Stockwell v. Stockwell

#25412-a-GAS

2010 S.D. 79

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *

LLOYD STOCKWELL, Plaintiff and Appellee,

v.

CECIL STOCKWELL, JR., BRUCE
STOCKWELL, JOHN L. STOCKWELL and
ESTATE OF CECIL STOCKWELL, SR., Defendants and Appellants.

* * * *

APPEAL FROM THE CIRCUIT COURT
OF THE FIFTH JUDICIAL CIRCUIT
McCOOK COUNTY, SOUTH DAKOTA

* * * *

HONORABLE TIMOTHY W. BJORKMAN
Judge

* * * *

RONALD A. PARSONS, JR.
SCOTT N. HEIDEPRIEM
SHANNON R. FALON
PAMELA R. BOLLWEG of
Johnson, Heidepriem &
Abdallah, LLP
Sioux Falls, South Dakota Attorneys for plaintiff
and appellee.
SHAWN M. NICHOLS of
Cadwell, Sanford, Deibert
& Garry, LLP
Sioux Falls, South Dakota Attorneys for defendants
and appellants.

* * * *
ARGUED MAY 25, 2010

OPINION FILED 10/13/10
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SEVERSON, Justice

[¶1.] Lloyd Stockwell initiated this action to quiet title to property deeded to

him by his father, Cecil Stockwell, Sr. (Cecil Sr.). Cecil Stockwell, Jr. (Cecil Jr.),

Bruce Stockwell, John Stockwell, and the Estate of Cecil Sr. filed a counterclaim,

alleging that Cecil Sr. lacked the testamentary capacity to execute the deed and

that the deed was the product of undue influence. 1 The trial court entered a

judgment quieting title and recognizing the legal validity of and enforcing Cecil Sr.’s

warranty deed in favor of Lloyd. We affirm.

BACKGROUND

[¶2.] Cecil Sr. was born on August 11, 1913, to Bernard and Ida Stockwell.

Cecil Sr. lived and farmed in Minnehaha and McCook counties until his death in

2004 at the age of ninety-one. Cecil Sr. and his ex-wife, Opal, had five children:

Cecil Jr., Dennis, Bruce, John, and Lloyd. Dennis was killed in the Vietnam War.

Cecil Sr.’s remaining four children are the parties to this lawsuit.

[¶3.] Cecil Sr. purchased his first parcel of land at the age of twenty-eight

and continued to acquire land until he was seventy-five years old. At the time of his

death, Cecil Sr. owned nearly 1,000 acres of farmland in fourteen separate parcels

in Minnehaha and McCook counties. It was extremely important to Cecil Sr. that

his farmland remain in the Stockwell family. Throughout his life, Cecil Sr. gave his

1. The appellants, Cecil Stockwell, Jr., Bruce Stockwell, John Stockwell, and
the Estate of Cecil Stockwell, Sr., will collectively be referred to as “the
Stockwells.” The appellee, Lloyd Stockwell, will be referred to as “Lloyd.”
Any other reference to the parties in an individual capacity will be on a first
name basis.

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sons land or money to buy land or allowed them to acquire his land at a reduced

price. Cecil Sr. never sold a parcel of his land to anyone other than his children.

[¶4.] Cecil Sr. also farmed with each of his sons. From approximately 1972

to 1975, Cecil Sr., John, and Lloyd farmed together. Cecil Sr. experienced a difficult

financial period in the mid 1970’s. At that time, John and Lloyd assumed Cecil Sr.’s

debt and took possession of his machinery. John and Lloyd continued to farm

together until 1984. In 1985, Cecil Sr. asked Bruce, John, and Lloyd whether they

would enter into a farming partnership with him. Bruce and John declined the

invitation, but Lloyd accepted. Cecil Sr. and Lloyd began farming together as

business partners. This partnership continued until Cecil Sr.’s death in 2004.

[¶5.] In February 1992, Cecil Sr. consulted with Dale Strasser, an attorney

in Freeman, South Dakota, regarding estate planning. At that time, Cecil Sr.

executed and Attorney Strasser notarized a power of attorney in favor of Lloyd.

This power of attorney continued in full force and effect until Cecil Sr.’s death.

Cecil Sr. also asked Attorney Strasser to prepare a deed for each of his four sons.

The deeds provided that Lloyd would receive 594 acres, Bruce would receive 300

acres, John would receive 160 acres, and Cecil Jr. would receive eighty acres. Each

deed reserved a life estate in favor of Cecil Sr. Cecil Sr. executed the deeds, but

they were not delivered to the grantees or recorded.

[¶6.] Cecil Sr. became ill and began living with Lloyd and his wife, Lynn, in

November 1997. Cecil Sr. eventually recovered from his illness and regained the

strength to help around the farm. In 2001, Cecil Sr. was able to drive a vehicle,

walk around the farm to check on livestock, fill water tanks, sort cattle, and assist

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with other chores. Cecil Sr.’s health declined after he broke his hip in 2002, and

Lloyd became increasingly responsible for Cecil Sr.’s personal needs.

