Court Opinion

ID: 9689191
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:24:16.488742+00
Date Added: 2024-06-11T12:27:33.512745
License: Public Domain

HENDERSON, Justice
(concurring in part, dissenting in part).
I respectfully dissent to this entire opinion, as it is now written, with the exception of that portion of the opinion dealing with NEW TRIAL. If this case is being returned for a new trial, as I understand it to *188be, to determine if, indeed, there is a valid trust, it makes no sense to propound holdings on
(a) the beneficiaries of the trust;
(b) the property properly includable or excludable in the trust;
(c) if the trust was revoked and its date of revocation;
(d) determining whether the trustee acted properly, and unjust or just award of fees to the trustee; and
(e) lawful entitlement to attorneys fees from the trustee.
For the record, it should be mentioned that an original proceeding was filed to revoke a trust triggered by a petition of Herbert C. Coe to revoke his own trust document. In actuality, that proceeding was never heard to fruition. It was not heard because he died. His original proceeding was instituted on March 13, 1985, and he died on June 15, 1985. We now have before us, on appeal, a motion for a new trial, which was denied below, arising from a declaratory judgment action. Ap-pellees filed the declaratory judgment action alleging that the trust was irrevocable. Hence, the original proceeding and this proceeding both have the basic issue: Should the trust be honored or should it be held for naught?
I would reverse the trial court on the basis that the trial court abused its discretion in denying a motion for new trial. See Hepper v. Triple U Enterprises, Inc. 388 N.W.2d 525, 531 (S.D.1986). It is important to recognize that the trial court took evidence on the execution of the trust document. However, no evidence was ever adduced on fraud, undue influence, coercion, or that the trust was established for a fraudulent purpose, ie., to escape the claims of Herbert Coe’s sister. 76 Am. Jur.2d Trusts § 93, at 341 (1975), instructs:
Fraud or undue influence and duress or coercion instrumental in procuring the execution of a deed of trust are grounds for setting it aside. The mere fact, however, that the trustee was the confidential adviser of the grantor is not sufficient to cause the setting aside of the deed, where it appears that the grantor acted on his independent judgment.
Before expressing any evidentiary showings below, I feel it is my duty to express that Attorney Lee Tappe, attorney for appellant Vickie Coe, did not enter an appearance in this case until the substantial part of this trial was over. His ethics are not in question here. Attorney John J. Simpson, attorney for appellee Trust, was not involved in the creation of this trust nor in the early facts giving rise to the questionable birth of a trust, and his ethics are not to be questioned here. During the course of this particular proceeding, the presiding trial judge became highly concerned with what appeared to him to be unacceptable ethical conduct, relating to the creation of this trust, and saw fit to refer the matter to the State Bar of South Dakota. Although it was during the time-frame of this proceeding that the trial judge learned of this, he became knowledgeable of it in a related receivership trial, which was also venued in Tripp County. In In re Estate of Herm, 284 N.W.2d 191, 200 (Iowa 1979), the Supreme Court of Iowa held: “Where such a confidential relationship exists, a transaction by which the one having the advantage profits at the expense of the other will be held presumptively fraudulent and voidable.” This Court held in Hyde v. Hyde, 78 S.D. 176, 186, 99 N.W.2d 788, 793 (1959): “[A] [cjonfidential relationship is not restricted to any particular association of persons. It exists whenever there is trust and confidence, regardless of its origin.” See also Quist v. Beto, 81 S.D. 375, 135 N.W.2d 730 (1965), for similar pronouncement but holding that friendship and affection between trust or beneficiary was not the product or undue influence which controlled a will of decedent. Greene v. Greene, 56 N.Y.2d 86, 91-92, 451 N.Y.S.2d 46, 49, 436 N.E.2d 496, 499 (1982), involving attorney, client, and trust agreement, held that the relationship between an attorney and client “is a fiduciary one and the attorney cannot take advantage of his superior knowledge and position.” For a recent case on fraud in a trust agreement, see Shannon v. Shannon, 680 S.W.2d 367 (Mo.App.1984). It is obvious to this writer that the trial court must dig into the facts, in the case before us, to determine if there was fraud or undue influence encompassed *189within the creation of the Herbert C. Coe trust. First thing’s first!
