Estate of Bronson , 2017 S.D. LEXIS 30 ( 2017 )

#27919-a-SLZ
2017 S.D. 9
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
ESTATE OF LESTER BRONSON, Deceased.
****
APPEAL FROM THE CIRCUIT COURT OF
THE THIRD JUDICIAL CIRCUIT
CODINGTON COUNTY, SOUTH DAKOTA
****
THE HONORABLE CARMEN MEANS
Judge
****
LEE SCHOENBECK
JOSHUA G. WURGLER of
Schoenbeck Law, PC
Watertown, South Dakota Attorneys for appellants
Debra Mills and Gloria
Sichmeller.
THOMAS F. BURNS
Watertown, South Dakota Attorney for appellee
Leslie Bronson, Personally and
as Personal Representative of
the Estate.
****
CONSIDERED ON BRIEFS
ON JANUARY 9, 2017
OPINION FILED 03/22/17
#27919
ZINTER, Justice
[¶1.] Lester Bronson executed a power of attorney appointing his son, Leslie
“Butch” Bronson, as his attorney-in-fact. Several years later, at Lester’s request,
the bank added Butch as a joint owner on one of Lester’s bank accounts. On the day
of the transaction, Lester was allegedly physically unable to sign his name to the
required bank form, so Butch signed Lester’s name while they were together in the
bank employee’s office. After Lester died, his daughters brought claims on behalf of
his estate against Butch to recover the account balance together with exemplary
damages. The daughters contended that in signing Lester’s name, Butch was
exercising his power of attorney and had engaged in impermissible self-dealing.
After a court trial, the circuit court dismissed the daughters’ claims. The court
found that Butch signed Lester’s name as an amanuensis rather than exercising the
power of attorney. The daughters appeal. We affirm.
Facts and Procedural History
[¶2.] In 2003, Lester executed a power of attorney appointing Butch as his
attorney-in-fact. At that time, Lester and his wife were the joint owners of a
checking account. Lester’s wife died in 2004, and in November 2010, he went by
himself to the bank where the account was located to remove her name from the
account. He met with Nancy Byer, a banker who had worked with him for many
years. Lester informed Byer that he also wished to add Butch to the account.
Because Butch’s signature was needed to be an account holder, Byer called Butch
and told him to come to the bank. When he arrived, Byer prepared the form
necessary to add him to the account as a joint owner, and she explained the form to
-1-
#27919
Lester and Butch. Byer explained that Butch would be able to write checks on the
account and that he would be the sole owner of the money in the account upon
Lester’s death. Lester confirmed that those were his intentions. Byer left Lester
and Butch alone in her office for a brief time while she made a deposit. When she
returned, the form appeared to have been signed by both Lester and Butch.
[¶3.] Lester died in December 2014. He was survived by his son, Butch, and
two daughters, Gloria Sichmeller and Debra Mills. Lester’s estate included
substantial land and certificates of deposit.∗ He also had $124,643 in the joint
checking account at the time of his death.
[¶4.] After Lester’s death, Sichmeller and Mills (Petitioners) brought these
claims against Butch for breach of fiduciary duty and conversion. They sought
recovery of the checking account balance and exemplary damages. Petitioners
asserted that Butch had signed Lester’s name on the bank form, which they
contended was an act of self-dealing that was not specifically authorized by the
power of attorney. Although both Butch and Byer testified in their depositions that
Lester had signed the bank form, they were apparently unaware that a handwriting
expert had opined that Butch had in fact signed Lester’s name. Byer, upon being
shown the expert’s report at the end of her deposition, then stated that she could
not remember who signed Lester’s name. Butch continued to believe that Lester
signed the form.
∗ Under Lester’s will, which he executed in 2013, all of his personal property
was to be equally divided among all three children, and the real property was
divided approximately equally. The will nominated, and the circuit court
appointed, Butch as the personal representative.
-2-
#27919
[¶5.] The case proceeded to a court trial to determine ownership of the
account. The parties stipulated that Butch had signed Lester’s name. Over
Petitioners’ objection, the court admitted oral extrinsic evidence of Lester and
Butch’s visit to the bank. Butch testified that while at the bank, Lester informed
Byer that he wanted Butch on the account so that the balance would go to Butch.
