Estate of Stoebner v. Huether

#28819-a-DG
2019 S.D. 58

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

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ESTATE OF KENNETH STOEBNER, Plaintiff and Appellee,

v.

CURTIS HUETHER, Defendant and Appellant.

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APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
HUTCHINSON COUNTY, SOUTH DAKOTA

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THE HONORABLE PATRICK T. SMITH
Judge

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TIMOTHY R. WHALEN
Lake Andes, South Dakota Attorney for plaintiff and
appellee.

TAMARA D. LEE
Yankton, South Dakota Attorney for defendant and
appellant.

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CONSIDERED ON BRIEFS
ON AUGUST 26, 2019
OPINION FILED 10/23/19
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GILBERTSON, Chief Justice

[¶1.] Curtis Huether served as Kenneth Stoebner’s attorney-in-fact under a

power of attorney. Pursuant to this role, Huether executed a sale of Stoebner’s real

property to himself four days before Stoebner’s death. Stoebner’s estate (Estate)

subsequently brought a breach of fiduciary duty claim against Huether for engaging

in an act of self-dealing. The Estate moved for summary judgment, which the

circuit court granted. We affirm.

Facts and Procedural History

[¶2.] Stoebner and Huether were first cousins who knew each other their

entire lives. They were both farmers and occasionally assisted each other with farm

work. Stoebner was eight years older than Huether, never married, and did not

have any children. In 2012, when he was 82 years old, Stoebner entered a nursing

home and was confined to a wheelchair. During Stoebner’s stay at the nursing

home, Huether and his son, Sheldon, visited Stoebner every one to two weeks, took

him to the farm for visits, and assisted with other tasks. For instance, Huether

handled the entirety of a farm sale for Stoebner in 2013. In approximately

February 2012, Huether began leasing Stoebner’s farmland. Huether continued

leasing the farmland for the next five years. The last lease was signed by Stoebner

in February 2017, four months before his death. This property is the subject of the

contested transaction and current appeal.

[¶3.] Several months after entering the nursing home, Stoebner met with

his attorney, James Haar, to discuss the preparation of a power of attorney. Haar

performed legal work for Stoebner since the late 1960s, assisting him with tax

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preparation, drawing up leases, handling the probate of his mother’s estate, and

drafting his will. Stoebner requested that Haar be his attorney-in-fact, but Haar

declined. Haar prepared a General Durable Power of Attorney and Durable Power

of Attorney for Health Care for Stoebner, naming Huether as Stoebner’s attorney-

in-fact. The power of attorney allowed Huether to act as Stoebner’s agent. In part,

it allowed Huether “[t]o acquire, purchase, exchange, grant options to sell, and sell

and convey real or personal property, tangible or intangible, or interests herein, on

such terms and conditions as my agent will deem proper.” It also allowed Huether

to manage real property in Stoebner’s name and benefit upon such terms Huether

deemed proper. Stoebner and Huether signed the document on August 6, 2012.

[¶4.] According to Huether, in 2016 he began having Stoebner’s mail sent to

him instead of the nursing home, and he took on full responsibility for paying

Stoebner’s bills. Huether would ask Stoebner to review a bill only if he had a

question about it. At the time, Huether paid Stoebner’s bills from Stoebner’s

checking account and replenished the account by cashing Stoebner’s certificates of

deposit (CDs).

[¶5.] As Stoebner’s assets depleted, Huether contends that he discussed

with Stoebner how to obtain funds to continue paying his bills by using Stoebner’s

farmland. He states that he suggested two options to Stoebner: (1) auction his

farmland or (2) allow the nursing home to obtain a lien on his property. Huether

claims that Stoebner declined these options and instead wanted Huether to

purchase the land in exchange for the help he had given him.

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[¶6.] Huether visited Haar in February 2017 to discuss how to arrange the

sale of Stoebner’s farmland. Haar refused to get involved, advising Huether that he

should not purchase the land and instead should mortgage the property. Haar also

stated that while the transaction was not necessarily illegal, there was a strong

possibility that Huether would be sued by other family members. Huether then

asked another attorney, Keith Goehring, if he would assist with the sale of the land.

Goehring also declined because he considered Haar a friend. Huether then went to

attorney Tamara Lee, who agreed to prepare the purchase agreement and warranty

deed. Lee had never performed legal work for Stoebner before.

