Restricting Guardianship and Conservatorship to Qualified Nonprofit Entities: Clarification of SDCL 29A-5-110

Introduction

This case arises from competing petitions for guardianship and conservatorship over 90-year-old Gerda Flyte, who suffers from advanced dementia and can no longer manage her medical and financial affairs. Daughter Charlene Monfore initially secured temporary appointment but brother Roger Flyte objected, alleging mismanagement and safety concerns. After a contested two-day hearing, the circuit court—finding neither sibling suitable—appointed a for-profit corporate entity, Black Hills Advocate, LLC (BHA). Charlene appealed both the denial of her own appointment and the statutory authority for a for-profit corporation to serve. Roger, though denied in the trial court, asks us to affirm BHA’s appointment and requests appellate fees. The Supreme Court of South Dakota reverses the corporate appointment, reaffirms the court’s discretion to name a third party sua sponte under SDCL 29A-5-304, and clarifies that SDCL 29A-5-110 prohibits for-profit entities (with the exception of qualified banks or trust companies) from serving as guardians or conservators.

Summary of the Judgment

On March 26, 2025, the South Dakota Supreme Court held:

The circuit court did not abuse its discretion in refusing to appoint Charlene or Roger as guardian and conservator, given evidence of care deficiencies, financial improprieties, and intra-family conflict.
SDCL 29A-5-304 authorizes a court to appoint a guardian or conservator sua sponte when no nomination by the protected person suffices, or when the nominee fails the “best interests” test.
SDCL 29A-5-110’s plain language restricts guardians and conservators to individuals, public agencies, nonprofit corporations, and—solely as conservators—banks or trust companies. For-profit corporations, except banks/trust companies, lack statutory standing to serve.
The trial court’s appointment of BHA, a for-profit LLC, was therefore beyond its statutory authority and is reversed.
The matter is remanded to allow the court to appoint a qualified guardian or conservator consistent with statutory criteria.
Roger Flyte’s request for appellate attorney fees is granted in part: one-half of his requested fees are awarded from the guardianship estate.

Analysis

Precedents Cited

The Court drew upon its guardianship jurisprudence to define the proper scope of court discretion and statutory eligibility:

In re Guardianship of Rich, 520 N.W.2d 63 (S.D. 1994) – affirmed the trial court’s discretion in guardianship appointments and reiterated that “best interests of the protected person” controls.
In re Guardianship of Blare, 589 N.W.2d 211 (S.D. 1999) – upheld appointment of a third-party guardian when family members withheld critical medical information, underscoring that family status does not override welfare concerns.
In re Guardianship & Estate of Jacobsen, 482 N.W.2d 634 (S.D. 1992) – confirmed that selection of a guardian lies “largely in the discretion of the appointing court,” subject to statutory constraints.

Legal Reasoning

The Court’s statutory interpretation followed these steps:

Plain‐Language Inquiry: SDCL 29A-5-110 enumerates who “may be appointed as a guardian or conservator.” It lists (a) adult individuals (unless employed by an agency providing “substantial services or financial assistance”), (b) public agencies or nonprofit corporations, and (c) banks or trust companies (as conservators). A final clause permits the Department of Human Services only if no qualified individual or nonprofit will serve.
Exclusion of For-Profit Entities: The statute’s express reference to “nonprofit corporation” and separate carve-out for banks/trust companies demonstrates a legislative intention to exclude for-profit entities from appointment. No waiver is available for entities ineligible under SDCL 29A-5-110, unlike the limited waiver available to individual nominees.
Authority to Appoint Sua Sponte: SDCL 29A-5-304 provides that where no nomination or nominee meets statutory standards, “the court shall appoint as guardian or conservator the individual or entity that will act in the protected person’s best interests.” This directive implicitly authorizes courts to consider third‐party candidates on their own motion when family nominees fail the “best interests” test.
Canon of Construction: Because the statutory language is clear and complete, no negative‐implication (“expressio unius”) or absurd‐results canon was needed. The Court adhered to the plain meaning of the statutory list and its exceptions.

Impact on Future Cases

This decision charts a definitive course for guardianship and conservatorship practice in South Dakota:

Courts must not appoint for-profit entities (other than banks/trust companies) as guardians or conservators, eliminating a burgeoning “guardianship industry” model.
Family members—while presumptively preferred—cannot be appointed if evidence shows they fail the “best interests” test. Courts have express authority under SDCL 29A-5-304 to seek out and name third-party nonprofits or public agencies.
Practitioners will need to vet nonprofit or public agency candidates and banks/trust companies in their jurisdiction, ensuring statutory compliance and protecting vulnerable adults from conflicts of interest.
Legislators and stakeholders may consider amendments if they wish to restore for-profit entity eligibility or refine waiver authority.

Complex Concepts Simplified

Guardianship vs. Conservatorship: A guardian makes personal and healthcare decisions for an incapacitated person; a conservator manages that person’s finances and property.

Protected Person: An adult adjudicated by a court to lack sufficient capacity to care for themselves or their property.

SDCL 29A-5-110 “Qualifications”: Legal criteria defining who may serve. Nonprofit status and absence of conflicting services are mandatory prerequisites for entities.

SDCL 29A-5-304 “Considerations”: Factors a court must weigh—geographic proximity, family relationship, conflict of interest, and focus on welfare—to determine who should serve.

Sua Sponte Appointment: Latin for “on its own motion.” Here, courts can go beyond proposed nominees to identify a suitable guardian or conservator where no nominee fulfills the statutory “best interests” requirement.

Conclusion

The Supreme Court of South Dakota’s decision in Guardianship and Conservatorship of Flyte provides two key takeaways: first, SDCL 29A-5-110 unambiguously restricts guardianship and conservatorship roles to individual adults, nonprofit or public entities, and banks/trust companies—excluding for-profit corporations from serving; second, SDCL 29A-5-304 empowers trial courts to appoint third-party guardians and conservators on their own motion when family nominees fail the statutory “best interests” test. This ruling refines South Dakota’s guardianship framework, bolsters protections for incapacitated persons, and clarifies the judiciary’s duty to ensure fiduciaries align with legislative qualifications and the welfare of those they serve.