Opinion ID: 2218425
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: Samuel Krause (Samuel) was born in 1897. He married in 1921 and had two children by the marriage; Lloyd Krause (Lloyd) and Lorraine Swanson (Lorraine). Samuel farmed in North Dakota until 1943, when he and his family moved to California. He moved back to North Dakota after the death of his wife in 1954. There he farmed 320 acres which he had purchased in 1946. Amanda was born in 1905. She married in 1928 and had two children by the marriage; Merle Klein (Merle) and Lois Lenling (Lois). In 1948, Amanda and her husband purchased a home in Aberdeen, South Dakota, for $8,500. The mortgage was paid off in 1957. Amanda's husband died in 1953. After his death, Amanda renewed her teaching certificate and began teaching school to support herself. Samuel and Amanda met in 1958 or 1959. They married on June 16, 1959. Samuel and Amanda opened a joint checking account with right of survivorship in either. Throughout their marriage, Samuel and Amanda worked together, pooled their assets, and placed their income in joint accounts and CDs. The major exception was the North Dakota farm held solely in Samuel's name. [1] Samuel and Amanda understood that this property would go to Samuel's children upon his death. To offset this, Samuel paid Amanda for her Aberdeen home and agreed that this money would go to Amanda's children. Amanda placed this and other money into CDs held jointly with her children. [2] Samuel and Amanda continued to farm the North Dakota property. They purchased a small mobile home, lacking in modern conveniences, and lived in it during planting and harvest. Both Samuel and Amanda worked hard on the farm. The rest of the year Samuel and Amanda lived in the home in Aberdeen. [3] For additional income, Amanda took boarders into their Aberdeen home. The evidence showed that Samuel and Amanda were happy throughout their marriage. In 1966, Samuel opened a safety deposit box in the First National Bank of Ellendale, North Dakota. Samuel held the box in his name and later added Lloyd's name. Amanda's name was not on the box and she was not allowed to see its contents. In 1973, Samuel made his last will and testament, which was kept in the box. Amanda did not know the terms of the will, nor that one had been made. In February of 1979, Samuel suffered a stroke. The stroke left him physically disabled and prevented him from continuing to farm. Amanda chose to care for Samuel at home, rather than placing him in a nursing home. Following the stroke, Lloyd attempted to obtain a guardianship to take care of Samuel's financial affairs. Lloyd obtained a statement from Dr. A.C. Vogele, Samuel's treating physician, that Samuel was unable to take care of his financial affairs. However, Dr. Vogele admitted that he saw Samuel once a year or less and that those around Samuel would be better able to judge his mental competency. According to family members and friends Samuel was competent following the stroke until his death. Samuel flatly rejected Lloyd's proposal for a guardianship. Samuel and Amanda continued to manage their affairs until Samuel's death. Samuel had a second stroke in October of 1980. However, Amanda continued to care for him. On October 28, 1985, Amanda fell down some steps and broke her hip. The injury required hospitalization and recovery in a nursing home. Due to Amanda's injury Samuel was also placed in a nursing home. On December 31, 1985, Amanda recovered sufficiently to return home in a wheelchair and made arrangements for Samuel to return home. Samuel returned home on January 2, 1986. He died suddenly on January 9, 1986. Lloyd and Lorraine arrived in Aberdeen shortly after Samuel's death. Following the funeral, Lloyd and Lorraine went to the Ellendale bank and opened Samuel's safety deposit box. They returned to Aberdeen that evening and read the will to Amanda. Article III of the will provided: My wife, Amanda Krause, and I have the dwelling that we live in at Aberdeen and our checking and savings accounts in joint tenancy and we have agreed orally between us as follows: that after the payment of specific bequests as set forth in Article II of this, my Last Will and Testament, that 1/3 of the residue of the joint checking and savings accounts shall go to Amanda Krause and the other 2/3 of the balance remaining, Amanda Krause, my wife, agrees that this shall become a part of my estate and be disposed of as hereinafter set forth. I, of course, understand that my wife need not do this because this property is in joint tenancy but I have enough faith in my wife to know that she will do as agreed upon. Further, I have a life insurance policy payable to her as beneficiary and she has agreed that this money shall be used by her for my funeral expense. Further I give, devise and bequeath to my wife, Amanda Krause, the house in Aberdeen that we live in; this