In re Estate of Howe

• Decision Date: 20 October 2004
• Docket Number: No. 22957, No. 22917, No. 22901, No. 22983.
• Citation: 689 N.W.2d 22,2004 SD 118
• Parties: ESTATE OF Edna Jane HOWE.
• Court: South Dakota Supreme Court

689 N.W.2d 22

2004 SD 118

ESTATE OF Edna Jane HOWE.

Nos. 22901, 22917, 22957, 22983.

Supreme Court of South Dakota.

Argued March 22, 2004.

Decided October 20, 2004.

Candi Thomson and Keith R. Smit of Morman Law Firm, Sturgis, South Dakota, Attorneys for appellant Randolph Howe.

Jeff Adel and Casey N. Bridgman of Bridgman and Adel, Wessington Springs, South Dakota, Attorney for appellant Lance Howe.

Rick Johnson and Sandy Steffen of Johnson, Eklund, Nicholson & Peterson, Gregory, South Dakota, Attorneys for appellee Michael Howe.

JENSEN, Circuit Judge.

[¶ 1.] Randolph Howe (Randolph) and Lance Howe (Lance) each appeal a trial court order distributing the proceeds of a wrongful death and survival tort action arising from the death of Edna Jane Howe (Edna) on March 29, 1999. Both also appeal a subsequent trial court order setting the amount of a supersedeas bond at $2,250,000. All four appeals are consolidated in this opinion. For the reasons set forth herein, we affirm in part and reverse and remand in part.

FACTS AND PROCEDURE

[¶ 2.] Edna and her husband Richard Howe (Richard) had three children during their marriage, Randolph, Andrew Howe (Andrew), and Michael Howe (Michael). Edna's husband and her son, Andrew, both predeceased her. Andrew had three children, all of whom were living at the time of Edna's death. Lance is one of Andrew's children.

[¶ 3.] Randolph and Michael were born in 1940 and 1947, respectively, and were raised by their parents in Pierre, South Dakota. Both Randolph and Michael appear to have had a good relationship with their parents while they were growing up and for much of their adult lives. However, problems developed in the family relationship a few years before Edna's death.

[¶ 4.] In July 1991 Edna gave a joint power of attorney to Michael and Randolph. Edna also deeded them her home in Pierre. In September 1991 Edna suffered an illness that required her hospitalization in Pierre. After a brief stay, Michael and Randolph placed Edna in a local retirement home. Michael and Randolph both spent a considerable amount of time with her while she recovered. Believing that Edna would not be able to return to her home, Michael and Randolph sold it. During this time, Randolph's wife, Dottie, handled Edna's financial affairs and sold some of her personal effects. Randolph and Dottie also took possession of some of Edna's personal property.

[¶ 5.] In March 1992 Edna hired an attorney to help her regain control of her financial affairs. Though Edna had shown mild signs of dementia, her attorney was satisfied at the time that she was competent. Edna's attorney wrote several letters in an effort to help her regain control of her financial affairs. This included a letter to Dottie requesting the return of Edna's financial papers and personal property and the revocation of any powers of attorney that Edna may have signed. These communications enraged Randolph and he became extremely upset while meeting with Edna's attorney, telling him not to stick his nose in where it did not belong.

[¶ 6.] In April 1992 Michael received a phone call informing him that Edna's property would be hauled to the dump if it was not retrieved from Randolph's home by five o'clock that day. Michael promptly traveled from Rapid City to Randolph's home to pick up the property including clothing, furniture and financial records. He found the items placed outside the front of Randolph's home. While Michael was loading the property, Randolph came out and told him, "I never want to see you or that old woman or talk to you again."

[¶ 7.] The evidence shows that Randolph became totally estranged from his mother after April 1992. At Edna's request, Michael moved her to Rapid City at that time. Edna continued to live in Rapid City until her death in 1999. Edna alternated between residing at Michael's home or at nursing/retirement homes. The trial court found that after April 1992 Randolph never saw or spoke to his brother or his mother again during her lifetime.

[¶ 8.] Lance grew up in Pierre while his grandmother, Edna, was living there. He had a close relationship with Edna and spent a considerable amount of time with her while growing up. After reaching adulthood, Lance continued to maintain a relationship with Edna until her death.

[¶ 9.] In August 1992 Edna executed a will leaving her entire estate to Michael with the exceptions of a bequest of furniture to a granddaughter and a $2,000 bequest to Randolph. This was a change from a prior will she executed in January 1992 dividing her property equally between Randolph, Michael and Andrew's children. The will was admitted to probate on December 24, 2001, and was not contested by Randolph or Lance.

