Weekley v. Prostrollo

2010 SD 13, 778 N.W.2d 823, 2010 S.D. LEXIS 14, 2010 WL 457360
CourtSouth Dakota Supreme Court
DecidedFebruary 10, 2010
Docket24970
StatusPublished
Cited by15 cases

This text of 2010 SD 13 (Weekley v. Prostrollo) 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
Weekley v. Prostrollo, 2010 SD 13, 778 N.W.2d 823, 2010 S.D. LEXIS 14, 2010 WL 457360 (S.D. 2010).

Opinions

KONENKAMP, Justice (on reassignment).

[¶ 1.] A beneficiary brought suit against an estate’s personal representatives. She alleged breach of fiduciary duty and negligence. After a bench trial, the circuit court ruled in favor of the personal representatives. On appeal, we affirm in part, reverse in part, and remand.

Background

[¶ 2.] Walter Brownlee, Sr. died testate on August 17, 1997. His will devised all his Certificates of Deposit, his residence, and most of his personal property to his long-time companion, Jeanie Weekley. The bulk of Brownlee’s estate, however, passed into a trust for the benefit of his children and grandchildren. Since Brown-lee’s death, his estate has been the subject of two decisions by this Court. In re Estate of Brownlee (Brownlee I), 2002 SD 142, 654 N.W.2d 206; Wagner v. Brownlee (Brownlee II), 2006 SD 38, 713 N.W.2d 592.

[¶ 3.] In Broumlee I, we examined, among other things, whether the terms of Brownlee’s will and trust prescribed that federal and state taxes would be paid by the principal of the trust. Based on the language of the trust and will, we concluded that the beneficiaries were responsible for the state inheritance taxes attributable to the property they received. The federal taxes, however, were to be equitably apportioned among the beneficiaries under SDCL 29A-3-916. Broumlee I, also considered whether Brownlee’s pre-death execution of a Bill of Sale to his son, Randy Brownlee, for certain construction equipment was a gift. Because Randy failed to establish all the elements of a gift, we affirmed the circuit court’s conclusion that the Bill of Sale was an ineffective gift of the construction equipment. At the time of Brownlee’s death, therefore, the equipment became part of the estate.

[¶ 4.] After Broumlee I, the estate initiated an action to recover the equipment and to apportion the inheritance taxes.1 Weekley counterclaimed for interest on [826]*826her unpaid devise of the certificates of deposit, as well as interest on $25,000 of personal funds that she provided to help administer the estate. She also sought an award of more than $76,000 in attorney’s fees that she incurred in the estate litigation, including the prior appeal. See Brownlee II, 2006 SD 38, ¶ 7, 713 N.W.2d at 595. The circuit court granted Week-ley’s fees related to her efforts in setting aside the transfer of the construction equipment and denied her request for interest on her unpaid devise and the $25,000 she provided to help administer the estate.

[¶ 5.] Weekley appealed to this Court. She challenged the court’s denial of her attorney’s fees request for her efforts regarding the inheritance tax apportionment. In Brownlee II, we affirmed the court’s denial of fees, concluding that “[b]eeause Weekley was the only beneficiary that would have avoided any tax liability under her theory, it was not an abuse of discretion for the circuit court to conclude that her efforts were primarily for her own financial gain rather than for the benefit of the estate, notwithstanding any alleged effort to effectuate the testator’s intent.” Id. ¶ 19. We also denied her request for appellate attorney’s fees incurred in Brownlee I, as she failed to request those fees in that appeal.

[¶ 6.] As for Weekley’s claim that the court erred when it denied her interest on her unpaid devise and the $25,000 contribution to the estate, we held that she indeed incurred damages by the estate’s inexplicable non-action. “[N]o justification has been presented for the estate’s failure to recover the equipment and pay Week-ley’s claims as expeditiously and efficiently as is consistent with the best interests of the estate[.]” Id. ¶ 26. Therefore, she was entitled to “interest on the amount of her unpaid devise and on the $25,000 she provided for the administration of the estate.” Id. We also awarded Weekley one-half her request for appellate attorney’s fees for Brownlee II.

[¶ 7.] Following Brownlee II, a judgment was entered against the estate in favor of Weekley awarding her $168,223.74, plus post-judgment interest, representing the amount she was owed for her devise, attorney’s fees, appellate attorney’s fees, and interest due to the delay in receiving her devise. Weekley then brought suit against Jerry Prostrollo and Robert Wagner, the past and current personal representatives, for breach of their fiduciary duties in the administration of the estate.2 According to Weekley, Pros-trollo and Wagner negligently handled the estate’s affairs, causing her to suffer loss to her devise. See SDCL 29A-3-808(b).

[¶ 8.] Following a trial, the circuit court issued a memorandum opinion, and later, findings of fact and conclusions of law. The parties did not dispute that the estate owed Weekley $168,223.74 in interest, her unpaid devise, and attorney’s fees. Nonetheless, the estate did not have sufficient money or assets to pay its obligations to Weekley. She argued that because Pros-trollo and Wagner negligently handled certain affairs of the estate, breaching their fiduciary duties, they should be jointly and severally liable for the loss she suffered.

[827]*827[¶ 9.] While the circuit court acknowledged that Prostrollo and Wagner owed a fiduciary duty to Weekley, it also considered the fact that in the ten years since Brownlee’s passing much of the delay in the administration of the estate was caused by the hostile relationship between Randy and Weekley. As to the federal estate taxes, the court concluded that Prostrollo did not breach his fiduciary duty to Weekley: Prostrollo was justified in relying on advice of counsel. Similarly, the court held that Wagner did not breach his duty to collect Randy’s portion of the federal estate tax obligation after Brown-lee I. At the time of the court’s decision, a suit by Wagner, against Randy, was pending, and Wagner’s strategy of attempting to negotiate with Randy was deemed legitimate.

[¶ 10.] The circuit court separately considered whether Prostrollo and Wagner were negligent when they failed to take possession or preserve the construction equipment after the circuit court judicially determined the equipment to be part of the estate. Acknowledging that during Prostrollo’s tenure as personal representative, he did not attempt to take possession of the equipment and failed to inventory or independently appraise the equipment, the court held that Prostrollo nonetheless did not breach his fiduciary duty to Weekley. The equipment was appraised shortly after Brownlee’s death at $171,000, but the issue of ownership of the equipment was not raised until almost three years afterwards, which resulted in litigation and an appeal to this Court. Because Brownlee I was not decided until after Prostrollo’s tenure, the court found no negligence.

[¶ 11.] As for the case against Wagner, the court found that his failure to inspect, inventory, collect, and manage the equipment after this Court’s November 2002 Brownlee I decision constituted a breach of his fiduciary duty. But the court held that it could not reasonably calculate Weekle/s damages and thus awarded her nothing.

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Cite This Page — Counsel Stack

Bluebook (online)
2010 SD 13, 778 N.W.2d 823, 2010 S.D. LEXIS 14, 2010 WL 457360, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weekley-v-prostrollo-sd-2010.