Pina v. Flaglore

443 N.W.2d 627, 1989 S.D. LEXIS 108
CourtSouth Dakota Supreme Court
DecidedJune 28, 1989
DocketNo. 16265
StatusPublished
Cited by1 cases

This text of 443 N.W.2d 627 (Pina v. Flaglore) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pina v. Flaglore, 443 N.W.2d 627, 1989 S.D. LEXIS 108 (S.D. 1989).

Opinions

MILLER, Justice.

In this appeal, we affirm the trial court and hold that (1) an heir failed to establish a gift causa mortis of certain estate property; (2) the trial court did not improperly admit into evidence a certain letter which also contained settlement proposals; and (3) there was sufficient evidence to support the trial court’s removal of the executor.

FACTS

Ingrid I. Pina (decedent) died in November 1986. At that time, her survivors included four children: Eugene Flaglore (Eugene), Peggy Flaglore (Peggy), Sylvia Pina (Sylvia) and Sophia Pina (Sophia). Decedent’s will named Eugene as executor and he subsequently was appointed by the court to that position over the objection of Sylvia and Sophia.

The assets of the estate included decedent's residence and certain nursing home property located in Sturgis, South Dakota. It also included personal property located at her residence and the nursing home and specific items from an antique business, which were stored in a building owned by Pyramid, Inc. in Sturgis. Eugene and his wife Nancy currently own more than 77% of the stock in Pyramid, Inc.

Prior to her death, decedent transferred her one-third ownership in Pyramid, Inc. to her children and also delivered the certificates of title to four automobiles (which include a 1958 Corvette and a 1969 Corvette) to Eugene. The parties dispute what decedent intended by the delivery of the titles. Eugene asserts that certain automobiles were to be distributed to family members according to the instructions of decedent unless his sisters caused a dispute concerning the distribution of the estate; in that event, Eugene was to keep the cars for himself. Sylvia and Sophia assert that the automobiles were to be kept by the estate and were to be sold in the event that the estate needed to raise cash; if such action was not necessary, then the cars were to be distributed to family members.

Shortly after decedent’s death, Eugene took over the operation of the Pina Nursing Home, which was formerly operated by decedent. Prior to decedent’s death, the nursing home was a successful business, operating at a profit of $24,787 in the previous year. The next year, when Eugene operated the nursing home, it had comparable receipts but operated at a loss.

Decedent’s children were in constant disagreement concerning the estate’s administration. Points of contention included not only Eugene’s signing of the certificates of title to the Corvettes over to himself and the deficit operation of the nursing home, but also included the terms of the proposed sale of the nursing home, Eugene’s use of the nursing home checking account for the purposes of both the nursing home and the estate, and his proposal to pay off the estate’s largest creditor, Pyramid, Inc., over a claim by First Western Bank (Bank).

Bank held a $25,000 note against the estate on which payment had not been made for at least a year and a half. At the same time, a $43,000 claim against the estate was filed by Nancy Flaglore (Eugene’s wife) as secretary of Pyramid, Inc. Eugene submits that this claim is for the storage of decedent’s antiques in a building owned by the corporation. It appears from the record that no written agreement existed concerning the storage of the antiques or the rental charge therefor. Eugene, as executor, intended to approve and pay Pyramid, Inc.’s claim at the same time that the estate had an outstanding and unsatisfied obligation to Bank.

[629]*629Concerning the sale of the nursing home, Eugene proposed that the buyer make a $70,000 down payment, with those funds to be borrowed and secured by a first mortgage against the nursing home. The subsequent payments were to be covered by a note and a second mortgage to the estate. In effect, the buyer would have been able to take possession without any personal investment or initial cash input into the estate. This proposal was rejected by Sylvia and Sophia. A later proposal was accepted under which the buyer made a down payment of $40,000 with the balance to be paid in monthly installments.

After Eugene came into possession of the $40,000 down payment, the outstanding note at Bank was in excess of $27,000. However, rather than paying Bank, Eugene elected to pay himself $5,000 in executor fees and another $7,000 was paid in attorney fees. The remainder of the money was used to satisfy other debts and obligations, including payment of sales taxes, outstanding bills, satisfaction of a contract for deed, and funeral expenses.

Sylvia and Sophia moved to have Eugene removed as executor. After a hearing, the court dismissed Eugene based upon his misconduct and mismanagement of the estate, the conflict of interest created by his actions as executor and the claim of Pyramid Inc., his deficit operation of the nursing home, his operation of the nursing home and the estate through the same bank account, and his transfer of the automobiles. The court, sua sponte, also ordered that the titles to the Corvettes be placed in escrow with the clerk of courts. Eugene appeals.

DECISION

I

WHETHER THE TRIAL COURT HAD JURISDICTION OVER THE AUTOMOBILES.

Eugene first asserts that the trial court did not have jurisdiction over the automobiles because the titles were delivered to him prior to the death of decedent and were intended as a gift causa mortis to him. A gift causa mortis is “one which is made in contemplation, fear, or peril of death, and with the intent that it shall take effect only in case of the death of the giver.” SDCL 43-36-4. In order to make a gift causa mortis, there must be a clear and intelligent manifestation of an intention to make a present gift to another and a delivery of the property to or for the use of the intended donee. See Steffen v. Davis, 52 S.D. 283, 217 N.W. 221 (1927). Eugene asserts that it was decedent’s intent that the automobiles not pass through the estate or by the provisions of her will; rather, she expressed specific desires about who was to receive each of the cars. Eugene further asserts that the titles were given to him with the specific instructions to hold them until the final settlement of the estate; if the estate was settled amicably, the automobiles were to be distributed in conformity with decedent’s instructions. However, according to Eugene, if a dispute arose in settling the estate, then he was to retain the cars as his own.

Sylvia and Sophia correctly assert that the burden is on Eugene to prove that the automobiles were intended as a gift causa mortis, including proof of both donative intent and delivery. Matejka v. Reider, 62 S.D. 335, 252 N.W. 878 (1934); see also O’Gorman v. Jolley, 34 S.D. 26, 147 N.W. 78 (1914). Sophia and Sylvia allege that the cars were never intended to be a gift causa mortis to Eugene, but were to be held by him pending the completion of the probate of the estate and that they were to be liquidated in the event that the estate needed to raise cash. They assert that these instructions from decedent did not manifest her intent to give the cars to Eugene.

We note that both Sylvia and Eugene agreed and testified to the fact that decedent wanted the cars to be sold in case the estate was in need of money. We note further that Eugene alone testified that he was to keep the automobiles for himself in the event that the estate could not be settled amicably.

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Related

Matter of Estate of Pina
443 N.W.2d 627 (South Dakota Supreme Court, 1989)

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Bluebook (online)
443 N.W.2d 627, 1989 S.D. LEXIS 108, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pina-v-flaglore-sd-1989.