Butch also indicated that Lester had severe gout and that parts of the fingers on
Lester’s right hand were amputated in 2005 or 2006. According to Butch, Lester
had difficulty holding a pen whenever his gout flared up. Butch further indicated
that Lester’s gout was bad on the day the bank form was signed.
[¶6.] Byer also testified at trial, and she described Lester as a man who was
meticulous with his money and who knew exactly where he wanted it to go. She
testified that it was Lester who wanted to add Butch to the account, that Lester did
not want anyone else except Butch on the account, and that Lester wanted the
account to go to Butch after Lester died. According to Byer, Butch signed the bank
form when all three of them were in her office. She then left her office to deposit
money for Lester. While outside her office, she observed Butch trying to put a pen
in Lester’s hand. When she returned to her office, Lester appeared to have signed
the form, but she testified that she did not see Lester sign it. Byer also confirmed
that Lester had problems with gout and would occasionally complain about pain in
his hands.
[¶7.] After hearing the evidence, the circuit court ruled that Butch was the
owner of the funds in the account. Although the parties stipulated that Butch had
signed Lester’s name on the form, the court found that Butch did not act pursuant
-3-
#27919
to the power of attorney. Instead, the court found that Butch had acted as “a mere
instrument or [amanuensis]” at Lester’s request. Petitioners appeal, arguing that
Butch obtained joint ownership of the account by engaging in impermissible acts of
self-dealing. Petitioners also argue that the evidence was insufficient to support a
finding that Butch acted as an amanuensis. Additionally, Petitioners request this
Court to require the estate to pay their appellate attorney’s fees.
Decision
Amanuensis Doctrine
[¶8.] Petitioners’ arguments focus primarily on legal principles governing
self-dealing by an agent acting pursuant to a power of attorney. Specifically, they
contend that: Butch’s power of attorney did not authorize him to sign Lester’s name
on the bank form; signing Lester’s name was an impermissible act of self-dealing;
and the circuit court erred when it based its ruling on oral extrinsic evidence of the
circumstances surrounding the signing.
[¶9.] It is undisputed that the power of attorney in this case did not give
Butch the power to self-deal. We also agree with Petitioners that: “a power of
attorney must be strictly construed and strictly pursued,” Bienash v. Moller,
2006 S.D. 78, ¶ 13, 721 N.W.2d 431, 435; “if the power to self-deal is not specifically
articulated in the power of attorney, that power does not exist,” id. ¶ 14; and oral
extrinsic evidence is inadmissible to show that “the attorney-in-fact [had] the power
to self-deal when the power of attorney does not explicitly provide such,” Hein v.
Zoss, 2016 S.D. 73, ¶ 10, 887 N.W.2d 62, 66. But these legal principles do not apply
here because Butch did not seek to admit oral extrinsic evidence to show that he
-4-
#27919
had the power to self-deal. Further, Butch did not claim ownership of the money in
the account based on a power granted in the power of attorney. Instead, he relied
on the amanuensis doctrine and asserted that he signed Lester’s name in Lester’s
presence and at Lester’s direction.
