Estate of Cunningham

2025 S.D. 59

• Court: South Dakota Supreme Court
• Decided: November 5, 2025
• Docket: 30871
• Status: Published

Opinion

#30871-vacate-MES 2025 S.D. 59

IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA

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IN THE MATTER OF THE ESTATE OF ROGER J. CUNNINGHAM, Deceased. ****

APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT LINCOLN COUNTY, SOUTH DAKOTA

THE HONORABLE JENNIFER D. MAMMENGA Judge

ELIZABETH S. HERTZ of Davenport, Evans, Hurwitz & Smith, LLP Sioux Falls, South Dakota Attorneys for appellant Sheila Cunningham.

THOMAS P. SCHARTZ TIM R. SHATTUCK of Woods, Fuller, Shultz & Smith, P.C. Sioux Falls, South Dakota Attorneys for appellee Susan Metz as personal representative for the Estate of Roger Cunningham.

ARGUED OCTOBER 9, 2025 OPINION FILED 11/05/25 #30871

SALTER, Justice

[¶1.] This case concerns the disposition of an individual retirement account

(IRA) owned by the late Roger Cunningham. When he opened the account, Roger

designated his then-wife, Sheila, as the sole beneficiary. The couple later obtained

a Tennessee divorce, and Sheila gave up any claim to the IRA as part of a

negotiated property settlement. Roger moved to South Dakota before the divorce

was final, but he never changed the beneficiary designation for the IRA. Following

Roger’s death, the personal representative of his estate (the Estate) filed a motion

in the pending probate action seeking a declaration that Roger and Sheila’s divorce

automatically revoked his beneficiary designation under South Dakota law. Sheila

appeared specially and objected to the Estate’s motion, asserting a lack of

jurisdiction and improper procedure. The circuit court granted the Estate’s motion;

Sheila appealed. We vacate the circuit court’s order and remand with instructions

to grant Sheila’s motion to dismiss.

Factual and Procedural History

[¶2.] Roger and Sheila Cunningham were married in 1981. The couple

spent most of their marriage as residents of Tennessee. In 1996, Roger opened a

rollover IRA through Charles Schwab, though the account was managed by Delta

Asset Management. When he opened the account, Roger designated Sheila as the

primary beneficiary.

[¶3.] In 2015, the couple divorced. As part of their divorce, Roger and Sheila

negotiated a Marital Dissolution Agreement (MDA), which was then filed with the

Tipton County Chancery Court in Tennessee and incorporated into a final decree of

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divorce. Before the divorce was finalized, Roger moved to Sioux Falls. As part of

the MDA, Sheila, still living in Tennessee, agreed to execute a quitclaim deed for

Roger’s newly acquired South Dakota residence.

[¶4.] The MDA also addressed Roger’s IRA, stating:

[Roger] has a rollover IRA at Schwab, account #xxxx5836, with a value that has been disclosed to [Sheila]. The parties agree that [Sheila] is awarded $757,473.81 from this account . . . . The parties agree that [Roger] will maintain sole ownership, value and equity in all remaining funds in this account. [Sheila] relinquishes and waives any claim, interest, right or title she may have to this account[.]

(Alterations in original and emphasis added.)

[¶5.] But after the divorce, Roger never changed the beneficiary designation

on his IRA. He did, however, update his will, which appointed his daughter Susan

as the personal representative.1

[¶6.] Roger lived in Sioux Falls until his death in March 2024. Soon after

his passing, Susan filed an application for informal probate of her father’s will in

circuit court for Minnehaha County. Susan also sought information concerning the

funds in Roger’s IRA in an email to a Delta Asset Management representative who

advised that Sheila remained the IRA’s primary beneficiary. Based on this

beneficiary designation, the IRA funds were transferred to an inherited IRA account

solely in Sheila’s name.

[¶7.] Within the pending probate action, Susan, on behalf of the Estate, filed

a motion seeking a declaration that the IRA funds should be included in the Estate,

1. Roger and Sheila did not have any children, but the record indicates that Roger had three children from an earlier relationship. -2- #30871

asserting that the beneficiary designation was automatically revoked upon Roger

and Sheila’s divorce. As support, Susan cited SDCL 29A-2-804(b)(1), which

provides that a divorce “[r]evokes any revocable . . . disposition or appointment of

property made by a divorced individual to a former spouse in a governing

instrument and any disposition or appointment created by law or in a governing

instrument to a relative of the divorced individual’s former spouse.” The circuit

court scheduled a hearing on the Estate’s motion, and Susan mailed notice of the

motion and hearing to Sheila’s residence in Tennessee.

