Court Opinion

ID: 9931165
Source: CourtListenerOpinion
Date Created: 2024-02-08 16:08:33.438606+00
Date Added: 2024-06-11T12:17:00.692072
License: Public Domain

FILED
                                                                     IN THE OFFICE OF THE
                                                                  CLERK OF SUPREME COURT
                                                                       FEBRUARY 8, 2024
                                                                   STATE OF NORTH DAKOTA

                  IN THE SUPREME COURT
                  STATE OF NORTH DAKOTA

                                 2024 ND 23

In the Matter of the Estate of Viola J. Heath, Deceased

GayLe Schleve,                         Personal Representative and Appellant
      and
Bill D. Tisher,                                      Personal Representative
      v.
Barbara Ressler, Candy Ash, Carol Hansell,
Charlys Schulenberg, Cody A. Schleve
(aka Cody A. Hillard), Debra Quarve,
Devyn S. Kukowski, Douglas Stull, Jane or
John Doe as trustee of the Randall and
Norma Heinz Trust dated June 11, 2020,
Jason Kukowski, Jeff Miller, Josh Kukowski,
Kami Jo Martinez, Kimberly Helsper, Kurt
Stull, Kyla Marie Mees, Layne Kreitinger,
Lea Marie Buss, The Estate of Leann Russell,
Lori Watts, Lynne A. Lammers, Merrill
Fahlstrom, Michael Kukowski, Randal Heinz
(aka Randall Heinz), Richard L. Schleve,
Robert R. Becker, Robert D. Hellen, Sandra Hanen,
Shari Hellen, Shawn D. Hellen, Sheryl Douglas,
Tanner C. Schleve, Tara Booth, Thomas Smith,
The Estate of Tracie Honeycutt (aka Traci Honeycutt),
Trent Piseno, and Trevor Piseno                                  Respondents
     and
Wells Fargo Bank, N.A.,                          Interested Party and Appellee

                                  No. 20230250

In the Matter of the Estate of Caleb C. Heath, Deceased

Gayle Schleve,                         Personal Representative and Appellant
     v.
Wells Fargo Bank, N.A.,                          Interested Party and Appellee

                                  No. 20230251

Appeal from the District Court of Dunn County, Southwest Judicial District,
the Honorable Dann E. Greenwood, Judge.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

Opinion of the Court by Jensen, Chief Justice.

Jon Bogner, Dickinson, ND, for personal representative and appellant.

Zachary E. Pelham, Bismarck, ND, for interested party and appellee.
                             Estates of Heath
                         Nos. 20230250 & 20230251

Jensen, Chief Justice.

      GayLe Schleve (“Schleve”) appeals from a district court order granting
Wells Fargo Bank, N.A.’s (“Wells Fargo”) motion to vacate an order establishing
the authority of domiciliary foreign personal representatives and letters
testamentary in the matter of the Estate of Viola J. Heath, 13-2015-PR-00016,
and to vacate an order determining heirs and successors in the matter of the
Estate of Caleb C. Heath, 13-2016-PR-00017. We conclude the court erred in
determining the Dunn County District Court lacked subject matter jurisdiction
regarding an application for foreign probate proceedings as the basis for
granting the N.D.R.Civ.P. 60(b)(4) motion in the Estate of Viola J. Heath;
further, the district court erred in granting the N.D.R.Civ.P. 60(b)(6) motion in
the Estate of Caleb C. Heath without providing a sufficient finding relating to
timeliness. We reverse and remand for further determination of whether the
judgment was void for lack of personal jurisdiction and if relief should be
granted under Rule 60(b)(4) or if relief should be granted under Rule 60(b)(6)
in the Estate of Viola J. Heath, and remand for a determination on the
timeliness of the motion in the Estate of Caleb C. Heath.

