In Re the Amended & Restated Nelson Living Trust

#26585-aff in pt, rev in pt & rem-LSW
2013 S.D. 58
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
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IN THE MATTER OF THE:
AMENDED AND RESTATED
NELSON LIVING TRUST
DATED SEPTEMBER 19, 2002, AS AMENDED.
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APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
****
THE HONORABLE KATHLEEN K. CALDWELL
Retired Judge
****
RICK W. ORR
JUSTIN T. CLARKE of
Davenport, Evans, Hurwitz
& Smith, LLP
Sioux Falls, South Dakota Attorneys for trustee
and appellant The First
National Bank of Sioux Falls.
MICHAEL F. TOBIN
JENNIFER E. BUNKERS
MEGHANN M. JOYCE of
Boyce, Greenfield, Pashby,
& Welk, LLP
Sioux Falls, South Dakota Attorneys for petitioner
and appellee Ann Nelson.
****
CONSIDERED ON BRIEFS
ON MAY 21, 2013
OPINION FILED 07/31/13
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WILBUR, Justice
[¶1.] Ann Nelson, Decedent’s ex-wife, timely filed a claim against Decedent’s
estate claiming entitlement to compensation for nursing and convalescent services
she provided to Decedent prior to his death. Trustee denied the claim, contending
that forgiveness of a loan Decedent made to Ann constituted payment for services
rendered. Ann then filed a Petition for Allowance of Claim, alleging breach of
contract and unjust enrichment and seeking payment from Decedent’s trust in the
amount of $270,045. Based on surrounding circumstances and statements ascribed
to Decedent, the trial court concluded that Ann was entitled to compensation, and
ordered that the trust pay her $183,538 for services she provided to Decedent. We
affirm the trial court’s conclusion that Ann was entitled to compensation for the
services she provided to Decedent, but remand to the trial court with instructions to
recalculate the award consistent with this opinion.
FACTS AND PROCEDURAL HISTORY
[¶2.] Ann Nelson and Dr. Robert E. Nelson were married on May 9, 1987.
The couple divorced approximately ten years later. After the divorce, Ann
purchased a nine-acre farmstead and a thirty-five acre parcel of land, which were
located approximately thirty-five miles west of Sioux Falls and nine miles north of
Parker (the “farmstead”). Although they were divorced, Ann and Dr. Nelson
remained friends. They often had dinner together, and Dr. Nelson helped Ann
restore the farmstead. Dr. Nelson frequently visited the farmstead, and he and Ann
took great pride in the work that they had done to restore it.
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[¶3.] When Ann purchased the farmstead, an adjoining forty-five acre parcel
of land (the “adjoining parcel”) was also available, but she did not purchase it.
Approximately one year after Ann purchased the farmstead, she had a second
opportunity to purchase the adjoining parcel. Although she submitted a bid, she
was not successful in purchasing the adjoining parcel at that time. Ann and the
new owner of the adjoining parcel later came to a verbal understanding that if he
were to sell the property, he would afford Ann the first opportunity to purchase it.
[¶4.] Despite this verbal understanding, Ann discovered on September 16,
2007, that the adjoining parcel was to be auctioned off in thirty days. A few days
later, while having dinner with Dr. Nelson, Ann brought the upcoming auction to
his attention. At that time, Ann asked Dr. Nelson whether he would “go halfsies on
it,” meaning that he would help Ann pay for the adjoining parcel and that they
would jointly own it. Dr. Nelson responded, “[L]et me think about it.”
[¶5.] Approximately a week later, while having dinner at the farmstead,
Ann and Dr. Nelson discussed the upcoming auction of the adjoining parcel. Dr.
Nelson asked Ann the amount of the mortgage against the farmstead. Upon
learning that Ann did not owe anything on the farmstead and that she had
approximately $40,000 to put toward the purchase of the adjoining parcel, Dr.
Nelson indicated he would loan Ann the difference between the amount of money
that she could contribute and the purchase price. Dr. Nelson further indicated that
Ann need only pay him interest on the loan and that any balance that remained
upon his death would be forgiven:
Q: Did he make any other statements about what may happen
to this loan at some point in time?
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A: Yes, he did. He followed that up.
Q: What did he say?
