Wilcox v. VERMEULEN

#25144-a-GAS

2010 SD 29

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *
STACIE WILCOX f/k/a Stacie
Sheesley, Personal
Representative of the
Estate of Shane Sheesley, Plaintiff and Appellee,

v.

DEE ANN VERMEULEN, as Personal
Representative of the Estate
of Thomas Vermeulen, Defendant and Appellant.

* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA

* * * *
HONORABLE JANINE M. KERN
Judge
* * * *

JAMES W. OLSON of
Wilson, Olson & Nash, PC
Rapid City, South Dakota Attorneys for plaintiff
and appellee.

DENNIS W. FINCH of
Finch Maks, Prof. LLC
Rapid City, South Dakota Attorneys for defendant
and appellant.

* * * *
ARGUED OCTOBER 6, 2009
REASSIGNED JANUARY 5, 2010

OPINION FILED 3/31/10
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SEVERSON, Justice (on reassignment).

[¶1.] The proceeds from the settlement of multiple wrongful death lawsuits

were paid into the Sheesley, Vermeulen, Bielstein Trust (SVB Trust) to be held

pending a distribution of the funds. Stacie Wilcox, f/k/a Stacie Sheesley, personal

representative of the Estate of Sheesley, brought this declaratory judgment action

seeking to divide the corpus of the SVB Trust between its beneficiaries, the Estates

of Sheesley and Vermeulen. The trial court distributed the corpus of the SVB Trust,

but did not allow Dee Ann Vermeulen, personal representative of the Estate of

Vermeulen, to present additional expert testimony in this distribution proceeding

based on judicial estoppel. Vermeulen appeals. We affirm.

BACKGROUND

[¶2.] Shane Sheesley, Thomas Vermeulen, and Robert Bielstein died as a

result of injuries sustained in an aircraft accident near Mission, South Dakota, on

August 23, 2000. The decedents’ estates filed wrongful death actions against

numerous defendants whose identities are not relevant to this appeal. In deciding

to sue, the Estates of Sheesley and Vermeulen retained common attorneys, while

the Estate of Bielstein hired separate counsel. One wrongful death lawsuit was

initiated in state court in Hughes County, South Dakota, and the other two suits

were initiated in federal court in the United States District Court, District of South

Dakota.

[¶3.] In order to prove damages in both wrongful death lawsuits, the Estates

of Sheesley and Vermeulen hired Donald Frankenfeld, a forensic economist, to

testify to the economic losses of the Estates. Neither estate provided expert

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testimony as to non-economic losses, which include “the loss of decedent’s

companionship and society as expressed by, but not limited to, the words ‘advice,’

‘assistance,’ and ‘protection[.]’” Zoss v. Dakota Truck Underwriters, 1999 SD 37,

¶11, 590 NW2d 911, 913-14 (quoting Sander v. Geib, Elston, Frost Prof’l Ass’n, 506

NW2d 107, 119 (SD 1993) (quoting Flagtwet v. Smith, 367 NW2d 188, 191 (SD

1985))).

[¶4.] Before the wrongful death lawsuits were decided on their merits, all

parties and lawsuits settled out-of-court. The wrongful death lawsuit brought in

state court settled for $2,500,000.00, and the federal lawsuit settled for $950,000.00.

Both settlements were approved by the respective courts and placed in the SVB

Trust. A separate settlement of $200,000.00 was reached with one defendant. This

amount was not placed in the SVB Trust, but was distributed equally between the

Estates of Sheesley and Vermeulen prior to the distribution proceeding leading to

this appeal. After deduction of the Estate of Bielstein’s award, court costs, and

attorneys’ fees from the SVB Trust, the remaining corpus of the trust

($1,625,872.00) was insufficient to make the Estates of Sheesley and Vermeulen

whole. Further, the trust agreement did not provide a formula for dividing the trust

corpus, and the parties could not agree on the distribution.

[¶5.] Stacie Wilcox (Wilcox), the personal representative of the Estate of

Sheesley, brought this declaratory judgment action in the trial court seeking to

divide the corpus of the SVB Trust between the Estates of Sheesley and Vermeulen.

Dee Ann Vermeulen (Vermeulen), the personal representative of the Estate of

Vermeulen, sought leave of court to present additional expert testimony in this

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distribution proceeding. In response, Wilcox argued that both parties pursued the

defendants together using one team of lawyers and one expert, Frankenfeld; that

throughout the litigation, the parties relied on the opinion of Frankenfeld when

making trial and settlement decisions; and, that based on a theory of estoppel,

Vermeulen was prohibited from taking an “inconsistent position” by proffering a

different expert in this distribution proceeding. The trial court agreed and did not

allow the additional expert testimony based on judicial estoppel.

[¶6.] At the hearing concerning the distribution of the SVB Trust and other

settlement proceeds, the trial court made findings of fact based on the stipulated

record from the previous state and federal cases. The stipulated record included the

depositions and testimony of the two widows and the economic expert, Frankenfeld.

Ryan Vermeulen and Karla Vermeulen Taylor, Vermeulen’s children, also testified

at this hearing to aid the trial court in determining non-economic losses. Based on

the economic losses determined by Frankenfeld and the non-economic losses

determined by the trial court, the trial court distributed 87% of the SVB Trust to

the Estate of Sheesley (Stacie Wilcox and Shelbie Sheesley Wilcox) and 13% to the

Estate of Vermeulen. The trial court allocated 9.75% of the Estate of Vermeulen to

Dee Ann Vermeulen, 1.95% to Ryan Vermeulen, and 1.3% to Karla Vermeulen

Taylor.