                                       I

       Viola Heath and Caleb Heath were residents of Montana who owned
mineral rights in Dunn County, North Dakota. In 1976, the Heaths executed
wills, and Caleb Heath executed a trust agreement appointing Norwest Capital
Management & Trust Co. (“Norwest”) as trustee. Caleb Heath’s trust provided
for the creation of two trusts upon the death of Viola Heath; the Jackson Heath
Educational Fund and the Jackson Heath Foundation. Caleb Heath died in
1978, followed by Viola Heath in 1987. Following Viola Heath’s death, litigation
was initiated between Norwest and the Heath heirs. In 1989, the litigants
reached a settlement requiring Norwest to transfer certain probate assets to
Viola Heath’s Estate. At this time, Bill Tisher (“Tisher”) and Schleve were
appointed co-personal representatives of the Viola Heath Estate in Montana.

                                       1
In 1993, the Montana probate proceedings were terminated, and the letters of
appointment issued to Tisher and Schleve were suspended.

      In 2015, Tisher and Schleve filed for ancillary probate in Dunn County
in the Estate of Viola J. Heath, requesting an order recognizing the authority
of domiciliary foreign personal representatives and the issuance of letters
testamentary. Tisher and Schleve provided the Dunn County District Court
copies of Viola Heath’s will, their appointment as personal representatives in
Montana, the 1989 Montana settlement agreement, and the docket entry from
the Montana probate proceedings suspending their appointment. The court
subsequently issued an order recognizing the authority of Tisher and Schleve
as domiciliary foreign personal representatives and issued letters
testamentary.

       In 2016, Schleve filed a petition to determine heirs and successors in
Dunn County for the Estate of Caleb C. Heath. With the petition, Schleve filed
copies of the documents they filed in the Estate of Viola J. Heath, along with
Caleb Heath’s will, an inventory for Viola Heath’s estate, the personal
representative mineral deed, and an affidavit of publication. An order
determining the heirs and successors in the Estate of Caleb C. Heath was
granted. In addition to determining the heirs and successors, the order
included a finding that Norwest and the trust referenced in Caleb Heath’s will
no longer existed. The order also granted to the Estate of Viola J. Heath the
mineral rights that are the subject of this litigation and claimed by Wells Fargo
to belong in the trusts created by Caleb Heath. Subsequent to the issuance of
these orders, the mineral rights at issue were dispersed among Viola Heath’s
heirs.

      During the 1980s, Northwestern Union Trust Co. changed its name to
Norwest Capital Management & Trust Co., and, in 2000, Norwest merged with
Wells Fargo under the “Wells Fargo” name. Since then, Wells Fargo has
managed the Jackson Heath Educational Fund and the Jackson Heath
Foundation. During a review of the trust operations in May 2017, Wells Fargo
discovered it was no longer receiving revenue from the Dunn County mineral
rights. In 2018, Wells Fargo again detected revenue from the Dunn County

                                       2
minerals was not being received. In 2019, Wells Fargo identified the reason for
the unpaid revenue as being the transfer of the mineral rights as part of the
Dunn County foreign probate proceedings involving the Estate of Viola J.
Heath.

      In March 2023, Wells Fargo filed a motion in the Dunn County Estate of
Caleb C. Heath probate proceedings to vacate the 2015 order determining the
heirs of Caleb Heath and filed a second motion in the Estate of Viola J. Heath
probate proceedings seeking to vacate the 2016 order, which provided for the
transfer of the Dunn County mineral interests to the heirs of Viola Heath. The
motions were brought under N.D.R.Civ.P. 60(b)(4) and 60(b)(6). The district
court consolidated the proceedings. In July 2023, the court granted the
motions.

      On appeal, Schleve challenges Wells Fargo’s standing to initiate the
proceedings to vacate the orders. Schleve also asserts the district court erred
in granting Wells Fargo’s motion to vacate the order establishing the authority
of domiciliary foreign personal representatives and letters testamentary after
wrongfully determining the court lacked subject matter jurisdiction at the time
the order was issued. Schleve also argues the court erred in granting the
motion to vacate the order determining heirs and successors based, in part, on
a finding that because it was common knowledge Wells Fargo was a successor
to Norwest, Schleve failed to exercise reasonable diligence by limiting service
to notice by publication. Finally, Schleve argues Wells Fargo failed to bring the
motion to vacate within a reasonable time under N.D.R.Civ.P. 60(c)(1).