A: He said, and then I have to decide what to do if I should die,
meaning him. And he said, I have decided that you should
have it.
[¶6.] On October 3, 2007, Dr. Nelson decided to undergo back surgery. Dr.
Nelson called Ann on October 8, 2007 to inform her that he was scheduled to have
back surgery on October 10, 2007. When Ann expressed concern about his ability to
attend the upcoming auction, which was scheduled on October 13, 2007, Dr. Nelson
assured her that the surgery was “not a big deal.” Dr. Nelson explained that he
would be discharged from the hospital on October 12, 2007, and that he intended to
attend the auction. Dr. Nelson believed that the back surgery would be a simple
procedure and that he would be fully capable of caring for himself after it.
However, Dr. Nelson did not recover as fast as expected, and on October 12, 2007,
Richard Lauer, Sr., Dr. Nelson’s financial planner and adviser, informed Ann that
Dr. Nelson would not be able to attend the upcoming auction.
[¶7.] Ann attended the auction and was the successful bidder on the
adjoining parcel. On the day of the auction, she signed a real estate purchase
agreement and provided a ten-percent down payment. The purchase price was
$161,383, and the closing of the transaction was scheduled to take place on
November 13, 2007. Ann immediately informed Dr. Nelson that she was the
successful bidder.
[¶8.] On October 19, 2007, Dr. Nelson returned to his home. Ann drove Dr.
Nelson from Covington Heights, where he underwent rehabilitation, to his home.
Because Dr. Nelson believed he was independent enough to care for himself, Ann
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returned home. She did not speak to Dr. Nelson until October 21, 2007, when she
received a phone call from him indicating that he was very sick and needed her to
come to his house quickly. Ann headed to Sioux Falls. Upon arriving at Dr.
Nelson’s home, Ann and Dr. Richard Hosen, a friend of Dr. Nelson’s, transported
Dr. Nelson to Avera McKennan Hospital.
[¶9.] Dr. Nelson was diagnosed with pneumonia and sepsis and was
admitted to the Intensive Care Unit (ICU). During his stay in the ICU, Dr. Nelson
asked Ann if he could hire her to move in with him and take care of him until he
recovered. Ann agreed. Dr. Nelson and Ann did not discuss the length of her
service or the rate of her pay. The next day, Dr. Nelson informed his son, Robert
Nelson, about this arrangement: “Rob, I am going to hire Annie to take care of me.
I can’t do it by myself. I’m going to need help. She knows how to do it. She knows
how to manage the house, run the house and manage the dogs, and I don’t want a
bunch of strangers around.” On October 26, 2007, with the understanding that Ann
would be caring for Dr. Nelson upon his return home, Avera discharged Dr. Nelson.
[¶10.] On October 30, 2007, Dr. Nelson and Ann met with Jayna Voss,1 an
estate planning attorney, to finalize the loan documents between them. Voss first
met with Dr. Nelson. Dr. Nelson informed Voss that he wanted to loan Ann money
and wanted to amend the Robert E. Nelson Trust (the “Trust”) to forgive the loan
upon his death. Voss then met with Dr. Nelson and Ann. During the meeting, they
discussed the amount of the loan, the interest rate, repayment period, and method
of repayment. They determined that the amount of the loan related to the purchase
1. Voss did not have a prior relationship with either Dr. Nelson or Ann.
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of the adjoining parcel would be $125,000 at 4.89 percent interest for a fifteen-year
term.
[¶11.] Dr. Nelson also mentioned that Ann would be taking care of him
because he was in poor health. Because the monthly payment on the loan was
approximately $1,000 and because Dr. Nelson could gift Ann up to $12,000 per year
without any gift tax consequences, they considered the option of Dr. Nelson gifting
Ann $12,000 a year to repay the loan. They also discussed the possibility of a
personal services contract whereby Ann would use the money that Dr. Nelson paid
her to pay the loan. Ultimately, Ann and Dr. Nelson decided not to enter into a
personal services contract.2 In fact, they reached no agreement regarding the
repayment options.