STANDARD OF REVIEW

[¶7.] “Admission of expert testimony is within the broad discretion of the

trial court.” Thompson v. Mehlhaff, 2005 SD 69, ¶21, 698 NW2d 512, 519 (citing

Schrader v. Tjarks, 522 NW2d 205, 209 (SD 1994); Stormo v. Strong, 469 NW2d

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816, 820 (SD 1991)). “A trial court’s evidentiary rulings are presumed correct and

will not be reversed unless there is a clear abuse of discretion.” Id. ¶21, 698 NW2d

at 519-20 (citing Stormo, 469 NW2d at 820). As this Court noted in State v.

Asmussen: “With regard to the rules of evidence, abuse of discretion occurs when a

trial court misapplies a rule of evidence, not when it merely allows or refuses

questionable evidence.” 2006 SD 37, ¶13, 713 NW2d 580, 586 (citing State v.

Guthrie, 2001 SD 61, ¶30, 627 NW2d 401, 415 (citing Koon v. United States, 518 US

81, 100, 116 SCt 2035, 2047, 135 LEd2d 392 (1996))). “In addition to showing an

abuse of discretion, [Vermeulen] must show that the excluded evidence might and

probably would have resulted in a different verdict.” Thompson, 2005 SD 69, ¶21,

698 NW2d at 520 (citing Schrader, 522 NW2d at 209-10). Finally, the proponent of

excluded evidence must make the substance of the evidence known to the trial court

by making an offer of the excluded evidence at trial or prior to trial by an offer of

proof. 1 Id. (citing Joseph v. Kerkvliet, 2002 SD 39, ¶7, 642 NW2d 533, 535 (quoting

State v. Norville, 23 SW3d 673, 685 (MoCtApp 2000))).

1. SDCL 19-9-3 (Rule 103(a)) provides:

Error may not be predicated upon a ruling which admits or excludes
evidence unless a substantial right of the party is affected, and:
(1) In case the ruling is one admitting evidence, a timely objection
or motion to strike appears of record, stating the specific
ground of objection, if the specific ground was not apparent
from the context; or
(2) In case the ruling is one excluding evidence, the substance of
the evidence was made known to the court by offer or was
apparent from the context within which questions were asked.
Once the court makes a definitive ruling on the record admitting or
excluding evidence, either at or before trial, a party need not renew an
objection or offer of proof to preserve a claim of error for appeal.

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ANALYSIS AND DECISION

[¶8.] 1. Whether the trial court erred by applying judicial
estoppel to deny Vermeulen’s motion to offer additional
expert testimony.

[¶9.] We must first address Vermeulen’s argument that the trial court erred

by denying her motion to offer additional expert testimony in this distribution

proceeding. Wilcox argued that based on a theory of estoppel, Vermeulen was

prohibited from taking an “inconsistent position” by proffering a different expert for

distribution purposes.

To create an estoppel, there must have been some act or conduct
upon the part of the party to be estopped, which has in some
manner misled the party in whose favor the estoppel is sought
and has caused such party to part with something of value or do
some other act relying upon the conduct of the party to be
estopped, thus creating a condition that would make it
inequitable to allow the guilty party to claim what would
otherwise be his legal rights.

A-G-E Corp. v. State, 2006 SD 66, ¶32, 719 NW2d 780, 789 (quoting Western Cas.

and Sur. Co. v. Am. Nat’l Fire Ins. Co., 318 NW2d 126, 128 (SD 1982) (quoting

Somers v. Somers, 27 SD 500, 504, 131 NW 1091, 1093 (1911))). “Estoppel will be

applied against a party ‘who by [his] words or conduct take[s] positions inconsistent

with [his] rights, unfairly misleading others into detrimental reliance.’” Id. (quoting

Harms v. Northland Ford Dealers, 1999 SD 143, ¶17, 602 NW2d 58, 62) (additional

citations omitted).

[¶10.] The trial court ruled that because both parties pursued the defendants

together with one expert and relied on that expert’s opinion in making trial and

settlement decisions, Vermeulen was judicially estopped from offering a different

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expert in this distribution action. This Court has considered the following elements

in deciding whether to apply judicial estoppel:

[T]he later position must be clearly inconsistent with the earlier
one; the earlier position was judicially accepted, creating the
risk of inconsistent legal determinations; and the party taking
the inconsistent position would derive an unfair advantage or
impose an unfair detriment to the opponent if not estopped.

Canyon Lake Park, L.L.C. v. Loftus Dental, P.C., 2005 SD 82, ¶34, 700 NW2d 729,

737 (quoting Watertown Concrete Prod., Inc. v. Foster, 2001 SD 79, ¶12, 630 NW2d

108, 112-13 (citing New Hampshire v. Maine, 532 US 742, 750, 121 SCt 1808, 1814-

15, 149 LEd2d 968, 977)) (additional citations omitted). Vermeulen now argues that

the retention of a separate expert was necessary because Frankenfeld did not

consider the non-economic losses to the parties or the economic losses to

Vermeulen’s children.

[¶11.] Wilcox brought this declaratory judgment action because the trust

agreement did not provide a formula for dividing the trust corpus and the parties

could not agree on the distribution. The trial court addressed two tasks in this

action. First, the complaint was filed under SDCL 21-24-5 to divide the corpus of

the SVB Trust between its beneficiaries, 2 the Estates of Sheesley and Vermeulen.