                                       II

       Schleve asserts Wells Fargo does not have standing to challenge the
district court’s issuance of the order establishing proof of authority of
domiciliary foreign personal representative and letters testamentary in the
Estate of Viola J. Heath because Wells Fargo lacked sufficient interest in the
matter. The existence of standing is a question of law, which we review de novo.
Nodak Mut. Ins. Co. v. Ward Cnty. Farm Bureau, 2004 ND 60, ¶ 12, 676 N.W.2d
752. To be recognized as possessing standing for the purpose of participating

                                       3
in a proceeding, we have held a party must have sufficient interest in the
matter as follows:

      A party is entitled to have a court decide the merits of a dispute
      only after demonstrating the party has standing to litigate the
      issues placed before the court. Standing is the concept used to
      determine if a party is sufficiently affected so as to insure that a
      justiciable controversy is presented to the court.

Rebel v. Nodak Mut. Ins. Co., 1998 ND 194, ¶ 8, 585 N.W.2d 811 (cleaned up).

       Caleb Heath appointed Norwest as an alternative personal
representative over his estate and trustee of the trust Wells Fargo now
manages. At its inception, the trust was to include the Dunn County minerals
at issue as an asset. In the Estate of Viola J. Heath, the Dunn County District
Court issued an order establishing the authority of domiciliary foreign
personal representatives and issued letters testamentary to Tisher and
Schleve, along with an order determining heirs and successors. Through those
orders, the Dunn County mineral interests were transferred to the heirs of
Viola Heath. Wells Fargo, as the successor trustee, claiming an ownership
interest in the Dunn County mineral rights now challenges the transfer of
those mineral rights to the heirs of Viola Heath. Schleve contends the
determination in the earlier proceeding that Norwest and the trust no longer
existed and the mineral interests were never transferred to the trust
terminated any potential standing.

      Wells Fargo, as the successor trustee, has an interest in asserting a claim
to the mineral interest it contends were intended to be part of the trust
established by Caleb Heath and were ultimately transferred to the heirs of
Viola Heath through the two Dunn County proceedings. We conclude Wells
Fargo has sufficient standing to challenge the order establishing the authority
of domiciliary foreign personal representatives and letters testamentary in the
matter of the Estate of Viola J. Heath, as well as the order determining heirs
and successors in the matter of the Estate of Caleb C. Heath.

                                       4
                                      III

       Schleve further asserts the district court erred when it granted Wells
Fargo’s N.D.R.Civ.P. 60(b)(4) motion to vacate the order establishing the
authority of domiciliary foreign personal representatives and issuing the
letters testamentary in the matter of the Estate of Viola J. Heath. Specifically,
Schleve contends the court erroneously determined the Dunn County District
Court lacked subject matter jurisdiction at the time it issued the order and
letters testamentary.

      We have consistently held:

      Our standard of review for motions under Rule 60(b)(iv) is plenary.
      A motion under subdivision iv is not left to the court’s discretion.
      The court’s task is purely to determine the validity of the
      judgment. If the judgment is valid, the motion must be denied. If
      the judgment is void, the court has no discretion to protect it. The
      question to be resolved is whether the judgment is void as a matter
      of law.

First W. Bank & Tr. v. Wickman, 527 N.W.2d 278, 279 (N.D. 1995) (cleaned
up).