[¶12.] On November 1, 2007, Ann and Dr. Nelson returned to Voss’s office to
sign the promissory notes.3 Voss wrote a memo to the file on November 9, 2007,
regarding the October 30, 2007 and November 1, 2007 meetings. The memo
provided in part that “[Dr. Nelson and Ann] informed me that they intended that
Ann take care of Dr. Nelson and that he would likely make annual gifts to her so
that she can pay the loan[,]” but the note does not otherwise mention Ann’s services.
2. Ann disliked the personal services contract option because it would require
her to pay income tax.
3. Ann and Dr. Nelson could not decide on a monthly or yearly payment
obligation. As a result, Ann and Dr. Nelson directed Voss to prepare two
promissory notes, one requiring monthly payments and the other requiring
yearly payments. The monthly note required payment beginning December
1, 2007, while the yearly note required payment beginning December 1, 2008.
Ann and Dr. Nelson were then to decide which option they desired, which
they never did. We refer to the promissory notes as the “Note.”
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[¶13.] Following execution of the Note, Ann received a check from the Trust
for $125,000 payable from First National Bank. The check contained the following
description: “Gift to Ann Marie Nelson from Robert E[.] Nelson[.]” Ann then used
the funds to close on the purchase of the adjoining parcel.
[¶14.] For the next year, Ann cared for Dr. Nelson until his unexpected death
on October 15, 2008. At the time that Ann was caring for Dr. Nelson, he was
suffering from diabetes, Hepatitis C, autoimmune Hepatitis, ecchymosis,4 and
edema.5 According to Ann, she was responsible for coordinating the care that Dr.
Nelson was receiving from a variety of specialists in Sioux Falls and Minneapolis.
She scheduled Dr. Nelson’s doctor appointments, filled out necessary paperwork in
advance of his appointments, followed up with doctor’s requests, transported him to
his appointments, and attended his appointments with him. She also coordinated
Dr. Nelson’s physical therapy, x-ray, and lab work appointments. Additionally, Ann
was responsible for managing Dr. Nelson’s various medications, including filling his
prescriptions, administering them, and monitoring his dosages. Ann also performed
nursing assessments and cleaned and dressed surgical wounds, torn skin, and
tissue. Finally, Ann attended to Dr. Nelson’s personal cares, including bathing,
toileting, laundry, cleaning, dressing, grocery shopping, cooking, paying bills, and
caring for his pets.
[¶15.] Following Dr. Nelson’s death, Ann submitted an invoice to the Trust,
requesting reimbursement for the services that she provided to Dr. Nelson in the
4. Ecchymosis is a bruising of the extremities and thinning of the skin tissue.
5. Edema is a swelling of the legs, ankles, and feet, or upper extremities.
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last year of his life. On February 19, 2009, Trustee responded to Ann’s request,
stating that, without a directive from Dr. Nelson, it could not pay the invoice that
Ann submitted. In a later letter dated March 24, 2009, Trustee informed Ann that
forgiveness of the Note was intended as payment for the services that she provided
to Dr. Nelson. Ann subsequently filed a Petition for Allowance of Claim, alleging
breach of contract and unjust enrichment, and seeking payment from the Trust in
the amount of $270,045 for the services she provided to Dr. Nelson.
[¶16.] A court trial was held on June 14 and 15, 2012. At trial, Ann testified
that while she was caring for Dr. Nelson, he made several statements regarding his
need to compensate her for her services. For example, at an art show at the
Downtown Holiday Inn in February 2008, Dr. Nelson told several of his friends and
acquaintances that he was not recovering well from his surgery and that “he had
hired [Ann] to take care of him.” Subsequently, while driving home from
Minneapolis after a second back surgery in August 2008, Dr. Nelson said to Ann,
“Annie, I know I owe you a lot of money, but we’ll settle up when I get better. . . .
[A]nd this is good, because this will be your retirement. You can use this for your
retirement.” Finally, just days before Dr. Nelson passed away, he said to Ann,
“Sweetie, I know I owe you a lot of money, but we will settle this. But if you can
just hang in there a little while longer until I work myself through this, I will pay
you, and will you just stay.”
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[¶17.] Lawrence L. Piersol,6 a neighbor and friend of Dr. Nelson’s, also
testified that Dr. Nelson made several statements to him regarding his need to
compensate Ann for her services. For example, in October 2007, Dr. Nelson
commented to Piersol: “I’ve got to take care of Ann because . . . if it weren’t for her, .