[¶8.] Sheila retained South Dakota counsel who appeared specially and filed

a motion to dismiss, claiming that the circuit court lacked personal jurisdiction over

Sheila and jurisdiction over the IRA funds. She also argued that a motion for

declaratory judgment within the probate proceeding was procedurally improper and

should have been brought as a separate action. The court did not take evidence at

the hearing, but it appears undisputed that Sheila’s only arguable connections to

South Dakota are limited to the fact that she completed negotiating the MDA with

Roger after he moved to Sioux Falls, that she executed a quitclaim deed to Roger’s

new Sioux Falls residence, and that she now possesses the money that was

transferred to her from Roger’s IRA.

[¶9.] In a written memorandum opinion and order, the circuit court granted

the Estate’s motion. In so doing, the court determined that it had jurisdiction by

virtue of its broad statutory authority to hear “any other action or proceeding

concerning a succession or to which an estate, through a personal representative,

may be a party, including actions to determine title to property.” See SDCL 29A-3-

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105. The court, however, did not examine the nature and extent of any contacts

Sheila had with South Dakota.

[¶10.] Regarding the merits, the circuit court concluded that Roger’s

beneficiary designation for his IRA had automatically been revoked by virtue of the

revocation-on-divorce provisions of SDCL 29A-2-804. The court then determined

that the IRA funds were “part of Roger’s estate, to be disposed of upon his death by

the terms of his will.”

[¶11.] Sheila appeals the circuit court’s decision, raising two issues, which we

rephrase as follows:

1. Whether the circuit court erred when it concluded it had jurisdiction to adjudicate Sheila’s interest in the IRA.

2. Whether the circuit court erred by granting declaratory judgment through a motion rather than requiring the Estate to file a separate action.

Analysis and Decision

The circuit court’s jurisdiction

[¶12.] “Issues pertaining to a circuit court’s jurisdiction are questions of law

that we review” de novo. Marschke v. Wratislaw, 2007 S.D. 125, ¶ 8, 743 N.W.2d

402, 405 (citing Grajczyk v. Tasca, 2006 S.D. 55, ¶ 8, 717 N.W.2d 624, 627); see also

Davis v. Otten, 2022 S.D. 39, ¶ 9, 978 N.W.2d 358, 362 (stating that “[a] motion to

dismiss under SDCL 15-6-12(b)(2) is a challenge to the court’s jurisdiction over the

person and is a question of law that we review de novo” (citation modified)). This is

true whether we are considering subject matter jurisdiction or jurisdiction over a

person. See Farmer v. Farmer, 2022 S.D. 47, ¶ 25, 979 N.W.2d 173, 180 (reviewing

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subject matter jurisdiction de novo); Engel v. Geary, 2023 S.D. 69, ¶ 16, 1 N.W.3d

644, 649 (reviewing personal jurisdiction de novo).

[¶13.] For a court to properly adjudicate a matter, it must have subject

matter jurisdiction as well as personal jurisdiction or, in the case of actions against

property, in rem jurisdiction. Miller v. Weber, 1996 S.D. 47, ¶ 13, 546 N.W.2d 865,

868–69 (stating that a judgment or order entered without jurisdiction is void).

“Subject matter jurisdiction is the power of a court to act[.]” Alone v. C. Brunsch,

Inc., 2019 S.D. 41, ¶ 24, 931 N.W.2d 707, 713 (alteration in original) (quoting Cable

v. Union Cnty. Bd. of Cnty. Comm’rs, 2009 S.D. 59, ¶ 20, 769 N.W.2d 817, 825). It

“is conferred solely by constitutional or statutory provisions.” Lippold v. Meade

Cnty. Bd. of Comm’rs, 2018 S.D. 7, ¶ 17, 906 N.W.2d 917, 921–22 (quoting Lake

Hendricks Improvement Ass’n v. Brookings Cnty., Plan. & Zoning Comm’n, 2016

S.D. 48, ¶ 15, 882 N.W.2d 307, 312).

[¶14.] South Dakota circuit courts are courts of general subject matter

jurisdiction, and neither party disputes the court’s subject matter jurisdiction here.

