In re Shirley A. Hickey Living Tr., 29677-r-SRJ

CourtSupreme Court of South Dakota
Writing for the CourtJENSEN, CHIEF JUSTICE
Parties2022 S.D. 53 IN THE MATTER OF THE SHIRLEY A. HICKEY LIVING TRUST.
Docket Number29677-r-SRJ
Decision Date24 August 2022

2022 S.D. 53 IN THE MATTER OF THE SHIRLEY A. HICKEY LIVING TRUST.

No. 29677-r-SRJ

Supreme Court of South Dakota

August 24, 2022


CONSIDERED ON BRIEFS MARCH 21, 2022

APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA THE HONORABLE JON SOGN Judge

JOHN K. NOONEY ROBERT J. GALBRAITH JARED D. NOONEY of Nooney & Solay LLP Rapid City, South Dakota Attorneys for appellants Kristina Lippert and Darren Hickey.

JACK H. HIEB of Richardson, Wyly, Wise Sauck & Hieb, LLP Aberdeen, South Dakota Attorneys for appellees Warren Hickey, Jeannine Hickey-Reuer, and Annette Jarrell.

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LEE SCHOENBECK of Schoenbeck & Erickson, P.C. Watertown, South Dakota Attorneys for appellees Warren Hickey and Jeannine Hickey-Reuer.

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JENSEN, CHIEF JUSTICE

[¶1.] Bradley Hickey filed a petition challenging the validity of an amendment to the Shirley A. Hickey Trust (Trust). Nearly a year later, Kristina Lippert and Darren Hickey filed a motion to intervene in the petition. The circuit court denied the motion to intervene, finding that the motion was untimely under SDCL 15-6-24(a) because Kristina and Darren had failed to timely challenge the validity of the Trust as required by SDCL 55-4-57(a). Kristina and Darren filed a motion for clarification and reconsideration, requesting the court to reconsider the denial of the motion to intervene and to clarify their ability to participate in discovery and at trial. The circuit court denied the motion for reconsideration and determined Kristina and Darren could not participate in the trial through the presentation of evidence and the examination of witnesses. Kristina and Darren appeal the denial of their motion to intervene and the denial of their motion for clarification and reconsideration. We reverse, vacate a portion of the order denying the motion for clarification and reconsideration, and remand for further proceedings.

Facts and Procedural History

[¶2.] Shirley and Clifford Hickey were married in 1956. They had eight children: Jeannine Hickey-Reuer, Vance Hickey, Bradley, Michelle Hoesing, Terence Hickey, Warren Hickey, Darren, and Kristina. Shirley and Clifford owned and operated several successful businesses and accumulated significant assets during their lifetimes. Clifford died in 2007. Shirley established the Trust on March 22, 2010, and transferred substantially all of her assets into the Trust. The

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Trust provided that upon Shirley's death, each of her eight children would receive an equal share in the Trust. Shirley amended the Trust several times before her death.

[¶3.] Shirley initially amended and restated the Trust (First Amended Trust) in September 2016. The First Amended Trust distributed some real property to a separate trust and provided that upon Shirley's death, the Trust corpus would be divided equally among her eight children. The First Amended Trust named Shirley and Kristina as co-trustees. In 2017, Kristina petitioned to place Shirley under a guardianship and conservatorship and requested to be appointed as Shirley's guardian and conservator.[1] Bradley, Vance, Michelle, Terence, and Darren also supported the petition. A circuit court judge ultimately denied Kristina's petition.

[¶4.] Shirley's relationship with the children who had supported the guardianship became strained. In January 2018, Shirley removed Kristina as a co-trustee of the Trust. Shirley amended and restated the First Amended Trust, creating the Second Amended Trust in February 2018. Shirley named herself and First National Bank as the co-trustees of the Second Amended Trust. The Second Amended Trust directed the trustee, upon Shirley's death, to distribute $1,000 each to Bradley, Vance, Michelle, Terence, Darren, and Kristina, and to distribute certain real property to a separate trust. The remainder of the trust corpus was to

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be divided equally into one-third shares and distributed to Warren and his wife Deb Crawford, Jeannine, and Shirley's sister, Annette Jarrell.

[¶5.] Shirley died on September 12, 2019. Per the terms of the Second Amended Trust, the Trust became irrevocable and First National Bank became the sole trustee. On September 25, 2019, First National Bank sent letters to the beneficiaries of the Second Amended Trust, including Kristina and Darren, providing notice of the 60-day limitation period to challenge the validity of the Second Amended Trust under SDCL 55-4-57(a).