2. SDCL 21-24-5 provides:

Any person interested as or through a personal representative, trustee,
conservator, or other fiduciary, creditor, devisee, legatee, heir, next of
kin, or cestui que trust in the administration of a trust, or of the estate
of a decedent, minor, protected person, or insolvent, may have a
declaration of rights or legal relations in respect thereto:
(1) To ascertain any class of creditors, devisees, legatees, heirs,
next of kin, or others;
(continued . . .)
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A second related issue was the allocation between the two beneficiaries of the

Estate of Sheesley and among the three beneficiaries of the Estate of Vermeulen

based on SDCL 21-5-8. 3

[¶12.] The trial court divided the corpus of the SVB Trust between its

beneficiaries with 87% to the Estate of Sheesley and 13% to the Estate of

Vermeulen. The amount of distribution to each estate was based on the trial court’s

determination of pecuniary loss to each estate. “[P]ecuniary losses include both

economic and non-economic losses[.]” Dakota Plains A.G. Ctr., L.L.C. v. Smithey,

2009 SD 78, ¶13, 772 NW2d 170, 177 (citing Zoss, 1999 SD 37, ¶¶11-15, 590 NW2d

at 913-14). In the present action, non-economic loss was based primarily on the

testimony of family members. Frankenfeld testified to economic loss using life

expectancy and estimations of earning capacity. The Estate of Sheesley’s damages

were calculated as greater than the Estate of Vermeulen’s damages because

________________________
(. . . continued)
(2) To direct the personal representatives or trustees to do or
abstain from doing any particular act in their fiduciary
capacity;
(3) To determine any question arising in the administration of the
estate or trust, including questions of construction of wills and
other writings.

3. SDCL 21-5-8 provides:

The amount received by such personal representative, whether by
settlement or otherwise, shall be apportioned among the beneficiaries,
unless adjusted between themselves, by the court making the
appointment, in such manner as shall be fair and equitable, having
reference to the age and condition of such beneficiaries.

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Sheesley was younger and had more years of lost earnings, and also because

Sheesley had a greater earning capacity than Vermeulen.

[¶13.] The trial court also allocated each estate between or among its

beneficiaries. The allocation within the Estate of Sheesley between its two

beneficiaries, the wife and daughter of Sheesley, was delayed pending appointment

of a guardian ad litem as the daughter, Shelbie Sheesley Wilcox, was a minor. This

matter was not appealed. The trial court allocated loss among the beneficiaries of

the Estate of Vermeulen with 75% to Vermeulen’s wife, Dee Ann Vermeulen; 15% to

his son, Ryan Vermeulen; and 10% to his daughter, Karla Vermeulen Taylor. The

allocation among the beneficiaries of the Estate of Vermeulen was not appealed.

[¶14.] In wrongful death actions, damages may be awarded proportionally

based on pecuniary injuries under SDCL 21-5-7. 4 “[P]ecuniary injury encompasses

more than strictly economic losses[.]” Dakota Plains A.G. Ctr., 2009 SD 78, ¶29,

772 NW2d at 181 (quoting Zoss, 1999 SD 37, ¶11, 590 NW2d at 913). “[I]t includes

‘the loss of decedent’s companionship and society as expressed by, but not limited to,

the words “advice,” “assistance,” and “protection,” but without consideration for the

grief and mental anguish suffered by the beneficiaries because of the wrongful

death.’” Id. (quoting Zoss, 1999 SD 37, ¶11, 590 NW2d at 913-14).

[¶15.] The parties submitted evidence relevant to their pecuniary losses at

trial in this distribution action. This evidence included the testimony of Ryan

4. SDCL 21-5-7 provides: “In every action for wrongful death the jury may give
such damages as they may think proportionate to the pecuniary injury
resulting from such death to the persons respectively for whose benefit such
action shall be brought.”

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Vermeulen and Karla Vermeulen Taylor. The trial court also considered

stipulations, exhibits, and transcripts of testimony of Wilcox, Vermeulen, and

Frankenfeld in depositions and at trial in proceedings before the Sixth Judicial

Circuit Court, Hughes County, South Dakota, and in discovery in United States

District Court, District of South Dakota, Southern Division. Finally, the trial court

considered Frankenfeld’s report and the summary of the case submitted by attorney

Bart Banks, who represented both parties in the wrongful death actions. Both

parties submitted briefs and argument of counsel.

[¶16.] Prior to trial, Vermeulen moved to submit further expert testimony on

economic damages, but he did not make an offer of proof as to the substance of the

proposed evidence, explain how that evidence would assist the trial court, or even

name an expert. To be admissible, an expert’s opinion must assist the trier of fact. 5

SDCL 19-15-2. Vermeulen focuses on Frankenfeld’s testimony concerning the

economic portion of the pecuniary injury. Frankenfeld calculated the economic loss

suffered by each estate based on Sheesley’s and Vermeulen’s lost earning potential

over what would have been their expected life span. Economic loss generally is

comprised of lost lifetime earnings. No evidence was presented to support economic

5. SDCL 19-15-2 (Rule 702) provides:

If scientific, technical, or other specialized knowledge will assist the
trier of fact to understand the evidence or to determine a fact in issue,
a witness qualified as an expert by knowledge, skill, experience,
training, or education, may testify thereto in the form of an opinion or
otherwise.

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loss more than the amounts Sheesley or Vermeulen could have earned during their

lifetime less their consumption.

[¶17.] Vermeulen argues Frankenfeld was remiss in not specifically

addressing Ryan Vermeulen’s economic loss and in not calculating non-economic

pecuniary loss. Ryan Vermeulen was eighteen at the time of his father’s death but

was a high school student living at home and was still dependent on his father’s

support. Because the Estate of Vermeulen’s economic loss was based on potential

earnings, the Estate’s economic losses do not increase simply by showing that more

family members were injured or suffered an economic loss. The trial court

specifically found Ryan Vermeulen had an economic loss and considered that

evidence in the allocation within the Estate of Vermeulen.

