Johnson v. Markve, 29511-MES

CourtSupreme Court of South Dakota
Writing for the CourtSALTER, JUSTICE
Citation2022 S.D. 57
PartiesGUSTAV K. JOHNSON, as Personal Representative of the ESTATE OF SUSAN JANE MARKVE, Plaintiff and Appellant, v. KENNETH CHARLES MARKVE Defendant and Appellee.
Docket Number29511-MES
Decision Date21 September 2022

2022 S.D. 57

GUSTAV K. JOHNSON, as Personal Representative of the ESTATE OF SUSAN JANE MARKVE, Plaintiff and Appellant,

KENNETH CHARLES MARKVE Defendant and Appellee.

No. 29511-MES

Supreme Court of South Dakota

September 21, 2022



GEORGE J. NELSON Rapid City, South Dakota Attorney for plaintiff and appellant.

HEATHER LAMMERS BOGARD of Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter, LLP Rapid City, South Dakota Attorneys for defendant and appellee.



[¶1.] Acting as the personal representative of the Estate of Susan Markve, Gustav Johnson commenced this action against Kenneth Markve, alleging a variety of claims including undue influence, conversion, breach of fiduciary duty, statutory fraud, and common law fraud. The circuit court granted Kenneth Markve's motion for summary judgment after determining that there were no genuine disputes of material fact as to any of the claims. The Estate appeals, and we affirm in part and reverse in part.

Facts and Procedural History

[¶2.] Kenneth Markve (Ken) and Susan Johnson lived in the Hot Springs area of Fall River County and met in 2011 while playing bridge. They quickly fell in love and were engaged in the fall of 2012. Ken and Susan had met later in their lives, and both had accumulated their own property and wealth. Given the circumstances, they made a plan to enter into a prenuptial agreement, but before they did, Susan broke off the engagement following a visit with her brother, Gustav Johnson (Gus), who was opposed to the marriage.

[¶3.] Prior to canceling their wedding plans, Ken and Susan were preparing to purchase a home. They settled on a residence in Hot Springs referred to in the record as the "Flock house." In an affidavit, Ken later explained that the two planned to purchase the home as joint tenants with rights of survivorship, though he did not indicate how or if they would share the cost of the home. The couple ultimately did not purchase the Flock house after their engagement ended.


[¶4.] Despite canceling their plan to be married, Ken and Susan continued to spend time together, and they soon rekindled their romance and were again engaged. On January 15, 2013, they entered into a prenuptial agreement using a form obtained from an unspecified internet source and without the assistance of counsel.[1]

[¶5.] The prenuptial agreement provided that "[a]ll property, including real or personal property" would "remain and be [each spouse's] separate property." Attached to the agreement and specifically incorporated into its provisions were individual schedules of separate property owned by Ken and Susan. The property Ken listed totaled approximately $1.8 million and was heavily weighted to his $1.5 million interest in a farm. Susan listed assets of approximately $1 million.[2]

[¶6.] The couple's prenuptial agreement contemplated that they would live in a home Susan already owned in Rapid City, which the agreement stated "shall remain her separate property." However, the agreement also gave Ken and Susan flexibility with respect to the joint acquisition of property in the future and even the ability to transfer property to each other:

The parties agree and understand that nothing in the Agreement shall preclude them from acquiring property interests during the course of their marriage as joint tenants with right of survivorship or as tenants in common with undivided interests. Additionally, nothing in the Agreement shall preclude them from making binding transfers of real or personal property to the other at any time during the marriage
Furthermore, nothing in this Agreement shall preclude the parties from voluntarily electing to comingle a part or all of the income from their respective properties for investment purposes or for the purpose of jointly providing for their mutual support and living expenses, or for other reasons.

[¶7.] The prenuptial agreement also provided that if either spouse sustained a partial or total disability, the other spouse would assume responsibility and care for the disabled spouse. The agreement further allowed Ken and Susan to "voluntarily elect[ ] to comingle a part or all of the income from their respective properties . . . for the purpose of jointly providing for their mutual support and living expenses."