[¶7.] Cecil Sr.’s relationship with John became strained in 2000. Cecil Sr.

gifted an eighty-acre parcel of farmland to John in 1979. In 2000, Lynn saw a

notice in the newspaper regarding the upcoming auction of a forty-acre parcel of

this land. She brought the notice to the attention of Lloyd, Cecil Sr., and Cecil Jr.

John had not told any member of the family about the upcoming sale. Upon reading

the notice, Cecil Sr. disappeared into his bedroom and emerged a few hours later

with red, teary eyes. Cecil Sr. commented that John would receive no land from

him and expressed a desire to redraft the 1992 deeds.

[¶8.] In the summer of 2001, Cecil Sr. directed Lynn to prepare deeds in

favor of Bruce, Cecil Jr., and Lloyd. Cecil Sr. provided Lynn with the 1992 deeds to

use as templates. Lynn typed at least three drafts of each of the deeds. When each

draft was completed, she gave it to Cecil Sr. for his review. Cecil Sr. pointed out

errors, and Lynn corrected them. At this time, Cecil Sr. could recite the legal

descriptions of each of his fourteen parcels of farmland from memory. While

preparing the 2001 deeds, Lynn was not familiar with the legal descriptions of land,

but could see that Lloyd’s deed contained more legal descriptions than the deeds in

favor of Bruce and Cecil Jr. Because Cecil Sr. and Lynn prepared these deeds in the

evening after Lloyd had gone to bed, Lloyd was not involved in their preparation.

[¶9.] The 2001 deeds were different than the 1992 deeds. Cecil Sr. did not

prepare a deed for John in 2001. Bruce’s 2001 deed included a 140-acre parcel in

his 1992 deed, but not an eighty-acre parcel along the Vermillion River. Lloyd’s

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2001 deed included all the property in his 1992 deed, plus two additional parcels:

the eighty-acre parcel in John’s 1992 deed and the eighty-acre parcel along the

Vermillion River in Bruce’s 1992 deed. Cecil Jr.’s 2001 deed contained the same

eighty-acre parcel as his 1992 deed. Like the 1992 deeds, each deed reserved a life

estate in favor of Cecil Sr.

[¶10.] On the morning of September 27, 2001, Cecil Sr. asked Lloyd to take

him to a notary public to sign the deeds he and Lynn prepared. That afternoon,

Lloyd drove Cecil Sr. to a bank in Humboldt where Cecil Sr. previously had

documents notarized. Upon learning that there was no notary public on duty, Lloyd

drove Cecil Sr. to the Home Federal Bank in nearby Hartford. Maryls Bartmann,

an employee of Home Federal Bank, notarized the 2001 deeds. Cecil Sr. retained

possession of the deeds on the drive back to Lloyd’s home. Once they arrived home,

Cecil Sr. handed the three executed deeds to Lloyd, smiled, and said either, “Here

you go,” or “Here they are.” Lloyd accepted the deeds and placed them in the top

drawer of a dresser in Cecil Sr.’s bedroom. The dresser belonged to Lloyd, but he

and Cecil Sr. kept titles, abstracts, and loan information in it.

[¶11.] In October 2003, Cecil Jr., Bruce, and John filed an action seeking the

appointment of a conservator and guardian for Cecil Sr. They sought to place Cecil

Sr. in a nursing home. This lawsuit greatly upset Cecil Sr. Lloyd hired Tom

Johnson, an attorney in Sioux Falls, to defend the conservatorship and

guardianship action. In December 2003, Attorney Johnson videotaped an interview

with Cecil Sr. to document his competency and desire to continue living with Lloyd

and Lynn. During the interview, Cecil Sr. was able to identify his four children,

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their occupations, and generally where they resided. He stated that he liked living

with Lloyd and Lynn and that he did not want to change his living arrangement.

He confirmed that Lloyd had never threatened or harmed him.

[¶12.] But Cecil Sr. made several misstatements during the course of the

interview. When asked how much land he owned, Cecil Sr. incorrectly stated that

he owned 300 acres. He, in fact, owned nearly 1,000 acres at the time. He was not

asked to identify the parcels he owned or how many quarter-sections they

comprised. He indicated that he remembered signing the 2001 deeds and that

Lloyd was to receive a majority of his property because it was the “fairest way to do

it,” but could not say why. Cecil Sr. also struggled to name one of his grandchildren

and appeared unaware that Opal, his ex-wife, had remarried.

[¶13.] On July 7, 2004, Lloyd informed Cecil Sr. that he would have to move

to a nursing home. Cecil Sr. told Lloyd that he should record the 2001 deeds and

directed him to retrieve the deeds from the dresser in his bedroom. Realizing that

he likely would never see his land and livestock again, Cecil Sr. asked Lloyd to drive

him around the farm one last time. Lloyd drove Cecil Sr. around the property

before taking him to the Good Samaritan Home in Canistota. Shortly thereafter,

Lloyd took the 2001 deeds to Attorney Johnson to be recorded. Cecil Sr. passed

away four months later on November 19, 2004.

