Court Opinion

ID: 2929229
Source: CourtListenerOpinion
Date Created: 2015-09-14 20:13:57.67977+00
Date Added: 2024-06-11T11:32:27.312638
License: Public Domain

This opinion will be unpublished and
                          may not be cited except as provided by
                          Minn. Stat. § 480A.08, subd. 3 (2014).

                               STATE OF MINNESOTA
                               IN COURT OF APPEALS
                                     A15-0546

                                   In re the Estate of:
                               Mary Ann Nething, Deceased

                                Filed September 14, 2015
                    Affirmed in part, reversed in part, and remanded
                                      Smith, Judge

                              Meeker County District Court
                                File No. 47-PR-14-847

John E. Mack, Mack & Daby, P.A., New London, Minnesota (for appellant Lois Nething)

Paul A. Jeddeloh, Anthony J. Weigel, Jeddeloh & Snyder, P.A., St. Cloud, Minnesota
(for respondent Mary Jean Anderson)

Chad M. Roggeman, Roggeman Law Office, P.A., St. Cloud, Minnesota (for respondent
Presbyterian Family Foundation)

         Considered and decided by Peterson, Presiding Judge; Stauber, Judge; and Smith,

Judge.

                         UNPUBLISHED OPINION

SMITH, Judge

         We affirm the district court’s appointment of Presbyterian Family Foundation

(Presbyterian) as personal representative of decedent Mary Ann Nething’s estate because

the district court did not abuse its discretion in appointing Presbyterian. However, we

reverse and remand the district court’s appointment of Presbyterian as successor trustee
of the Nething Living Trust and simultaneous removal of the decedent’s daughter Lois

Nething as trustee because notice under Minn. Stat. § 501B.18 (2014) was not proper.

                                          FACTS

       Mary Ann Nething died in August 2014. Lois Nething (Nething), the decedent’s

daughter, petitioned the district court to appoint Patricia Bury, the decedent’s niece, as

personal representative of her estate. Another daughter of the decedent, Mary Jean

Anderson, objected and petitioned the court to instead appoint Presbyterian as the estate’s

personal representative. Presbyterian had been the decedent’s emergency guardian and

conservator from March to September 2014, after Meeker County Social Services

removed decedent from the home she shared with Nething and began investigating

Nething for caregiver neglect, financial exploitation, and isolation. Anderson also asked

the court to appoint Presbyterian as trustee of the Nething Living Trust, replacing

Nething.    The decedent and her late husband had been the primary trustees and

beneficiaries of this trust. They designated Nething as alternate successor trustee and

made their nine children beneficiaries after their deaths.

       Anderson raised trust issues for the first time in her answer to an amended petition

that Nething filed, and the district court held an evidentiary hearing just five days later.

Nething objected to the court’s considering her removal as trustee because she lacked

time to prepare. The court nonetheless heard the trustee removal petition.

       Witnesses at the hearing were Nething, Anderson, and two of the decedent’s other

daughters, Susan Snelling and Karen Dye. Much of the testimony focused on Bury’s

suitability as personal representative.     Nething admitted that Bury has four minor

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children, has more than one job, and had only recently communicated with her.

Anderson, Snelling, and Dye testified that Bury was communicating only with Nething.

They asserted that Bury would protect Nething and lacked the neutrality, skill,

forcefulness, or time to investigate the estate’s potential claims against Nething.

       Witnesses also discussed Nething. Both sides acknowledged substantial family

acrimony and a lack of communication between Nething and the decedent’s other

children. Nething acknowledged that she had entered a personal-services contract with

her parents and that there was a pending Meeker County investigation of her alleged

financial exploitation. Anderson and Snelling testified that they believed that Nething

had violated the personal-services contract and had taken trust property, which they

argued created a conflict of interest between her and the estate. Anderson, Snelling, and

Dye believed that Presbyterian, in contrast, would be neutral and efficient and would

communicate as personal representative and as trustee.

       In making its decision, the district court considered several documents labelled as

“exhibits,” including Nething’s personal-services contract, that were appended to

Anderson’s filings. The contract showed that Nething’s duties included paying all her

parents’ bills and doing all housekeeping in exchange for a monthly stipend and options

to purchase trust property after her parents died. These options would be forfeited if

Nething failed to perform to the reasonable satisfaction of her parents.

       The district court also took judicial notice of its March 2014 order in the

decedent’s guardianship and conservatorship proceedings. In that order, the court found

that the decedent’s health, safety, or welfare were at risk. The decedent had severe

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dementia, preventing her from knowing time or place, recognizing her children, or

“understand[ing] any aspect of her financial situation.” Decedent’s housing conditions

were “very poor and unsafe” due to extreme hoarding, which involved blocked exits and

poultry living in the basement. She was also unable to call for help or exit the home on

her own. Nething had nonetheless sometimes left her alone. Nething also had failed to

pay taxes on her mother’s property for 2013, failed to pay her father’s 2012 funeral

expenses, and charged $8,000 to her mother’s credit cards.

