935 N.W.2d 262
S.D.2019Background
- Kenneth Stoebner executed a durable power of attorney (POA) in 2012 naming his cousin Curtis Huether as attorney-in-fact; the POA authorized Huether to buy, sell, and manage real property but did not explicitly authorize self-dealing.
- Huether managed Stoebner’s financial affairs while Stoebner was in a nursing home, leased and farmed Stoebner’s land, and paid bills from Stoebner’s accounts beginning in 2016.
- In June 2017 Huether arranged a sale of Stoebner’s farmland to himself: purchase price agreed at $350,000 to be paid by Huether’s payment of Stoebner’s medical and living expenses up to that amount; obligations terminated at Stoebner’s death.
- Huether signed the purchase agreement for himself and signed "Kenneth Stoebner by Curtis Huether POA" on June 26, 2017; Stoebner died four days later; Huether paid about $20,000 under the agreement.
- Stoebner’s Estate sued for breach of fiduciary duty (self-dealing) and sought to void the sale; the circuit court granted summary judgment for the Estate, voided the sale, and revested title in the Estate; Huether appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a fiduciary relationship existed at the time of the sale | Stoebner had placed trust in Huether via the POA and reliance on him to manage affairs, creating a fiduciary duty | Huether disputed that Stoebner was dependent or unable to protect his interests at signing | POA existed and Huether acted under it, so fiduciary relationship existed as a matter of law |
| Whether the POA authorized self-dealing (sale to agent) | POA lacked "clear and unmistakable" language authorizing self-dealing; therefore sale was impermissible | Language allowing purchase/sale of property and broad authority implied ability to buy from principal | Self-dealing requires explicit authorization; POA did not clearly permit self-dealing, so sale breached fiduciary duty |
| Whether Huether’s affidavits and claimed oral approvals create a genuine factual dispute | Estate: affidavits and corrected testimony contradict deposition and cannot create admissible written authority to self-deal | Huether: affidavits show Stoebner approved terms and that Huether acted to benefit Stoebner | Affidavits cannot supply the required written authorization; oral/extrinsic evidence barred to imply self-dealing authorization; no genuine issue of material fact |
| Whether the amanuensis doctrine applies (agent merely signed as Stoebner’s instrument) | Estate: circumstances show Huether signed as attorney-in-fact, not mere amanuensis | Huether: contends he acted as amanuensis and Stoebner reviewed/approved agreement | Amanuensis doctrine inapplicable because Huether signed as POA and Stoebner was not present; agent acted as attorney-in-fact |
Key Cases Cited
- Hein v. Zoss, 887 N.W.2d 62 (S.D. 2016) (POA creates fiduciary relationship as a matter of law)
- Bienash v. Moller, 721 N.W.2d 431 (S.D. 2006) (POAs must be strictly construed; clear language required to permit self-dealing)
- Wyman v. Bruckner, 908 N.W.2d 170 (S.D. 2018) (self-dealing precluded unless power of attorney explicitly authorizes it)
- Estate of Bronson, 892 N.W.2d 604 (S.D. 2017) (amanuensis doctrine applies when agent acts merely as instrument and principal independently makes decisions)
- Studt v. Black Hills Fed. Credit Union, 864 N.W.2d 513 (S.D. 2015) (affidavits are insufficient to create written authorization for self-dealing)
- In re Guardianship of Blare, 589 N.W.2d 211 (S.D. 1999) (powers of attorney are to be strictly pursued)
- Johnson v. Matthew J. Batchelder Co., Inc., 779 N.W.2d 690 (S.D. 2010) (affidavits contradicting deposition testimony are inadmissible absent explanation)