IN THE MATTER OF THE SHIRLEY A. HICKEY LIVING TRUST.
#29677-r-SRJ
IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA
2022 S.D. 53, OPINION FILED 08/24/22
APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA. THE HONORABLE JON SOGN Judgе. CONSIDERED ON BRIEFS MARCH 21, 2022
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JOHN K. NOONEY
ROBERT J. GALBRAITH
JARED D. NOONEY of
Nooney & Solay LLP
Rapid City, South Dakota
Attorneys for appellants Kristina Lippert and Darren Hickey.
JACK H. HIEB of
Richardson, Wyly, Wise Sauck & Hieb, LLP
Aberdeen, South Dakota
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Attorneys for appellees Warren Hickey, Jeannine Hickey-Reuer, and Annette Jarrell.
LEE SCHOENBECK of
Schoenbeck & Erickson, P.C.
Watertown, South Dakota
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Attorneys for appellees Warren Hickey and Jeannine Hickey-Reuer.
[¶1.] Bradley Hickey filed a petition challenging the validity of an amendment to the Shirley A. Hickey Trust (Trust). Nearly a year later, Kristina Lippert and Darren Hickey filed a motion to intervene in the petition. The circuit court denied the motion to intervene, finding that the motion was untimely under
Facts and Procedural History
[¶2.] Shirley and Clifford Hickey were married in 1956. They had eight сhildren: Jeannine Hickey-Reuer, Vance Hickey, Bradley, Michelle Hoesing, Terence Hickey, Warren Hickey, Darren, and Kristina. Shirley and Clifford owned and operated several successful businesses and accumulated significant assets during their lifetimes. Clifford died in 2007. Shirley established the Trust on March 22, 2010, and transferred substantially all of her assets into the Trust. The Trust provided that upon Shirley‘s death, each of her eight children would receive an equal share in the Trust. Shirley amended the Trust sevеral times before her death.
[¶3.] Shirley initially amended and restated the Trust (First Amended Trust) in September 2016. The First Amended Trust distributed some real property to a separate trust and provided that upon Shirley‘s death, the Trust corpus would be divided equally among her eight children. The First Amended Trust named Shirley and Kristina as co-trustees. In 2017, Kristina petitioned to place Shirley under a guardianship and conservatorship and requested to be appointed as Shirley‘s guardian and conservator.1 Bradley, Vance, Michelle, Terence, and Darren also supported the petition. A circuit court judge ultimately denied Kristina‘s petition.
[¶4.] Shirley‘s relationship with the children who had supported the guardianship became strained. In January 2018, Shirley removed Kristina as a co-trustee of the Trust. Shirley amended and restated the First Amended Trust, creating the Second Amended Trust in February 2018. Shirley named herself and First National Bank as the co-trustees of the Second Amended Trust. The Seсond Amended Trust directed the trustee, upon Shirley‘s death, to distribute $1,000 each to Bradley, Vance, Michelle, Terence, Darren, and Kristina, and to distribute certain real property to a separate trust. The remainder of the trust corpus was to be divided equally into one-third shares and distributed to Warren and his wife Deb Crawford, Jeannine, and Shirley‘s sister, Annette Jarrell.
[¶5.] Shirley died on September 12, 2019. Per the terms of the Second Amended Trust, the Trust became irrevocable and First Natiоnal Bank became the sole trustee. On September 25, 2019, First National Bank sent letters to the beneficiaries of the Second Amended Trust, including Kristina and Darren, providing notice of the 60-day limitation period to challenge the validity of the Second Amended Trust under
[¶6.] On November 22, 2019, Bradley filed a petition for court supervision of the Trust, an accounting, protection of privacy, and a declaration of invalidity, reformation and modification of the Trust (Petition). The Pеtition requested the court to invalidate the Second Amended Trust, alleging undue influence by Warren. Alternatively, the Petition alleged claims of mistake of fact and undue influence and requested the court to reform or modify the Second Amended Trust to distribute the Trust pursuant to the First Amended Trust to properly reflect Shirley‘s lifelong intent to equally divide her estate between all eight children. None of the other siblings filed a petition challenging the validity of the Second Amended Trust.
[¶8.] Warren, Jeannine, and Annette opposed the Motion, arguing that it was untimely under
[¶9.] Kristina and Darren served discovery requests on Warren on November 13, 2020. The discovery requests sought financial and tax information from Warren from 1988 to 2010. Warren filed a motion for a protective order to prohibit the discovery requests. Kristina and Darren also filed a motion to amend the scheduling order seeking to extend the discovery deadline, which Warren, Jeannine, and Annette opposed.
[¶10.] On April 15, 2021, the court denied the Motion. The court concluded that Kristina and Darren satisfied the tripartite test from Berbos v. Berbos, 2018 S.D. 82, ¶ 7, 921 N.W.2d 475, 477, but determined the Motion was untimely under
[¶11.] On April 27, 2021, Kristina and Darren filed a motion for clarification and reconsideration of the circuit court‘s orders denying the Motion, granting the protective order, and denying the motion to amend the scheduling order. Kristina and Darren also sought clarification as to whether they would be allowed to present evidence or examine witnesses at the trial.
[¶13.] Kristina and Darren appeal, arguing that the circuit court erred in denying the Motion as untimely and in denying their motion for clarification and reconsideration.