[¶18.] At the trial before Judge Kern, Ryan Vermeulen and Karla Vermeulen

Taylor testified as to the non-economic pecuniary losses they suffered. In the trial

court’s findings, damages were allocated based on total pecuniary loss, both

economic loss and non-economic loss. The differences in their relationships with

their father would have affected allocation, a fact recognized by the trial court’s

decision. Vermeulen made no showing at the motion hearing or at the trial as to

the nature or relevance of any proposed expert testimony on non-economic loss.

[¶19.] Vermeulen contends the trial court erred in refusing further expert

testimony based on judicial estoppel. Wilcox argued such evidence should not be

allowed based on principles of estoppel since the corpus of the SVB Trust consisted

of settlements reached by the parties where they jointly presented evidence of

economic loss based on the testimony of the same forensic economist, Frankenfeld.

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Even if the trial court was not technically correct in using judicial estoppel rather

than promissory estoppel 6 or equitable estoppel, 7 this is not an error that requires

that we reverse the trial court’s decision.

[¶20.] We should not reach that issue because Vermeulen failed to make an

offer of proof as to the evidence that would be presented and the substance of the

6. Wilcox argues that promissory estoppel prevents Vermeulen from presenting
additional expert testimony in this distribution proceeding. “This Court has
held that ‘promissory estoppel may be invoked where a promisee alters his
position to his detriment in the reasonable belief that a promise would be
performed.’” Canyon Lake Park, 2005 SD 82, ¶38, 700 NW2d at 739 (quoting
Garrett v. BankWest, Inc., 459 NW2d 833, 848 (SD 1990) (citing Minor v.
Sully Buttes Sch. Dist. No. 58-2, 345 NW2d 48, 51 (SD 1984))). The elements
of promissory estoppel are as follows:

(1) The detriment suffered in reliance must be substantial in an
economic sense;
(2) The loss to the promise must have been foreseeable by the
promisor; and
(3) The promisee must have acted reasonably in justifiable reliance
on the promise made.

Id. Wilcox asserts that each of these elements is established in the present
case.

7. In order to constitute equitable estoppel,

(1) False representations or concealment of material facts must
exist;
(2) The party to whom it was made must have been without
knowledge of the real facts;
(3) The representations or concealment must have been made with
the intention that it should be acted upon; and
(4) The party to whom it was made must have relied thereon to his
prejudice or injury.

Hahne v. Burr, 2005 SD 108, ¶17, 705 NW2d 867, 873 (quoting Cleveland v.
Tinaglia, 1998 SD 91, ¶38, 582 NW2d 720, 727). Equitable estoppel cannot
exist “if any of these essential elements are lacking, or if any of them have
(continued . . .)

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evidence was not apparent from the context. Thompson, 2005 SD 69, ¶21, 698

NW2d at 520 (citations omitted). See City of Sioux Falls v. Kelley, 513 NW2d 97,

108 (SD 1994) (citing Crilly v. Morris, 70 SD 584, 19 NW2d 836 (1945)) (“Where

there has been no offer of proof on excluded testimony, and it is impossible to

determine whether the party has been prejudiced by the court’s ruling, the

contention that the court erred in excluding testimony has not been preserved for

appeal.”). Neither the trial court nor this Court should speculate as to the

substance of the proposed evidence. This was an evidentiary ruling that should not

be reversed because there was not a clear abuse of discretion.

[¶21.] In addition, Vermeulen failed to show “that the excluded evidence

might and probably would have resulted in a different verdict,” or even that the

expert testimony would assist the trial court. See Thompson, 2005 SD 69, ¶21, 698

NW2d at 520 (citations omitted). “Findings of fact, whether based on oral or

documentary evidence, may not be set aside unless clearly erroneous.” SDCL 15-6-

52(a). The trial court entered detailed Findings of Fact and Conclusions of Law.

The trial court’s findings of fact were methodical and supported by the evidence.

[¶22.] 2. Whether the trial court erred by considering the
$93,333.00 distribution to each estate an interim
distribution.

[¶23.] Vermeulen also argues that the trial court erred by considering the

$93,333.00 distribution to the Estates of Sheesley and Vermeulen an interim

________________________
(. . . continued)
not been proved by clear and convincing evidence.” Cooper v. James, 2001
SD 59, ¶16, 627 NW2d 784, 789.

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distribution. The wrongful death lawsuit brought in state court settled for

$2,500,000.00, and the federal lawsuit settled for $950,000.00. Although both

settlements were approved by the respective courts and placed in the SVB Trust,

neither settlement provided guidance for distribution of the SVB Trust between the

Estates of Sheesley and Vermeulen or allocation among the beneficiaries of the

Estates. A separate settlement of $200,000.00 was reached with one defendant.

This amount was not placed in the SVB Trust, but was distributed equally between

the Estates of Sheesley and Vermeulen, less their equal share of attorneys’ fees.

Each estate received $93,333.00. Based on a written stipulation between Wilcox

and Vermeulen, and upon oral argument by the parties at trial, the trial court

decided the $200,000.00 settlement and subsequent distributions did not include an

agreement to exclude that amount from this distribution proceeding. The trial

court found that the lack of an agreement to the contrary established that the two

interim distributions of $93,333.00 were subject to a final distribution between the

Estates of Sheesley and Vermeulen.

