No. 86-148 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

IN THE MATTER. OF THE ESTATE OF 

ROBERT EMRRSOK STONE, Deceased. 

APPEAL FROM: District Court of the Fifth Judicial District, 

In and for the County of Madison, 

The Honorable Frank Davis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

David N. Niklas, Helena, Montana 

For Respondent: 

Jardine, McCarthy & Grauman; Daivd A. Grauman, 

Whitehall, Montana 

Submitted on Briefs: August 7, 1986 

Decided: October 1, 1986 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

The District Court for Madison County denied a petition 

to terminate the appointment of R. Thomas Garrison as the 

personal representative of this estate. We reverse and 

remand to the district court. 

The issue is whether the District Court abused its 

discretion by refusing to remove the personal representative. 

Robert Emerson Stone died in December 1980. His will 

designated his attorney, R. Thomas Garrison, as personal 

representative for the estate and as trustee for any beneficiary who was a minor. Mr. Stone's daughter and son, then 21 

and 13, were named as devisees. The will was admitted to 

informal probate in January 1981. Mr. Garrison acted both as 

personal representative and as the attorney for the estate. 

In September 1985 the children and the son's great uncle 

petitioned the District Court for Mr. Garrison's removal as 

personal representative. They asked for an accounting and 

for the appointment of Sherrie Schandelmeier, the daughter, 

and Sam Wonderly, the great uncle, as successor co-personal 

representatives. The petition stated that over 4% years had 

elapsed and the estate was not yet closed; that neither an 

Inventory and Appraisement nor an Application for Determination of Inheritance Tax had been filed with the State of 

Montana; that the personal representative had failed to 

provide the children's aunt, a major creditor of the estate, 

with a requested accounting of the estate proceedings; that 

the personal representative had failed to keep the children 

and the aunt reasonably informed of the status of estate 

proceedings; and that the personal representative failed to 

timely file the Federal Estate tax return. 
A hearing was held before the District Court. Mr. 

Garrison testified that the chief asset of the estate is a 

ranch in the Ruby Valley valued at $496,950. The ranch is 

without livestock or equipment and was encumbered by a renewable five year lease. There was also a bank account containing approximately six hundred dollars, and a Chrysler car. 

As of the date of the hearing Mr. Garrison had not mailed an 

inventory and appraisement to the Department of Revenue, nor 

mailed one to the parties interested in the estate or filed 

one with the Court. A personal representative is required by 

statute to take these steps within three months of his appointment. Section 72-3-607, MCA. Furthermore, Mr. Garrison 

had not filed an Application for Determination of Inheritance 

Tax with the Department of Revenue, as required by 

$ 72-16-401, MCA. Neither had he paid any portion of the 

Montana taxes owing. If the total amount owing is paid 

within 18 months, a discount of 5% of the amount owing is 

granted to the estate. - See 5 72-16-440, MCA. No portion of 

the federal inheritance taxes had been paid, although Mr. 

Garrison had obtained an extension of time in which to pay. 

Interest was, and is, accruing on these unpaid taxes. 

During the administration of the estate, Mr. Garrison 

collected approximately $100,000 in income from leasehold 

payments and timber sales. At the time of the hearing Mr. 

Garrison had expended approximately $60,000, which included 

among other things the discharging of a mortgage on the 

estate property. He had on hand approximately $40,000 in 

estate funds. These funds were not placed in an interest 

bearing account. Since the hearing, Mr. Garrison has deposited with the State the amount due as Montana inheritance 

tax, plus interest. 
In addition to the failure to administer the estate in a 

timely and judicious fashion, Sherrie Schandelmeier testified 

that Mr. Garrison failed to provide her with written accountings though she asked him to do so several times. The son's 

mother testified that she had requested financial statements 

on behalf of her son, and none had been provided. 

Petitioners also maintain that Sherrie was deliberately 

misled by a letter from Mr. Garrison dated April 23, 1985. 

That letter stated: 

As you know further, there was no livestock upon 

the premises or any revenue or income except the 

lease he had made of the ranch to Max Miller for an 

annual income of $17,500. This lease, as you are 

well aware, was subject to a renewal this February 

which was exercised by Max, leasing the property 

until 1990 and subjecting any sale of all or part 

of the property to the terms of the lease. 

The letter failed to inform Sherrie that Mr. Garrison had 

terminated the lease by an agreement with the lessee one 

month before. As part of the termination agreement, Mr. 

Garrison conveyed approximately 75 acres of ranch land to the 

lessee. Following the termination of the lease, Mr. Garrison 

placed the ranch on the market for sale without notice to the 

devisees. The petitioners contend all these actions by Mr. 

Garrison constitute a breach of the fiduciary duty which Mr. 

Garrison owes to the estate and to themselves as devisees. 

- See 5 72-3-610, MCA. 