Analysis
[¶14.] “We review a circuit court‘s denial of a motion to intervene for an abuse of discretion.” Berbos, 2018 S.D. 82, ¶ 5, 921 N.W.2d at 477. “An abuse of discretion refers to a discretion exercised to an end or purpose not justified by, and clearly against reason and evidence.” Id. (quoting O‘Day v. Nanton, 2017 S.D. 90, ¶ 17, 905 N.W.2d 568, 572). “[S]tatutory interpretation and application are questions of law, and are reviewed by this Court under the de novo standard of review.” In re Est. of Flaws, 2016 S.D. 61, ¶ 12, 885 N.W.2d 580, 583 (citation omitted).
I. Appellate Jurisdiction
[¶15.] Warren, Jeannine, and Annette acknowledge that this Court has jurisdiction under
[¶16.] In S.M.D.N., we determined this Court lacked jurisdiction to consider an appeal of an order denying a motion to reconsider because the underlying order being challenged had previously been summarily affirmed by this Court and the statutory right to appeal the order had long since passed. 2004 S.D. 5, ¶ 7, 674 N.W.2d at 517. S.M.D.N. properly recognized that a motion to reconsider could not revive the appeal periоd for the underlying order. Here, however, the notice of entry of the circuit court‘s order denying the Motion was not served on Kristina and Darren until May 12, 2021. Kristina and Darren timely appealed this order by filing their notice of appeal on June 8, 2021, less than 30 days after the written notice of entry of the order. See
[¶17.] Because the appeal of the order denying the Motion is timely, this Court also has appellate jurisdiction to consider any error in the order denying the motion for clarification and reconsideration to the extent it implicates our appellate jurisdiction under
II. Whether the circuit court abused its discretion in denying Kristina and Darren‘s Motion as untimely.
[¶18.] “South Dakota‘s court rule
Upon timely application anyone shall be permitted to intervene in an action:
. . .
(2) When the applicant claims an interest relating to the property or transaction which is the subject of the actiоn and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant‘s interest is adequately represented by existing parties.
(Emphasis added.) This Court construes
[¶19.] When applying intervention as a matter of right under
1) the party must have a recognized interest in the subject matter of the litigation; 2) that interest must be one that might be imрaired by the disposition of the litigation; and 3) the interest must not be adequately protected by the existing parties.
Id. (citation omitted). Additionally, the language of the rule requires that “[a]n application to intervene must be timely made. Whether such requirement is satisfied is committed to the sound discretion of the trial court.” Weimer v. Ypparila, 504 N.W.2d 333, 334 (S.D. 1993) (citation omitted).
[¶20.] The circuit court found that Kristina and Darren met the tripartite test applied to
[¶21.] Kristina and Darren argue that the circuit court erred in denying their Motion as untimely under
[¶22.]
A judicial proceeding to contest whether a rеvocable trust or any amendment thereto, or an irrevocable trust was validly created may not be commenced later than the first to occur of:
(1) One year after the settlor‘s death; [or]
(2) Sixty days after the trustee . . . sent the person who is contesting the trust a copy of the trust instrument and a notice informing the person of the trust‘s existence, of the trustee‘s name and address, and of the time allowed for commencing a proceeding[.]
[¶23.] To the extent that Kristina and Darren sought to intervene to assert an independent claim challenging the validity of the Second Amended Trust, that effort was untimely and barred by
[¶24.] However, the circuit court did not consider whether, under the timeliness standards applicable to requests under
[¶25.] In denying the Motion as untimely, the circuit court relied on Wintersteen, but Wintersteen did not address the question of whether a beneficiary with a recognized interest in a properly filed challenge to a trust may intervene in the proceeding after the repose period has run. Rather, in Wintersteen, this Court concluded that a widow could not amend her original petition for court supervision of her deceased husband‘s trust to include a belated challenge to the validity of the trust that was otherwise barred by
[¶26.] Unlike Wintersteen, Bradley‘s Petition challenging the validity of the Second Amended Trust was сommenced before the statute of repose in
[¶27.] The circuit court also erred in denying the portion of Kristina and Darren‘s motion for clarification and reconsideration seeking to participate in the trial. The court had already еntered an order for court supervision of the Trust. See
[¶29.] There is no dispute that Kristina and Darren have a recognized interest in Bradley‘s Petition and have satisfied the tripartite test for mandatory intervention applicable to requests under
[¶30.] Warren, Jeannine, and Annette argue that allowing Kristina and Darren to intervene in the Petition would be prejudicial and cause undue delay, where there had already been months of time-consuming and expensive discovery. The circuit court seems to have alleviated some of thesе concerns by entering a protective order and denying the request to modify the scheduling order. However, it is not apparent from the record that the circuit court considered whether the other beneficiaries would be prejudiced if Kristina and Darren intervened. While the court has discretion to determine timeliness of an application for intervention, “[t]he most important factor” for the court to consider in making this determination “is whether the delay in moving for intervention will unduly delay or prejudice the adjudication of the rights of the original parties.” Larson, 164 N.W.2d at 606; see Weimer, 504 N.W.2d at 336 (granting intervention because a party would not have suffered any prejudice from allowing a party to intervene). On remand, the court may consider any further prejudice concerns, and if the court grants intervention, it may appropriately “tailor” the intervention order to facilitate the expeditious administration of the Trust and address any alleged prejudice. See In re Adoption of D.M., 2006 S.D. 15, ¶ 4, 710 N.W.2d 441, 443 (“We have emphasized . . . ‘that intervention standards are flexible, allowing for some tailoring of decisions to the facts of each case.‘” (citation omitted)).
Conclusion
[¶31.] We reverse the order denying intervention and remand for the circuit court
[¶32.] KERN, SALTER, DEVANEY, and MYREN, Justices, concur.
