VIVA CAPITAL TRUST v. GARRETT, 2026 S.D. 42

Viva sought a declaration that it owned a $10 million life insurance policy on Frank Garrett, Jr.’s life, while the Estate counterclaimed to recover the death benefit under South Dakota’s insurable-interest statutes. 1
Frank created an irrevocable trust naming his wife Jean as beneficiary, and the trust applied for and received the policy using premium financing from United. 2
The policy application stated the proceeds were for “Income for Dependents” and “Estate Taxes,” and no planned sale was disclosed to the insurer. 3
After the initial financing period, the policy was assigned to New Stream, premium payments continued, and Frank later surrendered the policy rather than immediately selling it. 4
Viva ultimately purchased the policy in 2014, paid additional premiums, and received the $10 million death benefit after Frank died in 2019. 5
The circuit court granted summary judgment to Viva, held the Estate’s trust-based counterclaims were time-barred, upheld the policy under the insurable-interest statutes, and awarded Viva taxable costs. 6

Issue	Plaintiff's Argument	Defendant's Argument	Held
Were the Estate’s trust-validity counterclaims time-barred? 7	Viva said challenges to the trust were barred one year after Frank’s death.	The Estate said the repose statute did not cover its insurance-proceeds claims.	Yes; the trust-validity counterclaims were barred by SDCL 55-4-57(a)(1). 8
Did the policy satisfy South Dakota’s insurable-interest statute? 9	Viva argued Frank procured the policy for a trust and beneficiary with insurable interests.	The Estate argued United procured the policy through a STOLI wager scheme.	Yes; the policy complied because benefits were payable to insured parties with insurable interests when issued. 10
Was the policy void as an unlawful STOLI arrangement despite facial compliance? 11	Viva argued the statutes permit later transfer and the facts showed no initial transfer scheme.	The Estate argued substance controls and the transaction was an illegal STOLI wager.	No; the record did not justify invalidating the policy as STOLI. 12
Did the circuit court properly award taxable costs? 13	Viva argued its cost request and declarations supported the award.	The Estate challenged unauthorized deposition-related expenses.	Affirmed in part, but some video/deposition fees were reversed and remanded. 14

Warnock v. Davis, 104 U.S. 775 (U.S. 1881) (life insurance payable to one without a genuine interest is a wagering contract 15)
Grigsby v. Russell, 222 U.S. 149 (U.S. 1911) (a valid life policy is property that may be assigned 16)
Murray v. Mansheim, 779 N.W.2d 379 (S.D. 2010) (counterclaims seeking affirmative relief are actions subject to time limits 17)
In re Wintersteen Rev. Tr. Agreement, 907 N.W.2d 785 (S.D. 2018) (SDCL 55-4-57(a)(1) operates as a statute of repose 18)
In re Elizabeth A. Briggs Rev. Living Tr., 898 N.W.2d 465 (S.D. 2017) (the repose statute bars claims negating valid trust creation, including lack of capacity and undue influence 19)
Sun Life Assurance Co. of Canada v. Wells Fargo Bank, N.A., 44 F.4th 1024 (7th Cir. 2022) (courts may invalidate some policies as unlawful STOLI schemes based on substance over form 20)
Sun Life Assurance Co. of Canada v. Wells Fargo Bank, N.A., 208 A.3d 839 (N.J. 2019) (STOLI analysis turns on inception intent and surrounding facts 21)
PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Tr., 28 A.3d 1059 (Del. 2011) (a policy lacks insurable interest where a third party funds premiums under a prenegotiated transfer arrangement 22)
PHL Variable Ins. Co. v. Bank of Utah, 780 F.3d 863 (8th Cir. 2015) (facial compliance can suffice when the insured procures the policy and later assigns it 23)