Guardianship of Larson, Matter of, 20044

• Decision Date: 20 May 1998
• Docket Number: No. 20044,20044
• Citation: 579 N.W.2d 24,1998 SD 51
• Parties: In the Matter of the GUARDIANSHIP OF Harold L. LARSON.
• Court: South Dakota Supreme Court

Page 24

579 N.W.2d 24

1998 SD 51

In the Matter of the GUARDIANSHIP OF Harold L. LARSON.

No. 20044.

Supreme Court of South Dakota.

Argued Dec. 3, 1997.

On Reassignment April 1, 1998.

Decided May 20, 1998.

Michael M. Hickey of Bangs, McCullen, Butler, Foye & Simmons, Rapid City, for appellee Verlyne J. Larson, guardian of the person and estate of Harold L. Larson.

Sandra K. Hoglund of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for appellants and objectors Kathryn J. Larson Proano and Robert F. Larson.

GILBERTSON, Justice (on reassignment).

¶1 Kathryn J. Larson Proano and Robert F. Larson (Children), filed objections to the Final Accounting and Report of the guardian of their father's estate. After a contested hearing, the trial court overruled those objections and approved the accounting and discharge of the guardian. Children appeal, alleging inadequate accounting by the guardian and asking that the guardian be surcharged for improper and unexplained expenditures. We affirm.

FACTS

¶2 On October 26, 1990, Verlyne J. Larson was appointed guardian of the person and estate of Harold L. Larson, her husband of sixteen years. Verlyne was Harold's second wife. She sought the appointment because Harold was suffering from Alzheimer's disease. By the time of Verlyne's appointment as guardian, the disease had progressed to the point where Harold was unable to manage his business affairs. Verlyne's appointment was strenuously opposed by the children of Harold's first marriage, David, Robert and Kathy.

¶3 Verlyne's relationship with Harold's children was strained at best. Family discord also stemmed from a suit that David had filed against his father's company, Kreiser's, Incorporated. See Larson v. Kreiser's, Inc., 427 N.W.2d 833 (S.D.1988); 472 N.W.2d 761 (S.D.1991). As a result of these family disputes, David was disinherited.

¶4 Robert and Kathy remained potential beneficiaries of Harold's assets. Upon Harold's death, his assets were to be placed in trust during the life of Verlyne. Verlyne would receive the income from this trust and the principal of the trust would be distributed to Robert and Kathy when Verlyne died. Verlyne could also consume the principal of the trust if it was needed for her support.

¶5 At the time of her appointment, Verlyne was directed to file an accounting of all moneys or property received, or under her control, and to make an annual report to the court on the status of such assets and the estate of Harold Larson. Pursuant to that direction, Verlyne filed with the court annual reports for 1990, 1991, and 1992. For the years 1990-1992 she showed expenses for cash expenditures, the three country club memberships and expenditures for attorneys fees. No objections were raised by Kathryn or Robert to these expenditures during 1990-1992. The accountings were reviewed by the court and approved. Nevertheless, for the final accounting period, commencing in 1993, the children found fault with expenditures for the same type of expenses and methods of reporting they had previously acquiesced to.

¶6 Harold died on May 10, 1994, and Verlyne filed a final account and report of guardian on April 20, 1995, covering the period from January 1, 1993, up until the time of Harold's death. Children filed an objection to the final account because of what they alleged were unexplained, unsupported and improper expenses, and requests for reimbursement from the Harold L. Larson guardianship estate by Verlyne.

¶7 These objections boiled down to five basic areas of contention. First, children took issue with cash expenditures which were unaccompanied by individual receipts. These disbursements, which children contend amounted to over $36,000 during a sixteen-month period, were simply noted in a general ledger in their amount without any record of what expenses were covered by them. Verlyne responded to these objections by contending that cash was often required in the community in which they lived in California, especially since Verlyne and Harold were from out of state and still banked in Sioux Falls. Verlyne also testified that $19,500 was spent on the purchase of a car for Harold.

Next, objections were made to payments for full country club memberships which historically Harold had extensively used but because of declining health and geography, were now used to a much lesser extent. Verlyne maintained Harold's membership at both the country club near their home in California and also his charter memberships at Minnehaha and Westward Ho country clubs in Sioux Falls, although they had not been back to Sioux Falls for many years. Harold's declining physical condition prevented him from golfing like he had during his healthier days and now only allowed him to chip and putt on limited occasions. Verlyne testified that she felt compelled to maintain the memberships in South Dakota because of Harold's history as one of the original members at Westward Ho and Minnehaha and because of the possibility of returning to Sioux Falls to live. The membership in the California country club was maintained, in Verlyne's view, to maintain Harold's dignity and pride. Harold often dined at the country club in California and, although a less expensive social membership was available, Verlyne wanted Harold to be able to do a little chipping and putting in the middle of the course at his leisure and also ride around in a golf cart without actually playing. She felt this gave him great pleasure.