[¶10.] It is “well settled, that where the name of a party is signed to an
instrument in the presence of the party, and by his authority, and where he knows
the contents of the same, the signature will be regarded as the signature of the
party whose name purports to be signed to the instrument . . . .” Hickox v. Bacon,
17 S.D. 563, 97 N.W. 847, 847 (1903); see also Nw. Loan & Banking Co. v. Jonasen,
11 S.D. 566, 79 N.W. 840, 842 (1899) (“The signature of a mortgagor . . . made in his
immediate presence by another, with his intelligent acquiescence, is as much his act
as though he held the pen.”); Estate of Stephens v. Williams, 49 P.3d 1093, 1098
(Cal. 2002) (“The attorney in such case, so far as the signature to the instrument is
concerned, is a mere amanuensis of the grantor, and in the affixing of the seal is
only the instrument, the hand, as it were, of the grantor.”); In re Estate of Moore,
No. 115,628, ___ P.3d ___, ___, 2017 WL 656130, at *7 (Kan. Ct. App. Feb. 17, 2017)
(“It is familiar law that where a person’s name is signed for him at his direction and
in his presence by another, the signature becomes his own, and has precisely the
same validity as if he had written it himself.”); Gaspard v. Iberia Bank, 953 So. 2d
997, 999 (La. Ct. App. 2007) (“Where a person’s name is signed for him at his
direction and in his presence by another, the signature becomes his own, and is
sufficient to give the same validity to an instrument as though written by the
person himself.”); Jones v. Minton, 141 So. 2d 564, 565 (Miss. 1962) (“A person may
-5-
#27919
adopt the writing of another as his individual signature.”); Graff v. Graff,
138 N.W.2d 644, 650 (Neb. 1965) (“Where a person’s name is signed to an
instrument for him, at his direction and in his presence, by another, the signature
becomes his own.”). This doctrine is significant because if it applies, the signing is
“not deemed the act of an agent, but is the direct act of the person by whose
direction it was done.” United Bonding Ins. Co. v. Banco Suizo-Panameno, S.A.,
422 F.2d 1142, 1147 (5th Cir. 1970) (applying Florida law); accord Estate of Moore,
___ P.3d at ___, 2017 WL 656130, at *15; 80 C.J.S. Signatures § 14, Westlaw
(database updated Dec. 2016) (“Where a signature is made in this manner, the
person writing the name is regarded as a mere instrumentality, by which the
person whose signature is written exercises his own discretion and acts for himself,
and not through an agent.”). The circuit court did not err in recognizing the
amanuensis doctrine.
[¶11.] Nevertheless, Petitioners insist that our law of agency and fiduciary
self-dealing must govern this case, or else the law protecting principals will be
subverted. We disagree. Applying only the laws of agency and fiduciary self-
dealing in a case like this would create an irrebuttable presumption that once a
power of attorney is granted, every subsequent act of the attorney-in-fact involves a
fiduciary duty of that agent—even if it is an act regarding a matter unconnected to
the agency. Petitioners cite no law for such a presumption, and we decline to adopt
one. After all, “[t]he law will imply such duties only where one party to a
relationship is unable to fully protect its interests and the unprotected party has
placed its trust and confidence in the other.” Bienash, 2006 S.D. 78, ¶ 11, 721
-6-
#27919
N.W.2d at 434. “We recognize no ‘invariable rule’ for ascertaining a fiduciary
relationship, ‘but it is manifest in all the decisions that there must be not only
confidence of the one in the other, but there must exist a certain inequality,
dependence, weakness of age, of mental strength, business intelligence, knowledge
of the facts involved, or other conditions giving to one advantage over the other.’”
Id. (quoting Ward v. Lange, 1996 S.D. 113, ¶ 12, 553 N.W.2d 246, 250). But here,
none of the factors necessary for a fiduciary relationship were present in this
banking transaction. The evidence undisputedly indicates that Lester was
independently and competently handling his own financial affairs when he went to
the bank to request the creation of the joint account.
[¶12.] We do, however, acknowledge concerns that may arise where the
person acting as an amanuensis also has an interest in the transfer or is a fiduciary
for the other. We find the California Supreme Court’s resolution of those situations
instructive. In Estate of Stephens, a daughter held a power of attorney for her blind
father, whom she cared for and who was dependent on her. 49 P.3d at 1095. The
father had a deed drafted to convey real property to the daughter, and he instructed
the daughter to sign his name on the deed. Id. Because the daughter had an
interest in the transfer and had no express written authority to self-deal, the court
held that “the signing of a grantor’s name by an interested amanuensis must be
presumed invalid.” Id. at 1100. To rebut the presumption, the interested
amanuensis had “to show that his or her signing of the grantor’s name was a
mechanical act in that the grantor intended to sign the document using the
-7-
#27919
instrumentality of the amanuensis.” Id. at 1100-01. We agree with the California
Supreme Court’s concerns and adopt these requirements.
Sufficiency of the Evidence
[¶13.] Petitioners contend that because there was no direct evidence that
Lester asked Butch to sign for him, and because the circuit court only found that
Lester “in some manner” asked Butch to sign, the evidence was insufficient to
support a finding that Butch signed as an amanuensis. Petitioners also emphasize
discrepancies between Butch’s and Byer’s deposition and trial testimony. We
acknowledge that there was no direct evidence that Lester requested Butch to sign
for him. But “[d]irect and circumstantial evidence have equal weight.” State v.