      A judgment is void only if the district court lacks subject matter
jurisdiction over the action itself or personal jurisdiction over the parties.
Johnson, Johnson, Stokes, Sandberg & Kragness, Ltd. v. Birnbaum, 555
N.W.2d 583, 585 (N.D. 1996). A district court’s misapplication of statute
generally implicates neither subject matter nor personal jurisdiction. Matter of
Estate of Hansen, 458 N.W.2d 264, 268 (N.D. 1990). “Subject-matter
jurisdiction is the court’s power to hear and determine the general subject
involved in the action[.]” Albrecht v. Metro Area Ambulance, 1998 ND 132, ¶ 10,
580 N.W.2d 583. For subject matter jurisdiction to attach, the particular issue
to be determined must be properly brought before the court. Id. at ¶ 11.
“[S]ubject matter jurisdiction of a district court is not determined by whether
or not it correctly applied a statute to a particular cause of action because, to
hold otherwise, would vest subject matter jurisdiction in a district court subject
to divestment upon an erroneous ruling.” Hansen, at 268 (quoting Production

                                        5
Credit Ass’n v. Dobrovolny, 415 N.W.2d 489, 491 (N.D. 1987)). Instead, an error
in the application of law in the proceedings may furnish grounds for appeal but
it does not invalidate the judgment. Id.

      Under N.D.C.C. § 30.1-24-06, “[a] domiciliary foreign personal
representative who has complied with section 30.1-24-05 may exercise, as to
assets in this state, all powers of a local personal representative and may
maintain actions and proceedings in this state subject to any conditions
imposed upon nonresident parties generally.” Stuber v. Engel, 2017 ND 198,
¶ 23, 900 N.W.2d 230. To obtain appointment as a foreign personal
representative, an applicant must fully comply with the requirements under
N.D.C.C. § 30.1-24-05, which reads, in part, as follows:

      If no local administration . . . is pending in this state, a domiciliary
      foreign personal representative may file . . . authenticated or
      certified copies of the person’s appointment and of any official bond
      the person has given, and the court shall enter an order
      establishing the filing of the copies.

      In its ruling, the district court found the Dunn County District Court
lacked the subject matter jurisdiction needed to establish Tisher and Schleve
as domiciliary foreign personal representatives because the Montana probate
proceedings had been terminated and the personal representative’s authority
was suspended. Specifically, the district court found as follows:

      [A]s a matter of law that there no longer was a foreign probate and
      neither Tisher nor Schleve was a domiciliary foreign personal
      representative at the time they filed the Proof of Authority of
      Domiciliary Foreign Personal Representative form. As a result,
      neither a North Dakota district court judge nor the Dunn County
      District Court deputy clerk who signed such had authority under
      the statute to sign the Order Establishing Authority of Domiciliary
      Foreign Personal Representative and Letters Testamentary dated
      May 6, 2015.

      The record supports the district court’s holding that Tisher and Schleve
no longer had the power to act as personal representatives in the Montana
probate proceedings; a prerequisite for appointment as a foreign personal

                                         6
representative in North Dakota is proof of the authority to act as the personal
representative in the foreign jurisdiction. Schleve does not dispute when the
application for foreign probate proceedings was initiated in Dunn County, the
Montana probate had been terminated, and the authority of the personal
representatives suspended. The question presented is whether a court lacked
subject matter jurisdiction, characterized by the court’s reference to lack of
authority, when it is not possible to satisfy all the legal requirements to
establish a foreign probate proceeding.

       We conclude the district court erred in holding the Dunn County District
Court lacked subject matter jurisdiction regarding an application for foreign
probate proceedings. Chapter 30.1-24, N.D.C.C., clearly provided the district
court with the authority to consider petitions to initiate foreign probate
proceedings. We conclude the court erred in determining the Dunn County
District Court lacked subject matter jurisdiction to issue an order in the Estate
of Viola J. Heath.

