In the Matter of the ESTATE of SEDLACEK, Appellant v. MOUNT MARTY HOSPITAL ASSOCIATION, et al., Respondents
File No. 11089
Supreme Court of South Dakota
Opinion filed May 28, 1974
Order for rehearing denied July 2, 1974.
218 N.W.2d 875 | 88 S.D. 333
EVANS, Circuit Judge.
May, Johnson & Burke, Harold C. Doyle, Sioux Falls, for respondents.
EVANS, Circuit Judge.
This is an appeal from a judgment of the circuit court affirming an order of the district county court which denied a
Appellant‘s first contention is that there was fraud, deceit and misrepresentations used or perpetrated by Don Bierle, the attorney for respondents, in negotiating a compromise settlement with Stanley Sedlacek and upon the court of Yankton County in connection with such special administration proceedings.
On April 8, 1968, Patricia B. Sedlacek died at Sacred Heart Hospital in Yankton, South Dakota after she had been administered an overdose of sodium chloride solution by a nurse in excess of doctor‘s orders. She was 37 years of age and was survived by her husband, Stanley, and five minor children. Sacred Heart Hospital had liability insurance coverage with Agricultural Insurance Company. About two weeks after decedent‘s death respondent‘s attorney called Stanley Sedlacek and asked him to stop at his office to discuss the matter with him. Stanley Sedlacek was a carpenter and lacked six hours of having a degree in business administration. Mr. Sedlacek testified he had known Mr. Bierle well approximately 25 years and they were on a first-name basis, that they discussed the hospitalization of his wife and that the hospital wanted to help me out and all this to pay my bills and so forth; that he told Mr. Bierle he had quite a few bills and Mr. Bierle asked him to get them together and find out how much he owed; that Mr. Bierle did not tell him who he represented but he assumed he was the attorney for the hospital; that he saw Mr. Bierle the following Saturday with his compiled bills; that he asked Mr. Bierle about a $1,000 life insurance policy that he had for his wife and Mr. Bierle offered to and did write a letter to the insurance company to collect it; that Sedlacek signed it and the secretary mailed it. Mr. Sedlacek further testified that at the last meeting Mr. Bierle offered to assist him in making a new will without any request on his part, however he did not have it done.
The record further shows that on Saturday, May 11, 1968, after discussion and negotiations on five previous occasions all at Bierle‘s office, Mr. Sedlacek signed a petition for letters of administration, a petition asking authorization to compromise for $15,000 all claims for wrongful death and any possible survival action, a bond and oath. An order with letters of special administration appointing Mr. Sedlacek special administrator and an order authorizing compromise as prayed for in the petition were signed by the county judge on May 11, 1968 and filed and attested by the clerk on May 13, 1968. Mr. Sedlacek on May 11, 1968, after the county judge signed the order authorizing compromise, signed two releases, one as special administrator and one in his individual capacity. A Decree of Distribution was signed and filed May 13, 1968 distributing $10,000 to Mr. Sedlacek and $1,000 to each of his five children. All the petitions and other papers were prepared by Mr. Bierle and Mr. Sedlacek did not have other counsel to represent him.
On May 21, 1968 Mr. Bierle completed and filed the guardianship petition, order and bond and had checks made out to distribute the funds as provided by the decree.
On March 2, 1970 a surviving brother of the decedent was appointed as general administrator of the estate of Patricia B. Sedlacek,2 and that same day he filed a petition in District
A hearing was held in District County Court in March 1970 and the court entered an order denying the petition to vacate and set aside. Petitioner, appellant herein, appealed to the Circuit Court which entered judgment affirming the District County Court order denying the petition to vacate and set aside.
The Circuit Court appeal was by stipulation heard de novo and solely on the record of the evidence and testimony submitted to the District County Court. No witnesses appeared before the Circuit Court. In view of this our review of the evidence is unhampered by the rule that a trial judge who has observed the demeanor of the witnesses is in a better position to intelligently weigh the evidence than are we and we determine the facts on the written evidence in the record as though it were presented here in the first instance. National Surety Corporation v. Shoemaker, 86 S.D. 302, 195 N.W.2d 134; State Automobile Casualty Underwriters v. Ruotsalainen, 81 S.D. 472, 136 N.W.2d 884; Davis v. Interstate Motor Carriers Agency, 85 S.D. 101, 178 N.W.2d 204. Consequently, complaints as to findings made or refused lose their traditional significance. Our only inquiry is whether the Court erred in denying the petition to vacate and set aside.
The petition to vacate and set aside the proceedings of the County Court must be decided pursuant to the provisions of
“On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:
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(3) Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) The judgment is void;
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(6) Any other reason justifying relief from the operation of the judgment.
