IN RE: the Administration of the LEE R. WINTERSTEEN REVOCABLE TRUST AGREEMENT.
CONSIDERED ON BRIEFS ON NOVEMBER 6, 2017
FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA THE HONORABLE MARK E. SALTER
R. KERKVLIET DANA VAN BEEK PALMER of Lynn Jackson Shultz
& Lebrun, PC Attorneys for petitioner and Sioux Falls,
South Dakota appellant, Charlotte A. Wintersteen.
KW KRAUSE MATTHEW J. ABEL of Dorothy & Krause Law Firm,
PC Attorneys for respondents and Sioux Falls, South Dakota
appellees, Trustees, and First National Bank of Sioux Falls.
Charlotte A. Wintersteen (Charlotte), widow of Lee R.
Wintersteen (Lee), filed a petition for court supervision of
the Lee R. Wintersteen Revocable Trust Agreement (the Trust)
on February 10, 2016, after learning she had been removed as
a beneficiary in a subsequent amendment to the Trust. The
circuit court granted her petition and assumed supervision of
the Trust pursuant to SDCL 21-22-9. On September 20, 2016,
Charlotte filed a motion to amend her petition to include a
claim challenging the validity of the most recent amendment
to the Trust. After a hearing, the circuit court denied her
request, concluding her amended petition would be futile
because it was time-barred under SDCL 55-4-57(a)(1) as more
than one year had passed since the date of Lee's death.
Charlotte appeals the denial of her motion to amend the
original petition. We affirm.
and Procedural History
Charlotte married Lee on May 23, 2010. Both had children from
previous marriages and executed a prenuptial agreement prior
to their marriage. On May 3, 2011, Lee created a Trust,
providing Charlotte with a lifetime income benefit of $2, 000
a month upon Lee's death as well as a lump sum financial
However, Lee amended the Trust several times during his
lifetime. The Trust was first amended on March 1, 2012,
removing Charlotte as a beneficiary. Lee later reinstated
Charlotte as a beneficiary by executing a second amendment to
the Trust on November 22, 2013. The second amendment provided
Charlotte with benefits similar to those originally
contemplated but increased Charlotte's lifetime income
benefit to $3, 000 a month upon Lee's death. The Trust
was amended a third and final time on March 5, 2014, again
removing Charlotte as a beneficiary.
After executing the third amendment, Lee was evaluated by Dr.
Timothy Hurley on May 15, 2014, to address problems with his
memory. Dr. Hurley performed a mental examination on Lee and
concluded he suffered from moderate dementia, which had
progressed over the course of the preceding four years.
During this examination, Lee indicated that he wanted his son
Tom to handle his financial affairs, and he wanted Charlotte
to handle his medical decisions. On April 13, 2015, Tom and
Charlotte were appointed as Lee's conservator and
Lee passed away on May 26, 2015, and the Trust became
irrevocable upon his death. While Charlotte was aware of the
Trust and its subsequent first and second amendments, she
claims that Lee never discussed the third amendment with her
and that she first learned of its existence on September 21,
2015. On February 10, 2016, Charlotte filed a petition
seeking court supervision of the Trust, alleging that
"[c]ourt supervision [was] necessary to ensure proper
administration of the Trust and to prevent any further
irreparable damage to the Trust."
The Trustees opposed court supervision, and the circuit
court set the matter for hearing on April 11, 2016. At the
hearing, the court inquired of Charlotte's counsel
regarding the objective of the petition. Charlotte's
counsel replied that she sought court supervision to obtain
accounting obligations and an inventory from the Trust. While
Charlotte's counsel admitted the existence of a potential
claim challenging the validity of the third amendment, she
explained that the value of the Trust's assets, once
known, would inform Charlotte's decision about what
course of action to pursue in the future. The circuit court
found Charlotte was a "beneficiary" per SDCL
21-22-1(1) and assumed supervision over the Trust
pursuant to SDCL 21-22-9.