Vickie Coe, through her attorney, Lee Tappe, made motions subsequent to the receivership proceeding, to reopen this case for the purpose of accepting additional evidence. However, the trial court refused to do so. The thrust of these motions, filed on February 23, September 17, and September 29, 1987, all pertained to newly discovered evidence, insufficiency of evidence, and irregularities in the proceedings which Tappe maintained had denied his client, Vickie Coe, a fair trial. It is my opinion that these motions should have been granted in light of the evidence that was discovered. A startling revelation of the background, on the factual backdrop in the creation of this trust, was found in a well-kept diary belonging to one Jeannette Long of Winner, South Dakota, who had been the housekeeper of Herbert C. Coe. She kept very revealing records of Herbert Coe’s health and the circumstances in his home, all relevant to his competence when he executed the trust, not to mention many revealing facts about alleged undue influence exerted upon him during states of drunkenness and ill health. She documented the gift of three new automobiles to trust beneficiaries and' of trips to Mexico and Canada purchased for them by Herbert C. Coe, not to mention large sums of cash given to these beneficiaries and to his attorney. She documented events concerning suspicions created and arising between the beneficiaries and Herbert Coe’s counsel. At one time, she even detailed that she had found this man literally stuck to his chair, in his own excrement, unable to take care of himself. Under this backdrop, a legal document was signed and this diary singularly, with all of its ramifications, should be brought forward in a new trial, accompanied with its writer, to then and there expose the truth. Paramount consideration should be given to possible fraud, undue influence, duress, or coercion in the creation of the trust. There are many other factual details suggesting undue influence which should be amplified and adjudicated upon for justice in this case.
Vickie Coe’s counsel moved for a new trial under the provisions of SDCL 15-6-59(a)(1), (4), and (6); and, alternatively, moved for relief pursuant to SDCL 21-24-12. Vickie Coe, through counsel, strenuously advocated that a new trial should be granted because of irregularities in the proceedings. These were supported by affidavits. This includes allegations that certain attorneys acted, when having a conflict of interest, and thereby failed and neglected to advise Vickie Coe to seek independent counsel. These attorneys, it is alleged, prevented Vickie Coe from having a fair trial because they participated in the execution of the trust, and then failed to attack the execution of the trust because of a conflict of interest.
Trustor, Herbert C. Coe, himself admitted and alleged that he was incompetent at the time he executed the trust. He filed an affidavit that he had been in very poor health and was using alcoholic beverages in excess over a long period of time. When executing the trust, by his own affidavit, before he died, he stated that he did not understand that his trust could not be changed or altered. Based upon that petition, the plaintiffs in this action petitioned the circuit court for judicial supervision of the trust. This later spawned the present declaratory judgment action.
We are dealing with a situation of whether or not Vickie Coe received a fair trial. Covering this trust scenario like a blanket is the suggestion of counsel improperly representing conflicting interests and securing a great sum of money when a man was both ill and an alcoholic.
Therefore, I am convinced that the trial court below should now take testimony concerning the competency of Herbert Coe when he executed the trust. Were there attendant circumstances such as excessive importunity, superiority of will or mind, or any means by which the free agency of Herbert C. Coe was destroyed thereby constraining him to do what he was unable to refuse? Beard v. Beard, 173 Ky. 131, 190 S.W. 703 (1917). A trust can be rescinded or reformed upon a showing of factors such as fraud, duress, undue influence or mistake. Cruse v. Leary, 727 S.W.2d 408, 410 (Ky.App.1987). See also Restatement (Second) of Trusts § 333 comment d (1959). Until such time it is determined whether or *190not the trust will survive, I cannot join an opinion which is detailed in its analysis on various legal ramifications with a basic tenet, already assumed, that the trust exists. We do not know, at this time, if the trust shall survive allegations of fraud, coercion, undue influence, duress, insufficiency of evidence, and irregularity of proceedings below.