In re Estate of Olson, No. 24898.

• Court: Supreme Court of South Dakota
• Writing for the Court: Zinter
• Citation: 2008 SD 126,759 N.W.2d 315
• Decision Date: 23 December 2008
• Docket Number: No. 24898.
• Parties: In Matter Of ESTATE OF Glenn E. OLSON, Deceased.

759 N.W.2d 315 2008 SD 126 In Matter Of ESTATE OF Glenn E. OLSON, Deceased. No. 24898. Supreme Court of South Dakota. Considered on Briefs on November 3, 2008. Decided December 23, 2008.

[759 N.W.2d 317]

Thomas E. Alberts, Avon, South Dakota, Attorney for appellants James W. Olson and Gary E. Olson.

Craig K. Thompson, Vermillion, South Dakota, Attorney for appellees Estate of Glenn E. Olson and Wayne A. Olson, as Personal Representative.

Sheila S. Woodward Steven K. Huff of Johnson, Miner, Marlow, Woodward & Huff, L.L.P., Yankton, South Dakota, Attorneys for appellees Jared and Luke Muhlbauer.

ZINTER, Justice.

[¶ 1.] Over the objection of the personal representative,¹ two specific devisees in the Estate of Glenn Olson (the Estate) moved to intervene in an Estate proceeding. The proceeding involved a third party claim to real property the devisees stood to inherit under the will. The devisees appeal the denial of their motion to intervene. Under the unusual circumstances of this case, we reverse.

Facts and Procedural History

[¶ 2.] In In re Estate of Olson, 2008 SD 4, 744 N.W.2d 555 (Olson I), a majority of this Court held that the personal representative had no authority to sell specifically devised real property, and therefore, the personal representative's sale to Jerad and Luke Muhlbauer (Muhlbauers) was void. The Court then remanded the matter to the circuit court to allow the Muhlbauers to intervene and protect their interests. Following remand, Muhlbauers intervened and filed a claim against the Estate seeking to confirm the sale that this Court had previously voided. In the alternative, Muhlbauers asserted a damage claim that they contended would arise if the sale were not confirmed. Muhlbauers' claims were based on their contention that they were good faith purchasers for value who were protected as if the personal representative had been properly authorized to sell the property. See SDCL 29A-3-714.²

[¶ 3.] Over the personal representative's objection, James W. Olson (James) and Gary E. Olson (Gary), beneficiaries of the estate, moved to intervene in the proceedings

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involving Muhlbauers' claims. James and Gary, who were entitled to the property as specific devisees under the will, objected to the personal representative's legal position that the sale of the property to Muhlbauers should again be confirmed. The circuit court denied James and Gary's motion to intervene, concluding that the personal representative was deemed to adequately represent the interests of all beneficiaries of the Estate. See SDCL 29A-3-715(22). James and Gary appeal contending that the circuit court erred in denying their motion to intervene as a matter of right under SDCL 15-6-24(a), or as a matter of discretion under SDCL 15-6-24(b).

Decision

[¶ 4.] We generally review a circuit court's decision denying a motion to intervene under the abuse of discretion standard of review. Baker, et al. v. Atkinson, et al., 2001 SD 49, ¶ 12, 625 N.W.2d 265, 269-70 (citations omitted). This case, however, presents a question of first impression in this jurisdiction regarding intervention in representative litigation under SDCL 15-6-24. The circuit court applied the general rule precluding intervention in such cases. We must decide whether an exception should be adopted. We consider that question of law de novo.

[¶ 5.] "South Dakota's court rule SDCL 15-6-24(a)(2) is almost identical to Federal Rule of Civil Procedure 24(a)(2)." In re D.M., 2006 SD 15, ¶ 5, 710 N.W.2d 441, 443-44. SDCL 15-6-24(a)(2) governs intervention as a matter of right and provides, in relevant part:

Upon timely application anyone shall be permitted to intervene in an action:

...

(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

The purpose of this rule is "to obviate delay and multiplicity of suits by creating an opportunity to persons directly interested in the subject matter to join in an action or proceeding already instituted." In re D.M., 2006 SD 15, ¶ 4, 710 N.W.2d at 443 (quoting Mergen v. N. States Power Co., 2001 SD 14, ¶ 5, 621 N.W.2d 620, 622). Intervention is strictly procedural and "intervention standards are flexible, allowing for some tailoring of decisions to the facts of each case." Id. (quoting Southard v. Hansen, 342 N.W.2d 231, 233-34 (S.D. 1984)). "Rule 24 is construed liberally, and we resolve all doubts in favor of the proposed intervenors." United States v. Union Elec. Co., 64 F.3d 1152, 1158 (8th Cir.1995) (citing Kansas Pub. Employees Retirement Sys. v. Reimer Koger Assocs., Inc., 60 F.3d 1304, 1307 (8th Cir.1995)). In applying this rule, this Court utilizes the following tripartite test:

1) the party must have a recognized interest in the subject matter of the litigation; 2) that interest must be one that might be impaired by the disposition of the litigation; and 3) the interest must not be adequately protected by the existing parties.

D.M., 2006 SD 15, ¶ 5, 710 N.W.2d at 444.

1) James's and Gary's Interests in the Subject Matter of the Litigation

[¶ 6.] "Upon the death of a person, that person's real and personal property devolves to the persons to whom it is devised by will...." SDCL 29A-3-101. "This statute makes it clear that Glenn's real property vested in James and the other six nieces and nephews [(Gary)] at the time of Glenn's death, subject only to the probate

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of the estate." Olson I, 2008 SD 4, ¶ 15, 744 N.W.2d at 560 (citing generally In re Estate of Roehr, 2001 SD 85, ¶ 6, 631 N.W.2d 600, 602). Because the real property at issue vested in James and Gary subject only to administration of the estate, they had a recognized interest in the property that was the subject matter of this litigation.

2) Impairment of James's and Gary's Property Interests by the Disposition of the Litigation

[¶ 7.] Muhlbauers' primary claim against the Estate is to "award or otherwise confirm the original sale from the Estate to the Muhlbauers." Complaint, ¶ 10. The Estate's personal representative, Wayne A. Olson (Wayne), agreed with the position of these claimants against the Estate. In his answer to Muhlbauers' complaint, Wayne admitted "that part of paragraph 10 [of Muhlbauers' complaint] that the court should confirm...