. . I’d be in a nursing home.” Again, on September 21, 2008, Dr. Nelson told Piersol
that he “had to do something to compensate Ann for the care that she was giving
him.” And, during a conversation with Dr. Hosen on September 22, 2008,
concerning Ann’s care of Dr. Nelson, Piersol took the following note: “He has not put
her on any income – land separate from him.” Piersol testified that it was his
impression that Dr. Nelson needed to pay Ann for her services, but also that he had
not paid her anything thus far:
Q: Just to follow up on that, from your conversation with Dr.
Nelson on September 21, 2008, at his home, whether the
word “compensate” was used or not, you were certainly left
with the impression and understanding that Dr. Nelson
needed to pay or reward Ann in some manner for the care
that she had provided to him for the past several months?
A: I had no question about that, that was what he meant with
what he said.
...
Q: In that conversation with Dr. Nelson on September 21st at
his home in 2008, you already indicated that you were left
with the clear impression that Dr. Nelson needed to do
something along the lines of paying or compensating Ann.
Was it also your understanding that he had thus far not paid
her anything?
A: Yes. That was my understanding.
6. Lawrence L. Piersol, a United States District Judge for the District of South
Dakota, did not testify in his official capacity, but rather, testified as a fact
witness during this proceeding.
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[¶18.] Voss testified that when Dr. Nelson and Ann came in to finalize the
loan documents, Dr. Nelson indicated that “he intended to loan [Ann] one hundred
twenty-five thousand for the purchase of the real estate[,]” and that “he either
intended to pay her for [her] services or to forgive – forgive the [N]ote.” According
to Voss, it was her impression that the Note’s forgiveness was related to Ann’s
services:
Q: And is there any doubt in your mind that the purpose of this
loan to purchase the land was in exchange for Ann’s services
to Dr. Nelson?
A: The purpose of the loan was to purchase real estate, but what
went with it, is the fact she was going to be providing
services and then that is how the note would be forgiven.
Q: So there was a relationship between the two?
A: Yes.
[¶19.] Lauer also testified concerning a conversation he had with Dr. Nelson
in October 2007, wherein Dr. Nelson informed Lauer he was going to loan Ann
$125,000, and that, based on this conversation, it was Lauer’s impression that the
Note’s forgiveness and Ann’s services were related:
Q: And just in your own words and as best you can recall,
exactly what did he say?
A: Okay, He had – he came in that day. . . . And he had said he
had been down to the bank and was going to make a loan to
Ann that would be forgiven at his death. So he had wanted
her to be able to acquire this farm property. And then he
went on to say that Ann was going to take care of him.
...
Q: And there is no doubt in your mind that it was, at least from
your perspective, that it was his intention that these two
things be a quid pro quo for one another?
A: That – is my impression of it. And in looking at him, and the
way he was saying this, that we were going to do this loan,
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and she’s going to move in, that was my impression, that it
was a quid pro quo.
[¶20.] Rob7 also testified that shortly after Dr. Nelson’s first back surgery,
Dr. Nelson told Rob that “he was going to hire Ann for an amount of money roughly
equivalent to what it would cost to be in a nursing home, on the order of seven
thousand dollars a month, in exchange for Ann being around and helping him out.”
Approximately, one to two months later, Dr. Nelson informed Rob that he had
loaned Ann $125,000 to buy the adjoining parcel and that he had amended the
Trust to forgive the loan upon his death. Based upon that conversation, Rob’s
impression was that “[Dr. Nelson] had amended the Trust to forgive the loan when
he died in exchange for [Ann] helping him out.”
[¶21.] Finally, Charis Poppens, a registered nurse who worked for Sanford
Home Health Services for 26 years, testified concerning the value of Ann’s services.
Poppens performed a detailed review of the December 9, 2008 invoice that Ann
submitted to Trustee and the services that she provided to Dr. Nelson. Poppens
allocated the care that Ann provided to Dr. Nelson among three categories: (1)
registered nurse care, (2) nurse aide care, and (3) companion care. Using the
charges that Sanford Home Health would have charged if Dr. Nelson had employed
an in-home healthcare agency, Poppens determined that Ann provided Dr. Nelson
one hour of registered nurse care each day at the rate of $75.00 per hour, four hours
of nurse aide care each day at the rate of $35.00 per hour, and nineteen hours of
7. Rob is the beneficiary of the Trust and is currently living in Dr. Nelson’s
home. All costs associated with the house are covered by the Trust.
