In The Matter Of The Estate Of Fred L. Berg
| Decision Date | 16 June 2010 |
| Docket Number | No. 25429.,25429. |
| Citation | 2010 S.D. 48,783 N.W.2d 831 |
| Parties | In the Matter of the ESTATE OF Fred L. BERG, Deceased. |
| Court | South Dakota Supreme Court |
Stephen J. Wesolick of Wesolick Konenkamp & Rounds, LLP, Rapid City, South Dakota, Jamison A. Rounds of Wesolick Konenkamp & Rounds, LLP, Sioux Falls, South Dakota, Attorneys for appellant, Carol Berg Opdahl.
Gregory A. Eiesland, Aaron D. Eiesland, Johnson Eiesland Law Firm, PC, Rapid City, South Dakota, Attorneys for appellee, Helen Manns.
Robert Van Norman of Nooney, Solay & Van Norman, LLP, Rapid City, South Dakota Attorneys for appellee, Great Western Bank.
[¶ 1.] In a probate proceeding, contestant Carol Opdahl (Opdahl) unsuccessfully objected to her uncle's will claiming lack of testamentary capacity and undue influence. We affirm.
[¶ 2.] Fred L. Berg was born on July 27, 1919, and died on November 5, 2006, at the age of 87. He was the youngest of nine children. Fred grew up in North Dakota and served in the United States Army during World War II. He was discharged from the Army in 1943 and admitted to hospitals in Washington State and North Dakota due to service-connected schizophrenia.
[¶ 3.] Fred was eventually admitted to the Veteran Affairs (VA) Hospital in Fort Meade, South Dakota. His medical records from 1945 through 1950 indicate he suffered visual and auditory hallucinations. After several rounds of electro shock therapy, Fred experienced periods of remarkable improvement. However, he subsequently refused electro shock therapy due to unfounded fears that he had a severe back condition that could be worsened by further treatments. His medical records indicate several times that his doctors considered him to be incompetent.
[¶ 4.] In March 1950, Fred received a bilateral prefrontal lobotomy for unclassified schizophrenia.1 His post-operative diagnoses were: (a) schizophrenic reaction, paranoid type, manifested by delusions and auditory hallucinations, peculiar hyperactive behavior, and confusion; and (b) convulsive disorder, grand mal type, probably secondary to bilateral prefrontal lobotomy. Fred received psychotropic medications for the rest of his life including Stelazine for schizophrenia and Dilantin for the convulsive disorder. He gradually improved enough to engage in social and recreational activities, but preferred to be alone.
[¶ 5.] On July 6, 1950, Fred's parents brought Fred back to North Dakota to live with his sister Helen Manns and her husband on a trial basis.2 He was, however, unable to function well outside of a care facility due to his tendency to set small fires while smoking. He returned to live at the VA Hospital at Fort Meade.
[¶ 6.] In 1964, Fred was found to have sufficient “present contact with reality” to try a year of foster care in a private residence that provided housing for disabled veterans. His medical records indicated that he was no longer considered incompetent by his physicians. At the end of a year in foster care, Fred was found well enough to relocate to Ox Yoke Ranch, a residential facility for disabled veterans in Nemo, South Dakota.
[¶ 7.] On February 1, 1967, the VA declared Fred incompetent under 38 C.F.R. § 3.353. That incompetency was “ limited for purposes of insurance and disbursement of benefits.” See 38 C.F.R. § 3.353(b)(1) (emphasis added).3 No determination was ever made by the VA as to Fred's testamentary capacity under 38 C.F.R. § 3.355.4
[¶ 8.] After Fred was found incompetent under 38 C.F.R. § 3.353, the VA required the appointment of a guardian as a condition precedent to the receipt of future benefits. On February 28, 1967, a county court order appointed American National Bank & Trust Company (nka U.S. Bank Trust National Association SD) (“U.S. Bank”) as guardian. U.S. Bank served as guardian under SDC 1960 § 35.1907 until the relationship was changed to that of a conservatorship by the enactment of the South Dakota Guardianship and Conservatorship Act in 1993. See SDCL 29A-5-103. After the 1993 change in the code, a guardian was not appointed for Fred.
[¶ 9.] Fred remained at Ox Yoke Ranch until it closed in 1991. He was relocated to the nursing home care unit at the VA Hospital at Fort Meade until a proper nursing home placement could be found. A nursing care note in his VA Hospital records dated April 28, 1992, stated that Fred wanted to have his will drawn up. The nursing notes indicated that Fred was competent for purposes of making a will. Fred was referred to an attorney, but nothing in the nursing notes indicated that a meeting took place.