[¶7.] In June 2017, Huether had the land appraised. A certified appraiser

estimated the value of the land to be $720,000. Based on this appraisal, along with

a real estate assessment that the Hutchinson County Department of Equalization

issued assessing the value of the property at $374,397, and the advice of an

accountant, Huether claims he and Stoebner agreed on a purchase price of

$350,000. However, Huether’s payment for the land would be in the form of

payment of Stoebner’s expenses up to the purchase price. The purchase agreement

provided:

Consideration and Payments. In consideration of Seller’s
transfer of the above-described real property to Purchaser, in
addition to continuing to provide companionship and to assist
Seller with Seller’s daily business needs, Purchaser agrees to
pay medical expenses, costs of care, and costs of living expenses
on behalf of Seller, up to a cumulative total that does not exceed
Three Hundred and Fifty Thousand Dollars ($350,000).

The agreement also provided that Huether’s responsibility to pay for the land would

extinguish upon Stoebner’s death, even if Huether had not paid the full price:

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Death of Seller. Upon the death of Seller, all obligations of
Purchaser under this Agreement to pay monies to service
providers shall cease, regardless of whether the total sum of
Three Hundred Fifty Thousand Dollars ($350,000) has been paid
by Purchaser at that point.

[¶8.] On June 26, 2017, Huether took the purchase agreement and deed to a

bank to sign before a notary. Huether signed for himself as the purchaser and for

“Kenneth Stoebner by Curtis Huether POA” as the seller. Huether claims he asked

the notary if Stoebner was required to be present, but the notary said it was not

necessary. The purchase agreement and deed were also accepted by the register of

deeds and the Farm Services Administration office. Stoebner passed away on June

30, 2017, four days after the sale. In total, Huether claims he paid approximately

$20,000 pursuant to the agreement. This total consisted of services related to

expenses for the sale of the land, such as the cost of the appraisal, and the last days

of Stoebner’s care, including medical and funeral costs.

[¶9.] Stoebner’s Estate commenced this action for breach of fiduciary duty,

alleging that Huether “breached his fiduciary duty to Stoebner by engaging in an

act of self-dealing when he executed [the purchase agreement and warranty deed] in

his favor as the attorney-in-fact for Stoebner because such act was not for the

benefit of Stoebner, but only benefitted the Defendant.” The Estate requested that

the sale be rendered null and void and the property conveyed back to the Estate. In

the alternative, the Estate alleged that Huether had committed an act of conversion

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by depriving “the beneficiaries of the Last Will and Testament of Stoebner . . . of

their inheritance.” 1

[¶10.] The Estate moved for summary judgment as to its first claim that

Huether breached his fiduciary duty to Stoebner. The Estate argued that it was

undisputed that a fiduciary relationship existed between Stoebner and Huether due

to Huether’s role as attorney-in-fact and the reliance and trust Stoebner placed in

Huether to take care of his affairs while he was in the nursing home. Furthermore,

the Estate argued, it was undisputed that the power of attorney did not contain any

provisions allowing Huether to self-deal. The Estate also disagrees with Huether’s

contention that he was acting at Stoebner’s oral direction as Stoebner’s amanuensis

by signing the purchase agreement, rather than as Stoebner’s attorney-in-fact.

[¶11.] Beyond that, the Estate pointed out that the circumstances of the sale

indicated Huether was acting in only his best interests to the detriment of Stoebner

by selling Stoebner’s land to himself. Among these circumstances was Huether’s

deposition testimony that he had known for six months prior to the sale that

Stoebner was suffering from cancer, that Stoebner was unable to physically care for

himself, and that Stoebner had never reviewed the purchase agreement or known

the final purchase price for his land.

[¶12.] Huether argued that there was insufficient evidence produced by the

Estate that a fiduciary relationship existed at the time the purchase agreement was

1. Stoebner’s will, drafted in 1990, listed eight charities as beneficiaries.
Stoebner did not provide any bequests to his family members, and Haar was
named as the personal representative of the Estate. The property in question
was Stoebner’s last remaining asset before the sale to Huether.

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signed. Even if such a relationship existed at the time of the sale, he argued he was

acting in the best interests of Stoebner and was undertaking the transaction to

ensure that Stoebner’s needs continued to be met. Huether further claimed that

although the power of attorney did not explicitly allow him to self-deal, it did allow

him to purchase and sell real property, thus granting him the authority to

undertake the sale of Stoebner’s land to himself under these circumstances. 2

[¶13.] In support of his arguments, Huether relied on several affidavits

submitted seven months after his deposition. In his first affidavit, Huether

contended that Stoebner was not in the nursing home because he was in a frail

condition physically, but because he “needed assistance with activities of daily

living.” He stated that he had, in fact, discussed the terms of the sale with Stoebner

and had taken the contract to him to review prior to it being signed. He also

contended that he had not been aware of Stoebner’s cancer diagnosis until six weeks

before his death, not six months, and that his death had been a “surprise.”