Currently, the Trust does not have enough cash to pay for Ann’s services and
the house would likely have to be sold to cover these costs.
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companion care each day at a rate ranging from $15.00 to $18.00 per hour. Poppens
testified that, according to her calculation, if Dr. Nelson had hired Sanford Home
Health to care for him, it would have cost Dr. Nelson $189,295.
[¶22.] On November 28, 2012, the trial court entered findings of fact,
conclusions of law, and an order, concluding that Ann was entitled to compensation
for the services she provided to Dr. Nelson. In calculating the value of the services
Ann rendered, the trial court determined that Ann cared for Dr. Nelson twenty-four
hours a day for 350 days and 343 nights.8 Using the prices Sanford Home Health
charges for in-home healthcare, the trial court then calculated the value of Ann’s
services for those days and nights, accounting for the type of care she provided as
well as overnight and weekend rates. The court ultimately concluded that Ann was
entitled to $183,538 for the services she provided to Dr. Nelson. A judgment was
subsequently entered on December 14, 2012, in favor of Ann in the amount of
$259,768.88, including pre-judgment interest. Trustee appeals, raising the
following issues:
1. Whether the trial court erred in finding that the purpose
of the Note’s forgiveness and its subsequent forgiveness
did not constitute compensation for the services Ann
provided to Dr. Nelson.
2. Whether the trial court erred in finding that Ann
established, by clear and convincing evidence, that she
was entitled to compensation for the services she provided
to Dr. Nelson.
3. Whether the trial court erred in finding that the value of
the services Ann provided to Dr. Nelson was $183,538.
8. The trial court deducted five days when Dr. Nelson attended hunting trips
and eight nights when Dr. Nelson’s housekeeper stayed with him.
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4. Whether the trial court erred, as a matter of law, in
failing to consider circumstances surrounding the Note’s
creation.
STANDARD OF REVIEW
[¶23.] We review a trial court’s conclusions of law de novo. Eagle Ridge
Estates Homeowners Ass’n, Inc. v. Anderson, 2013 S.D. 21, ¶ 13, 827 N.W.2d 859,
864-65. Findings of fact are reviewed under the clearly erroneous standard. Id. ¶
12. A finding is clearly erroneous when, after reviewing the entire record, we are
left with a definite and firm conviction that a mistake has been made. Id. “[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.” Id. (alteration in original).
ANALYSIS AND DECISION
Purpose of the Forgiveness of the Note
[¶24.] Trustee argues that the trial court erred in finding that the purpose of
the Note’s forgiveness and its subsequent forgiveness did not constitute
compensation for the services Ann provided to Dr. Nelson.9 Trustee claims the
9. Trustee contends this issue presents a mixed question of law and fact and,
thus, must be reviewed under the de novo standard of review. See Manuel v.
Toner Plus, Inc., 2012 S.D. 47, ¶ 8, 815 N.W.2d 668, 670 (explaining that a
mixed question of law and fact that requires the Court “to consider legal
concepts in the mix of fact and law and to exercise judgment about the values
that animate legal principles” is one of law and should be reviewed de novo).
We disagree. The question of whether forgiveness of the Note was
compensation for Ann’s services required the court to resolve disputed facts.
It did not require the court to “consider legal concepts in the mix of fact and
(continued . . .)
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court ignored its evidence establishing that Ann agreed to care for Dr. Nelson in
exchange for the Note’s forgiveness. According to Trustee, “[t]he overwhelming
evidence at trial supports [such a] conclusion.”
[¶25.] In this case, Trustee presented testimony and evidence at trial that the
purpose of the Note’s forgiveness and its subsequent forgiveness was to compensate
Ann for the services she provided to Dr. Nelson. For example, Voss testified that
she had no doubt that a relationship existed between the Note’s forgiveness and
Ann’s services. She stated: “The purpose of the loan was to purchase the real
estate, but what went with it, is the fact [Ann] was going to be providing services
and then that is how the [N]ote would be forgiven.” Similarly, Lauer testified that
he believed Dr. Nelson intended to forgive the Note in exchange for Ann’s services
because “[Dr. Nelson] came in and he was basically sharing these two items and
said them basically back-to-back.” Rob also testified that his impression was that
Dr. Nelson chose to forgive the Note upon his death in exchange for Ann “helping
him out.”