[¶24.] “We review conclusions of law under the de novo standard without

deference to the [trial] court.” In re Estate of Watson, 2003 SD 142, ¶9, 673 NW2d

60, 62 (citations omitted). The “[e]xistence of a valid contract is a question of law,”

In re Estate of Neiswender, 2000 SD 112, ¶9, 616 NW2d 83, 86 (citations omitted),

and the “proponent has the burden ‘to prove the contract by evidence so clear and

satisfactory’ that no doubt remains,” id. ¶10 (citing Neuharth v. Brunz, 85 SD 267,

274, 181 NW2d 92, 95 (1970) (citing Ward v. Melby, 82 SD 132, 142 NW2d 526

(1966))) (additional citation omitted).

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[¶25.] Vermeulen had the burden as the proponent to establish the existence

of an agreement that the $93,333.00 was a final distribution. See id. In support of

her contention, Vermeulen noted that the parties stipulated that the $200,000.00

settlement was not deposited in the SVB Trust, “which is the subject of the instant

action”; that Vermeulen signed a release based on the receipt of $93,333.00; and,

that to divide those proceeds using the same percentages as applied to the SVB

Trust would be “patently unfair.” These arguments fail to establish an agreement

that the $200,000.00 settlement and subsequent $93,333.00 distributions to each

estate were final distributions not subject to a later distribution between the

Estates of Sheesley and Vermeulen.

[¶26.] The signed release was a condition to settlement, “simply a release to

settle the case.” Both parties admit the release and settlement did not include

language referencing the type of distribution. Vermeulen conceded that it was “sort

of a boiler plate standard release.” Furthermore, the stipulations confirm that the

parties understood these were not final distributions. The December 18, 2008,

Stipulation #5 states: “That at the time [the $200,000.00 claim] was settled, there

was no agreement as to how such proceeds should be allocated among any

beneficiaries of the wrongful death proceeds.” (Emphasis added.)

[¶27.] Finally, leaving this settlement out of the SVB Trust does not reflect a

final distribution of those proceeds. The parties stipulated that Wilcox and

Vermeulen, apart from Bielstein, entered into an agreement to settle with one of the

defendants in the federal court lawsuit. Deposit of this settlement into the SVB

Trust raised further settlement complications with the Estate of Bielstein because

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that Estate was a party to the SVB Trust. Wilcox and Vermeulen agreed to split

the settlement proceeds therein on an equal basis to facilitate resolution of the

matter. This evidence suggests an interim distribution to circumvent a problem

with the Estate of Bielstein; it does not reflect an agreement that the distribution

would be final as between the Estates of Sheesley and Vermeulen. Furthermore,

because the parties in fact did not divide the settlement proceeds themselves, the

trial court was required to divide the entire award between them. SDCL 21-5-8.

[¶28.] Therefore, the trial court did not err as a matter of law. The trial court

correctly decided that Vermeulen failed to establish the existence of an agreement

as to the finality of the $93,333.00 distribution “by evidence so clear and

satisfactory that no doubt remains.” Neiswender, 2000 SD 112, ¶10, 616 NW2d at

86 (citations and internal quotations omitted). Further, because this amount was

not distributed between the Estates of Sheesley and Vermeulen, it was subject to

final court distribution pursuant to SDCL 21-5-8. The entire $186,666.00 is subject

to final distribution between the Estates of Sheesley and Vermeulen because there

was no agreement that each $93,333.00 distribution was a final distribution.

[¶29.] Affirmed.

[¶30.] ZINTER, Justice, concurs.

[¶31.] GILBERTSON, Chief Justice, and MEIERHENRY, Justice, concur

specially.

[¶32.] SABERS, Retired Justice, dissents in part and concurs in part.

[¶33.] SABERS, Retired Justice, sitting for KONENKAMP, Justice,

disqualified.

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MEIERHENRY, Justice (concurring specially).

[¶34.] I concur. I write only to point out some of the problems that this case

raises concerning attorney representation in the underlying litigation. Initially,

both parties in this action - Wilcox and Vermeulen - were represented by the same

attorneys. Those attorneys instituted lawsuits against the aircraft companies and

other defendants. Their representation of both Wilcox and Vermeulen appears to be

in direct conflict with Rule 1.7 of the South Dakota Rules of Professional Conduct.

Rule 1.7 provides:

(a) Except as provided by paragraph (b), a lawyer shall not
represent a client if the representation involves a concurrent
conflict of interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly
adverse to another client; or
(2) there is a significant risk that the representation of
one or more clients will be materially limited by the
lawyer’s responsibilities to another client, a former client
or a third person or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of
interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will
be able to provide competent and diligent representation
to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a
claim by one client against another client represented by
the lawyer in the same litigation or same matter before a
tribunal; and
(4) each affected client gives informed consent,
confirmed in writing.

SDCL 16-18 App., Rules of Prof. Conduct, Rule 1.7 (emphasis added).

[¶35.] A conflict of interest exists if “there are substantially different

possibilities of settlement of the claims or liabilities in question.” Id. cmt. 23.

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Additionally, as the comment to this Rule indicates, some conflicts prohibit

concurrent representation and are “nonconsentable.”

Paragraph (b)(3) describes conflicts that are nonconsentable
because of the institutional interest in vigorous development of
each client’s position when the clients are aligned directly
against each other in the same litigation or other proceeding
before a tribunal. Whether clients are aligned directly against
each other within the meaning of this paragraph requires
examination of the context of the proceeding.

