«This opinion will be unpublished and may not be cited except as provided by Minn.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 ...»
This opinion will be unpublished and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
In the Matter of the Estate of: Rosalie S. Allard, Decedent
Filed December 21, 2015
Affirmed in part, reversed in part, and remanded
Hennepin County District Court File No. 27-PA-PR-09-1585; 27-08-3379 Mary R. Allard, Prior Lake, Minnesota (pro se appellant) Jon L. Farnsworth, Felhaber Larson, Minneapolis, Minnesota (for respondent Nicolas Allard) Paula Duggan Vraa, Larson King, LLP, St. Paul, Minnesota (for respondents Kim Tophen and Senior Options, Inc.) Considered and decided by Schellhas, Presiding Judge; Rodenberg, Judge; and Reilly, Judge.
Stat. §§ 524.3-712 and 524.3-720 (2014). Respondents and cross-appellants Kimberly Tophen and Senior Options, Inc., argue that the probate court erred in determining that decedent’s cooperative share was a “homestead” under Minn. Stat. § 524.2-402 (2014).
We affirm in part, reverse in part, and remand for further proceedings.
FACTS Decedent Rosalie Statz Allard died testate on November 8, 2009. She was survived by her two adult children, appellant and respondent Nicolas Allard. At the time of her death, decedent lived in a condominium cooperative community located in Edina, Minnesota.
Decedent validly executed her will on August 21, 1980. The will nominated appellant as PR and directed the PR to pay all “funeral expenses, expenses of last illness, other claims allowed in the administration of [the] estate [and]... all death taxes of any character, including interest and penalties....” The will directed the PR to “satisfy all gifts contained in this Will as soon as deemed convenient by [the] executor” and gave “equal shares” to decedent’s surviving children in “the interest [she] may have in household goods and furnishings, books, works of art, jewelry, articles of personal use, automobiles, and all other tangible personal property not otherwise disposed of by this Will.” The will further gave decedent’s residuary estate in equal shares to decedent’s surviving children.
2008 Codicil In 2008, appellant’s relationships with decedent and Nicolas Allard became “contentious.” In April 2008, decedent appointed respondent and cross-appellant Kim Tophen of Senior Options, Inc., as her attorney-in-fact under a power-of-attorney. On September 12, 2008, decedent validly executed a codicil to her will designating Tophen as her PR, Nicolas Allard as her first-alternate choice as PR, and appellant as her secondalternate choice as PR. Decedent died fourteen months later.
The Probate Process On December 10, 2009, Tophen petitioned to be formally appointed PR of decedent’s estate. Appellant objected and requested that she be appointed PR. Appellant later withdrew her objection to Tophen’s appointment, and Tophen was appointed PR in a supervised administration as agreed by the parties.
In July 2010, the PR discovered that a significant amount of personal property had been removed from decedent’s cooperative unit. The PR contacted police and learned that appellant had removed the property over a three- or four-month period. Appellant had also accessed decedent’s safety deposit box and removed some personal family documents, jewelry, coins, and savings bonds. The missing personal property from the cooperative unit were not returned to the estate until November 2010, and the items missing from the safety deposit box were not returned until December 2011. The PR maintains that her ability to timely complete an inventory was impaired because of these missing items.
In December 2010, appellant filed complaints with the Office of Lawyers Professional Responsibility Board against the PR (a non-lawyer), the estate’s attorney, and Nicolas Allard’s attorneys. These complaints were dismissed without investigation.
In December 2010, the PR attempted to arrange an estate sale with the cooperative community’s authorized company. In January 2011, she sent a letter to both appellant and Nicolas Allard informing them of the estate sale and allowing them to go through a presale to select items of interest. The pre-sale was intended to allow the beneficiaries to “purchase” items for a determined value. Because the estate was then solvent, any payments the beneficiaries made or owed would be accounted for in the final account and in the final distribution.
On February 4, 2011, appellant moved for a temporary restraining order (TRO) to prohibit the PR from selling, donating, or disposing of decedent’s personal property and gold coins. Appellant demanded that all of the personal property be professionally evaluated before an estate sale was held. That same day, the probate court issued a TRO prohibiting the PR from selling, donating, or disposing of decedent’s coins until she provided an inventory of the estate pursuant to Minn. Stat. § 524.3-706 (2010) and until the probate court determined the assets’ fair market value, the administration’s reasonable expenses, and the necessity to sell devised assets to pay the reasonable expenses. On February 11, 2011, the PR objected to the TRO and filed the completed inventory. On February 22, 2011, the probate court issued an order determining that the coins were tangible personal property, enjoining the PR from selling or otherwise disposing of the coins without further court order, and reserving any issues of abatement of specific devises.
