In re Estate of Duebendorfer

• Decision Date: 16 August 2006
• Docket Number: No. 23833.,23833.
• Citation: 721 N.W.2d 438,2006 SD 79
• Parties: In the Matter of the ESTATE OF Kenneth Thomas DUEBENDORFER.
• Court: South Dakota Supreme Court

Page 438

721 N.W.2d 438

2006 SD 79

In the Matter of the ESTATE OF Kenneth Thomas DUEBENDORFER.

No. 23833.

Supreme Court of South Dakota.

Considered on Briefs May 25, 2006.

Decided August 16, 2006.

COPYRIGHT MATERIAL OMITTED

Kristine L. Kreiter O'Connell, Sander J. Morehead of Woods, Fuller, Shultz and Smith, Sioux Falls, South Dakota, Attorneys for appellants Mollers.

Jeff Cole of Zimmer, Duncan & Cole, Parker, South Dakota, Attorneys for contestants and appellees, M. Hinds, V. Sikkink, L. Zenk, M. Bienash, R. Jeffords, & E. Barks.

MILLER, Retired Justice.

[¶ 1.] Kenneth Duebendorfer executed a will that made Randy and Kathy Moller (Mollers) the chief beneficiaries. Upon Duebendorfer's death, several individuals filed a petition contesting probate of the will. A jury found the will to be the product of undue influence and it was denied probate. Mollers appeal. We affirm.

Facts and Procedural History

[¶ 2.] Duebendorfer died on April 27, 2003, at the age of ninety. He was a bachelor who lived modestly, but had substantial wealth. He had one sister, Irene Rohrabaugh, who died on February 23, 2001. Kathy Moller is the great niece by marriage of Rohrabaugh. She and her husband Randy are the appellants in this case. The contestants are Marcella Hinds (she and her deceased husband, Don, were close friends of Duebendorfer), the Hinds' two daughters, Victoria Sikkink and Linda Zenk, Maxine Bienash and Elizabeth Barks, both cousins of Duebendorfer, and Russell Jeffords, Duebendorfer's friend.

[¶ 3.] In 1998 Duebendorfer executed a power of attorney naming Hinds as his attorney-in-fact. She was taking care of Duebendorfer on a daily basis, providing hygiene, meals and transportation. She also assisted Duebendorfer in his financial affairs by paying his bills. It is undisputed that Hinds never asked for money, nor was she ever paid by Duebendorfer for assisting him.

[¶ 4.] From the time Hinds was named Duebendorfer's attorney-in-fact until Rohrabaugh's death, Mollers had mere "sporadic" contact with Duebendorfer, seeing him only about once a month. After Rohrabaugh's death, Duebendorfer was requested by Attorney Mike McGill, (who was representing Kathy on behalf of Rohrabaugh's estate), to disclaim his interest in joint bank accounts and property Duebendorfer held with Rohrabaugh. This request was apparently for South Dakota inheritance tax concerns. Duebendorfer disclaimed his interest in the property, but refused to disclaim his interest in the money. If he had done so, Kathy would have financially benefited as she was a beneficiary of Rohrabaugh's estate.

[¶ 5.] In March 2001, Hinds took Duebendorfer to the State Bank of Alcester to meet with bank official Lois Anderson to change several bank accounts and certificates of deposits (CD's) he had held jointly with Rohrabaugh.¹ Duebendorfer opened five different CD's with payable on death (POD) beneficiaries for a total of approximately $170,000. He also opened two other accounts for a total of approximately $178,000. Those two accounts were in Duebendorfer's name only with no POD beneficiaries.

[¶ 6.] Also in March, Duebendorfer met with Attorney Gary Ward to discuss making a will. Hinds was present at this meeting, but did not participate in the discussion. Duebendorfer executed that will on March 21, 2001. It provided cash bequests to Evelyn Brugger, Dennis West, Elizabeth Barks, Maxine Bienash, Judy Timm, Joyce Phyle, Marcella Hinds, Linda Floren, and Victoria Sikkink. The will further provided that the residue of the estate would be divided in seven equal shares to Ella Nason, Joyce Phyle, Russell Jeffords, Hinds, Linda Floren, Victoria Sikkink, and Kathy and Randy (they were to share 1/7 equally).

[¶ 7.] After Rohrabaugh's death, Mollers began to have more frequent contact with Duebendorfer. Beginning in March 2002, Randy was attempting to see him once a week. Mollers also began to help care for Duebendorfer, assisting with his hygiene, meals, and household needs. At the same time, Hinds noted that her relationship with Duebendorfer began to suddenly change; his actions towards her were angry and belligerent. Duebendorfer apparently was upset with Hinds over a gun her grandson had borrowed from him, as well as the care and frequency of visits he was receiving from her. Additionally, there was concern because it was being suggested to Duebendorfer by Randy and Duebendorfer's friend, Ray Lewis, that Hinds was mishandling or mismanaging his money.² These suggestions upset Duebendorfer.