[¶6.] On November 22, 2019, Bradley filed a petition for court supervision of the Trust, an accounting, protection of privacy, and a declaration of invalidity, reformation and modification of the Trust (Petition). The Petition requested the court to invalidate the Second Amended Trust, alleging undue influence by Warren. Alternatively, the Petition alleged claims of mistake of fact and undue influence and requested the court to reform or modify the Second Amended Trust to distribute the Trust pursuant to the First Amended Trust to properly reflect Shirley's lifelong intent to equally divide her estate between all eight children. None of the other siblings filed a petition challenging the validity of the Second Amended Trust.

[¶7.] The court granted the request for court supervision of the Second Amended Trust pursuant to SDCL 21-22-9. On June 18, 2020, the court entered a scheduling order for the litigation involving the Petition. On October 12, 2020, Kristina and Darren filed a motion to intervene (Motion) in the Petition. The Motion asserted that Kristina and Darren were entitled to intervene as a matter of right pursuant to SDCL 15-6-24(a)(2). They argued that as beneficiaries of the

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Second Amended Trust they had an interest in the litigation because the Petition sought to invalidate or reform the Trust to equally divide the Trust assets between Shirley's eight children. The Motion further alleged that Bradley was not adequately protecting Kristina's and Darren's interests in the litigation because they believed Warren, alone or with one or more of the other residuary beneficiaries, was attempting to settle the Petition to the exclusion of Kristina and Darren. Kristina and Darren also claimed that Bradley had refused to enter into an agreement to divide any monies received from litigation evenly among the beneficiaries who were to receive $1,000 under the Second Amended Trust and that there was other adverse, pending litigation between the siblings.

[¶8.] Warren, Jeannine, and Annette opposed the Motion, arguing that it was untimely under SDCL 15-6-24(a)(2).[2] Warren, Jeannine, and Annette argued that under SDCL 55-4-57(a), Kristina and Darren had 60 days after First National Bank provided notice to challenge the Second Amended Trust, and because the Motion was filed outside the 60-day period, they were prohibited from intervening. In response, Kristina and Darren asserted that they timely intervened as interested parties under SDCL 15-6-24(a)(2) once they learned that Bradley was no longer protecting their interests and also asserted that Warren, Jeannine, and Annette had failed to identify any prejudice arising from intervention.

[¶9.] Kristina and Darren served discovery requests on Warren on November 13, 2020. The discovery requests sought financial and tax information

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from Warren from 1988 to 2010. Warren filed a motion for a protective order to prohibit the discovery requests. Kristina and Darren also filed a motion to amend the scheduling order seeking to extend the discovery deadline, which Warren, Jeannine, and Annette opposed.

[¶10.] On April 15, 2021, the court denied the Motion. The court concluded that Kristina and Darren satisfied the tripartite test from Berbos v. Berbos, 2018 S.D. 82, ¶ 7, 921 N.W.2d 475, 477, but determined the Motion was untimely under SDCL 55-4-57(a) because it was not filed within 60 days after First National Bank provided notice to the beneficiaries of the repose period to challenge the validity of the Second Amended Trust. The court also entered a protective order prohibiting the discovery sought by Kristina and Darren and entered an order determining that Kristina and Darren's motion to modify the scheduling order was moot.

[¶11.] On April 27, 2021, Kristina and Darren filed a motion for clarification and reconsideration of the circuit court's orders denying the Motion, granting the protective order, and denying the motion to amend the scheduling order. Kristina and Darren also sought clarification as to whether they would be allowed to present evidence or examine witnesses at the trial.

[¶12.] The circuit court denied the motion for clarification and reconsideration on June 2, 2021. The order specified that Kristina and Darren would not be allowed to present evidence or examine witnesses at the time of trial. The court also denied the portion of the motion requesting reconsideration of the protective order and the order denying the request to amend the scheduling order.

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[¶13.] Kristina and Darren appeal, arguing that the circuit court erred in denying the Motion as untimely and in denying their motion for clarification and reconsideration.

Analysis

[¶14.] "We review a circuit court's denial of a motion to intervene for an abuse of discretion." Berbos, 2018 S.D. 82, ¶ 5, 921 N.W.2d at 477. "An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence." Id. (quoting O'Day v. Nanton, 2017 S.D. 90, ¶ 17, 905 N.W.2d 568, 572). "[S]tatutory interpretation and application are questions of law, and are reviewed by this Court under the de novo standard of review." In re Est. of Flaws, 2016 S.D. 61, ¶ 12, 885 N.W.2d 580, 583 (citation omitted).

I. Appellate Jurisdiction

[¶15.] Warren, Jeannine, and Annette acknowledge that this Court has jurisdiction under SDCL 15-26A-3(2) to consider the appeal from the circuit court's order denying the Motion. See Southard v. Hansen, ...

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