In re Estate of Olson

• Decision Date: 15 October 2008
• Docket Number: No. 24768.,24768.
• Citation: 2008 SD 97,757 N.W.2d 219
• Parties: In the Matter of the ESTATE OF Joseph E. OLSON, Roger D. Olson, Personal Representative of the Estate of Joseph E. Olson, Marlys Sides, Kenwood Olson, Roger Olson, Nona Foster, Linda Torgrude and Ricky Olson, Plaintiffs and Appellants, v. Nora Olson, a/k/a Nora A. Olson, and Citizens State Bank, Sinai, South Dakota Branch, Defendants and Appellees.
• Court: South Dakota Supreme Court

757 N.W.2d 219

2008 SD 97

In the Matter of the ESTATE OF Joseph E. OLSON,

Roger D. Olson, Personal Representative of the Estate of Joseph E. Olson, Marlys Sides, Kenwood Olson, Roger Olson, Nona Foster, Linda Torgrude and Ricky Olson, Plaintiffs and Appellants, v. Nora Olson, a/k/a Nora A. Olson, and Citizens State Bank, Sinai, South Dakota Branch, Defendants and Appellees.

No. 24768.

Supreme Court of South Dakota.

Considered on Briefs August 26, 2008.

Decided October 15, 2008.

Jerome B. Lammers of Lammers, Kleibacker & Brown, LLP, Madison, SD, for plaintiffs and appellants.

Gary J. Pashby, Michael F. Tobin of Boyce, Greenfield, Pashby & Welk, LLP, Sioux Falls, SD, for appellee, Citizens Bank.

Alan F. Glover of Glover & Helsper, PC, Brookings, SD, for appellee, Nora Olson.

SABERS, Justice.

[¶ 1.] At the time of Joseph E. Olson's ("Joe") death, ten certificates of deposit ("CDs") he purchased were held in joint ownership with his wife, Nora A. Olson ("Nora"). Joe's six children from a previous marriage claim that Joe intended the CDs' proceeds to go to them, rather than to Nora, upon Joe's death. The circuit court held: (1) Nora was a joint tenant with rights of survivorship to the CDs. We affirm Issue 1.(2) The court further held that Joe's children were not permitted money damages due to their failure to request them in their complaint. In addition, the complaint does not contain a claim against the Bank for negligence or any other cause of action. Despite an opportunity to amend the complaint, the opportunity was declined by Joe's children. For these reasons, we also affirm Issue 2.

FACTS

[¶ 2.] Joe and Nora were married in May of 1985.¹ This was the second marriage for each of them and each had six children from their prior marriages. Joe and Nora had a very good marriage, and they worked "hand in hand." After twenty-one years of marriage, Joe died on June 3, 2006.

[¶ 3.] Beginning in 1997 and over the next four and a half years, Joe purchased ten CDs from the Citizens State Bank, Sinai, South Dakota, Branch (f/k/a First Bank of Sinai) ("Bank"). The first nine CDs were in the amount of $5,000 each, and the tenth one was for $10,000.² Initially, the first nine were issued to "Joseph E. Olson or Nora A. Olson" and required only one endorsement. The tenth CD was issued solely to "Joseph E. Olson" and similarly required one endorsement. This CD contained a payable on death provision naming Joe's daughter, Linda Torgrude, as the beneficiary.

[¶ 4.] On February 15, 2003, Joe and two of his children went to the Bank to make changes to the CDs. Joe informed the Bank officer of his intent to establish individual ownership of the CDs. Nora's name was stricken from the ownership portion of the CDs, and Joe's children were named as the beneficiaries in the payable on death provisions. These changes were made to both the original CDs and to the Bank's copies of the CDs. Joe signed a notarized document detailing his intent to make these changes. The originals were placed in a new safety deposit box Joe opened at the Bank. Joe's children were given the keys to this box.

[¶ 5.] On December 8, 2003, Joe returned to the Bank with Nora and one of her daughters to again change the CDs. This time the changes consisted of reinstating Nora's joint ownership to the first nine CDs and to add her name to the tenth CD originally issued in Joe's name. Joe informed Bank officer William Buck that he intended the CDs to be survivorship documents with Nora. Upon signing a document evidencing this intent, the CDs were changed to indicate ownership as "Joseph E. Olson and Nora A. Olson." Because Joe's children had possession of the key to the safety deposit box containing the originals, these changes were made only to the Bank's copies of the CDs.³ In light of these changes, Buck did not alter the requirement of one endorsement for each CD. Moreover, the CDs were left as individual accounts rather than changed to joint accounts, and the payable on death provisions naming Joe's children as beneficiaries were not deleted.