[¶14.] Huether also submitted a correction sheet after reviewing the

deposition transcript, indicating changes to his answers regarding when he knew of

Stoebner’s cancer diagnosis and that he had reviewed the contract with Stoebner. A

second affidavit from Huether indicates he changed his deposition answers because

he remembered the correct answers after discussing the matter with his attorney

and Sheldon. Sheldon also submitted an affidavit supporting these changes to

Huether’s testimony, stating that he was familiar with Stoebner’s condition and

2. Huether also brought a counterclaim for compensation of expenses he
incurred on behalf of Stoebner. We express no opinion on that outstanding
counterclaim.

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present during the conversations Huether and Stoebner had about the land sale.

The Estate argued that Huether was impermissibly attempting to change his

deposition testimony and could not explain the changes to his answers.

[¶15.] The circuit court heard oral argument from the parties. It issued an

order granting summary judgment to the Estate on October 29, 2018, determining

that there was no genuine issue of material fact as to the breach of fiduciary duty

claim. The court ordered the sale be declared null and void and reinvested the

Estate with the right of ownership to the property. 3 Huether appealed, raising one

issue: whether the circuit court erred in granting summary judgment to the Estate.

Standard of Review

[¶16.] “We review a circuit court’s entry of summary judgment under the de

novo standard of review.” Harvieux v. Progressive N. Ins. Co., 2018 S.D. 52, ¶ 9,

915 N.W.2d 697, 700 (quoting Wyman v. Bruckner, 2018 S.D. 17, ¶ 9, 908 N.W.2d

170, 174). When conducting a de novo review, “[w]e give no deference to the circuit

court’s decision[.]” Oxton v. Rudland, 2017 S.D. 35, ¶ 12, 897 N.W.2d 356, 360.

“Our task on appeal is to determine only whether a genuine issue of material fact

exists and whether the law was correctly applied.” Brandt v. Cty. of Pennington,

2013 S.D. 22, ¶ 7, 827 N.W.2d 871, 874 (quoting Jacobson v. Leisinger, 2008 S.D. 19,

¶ 24, 746 N.W.2d 739, 745). “Unsupported conclusions and speculative statements

do not raise a genuine issue of fact.” Dakota Indus., Inc. v. Cabela’s.com, Inc.,

2009 S.D. 39, ¶ 20, 766 N.W.2d 510, 516. “[T]his Court will affirm the circuit court’s

3. At the hearing, the circuit court left open the ability for Huether to make
claims against the Estate for reimbursement of expenses incurred after
Stoebner’s death.

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ruling granting a motion for summary judgment if any basis exists to support the

ruling.” Stern Oil Co., Inc. v. Brown, 2012 S.D. 56, ¶ 9, 817 N.W.2d 395, 399

(quoting Discover Bank v. Stanley, 2008 S.D. 111, ¶ 19, 757 N.W.2d 756, 762).

Analysis and Decision

[¶17.] Fiduciary relationships are built on trust and reliance one places in

another to faithfully act for the benefit of the other. Bienash v. Moller, 2006 S.D.

78, ¶ 11, 721 N.W.2d 431, 434. These kinds of relationships are not typical business

relationships, but are created

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. 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). Whether a

fiduciary relationship exists and the scope of the duty are questions of law, while

breach of that duty is a question of fact. Id. ¶ 12, 721 N.W.2d at 434. Importantly,

“as a matter of law, a fiduciary relationship exists whenever a power of attorney is

created.” Hein v. Zoss, 2016 S.D. 73, ¶ 8, 887 N.W.2d 62, 65 (quoting Estate of

Duebendorfer, 2006 S.D. 79, ¶ 26, 721 N.W.2d 438, 445).