[¶14.] On January 12, 2005, Lloyd initiated this action against the Stockwells

to quiet title to the property deeded to him by Cecil Sr. The Stockwells filed a

counterclaim on March 8, 2005, alleging lack of testamentary capacity and undue

influence. The case proceeded to trial on April 21 and 22, 2009. On June 23, 2009,

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the trial court entered findings of fact and conclusions of law, finding that Lloyd’s

2001 deed was validly delivered on September 27, 2001, and that Cecil Sr. was

competent when the deed was prepared, executed, delivered, and recorded. The

trial court further found that the 2001 deeds were not the product of undue

influence. As a result, the trial court concluded that Lloyd is the sole and exclusive

owner of the property described in his 2001 deed.

STANDARD OF REVIEW

[¶15.] We have said that testamentary capacity and undue influence are

questions of fact reviewed under the clearly erroneous standard. See In re Estate of

Pringle, 2008 S.D. 38, ¶ 18, 751 N.W.2d 277, 284 (quoting In re Estate of Dokken,

2000 S.D. 9, ¶ 10, 604 N.W.2d 487, 490-91). But to clarify, testamentary capacity

and undue influence are mixed questions of law and fact and require a compound

inquiry. See In re Dorsey & Whitney Trust Co., L.L.C., 2001 S.D. 35, ¶ 6, 623

N.W.2d 468, 471 (A mixed question of law and fact is one in which “the historical

facts are admitted or established, the rule of law is undisputed, and the issue is

whether the rule of law as applied to the established facts is or is not favorably

satisfied.”) (quoting Permann v. S.D. Dep’t of Labor, 411 N.W.2d 113, 118 (S.D.

1987) (quoting Pullman-Standard v. Swint, 456 U.S. 273, 289 n.19, 102 S.Ct. 1781,

1790 n.19, 72 L.Ed.2d 66, 80 n.19 (1982))). We are asked to review not only the trial

court’s findings of historical fact concerning testamentary capacity and undue

influence, but also the trial court’s application of those established legal standards

to the facts.

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[¶16.] We separately determine the standard of review for these two

inquiries. As to the first inquiry, the trial court’s findings of fact will not be set

aside unless they are clearly erroneous. See SDCL 15-6-52(a). The question is not

whether this Court would have made the same findings the trial court did, but

whether on the entire evidence, “we are left with [a] definite and firm conviction

that a mistake has been made.” Pringle, 2008 S.D. 38, ¶ 18, 751 N.W.2d at 284

(quoting Dokken, 2000 S.D. 9, ¶ 10, 604 N.W.2d at 490-91). But in deciding a mixed

question of law and fact, the standard of review for the second inquiry – the

application of law to fact – depends on the nature of the inquiry:

If application of the rule of law to the facts requires an inquiry
that is ‘essentially factual’ – one that is founded ‘on the
application of the fact-finding tribunal’s experience with the
mainsprings of human conduct’ – the concerns of judicial
administration will favor the [trial] court, and the [trial] court’s
determination should be classified as one of fact reviewable
under the clearly erroneous standard. If, on the other hand, the
question requires us to consider legal concepts in the mix of fact
and law and to exercise judgment about the values that animate
legal principles, then the concerns of judicial administration will
favor the appellate court, and the question should be classified
as one of law and reviewed de novo.2

2. Permann, 411 N.W.2d 113, which adopted the reasoning of United
States v. McConney, 728 F.2d 1195 (9th Cir. 1984) (en banc), overruled on
other grounds by Estate of Merchant v. C.I.R., 947 F.2d 1390 (9th Cir. 1991),
is at times erroneously cited for the proposition that all mixed questions of
law and fact are reviewed de novo with no deference to the fact-finding court.
In McConney, the Ninth Circuit thoroughly examined issues regarding the
standard of review for mixed questions of law and fact. 728 F.2d 1195. That
frequently cited case does more than merely assign a de novo standard of
review to mixed questions of law and fact. Rather, the standard of review
depends on which court, the trial court or the appellate court, is in the best
position to address the particular critical issue in the case. Id. at 1202. See
also Warner, Randall H., All Mixed Up About Mixed Questions, 7 J. App.
Prac. & Process 101 (2005) (analyzing issues courts face in determining the
appropriate standard of review for mixed questions of law and fact).

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Darling v. West River Masonry, Inc., 2010 S.D. 4, ¶ 10, 777 N.W.2d 363, 366

(quoting McNeil v. Superior Siding, Inc., 2009 S.D. 68, ¶ 6, 771 N.W.2d 345, 347-48

(quoting Permann, 411 N.W.2d at 119 (quoting McConney, 728 F.2d at 1202))). In

reviewing the application of the established legal standards of testamentary

capacity and undue influence to the facts, the concerns of judicial administration

favor the trial court. After all, testamentary capacity and undue influence are non-

technical, fact-based inquiries that require a trial court to examine the parties’

motives and states of mind. See Pullman-Standard, 456 U.S. at 289, 102 S.Ct. at

1790 (concluding that the mixed question whether the facts demonstrated the

intent to discriminate is a non-technical, fact-based inquiry reviewed under the

clearly erroneous standard); see also Oregon v. Kennedy, 456 U.S. 667, 677 n.7, 102

S.Ct. 2083, 2090 n.7, 72 L.Ed.2d 416 (1982); Commissioner v. Duberstein, 363 U.S.