[¶ 6.] In early February 2004, Joe and two of his children consulted with their attorney, Richard Ericsson. Ericsson urged Joe to return to the Bank and request the CDs be changed by once again removing Nora's name as a joint owner. Joe and another son returned to the Bank on February 9, 2004, and again met with Buck. Joe requested that Nora's name be removed from the CDs. Buck refused to make any further changes upon recognizing the tug-of-war that was occurring. Buck told Joe and Joe's son that Buck first wanted to consult with the Bank's attorney, because he believed that Nora's endorsement was necessary since the CDs ownership was now titled as "Joseph E. Olson and Nora A. Olson."

[¶ 7.] On February 19, 2004, the attorneys for Joe and his children, Nora and her children, and the Bank entered into an agreement that the CDs would remain in their current state reflecting the joint ownership, until there was an agreement by all the parties or a court ordered otherwise. By letter, Ericsson informed Joe's children of this agreement to maintain the status quo.

[¶ 8.] Throughout the year and a half following the agreement, the parties attempted to resolve their disputes. Their efforts were unsuccessful. The Olson family became frustrated with attorney Ericsson, and engaged attorney Jerome Lammers to represent them. Lammers contacted the Bank to have the CDs reflect Joe's sole ownership. The Bank refused Lammers' oral request, as well as Joe's request when he visited the Bank again with two of his children in July of 2005. More than two years passed between the date of the agreement and Joe's death on June 3, 2006. At Joe's death, the agreement was still in place and the CDs remained jointly owned with Nora.

[¶ 9.] On August 21, 2006, Joe's children commenced this declaratory judgment action seeking a declaration of the ownership of the ten certificates of deposit. All the parties filed motions for summary judgment, which were denied. The case was tried on November 1, 2007. In its December 4, 2007 memorandum decision, the circuit court held that Joe intended to create joint ownership of the CDs with Nora, and she was entitled to the proceeds from the CDs. The court further refused to award Joe's children money damages from the Bank due to the children's failure to request money damages in their complaint. Joe's children appeal raising the following issues:

1. Whether the circuit court was clearly erroneous in holding that Joe's children failed to meet their burden of proving by clear and convincing evidence that Joe did not intend to establish joint tenancies with rights of survivorship.

2. Whether the Bank was liable for negligence in failing to honor Joe's intentions.

STANDARD OF REVIEW

We review the circuit court's findings of fact under the clearly erroneous standard. Under this standard we will only reverse when we "are left with a definite and firm conviction that a mistake has been made" after a thorough review of the evidence. We review conclusions of law under the de novo standard without deference to the circuit court.

In applying the clearly erroneous standard, our function is not to decide factual issues de novo. The question is not whether this Court would have made the same findings that the trial court did, but whether on the entire evidence we are left with a definite and firm conviction that a mistake has been committed. This Court is not free to disturb the lower court's findings unless it is satisfied that they are contrary to a clear preponderance of the evidence. Doubts about whether the evidence supports the court's findings of fact are to be resolved in favor of the successful party's "version of the evidence and of all inferences fairly deducible therefrom which are favorable to the court's action."

Osman v. Karlen and Associates, 2008 SD 16, ¶ 15, 746 N.W.2d 437, 442-43 (quoting Fin-Ag, Inc. v. Feldman Bros., 2007 SD 105, ¶ 19, 740 N.W.2d 857, 862-63 (additional citation omitted)).

[¶ 10.] 1. Whether the circuit court was clearly erroneous in holding that Joe's children failed to meet their burden of proving by clear and convincing evidence that Joe did not intend to establish joint tenancies with rights of survivorship.

[¶ 11.] SDCL 29A-6-101(4) (2004) defines a "joint account" as "any account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship[.]" In determining whether a joint account exists, however, the intent of the original depositor is paramount. Matter of Estate of Steed, 521 N.W.2d 675, 678 (S.D. 1994); Farmers State Bank of Winner v. Westrum, 341 N.W.2d 631, 634 (S.D.1983) (citing Wagner v. Wagner, 83 S.D. 565, 571, 163 N.W.2d 339, 342 (1968)). Moreover, there is a rebuttable presumption that an account with more than one owner has rights of survivorship. Steed, 521 N.W.2d at 678; Estate of Kuhn, 470 N.W.2d 248, 250 (S.D.1991); Wagner, 83 S.D. at 571, 163 N.W.2d at 342. "The principle is the same whether the asset is a bank account or a C.D." Kuhn, 470 N.W.2d at 250 (citing Estate of Pfeifer, 1 Wis.2d 609, 85 N.W.2d 370, 372 (1957); SDCL 51A-10-1). Thus, any "[s]ums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created." SDCL 29A-6-104 (2004). In fact,

The presumption that an asset held in joint tenancy passes to the second party upon the death of the first can be rebutted only by a showing with clear and convincing evidence that the original depositor or purchaser did not intend rights of survivorship to attach to the joint asset, but merely intended the arrangement for her own convenience.

Kuhn, 470 N.W.2d at 250 (citing Roth v. Pier, 309 N.W.2d 815, 816 (S.D.1981); Kirsch v. First Nat'l Bank of Watertown, ...