In re Estate of Smeenk
| Decision Date | 20 July 2022 |
| Docket Number | #29580 |
| Citation | 978 N.W.2d 383 |
| Parties | In the MATTER OF the ESTATE OF Neil William SMEENK, Deceased. |
| Court | South Dakota Supreme Court |
KATELYN A. COOK, TALBOT J. WIECZOREK of Gunderson, Palmer, Nelson and Ashmore, LLP, Rapid City, South Dakota, Attorneys for appellant Denise Schipke-Smeenk.
JOHN W. BURKE, KIMBERLY S. PEHRSON of Thomas, Braun, Bernard & Burke, LLP, Rapid City, South Dakota, Attorneys for appellee Ryan William Smeenk.
[¶1.] Denise L. Schipke-Smeenk and Neil Smeenk, as husband and wife, executed mutual wills (2017 Wills) and an agreement that neither party would revoke their respective wills without the other's consent (Agreement). Neil later executed a new will (2019 Will) without Denise's consent. After Neil's death, the circuit court ordered the 2019 Will to be probated and appointed Denise as personal representative of Neil's estate (Estate). Denise filed a motion for approval and payment of claim (Motion) in her capacity as personal representative and sought specific performance of the Agreement. The circuit court determined the Motion was not properly presented as a creditor claim and was untimely under the nonclaim statute. However, the court considered the merits of the Motion and determined that Denise was not entitled to specific performance. Denise appeals, arguing that the Motion was a timely and properly presented creditor's claim and that she is entitled to specific performance as the remedy for Neil's alleged breach of the Agreement. We conclude that the circuit court erred in determining that Denise's claim was not timely and properly presented but correctly ruled that Denise was not entitled to specific performance. We therefore affirm in part and reverse in part.
[¶2.] Neil and Denise were married in 2000. They each had two children from a prior marriage. After they were married, Neil and Denise began residing at the ranch that Neil owned prior to the marriage. Neil sold the ranch in 2011 pursuant to a contract for deed.
[¶3.] On August 25, 2017, Neil and Denise executed the 2017 Wills and the Agreement. The Agreement provided that the parties "agree not to revoke or amend the Last Wills which each party has executed contemporaneously with and in reliance upon this Agreement without the express consent of the other party." Additionally, the Agreement provided that Neil would assign an undivided one-half interest in the contract for deed for the sale of the ranch to Denise, which included the right to receive one-half of the contract payments. On the same day, Neil executed an assignment and a quitclaim deed granting Denise a one-half interest in the contract for deed and the ranch.
[¶4.] The 2017 Wills provided that the assets of the first spouse to die would be distributed to the surviving spouse. Upon the death of the surviving spouse, the assets would be distributed 50% to Denise's children and 50% to Neil's children. The 2017 Wills nominated one another as personal representative of their respective estates.
[¶5.] Neil and Denise's relationship began to deteriorate following the making of the 2017 Wills. Neil battled depression and had a severe drinking problem that caused tension in the marriage. Neil and Denise had separated by March 2019. In April 2019, Neil commenced a divorce action. Denise hired a divorce attorney but did not file an answer to the complaint because she believed they were working toward an amicable resolution of the divorce. The divorce was never finalized.
[¶6.] On April 19, 2019, Neil executed the 2019 Will. The 2019 Will revoked his prior wills and codicils, expressly disinherited Denise, and named his son, Ryan Smeenk, as personal representative. Neil took his own life on June 14, 2019. Denise testified that she became aware of the 2019 Will on the day that Neil died.
[¶7.] On July 15, 2019, Denise filed a petition for formal probate, seeking to probate Neil's 2017 will and requesting appointment as personal representative. Shortly thereafter, Ryan filed a petition for formal probate, seeking to probate the 2019 Will and requesting appointment as personal representative. The circuit court held an evidentiary hearing on the competing petitions. On November 25, 2019, the circuit court entered findings of fact and conclusions of law determining that the 2019 Will was valid and that it revoked Neil's 2017 will. In upholding the 2019 Will, the circuit court concluded that the Agreement did not make Neil's 2017 will irrevocable and did not impact the validity of the 2019 Will. Rather, the court reasoned that Neil, as the testator, may revoke a will until his death, but the Estate may be subject to a claim for breach of contract if Neil's execution of the 2019 Will breached the Agreement. The court declined to resolve the question whether the Agreement is enforceable, stating "that determination is left for another day." The circuit court admitted the 2019 Will to probate.