Webster, 2001 S.D. 141, ¶ 13, 637 N.W.2d 392, 396. Additionally, “[t]he credibility
of the witnesses, the import to be accorded their testimony, and the weight of the
evidence must be determined by the trial court, and we give due regard to the trial
court’s opportunity to observe the witnesses and examine the evidence.” Baun v.
Estate of Kramlich, 2003 S.D. 89, ¶ 21, 667 N.W.2d 672, 677. This Court will only
overturn findings of fact on appeal for clear error; i.e., “when a complete review of
the evidence leaves the Court with a definite and firm conviction that a mistake has
been made.” Aguilar v. Aguilar, 2016 S.D. 20, ¶ 9, 877 N.W.2d 333, 336.
[¶14.] Here, the circuit court did not clearly err in finding that Butch acted as
a mere amanuensis. It is significant that there is no claim that Butch obtained
ownership of the account through fraud, duress, or undue influence; and there is no
claim that anyone other than Lester desired to add Butch as a joint owner. Indeed,
Lester was described as a man who was very meticulous with his money and who
-8-
#27919
knew exactly what he had and where he wanted it to go. Additionally, there was
evidence that Lester wanted to add Butch to the account as a joint owner, Lester
went to the bank alone to do so, and Lester directed the bank to prepare the
paperwork necessary to accomplish his wishes. Butch then went to the bank only
after Byer called him and told him to come because all joint-account holders’
signatures were required on joint accounts. Once Butch arrived, Byer explained the
bank form to Lester and Butch, and Lester confirmed that he wanted Butch to be
the sole owner of the account upon Lester’s death. There was also evidence that
Lester had gout, which made it difficult for him to use a pen. This circumstantial
evidence, together with the testimony that both Lester and Butch were present, side
by side in Byer’s office, when the form was signed, supports the circuit court’s
decision. The evidence supports a finding that Butch’s “signing of [Lester’s] name
was a mechanical act in that [Lester] intended to sign the document using the
instrumentality of the amanuensis.” See Estate of Stephens, 49 P.3d at 1100-01. It
also supports a finding that the form was signed in the “presence of [Lester], and by
his authority, and where he [knew] the contents of the same.” See Hickox, 97 N.W.
at 847.
[¶15.] We conclude that the circuit court did not clearly err in finding that
Butch was not exercising his power of attorney when he signed Lester’s name;
rather, he was acting as an amanuensis. Thus, the circuit court did not err in
rejecting Petitioners’ claims and ruling that Butch was the owner of the funds in the
account.
-9-
#27919
Appellate Attorney’s Fees
[¶16.] Petitioners move this Court for an order requiring their appellate
attorney’s fees be paid from the estate. “SDCL 15-26A-87.3 permits an award of
appellate attorney’s fees if they are otherwise allowable.” In re Estate of Laue,
2010 S.D. 80, ¶ 42, 790 N.W.2d 765, 774. Under SDCL 29A-3-720, a personal
representative “who defends or prosecutes any proceeding in good faith, whether
successful or not, is entitled to . . . reasonable attorney’s fees”; all other persons may
receive attorney’s fees only if they “prosecuted or defended an action that resulted
in a substantial benefit to the estate.”
[¶17.] Because Petitioners’ action did not result in a substantial benefit to the
estate, they are not entitled to fees under the “all other persons” portion of the
statute. However, Petitioners contend that because they brought this action on
behalf of Lester’s estate, they are entitled to attorney’s fees whether successful or
not under the “personal representative” portion of the statute. Petitioners contend
that in suing the appointed personal representative on behalf of the estate, they
“stepped into the shoes of the personal representative.” But the circuit court never
appointed Petitioners as personal representatives or special administrators of
Lester’s estate. Under SDCL 29A-3-601 and SDCL 29A-3-614(2), personal
representatives or special administrators of the estate must be appointed by the
court. Although the parties stipulated that Petitioners could bring this action
against Butch on behalf of the estate, that private-party stipulation did not make
them “personal representatives” within the meaning of SDCL 29A-3-720.
Therefore, we deny Petitioners’ motion for appellate attorney’s fees.
-10-
#27919
[¶18.] Affirmed.
[¶19.] GILBERTSON, Chief Justice, and SEVERSON, WILBUR, and KERN,
Justices, concur.
-11-