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In re Estate of Bickel

Supreme Court of South Dakota

March 30, 2016

In the Matter of the Estate of EDWARD F. BICKEL, Deceased

         Considered on Briefs January 11, 2016

         As modified April 5, 2016.

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[Copyrighted Material Omitted]

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          APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT, CORSON COUNTY, SOUTH DAKOTA. THE HONORABLE WARREN G. JOHNSON, Retired Judge.

         MITCHELL A. PETERSON, ELIZABETH S. HERTZ of Davenport, Evans, Hurwitz & Smith, LLP, Sioux Falls, South Dakota, Attorneys for appellant, Gail Bickel.

         JACK H. HIEB, ZACHARY W. PETERSON of Richardson, Wyly, Wise, Sauck & Hieb, LLP, Aberdeen, South Dakota, Attorneys for appellee, Edward J. Bickel.

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

          OPINION

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          WILBUR, Justice

          [¶1] In this seven-year estate dispute, testator's daughter appeals the circuit court's decision denying her relief from an order under SDCL 15-6-60(b). The daughter also asserts the circuit court erred when it considered extrinsic evidence to interpret the testator's Last Will and Testament and subsequent Codicil, approved the personal representative's proposed distribution of testator's assets, reformed the Will and Codicil, and awarded attorney's fees to testator's grandson. We affirm.

         Background

          [¶2] Edward F. Bickel was born in 1925, and grew up on his family's farm and ranch until he left to join the military. After his service, Edward F. returned to the family farm and worked with his father and brother until they split the farm. After the split, Edward F. began to operate his own farm and ranch near Isabel, South Dakota. He married Nadine and had two children, Edward P. and Gail. Nadine and Edward F. divorced in 1972, and Edward F. never remarried. Edward P. and Gail continued to live and work on the ranch while growing up. As adults, neither Edward P. nor Gail remained on the ranch or maintained an active role in the day-to-day ranch operations.

          [¶3] Edward P.'s son, Edward J. (Eddy), was close to his grandfather, Edward F. Eddy described the relationship to be akin to one between a father and son. During high school and college, Eddy spent the summer months helping Edward F. operate the ranch. After Eddy graduated college in 2005, he returned to the ranch to work with his grandfather full time. A few years later, Eddy and his wife Megan wanted assurances from Edward F. that a long-term plan would exist for Eddy's involvement in the ranch. And Edward F. wanted the ranch to remain in the Bickel name. Edward F. and Eddy had ongoing discussions about Eddy's continued involvement.

          [¶4] In 2008, Edward F.'s health began to deteriorate. He ranched less and less. At the time, Edward F. did not have a written will. He contacted attorney Andrew Aberle to assist in planning his estate. According to Aberle, Edward F. wanted the ranch to remain in the Bickel name and wanted Eddy to take over its operation. Between June 2008 and November 2009, Edward F. had Aberle execute multiple estate planning documents.

          [¶5] In June 2008, Edward F. executed a Will giving land to Edward P. unrestricted, land to Gail in trust, and land to Eddy unrestricted. Edward F. provided Aberle the legal descriptions for the land

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by memory. The Will nominated Eddy as personal representative. In July 2008, Edward F. gave Eddy and Megan a quarter section of real property by warranty deed. In August 2008, Edward F. executed a Codicil to his June 2008 Will. The handwritten Codicil directed that Eddy could rent one of Edward F.'s tractors. It further provided that Edward F.'s " investments and personal property" be used to pay inheritance tax, with any remaining funds to be split equally among his three granddaughters. In September 2008, Edward F. purchased a hay rake for $19,240. Eddy used the rake on the farm.

          [¶6] In November 2008, Edward F.'s health continued to deteriorate. He was admitted to an assisted living facility. That same month he executed a power of attorney giving Eddy authority to deposit and withdraw money from an account at Western Dakota Bank. In December 2008, Edward F. purchased a hay baler for use on the farm at a cost of $21,000. Also in December 2008, Edward F. executed a second Codicil to his 2008 Will. The Codicil provided that all oil, gas, and mineral rights to his property be distributed one-quarter to Edward P., one-quarter to Gail, and the remaining one-half to his grandchildren. The Codicil restricted the sale of land distributed to Edward P. Edward F. amended the Codicil again, but never signed the amended Codicil.

