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Studt v. Black Hills Fed. Credit Union

Supreme Court of South Dakota

May 20, 2015

RONALD L. STUDT, Plaintiff and Appellant,
v.
BLACK HILLS FEDERAL CREDIT UNION, Defendant, and DAVID SHOLES, Defendant and Appellee

Considered on Briefs April 20, 2015.

APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT PENNINGTON COUNTY, SOUTH DAKOTA.

STANTON A. ANKER of Anker Law Group, PC Rapid City, South Dakota, Attorneys for plaintiff and appellant.

KYLE L. WIESE of Gunderson, Palmer, Nelson & Ashmore, LLP Rapid City, South Dakota, Attorneys for defendant and appellee.

WILBUR, Justice. GILBERTSON, Chief Justice, and ZINTER, SEVERSON, and KERN, Justices, concur.

OPINION

Page 514

WILBUR, Justice

[¶1] Ronald L. Studt appeals the circuit court's grant of summary judgment in favor of Black Hills Federal Credit Union (BHFCU) and David Sholes. The court determined that the operative language in the power of attorney authorizing Studt to make gifts was too broad and did not specifically permit Studt to self-deal. We affirm.

Facts and Procedural History

[¶2] On October 28, 2008, Dorothy E. McLean invested in a certificate of deposit (the CD) with BHFCU with a maturity date of October 28, 2013. On July 19, 2011, McLean changed the CD's payable-on-death beneficiary from Studt to Sholes. Studt is the only child of McLean. Sholes is McLean's second cousin.

[¶3] In the summer of 2012 and due to McLean's age and poor health, she moved from Rapid City, South Dakota, to Winona, Minnesota, to live with Studt so that he could care for her. On October 22, 2012, McLean executed a general, durable power of attorney, naming Studt as her attorney-in-fact. Steven Pederson, an attorney from Minnesota, prepared the power of attorney.

[¶4] According to the undisputed facts of the case, Pederson and McLean discussed the power of attorney before McLean effectuated it. They discussed that Studt, as the attorney-in-fact, would be able to transfer and gift property to any persons or organizations as long as he determined that her financial needs would still be met and that such transfers and gifts were prudent for the purpose of estate and tax planning.[1] McLean further understood that Studt would have full and complete authority over her assets and financial matters.

[¶5] After McLean executed the power of attorney, Studt forwarded a copy to BHFCU via email on October 23, 2012. The email directed BHFCU to close all of McLean's accounts and send the assets to Winona. The email further directed BHFCU to forward the funds of the CD to McLean when it matured. Jessica Paul, Senior Personal Financial Officer at BHFCU, acknowledged receipt of Studt's email on November 29, 2012, stating that BHFCU was able to accept the power of attorney. On or about December 10, 2012, all of the accounts, except the CD, were closed as requested. By April 2013, Studt had transferred all of McLean's assets except the CD from South Dakota to Minnesota. The CD was not withdrawn from BHFCU at that time because it had a favorable interest rate and early withdrawal would result in a redemption penalty.

[¶6] Around April or May 2013, McLean became terminally ill. Studt sent an email to Paul on May 21, 2013, at 2:42 p.m., inquiring ...


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