Id. cmt. 17. Based on the issues now before us concerning the division of the trust,

a real question exists as to whether the original lawyers were able to “vigorously

develop each client’s position in the same litigation or other proceeding before a

tribunal.” The original lawyers settled in the midst of trial, took their fees - totaling

over $1,657,500 - and left the widows and children to fight over the settlement

balance of $1,625,000 placed in the trust. As a result, the parties had to hire new

lawyers to litigate the division of the trust. I point this fact out in an attempt to

identify the source of the conflict in this case rather than just the symptom.

[¶36.] GILBERTSON, Chief Justice, joins this special writing.

SABERS, Retired Justice (concurring in part and dissenting in part).

[¶37.] I dissent on Issue I and concur on Issue II. I dissent because a decision

based on an error of law is, by definition, an abuse of discretion. Credit Collection

Servs., Inc. v. Pesicka, 2006 SD 81, ¶5, 721 NW2d 474, 476 (citation omitted). The

application of judicial estoppel is a mixed question of fact and law we review de

novo. Watertown Concrete, 2001 SD 79, ¶11, 630 NW2d at 112 (citation omitted).

The trial court erred as a matter of law in applying judicial estoppel to the facts of

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this case to deny Vermeulen’s motion to admit expert testimony. This decision was

based on an error of law and it was an abuse of discretion.

[¶38.] 1. The trial court erred in applying judicial estoppel and in
denying Vermeulen’s motion to offer additional expert
testimony.

[¶39.] The trial court ruled that Vermeulen was judicially estopped from

offering a different expert. This Court has considered the following factors in

deciding whether to apply judicial estoppel:

[T]he later position must be clearly inconsistent with the earlier
one; the earlier position was judicially accepted, creating the
risk of inconsistent legal determinations; and the party taking
the inconsistent position would derive an unfair advantage or
impose an unfair detriment to the opponent if not estopped.

Canyon Lake Park, 2005 SD 82, ¶34, 700 NW2d at 737 (emphasis added) (citations

omitted).

Vermeulen’s Position is Not Clearly Inconsistent

[¶40.] It is clear that Vermeulen did not take the position that Frankenfeld

would be the sole expert for apportionment purposes. The co-plaintiffs hired one

expert for three wrongful death actions that were ultimately settled out-of-court.

This does not mean that Vermeulen took the position during those trials that

Frankenfeld, the sole expert for trial, would also provide the exclusive testimony for

apportionment purposes. In fact, the settlements failed to apportion the money

among the beneficiaries or estates according to Frankenfeld’s testimony. That

failure suggests that apportionment of the settlements would not be based on the

sole testimony of Frankenfeld. Based on these facts, and the fact that Frankenfeld

omitted all non-economic loss analysis and economic loss analysis as to Vermeulen’s

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children, Vermeulen did not assert a clearly inconsistent position by offering expert

opinion.

The Trial Court Erred in Ruling Vermeulen’s Position was Judicially
Accepted and the Majority Opinion Affirms that Error

[¶41.] Vermeulen claims that even if a “clearly inconsistent” position was

asserted during the trials leading to settlement, any earlier position was not

“judicially accepted.” While we have yet to define the contours of “judicially

accepted” under the judicial estoppel doctrine, it appears that neither party’s

positions were judicially accepted in this case.

[¶42.] The judicial acceptance element requires inquiry into “whether the

party has succeeded in persuading a court to accept that party’s earlier position, so

that judicial acceptance of an inconsistent position in a later proceeding would

create ‘the perception that either the first or the second court was misled[.]’” New

Hampshire v. Maine, 532 US at 750, 121 SCt at 1815 (citation omitted), cited with

approval in Watertown Concrete, 2001 SD 79, ¶12, 630 NW2d at 112-13. The law is

unsettled as to what constitutes success in achieving judicial acceptance.

[¶43.] One view “hold[s] that [judicial estoppel] is inapplicable unless the

inconsistent statement was actually adopted by the court in the earlier litigation;

only in that situation . . . is there a risk of inconsistent results and a threat to the

integrity of the judicial process.” Morris v. State of Cal., 966 F2d 448, 453 (9thCir

1991) (citations omitted). The opposing view holds that judicial estoppel “applies

even if the litigant was unsuccessful in asserting the inconsistent position, if by his

change of position he is playing ‘fast and loose’ with the court.” Id. (citations

omitted). Clearly, judicial estoppel is more appropriate when a court has adopted a

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prior position or statement because only then is there a clear risk of inconsistent

results which threatens the integrity of the judicial process.

[¶44.] Our case law reflects that judicial acceptance of a party’s underlying

theories or claims through prior legal determinations is required to apply judicial

estoppel. See State ex rel. White v. Brandt, 2008 SD 33, ¶¶20-21, 748 NW2d 766,

772-73 (noting that assertion of paternity was judicially accepted through a guilty

plea for failure to pay child support and also through Brandt’s request for

modification of child support obligation); Canyon Lake Park, 2005 SD 82, ¶37, 700

NW2d at 738 (noting that a position was not judicially accepted because it was not

relied upon by the Board in making the decision); Foster v. Foster, 2003 SD 151,

¶18, 673 NW2d 667, 672-73 (applying judicial estoppel and noting an inconsistent

position was judicially accepted in prior bankruptcy adjudication); Watertown

Concrete, 2001 SD 79, ¶10, 630 NW2d at 112 (noting judicial estoppel was only

applicable “when a party successfully maintains a certain position in a legal

proceeding” (emphasis added)); Gregory v. Solem, 449 NW2d 827, 832 n8 (SD 1989)