[¶26.] Ann, by contrast, presented testimony and evidence at trial that the
Note’s forgiveness and her services were not related. Ann testified that prior to Dr.
Nelson’s back surgery, they had a conversation in which Dr. Nelson told Ann he
decided to forgive the loan upon his death. Ann also testified that she and Dr.
Nelson never discussed compensation, and, more importantly, never discussed
________________________
(. . . continued)
law and to exercise judgment about the values that animate legal principles.”
See id. Thus, we decline to apply a de novo standard of review, and, instead,
review the court’s findings of fact on this issue under the clearly erroneous
standard.
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whether the Note’s forgiveness was her compensation when they agreed that he
would hire her to care for him. Further, Ann presented evidence that Dr. Nelson
told Piersol he needed to compensate Ann for her services and that in a September
22, 2008 phone conversation with Dr. Hosen concerning Ann’s care of Dr. Nelson,
Piersol took the following note: “He has not put her on any income – land separate
from him.”
[¶27.] In determining whether the Note’s forgiveness and Ann’s services were
related, the trial court also examined the $125,000 check Ann received from the
Trust, which included a notation describing the check as a “[g]ift to Ann Marie
Nelson from Robert E[.] Nelson[.]” The court also examined the language of the
Trust amendment, which indicates that the Note’s forgiveness was a gift. The Trust
Amendment provides, in relevant part:
It is my intent that the loan owed by [ANN MARIE NELSON] to
the Trust be forgiven at my death, and that ANN MARIE
NELSON no longer be obligated to pay said Note to the Trust or
my estate. If ANN MARIE NELSON shall predecease me, then
this gift shall lapse, and the Note shall be fully enforceable
against ANN MARIE NELSON’s estate.
(Emphasis added.) The court found that the Trust amendment “clearly states that
the loan forgiveness is a gift to Ann upon Dr. Nelson’s death, and that the gift will
lapse if Ann predeceases Dr. Nelson.” The court also found that the Trust
amendment allows the Trust to enforce the Note against Ann’s estate if Ann
predeceased Dr. Nelson, which is significant because Ann’s estate would not receive
any compensation from Dr. Nelson for the services Ann provided to him during her
lifetime if the Note’s forgiveness and her services were in fact related.
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[¶28.] The trial court carefully considered and weighed all the evidence and
testimony presented concerning the Note’s forgiveness, and ultimately found that
the Note’s forgiveness was “not compensation for the services [Ann] rendered during
Dr. Nelson’s lifetime.” The court was in the best position to weigh the conflicting
evidence, and we will not overturn the trial court’s factual findings unless we are
left with a definite and firm conviction that a mistake has been made. The court’s
findings are based on record evidence. Trustee has not demonstrated that a
mistake has been made. The trial court’s finding that the purpose of the Note’s
forgiveness and its subsequent forgiveness was not compensation for the services
Ann provided to Dr. Nelson was not clearly erroneous.
Ann’s Entitlement to Payment for Services Rendered
[¶29.] Trustee argues the trial court erred in finding that Ann established, by
clear and convincing evidence, that she was entitled to compensation for the
services she provided to Dr. Nelson. “Claims against estates for personal services
rendered to decedents require proof by clear and convincing evidence.” In re
Regennitter, 1999 S.D. 26, ¶ 11, 589 N.W.2d 920, 923. “This high standard is
imposed, as claims of this nature must be closely scrutinized, being objects of
suspicion, and must be established by greater quantum of proof than in ordinary
actions.” In re Estate of Dimond, 2008 S.D. 131, ¶ 11, 759 N.W.2d 534, 538.