[¶ 8.] Towards the end of March 2002, Duebendorfer reviewed his will with Ray Lewis. Lewis told Duebendorfer that he thought Hinds was trying to "take him" and this upset Duebendorfer. Duebendorfer further reviewed his will with Mollers. Kathy testified that she was "amazed" at what the will contained and she "questioned" the will's provisions, noting that her brother was not mentioned. Randy contacted Attorney McGill to arrange an appointment so that Duebendorfer could execute a new power of attorney and will.

[¶ 9.] On March 30, 2002, Duebendorfer signed a new power of attorney naming Mollers as his true and lawful attorneys-in-fact. He also discussed terms of a new will with McGill. McGill testified that he noted at the meeting that Duebendorfer was very angry with Hinds, but was not angry at nor had any ill feelings towards any of the other beneficiaries of his current will. After this meeting McGill communicated with Duebendorfer through Randy, receiving from Randy changes Duebendorfer allegedly wanted to make. Both Randy and Kathy admitted that they were aware of the impact of the changes Duebendorfer was making in his will, i.e., that they were to be the chief beneficiaries under the new will.

[¶ 10.] McGill testified that at the time of drafting the new will he was concerned with the possibility Mollers were exercising undue influence over Duebendorfer. In McGill's opinion, three of the four elements of undue influence were present. He testified that Mollers had both access and opportunity to exercise undue influence over Duebendorfer. Finally, McGill testified that had he known Randy was telling Duebendorfer that Hinds was stealing from him or mishandling his money, the information would be evidence of undue influence and a badge of fraud and, importantly, he would not have prepared the new will or permitted it to be executed.

[¶ 11.] Duebendorfer executed the new will on April 10, 2002. It again made monetary bequests to Russell Jeffords, Evelyn Brugger, Hinds, and Roy Zinser, as well as a bequest to Ray Lewis. However, unlike the old will, under the new will these bequests would fail if the individual predeceased Duebendorfer. The will then made Mollers the chief beneficiaries of Duebendorfer's estate by leaving the remainder, both real and personal property, to them rather than dividing it evenly as he had before. The new will made this provision even though several people, including Mollers, testified that Duebendorfer did not want his estate to go to one individual; rather, he wanted it divided evenly among several people. Also troublesome was that the bequest to Mollers would not fail if they predeceased Duebendorfer; rather, it would go to their heirs. The new will further contained a contestability clause that the old will had not.

[¶ 12.] After the execution of the April 2002 will, Mollers used the power of attorney for their personal benefit. Randy used it to attempt to terminate a lease Duebendorfer had with Roger Stevens on Duebendorfer's farm, which had existed for over thirty years (because Randy was interested in farming the land himself). When Stevens spoke to Duebendorfer about the lease, Duebendorfer apparently had no idea that Randy had termination papers prepared. After talking with Duebendorfer, they agreed the lease would remain in effect Stevens agreed to increase the rent on 9.5 acres of land and keep the rent the same for the remainder of the term.

[¶ 13.] Moreover, on January 15, 2003, after obtaining a note allegedly signed by Duebendorfer, Randy changed the POD beneficiary on all of the accounts at the Alcester bank, listing himself and Kathy as the POD beneficiaries.³ All of these changes resulted in approximately $266,000 in POD benefits to Mollers upon Duebendorfer's death on April 27, 2003. Randy also made POD beneficiary changes on two accounts Duebendorfer had at the Wells Fargo Bank in Beresford. After the changes made by Randy, these two accounts had Randy and Kathy as POD beneficiaries and resulted in a payment of approximately $129,000 to Mollers. Overall, upon Duebendorfer's death Mollers were paid a total of approximately $395,000 as a result of all the POD beneficiary changes Randy made using the power of attorney.

[¶ 14.] After Duebendorfer's death, Hinds and several others filed a petition contesting probate of Duebendorfer's April 10, 2002 will, claiming it had been procured by undue influence on the part of Mollers. A jury trial was held July 25-28, 2005. The jury found the will was the product of undue influence and it was denied probate.

[¶ 15.] Mollers appeal raising two issues:

1. Whether the trial court erred in allowing "other acts" evidence under SDCL 19-12-5 (Rule 404(b)).

2. Whether the trial court erred in giving Jury Instruction 17.

Standard of Review

[¶ 16.] "Evidentiary rulings made by the trial court are presumed correct and are reviewed under an abuse of discretion standard." Veeder v. Kennedy, 1999 SD 23, ¶ 41, 589 N.W.2d 610, 619 (citing State v. Oster, 495 N.W.2d 305, 309 (S.D.1993)). See also State v. Mattson, 2005 SD 71, ¶ 13, 698 N.W.2d 538, 544 (citations omitted). "The test is not whether we would have made the same ruling, but whether we believe a judicial mind, in view of the law and the circumstances, could have reasonably reached the same conclusion." Veeder, 1999 SD 23, ¶ 41, 589 N.W.2d at 619 (citing State v. Rufener, 392 N.W.2d 424, 426 (S.D.1986)). "If error is found, it...