Court Opinion

ID: 8206600
Source: CourtListenerOpinion
Date Created: 2022-09-15 14:05:24.024581+00
Date Added: 2024-06-11T16:41:16.928531
License: Public Domain

FILED
                                                                     IN THE OFFICE OF THE
                                                                  CLERK OF SUPREME COURT
                                                                      SEPTEMBER 15, 2022
                                                                   STATE OF NORTH DAKOTA

                  IN THE SUPREME COURT
                  STATE OF NORTH DAKOTA

                                  2022 ND 170

In the Matter of the Rose Henderson Peterson Mineral Trust dated March 26,
1987

Lyle M. Henderson, Clifford Henderson,
Herbert Henderson, Emmalee McKenzie, and
Dixie J. Henderson,                                Petitioners and Appellees
      v.
Dennis Henderson and James Henderson,
individually and as co-trustees
of the Rose Henderson Peterson
Mineral Trust,                                   Respondents and Appellants
      and
Donna Foreman, Patsy Gabbert,
Kimber Henderson, Larry Henderson,
Lyleen Henderson, and
Penny Pitman,                                             Interested Parties

                                  No. 20210258

Appeal from the District Court of McKenzie County, Northwest Judicial
District, the Honorable Robin A. Schmidt, Judge.

AFFIRMED.
Per Curiam.

Michael T. Andrews, Fargo, ND, for petitioners and appellees; submitted on
brief.

Tyler J. Malm, and David J. Smith, Bismarck, ND, for respondents and
appellants; submitted on brief.
           Matter of Rose Henderson Peterson Mineral Trust
                             No. 20210258

Per Curiam.

[¶1] Dennis Henderson and James Henderson, individually and as co-
trustees of the Rose Henderson Peterson Mineral Trust (“Trustees”) appealed
from a judgment entered after the district court determined they paid
themselves an unreasonable amount of compensation from the Trust for their
duties as trustees. We were unable to determine whether the court erred by
failing to apply an exculpatory clause in the Trust because the court made no
findings concerning the Trustees’ culpability. See Matter of Rose Henderson
Mineral Trust dated March 26, 1987, 2022 ND 92, ¶ 26, 974 N.W.2d 372; see
also N.D.C.C. § 59-18-08 (exculpation of a trustee is not permitted for breaches
of trust committed in bad faith or with reckless indifference to the purposes of
the trust). We also could not determine whether the court erred by failing to
apply the doctrine of laches because the court did not make findings concerning
the length of the beneficiaries’ delay in bringing this lawsuit or the prejudice
any delay may or may not have caused. Id. at ¶ 29. We remanded the case
while retaining jurisdiction under N.D.R.App.P. 35(a)(3)(B). We instructed the
court to “make specific findings of fact concerning the application of the
exculpatory provision and the issue of whether the doctrine of laches applies.”
Id. at ¶ 30.

[¶2] On remand, the district court found the Trustees failed to follow a prior
order instructing them to review and evaluate their compensation; they
accepted annual compensation that was more than four times the amount of
the highest annual compensation a previous court had approved as reasonable;
they failed to quantify the amount of time they spent performing trust duties;
and they ignored requests by beneficiaries to reevaluate their compensation.
The court also found the beneficiaries did not delay invoking their rights and
the Trustees did not present evidence to establish prejudice. Based on these
findings, the court held the Trustees acted with reckless indifference to the
purposes of the Trust and the doctrine of laches did not apply.

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[¶3] The Trustees argue the district court misapplied the law by “applying
multiple, inapplicable culpability standards to the Trustees’ conduct.” They
specifically assert the district court erred because it “applied the appropriate
culpability standard only once.” (Emphasis in original). Although the court
used the words “reckless indifference” to describe the Trustees’ conduct in
respect to various matters of concern, including the purposes of the Trust, we
are not convinced the court applied an inappropriate standard. We conclude
the district court’s additional findings on remand are not clearly erroneous.
We summarily affirm under N.D.R.App.P. 35.1(a)(2).

[¶4] Jon J. Jensen, C.J.
     Gerald W. VandeWalle
     Daniel J. Crothers
     Lisa Fair McEvers
     Jerod E. Tufte

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