[¶30.] Again, Trustee alleges that the trial court incorrectly weighed the
evidence and should have given more weight to its evidence. Trustee claims Ann’s
testimony has little evidentiary value because it was uncorroborated and self-
serving. To support its position, Trustee cites Martinson v. Holso, 424 N.W.2d 664
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(S.D. 1988) and Mahan v. Mahan, 80 S.D. 211, 121 N.W.2d 367 (1963). In Mahan,
this Court explained that “testimony as to oral statements allegedly made by
deceased persons is regarded as the weakest kind of evidence.” 80 S.D. at 215, 121
N.W.2d at 369. Further, in Martinson, we explained that self-serving testimony
concerning statements allegedly made by a deceased person “is alone insufficient
and must be corroborated.” 424 N.W.2d at 668.
[¶31.] The trial court was confronted with conflicting evidence. Voss, Lauer,
and Rob all testified that they believed the Note’s forgiveness and Ann’s services
were related. Ann, on the other hand, testified that while Dr. Nelson was in the
ICU in October 2007, he asked her if he could hire her to move in with him and take
care of him until he recovered. She also testified that on at least two occasions, Dr.
Nelson acknowledged that he owed her a lot of money, but reassured her they would
“settle up” when his health improved. Moreover, Ann testified that at an art show
in February 2008, Dr. Nelson told several friends and acquaintances that he had
hired Ann to take care of him. Likewise, Piersol testified that Dr. Nelson
occasionally mentioned that he had to compensate Ann for the services she provided
to him. Even Rob testified that Dr. Nelson informed him he was going to hire Ann
for an amount equivalent to that of nursing home care.
[¶32.] “With conflicting testimony from numerous witnesses, we defer to the
trial court to weigh the evidence and judge the credibility of the witnesses.”
McCollam v. Cahill, 2009 S.D. 34, ¶ 9, 766 N.W.2d 171, 175. After examining the
evidence and observing the witnesses, the court was persuaded by the credibility
and weight of Ann’s evidence and resolved conflicting evidence in her favor. Thus,
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we hold that the court’s acceptance of Ann’s testimony and its finding that she
established entitlement to payment by clear and convincing evidence are not clearly
erroneous.
Value of Services Rendered
[¶33.] The trial court found Ann provided twenty-four-hour-a-day care from
October 27, 2007 to October 15, 2008, excluding five days when Dr. Nelson attended
hunting trips and eight days when his housekeeper cared for him. Using the prices
Sanford Home Health charges for in-home healthcare, the court determined that
the value of the services Ann provided to Dr. Nelson was $183,538. Trustee argues
that the court’s valuation of the services Ann provided to Dr. Nelson was clearly
erroneous. Trustee contends the court erred in finding that Ann provided twenty-
four-hour-a-day care. In the alternative, Trustee contends the court erred in finding
that Ann provided twenty-four-hour-a-day care on October 13 to 15, 2008 when Dr.
Nelson was hospitalized in the ICU. “Value is a question of fact[.]” W. Two Rivers
Ranch v. Pennington Cnty., 549 N.W.2d 683, 685 (S.D. 1996). Therefore, we will not
overturn the court’s valuation of the services Ann provided to Dr. Nelson unless it is
clearly erroneous. See id.
[¶34.] We first address Trustee’s assertion that the trial court erred in
determining Ann provided twenty-four-hour-a-day care. Trustee contends the
evidence at trial strongly suggested that Ann did not provide twenty-four-hour-a-
day care because Dr. Nelson frequently went to coffee and lunch with friends, Dr.
Nelson attended several hunting trips with friends, Ann continued to run her dog-
grooming business while she cared for Dr. Nelson, and Ann and Dr. Nelson agreed
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Ann could occasionally return to her farmstead to care for her property and horse.
Trustee, however, did not submit evidence showing the hours Ann did not render
services to Dr. Nelson because he was either at coffee or lunch with friends or she
was at the farmstead. The court deducted the dates Dr. Nelson attended hunting
trips from its award, which was the only evidence Trustee submitted concerning the
hours Ann did not render services to Dr. Nelson.
