In Re the Estate of Finch
2017 S.D. 15
| S.D. | 2017Background
- Fred W. Finch died in 2012; Coral Headrick, his longtime attorney-in-fact and nominated personal representative, was appointed and filed inventories showing a sizable estate.
- Finch’s nephews and niece (Dean, Dale Anderson, and Sharlene Swier) alleged Headrick engaged in unauthorized self-dealing while acting under a power of attorney (gifts, purchases, joint accounts).
- Headrick repaid about $56,154.84 in two reimbursements after counsel reviewed accounts and cited Bienash v. Moeller.
- A special administrator was appointed to investigate self-dealing, PR and attorney fees, undue influence, and other claims; the report found self-dealing occurred but generally with Finch’s knowledge and without evidence of undue influence.
- Parties mediated; most beneficiaries (except Dale) agreed Headrick would repay an additional $110,000; the special administrator recommended reductions and an hourly fee for estate counsel.
- The circuit court adopted the special administrator’s report, awarded Headrick $13,355.42 in personal representative fees, allowed part of attorney Shaeffer’s fees at $300/hour (with a small deduction), and denied beneficiaries’ objections. Dean appealed.
Issues
| Issue | Plaintiff's Argument (Dean) | Defendant's Argument (Headrick) | Held |
|---|---|---|---|
| Whether PR (Headrick) may recover PR fees under SDCL 29A-3-720 despite self-dealing | Self-dealing precludes good-faith defense; she should not receive PR fees and prolonged/obstructive conduct harmed estate | Many PR acts unrelated to self-dealing were in good faith and benefitted the estate; special administrator supported compensation for non-self-dealing work | Affirmed: court found PR acts (excluding self-dealing) were in good faith and awarded reasonable PR fees |
| Whether estate must pay estate attorney Shaeffer’s fees for work that may have defended Headrick’s self-dealing | Fees largely relate to defending improper self-dealing and should be disallowed or substantially reduced | Hours and rate are reasonable; special administrator recommended limited deduction for self-dealing-related work and set $300/hr as appropriate | Affirmed: court adopted special administrator’s recommendation, found fees reasonable, deducted limited hours for self-dealing defense |
Key Cases Cited
- Bienash v. Moeller, 721 N.W.2d 431 (S.D. 2006) (power-of-attorney self-dealing: oral extrinsic evidence cannot establish authority to self-deal absent written grant)
- In re Estate of Klauzer, 604 N.W.2d 474 (S.D. 2000) (discussing definition of good faith for personal representative actions)
- In re Bickel, 879 N.W.2d 741 (S.D. 2016) (standard of review for fee awards; abuse of discretion)
- In re Estate of Mathison, 468 N.W.2d 400 (S.D. 1991) (factors for evaluating reasonableness of attorney fees)