       The district court reserved its decision on whether a 2009 will submitted by

Nething was valid. The court found that the family dispute would make the personal

representative position “very difficult” for Bury and required a neutral party. It noted

that the personal representative of the estate would have to investigate Nething’s actions.

It also found that Nething had breached her personal-services contract, creating a conflict

of interest with the estate and the trust. The court appointed Presbyterian as personal

representative of the estate and as trustee of the trust.

       Nething appeals.

                                       DECISION

                                               I

       Nething argues that the record in this case does not support the district court’s

appointment of Presbyterian, rather than Patricia Bury, as the estate’s personal

representative. She contends that Bury had statutory priority for appointment because

Bury was nominated in the decedent’s 2009 will.

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       Minnesota Statutes section 524.3-203 sets out priority for qualified persons to be

appointed personal representative of an estate.        Minn. Stat. § 524.3-203(a) (2014).

Qualified persons who are designated by a probated will have highest priority for

appointment, but the will must be probated to convey priority. Id. (a)(1); see also Minn.

Stat. § 524.3-102 (2014) (stating that a will can exercise the power of appointment only

after it has been declared valid). The 2009 will was not probated, so Bury did not have

priority based on that will’s designation.

       In contrast, Anderson contends that Presbyterian had priority as personal

representative. Anderson notes that a conservator of the decedent may have priority if it

has not been discharged and if no representative has been appointed 90 days after the

decedent’s death.     Minn. Stat. § 524.3-203(a)(7).       But Presbyterian’s emergency

conservatorship of decedent ended in September 2014. Because Presbyterian was not the

decedent’s conservator at the time of its January 2015 appointment as decedent’s

personal representatives, this statutory paragraph is also inapplicable.

       Neither conclusion ends the analysis. A person need not have priority in her own

right to be appointed as personal representative.        A person who has priority may

nominate someone else. Id. (c) (2014). And the district court can unilaterally appoint a

person without priority if it determines that administration is necessary and those persons

with priority had notice of the proceedings and failed to request appointment or nominate

another. Id. (e) (2014).

       Both Nething and Anderson potentially had priority status as the decedent’s heirs,

see id. (a)(5) (granting priority to a decedent’s heirs), (c) (2014); see also Minn. Stat.

                                              5
§ 524.2-103(1) (2014) (making a decedent’s descendants her heirs), and this priority

would allow them to nominate others. Minn. Stat. § 524.3-203(c). But the person

nominated must be qualified. Id. And no person is qualified if the court in formal

proceedings finds her unsuitable to serve as personal representative. Id. (f)(2) (2014).

The court’s suitability inquiry should examine whether the person “appears to be

equipped by temperament, experience, and sagacity to discharge the trust with fidelity,

prudence, and promptness . . . having regard to the special conditions of each estate and

those interested in it as creditors, legatees, and next of kin.” In re Estate of Crosby, 218

Minn. 149, 157, 15 N.W.2d 501, 506 (1944) (quotation omitted). “The district court has

discretion to determine suitability of a personal representative,” and we will not reverse

that determination “unless the district court clearly abused its discretion by disregarding

the facts.” In re Estate of Martignacco, 689 N.W.2d 262, 269 (Minn. App. 2004) (citing

Estate of Crosby, 218 Minn. at 157-58, 15 N.W.2d at 506, and In re Estate of

Michaelson, 383 N.W.2d 353, 356 (Minn. App. 1986)).

       The district court was within its discretion to determine that the estate’s unique

challenges made Bury unsuitable and that she was therefore not qualified to serve as

personal representative. The court likewise acted within its discretion in determining that

Presbyterian’s neutrality, professionalism, and willingness to communicate qualified it to

act as personal representative.

       A remaining difficulty is that a nomination generally requires agreement, or at

least acquiescence, among those sharing priority. Minn. Stat. § 524.3-203(c). Nething

obviously did not concur in Anderson’s nomination. But Nething’s own shared priority

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as an heir depended on her being qualified. See id. (a), (c). The district court squarely

implied that Nething was unsuitable and not qualified through its finding that the estate’s

personal representative would have to investigate Nething for breach of the personal-

services contract and her duties as trustee. And the record supports this discretionary

determination because Nething herself recognized that she was still under investigation

for financial exploitation and because findings in the guardianship file allow a reasonable

conclusion that she lacked prudence as her mother’s caregiver. Moreover, when coupled

with evidence of Nething’s contractual duties, the guardianship file findings suggest that

Nething lacks the fidelity to carry out her obligations.

