Guardianship of Rich, Matter of

Decision Date27 July 1994
Docket Number18338,Nos. 18180,s. 18180
PartiesIn the Matter of The GUARDIANSHIP OF Margaret F. RICH.
CourtSouth Dakota Supreme Court

Ramon A. Roubideaux, Rapid City, for appellant, Robert M. Wakefield, Sr.

Richard A. Pluimer of Carr and Pluimer, Belle Fourche, for appellee Pioneer Bank & Trust of Belle Fourche.

MILLER, Chief Justice.

Robert M. Wakefield appeals from a circuit court order that Pioneer Bank & Trust be appointed conservator of the estate of his Mother, Margaret F. Rich. He also appeals a subsequent order that all funds from joint bank accounts be delivered to the conservator. We affirm.

FACTS

Margaret F. Rich (Mother) is an eighty-five-year-old widow from Newell, South Dakota, who at the time of the guardianship hearing resided in a group home in Spearfish, South Dakota. She owns real estate and personal property valued at over $997,000. Mother has one natural child, a son from her first marriage, Robert M. Wakefield (Son). Son moved to Newell approximately three years ago after residing out of state for a number of years.

On August 25, 1992, Marietta Kimble (Kimble), Mother's long-time friend and neighbor, petitioned the court to appoint a guardian of the person and a guardian of the estate (hereinafter conservator) for Mother on the ground that Mother was no longer able to adequately care for herself or her property. 1 Kimble asked that Pioneer Bank & Trust (Bank) be appointed conservator.

Son filed an objection to the appointment of Bank as conservator and argued that, as her only natural child and sole heir, he was entitled to management of Mother's assets. In support of his position he entered into evidence a copy of her current will, naming him as a beneficiary of a trust to be created under the will, and documents confirming the existence of joint tenancy bank accounts in the name of Margaret F. Rich or Robert M. Wakefield.

A hearing was held on September 10, 1992. The parties stipulated that Mother was not competent to manage her own affairs. After hearing argument from counsel, the court found that Mother's will "indicates a guarded attitude" toward giving Son financial control of her assets. It also determined that because of the joint tenancy bank accounts, there was a potential conflict of interest in appointing Son as conservator because "a dollar saved in the care of Mother would be a dollar earned in the long term for Mr. Wakefield." The court then appointed Bank as conservator and named Son as guardian of the person.

On Son's motion for rehearing, an evidentiary hearing was held on October 16, 1992. Kimble testified that Mother had discussed the guardianship petition with her and had indicated that she did not trust her family to manage her finances. Kimble reported Mother said that if the family got control of her finances they "would all be driving new cars." Kimble also stated she had been ordered out of the group home where Mother had been placed and no longer felt she could visit her good friend. Son had instructed the home not to allow Mother's friends to visit.

Son testified that he had "considerable" income of his own and was "getting by nicely." He also stated that Mother had recently announced "she wanted to buy me a new car." After first denying it, Son admitted he had borrowed $5,000 from Mother when his family moved back to Newell in 1988. He also confirmed that Mother had purchased a house for one of his daughters, Roberta, to live in and that Roberta paid rent on the home. Son stated that if he was appointed conservator, he would change a joint tenancy account with his Mother from "or to for." He then admitted that of the $103,000 in one joint account, his contribution was only $20.

After first denying that he had discouraged Mother's long-time friends from visiting her, he admitted that he had given written instructions to the group home in which she was living that no one was to see her without his written permission.

Mother testified at the hearing and stated she wanted her Son, not Bank, to watch over her assets.

The trial court affirmed its prior decision that Bank would be conservator and entered findings of fact and conclusions of law. Subsequently, the court allowed Son to propose additional findings of fact and conclusions of law. It entered a final order with findings of fact and conclusions of law on December 3, 1992. The court expressly required that Bank segregate and maintain any joint assets held by Mother.

Before the December order was filed, Son withdrew the $103,000 from a Newell bank and deposited it into an account in the name of two of his children, Roberta and Jeff (hereinafter Grandson). Subsequently, it was learned that Grandson had made an unsuccessful attempt to withdraw $19,900 from another joint account in the names of Margaret F. Rich or Jeff Wakefield at First Western Bank in Belle Fourche. During this time, Son also filed a deed giving him an interest in a parcel of property owned by Mother.