[¶18.] Huether contends there is insufficient evidence of a fiduciary

relationship present at the time the contract was signed because there is not

adequate evidence of Stoebner’s dependence and inability to fully protect his own

interests. However, a power of attorney was clearly in effect at the time of the sale

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and Huether used his authority as an attorney-in-fact to carry out the sale,

meaning Huether, as a matter of law, owed a fiduciary duty to Stoebner. Beyond

that, the undisputed evidence indicates that Stoebner placed a high degree of trust

in Huether, relying on him to take care of all his financial matters beginning in at

least 2016. This control Huether exercised over Stoebner’s assets, coupled with

Stoebner’s inability to see to all aspects of his physical needs, placed Stoebner in a

state of dependence on Huether and created an unequal relationship.

[¶19.] Next, we must look to the extent of Huether’s authority under the

power of attorney to determine whether Huether breached his fiduciary duty.

Powers of attorney “must be strictly construed and strictly pursued.” Bienash, 2006

S.D. 78, ¶ 13, 721 N.W.2d at 435 (quoting In re Guardianship of Blare, 1999 S.D. 3,

¶ 14, 589 N.W.2d 211, 214). Because fiduciaries must strictly avoid any acts of self-

dealing, the authority to self-deal exists only if the power of attorney provides “clear

and unmistakable language” specifically authorizing acts of self-dealing. Id. ¶ 14,

721 N.W.2d at 435. “Self-dealing occurs when an agent pits their personal interests

against their obligations to the principal.” Wyman, 2018 S.D. 17, ¶ 23, 908 N.W.2d

at 177. Self-dealing is precluded “even when the language of a power of attorney

might logically entail the ability to self-deal” if there is no explicit provision

allowing it. Id. ¶ 22, 908 N.W.2d at 177.

[¶20.] Huether contends that the power of attorney granted him the ability to

buy and sell real estate in the context of this transaction and, in any event, a

dispute of material fact exists regarding the interpretation of its provisions.

However, we have clearly stated that “[c]ases involving the interpretation of written

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documents are particularly appropriate for disposition by summary judgment, such

interpretation being a legal issue rather than a factual one.” Id. ¶ 9, 908 N.W.2d at

174.

[¶21.] Arguing that he had the authority to carry out this sale, Huether

points to language allowing him to “acquire,” “sell,” and “purchase” real property as

Stoebner might have, and an ability for Huether to “in any manner deal with any

real or personal property . . . .” We have rejected similar arguments urging us to

imply the right to self-deal under similar grants of authority. For instance, in

Wyman, we held that an attorney-in-fact’s power to “give or receive [property] as a

gift” did not include the power to give the principal’s property to herself or her

family in the absence of clear language allowing self-dealing. See id. ¶¶ 21, 23, 908

N.W.2d at 177. Here, there is simply no “clear and unmistakable” language in the

document allowing Huether to self-deal or personally benefit from his fiduciary role

by selling Stoebner’s real property to himself. Furthermore, there is no question

that this was an act of self-dealing and thus a breach of fiduciary duty. On the face

of this transaction, Huether benefitted by obtaining title to Stoebner’s property, for

less than market value and on payment terms that were favorable to Huether, by

using his power as Stoebner’s attorney-in-fact.

[¶22.] Huether argues that further disputes of fact exist regarding his

intentions for carrying out the transaction. Even if there was a fiduciary

relationship, Huether argues, there are issues of fact regarding whether he acted for

the benefit of Stoebner by offering consideration for the land in the form of payment

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of Stoebner’s bills. Huether also argues that a dispute exists as to whether

Stoebner reviewed and approved the purchase agreement.

[¶23.] Huether attempts to generate an issue of fact regarding the

circumstances of the sale by producing written affidavits that do not actually

generate issues of material fact rebutting the language of the power of attorney. We

have adopted a bright-line rule that no oral extrinsic evidence may be introduced to

raise a factual issue as to whether an attorney-in-fact was authorized to self-deal

under a power of attorney. Bienash, 2006 S.D. 78, ¶ 27, 721 N.W.2d at 437. We

have not precluded the introduction of written evidence providing such authority,

but a written document must clearly articulate that the fiduciary is authorized to

engage in self-dealing. See id. ¶ 25, 721 N.W.2d at 437. We have also stated that

affidavits are insufficient written evidence because they are “merely oral evidence

reduced to writing.” Studt v. Black Hills Fed. Credit Union, 2015 S.D. 33, ¶ 14, 864

