Wyman v. Bruckner

          Argued August 29, 2017

         APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT BEADLE COUNTY, SOUTH DAKOTA THE HONORABLE CARMEN MEANS Judge

          MATTHEW P. BOCK JAMES A. POWER of Woods, Fuller, Shultz and Smith, PC Sioux Falls, South Dakota Attorneys for plaintiff and appellant.

          LEE SCHOENBECK Watertown, South Dakota Attorney for defendant and appellee.

          KERN, Justice.

         [¶1.] Karen Wyman is the personal representative of the estate of her deceased mother, Barbara Ann Morris. Wyman alleges that her sister Pamala Bruckner engaged in impermissible self-dealing in her capacity as Morris's attorney-in-fact. Wyman alleges Bruckner improperly wrote checks from an account Bruckner owned jointly with Morris for the benefit of Bruckner and her family. Wyman sued Bruckner on several grounds, including breach of fiduciary duties. The circuit court granted partial summary judgment in favor of Bruckner on that issue. Wyman voluntarily dismissed her remaining claims and appeals from the circuit court's grant of summary judgment. We reverse and remand.

         Facts and Procedural History

         [¶2.] On March 25, 2014, Morris executed an estate plan, which included a will and revocable trust. The will provided that upon Morris's death, her property would pass to the trust, which in turn would be distributed to Wyman and Bruckner per stirpes. When she executed the estate plan, Morris lived with Wyman in Florida. Morris designated Wyman as the personal representative of her estate and the successor trustee of the trust. In the fall of 2014, Morris received a terminal cancer diagnosis and moved from Florida to South Dakota to live with Bruckner.

         [¶3.] Shortly thereafter, Bruckner contacted a South Dakota attorney and directed him to prepare a power of attorney for Morris's signature. The attorney drafted a non-springing durable power of attorney that appointed Bruckner as Morris's attorney-in-fact and mailed it to Bruckner. On October 29, 2014, Morris signed the power of attorney naming Bruckner as attorney-in-fact before a notary. The power of attorney is a two-and-a-half-page document of single-spaced text that reads in part:

Not to limit the full extent of the power and authority herein granted but merely to emphasize certain powers, said attorney-in-fact shall have full, unrestricted, power and authority as follows:

To handle, manage, lease, sell, purchase, convey, exchange, give or receive as a gift, loan, encumber, possess, use, consume, abandon or otherwise deal in or with, in any manner, all or any portion of my real or personal property, including any interest I may have therein, whether now owned or hereafter acquired, whatsoever and wheresoever located . . . .

         [¶4.] On November 12, 2014, Morris opened a pay-on-death account at Dakotaland Credit Union. Morris designated Wyman and Bruckner as equal beneficiaries of any money remaining in the account upon her death. But on December 17, 2014, Morris and Bruckner signed an account change authorization form that made Bruckner a joint owner of the Dakotaland account. On March 12, 2015, Morris passed away. Bruckner never deposited any of her personal funds into the Dakotaland account, and all of the funds in the account were deposited by Morris.

         [¶5.] Between January 22, 2015, and Morris's death, Bruckner wrote several checks to herself and her family from the Dakotaland account totaling $225, 077.16. These included a $200, 000 check to Bruckner's husband and two checks Bruckner wrote to herself totaling $6, 377.16. After Morris passed away on March 12, 2015, Bruckner wrote one check to her son-in-law for $175 and one to Kuhler Funeral Home for $5, 066.10.^[1] On June 24, 2015, Bruckner closed the Dakotaland account and transferred the remaining $29, 070.31 to her personal account.

         [¶6.] On April 5, 2015, Wyman filed a petition for formal probate of Morris's estate. On September 9, 2015, Wyman brought several claims against Bruckner in a separate civil action, alleging in part that because the power of attorney did not authorize self-dealing, Bruckner breached her fiduciary duties. Bruckner answered that her status as joint owner entitled her to withdraw funds from the account and, in her amended answer, argued that the power of attorney authorized self-dealing. Wyman and Bruckner then filed cross-motions for partial summary judgment on the issue of breach of fiduciary duties and self-dealing and to consolidate the probate and civil actions. Bruckner argued before the circuit court that the power of attorney permitted self-dealing, authorizing her to transfer funds out of the Dakotaland account to herself and to her family members. On May 31, 2016, the circuit court consolidated the actions.

         [¶7.] At a June 14 motion hearing, the circuit court ruled that the power of attorney permitted Bruckner to self-deal. Specifically, the circuit court determined that by authorizing Bruckner to "give or receive as a gift" Morris's property whether "now owned or hereafter acquired, " the power of attorney permitted Bruckner to self-deal. The court ruled that the power of attorney authorized Bruckner to gift Morris's money to herself as well as to her immediate family, stating: "[M]y thought is that if essentially she could have made a gift to herself that always authorize[s] her to give gifts to others, and these people were not just Bruckner's family, they were Morris's family." On June 20, 2016, the court entered a final order denying Wyman's motion and granting partial summary judgment in favor of Bruckner. In its order, the court concluded both that the power of attorney authorized self-dealing of the kind alleged here and that creation of the joint account did not involve an exercise of Bruckner's powers as attorney-in-fact.

         [¶8.] Wyman voluntarily dismissed her other claims and appeals the circuit court's decision. Following this Court's request for supplemental briefing, we restate the parties' issues on appeal as follows:

1. Whether Bruckner is judicially estopped from arguing on appeal that her withdrawal of funds from the Dakotaland account was permitted by her status as joint owner of the account rather than as authorized by the power of attorney.

2. Whether Bruckner is barred from arguing on appeal that she was authorized to write checks on the Dakotaland account as a joint owner when she did not raise this argument in ...