278, 289, 80 S.Ct. 1190, 1198, 4 L.Ed.2d 1218 (1960). This Court thus reviews the

trial court’s findings of fact on the mixed questions of testamentary capacity and

undue influence as well as the application of those established legal standards to

the facts under the clearly erroneous standard.

[¶17.] The Stockwells, relying on First Nat’l Bank of Biwabik, Minn. v. Bank

of Lemmon, 535 N.W.2d 866, 871 (S.D. 1995), argue that the facts of this case are

not settled. They urge this Court to review certain documentary evidence in this

case relating to testamentary capacity and undue influence de novo. This argument

is misplaced.

This Court formerly reviewed documentary evidence and
deposition testimony under the de novo standard. However,
SDCL 15-6-52(a), [as amended in 2000], specifically provides

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that “findings of fact, whether based on oral or documentary
evidence, may not be set aside unless clearly erroneous.”

Gluscic v. Avera St. Luke’s, 2002 S.D. 93, ¶ 15, 649 N.W.2d 916, 919 (quoting Faulk

v. Faulk, 2002 S.D. 51, ¶ 9, 644 N.W.2d 632, 634 (quoting In re Estate of Catron,

2001 S.D. 57, ¶ 11, 627 N.W.2d 175, 177)) (additional citations omitted). See 2000

S.D. Sess. Laws ch. 91, § 1. See also Melstad v. Kovac, 2006 S.D. 92, ¶ 6, n.2, 723

N.W.2d 699, 702 n.2; Convenience Ctr., Inc. v. Cole, 2004 S.D. 42, ¶ 11, 678 N.W.2d

774, 777.

ANALYSIS AND DECISION

[¶18.] 1. Whether the trial court’s conclusion on the mixed
question of law and fact that Lloyd’s deed was delivered
in 2001 is clearly erroneous.

[¶19.] “A gift is a transfer of [ ] property, made voluntarily and without

consideration.” SDCL 43-36-1. In South Dakota, a gift is complete when three

elements are satisfied: (1) intent; (2) delivery; and, (3) acceptance. Estate of Juhnke

ex rel. Juhnke v. Marquardt, 2001 S.D. 26, ¶ 11, 623 N.W.2d 731, 734 (citing Meyer

v. S.D. Dep’t of Soc. Servs., 1998 S.D. 62, ¶ 12, 581 N.W.2d 151, 155).

[¶20.] “A deed, to become effective, must be delivered by the grantor during

his lifetime.” Spitzer v. Spitzer, 84 S.D. 147, 151, 168 N.W.2d 718, 720 (1969). See

SDCL 43-4-7. “The delivery of a deed must be unconditional in nature and no

delivery can be accomplished without the grantor relinquishing possession of the

deed as well as all power and control over it.” Nelson v. Nelson, 293 N.W.2d 463,

466 (S.D. 1980) (citing Hagen v. Palmer, 87 S.D. 485, 210 N.W.2d 164 (1973);

Benson v. Benson, 63 S.D. 241, 257 N.W. 460 (1934); Cassidy v. Holland, 27 S.D.

287, 130 N.W. 771 (1911)). “[T]here exists a presumption of valid delivery where

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the deed was duly executed, acknowledged, and in possession of the grantee[.]” Id.

(citing Huber v. Backus, 79 S.D. 342, 112 N.W.2d 238 (1961); Lewis v. Tinsley, 66

S.D. 648, 287 N.W. 507 (1939); Wolf v. Wolf, 59 S.D. 418, 240 N.W. 349 (1932)). See

SDCL 43-4-7. Moreover, when possession of the deed by the grantee is established,

it is presumed that the grantor placed the deed in the grantee’s possession with the

intent to convey title. Lewis, 287 N.W. at 508. This Court reviews the trial court’s

findings of fact on the mixed question of delivery and the application of law to those

facts under the clearly erroneous standard. See supra ¶¶ 15-16.