       Nething contends that the district court could not take judicial notice of findings in

its emergency-guardianship file order, but we disagree. Courts may take judicial notice

of adjudicative facts “capable of accurate and ready determination by resort to sources

whose accuracy cannot reasonably be questioned.” Minn. R. Evid. 201(b). These kinds

of unassailable facts include orders issued in another proceeding of the same court.

Matter of Welfare of Clausen, 289 N.W.2d 153, 157 (Minn. 1980). And in taking judicial

notice of its own order, the district court may rely on the order’s findings. Matter of

Zemple, 489 N.W.2d 818, 820 (Minn. App. 1992).

       Nething also objects to the district court’s consideration of the marked exhibits

that Anderson filed with her petition, including her personal-services contract. Nething

does not dispute that these documents are properly part of the appellate record. But she

complains that they were never formally admitted as evidence at the hearing.

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       We may not consider “matters not produced and received in evidence below,”

Plowman v. Copeland, Buhl & Co., 261 N.W.2d 581, 583 (Minn. 1977), but a party need

not formally present documents as evidence for the files to be considered, Phillips-Klein

Cos., Inc. v. Tiffany P’ship, 474 N.W.2d 370, 374 (Minn. App. 1991). In Phillips-Klein,

we refused to strike documents that the district court considered and referred to in its

order. Id. A party had left these documents with the district court at a hearing but had

never formally offered them as evidence or marked them as exhibits. Id. In this case,

Anderson filed the personal-services contract with the court, and the district court treated

the contract as evidence in its order, explicitly citing to it as “exhibit.” Moreover,

Nething does not contest the authenticity of this document. Cf. Mattfeld v. Nester, 226

Minn. 106, 123, 32 N.W.2d 291, 303-04 (1948) (allowing appellate courts to affirm

based on “documentary evidence of a conclusive nature” even if that documentary

evidence is outside the record). Because the document was filed with the district court

and was considered as evidence by that court, and because its substance has not been

challenged, we do not strike this documentary evidence supporting the district court’s

decision.

       The district court’s well-supported discretionary determination that Nething is

unsuitable divests her of statutory priority she may have had to nominate Bury. This

leaves Anderson as the only qualified person with statutory priority who actually

nominated anyone or sought appointment. The district court did not abuse its discretion

by appointing Anderson’s nominee, Presbyterian, as the estate’s personal representative.

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                                             II

       Nething argues that the district court did not have jurisdiction to remove her as

successor trustee of the Nething Living Trust because Anderson did not follow statutory

removal procedures. Nething concedes that the probate court could entertain an action to

remove a trustee. But she insists that the statutory notice procedures of Minnesota

Statutes section 501B.18 must be followed.

       A person interested in a trust may petition the district court for an order to remove

a trustee for cause. Minn. Stat. § 501B.16(9) (2014). But the statute sets out procedures

for removal petitions. Minn. Stat. §§ 501B.17, .18 (2014). The district court must order

a time and place for a hearing upon receiving a petition for removal.          Minn. Stat.

§ 501B.18. And the petitioner must provide notice by publishing a copy of this order at

least 20 days before the hearing and by mailing the order to known or reasonably

ascertainable trust beneficiaries at least 15 days before the hearing. Id. Alternatively,

“Notice may be given in any other manner the court orders.” Id.

       Anderson filed her request for Nething’s removal as trustee just five days before

the hearing. Anderson’s late filing made the statutory 15-day notice to trust beneficiaries,

including Nething, impossible. And because the district court never issued an order

setting a time and place to hear the trustee-removal issue, Anderson did not even have the

information needed for mailed notice. Moreover, the district court did not order any

alternative notice. Anderson and the district court failed to comply with statutory notice

requirements.

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       In the parallel context of probate petitions, “failure to give proper notice to

interested parties of the hearing on a petition . . . is an irregularity which renders the

subsequent proceedings voidable and subject to be set aside on motion or appeal.”

Hanson v. Nygaard, 105 Minn. 30, 37, 117 N.W. 235, 238 (1908). Our supreme court

has required probate courts to strictly observe statutory notice requirements, including

publication and mailing of the order fixing time and place of hearing. In re Estate of

Stenzel, 210 Minn. 509, 517-18, 299 N.W. 2, 6 (1941). The failure to follow statutory

notice requirements requires us to set aside Nething’s removal as trustee.

       Nething alternatively argues that the record does not support her removal. In light

of our reversal for lack of notice, we do not reach this issue.

       Affirmed in part, reversed in part, and remanded.

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