See S.D. Const. art. V, § 1 (“The judicial power of the state is vested in a unified

judicial system consisting of a Supreme Court, circuit courts of general jurisdiction

and courts of limited original jurisdiction . . . .” (emphasis added)); see also SDCL

16-6-9(2), (5) (stating the original civil jurisdiction of circuit courts includes “all

actions at law or in equity” and “all matters of probate, guardianship,

conservatorship, and settlement of estates of deceased persons”).

[¶15.] In addition to subject matter jurisdiction, a state court’s adjudicative

authority is rooted in its “power over either persons or property.” Shaffer v.

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Heitner, 433 U.S. 186, 199 (1977). Prior to Shaffer, the prevailing inquiry for the

assertion of state-court jurisdiction was focused entirely upon the presence of a

person or property within the state. See id. at 197–200 (discussing the rule of

Pennoyer v. Neff, 95 U.S. 714 (1877)). Jurisdiction based on a state court’s authority

over a defendant’s person is described as in personam and carried with it the ability

to “impose a personal obligation on the defendant.” Id. at 199.

[¶16.] By contrast, in rem or quasi in rem jurisdiction was predicated on the

court’s power over property present in the state. Id. Historically, judgments based

upon this theory of jurisdiction did “not impose a personal liability on the property

owner, since he [was] not before the court.”2 Id. Though the in rem designation still

exists in some legal contexts, see In re Estate of Ager, 2024 S.D. 55, ¶ 8, 11 N.W.3d

878, 880 (discussing how supervised probate actions are in rem proceedings), it no

longer carries the same determinative jurisdictional impact.

[¶17.] In its Shaffer decision, the United States Supreme Court held “that all

assertions of state-court jurisdiction must be evaluated according to the standards

set forth in [International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945),] and its

progeny.” Shaffer, 433 U.S. at 212 (emphasis added). As a result, our resolution of

the issue before us turns not on a determination of whether the circuit court was

asserting in rem or personal jurisdiction, but rather “whether an[y] exercise of

2. The difference between “in rem” and “quasi in rem” jurisdiction is that “[a] judgment in rem affects the interests of all persons in designated property,” while “[a] judgment quasi in rem affects the interests of particular persons in designated property.” Shaffer, 433 U.S. at 199 n.17 (emphasis added); see also Froelich v. Swafford, 150 N.W. 893, 893 (S.D. 1914) (discussing “actions in rem or quasi in rem”). -6- #30871

jurisdiction . . . is consistent with the Due Process Clause” under “the minimum-

contacts standard elucidated in International Shoe.” Id. at 207; Rush v. Savchuk,

444 U.S. 320, 327 (1980).

Due process

[¶18.] We apply a three-step analysis to determine whether the assertion of

state-court jurisdiction over a non-resident comports with due process:

First, the defendant must purposefully avail [herself] of the privilege of acting in the forum state, thus invoking the benefits and protections of its laws. Second, the cause of action must arise from the defendant’s activities directed at the forum state. Finally, the acts of the defendant must have substantial connection with the forum state to make the exercise of jurisdiction over the defendant a reasonable one.

Davis, 2022 S.D. 39, ¶ 20, 978 N.W.2d at 366 (citation modified).

[¶19.] Under this standard, a court may exercise in rem jurisdiction over an

out-of-state party when “‘minimum contacts’ allow a defendant to enjoy the ‘benefits

and protection[s]’ of the laws of a forum state, and where ‘traditional notions of fair

play and substantial justice’ are upheld.” Id. ¶ 21 (alteration in original) (quoting

Int’l Shoe, 326 U.S. at 316–19). Importantly, “[j]urisdiction cannot be exercised on

the basis of ‘unilateral activity of another party or a third person.’” Id. ¶ 22

(quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)).

[¶20.] Here, Sheila did not have sufficient minimum contacts with South

Dakota “such that the maintenance of the suit does not offend traditional notions of

fair play and substantial justice.” Int’l Shoe, 326 U.S. at 316 (citation modified).

Sheila is a Tennessee resident whose only arguable “contact” with South Dakota is

her possession of money that was distributed to her from Roger’s IRA. And though

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this contact is related to the subject of the current litigation in the sense that the

law considers the IRA to be personal property that was situated with Roger in

South Dakota, see infra at ¶ 30, it is insubstantial.