A hearing on an order to show cause and a request for a temporary restraining order was held on December 8, 1992. The court ordered all funds withdrawn from Mother's accounts were to be paid to the clerk of courts pending final disposition. It also found that Son was withholding from the conservator substantial amounts of Mother's property, including keys to safe deposit boxes, savings bonds and certificates of deposits; it ordered all property to be turned over to the conservator for inventory. Son appeals.

I. THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN APPOINTING AN INDEPENDENT TRUSTEE BANK AS CONSERVATOR OF THE ESTATE.

Subject to statutory restrictions, the selection of a conservator is a matter which is left primarily to the discretion of the appointing court. 2 In re Guardianship of Jacobsen, 482 N.W.2d 634, 636 (S.D.1992) (citing 30 Am.Jur.2d Guardian and Ward, Secs. 27, 29 (1968)). Therefore, this Court's standard of review is whether the trial court abused its discretion in appointing a conservator. Only a clear abuse of discretion warrants reversal. Rykhus v. Rykhus, 319 N.W.2d 167, 170 (S.D.1982). Abuse of discretion refers to an end or purpose not justified by and clearly against reason and the evidence. Jacobsen, 482 N.W.2d at 636; Herndon v. Herndon, 305 N.W.2d 917, 918 (S.D.1981).

At the time Bank was appointed conservator, there was no South Dakota statute or case law setting forth the factors a trial court should examine in determining who should be appointed as conservator for a protected person. The legislature subsequently enacted SDCL 30-36-32. 3 While the statute is not controlling in this case, we look to it as a guide for the factors the court weighed in making the appointment.

The court examined whether Mother had chosen an individual to be her conservator. Mother's will directs that the residue of her estate is to be put into a residuary trust and names Pioneer Bank & Trust as sole trustee. Further, Mother limited disbursements from the trust to $400 per month for Son and, after his death, $100 per month to each grandchild. This is certainly an indication that Mother wanted a neutral, third party to manage her assets. This conflicts with Mother's testimony at trial. Where conflicting evidence is presented, all conflicts in the evidence must be resolved in favor of the trial court's findings. In re Metz' Estate, 78 S.D. 212, 214, 100 N.W.2d 393, 394 (1960).

The trial court then weighed the family relationships and wishes of Mother's family. Son admitted that Mother had previously relied on Kimble and requested her help with finances. Kimble testified that Mother had said she did not trust her family and did not want them to know about her financial affairs. This was corroborated by Mother's attorney who stated she had long expressed a desire to keep her financial business private. Evidence showed she had created life estates in deeds rather than giving Son the financial control of a fee simple interest in the properties.

The court then examined the commitment of the possible conservators to promoting Mother's welfare. Evidence was presented that Mother had been admitted to a hospital in the summer of 1992 and was released by the physician only after assurances from the Wakefield family that she would be adequately looked after at home. Approximately two weeks later she was readmitted to the hospital, malnourished and dehydrated. Son was out of town during this time but testified that his wife and daughter were supposed to look after his Mother in his absence. This indicates the family may have been unwilling or unable to look after Mother's personal well-being.

Finally, the court examined potential conflicts of interest. This is the strongest factor in support of the trial court's appointment of Bank. A large account was held by Mother and Son in joint tenancy, an account into which Son admitted he deposited only $20. He acknowledged he had never withdrawn money from the account before Mother was found to be unable to manage her own affairs. Son at first denied receiving a loan from Mother and then admitted he had borrowed money from her to buy a home when he returned to live in Newell. He repeatedly expressed concern over the cost of a corporate conservator. Although he stated that he had sufficient monthly income and assets of his own, the record shows a federal tax lien against Son in the amount of $46,978.67, plus penalties. There is also a small claims judgment filed against him.

Although the general inclination in this area is to appoint family members, and most statutes so provide, the best interests of the protected person is the overriding interest. See Bogan v. Arkansas First Nat'l Bank of Hot Springs, 249 Ark. 840, 462 S.W.2d 203, 204 (1971) (holding although statute expresses a preference for spouse, he has no absolute right to the appointment and the statute leaves it to the court to select that person as guardian who would act in the...

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