          [¶7] In January 2009, Edward F. executed a third Codicil to his 2008 Will. The Codicil amended the distribution of the oil, gas, and mineral rights to be distributed to his great-grandchildren after the death of Edward P., Gail, and all Edward F.'s grandchildren. In June 2009, Edward F. moved into a nursing home. He named Eddy as primary beneficiary of a JP Morgan account and Gail's daughter, Anne-Marie, as contingent beneficiary. Also in June 2009, Edward F. gave Eddy and Megan a quarter section of real property by warranty deed.

          [¶8] In September 2009, Eddy met with Attorney Aberle without Edward F. Edward F. was in hospice care. Eddy shared with Aberle notes from Edward F. related to Edward F.'s estate. During the meeting, Aberle called Edward F. to discuss Edward F.'s wishes. After the meeting and phone calls, Aberle prepared two codicils to the 2008 Will. Eddy took the first Codicil to Edward F. personally. The Codicil erroneously gave Eddy " artifacts" instead of " hay" and listed Edward P. as Edward F.'s " grandson." Aberle faxed a second, corrected version to Edward F. Also in September 2009, Edward F. executed a bill of sale for household items and personal property, a bill of sale for a rifle, a handwritten letter gifting his " tame and wild hay" to Eddy, a bill of sale giving Eddy his " tame and wild hay," and an institutional health care power of attorney appointing Eddy his health care attorney in fact.

          [¶9] In September 2009, Aberle realized that Edward F. signed the wrong codicil from September 14, 2009. Aberle contacted Eddy to arrange for Edward F. to update the estate documents. On September 22, 2009, Edward F. executed a new Last Will and Testament and Codicil. It incorporated the previous will and codicils. The new Will appointed Eddy to serve as personal representative. The Will gave land to Edward P. unrestricted, land to Gail in trust, land to Eddy unrestricted, and $40,000 in trust to Anne-Marie for college on the condition that she complete college in five years. The Will provided that " the rest and remainder" of Edward F.'s assets be distributed to Gail and Edward P. equally, with Eddy having the right " to lease, buy or sell" property held in trust for Gail " and other property handled as personal representative." Under

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the Will, Eddy had " the option to lease all land devised to Gail Bickel" for $1,600 per 160 acres ($10/acre) per year. The Codicil Edward F. gave Eddy the recently-purchased rake and baler. Rapid City attorney, John Burke, and two members of his staff witnessed Edward F.'s execution of the Will and Codicil. Burke asked Edward F. questions about his children and his property. He also observed Edward F. read portions of the Will.

          [¶10] On October 7, 2009, Edward F. executed another Codicil to the Will. The Codicil purported to " delete and remove" land given to Gail in trust. In fact, the Codicil deleted and removed land not owned by Edward F. The Codicil amended the provision in the Will giving $40,000 in trust for Anne-Marie's college education to include, in trust for Anne-Marie, a devise of the land deleted and removed from Gail's trust (the land Edward F. does not own). The Codicil provided Eddy with the right to " lease, buy or sell" Edward F.'s " assets in both the Gail Bickel Trust and the Annie Bickel Trust, . . . including to himself, at any reasonable price as determined in his sole discretion at either public or private sale without the necessity of notice and without court approval or authorization." The Codicil further amended the Will provision that gave the remainder of Edward F.'s assets to Edward P. and Gail equally to instead give " the rest and remainder" of Edward F.'s assets to his " grandchildren equally[.]"

          [¶11] On November 4, 2009, Edward F. died in hospice care. On November 13, 2009, Eddy petitioned the circuit court to adjudicate testacy, determine heirs, and appoint him personal representative. Eddy sought to have the September Will and October Codicil admitted to formal probate. He served notice of the petition and hearing, scheduled for December 14, 2009, on the heirs of Edward F.'s estate. On December 9, 2009, Edward P. and Gail served an objection to Eddy's petition. They asserted that Edward F. lacked testamentary capacity, and that the Will and Codicil were the products of undue influence, fraud, duress, and/or mistake. No other heir responded to or made an appearance on Eddy's petition or Edward P. and Gail's objections.

          [¶12] The parties postponed the hearing on Eddy's petition and stipulated to the appointment of a personal representative other than Eddy. On January 27, 2010, the court appointed Eric Bogue as personal representative of the Estate of Edward F. Bickel. The court scheduled a trial on Edward P. and Gail's objections for February 9-11, 2011. The other heirs did not receive notice of the trial date. Edward P. and Gail moved for a continuance, which the court granted. The other heirs did not receive notice of the continued trial date. The court held a trial on Eddy's petition and Edward P. and Gail's objections on June 14-17, 2011.