(applying judicial estoppel to a trial tactic decision that was accepted in a previous

ruling). The issue is whether the Sheesley, Vermeulen, Bielstein settlement

constituted a legal determination or judicial acceptance of the parties’ prior

positions. 8

8. Wilcox and the trial court relied on Warren Supply Co. v. Duerr, Pliley,
Thorsheim Dev., Inc., 355 NW2d 838 (SD 1984), for the proposition that
settlements qualify as being judicially accepted. In that case, however, this
Court upheld the application of judicial estoppel to a position taken in a
stipulation which was incorporated into a judgment by the trial court. That
case resulted in a settlement whose underlying theories and positions were
(continued . . .)
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[¶45.] In Konstantinidis v. Cheng Nan Chen, 626 F2d 933, 938-39 (DCCir

1980), the court stated: “A settlement neither requires nor implies any judicial

endorsement of either party’s claims or theories, and thus a settlement does not

provide the prior success necessary for judicial estoppel.” See E. Cambridge Sav.

Bank v. Wheeler, 422 Mass 621, 623, 664 NE2d 446, 448 (1996) (same); Vowers &

Sons, Inc., v. Strasheim, 254 Neb 506, 514-15, 576 NW2d 817, 824 (1998) (same);

Mainor v. Nault, 120 Nev 750, 766, 101 P3d 308, 319 (2004) (same); Commercial

Ins. Co. of Newark v. Steiger, 395 NJSuper 109, 116, 928 A2d 126, 130 (2007)

(same). These cases are persuasive authority that a settlement often lacks the

necessary judicial acceptance to invoke judicial estoppel. In this case, Vermeulen,

Sheesley, and Bielstein settled out-of-court for a sum of money which was approved

by the respective courts. These settlements and approvals were void of any legal

determinations as to the merits of the case, the underlying weight given to each

piece of evidence in reaching the settlement amount, or any determination as to

positions asserted during the trial. In this situation, without a legal determination,

it would be improper to claim Vermeulen is playing fast and loose with the courts or

is “perverting the judicial machinery.” Canyon Lake Park, 2005 SD 82, ¶34, 700

NW2d at 738 (citation omitted).

________________________
(. . . continued)
judicially accepted by the court through the entry of judgment which included
the stipulations. Therefore, Wilcox finds no support in that case.

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The Trial Court Gave Lip Service to the Wrongful Death Statutes and then
Ignored Them

[¶46.] Wilcox argues the apportionment hearing must be based on the

evidence presented at the wrongful death trials because the settlement amount was

agreed to in reliance on that evidence. In response, Vermeulen asserts that the

prior action was not adversarial between co-plaintiffs or between each statutory

beneficiary, but the apportionment hearing was, and therefore, additional

competing evidence was required.

[¶47.] Wilcox’s reliance on the evidence presented at trial as conclusive for

purposes of apportionment is misguided. Because the beneficiaries did not adjust

among themselves the portion each was to take under SDCL 21-5-8, the court was

charged with the responsibility of apportioning this settlement. Id. In so doing, the

apportionment court was not bound by the evidence used to ascertain the

settlement or jury award; rather, it was required to apportion “among the

beneficiaries” in a “manner as shall be fair and equitable, having reference to the

age and condition of such beneficiaries.” Id. Therefore, any reliance by Wilcox that

the apportioning court would consider only the evidence presented at the wrongful

death hearings is misplaced and unreasonable. Because the reliance element is

lacking, neither promissory nor equitable estoppel apply. 9

[¶48.] Despite Wilcox’s assertion, statutory beneficiaries are not “required to

participate in the wrongful death action in order to protect [their] interest in the

9. Additionally, promissory estoppel does not apply in this situation because
Wilcox has not come forward with sufficient evidence that Vermeulen
promised to use only one expert for trial and apportionment.

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proceeds.” In re Estate of Howe, 2004 SD 118, ¶26, 689 NW2d 22, 29. Therefore,

statutory beneficiaries will often benefit from the testimony offered at the wrongful

death trial to the detriment of the personal representative in whose name the action

was brought. Moreover, estoppel is a doctrine of equity “founded upon principles of

morality and fair dealing.” Weaver v. Bauer, 76 SD 401, 406, 79 NW2d 361, 364

(1956). In this case, fair dealing would dictate that the Vermeulen beneficiaries not

be required to challenge their own expert at trial. When settlement awards are less

than the sum of the separate claims, beneficiaries have competing interests in the

settlement fund. Corder v. Corder, 41 Cal4th 644, 658, 161 P3d 172, 181 (Cal 2007).

SDCL 21-5-8 presupposes those competing interests between beneficiaries of

wrongful death awards or settlements by requiring judicial apportionment if the

award or settlement is not adjusted among themselves. “And quite obviously,

competing interests cannot be adjudicated unless litigants are entitled to challenge

their adversary’s position.” 10 Corder, 41 Cal4th at 658, 161 P3d at 181 (emphasis

added).

[¶49.] Based on the foregoing, judicial estoppel is inapplicable because even

if Vermeulen took an inconsistent position, this out-of-court settlement did not

constitute judicial acceptance of any position by either plaintiff. Therefore, the trial

10. By Wilcox’s own stipulations, they have conceded that Vermeulen may put
forth arguments contrary to their purported position at trial. The December
11, 2008, stipulation number 7 states: “This Stipulation does not preclude
the parties’ ability to argue any points regarding the testimony.” This
further evidences that estoppel is unwarranted in this case. We should not
hold that beneficiaries can argue adverse positions during apportionment but
cannot present testimony supporting their arguments.