[¶35.] Moreover, because companion care includes preparing meals, doing
laundry, cleaning, and caring for pets, for example, Ann could have provided
companion care even when Dr. Nelson was not home. Further, Poppens testified
that companion care also requires the caregiver to “[j]ust kind of be there . . . to
make sure things are going well.” Thus, contrary to Trustee’s contention, nothing in
the record suggests that Ann could not provide companion care while attending to
her dog-grooming business. After all, Dr. Nelson agreed that Ann could keep the
dogs she was caring for at his house, which included a dog-grooming room. Finally,
Trustee did not challenge Ann’s evidence concerning the value of her services by
offering competing expert testimony. The trial court’s findings were based on record
evidence. Therefore, Trustee has not demonstrated that the court clearly erred in
determining that Ann provided Dr. Nelson twenty-four-hour-a-day care.
[¶36.] Next, we address Trustee’s assertion that the trial court erred in
determining Ann provided twenty-four-hour-a-day care on October 13 to 15, 2008
when Dr. Nelson was hospitalized in the ICU. Trustee contends that Ann could not
have cared for Dr. Nelson twenty-four hours a day while he was in the ICU. Ann
undoubtedly did not provide twenty-four-hour-a-day care to Dr. Nelson while he
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was being cared for by the ICU physicians, nurses, and staff. The court clearly
erred in finding that Ann provided twenty-four-hour-a-day care to Dr. Nelson on
October 13 to 15, 2008. We therefore remand to the trial court with instructions to
deduct the compensation related to these days from its award.
Evidence Concerning Circumstances Surrounding the Note’s Creation
[¶37.] When a contract is plain and unambiguous, “[t]he parol evidence rule
bars extrinsic evidence or prior negotiations offered to contradict or supplement a
written contract” because the intent of the parties can be derived from within the
four corners of the contract. Kernelburner, L.L.C. v. MitchHart Mfg., Inc., 2009 S.D.
33, ¶ 7, 765 N.W.2d 740, 742; Hofeldt v. Mehling, 2003 S.D. 25, ¶ 11, 658 N.W.2d
783, 787. However, “[t]he surrounding circumstances from which a contract stems
are to be considered when interpreting its provisions.” Mitzel v. Hauck, 78 S.D. 543,
547, 105 N.W.2d 378, 380 (1960) (citing Unke v. Thorpe, 75 S.D. 65, 69, 59 N.W.2d
419, 422 (1953)).
[¶38.] The trial court found that the language of the Note was plain and
unambiguous and concluded that the parol evidence rule applied. Trustee does not
dispute the court’s conclusion. However, Trustee alleges that because the court
applied the parol evidence rule, it did not consider the circumstances surrounding
the Note’s creation, which Trustee contends was an error of law. In support of its
position, Trustee alleges the trial court failed to include the complete and accurate
testimony of Voss, Lauer, and Rob. Trustee, however, does not provide additional
support for its argument. For example, Trustee does not identify any inaccuracies
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in the court’s findings of facts or conclusions of law nor specify what circumstances
the court failed to consider in its findings of fact and conclusions of law.
[¶39.] Contrary to Trustee’s argument, the trial court’s findings of fact are
replete with the details of the circumstances surrounding the Note’s creation.
Based upon our review of the record, the court made at least eighteen specific
findings of fact concerning discussions about the Note’s creation. Because the
record reveals that the court considered circumstances surrounding the creation of
the Note, Trustee’s bare assertion, absent further support, is without merit. We
therefore hold that no error of law existed because the trial court considered
circumstances surrounding the Note’s creation.
CONCLUSION
[¶40.] The trial court considered the circumstances surrounding the Note’s
creation and thus did not err as a matter of law. In addition, the court did not
clearly err in finding that the purpose of the Note’s forgiveness and its subsequent
forgiveness was not compensation for the services Ann provided to Dr. Nelson, that
Ann established entitlement to payment by clear and convincing evidence, and that
Ann provided Dr. Nelson twenty-four-hour-a-day care from October 27, 2007 to
October 12, 2008. However, the court’s finding that Ann provided Dr. Nelson
twenty-four-hour-a-day care from October 13 to 15, 2008, while Dr. Nelson was
hospitalized in the ICU is clearly erroneous. We therefore affirm in part, reverse in
part, and remand to the trial court with instructions to recalculate the award
consistent with this opinion.
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[¶41.] GILBERTSON, Chief Justice, and KONENKAMP and ZINTER
Justices, and MACY, Circuit Court Judge, concur.
[¶42.] MACY, Circuit Court Judge, sitting for SEVERSON, Justice,
disqualified.
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