The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order or proceeding was entered or taken.
* * * Section 15-6-60 does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as provided by statute or to set aside a judgment for fraud upon the court.”
Prior to the adoption of this rule in 1966 this Court had previously held that fraud as a ground for vacating a judgment must be what is known as extrinsic fraud. Alberts v. Brubaker, 72 S.D. 220, 31 N.W.2d 769.
The burden of proving such fraud, deceit and misrepresentation is, of course, upon the appellant and fraud and deceit is not to be presumed but must ordinarily be proved by clear and convincing evidence. M. E. Smith and Company v. Kimble, 38 S.D. 511, 162 N.W. 162; Erck v. Bachand, 69 S.D. 330, 10 N.W.2d 518. The measure of proof required by this designation falls somewhere between the rule in ordinary civil cases and the requirement of our criminal procedure, that is, it must be more than a mere preponderance but not beyond a reasonable doubt. Davis v. Kressly, 78 S.D. 637, 107 N.W.2d 5. The appellant herein has not met such burden of proof. Although
Appellant claims that Stanley Sedlacek was not informed by Mr. Bierle and that he did not know that his wife died as a result of negligence of Sacred Heart Hospital until he had signed all the legal papers and was never advised that he had a claim against Sacred Heart Hospital. This allegation of fraud is even contrary to Mr. Sedlacek‘s testimony. The record shows the following questions and answers on cross-examination:
“Q And didn‘t he also tell you that the hospital felt some responsibility in your wife‘s death?
A I don‘t know exactly how he said that, but I mean he related something like that, yes.
Q Anyway, you got the idea that there was some—
A He wanted to assist me in any way they could.
Q But at that time he let you know, didn‘t he, that the hospital felt somewhat responsible in her death?
A Yes, I guess you could say that, yes.
Q Yes. And this was the reason why the hospital was interested in making some sort of adjustment with you, isn‘t that correct?
A That‘s what he said, yes.”
Sedlacek testified he never asked Mr. Bierle why or how his wife died. Sedlacek further testified that he had a conversation with his wife‘s doctor on May 11, 1968, prior to his conference with Mr. Bierle at which the papers were signed, in which conversation with the doctor he was informed that there was an error in the transcription of the doctor‘s orders and that was the cause of his wife‘s death and that there was fault insofar as the hospital was concerned. It clearly appears that Mr. Sedlacek knew of the hospital‘s negligence even if Mr. Bierle did not tell him and there could be no prejudice to Sedlacek. In addition Mr.
Appellant further claims fraud in that Mr. Sedlacek was not advised that Mr. Bierle represented the Sacred Heart Hospital. Again Sedlacek‘s own admission said he knew from general knowledge that Mr. Bierle represented the Sacred Heart Hospital. The transcript of cross-examination of Sedlacek shows the following:
“Q You were aware of the fact that he was representing Sacred Heart Hospital?
A He was the attorney for them, yes, I knew that.
Q You knew that?
A Yes, I did.”
The transcript further shows:
“Q You again knew that Mr. Bierle was representing Sacred Heart Hospital didn‘t you?
A Yes.”
Further, Mr. Bierle testified that he advised Mr. Sedlacek that he represented Sacred Heart Hospital.
Appellant further claims fraud in that Mr. Sedlacek was not advised by Mr. Bierle that he represented the Agricultural Insurance Company. There is nothing in the record that would indicate that Mr. Bierle advised Mr. Sedlacek that he represented the Agricultural Insurance Company. However, the $15,000 check signed by Mr. Sedlacek clearly indicates that the payor was the Agricultural Insurance Company. In any event there is no
The appellant further claims fraud in that Mr. Sedlacek was never advised by Mr. Bierle that he should be represented by other independent counsel. It should first be pointed out that there is no evidence whatsoever that Mr. Bierle induced Mr. Sedlacek not to obtain other counsel. In view of the six different discussions and negotiations at Bierle‘s office and some phone calls between Bierle and Sedlacek it would appear that it was Mr. Sedlacek‘s own choice that he did not want other counsel to represent him. In addition Mr. Bierle testified that Mr. Sedlacek stated he did not feel he should have to pay for the drawing of the necessary legal papers or the bond premium and that he advised Sedlacek that if he wanted his own personal attorney that was his own personal decision for him to make. As far as any expenses in preparation of the papers, the hospital would pay Mr. Bierle and there would be no expense to Sedlacek.
