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In re Maurice M. Ricard Family Trust

Supreme Court of South Dakota

September 28, 2016

In the Matter of the MAURICE M. RICARD FAMILY TRUST

          CONSIDERED ON BRIEFS ON AUGUST 29, 2016

         APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT MEADE COUNTY, SOUTH DAKOTA THE HONORABLE JEROME A. ECKRICH, III Judge

          JEFFREY R. CONNOLLY of Gunderson, Palmer, Nelson & Ashmore, LLP Rapid City, South Dakota and JASON L. REED of Adam Jones Law Firm, PA Wichita, Kansas Attorneys for appellants Renee

          Laas, Racette Cuzzort, Individually & as Trustee of the Mary Bettwy Trust & Anna Marsden.

          MICHAEL W. STRAIN of Strain Morman Law Firm Sturgis, South Dakota Attorneys for appellee Kelly Ricard.

          WILBUR, Justice

         [¶1.] Many years after the sisters sold their respective interests in the family trust to one brother, the sisters sought to rescind their agreements and repurchase their respective interests. The sisters alleged that their brother obtained their consent to sell through fraud and undue influence. After a two-day court trial, the circuit court denied the sisters' request. The sisters appeal. We affirm.

         Background

         [¶2.] Maurice Ricard and his wife, Ella "Bernadette" Ricard, had six children: Kelly Ricard, Renee Anderson (now Renee Laas), Anna Henrickson (now Anna Marsden), Racette Cuzzort, Medric Ricard, and Mary Bettwy. Maurice and Bernadette each owned an undivided, one-half interest in the real property comprising the Ricard family ranch. They wanted the ranch to stay intact, remain in the family, and operate as a ranch. Since 1998, their son Kelly leased the real estate to graze cattle.

         [¶3.] Maurice passed away on August 11, 2002. Bernadette, as personal representative, admitted Maurice's Last Will and Testament to probate. The Will created The Maurice M. Ricard Family Trust (Family Trust or Trust). The Family Trust appointed Renee as trustee. The Family Trust provided that the real property owned by Maurice would be held by the Trust for the use and benefit of Bernadette during her lifetime. Bernadette, as personal representative, conveyed Maurice's undivided, one-half interest in the real property to the Family Trust. The Trust further provided that, upon the death of Bernadette, the Trust would terminate and Kelly would receive 50% of the assets, Renee, Anna, and Racette would each receive 12.5%, and the remaining 12.5% would be placed in a trust for the benefit of Mary.

         [¶4.] In 2003, Bernadette formed the Ricard Ranch Family Limited Partnership for estate planning purposes on the advice of attorney Kurt Solay. Attorney Solay had been giving Maurice and Bernadette estate planning advice since 1998, and continued to give Bernadette advice after Maurice's death. In regard to the Limited Partnership, Bernadette and Kelly were the general partners. Later, Bernadette assigned her general partnership interest to Kelly. The Family Trust was a limited partner. On November 20, 2003, Renee, as trustee of the Family Trust, conveyed the undivided, one-half interest in the real property owned by the Family Trust to the Limited Partnership. Bernadette similarly transferred her undivided, one-half ownership in the real property to the Limited Partnership.

         [¶5.] In November 2003, Kelly offered to purchase the sisters' respective 12.5% interests in the Family Trust for $20, 000 each. The offer included an option to purchase, providing that each sister could purchase back their interest under certain circumstances. The sisters accepted Kelly's offer, signed the agreements to sell (Agreements), and negotiated the $20, 000 checks mailed to them by Attorney Solay. After the purchase, the sisters no longer held an interest in the Family Trust. According to Renee, the sisters believed they would inherit from Bernadette's estate when Bernadette passed.

         [¶6.] In October 2008, the Limited Partnership transferred approximately 80 acres of real estate to Bernadette for estate planning purposes. According to Kelly, the 80 acres comprised Bernadette's personal residence. The Family Trust owned an undivided, one-half interest in the 80 acres.

         [¶7.] In August 2010, Bernadette passed away. Upon its terms, the Family Trust terminated. Renee, as trustee, took no action to distribute the Trust assets following Bernadette's death. Under the Trust, the assets would have been distributed to Kelly because he owned a 50% interest and purchased each sister's 12.5% interest. Kelly filed a petition for distribution in January 2013. The sisters objected and filed a petition for determination of beneficiary status. The sisters challenged the enforcement of the Agreements signed by them selling their respective 12.5% interests in the Family Trust to Kelly. They sought to rescind the Agreements due to fraud and undue influence by Kelly. Renee claimed that although she negotiated the $20, 000 check, she sent the funds back to Kelly and Bernadette. According to Renee, she ...


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