       Although the district court based its ruling on the erroneous finding that
the Dunn County District Court lacked subject matter jurisdiction regarding
an application for foreign probate proceedings under N.D.R.Civ.P. 60(b)(4), a
judgment can be void if the court lacked personal jurisdiction over the parties.
Here, the court concluded Wells Fargo was not properly served in the Estate of
Caleb C. Heath proceedings, but did not make a determination whether the
Dunn County District Court had adequate personal jurisdiction over the
parties in the Estate of Viola J. Heath. Additionally, Wells Fargo moved to
vacate the orders under both Rule 60(b)(4) and 60(b)(6). However, presumably
because it had already concluded relief was available under Rule 60(b)(4), the
court did not rule on Wells Fargo’s Rule 60(b)(6) motion to vacate. As such, we
reverse and remand for further determination of whether the judgment was
void for lack of personal jurisdiction and if relief should be granted under Rule
60(b)(4), or if relief should be granted under Rule 60(b)(6).

                                      IV

     Schleve asserts the district court erred when it granted Wells Fargo’s
N.D.R.Civ.P. 60(b)(6) motion to vacate an order determining heirs and

                                       7
successors in the matter of the Estate of Caleb C. Heath by improperly taking
judicial notice that it was common knowledge Wells Fargo was the successor
to the prior trustee. Schleve also argues the court failed to make adequate
findings as to whether the Rule 60(b)(6) motion was brought within a
reasonable time.

      We review a district court’s decision to grant a party relief under Rule
60(b)(6) under the abuse of discretion standard:

      [I]ts decision whether to vacate the judgment will not be disturbed
      on appeal unless the court has abused its discretion. The trial court
      abuses its discretion when it acts in an arbitrary, unreasonable, or
      unconscionable manner. A trial court acts in an arbitrary,
      unreasonable, or unconscionable manner when its decision is not
      the product of a rational mental process by which the facts and law
      relied upon are stated and considered together for the purpose of
      achieving a reasoned and reasonable determination.

Kopp v. Kopp, 2001 ND 41, ¶ 7, 622 N.W.2d 726 (internal citations omitted).

      Rule 60(b)(6) provides relief “when the movant demonstrates it would be
manifestly unjust to enforce a court order or judgment, and provides an escape
from the judgment, unhampered by detailed restrictions.” Kopp, 2001 ND 41,
¶ 10. When a judgment is “so blatantly one-sided or so rankly unfair under the
uncovered circumstances that courts should not enforce it,” this rule allows the
court to vacate the judgment to accomplish justice. Id. Under N.D.R.Civ.P.
60(c)(1), “[a] motion under Rule 60(b) must be made within a reasonable
time[.]”

      Schleve asserts the district court erred in taking judicial notice that
Wells Fargo was a successor to Norwest.

      We review a district court’s decision to take judicial notice of
      evidence under an abuse of discretion standard. A court abuses its
      discretion when it acts in an arbitrary, unreasonable, or
      unconscionable manner, it misinterprets or misapplies the law, or
      if its decision is not the product of a rational mental process
      leading to a reasoned determination.

                                       8
Orwig v. Orwig, 2021 ND 33, ¶ 6, 955 N.W.2d 34 (internal citations omitted).

      Under N.D.R.Ev. 201(b), “The court may judicially notice a fact that is
not subject to reasonable dispute because it: (1) is generally known within the
trial court’s territorial jurisdiction; or (2) can be accurately and readily
determined from sources whose accuracy cannot reasonably be questioned.” A
court “may take judicial notice on its own.” N.D.R.Ev. 201(c)(1).