[¶21.] The burden of overcoming these presumptions is on the party claiming

the deed was not delivered. “A presumption imposes on the party against whom it

is directed the burden of going forward with evidence to rebut or meet the

presumption, but does not shift to such party the burden of proof in the sense of the

risk of nonpersuasion, which remains throughout the trial upon the party on whom

it was originally cast.” In re Estate of Gustafson, 2007 S.D. 46, ¶ 11, 731 N.W.2d

922, 926 (quoting In re Estate of Duebendorfer, 2006 S.D. 79, ¶ 45, 721 N.W.2d 438,

450) (quoting SDCL 19-11-1)). “When substantial, credible evidence has been

introduced to rebut the presumption, it shall disappear from the action or

proceeding[.]” SDCL 19-11-1. “[M]ere assertions, implausible contentions, and

frivolous avowals will not avail to defeat a presumption.” In re Estate of Dimond,

2008 S.D. 131, ¶ 9, 759 N.W.2d 534, 538.

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[¶22.] The Stockwells argue that Lloyd’s deed was not delivered until it was

recorded in 2004. 3 The Stockwells maintain that the 2001 delivery was conditional

and therefore invalid because Cecil Sr. directed Lloyd not to record the deed at that

time. See Nelson, 293 N.W.2d at 466 (citations omitted). In other words, Cecil Sr.

did not relinquish “possession of the deed as well as all power and control over it.”4

See id. Yet the deed was duly executed, acknowledged, and in the possession of

Lloyd, the grantee, and there exists a presumption of valid delivery. See id.

Moreover, we must presume that Cecil Sr. placed the deed in Lloyd’s possession

with the intent to convey title. See Lewis, 287 N.W. at 508. The Stockwells

presented no evidence to contradict Lloyd’s testimony regarding the manner in

which he came into possession of his deed. The Stockwells therefore did not rebut

the presumption that Lloyd’s deed was validly delivered with the intent to convey

title on September 27, 2001, the day it was executed. Applying the undisputed facts

on the mixed question of delivery, the trial court’s conclusion that Lloyd’s deed was

delivered in 2001 is not clearly erroneous.

3. Because the issue has not been presented to this Court, we express no
opinion as to whether the 2001 deeds were delivered to Bruce, John, or Cecil
Jr. during Cecil Sr.’s lifetime.

4. The Stockwells appear to argue that the deeds were not delivered in
September 2001 because Lloyd placed them in a dresser in Cecil Sr.’s
bedroom. But the dresser belonged to Lloyd, and he kept legal documents in
it. Moreover, under South Dakota law, “[r]edelivering a grant of real
property to the grantor or canceling it does not operate to retransfer the
title.” SDCL 43-4-12. See Birchard v. Simons, 59 S.D. 422, 240 N.W. 490,
492 (1932) (holding that completed delivery of a deed was not subsequently
invalidated by return of deed to grantor for recording, safe-keeping, or other
special purpose).

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[¶23.] Nevertheless, the Stockwells contend that Lloyd is bound by

interrogatory answers he submitted in May 2007, indicating that Cecil Sr.

“delivered” Lloyd’s deed on July 7, 2004, when he instructed Lloyd to retrieve it

from the dresser and record it. Lloyd later amended his interrogatory answer to

provide that his deed was “delivered” on September 27, 2001. The Stockwells assert

that a finder of fact is empowered to reject all of a witness’s testimony if it concludes

that he has testified falsely. Given Lloyd’s prior inconsistent statement regarding

delivery, the Stockwells argue that the trial court should have rejected Lloyd’s

testimony and concluded that his deed was delivered in July 2004.

[¶24.] It is true that the interrogatory answers Lloyd submitted in May 2007

indicate that his deed was “delivered” in July 2004. But Lloyd is not an attorney

and testified that he did not understand “delivery” in the legal sense when he

initially answered the interrogatory. The undisputed facts establish the manner in

which Lloyd came into possession of his 2001 deed, and the trial court found Lloyd’s

explanation for the error in the interrogatories acceptable. While a finder of fact

may reject a witness’s testimony when that witness has testified falsely, it is not

required to do so. “The credibility of the witnesses, the weight to be accorded their

testimony, and the weight of the evidence must be determined by the [trial] court,

and we give due regard to the [trial] court’s opportunity to observe the witnesses

and the evidence.” Pringle, 2008 S.D. 38, ¶ 18, 751 N.W.2d at 284 (quoting Dokken,

2000 S.D. 9, ¶ 10, 604 N.W.2d at 490-91). The trial court’s acceptance of Lloyd’s

testimony and conclusion that delivery of his deed occurred on September 27, 2001,

are not clearly erroneous.

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[¶25.] 2. Whether the trial court’s conclusion on the mixed
question of law and fact that Cecil Sr. had capacity to
execute and deliver Lloyd’s deed is clearly erroneous.

[¶26.] The Stockwells argue that the trial court’s conclusion on the mixed

question that Cecil Sr. had capacity to execute and deliver Lloyd’s deed is clearly

erroneous. This Court has said that deeds are testamentary in nature when the

record indicates that they were executed “with a mind toward disposition of the real

property following [the testator’s] death.” Id. ¶ 24, 751 N.W.2d at 285. Because

Cecil Sr. executed the deeds to his sons in lieu of a will and intended those deeds to

govern the disposition of his real property at or near the end of his life, we apply

this Court’s well settled standard for testamentary capacity to the facts of this case.

See id.

[¶27.] SDCL 29A-2-501 requires that a testator be of sound mind.

