KAREN LEE WYMAN, Personally and as Personal Representative of the Estate of Barbara Ann Morris, Plaintiff and Appellant,
v.
PAMALA BRUCKNER, Defendant and Appellee.
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 ...