[¶8.] Ken and Susan were married on January 23, 2013. For Susan's wedding ring, Ken purchased a wedding band and had it joined to an existing diamond ring that Susan owned. In the summer of 2013, the Markves went to Alaska for a bridge tournament and a vacation. Susan eventually traveled back to Hot Springs alone to attend her 50-year high school reunion, and Ken stayed in Alaska to attend to an unrelated matter. While Ken was still in Alaska, Susan purchased a home in Hot Springs that became the Markves' marital home. She paid $250,000 for the house and purchased it individually as the trustee of the Susan J. Markve Trust.[3] The record does not indicate whether Ken contributed to the purchase price at any point.


[¶9.] In December 2013, Susan was diagnosed with glioblastoma, a deadly and incurable form of brain cancer. She underwent extensive medical care and treatment, including surgery to remove a tumor, as well as radiation, chemotherapy, and holistic care. Over the course of her treatment, Susan spent time in a swing bed facility as she transitioned from acute care in a hospital setting to skilled nursing care in her home.

[¶10.] It was during this period of time in early 2014 that Susan did two significant things with respect to her financial affairs: 1) she conveyed the Hot Springs house she held separately in her living trust by quitclaim deed to herself and to Ken as joint tenants with the right of survivorship; and 2) she executed a general power of attorney, naming Ken her agent. Susan's capacity to undertake either of these actions lies at the heart of this case.

[¶11.] Both the quitclaim deed conveying Susan's separate right to the Hot Springs home and the power of attorney were drafted by attorney Brian Hagg and signed by Susan on March 25, 2014. In two lines of an eleven-sentence affidavit, Hagg expressed the view that Susan had the capacity to convey her interest in the house and appoint Ken as her agent:

• I met with Susan two times regarding the deed and power of attorney.
• Susan was competent and very clear on what she wanted to do with the couple's marital home and desiring Ken to be her agent.

[¶12.] Nevertheless, notes contained in Susan's medical records from February and March 2014 indicate she was experiencing some degree of memory and cognitive difficulty. For instance, on February 17, 2014, the medical records from the swing bed facility, Fall River Health, indicate her attending physician noted "Short Term Memory loss/confusion[.]" The subjective assessment for February 17 also stated that "Husband present and reports that this is the worst her short term memory has been and Pt did not deny." On March 9, 2014, Susan's medical records stated that "she is aware of who she is[, but she is] [n]ot oriented to where she is but was able to recall after she was told."

[¶13.] Susan was transferred from Fall River Health to Rapid City Regional Hospital on March 11, and the hospital records indicate she was experiencing slurred speech and memory problems. Susan returned to Fall River Health on March 19, but she was largely unresponsive. On Monday, March 24, the nurse practitioner caring for Susan noted that Susan was feeling well. The nurse's notes further stated that Susan had a good weekend and that she was currently alert and oriented as she visited with her husband. The following day, March 25, was the day Susan signed the quitclaim deed to her Hot Springs home and the power of attorney. Though her medical records for March 25 indicate improved mental status, they also reveal Susan was experiencing low oxygen saturation levels and


"require[d] almost total care[.]" During this time, the medical records indicate Susan was experiencing significant "somulence"[4] and was unresponsive.

[¶14.] In early April 2014, Susan was also experiencing delirium while at Fall River Health and was transferred to a facility in Crawford, Nebraska. In her discharge report from Fall River Health on April 10, her doctor wrote:

The patient's stay is most notable for altered levels of consciousness. At times she would be slightly appropriate and able to talk with us. And at times she would have one to two days where she was almost noncoherent. She did better with the feeds with the husband present. She would go through levels of delirium at times.[5]

[¶15.] After her release from the Crawford facility, Susan returned home to live with Ken in Hot Springs. Ken hired caregivers and home health workers and paid any bills relating to Susan's treatment and care. Ken and Susan resumed hosting bridge club at their home. One of Susan's friends indicated in an affidavit that Susan maintained her "cognitive behavior" even as her physical health deteriorated, though the statement does not relate to a specific time period.


[¶16.] Susan passed away on April 12, 2016. Ken provided an inventory of the household goods to Gus who was appointed to serve as the personal representative of Susan's estate (the Estate). Ken also gave Susan's nephew the car that Susan had devised to him and transferred to the Estate all accounts and funds owned by Susan or held by the Susan J. Markve Trust. Ken did retain Susan's wedding ring but offered to give the ring to Susan's niece after he passed, though Ken states she declined this offer.

[¶17.] Gus commenced this action on behalf of the Estate in May 2018, alleging Susan lacked...

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