[¶21.] Sheila agreed to not make any further claim to Roger’s IRA in the

Tennessee divorce MDA. Her only remaining interest in the IRA was her

designation as the beneficiary, but this was a result of Roger’s inaction and failure

to remove her—not anything Sheila did to “deliberately . . . engage[] in significant

activities within [the] state.” State v. Am. Bankers Ins., 374 N.W.2d 609, 612 (S.D.

1985) (citation modified) (quoting Burger King, 471 U.S. at 475–76).

[¶22.] For similar reasons, we cannot accept the Estate’s argument that

Sheila had sufficient contacts with South Dakota by virtue of the fact that she

negotiated the MDA with Roger, who had since moved to South Dakota. Sheila

signed the MDA and a quitclaim deed to Roger’s new Sioux Falls residence as part

of the Tennessee divorce and because it was necessitated by Roger’s unilateral

decision to move to South Dakota; neither can be considered evidence of

“purposefully avail[ing oneself] of the privilege of acting in the forum state, thus

invoking the benefits and protections of its laws.” Davis, 2022 S.D. 39, ¶ 20, 978

N.W.2d at 366 (quoting Kustom Cycles, Inc. v. Bowyer, 2014 S.D. 87, ¶ 10, 857

N.W.2d 401, 407).

[¶23.] The Estate’s principal argument would have us avoid the topic of

minimum contacts altogether in favor of what it believes to have been the

dispositive operation of SDCL 29A-2-804 at the time of the Cunninghams’ divorce in

2015, long before this probate action. This statute was enacted as part of the

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Legislature’s 1995 adoption of the Uniform Probate Code (UPC) and is commonly

known as the “revocation-upon-divorce statute” because it provides a statutory

means of automatically “revok[ing] any revocable . . . disposition or appointment of

property made by a divorced individual to a former spouse in a governing

instrument.” SDCL 29A-2-804(b)(1).

[¶24.] The United States Supreme Court has observed that the revocation-on-

divorce statute applies to both “testamentary bequests [and] beneficiary

designations to a former spouse” by treating a “decedent’s failure to change his

beneficiary” designation post-divorce as a consequence of “inattention” rather than

“intention.” Sveen v. Melin, 584 U.S. 811, 815 (2018). And in Buchholz v. Storsve,

we held that SDCL 29A-2-804 operated to automatically revoke a decedent’s pre-

divorce designation of his ex-spouse as a beneficiary under his retirement plan.

2007 S.D. 101, ¶ 17, 740 N.W.2d 107, 112–13.

[¶25.] Here, placing the date of the statutory revocation back to 2015 allows

the Estate to declare the absence of an operative beneficiary designation for the IRA

at the time of Roger’s death in 2024, which, in turn, brings the IRA funds into the

Estate and beyond Sheila’s reach. See SDCL 29A-2-804(d) (providing that the

governing instrument is given effect “as if the former spouse and relatives of the

former spouse disclaimed all provisions revoked by” 804(b)(1)).

[¶26.] Through a linear operation of SDCL 29A-2-804, the Estate argues that

the revocation of Sheila’s beneficiary designation and the availability of the IRA

funds for inclusion in Roger’s augmented estate were a fait accompli long before

Roger’s death. The effort to obtain a declaration in this regard, the Estate claims, is

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nothing more than a historical recognition of the circumstances as they have existed

for a decade.

[¶27.] But the Estate’s nearly frictionless argument has one conspicuous

loose end—the money is in Sheila’s account. It was transferred to her through what

the rest of the world (unaware of SDCL 29A-2-804) would have viewed as a

perfectly valid beneficiary designation. And now the effort to wrest the money from

her possession—righteous or not—necessarily requires compliance with the due

process standard for the assertion of jurisdiction over a non-resident; it is not

simply an in rem proceeding that concerns only the funds in the IRA.

[¶28.] And because exercising jurisdiction over Sheila—whether viewed as in

rem or personal jurisdiction—would not comport with the “traditional notions of fair

play and substantial justice,” Rush, 444 U.S. at 327, the circuit court erred when it

denied Sheila’s motion to dismiss.

Conclusion

[¶29.] We vacate the circuit court’s order granting the Estate’s motion for a

declaratory judgment, and the case is remanded with instructions to grant Sheila’s

motion to dismiss. In light of our disposition of the jurisdictional issue, we do not

reach the issue regarding the propriety of a motion for declaratory judgment not

framed by the pleadings in a separate action.

[¶30.] JENSEN, Chief Justice, and KERN, DEVANEY, and MYREN,

Justices, concur.

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