       In its memorandum decision, the district court took judicial notice that
“Attorney Bogner is a contemporary of the undersigned and a lifelong resident
of the Dickinson, North Dakota area.” The court then proceeded to use that as
a basis in its finding that Wells Fargo’s successor status to Norwest was readily
known to those in the area. As this is neither information generally known
within the court’s jurisdiction nor information that can be accurately and
readily determined, the court misapplied the law regarding judicial notice.
Wood v. Krenz, 392 N.W.2d 395, 396 (N.D. 1986) (a judge cannot take judicial
notice of his personal experience in private practice paired with differing
statements of industry customs to declare a custom or a fact as being generally
known); see Guyton v. Monteau, 332 S.W.3d 687, 692 (Tex. App. 2011) (personal
knowledge of judge is not judicial knowledge); In re C.L., 304 S.W.3d 512, 515
(Tex. App. 2009) (a court cannot take judicial notice of a fact just because the
judge’s recollection of a previous proceeding); City of Beaver Dam v.
Cromheecke, 587 N.W.2d 923, 926 n.3 (Wis. Ct. App. 1998) (although a judge
knows a fact to be true, that alone is not sufficient to show that fact is generally
known within the territorial jurisdiction); O’Neill v. Dep’t of Revenue, 227
Mont. 226, 739 P.2d 456, 459-60 (1987) (concluding a court could not take
judicial notice a motel did not generate business similar to other motels in the
area as it was based on the judge’s own impressions and not commonly known
nor an ascertainable fact). We conclude the court abused its discretion by
taking judicial notice that it was common knowledge Wells Fargo was the
successor to Norwest and as a result, notice by publication was insufficient to
provide notice of the proceedings to Wells Fargo.

      Although we conclude the district court abused its discretion by taking
judicial notice, the court determined this case is worthy of relief under Rule

                                         9
60(b)(6) based on several factors, not just the determination Schleve failed to
make a reasonable diligent effort to effect service on Wells Fargo or to
determine if Norwest was merged into another entity. These included Schleve’s
indication that the determination of heirship and successors was not intended
as a quiet title action, the lack of evidence presented indicating interested
parties have altered their positions since the petition was executed and
mineral rights have been dispersed, and concerns the orders are inconsistent
with the last wishes of Caleb Heath.

       The district court ultimately concluded “[Schleve’s] actions in the two
probates lend themselves to the perception that Schleve’s conduct was a known
attempt to circumvent what were the outcomes in those matters,” and there
“constitutes extraordinary circumstances which justify the relief requested.”
As the court’s determination is a product of a rational mental process by which
the facts and law relied, it did not abuse its discretion in determining whether
relief was warranted under Rule 60(b)(6).

      While the district court’s findings of fact would not indicate an abuse of
discretion in its determination, the court’s lack of findings regarding Wells
Fargo bringing the motion in a reasonable time is problematic. The court’s only
reference regarding timeliness is:

      Schleve’s argument that Wells Fargo took too long to file its Motion
      to Vacate has merit, but the Court concludes that it is but one
      factor to consider and, after consideration of all of the
      circumstances, is not outcome determinative.

        This is an incorrect application of the law, as under N.D.R.Civ.P. 60(c)(1),
“[a] motion under Rule 60(b) must be made within a reasonable time”; if not
found to be made within a reasonable time, the motion must be denied. The
findings present in the district court order that Wells Fargo “took too long to
file its Motion to Vacate has merit,” but “is not outcome determinative” is not
sufficient to make a finding that the Rule 60(b)(6) motion was timely. We
conclude the court abused its discretion in granting the Rule 60(b)(6) motion
vacating the order determining heirs and successors in the matter of the Estate
of Caleb C. Heath without sufficient findings related to timeliness.

                                        10
                                      V

      We conclude the district court abused its discretion in granting the
N.D.R.Civ.P. 60(b)(4) motion in the matter of the Estate of Viola J. Heath, 13-
2015-PR-00016, as the Dunn County District Court did have subject matter
jurisdiction to issue the order; however, we reverse and remand for further
determination relating to whether the Dunn County District Court had
personal jurisdiction over the matter, and Wells Fargo’s N.D.R.Civ.P. 60(b)(6)
motion to vacate the judgment. Additionally, we conclude the district court
abused its discretion in granting the Rule 60(b)(6) motion in the matter of the
Estate of Caleb C. Heath, 13-2016-PR-00017, without sufficient findings
related to timeliness and reverse and remand for a determination. We affirm
in part, reverse in part, and remand.

      Jon J. Jensen, C.J.
      Daniel J. Crothers
      Lisa Fair McEvers
      Jerod E. Tufte
      Douglas A. Bahr

                                      11