house to be hers in fee simple. It is, of course, understood that this house is in joint tenancy and it is further understood that she may do with this house as she may desire when she inherits it from me. I further give, devise and bequeath to my wife the automobile that I may own at the time of my death and further, I give, devise and bequeath to my wife the household goods in the dwelling that we own at the time of my death. The will provided that the remaining two-thirds of the joint tenancy accounts would be distributed one-third to Lloyd and one-third to Lorraine. Amanda stated that she had never made such an agreement with Samuel. [4] The next day Lloyd and Lorraine met with Attorney Dan Diemert (Diemert) in Ellendale and reviewed Samuel's will. Diemert discussed the effect of the joint tenancy property and the conflicts which could arise from the will. He explained that the will would not, of itself, negate the right of survivorship and the burden would be upon them to show that there was no right of survivorship. Diemert suggested a family agreement to avoid an expensive court battle. That evening, Lloyd and Lorraine returned to Amanda's home. Amanda's son Merle was also present. A discussion ensued concerning the will and part of the conversation with Diemert. Though Lloyd understood that the jointly held property could pass to Amanda outside the will, this was not discussed with Amanda. Instead, Lloyd suggested that if the will was unsatisfactory to Amanda, they should draw up a family agreement to distribute the property. He proposed a settlement which would distribute the property similar to the will, except that Amanda would receive one-half the joint accounts, rather than the one-third under the will. [5] The discussion continued until 4:00 in the morning. Lloyd pressured Amanda to sign the proposed agreement that night, but she refused. After only a few hours of sleep, Amanda and Merle went to see Attorney Bill Hyde (Hyde). Amanda sought advice on the agreement proposed by Lloyd. There was evidence that Hyde should have known that the accounts were in joint tenancy with right of survivorship in Amanda. However, Hyde's testimony and notes from the conference show that he assumed the accounts were not in joint tenancy and advised Amanda under that assumption. Hyde explained to Amanda that she would receive slightly more under the family agreement than if she repudiated the will and chose to take her elective share. He did not advise Amanda concerning the effect joint tenancy would have on the distribution. Later that morning, Lloyd came to Hyde's office and hired Hyde to draw up the family agreement consistent with the proposal Lloyd had drawn up the prior evening. Lloyd told Hyde that things must be done quickly and hurried him to draw the agreement. Later in the day, Lloyd obtained a copy of the agreement drawn up by Hyde. The next morning Lloyd took the agreement to another attorney in Aberdeen. The attorney reviewed the draft and discussed its enforceability with Lloyd. Lloyd also took a draft of the agreement to Attorney Diemert for review. After several changes and revisions, the agreement was taken to Amanda's home where she signed it that same evening. Neither Amanda nor Merle received additional advice from Hyde or any other attorney after their initial conversation. Approximately one month later, Amanda was advised by her sister that property held in joint tenancy passes to the surviving owner regardless of any will terms. Amanda and Merle researched this and found Amanda's sister to be correct. Amanda and Merle went to see Attorney Hyde who confirmed their conclusion. Prior to this time, Amanda had no knowledge that the joint tenancy property might survive in spite of the will terms. Hyde informed Attorney Diemert by letter that Hyde could no longer represent Lloyd. He stated that Amanda intended to rescind the family agreement because it was obtained through mistake and fraud, and duress. On May 27, 1986, Samuel's will was admitted to probate. Lloyd was named executor. Amanda filed several motions which, among other things, requested distribution to her of the assets held in joint tenancy between her and Samuel. On August 14, 1987, Lloyd and Lorraine filed an action under SDCL 21-24-5 seeking to uphold the validity of the family agreement. In the alternative, the complaint requested the court to declare 1) that Samuel did not intend for the jointly held property to carry a right of survivorship in Amanda, or 2) that Amanda wrongly obtained the joint accounts and held them in constructive trust for all the heirs. Following a court trial, the court held the family agreement unenforceable because of mistake of fact and mistake of law on the part of Amanda. The court further held that Amanda was entitled to all the accounts held in joint tenancy between her and Samuel. Lloyd and Lorraine appeal. We affirm.