“Testamentary capacity and competence evincing the soundness of mind required to

make a will are demonstrated when, without prompting, one is able to comprehend

the nature and extent of his property, the persons who are the natural objects of his

bounty, and the disposition that he desires to make of [his] property.” Pringle, 2008

S.D. 38, ¶ 20, 751 N.W.2d at 284 (citing In re Estate of Linnell, 388 N.W.2d 881, 883

(S.D. 1986) (quoting In re Podgursky’s Estate, 271 N.W.2d 52, 55 (S.D. 1978))).

“Testamentary capacity and competence [ ] does not require that one have the

intellectual vigor of youth or perfect health.” Id. (citations omitted). “Moreover, it

is not necessary that a person desiring to make a will have the capacity to make

contracts and do business.” Id. (citations omitted). “One may lack competency,

such that in the view of medical science he is not of sound mind and memory, yet

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still retain the requisite competency to execute a will.” Id. (citations omitted).

“Testamentary capacity is not determined by any single moment in time, but must

be considered as to the condition of the testator’s mind a reasonable length of time

before and after the will is executed.” Id. (citations omitted).

[¶28.] The Stockwells argue that Lloyd’s deed was delivered in 2004 and

therefore focus on Cecil Sr.’s testamentary capacity as of that date. In challenging

Cecil Sr.’s testamentary capacity at trial, the Stockwells primarily relied on

Attorney Johnson’s December 2003 videotaped interview with Cecil Sr. and nursing

home records dated after execution and delivery of Lloyd’s 2001 deed. The trial

court ultimately concluded that Cecil Sr. was competent to execute and deliver

Lloyd’s deed with the intent to convey title in both September 2001 and July 2004.

[¶29.] We decline the Stockwells’ invitation to review the December 2003

videotaped interview and the nursing home records de novo to determine Cecil Sr.’s

testamentary capacity in 2004. See supra ¶ 17. The trial court did not err by

concluding that Lloyd’s deed was executed and delivered in September 2001, and we

need only consider the trial court’s findings regarding Cecil Sr.’s testamentary

capacity at that time. The December 2003 videotaped interview and nursing home

records were prepared well after the execution and delivery of Lloyd’s 2001 deed

and are therefore largely irrelevant. Lloyd, Lynn, and others testified that in 2001

Cecil Sr. readily knew and recognized members of his family, stated often that he

owned nearly 1,000 acres of land, and was able to recite the legal descriptions of his

land from memory, recall the names the family had given each of his fourteen

parcels, and assist with chores around the farm. Having reviewed the record, we

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cannot conclude that the trial court‘s conclusion on the mixed question that Cecil

Sr. had testamentary capacity to execute and deliver Lloyd’s deed in September

2001 is clearly erroneous.

[¶30.] 3. Whether the trial court’s conclusion on the mixed
question of law and fact that the 2001 deeds were not the
product of undue influence is clearly erroneous.

[¶31.] The Stockwells argue that the trial court’s conclusion on the mixed

question that the 2001 deeds were not the product of undue influence is clearly

erroneous. “A presumption of undue influence arises ‘when there is a confidential

relationship between the testator and a beneficiary who actively participates in

preparation and execution of the will and unduly profits therefrom.’” Pringle, 2008

S.D. 38, ¶ 39, 751 N.W.2d at 289 (citing Dokken, 2000 S.D. 9, ¶ 28, 604 N.W.2d at

495). “A ‘confidential relationship exists whenever a decedent has placed trust and

confidence in the integrity and fidelity of another.’” Duebendorfer, 2006 S.D. 79, ¶

27, 721 N.W.2d at 445 (quoting In re Estate of Unke, 1998 S.D. 94, ¶ 16, 583 N.W.2d

145, 148 (citing In re Estate of Madsen, 535 N.W.2d 888, 892 (S.D. 1995))). “When

this presumption arises, the burden shifts to the beneficiary to show he took no

unfair advantage of the decedent. However, the ultimate burden remains on the

contestant to prove the elements of undue influence by a preponderance of the

evidence.” Pringle, 2008 S.D. 38, ¶ 39, 751 N.W.2d at 289 (citing Dokken, 2000 S.D.

9, ¶ 28, 604 N.W.2d at 495) (emphasis omitted).

[¶32.] Lloyd was close to Cecil Sr. in the final years of his life. Lloyd was

engaged in a farming partnership with Cecil Sr., held a power of attorney, and was

responsible for Cecil Sr.’s increasing personal needs. While Lloyd was not involved

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in the preparation of the 2001 deeds, he drove his father to Humboldt and Hartford

to execute and notarize the deeds. Thus, the trial court’s conclusion that “there was

sufficient evidence that a confidential relationship existed between Lloyd and Cecil

Sr. such that Lloyd shoulder[ed] the burden of coming forward with evidence to

rebut the presumption” of undue influence is not clearly erroneous.