[¶ 10.] Edna died at a nursing home in March 1999. Michael hired an attorney to look into a wrongful death action regarding her death. The attorney agreed to pursue the claim on a contingency fee, but advised Michael that he would ultimately be responsible for the costs in the case, which could be as much as $50,000. Michael moved for appointment as special administrator for Edna's estate and filed an action against the nursing home and a bed manufacturer. The complaint sought survival damages for Edna's estate and wrongful death damages for the "pecuniary injury and loss suffered by the plaintiff (Michael Howe)."¹ Michael testified that he did not include Randolph in the wrongful death litigation and that he never intended to prosecute a claim to recover anything for Randolph. Michael expressed this intention to Lance at the time the tort claim was pending, stating that Randolph "was not getting a dime."

[¶ 11.] The tort claim against the nursing home was settled in the fall of 2001. The settlement proceeds were used to pay costs, attorneys' fees and expenses, and to reimburse Michael for out-of-pocket expenses. Additionally, Michael placed $50,000 of the proceeds in reserve for the ongoing litigation with the bed manufacturer. The balance of the settlement, except the $2,000 bequest to Randolph, was distributed to Michael without objection from Randolph or Lance.

[¶ 12.] In January 2002 Michael gave Lance a check for $10,000 which was a part of the settlement proceeds from the nursing home. Michael told Lance that there had been a settlement on Edna's case and that there would likely be an additional settlement in the six figure range for Lance and the other grandchildren. He also told Lance that it would be enough money to change his life and that he should consider hiring a financial advisor. Lance took the check to Randolph and offered to give him half of it. Although Randolph did not receive any of the money, Michael found out about the proposal and became upset. As a result, Michael decided not to give any more money to Lance.

[¶ 13.] While the tort claim was pending, one of the defendants filed a motion for summary judgment to exclude all grandchildren from the action. Lance did not receive notice of the motion and did not appear in opposition to it. Neither Michael nor the estate filed a brief in opposition to the exclusion of the grandchildren though they did orally resist the motion at the hearing. The court granted the summary judgment motion and excluded all grandchildren from the action.

[¶ 14.] The tort claim against the bed manufacturer was eventually settled. Michael petitioned the court to approve the settlement and allocate the proceeds between the survival action and the wrongful death action. Michael also petitioned the court to distribute all the proceeds of the wrongful death settlement to him after payment of expenses. Randolph and Lance objected to Michael's petition to distribute the proceeds, but agreed to a distribution to Michael of one-third of the net settlement proceeds.

[¶ 15.] Randolph and Lance appeal the trial court's order allocating the settlement proceeds between the survival action and the wrongful death action, as well as the order distributing all the wrongful death proceeds to Michael. Randolph and Lance sought to stay the trial court's order pending appeal. Following a hearing, the trial court ordered that Randolph and Lance post a bond in the total amount of $2,255,000 to stay execution of the order for distribution. The court ordered the bond to be posted within thirty days of the hearing or that the funds be distributed to Michael. Neither Randolph nor Lance posted the supersedeas bond ordered by the trial court and each appeal this latter order.

STANDARD OF REVIEW

[¶ 16.] We review the trial court's findings of fact under the clearly erroneous standard. City of Deadwood v. Summit, Inc., 2000 SD 29, ¶ 9, 607 N.W.2d 22, 25 (citing New Era Mining Co. v. Dakota Placers, Inc., 1999 SD 153, ¶ 7, 603 N.W.2d 202, 204). Under this standard, we reverse only when "we are left with a definite and firm conviction that a mistake has been made" after a thorough review of the evidence. Id. "The trial court's findings of fact are presumed correct and we defer to those findings unless the evidence clearly preponderates against them. Lewis v. Moorhead, 522 N.W.2d 1, 3 (S.D.1994) (citing Cuka v. Jamesville Hutterian Mut. Soc., 294 N.W.2d 419, 421 (S.D.1980)). Conclusions of law are reviewed under a de novo standard, giving no deference to the trial court's conclusions of law. Sherburn v. Patterson Farms, Inc., 1999 SD 47, ¶ 4, 593 N.W.2d 414, 416 (citing City of Colton v. Schwebach, 1997 SD 4, ¶ 8, 557 N.W.2d 769, 771). Likewise, construing a statute entails answering a question of law; thus, we review the trial court's statutory interpretation de novo. Esling v. Krambeck, 2003 SD 59, ¶ 6, 663 N.W.2d 671, 675.

[¶ 17.] We will not reverse a trial court's division of property "unless it clearly appears the trial court abused its discretion." Divich v. Divich, 2003 SD 73, ¶ 7, 665 N.W.2d 109, 112 (citing Kanta v. Kanta, 479 N.W.2d 505, 507 (S.D.1991)). "The term `abuse of discretion' refers to a discretion exercised to an end or...