Mr. Garrison testified that the devisees wish to retain 

the ranch, which has been in their family for four generations, but that they have not come up with a concrete plan 

which would allow them to do so. He stated that the renewable lease encumbered the property and discouraged any potential mortgage or sale of the property. Mr. Garrison 

testified he was unable to find a mortgagor who would lend 
enough to pay the estate taxes and provide operating capital 

for a ranch devoid of cattle or equipment. He stated he 

didn't put the estate's funds in an interest bearing account 

because the amount had vacillated back and forth. He testified that he had prepared the inventory and appraisement in 

March 1981. However, through an oversight, he failed to file 

it with the Montana Department of Revenue. Mr. Garrison 

further testified he had not filed the application for determination of Montana estate taxes because the estate did not 

have the funds to pay the tax in full. Mr. Garrison did file 

an extension on the federal estate taxes owing. He testified 

that his office records indicate he mailed copies of these 

forms to the devisees. Mr. Garrison testified that although 

he had not provided formal written accountings to the petitioners, he had provided informal oral accountings in his 

office. Finally, Mr. Garrison testified concerning communication with the devisees: 

And knowing the way they felt about the ranch, not 

to sell it . . . or make any arrangements to discharge any of it, I didn't think it was advisable 

to do so [contact or communicate with the 

devisees]. 

The District Court found "substantial compliance by the 

personal representative with the probate law in the discharge 

of his fiduciary duties, and no omissions which in any way 

adversely affected the estate, or those interested therein." 

It ordered Mr. Garrison to proceed with all deliberate speed 

with the sale of the property, subject to prior approval of 

the court and notice to the devisees. 

The removal of a personal representative for cause is 

authorized "when removal would be in the best interest of the 

estate. " Section 72-3-526 (2) (a) , MCA. This Court's review 
of the District Court's decision is limited to whether the 

District Court abused its discretion. Matter of Estate of 

Counts (Mont. 1985), 704 P.2d 1052, 1055, 42 St.Rep, 1243, 

1246. 

In examining the record, we see that the estate bank 

account contained at least $1700 at all times since it was 

opened in January 1981, and that at most times it contained 

much more than that amount, exceeding $18,000 in January 

1983. There has been no adequate reason given for the failure to invest this money, in a period when interest rates 

have gone as high as 15% or more. We conclude that Mr. 

Garrison was not a-cting in the best interest of the estate in 

this regard. 

Nonpayment for over four years of any portion of the 

Montana inheritance tax or the federal estate tax while money 

was available in the estate account has not been adequately 

explained. Mr. Garrison's explanation that he was waiting 

until he could pay the taxes in full is unpersuasive, given 

the discount available for prompt payment of the Montana tax 

and the interest charges on both the Montana and federal 

taxes owing. We conclude that Mr. Garrison's inaction was 

not in the best interest of the estate, and that he has not 

redeemed himself by paying the Montana tax subsequent to the 

hearing. 

The failure to file the inventory and appraisement with 

the State of Montana within 3 months after Mr. Garrison's 

appointment as personal representative was explained as a 

clerical error. That this omission was not discovered by Mr. 

Garrison until this action was brought, over 4 years after 

his appointment, does not speak well for the diligence of his 

monitoring of this matter. 
Also, Mr. Garrison's misleading of the daughter in his 

April 1985 letter mentioning the "renewed" lease of the land 

has not been shown as an act even remotely in the best interest of the estate. We do not condone this apparent misrepresentation to a devisee with a half-interest in the estate. 

Mr. Garrison's argument that the devisees have not made 

a concrete proposal which would allow them to retain the 

ranch and pay the inheritance taxes is irrelevant. At issue 

is whether Mr. Garrison's actions as a personal representative justify a conclusion that his termination would be in 

the estate's best interest. While we do not negate the 

District Court's expression of confidence in Mr. Garrison, 

that does not address the problems which have been disclosed 

in the administration of this estate. 

We conclude that the District Court abused its discretion in disregarding the uncontraverted evidence before it 

and refusing to remove Mr. Garrison as personal representative. We therefore reverse the decision of the District 

Court and remand for appointment of a successor personal 

representative or personal representatives, and for a determination of what fee is due Mr. Garrison for his services as 

personal representative. 

We Concur: 

Y 

Mr. Justice William E. Hunt, Sr., dissenting: 

I dissent. In this case the testator chose the personal 

representative of his estate. That act should not be 

annulled by this Court except under the most extreme 

circumstances. 

An order of removal of [a personal representative] 

is harsh and severe; and irregularities not 

directly harmful in the management of the estate 

will be overlooked. If the court can remedy a 

matter of the complaint, no removal will be 

ordered. 

Tice's Estate v. Tice (1962), 140 Mont. 28, 367 ~.2d 771, 

In this case, I agree with the District Court that there 

has been certain technical omissions, but there is no 

evidence of fraud, gross carelessness, or even indifference 

to duty. The District Court sympathized with the 

beneficiaries and heirs who are frustrated with the long 

wait, but noted that given the problems confronting the 

personal representative in this difficult estate, it was not 

shown that the estate could have been administered otherwise. 

The District Court held the personal representative's plan to 

sell the ranch land to pay the debts of the estate is the 

only feasible alternative although it is not what the heirs 

prefer. The District Court took the only steps available to 

complete the administration of this estate. This Court's 

action now transfers all of the problems to a new 

administration, not of the testator's choosing, which has the 

same problems as the prior administration with no clear 

solution available to them. 
I do not believe the District Court abused its 

discretion in these findings of fact and conclusions of law. 

The judgment of the District Court should be affirmed. 

Mr. Justice John C. Sheehy concurs in the above dissent.