          [¶13] In August 2011, the court issued findings of fact and conclusions of law overruling Edward P. and Gail's objection that the Will and Codicil were the products of Eddy's undue influence. The court held that Edward F. did not lack testamentary capacity and entered an order admitting Edward F.'s Will and Codicil to probate. Gail appealed. This Court dismissed Gail's appeal because she failed to serve notice of the appeal on all the heirs. See, e.g., In re Estate of Geier, 2012 S.D. 2, ¶ 23, 809 N.W.2d 355, 361 (" Under SDCL 15-26A-4(3), notice of appeal must be served on the heirs" and the failure to do so " is jurisdictionally fatal[.]" ).

          [¶14] On August 22, 2012, Gail moved the circuit court for relief from the court's August 2011 order under SDCL 15-6-60(b). She alleged that the court's order and judgment were void for Eddy's failure

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to serve notice of the trial on all heirs as required under SDCL 29A-1-401 and SDCL 29A-3-403. On October 1, 2012, the circuit court issued findings of fact and conclusions of law denying Gail relief from the August 2011 order.

          [¶15] Over the next two years, the parties litigated the probate of Edward F.'s estate and distribution of his assets. Edward P. and Gail objected to personal representative Bogue's September 2012 proposed final distribution. They asserted that Bogue failed to properly account for property rights and property passing under the Will and Codicil. Specifically, they challenged the proposed distribution of the S.E. 1/4 of S2-T18N-R23 (SE 1/4) to Anne-Marie in trust because the Will devised that quarter section to Gail in trust. Bogue had proposed distributing the S.E. 1/4 to Anne-Marie in trust because he believed Edward F. intended that quarter section be devised to Anne-Marie. He relied on Edward F.'s Codicil, which devised the S.W. 1/4 of S2-T18N-R23 (SW 1/4) to Anne-Marie in trust. Edward F. did not own the S.W. 1/4. In Bogue's view, therefore, Edward F. intended the Codicil to read the S.E. 1/4, not S.W. 1/4.

          [¶16] Edward P. and Gail also challenged the proposed distribution of the N.E. 1/4 of S7-T19N-R24 to Eddy because neither the Will nor Codicil made a provision for the distribution of that property. Rather, the Will distributed the N.E. 1/4 of S7-T20N-R24 to Eddy. Edward F. does not own the N.E. 1/4 of S7-T20N-R24. In response, Eddy argued that, Edward F. intended to give him the N.E. 1/4 of S7-T19N-R24 rather than the N.E. 1/4 of S7-T20N-R24.

          [¶17] The circuit court held a hearing in December 2012, and, in April 2013, issued findings of fact and conclusions of law. It concluded that the Will and Codicil were ambiguous. It ruled that Edward F. intended to distribute the S.E. 1/4 to Anne-Marie in trust and the N.E. 1/4 of S7-T19N-R24 to Eddy. The court further concluded that Edward F. intended that Eddy have the right to lease land devised to Anne-Marie and Gail in trust. It ordered that Eddy pay the Corson County FSA lease rate from the date of Edward F.'s death until April 5 2013, and $1,600 per 160 acres thereafter.

          [¶18] Bogue submitted a proposed final distribution consistent with the circuit court's order. He also moved for reimbursement of expenses and for compensation. Eddy, Edward P., and Gail filed objections. From April 2013 to April 2015, the parties continued to litigate the distribution of Edward F.'s assets. Relevant to this appeal are Edward P. and Gail's objections to the past and future rental rate and duration of the lease of Gail's land held in trust, and Gail's request for reimbursement for the loss in property value due to the deterioration of certain assets bequeathed to her. After multiple hearings, the court ruled that Eddy had the right to lease the land held in trust for Gail at a rate of $10 per acre on an annual basis. The court ordered that Eddy could offset future rent payments with the amounts he overpaid from the time of Edward F.'s death until the court's January 5, 2015 order. The court denied Gail's request for reimbursement for the deteriorated condition of certain household items bequeathed to her and denied her request to inspect the shop building to determine whether it contained household items bequeathed to her.

          [¶19] During the probate of Edward F.'s estate, Eddy had moved the circuit court for reimbursement of his necessary expenses including attorney's fees under SDCL 29A-3-720. He asserted that between December 2009 and ...


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