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Estate of Stoebner v. Huether

Supreme Court of South Dakota

October 23, 2019

ESTATE OF KENNETH STOEBNER, Plaintiff and Appellee,
CURTIS HUETHER, Defendant and Appellant.



          TIMOTHY R. WHALEN Attorney for plaintiff and appellee.

          TAMARA D. LEE Attorney for defendant and appellant.

          GILBERTSON, Chief Justice

         [¶1.] Curtis Huether served as Kenneth Stoebner's attorney-in-fact under a power of attorney. Pursuant to this role, Huether executed a sale of Stoebner's real property to himself four days before Stoebner's death. Stoebner's estate (Estate) subsequently brought a breach of fiduciary duty claim against Huether for engaging in an act of self-dealing. The Estate moved for summary judgment, which the circuit court granted. We affirm.

         Facts and Procedural History

         [¶2.] Stoebner and Huether were first cousins who knew each other their entire lives. They were both farmers and occasionally assisted each other with farm work. Stoebner was eight years older than Huether, never married, and did not have any children. In 2012, when he was 82 years old, Stoebner entered a nursing home and was confined to a wheelchair. During Stoebner's stay at the nursing home, Huether and his son, Sheldon, visited Stoebner every one to two weeks, took him to the farm for visits, and assisted with other tasks. For instance, Huether handled the entirety of a farm sale for Stoebner in 2013. In approximately February 2012, Huether began leasing Stoebner's farmland. Huether continued leasing the farmland for the next five years. The last lease was signed by Stoebner in February 2017, four months before his death. This property is the subject of the contested transaction and current appeal.

         [¶3.] Several months after entering the nursing home, Stoebner met with his attorney, James Haar, to discuss the preparation of a power of attorney. Haar performed legal work for Stoebner since the late 1960s, assisting him with tax preparation, drawing up leases, handling the probate of his mother's estate, and drafting his will. Stoebner requested that Haar be his attorney-in-fact, but Haar declined. Haar prepared a General Durable Power of Attorney and Durable Power of Attorney for Health Care for Stoebner, naming Huether as Stoebner's attorney-in-fact. The power of attorney allowed Huether to act as Stoebner's agent. In part, it allowed Huether "[t]o acquire, purchase, exchange, grant options to sell, and sell and convey real or personal property, tangible or intangible, or interests herein, on such terms and conditions as my agent will deem proper." It also allowed Huether to manage real property in Stoebner's name and benefit upon such terms Huether deemed proper. Stoebner and Huether signed the document on August 6, 2012. [¶4.] According to Huether, in 2016 he began having Stoebner's mail sent to him instead of the nursing home, and he took on full responsibility for paying Stoebner's bills. Huether would ask Stoebner to review a bill only if he had a question about it. At the time, Huether paid Stoebner's bills from Stoebner's checking account and replenished the account by cashing Stoebner's certificates of deposit (CDs).

         [¶5.] As Stoebner's assets depleted, Huether contends that he discussed with Stoebner how to obtain funds to continue paying his bills by using Stoebner's farmland. He states that he suggested two options to Stoebner: (1) auction his farmland or (2) allow the nursing home to obtain a lien on his property. Huether claims that Stoebner declined these options and instead wanted Huether to purchase the land in exchange for the help he had given him.

          [¶6.] Huether visited Haar in February 2017 to discuss how to arrange the sale of Stoebner's farmland. Haar refused to get involved, advising Huether that he should not purchase the land and instead should mortgage the property. Haar also stated that while the transaction was not necessarily illegal, there was a strong possibility that Huether would be sued by other family members. Huether then asked another attorney, Keith Goehring, if he would assist with the sale of the land. Goehring also declined because he considered Haar a friend. Huether then went to attorney Tamara Lee, who agreed to prepare the purchase agreement and warranty deed. Lee had never performed legal work for Stoebner before.

         [¶7.] In June 2017, Huether had the land appraised. A certified appraiser estimated the value of the land to be $720, 000. Based on this appraisal, along with a real estate assessment that the Hutchinson County Department of Equalization issued assessing the value of the property at $374, 397, and the advice of an accountant, Huether claims he and Stoebner agreed on a purchase price of $350, 000. However, Huether's payment for the land would be in the form of payment of Stoebner's expenses up to the purchase price. The purchase agreement provided:

Consideration and Payments. In consideration of Seller's transfer of the above-described real property to Purchaser, in addition to continuing to provide companionship and to assist Seller with Seller's daily business needs, Purchaser agrees to pay medical expenses, costs of care, and costs of living expenses on behalf of Seller, up to a cumulative total that does not exceed Three Hundred and Fifty Thousand Dollars ($350, 000).

         The agreement also provided that Huether's responsibility to pay for the land would extinguish upon Stoebner's death, ...

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