Four children of the late former owner of a Chamberlain nursing home are suing a law firm, an attorney, their mother's living trust and two of their siblings, alleging they were cheated out of the money generated by the nursing home's sale.
In the Brule County complaint filed April 27, Bradley Hickey, Terence Hickey, Vance Hickey and Michelle Hoesing requested repayment from two of their siblings, Kristina Lippert and Darrent Hickey, as well as from attorney Lindsay Harries, Swier Law Firm and the living trust established by their mother, Shirley Hickey, for what they say constituted breaches of fiduciary duty, legal malpractice and conversion.
Shirley Hickey, who died last fall, owned and operated Regency Retirement Facility, a Chamberlain nursing home and assisted living facility. In 2000, she organized Regency Retirement, LLC, naming herself as the sole member and owner of all membership units. She then transferred facility assets into the LLC. Hickey established the Shirley A. Hickey Living Trust in 2010 and transferred those membership units in the LLC to the living trust.
In 2012, Hickey established the Shirley A. Hickey Regency Trust, the money in which was to be distributed to her children when she died. Two of her children, Lippert and Darren Hickey, were named as co-trustees. According to the complaint, Hickey planned to transfer the membership units in the living trust to the Regency trust. Hickey's eight children, including the two co-trustees, are named as beneficiaries of the Regency Trust, and seven are listed in the complaint as living in Chamberlain.
Hickey's intentions, the complaint stated, were that Regency Retirement Facility's building would either be owned by Regency Retirement LLC or held by the Regency trust and that membership units be transferred from the living trust to the Regency trust gradually, with the goal of benefiting her children while avoiding gift taxes. The complaint states neither of those goals were completed, but that she transferred 237 membership units from the LLC to the Regency trust, leaving 763 units in the LLC's name.
In late 2016, the Regency Retirement Facility building and property, along with the fixtures and equipment inside, were sold for more than $1.8 million. The complaint states none of the proceeds from that sale went into the Regency trust, although the trust held nearly a quarter of the membership units available at that time.
While working at Thompson Law and later at Swier Law, Harris reportedly did legal work for Hickey, as well as for the Regency trust and Lippert. In June 2017, Harris sent a letter to the Regency trust beneficiaries explaining that the trust had less money in it than originally intended. Harris, according to the complaint, wrote that the trust's only asset was valued at about $100,000 and that if all beneficiaries signed a revocation and termination agreement, that money could be distributed among them. The Regency trust is still in effect because not all beneficiaries signed the agreement.
Earlier that year, more than $1.3 million in proceeds from the Regency Retirement Facility's sale had been deposited into a bank account under Hickey's name. According to the complaint, that money was transferred to an account in the name of the living trust after Harris had asked the Regency trust beneficiaries to sign the revocation and termination agreement. The four plaintiffs in the case didn't receive any of the proceeds from the sale, the complaint alleges.
The handling of Hickey's estate was listed among the reasons the South Dakota Supreme Court decided in February to suspend attorney Scott Swier from practicing law for a year. The court's opinion stated Harris and Swier Law had violated the state's rules of professional conduct. Harris had done legal work establishing trusts for Hickey, resulting in her and all of Swier Law being disqualified from representing Lippert in a suit filed in 2018 disputing Hickey's request to remove her as a co-trustee.
The Supreme Court's opinion stated Harris, Swier and another Swier Law attorney had all appeared before a disciplinary board and that Harris had left Swier Law prior to Swier's suspension.
A total of five claims are listed in the complaint filed last week. Two of those are based on allegations that Lippert, Darren Hickey, Swier Law and Harris each breached their duties associated with preserving the Regency trust and making sure its assets were allocated correctly, with the second claim accusing Harris and Swier Law of aiding and abetting Lippert and Hickey's breaches in ways that included concealment of the conflict of interest, Harris' legal malpractice and negligence and the Regency trust funds not being allocated as intended.
The three remaining claims accuse Harris and Swier Law of legal malpractice, Lippert and Hickey of wrongly converting funds and the living trust of being enriched unethically.
The plaintiffs are requesting judgments for damages and restitution in amounts to be determined at trial, accompanied by an order compelling Harris, Swier Law, Lippert and Hickey to "redress their breach of trust." They're also requesting that a court order Regency trust assets to be accounted for in order to trace and recover property and establish what assets belong to the trust.