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court erred as a matter of law in applying judicial estoppel to deny Vermeulen’s

request to offer expert testimony. As noted above, a decision based on an error of

law is, by definition, an abuse of discretion. Credit Collection Servs., 2006 SD 81,

¶5, 721 NW2d at 476 (citation omitted). The majority opinion acknowledges that

judicial estoppel is not proper and hints, without proof, that promissory or equitable

estoppel applies. However, any estoppel based on Wilcox’s reliance that the

evidence offered at the wrongful death trials would be the only evidence considered

at the apportionment hearing would also be error. The apportioning court is not

bound to the evidence submitted at the wrongful death trials, and is required to

apportion in a “fair and equitable” manner. SDCL 21-5-8. The majority opinion

does an end run around this clear abuse of discretion by reasoning that we must

affirm whether estoppel was appropriate or not because no offer of proof was

provided and prejudice was not shown.

An Offer of Proof was Not Necessary and Prejudice is Obvious

[¶50.] The majority opinion states, “In addition to showing an abuse of

discretion, [Vermeulen] must show that the excluded evidence might and probably

would have resulted in a different verdict,” Thompson, 2005 SD 69, ¶21, 698 NW2d

at 520 (citation omitted), and that “[Vermeulen] must make the substance of the

evidence known to the trial court by making an offer of the excluded evidence at

trial or prior to trial by an offer of proof.” Id. (citations omitted). Supra ¶7.

However, no offer is necessary when “the substance of the evidence [is] apparent

from the context[.]” SDCL 19-9-3(2) (Rule 103(a)).

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[¶51.] In this case, the substance of Vermeulen’s expert evidence was

apparent from the context. The trial court knew the substance of Vermeulen’s

expert evidence from the context because of the dialogue at the motion hearing and

Vermeulen’s brief in support of the motion. During the hearing on the motion for

leave to present expert testimony, Vermeulen’s counsel specifically argued that

Frankenfeld did not consider economic damages to Karla and Ryan Vermeulen and

“did not look at apportionment in any manner.” Further, Vermeulen’s counsel

stated that a prior summary by joint counsel points out that “Mr. Frankenfeld

overestimated Shane Sheesley’s wages.” Vermeulen’s counsel then stated, “[These]

points alone should allow my client to have a separate analysis for purposes of

helping or assisting [ ] this court in apportioning all the damages.” Vermeulen’s

counsel also stressed at the motion hearing that there is no testimony as to non-

economic damages. These arguments were also put forth in Vermeulen’s brief in

support of the motion. From the dialogue at the motion hearing and the brief in

support of the motion, the substance of Vermeulen’s expert evidence was apparent

from the context and known by the trial court. Vermeulen clearly intended to offer

expert testimony as to economic and non-economic loss to the parties and to

challenge Frankenfeld’s opinion as to Sheesley’s earning capacity. Therefore,

because this substance was apparent from the context, no offer of proof was

necessary. SDCL 19-9-3(2).

[¶52.] Moreover, the trial knew the substance of Vermeulen’s expert evidence

because the trial court based its ruling on judicial estoppel. In order to apply

judicial estoppel, the trial court must have known the substance of both the prior

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testimony and the offered testimony. Without knowing both, the trial court would

not be able to determine if the offered evidence was inconsistent. Therefore,

because the trial court applied judicial estoppel in this case, it must have known the

substance of Vermeulen’s expert evidence.

[¶53.] The majority notes that Vermeulen must also “show that the excluded

evidence might and probably would have resulted in a different verdict.”

Thompson, 2005 SD 69, ¶21, 698 NW2d at 520 (citation omitted). In the

subsequent apportionment hearing after the wrongful death trials, it was clear that

beneficiaries had competing interests in the settlement fund. See Corder, 41 Cal4th

at 658, 161 P3d at 181. As noted above, “competing interests cannot be adjudicated

unless litigants are entitled to challenge their adversary’s position.” Id. (emphasis

added). The trial court erroneously adjudicated Vermeulen’s competing interests

without allowing Vermeulen to challenge Wilcox’s position through expert

testimony. This alone shows that the excluded evidence might and probably would

have resulted in a different verdict and definitely would have helped the trier of fact

apportion the settlements in a “fair and equitable” manner.

CONCLUSION

[¶54.] The trial court erred as a matter of law in applying judicial estoppel to

Vermeulen’s request to offer expert testimony. Therefore, the trial court abused its

discretion. Credit Collection Servs., 2006 SD 81, ¶5, 721 NW2d at 476 (a decision

based on an error of law is, by definition, an abuse of discretion) (citation omitted).

In addition to showing an abuse of discretion, the record satisfies the majority

opinion’s concerns as to the substance of the evidence and prejudice. Because the

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substance of Vermeulen’s expert evidence was apparent from the context, i.e., the

dialogue at the motion hearing, briefs in support of the motion, and the trial court’s

application of judicial estoppel, an offer of proof was not necessary. SDCL 19-9-3(2).

Furthermore, we should not penalize co-plaintiffs in wrongful death actions by

requiring them to cross-examine their own expert during trial. Because the prior

co-plaintiffs now have a competing interest in the settlement fund, they were

prejudiced by not being allowed to challenge their adversary’s position through

expert testimony at the apportionment hearing. Therefore, the trial court abused

its discretion by precluding competing expert testimony. Without expert testimony

it would be impossible to find compliance with the wrongful death statutes which

require a “fair and equitable” apportionment among beneficiaries. SDCL 21-5-8.

[¶55.] For these reasons, I respectfully dissent on Issue I. I would reverse the

trial court and remand for a new apportionment hearing in which any statutory

beneficiary could offer additional expert testimony.

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