The South Dakota Supreme Court last week upheld a Hutchinson County court's decision to nullify the transfer of farmland from a man acting under power of attorney to himself.
In the opinion filed last Wednesday, Chief Justice David Gilbertson wrote that because appellant Curtis Huether, of Parkston, didn't demonstrate a genuine issue of material fact in connection with his fiduciary duty to Kenneth Stoebner, of Tripp, Judge Patrick Smith hadn't erred in granting summary judgment to Stoebner's estate and against Huether in October 2018.
In 2012, Huether was given power of attorney by his cousin, Stoebner, who died at age 87 in 2017. That gave him authority that included being able to manage real property in Stoebner's name.
Gilbertson wrote that Huether began having Stoebner's mail sent to him in 2016, and he handled most of Stoebner's bills. As Stoebner's assets diminished, Huether reportedly said he suggested either auctioning the farmland or allowing Stoebner's nursing home to obtain a lien on it, but Stoebner refused, instead asking Huether to purchase the property from him. According to the opinion, Huether had leased that farmland from Stoebner since 2012.
Four days before Stoebner's death in June of that year, Huether signed Stoebner's Hutchinson County property over to himself for $350,000. Gilbertson wrote that a certified appraiser had estimated the land was worth $720,000, while the Hutchinson County Department of Equalization valued it at $374,397.
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Stoebner's estate moved for summary judgment on the grounds that Huether hadn't had permission to self-deal with Stoebner's property and that the deal breached Huether's fiduciary duty by only benefiting him and not Stoebner. When summary judgment was granted, the sale agreement and warranty deed for the property was ordered to be declared null and void, and Huether was ordered to pay costs Stoebner's estate incurred from the lawsuit. Huether appealed to the Supreme Court on Nov. 28, 2018.
The Supreme Court ruled that because Huether was in control of Stoebner's assets and Stoebner depended on him, Huether was in fact acting under fiduciary duty when the land was sold, and he breached that duty because the documents granting him power of attorney didn't include language clearly allowing self-dealing. Gilbertson wrote that based on case law, a power of attorney agreement between Huether and Stoebner would have had to have that clear language in order for Huether to be able to take the property for himself.
