812 N.W.2d 485
S.D.2012Background
- Bernadine Moncur created the Trust on December 20, 2002, with five daughters as beneficiaries.
- Bernadine’s will (Jan 14, 2003) devised the estate to the Trust; Miki and Dianne named as co-personal representatives.
- Bernadine died December 25, 2007; Miki and Dianne became co-trustees and co-personal representatives.
- Trust assets included real property in Butte County; Miki and Dianne delayed sale until after creditor notice period.
- Butte County property was sold at auction on November 13, 2008 using a surrogate bidder; Shirley and Janet’s attorney received the bidding contract.
- Shirley and Janet petitioned to remove the co-trustees in June 2009; trial occurred Feb–Apr 2010; trial court denied the petition; appellate review followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the surrogate bid violate the duty of loyalty? | Shirley/Janet contend loyalty was breached by self-dealing via surrogate bid. | Miki/Dianne argue SDCL 55-2-3(1) or (4) apply or presumption overcome. | No reversible error; duty not violated. |
| Were remaining fiduciary duty allegations meritless? | Shirley/Janet allege various breaches of the Trust terms. | Miki/Dianne deny the additional allegations; evidence insufficient. | Trial court proper to deem allegations unsubstantiated. |
Key Cases Cited
- Willers v. Wettestad, 510 N.W.2d 676 (S.D. 1994) (trustee loyalty duty; utmost good faith)
- In re Estate of Stevenson, 605 N.W.2d 818 (S.D. 2000) (fiduciary duties; self-dealing; exceptions to loyalty)
- American State Bank v. Adkins, 458 N.W.2d 807 (S.D. 1990) (utmost good faith; fiduciary duties)
- Ward v. Lange, 553 N.W.2d 246 (S.D. 1996) (trustee actions; factual review standard)
- Lustig v. Lustig, 560 N.W.2d 239 (S.D. 1997) (fiduciary duties; factual vs. legal questions)