[¶33.] Lloyd produced substantial, credible evidence to rebut the presumption

of undue influence. See SDCL 19-11-1. Lloyd did receive more property under the

2001 deeds than his brothers. Yet even under the 1992 deeds, which were prepared

at a time when there has been no suggestion of undue influence, Lloyd was to

receive the bulk of Cecil Sr.’s property. Furthermore, evidence was presented that

Cecil Sr. chose to give Lloyd more property under the 2001 deeds than the 1992

deeds for several reasons: (1) John sold family land in 2000 without informing any

member of the family; (2) Bruce and Cecil Sr. had a falling out in 1996 over a family

combining business; (3) Lloyd’s son is the only grandchild who intends to continue

the family farming tradition; and, (4) Lloyd’s children expressed a desire to build

homes and live on the eighty-acre parcel along the Vermillion River. The trial court

found that Cecil Sr. chose to leave the eighty-acre parcel in John’s 1992 deed and

the eighty-acre parcel along the Vermillion River in Bruce’s 1992 deed to Lloyd for

these reasons.

[¶34.] Cecil Sr.’s generosity to his sons throughout his life also affected the

final distribution of his property. In 1965, Cecil Sr. gifted Cecil Jr. $5,500 to help

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him buy farmland near Humboldt. 5 In 1972, Cecil Sr. gifted Lloyd $9,400 to buy a

parcel of farmland. Cecil Sr. was also generous to Bruce and John. In 1975, Cecil

Sr. gifted Bruce a twenty-acre parcel of land. Cecil Sr. gave John $3,400 for a down

payment on a house in Sioux Falls in 1976, gifted him an eighty-acre parcel in 1979,

and helped him buy a sixty-acre parcel of land in 1987. Additionally, in 1995, Cecil

Sr. sold a 160-acre parcel of land to Bruce and John at approximately one-half its

fair market value, equating a gift to each of approximately $40,000. Having

established that Lloyd rebutted the presumption of undue influence, it remains for

the Stockwells to prove it occurred.

[¶35.] “It is well settled that it is the burden of the contestant of a

testamentary document to prove each of the four elements of undue influence by the

greater weight of the evidence.” Pringle, 2008 S.D. 38, ¶ 44, 751 N.W.2d at 291

(quoting In re Estate of Schnell, 2004 S.D. 80, ¶ 21, 683 N.W.2d 415, 421 (citing In

re Estate of Holan, 2001 S.D. 6, ¶ 16, 621 N.W.2d 588, 591-92)). “These elements

include: (1) decedent’s susceptibility to undue influence; (2) opportunity to exert

such influence and effect the wrongful purpose; (3) a disposition to do so for an

improper purpose; and, (4) a result clearly showing the effects of undue influence.”

Id. (citations omitted). “For influence to be undue it must be of such a character as

to destroy the free agency of the testator and substitute the will of another for that

5. Cecil Jr. later refinanced and borrowed $140,000 against this land. He was
not able to make the payments on that loan, and the bank foreclosed on the
land in the early 1980’s. This foreclosure, accompanied by Cecil Sr.’s decision
in 1980 to allow John and Lloyd to farm land previously farmed by Cecil Jr.,
caused a serious divide between Cecil Jr. and his parents.

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of the testator.” Id. (quoting Schnell, 2004 S.D. 80, ¶ 21, 683 N.W.2d at 421

(quoting In re Estate of Elliot, 537 N.W.2d 660, 662 (S.D. 1995))). We review a trial

court’s factual findings concerning undue influence and the application of law to

those facts under the clearly erroneous standard. Id. ¶ 18, 751 N.W.2d at 284. See

supra ¶¶ 15-16.

[¶36.] We must first examine Cecil Sr.’s susceptibility to undue influence and

Lloyd’s opportunity and disposition to exert such influence. The trial court found

that “Cecil Sr. was a strong-willed man; he could be stubborn, and generally did as

he saw fit. He was not the type of man who was easily influenced by others.”

Indeed, Attorney Strasser observed that Cecil Sr. “did not appear to be under

Lloyd’s control at the time that he did work for Cecil Sr.,” found Cecil Sr. to be

independent, and “did not believe him to be unduly influenced by Lloyd.” The trial

court did not err by finding that Lloyd was not disposed to exert influence over Cecil

Sr. and that if Lloyd did have the opportunity to exert influence over Cecil Sr. given

the nature of their relationship, there was no evidence that he did so to effect a

wrongful purpose.

[¶37.] We must also examine whether the final distribution of Cecil Sr.’s

property as set forth in the 2001 deeds is a result demonstrating the effects of

undue influence. Cecil Sr.’s relationship with each of his four sons and his

generosity to them throughout his life explains the distribution of his property. See

supra ¶¶ 33-34. Additionally, it appears that Cecil Sr. took into consideration the

role each son played in the acquisition and maintenance of each of his fourteen

parcels of farmland. Much of the land Cecil Sr. deeded to Lloyd was purchased with

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the proceeds of Cecil Sr. and Lloyd’s farming partnership. Cecil Sr. also attempted

to deed land to sons who owned adjoining land or had previously farmed or rented

that which he was to receive. For these reasons, we cannot conclude that the trial

court’s conclusion on the mixed question that the 2001 deed was not the product of

undue influence is clearly erroneous.

[¶38.] 4. Whether the trial court abused its discretion by
excluding Exhibit 81, which contains a settlement
discussion recorded without Lloyd’s knowledge.