¶9 The third area of objection was with regard to payments for travel expenses Verlyne incurred while vacationing without Harold. Verlyne took trips during 1993 and 1994 to Mexico City, Cancun, and Tijuana, Mexico; Houston, Texas; Sacramento and Ontario, California; Amelia Island and Jacksonville, Florida; and Las Vegas, Nevada. Verlyne's travel and theater expenditures during this time period reached over $7,000. Payments for these trips were made both from the guardianship account and from a joint account in which Verlyne commingled Harold's money with her own. Verlyne responded to the objections to the trip expenses by contending that she had placed around $17,000 of her own money in the joint account in 1993 and 1994, which she was entitled to spend. Also, Verlyne maintained that the trips were necessary for her to regain her health and strength after enduring the hardships of caring for Harold.

¶10 The fourth objection pertained to the purchase of an automobile for $19,500. Robert and Kathy questioned the purchase of the car by the estate when there is no indicia of ownership linking it to Harold or his estate. Verlyne maintained that the car was purchased for Harold because he enjoyed going for drives and the cars otherwise available to Harold were either too small or prone to break down.

¶11 The last objection pertained to the attorney fees and expenses which were awarded to Verlyne and denied to children who contend fees and expenses were not properly granted to Verlyne because they were not incurred to protect Harold's estate. Instead, they argue, the attorney fees went to protect Verlyne's position as guardian and her inadequate accounting.

¶12 The court held a hearing and considered the objections raised by the Larson children. The court gave great evidentiary weight to the testimony of Verlyne. Moreover, the court felt that the objections were simply part of an ongoing family feud that the court did not want to continue. The court overruled the objections and approved the final accounting. Children brought this appeal challenging the sufficiency of the accounting and focusing on the five areas outlined above.

STANDARD OF REVIEW

¶13 In guardianship proceedings, the trial court's findings of fact are reviewed under the "clearly erroneous" standard. In re Guardianship of Viereck, 411 N.W.2d 102, 106 (S.D.1987) (citing SDCL 15-6-52(a)). Under this test, "[w]e will not overturn the trial court's findings unless, after reviewing all the evidence, we are left with a definite and firm conviction that a mistake was made." Id. (citing Wiggins v. Shewmake, 374 N.W.2d 111, 114 (S.D.1985)).

APPLICABLE STATUTES

¶14 The children attempt to apply the wrong law to Verlyne. At the commencement of the reporting period in question, January 1, 1993, the law relied upon by the children did not exist. From January 1 to July 1, 1993, SDCL §§ 30-23-1 through 30-23-3 controlled guardianship accountings. Per SDCL §§ 30-26-3 and 30-25-28, receipts were optional with the trial court rather than required. See Estate of Nelson, 330 N.W.2d 151, 156 (S.D.1983); Estate of Weickum, 323 N.W.2d 874, 876 (S.D.1982).

[T]he rigid requirements imposed upon an executor or administrator regarding the filing of vouchers is no longer applicable. This is not to say, of course, that the personal representative of an estate does not owe the highest duty of fidelity to the estate and to the beneficiaries thereof. We are satisfied that the trial court made a painstaking effort to insure that this high standard of fidelity be honored....

Weickum, 323 N.W.2d at 876. This standard also applied to guardianships. Nelson, supra. ¹

¶15 On July 1, 1993, SDCL §§ 30-26-3 and 30-25-28 were repealed and SDCL ch 29A-5, the current South Dakota Guardianship and Conservatorship Act went into effect. ² SDCL 29A-5-103 states:

The provisions of this chapter concerning the filing of reports by guardians and the filing of accountings by conservators may not be retroactively applied and prior law shall control as to whether a report or accounting will be required for any period prior to July 1, 1993.

(Emphasis added). Thus, the children are incorrect when they argue it retroactively applies the receipt requirements of SDCL 29A-5-408. ³

ISSUE

¶16 ARE THE TRIAL COURT'S FINDINGS CLEARLY ERRONEOUS THAT VERLYNE PROPERLY CARRIED OUT HER DUTIES AS GUARDIAN?

¶17 1. Cash Disbursements

¶18 We hold that the trial court was not "clearly erroneous" in its determination that the $36,905...