[¶ 10.] In 1992, Fred moved to the Good Samaritan Center (Good Samaritan) in New Underwood, South Dakota. He resided there until November 29, 1999, when his declining physical state required a higher level of care and he returned to the VA Hospital at Fort Meade. Fred's file indicated an increasing number of falls throughout his last three years at Good Samaritan and a progression from a cane to a walker. However, the use of these aids did not improve his gait or balance.
[¶ 11.] In 1991, Roger Berg (Roger), one of Fred's many nephews, and Roger's son visited Fred at the VA Hospital at Fort Meade while in the Black Hills for a vacation. This was the first time Roger and Fred had seen each other since the two first met in 1961 when Roger was fifteen or sixteen and Fred was visiting his parents on their North Dakota farm. Fred remembered Roger and described for him their meeting in great detail. Fred described the farm layout including what crops were being grown in which fields. Fred also remembered that Roger had left before Fred that day and that Roger had his horse with him. Fred remembered the name of Roger's horse some thirty years later.
[¶ 12.] Roger and his son took Fred out to dinner that evening. While in Deadwood, they stopped at a casino because Fred wanted to play Blackjack. Roger observed that Fred was counting points as he played and was surprised that Fred was able to do so faster than Roger could. That evening a friendship began between the two men that lasted until Fred's death.
[¶ 13.] After Fred moved to Good Samaritan a few months later, Roger and Fred would see each other one to two times per year almost every year for the next sixteen years. Roger would take Fred out for a few days each time. The two traveled to the state of Washington to visit Fred's sister, Anne Hunt, and her family.5 Roger also brought Fred to North Dakota for a Berg family reunion where Fred spent time with his favorite sister, Helen. The two also took trips together in and around the Black Hills. Roger also regularly telephoned Fred at Good Samaritan.
[¶ 14.] During the family reunion, Helen and Norma Miedema, one of Fred's nieces and sister to Opdahl and who was then serving as the family contact for Good Samaritan, asked Roger if he would be willing to serve as Fred's attorney-in-fact for health care as well as for financial and business purposes. 6 Roger was honored to do so and on his next visit to see Fred at Good Samaritan, Roger discussed the matter with Fred who agreed it was a good idea. Roger also discussed the power of attorney with Diana Tines, Director of Social Services at Good Samaritan, who would later testify that it was a natural progression of the relationship between the two men as Roger was the only family member who routinely visited Fred.
[¶ 15.] In early December 1995, Roger made an appointment for Fred with attorney Tom Foye of the firm of Bangs, McCullen, Butler, Foye and Simmons LLP in Rapid City for the preparation and signing of the power of attorney. On December 21, 1995, during one of Roger's visits, he took Fred to Attorney Foye's office. Attorney Foye explained to Fred the purpose of a durable power of attorney and a power of attorney for health care purposes. Fred signed the power of attorney in Roger's presence. From that time on, Roger received numerous calls from Good Samaritan staff concerning Fred's health issues, medication changes, and other issues for which staff needed Roger's assistance or approval.
[¶ 16.] In the spring of 1996, Roger received a copy of an annual conservatorship report from U.S. Bank in his capacity as Fred's attorney-in-fact. He learned for the first time that Fred had a significant amount of money. Up until that time, Roger and the entire Berg family had been under the impression that Fred was a pauper. During a family reunion, Fred had mentioned to Roger and another cousin, Kenny, that he had $100,000 in the bank. Roger remembered he and Kenny chuckled about Fred's claim, which ultimately proved to be more than true. The conservatorship accounting indicated Fred had somewhere around $500,000 in the bank.7 Roger decided against sharing the information about Fred's finances with the Berg family for two reasons: his position as a fiduciary for Fred and his concern that despite the few visits family were able to make over the past twenty years, some family members might begin visiting Fred in order to obtain access to the money or in an attempt to inherit.
[¶ 17.] The revelations of Fred's financial condition in the spring of 1996 also prompted Roger to discuss with Fred the need for a will. Roger did not tell Fred the exact size of his bank account, but left the matter at Fred's estimation of $100,000. Roger told Fred that in order to have a say in how his money would be distributed after death, Fred needed a will or the State of South Dakota would make that determination for him. Fred appeared to understand the purpose of a will based on his conversation with Roger and agreed to see an attorney.
[¶ 18.] Roger scheduled an appointment with Attorney Foye for December 8, 1997, for purposes of drafting Fred's will. Fred recalled Attorney Foye from the power of attorney signing in 1995. Roger took Fred to that appointment and waited in the lobby while Attorney Foye met with Fred.
[¶ 19.] Roger,...
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