The appellant further claims that fraud was practiced upon Mr. Sedlacek because Mr. Bierle attempted to represent both his clients and Mr. Sedlacek at the same time. Sedlacek‘s testimony was that he asked Mr. Bierle about a $1,000 life insurance policy that he had for his wife, and Mr. Bierle offered to write a letter to the company to collect it and the letter was typed by Mr. Bierle and signed by Mr. Sedlacek and mailed by Mr. Bierle‘s secretary. While we do not sanction the attorney‘s conduct in writing the letter in this situation, we do decide that such infraction in comparison to the whole transaction did not amount to fraud, deceit or misrepresentation. This letter was not written on the attorney‘s letterhead stationery and the letter merely recited that certain things were enclosed and asked that payment be made. Sedlacek further claimed that Mr. Bierle offered to draft a will for him but such was not done. Mr. Bierle denied having made such offer. It is therefore unnecessary to decide whether or not an offer was made since no will was drafted and appellant has not shown in what way Sedlacek was prejudiced or induced to surrender legal rights and we are unable to see how any fraud resulted.
We need not rest our decision solely upon the ground that there was no fraud. The petition to vacate and set aside was not made until approximately 21 1/2 months after the order authorizing compromise and decree of distribution were made and filed.
Appellant next claims there was fraud practiced upon the Court by Mr. Bierle. Gifford v. Bowling, supra, sets forth what is necessary to constitute fraud on the Court. The record in the present case shows that Mr. Bierle presented Judge Welter with his entire file and the facts were discussed in detail for approximately an hour or an hour and a half. The medical records and autopsy report were given to the judge to read. It is clear that this was not just a paper signing transaction. Although Mr. Sedlacek did not appear before the County Judge and Mr.
Petitioner next contends that the five minor children were entitled to be represented by legal guardian to protect their rights and that the Court did not appoint a guardian until the probate was terminated and that would render any acts null and void as to such minor children. A further review of the facts is necessary. When the proposed settlement was discussed with the County Judge by Mr. Bierle the County Judge indicated that it would be necessary to have a general guardian appointed for the children prior to distribution to the children being made and Mr. Bierle agreed and said that he would prepare the necessary guardianship papers and have Stanley Sedlacek appointed guardian. Stanley Sedlacek, as special administrator, was required to represent all persons interested in the estate which includes the minor children. Appellant cites no cases where failure to appoint a guardian in this situation would make the County Court‘s acts null and void. There was no conflict of interest between Mr. Sedlacek and his minor children as to what the amount of the settlement should be as both were interested in obtaining the largest settlement possible.
Appellant claims that the five minor children were entitled to be represented by an attorney at law to protect their rights and the Court should have appointed an attorney under
Appellant claims that the proceedings of the County Court were null and void because there are no sufficient statutory grounds existing for the appointment of special administrator in this case, and that a special administrator‘s sole and exclusive power in this state is the preservation of assets and he has no power or authority to distribute the assets of the estate ex parte. Neither the record of the proceedings nor appellant‘s briefs point out in what particulars the statutes of the State of South Dakota were not complied with.
WINANS, J., concurs.
WOLLMAN, J., and HANSON, Ret., J., concur specially with opinion.
HERSRUD, Cir. J., dissents.
EVANS, Cir. J., sitting for BIEGELMEIER, Chief Justice, disq.
HERSRUD, Cir. J., sitting for DOYLE, J., disq.
HANSON, Ret. J., sitting for DUNN, J., disq.
WOLLMAN, Justice (concurring specially).
I agree that the petition to vacate and set aside the judgment under the provisions of
My concurrence should not in any way be construed as an approval of the manner in which the wrongful death claim was settled by counsel for the hospital with unrepresented claimants, including minor children. At the very least, the claimants should have been required to appear at the time the petition to make a compromise settlement was considered by the court so that the court could have questioned them personally on all aspects of the proposed settlement, including the question of possible representation by counsel. I find counsel‘s failure to have claimants present
I am authorized to state that Justice HANSON joins in this special concurrence.
HERSRUD, Circuit Judge (dissenting).
I agree with the special concurrence with reference to the one-year statute of limitations as to
This wrongful death claim was settled by hospital counsel appearing before the court alone. The minors were not represented in any manner. They had a real interest, having lost their mother as a result of a lethal overdose of medication. The hospital counsel settled the case with the husband, who was without counsel and who was under the pressure of hospital bills and doctor bills of considerable amounts. The settlement would make it possible for him to settle these debts. As a result the settlement was designed to give each child $1,000 and the husband $10,000. One of the children was afflicted with cerebral palsy and mental retardation. To leave minors at the mercy of a debt-ridden parent before whom a debt-satisfying award is dangled is not realistic.
I believe it to be within the power and spirit of
I respectfully dissent.