On September 20, 2016, Charlotte, having changed counsel,
filed a motion to amend the petition to include a claim
alleging the third amendment was invalid. The proposed claim
alleged that Lee lacked the capacity to execute the third
amendment and that he was unduly influenced. The circuit
court held a hearing on Charlotte's motion to amend on
November 29, 2016. The Trustees opposed Charlotte's
motion, arguing that the amended claim was time-barred under
SDCL 55-4-57(a)(1). In response, Charlotte's counsel
alleged that SDCL 21-22-13 permitted an amendment to a
petition at any time during court supervision of a trust. In
the alternative, Charlotte argued that even if SDCL 55-4-57
controlled, the amended petition was not time-barred because
she contested the validity of the third amendment in her
original petition and the affidavit filed in support thereof-
allowing her amended claim to relate back to the filing of
the original petition.
The circuit court issued a memorandum opinion and order on
February 14, 2017, denying Charlotte's proposed amendment
as futile. The court, applying SDCL 55-4-57(a)(1) to
Charlotte's claim, held that because she did not commence
a judicial proceeding to contest the validity of the third
amendment within the required one-year period from Lee's
death, her claim was now time-barred. Additionally, the court
found that SDCL 55-4-57(a)(1) is a statute of repose, which
prohibits the relation-back doctrine from applying to
Charlotte's proposed amendment.
Charlotte appeals, asserting the following
1. Whether the circuit court erred in concluding SDCL 55-4-57
applied to Charlotte's proposed claim.
2. Whether the circuit court erred in concluding a
"judicial proceeding" challenging the validity of
the third amendment was not timely commenced.
3. Whether the circuit court erred in holding that SDCL
55-4-57(a)(1) is a statute of repose.
4. Whether the circuit court erred in concluding the
relation-back doctrine is not applicable to SDCL
1. Whether the circuit court erred in concluding SDCL
55-4- 57 applied to Charlotte's proposed claim.
Charlotte first contends that the limitation period set forth
in SDCL 55-4-57(a)(1) is inapplicable to her proposed claim
because the circuit court assumed supervision of the Trust
under SDCL 21-22-9. Charlotte's argument is premised on
SDCL 21-22-31, which states that "[a] proceeding brought
pursuant to this chapter is considered an action for purposes
of title 15. . . ." SDCL 15-6-15(a) provides that
"a party may amend his pleading only by leave of court
or by written consent of the adverse party; and leave shall
be freely given when justice so requires." Thus, in
Charlotte's view, her claim challenging the validity of
the third amendment could be filed at any time under the
unlimited time frame found in SDCL 21-22-13. However, a court
"may appropriately deny leave to amend 'where there
are compelling reasons such as . . . futility of the
amendment, ' even when doing so will necessarily prevent
resolution on the merits." Ash v. Anderson
Merchandisers, LLC, 799 F.3d 957, 963 (8th Cir.
2015) (quoting Horras v. Am. Capital Strategies,
Ltd., 729 F.3d 798, 804 (8th Cir. 2013)); see
Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9
L.Ed.2d. 222 (1962).
Whether SDCL 21-22-13 or SDCL 55-4-57 governs Charlotte's
proposed claim is a matter of statutory
interpretation. "[W]hen the question is which of two
enactments the legislature intended to apply to a particular
situation, terms of a statute relating to a particular
subject will prevail over the general terms of another
statute." Martinmaas v. Engelmann, 2000 S.D.
85, ¶ 49, 612 N.W.2d 600, 611 (quoting Moss v.
Guttormson, 1996 S.D. 76, ¶ 10, 551 N.W.2d 14, 17).
As such, "we begin with the plain language and structure
of the statute." Pitt-Hart v.Sanford USD
Med. Ctr., 2016 S.D. 33, ¶ 10, 878 N.W.2d 406, 410
(quoting MagellanPipeline Co., LP v. S.D.
Dep't of Revenue & Regulation, 2013 S.D. 68,
¶ 9, 837 N.W.2d 402, 404). "When the language in a
statute is clear, certain and unambiguous, there is no reason
for construction, and the Court's only function is to
declare the meaning of the statute as clearly
expressed." Larson v. Krebs, 2017 S.D. 39,
¶ 18, 898 N.W.2d 10, 17. "When we must, however,
resort to statutory construction, the intent of the
legislature is derived from the ...