[¶39.] The Stockwells argue that the trial court abused its discretion by

excluding Exhibit 81, which contains a settlement discussion recorded without

Lloyd’s knowledge. Exhibit 81 begins with Lloyd discussing the distribution of Cecil

Sr.’s property and various assets and assuring Bruce that the distribution conforms

with Cecil Sr.’s wishes. Lloyd informs Bruce that John is not to receive any land

and explains why. The discussion continues with Bruce repeatedly assuring Lloyd

that his brothers, John and Cecil Jr., will not accept Lloyd’s proposed distribution of

Cecil Sr.’s assets. Bruce and Lloyd also discuss the distribution of Cecil Sr.’s cattle

as well as the payment of estate taxes, real property taxes, and Cecil Sr.’s debts,

including the mortgages on the deeded properties.

[¶40.] The Stockwells first argue that Exhibit 81 is admissible under SDCL

19-16-34, which provides:

In actions, suits, or proceedings by or against the
representatives of deceased persons including proceedings for
the probate of wills, any statement of the deceased whether oral
or written shall not be excluded as hearsay, provided that the
trial judge shall first find as a fact that the statement was made
by decedent, and that it was in good faith and on decedent’s
personal knowledge.

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Exhibit 81 contains no statements by Cecil Sr., the decedent. It is a discussion

between Bruce and Lloyd. Therefore, while “[t]his Court liberally construes [SDCL

19-16-34] so as to achieve its intended purpose[,]” we cannot conclude that Exhibit

81 is admissible under this statute. Olson-Roti v. Kilcoin, 2002 S.D. 131, ¶ 23, 653

N.W.2d 254, 259 (citing In re Estate of Regennitter, 1999 S.D. 26, ¶ 14, 589 N.W.2d

920, 924).

[¶41.] The Stockwells also rely on In re Estate of Melcher, 89 S.D. 253, 232

N.W.2d 442 (1975), and In re Estate of Blake, 81 S.D. 391, 136 N.W.2d 242 (1965), to

argue for the admissibility of Exhibit 81. In Melcher, this Court stated, “[A]ny

evidence which shows susceptibility, opportunity, disposition to use, or a result

indicative of undue influence is admissible.” 89 S.D. at 262, 232 N.W.2d at 447

(quoting Blake, 81 S.D. at 398, 136 N.W.2d at 246-47). Exhibit 81 contains several

statements by Lloyd: “I done just what my father told me to do clear to the end”;

“But it ain’t my doing. It’s just the way Dad had it”; and, “I guaranteed him I would

take care of him. He held that over my head.” Having reviewed Exhibit 81 in its

entirety, we cannot see that its contents demonstrate “susceptibility, opportunity,

disposition to use, or a result indicative of undue influence.” 6 Id.

[¶42.] Furthermore, Melcher and Blake do not stand for the proposition that

the traditional rules of evidence fail to apply in actions involving allegations of

6. An error in admitting evidence must be prejudicial before this Court will
overturn the trial court’s evidentiary ruling. SDCL 15-6-61. Because the
discussion on Exhibit 81 largely corroborates the testimony and evidence
presented at trial, its exclusion did not prejudice the Stockwells’ “substantial
rights.” See id.

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undue influence. SDCL 19-12-10 governs the admissibility of offers of compromise

and settlement negotiations:

Evidence of:
(1) Furnishing or offering or promising to furnish; or
(2) Accepting or offering or promising to accept,
a valuable consideration in compromising or attempting to
compromise a claim which was disputed as to either validity or
amount, is not admissible to prove liability for or invalidity of
the claim or its amount. Evidence of conduct or statements
made in compromise negotiations is likewise not admissible.
This section does not require the exclusion of any evidence
otherwise discoverable merely because it is presented in the
course of compromise negotiations. This section also does not
require exclusion when the evidence is offered for another
purpose, such as proving bias or prejudice of a witness,
negativing a contention of undue delay or proving an effort to
obstruct a criminal investigation or prosecution.

Exhibit 81 begins with Lloyd stating, “Okay. I’m going to start out with the end

first. We’ve come to an agreement. This is what she is[.]” Bruce and Lloyd

thereafter discuss Lloyd’s proposed distribution of Cecil Sr.’s property, assets, and

debts, and Bruce assures Lloyd that John will not accept his proposal. Whether

Exhibit 81 contains a settlement discussion is admittedly a close question, but

“[e]videntiary rulings made by the trial court are presumed correct and are

reviewed under an abuse of discretion standard.” Olson-Roti, 2002 S.D. 131, ¶ 19,

653 N.W.2d at 258 (citations omitted). We conclude that the trial court did not

abuse its discretion by excluding Exhibit 81 pursuant to SDCL 19-12-10.

[¶43.] Affirmed.

[¶44.] GILBERTSON, Chief Justice, KONENKAMP and ZINTER, Justices,

concur.

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[¶45.] MEIERHENRY, Justice, deeming herself disqualified, did not

participate.

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