Court Opinion

ID: 9688361
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:44:40.905074+00
Date Added: 2024-06-11T18:18:37.859657
License: Public Domain

MILLER, Justice
(concurring in part, dissenting in part).
I concur with the majority holding that this case must be remanded on the issue of fraud. However, I dissent from that part of the majority opinion which limits the inquiry to the interim period between the two accountings.1
The majority correctly observes that SDCL 30-25-33 makes an order approving an accounting “conclusive” as against persons interested in an estate, except as to those persons “laboring under any legal disability” in which event the allowance and settlement of the account is merely “prima facie evidence of its correctness.”
The majority, however, minimizes, discounts, or gives slight shrift to appellant’s contention that under SDCL 15-6-60(b)(3) the court may relieve a party from a final order which was obtained by fraud.2
SDCL 15-6-60(b) provides:
On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:
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(3) Fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;
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Section 15-6-60 does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant *748relief to a defendant not actually personally notified as provided by statute or to set aside a judgment for fraud upon the court.
The usual one year time limitation for bringing an action under Rule 60(b)(3) would not be applicable here since the claimed fraud would be, in my opinion, a fraud upon the court, considering the court’s special responsibilities and functions in the administration of estates.
This court discussed at length what constitutes a fraud on the court in Gifford v. Bowling, 86 S.D. 615, 625, 200 N.W.2d 379, 384 (1972). There, we said:
“ ‘Fraud upon the court” should ... embrace only that species of fraud which does, or attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery can not perform in the usual manner its impartial task of adjudging cases that are presented for adjudication. ...’
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... ‘... “[i]n order to set aside a judgment or order because of fraud upon the court under Rule 60(b), * * * it is necessary to show an unconscionable plan or scheme which is designed to improperly influence the court in its decision.” Courts have found fraud upon the court only where there has been the most egregious conduct involving a corruption of the judicial process itself. Examples are ... the involvement of an attorney (an officer of the court) in the perpetration of fraud....’ (Emphasis added.)
It must be remembered that in its findings of fact the trial court specifically found:
5. The accountings filed by the co-executors contained conflicting and frequently unexplained figures, and there was inadequate identification of the sources of receipts of income and the disposition of disbursements throughout both ac-countings. (Emphasis added.)
6. Douglas R. Bleeker, attorney for the co-executors, throughout the administration of the estate maintained a trust account called the Bleeker Trust and during the years 1978 through 1982 the following amounts were shown in the executor’s (sic) accountings as income received from the Bleeker Trust, without any accompanying explanation of the nature or source of the money: $5000 in 1978, $36,281.76 in 1979, $20,000 in 1980, $24,262.50 in 1981, and $18,307.50 in 1982.
7. During the same period the following expenses were shown as paid to the Bleeker Law Firm without any accompanying explanation of the services provided: $5000 in 1978, $10,000 in 1979, $20,-000 in 1980, and $18,000 in 1981.
8. Examples of inadequate reporting in said accountings include: For the year 1981, an expense is listed in the first accounting as ‘Error — $65,000’, without further explanation; certain expenses of attorney Bleeker for the year 1982 were reported and claimed in the first accounting but were not even mentioned in the final accounting for the year 1982; for the year 1983 expenses were charged for loss on the sale of treasury notes, but no account was made for the proceeds of said notes; again in 1984, there was a loss shown for the sale of treasury notes without accounting for the proceeds of said notes.
9. Douglas R. Bleeker, as the attorney for the executors, was responsible for the actual preparation of the account-ings, and as to all transactions through the Bleeker Trust, he was responsible for the information therein. (Emphasis added.)
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11. [The CPA] retained by the executor ... to audit the accountings and books and records of the executors and the Bleeker Trust, reported that executor’s (sic) fees of $41,222 had been approved in the first accounting, further demonstrating the inaccuracies of the executor’s (sic) accountings. (Emphasis added.)
12. The executor’s (sic) fees approved in the first accounting greatly exceeded that allowed by statute ...
13. [Because of the erroneous computation of executors fees on the first ac*749counting it resulted] ... in an overpayment of $41,821.08. (Emphasis added.)
14. In approving the first accounting [the circuit court] approved payment of at least $53,000 for attorney’s fees to Douglas R. Bleeker; however, [the CPA’s] audit indicated that the amount paid was $58,000. (Emphasis added.)
15. Mr. Bleeker claimed attorney’s fees due for services rendered the decedent prior to death; however, he filed no creditor’s claim against the estate, but instead withdrew the amount from the Bleeker Trust sometime after the time for filing claims against the estate had expired.
16. [Co-executor bank] ... was first advised on October 29, 1981 that Mr. Bleeker had paid himself from the Bleeker Trust account a sum of over $43,000 for attorney’s fees during the preceding two years.
17. During the month of September, 1986, after the [appellant] had filed its objections to the executor’s (sic) final account and petition for distribution, including a demand for an audit of the Bleeker Trust, Douglas R. Bleeker paid over to the executors approximately $70,-000 in estate funds which had not been included or mentioned in the accountings of the Bleeker Trust account furnished by him for the first or final accountings. (Emphasis added.)
18. Included in the amount paid by Douglas R. Bleeker to the executors were: a $5000 municipal bond; a check drawn on the Bleeker Trust account in the amount of $15,000 representing the proceeds of a United States Treasury Bill which matured January 8, 1976, and which was deposited in the Bleeker Trust account on January 14, 1976; a personal check drawn on Bleeker’s personal account in the amount of $30,143.10, representing accrued but unpaid interest on estate property held in the Bleeker Trust; $14,893 also representing accrued but unpaid interest on estate property held in the Bleeker Trust; and $8650 of remaining funds held in the Bleeker Trust. (Emphasis added.)
19. According to [the CPA], his audit of the payments made by attorney Bleeker as stated above constituted an overpayment of $5236 of what was actually owed to the estate.
20. Assets of the estate ... were held in trust by attorney Douglas Bleeker and were not properly and adequately identified.
21. Attorney Bleeker commingled his own funds with John Althen’s and other clients’ funds in said Bleeker Trust account, and he withdrew funds from that trust account for his own use and benefit without authorization to do so.
22. Certain securities held by attorney Bleeker were not properly labeled and secured as property belonging to the estate of John Althen and were not accounted for in the first or final account-ings of the co-executors, particularly that part thereof relating to the Bleeker Trust account prepared by Mr. Bleeker. (Emphasis added.)
23. Said securities were not accounted for, and a substantial amount of interest income on assets held in the Bleeker Trust were not accounted for, until objections to the final accounting were raised, including a demand for an audit of the Bleeker Trust.
Considering the foregoing serious and significant findings, and the claims that could flow therefrom, the trial court on remand should be able to inquire into Bleeker’s conduct in the preparation and filing of the first accounting. SDCL 15-6-60(b). If it determines that a fraud was committed “upon the court” it should be entitled, under the auspices of Rule 60(b) to set aside its previous order approving the first accounting and fashion whatever remedy is appropriate. Wooster v. Wooster, 399 N.W.2d 330 (S.D.1987); Gifford, supra.
I am authorized to state that McKEEVER, Circuit Judge, joins in this concurrence in part and dissent in part.

. Note that over six years expired between the time the petition for probate of will was filed and the filing of the co-executors’ first accounting. The second and final accounting was filed ten and one-half years after the original petition for probate of will. Under SDCL 30-25-11, it is required that an accounting be submitted within one year after decedent’s death (here the petition for probate of will was filed within a month of death) and annually thereafter, or at any time when required by the court.

. See SDCL 20-10-1 and -2 for the appropriate definitions.