N.W.2d 513, 517. No written evidence has been introduced that clearly articulates

that Stoebner authorized this act of self-dealing. 4 Regardless of Huether’s

4. The Estate contends that Huether’s breach of his fiduciary duty is
demonstrated by his own deposition testimony and written documents in the
record, and all attempts by Huether to create disputed issues through his
affidavits are inadmissible attempts to contradict his own sworn testimony.
Generally, one cannot “claim a version of the facts more favorable than they
gave in their deposition[].” Johnson v. Matthew J. Batchelder Co., Inc., 2010
S.D. 23, ¶ 11, 779 N.W.2d 690, 694. As such, we prohibit the “consideration
of affidavits contradicting a witness’s prior deposition testimony . . . ‘when
there is no explanation for the change in testimony from the deposition to the
affidavit.’” Id. ¶ 12, 779 N.W.2d at 694 (quoting Taggart v. Ford Motor Credit
Co., 462 N.W.2d 493, 503 (S.D. 1990)). Affidavits are permissible “if they
provide an ‘explanation for the change in testimony or a showing that the
answers were ambiguous and the affidavit clarified them.’” Id. (quoting
Carpenter v. City of Belle Fourche, 2000 S.D. 55, ¶ 26, 609 N.W.2d 751, 762).
(continued . . .)
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intentions and even if Stoebner approved of the transaction, there is no admissible

written evidence supporting Huether’s ability to self-deal.

[¶24.] However, these principles regarding the introduction of oral extrinsic

evidence do not apply if an attorney-in-fact is not acting in that capacity at the time

of the transaction, but rather as an amanuensis. Estate of Bronson, 2017 S.D. 9,

¶ 9, 892 N.W.2d 604, 607-08. The doctrine of amanuensis applies “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.” Id. ¶ 10, 892 N.W.2d at

608. In such a situation, the signature of the amanuensis is treated as the

signature of the person directing the amanuensis. Id. Furthermore, the act is not

considered to be the act of an attorney-in-fact, but the act of the person through the

amanuensis. Id.

[¶25.] For example, we applied this doctrine in Bronson, where a father and

his son, who was the father’s attorney-in-fact, went to a bank to add the son as a

joint owner to the father’s checking account. Id. ¶ 2, 892 N.W.2d at 606. While

there, the son signed documents as his father because severe gout was preventing

the father from holding a pen. Id. ¶ 5, 892 N.W.2d at 607. We determined that

extrinsic evidence to rebut a presumption of self-dealing by the son in this

________________________
(. . . continued)
We have held that newly discovered evidence provides a good explanation for
the changed testimony. Id. ¶ 13, 779 N.W.2d at 694. In contrast,
explanations that are “simply conclusory” do “not provide a proper basis to
contradict, modify, or recant the explicit prior” testimony. DFA Dairy Fin.
Servs., L.P. v. Lawson Special Tr., 2010 S.D. 34, ¶ 23, 781 N.W.2d 664, 671.
Having determined Huether has not introduced any admissible evidence
authorizing an act of self-dealing, we need not address whether Huether’s
reasons for correcting his deposition testimony were adequate explanations.

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circumstance was appropriate because the evidence showed the father was

independently making his own decisions, meaning the son was not acting as an

attorney-in-fact at the time, but rather the father was using the son as an

instrument to sign the documents for him. Id. ¶ 11-12, 892 N.W.2d at 608-09.

[¶26.] Huether argues that because the purchase agreement was written and

allegedly reviewed by Stoebner, “the possibility of this being a written exception to

the amanuensis doctrine needs to be further explored at the trial level.” However,

the Estate asserts that the amanuensis doctrine is inapplicable to the transaction

because the evidence does not show that Huether was acting as a mere instrument

of Stoebner when he signed the agreement. The circumstances of this agreement

indeed do not indicate that Huether was acting as an instrument of Stoebner. Even

if Stoebner had been aware of the sale, he was not present for the signing of the

contract, and Huether clearly signed as an attorney-in-fact by signing “Kenneth

Stoebner by Curtis Huether POA.” The amanuensis doctrine, therefore, cannot be

used as an exception against the introduction of oral evidence validating an act of

self-dealing.

Conclusion

[¶27.] The circuit court did not err when it granted summary judgment to the

Estate. Huether has not demonstrated a genuine dispute of material fact regarding

his fiduciary duty to Stoebner to not engage in acts of self-dealing. Having

determined that no genuine disputes of material fact exist because Huether violated

his fiduciary duty under the provisions of the power of attorney, we need not

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address Huether’s various affirmative defenses. The circuit court’s order is

affirmed.

[¶28.] KERN, JENSEN, SALTER, and DEVANEY, Justices, concur.

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