, from about January 1981 to July 1981, Frederick Borsch was 81 years old. Age was beginning to take its toll. His health was failing, and he did not feel well at times. Injuries incurred in youth were beginning to show their rage. Though his physician at the V.A. Hospital felt him to be alert "considering his age," he did indicate that Borsch's physical condition had deteriorated and he noticed a bit of "euphoria," a seeming unconcern at his discomfort. Nurses at the hospital noticed that Borsch had lapses, which occurred more frequently in April than in January, when last seen. They attributed this to old age.

A cousin noticed that Borsch's physical and mental capacity had diminished somewhat. Friends of Borsch also noticed changes. He seemed "down," much more "negative" the last years. He was described as being sad and unhappy. Others testified to changes in Borsch. He was growing confused, getting older, and feeble.

"Certain it is that while mere physical weakness is not necessarily evidence of undue influence, evidence of physical and mental weakness is always material upon the question of undue influence." Johnson v. Shaver, 41 S.D. 585, 594, 172 N.W. 676, 678 (1919) (citations omitted). "Obviously, an aged and infirm person with impaired mental faculties would be more susceptible to influence than a mentally alert younger person in good health." In re Metz' Estate, 78 S.D. at 221, 100 N.W.2d at 398.

B) OPPORTUNITY TO EXERT INFLUENCE AND EFFECT WRONGFUL PURPOSE

As indicated previously, the Herberts and Borsch shared a very close relationship. They saw each other on a daily basis. The Herberts...