[¶8.] The circuit court also addressed the separate requests by Denise and Ryan to serve as personal representative of the Estate and found that Denise and Ryan had a hostile relationship that would make it difficult for them to work together. Despite admitting the 2019 Will to probate, the circuit court determined Denise was qualified to serve as personal representative. The circuit court entered an order for formal probate of the 2019 Will and appointed Denise as personal representative on December 9, 2019. Neither party appealed the circuit court's order.
[¶9.] On December 12, 2019, Denise sent the required statutory notice to the Department of Social Services (DSS) pursuant to SDCL 29A-3-705(c). The notice informed DSS of Denise's appointment and provided that if DSS "claim[ed] to be a creditor" it must present a claim within four months from the date of Denise's appointment as personal representative. Denise did not provide any other written notice to any known or reasonably ascertainable creditors pursuant to SDCL 29A-3-801(b).1 On December 16, 2019, Denise first published a general notice to creditors in a legal newspaper pursuant to SDCL 29A-3-801(a). The notice established a four-month deadline after the first publication for creditors to present a claim against the Estate.
[¶10.] On April 8, 2020, Denise filed the Motion seeking specific performance of the Agreement and requesting permission from the circuit court to distribute the Estate in accordance with Neil's 2017 will. Denise filed the Motion in her capacity as personal representative pursuant to SDCL 29A-3-713. In support of the Motion, Denise argued that the Agreement was an enforceable contract and that there were no existing grounds that would allow the Estate to reject the Agreement. Denise also asserted that specific performance was the appropriate remedy to prevent a testator from avoiding his or her contractual obligations.
[¶11.] Ryan objected to the Motion arguing that Denise had failed to timely present a creditor's claim to the Estate, that payment of the claim was not in the best interest of the Estate and its heirs, and that specific performance of the Agreement violated Neil's testamentary intent. Ryan asserted that Denise's breach of contract claim should not be approved in the probate proceedings without a separate action on the merits of the claim. Ryan argued that an independent personal representative should handle the breach of contract claim in the separate action. The court held a hearing on the Motion on December 3, 2020.
[¶12.] The circuit court determined that the Motion failed to comply with the requirements of SDCL 29A-3-804 for presentment of a creditor's claim. By applying the principles of judicial estoppel, the court also determined that Denise's creditor claim was time-barred, at the latest, on April 16, 2020. Notwithstanding its procedural determination that Denise had not timely and properly presented a creditor claim, the court received evidence and arguments from the parties on the merits of Denise's claim for specific performance as a remedy for Neil's alleged breach of the Agreement. The court then made a merits-based determination that Denise was not entitled to specific performance because Denise failed to show an inadequate remedy at law. Additionally, the circuit court concluded that specific performance of the Agreement was not a just or reasonable remedy under SDCL 21-9-3(2). The court incorporated its previous findings of fact and conclusions of law from its December 2019 order entering the 2019 Will to probate, but the court again made no determination concerning the enforceability of the Agreement or whether Neil had breached it.
[¶13.] Subsequently, Denise filed a statement of claim with the clerk of court, in her individual capacity as a creditor of the Estate, seeking specific performance of the Agreement. Denise also filed a motion for reconsideration of the circuit court's ruling on the Motion. However, Denise, individually and in her capacity as personal representative, had appealed the circuit court's denial of the Motion. Therefore, the circuit court could not address the statement of claim or the motion for reconsideration.
[¶14.] On appeal, Denise argues (1) that the circuit court erred in determining that the Motion was not a timely and properly presented creditor claim, and (2) that the circuit court erred in determining that she was not entitled to specific performance for Neil's alleged breach of the Agreement.
[¶15.] "A circuit court's findings of fact will be upheld ‘unless they are clearly erroneous.’ " In re Estate of Fox , 2019 S.D. 16, ¶ 12, 925 N.W.2d 467, 471, (reh'g denied Apr. 24, 2019) (citation omitted). "We review the circuit court's conclusions of law and rulings on statutory interpretation de novo." In re Estate of Ginsbach , 2008 S.D. 91, ¶...
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