On March 15, 2011, appellant moved to remove the PR. Nicolas Allard opposed the motion. On June 15, 2011, the probate court issued an order prohibiting the PR “from performing any acts or activities as the personal representative,” except for preparing to liquidate the estate’s stock shares, preparing a final account, and to preserve the estate’s assets until an evidentiary hearing on appellant’s petition. The record does not reflect that any hearing was held until November 21, 2011.
Between April and November 2011, appellant and Nicolas Allard attempted to mediate their differences. Mediation failed, because appellant maintained that the beneficiaries needed to remove items from the unit before continuing the mediation process. On November 1, 2011, the PR petitioned to withdraw due to non-payment of fees and because of her belief that “[appellant] will never cooperate with [her] in the administration of her mother’s estate.” Appellant responded on November 18, 2011, agreeing with the PR’s request for withdrawal, but claiming that she had tried to cooperate and that the PR was merely trying “cut bait and run.” Nicolas Allard objected to the PR’s withdrawal and requested that any excess attorney or PR fees and expenses be charged against appellant because of her “bad faith actions.” At the November 21, 2011 hearing, the probate court ordered that: (1) the beneficiaries pay their own appraiser fees; (2) the PR’s time be charged to the estate; (3) all appraisals, the selection of sentimental property, and appellant’s return of the still-missing jewelry occur by December 31, 2011; and (4) the PR file an amended final account.
On January 19, 2012, the PR filed a petition to approve the sale and distribution of personal property and liquidation of the remaining estate assets. On February 15, 2012, the probate court held a bench trial to determine the value of personal property, determine the distribution of sentimental property, and authorize the PR’s sale of the personal property. On February 28, 2012, the probate court issued an order dividing the requested sentimental property and permitting the PR to sell and dispose of the remaining personal property at her sole discretion. In April 2012, the cooperative share was sold. The remaining personal property was moved to a different location for an estate sale that was held in June 2012. The remaining coins were sold on September 21, 2012.
On February 14, 2013, appellant commenced a civil lawsuit against Nicolas Allard, the PR, the estate’s attorney, and others not associated with this probate matter (Hennepin County file number 27-CV-13-2714). The district court granted summary judgment to the PR on appellant’s claims for alleged violation of Minn. Stat. § 523.21 (2012) (breach of fiduciary duty under a power-of-attorney), intentional infliction of emotional distress, negligence, fraud, conspiracy, and aiding or abetting tortious conduct. The district court also granted summary judgment to Nicolas Allard on appellant’s claims against him for intentional infliction of emotional distress, conspiracy, and aiding or abetting tortious conduct. The district court allowed appellant’s claims for trespass and vicarious liability to continue. Appellant did not appeal the district court’s order in that case, and the record on appeal does not reflect what became of appellant’s remaining claims in that case.
On August 6, 2013, the probate court ordered the PR to file the final account, which was done on September 24, 2013. On October 24, 2013, appellant moved for a continuance to complete discovery regarding the final account. On October 28, 2013, appellant requested a hearing concerning her claims against the PR for breach of her fiduciary duties and against Nicolas Allard for “unclean hands.” On January 29, 2014, the probate court dismissed appellant’s claims as collateral attacks on the district court’s order in appellant’s civil lawsuit against the PR, Nicolas Allard, and others not involved with this appeal. Appellant appealed that order, and, after informal memoranda addressing the immediate appealability of the January 29, 2014 order, we issued a special term order dismissing appellant’s appeal as taken from an interlocutory, nonappealable order. See In re the Estate of Rosalie S. Allard, Deceased, No. A14-0511 (Minn. App. Apr. 29, 2014).
The probate court suspended the proceedings during appellant’s first appeal and ordered the PR to file and serve an amended final account and complete responses to discovery requests by April 4, 2014. On April 4, 2014, the PR filed the amended final account. A second amended final account was filed on June 30, 2014.
Appellant objected to the second amended final account, arguing that the PR (1) did not act in the estate’s best interest; (2) “egregiously” erred in the administration, causing substantial losses of estate assets; (3) used estate assets to “wage a personal vendetta” against appellant; (4) impermissibly allowed tax liabilities and penalties to the estate; (5) overstated the value of miscellaneous personal property; (6) failed to consider the cooperative share under the homestead exemption in Minn. Stat. § 524.2-402 (2012) and allowed the value of the cooperative share to be reduced by various expenses; (7) failed to properly value decedent’s savings bonds and shares; and (8) improperly incurred over $65,000 in professional fees. Appellant also requested attorney fees.
Trial and Order On October 27-29, 2014, the probate court held a bench trial on the second amended final accounting and appellant’s breach-of-fiduciary-duty claims against the PR. The parties disagreed concerning the nature and character of decedent’s cooperative share.
According to cooperative documents, the cooperative holds title to the entire project, including the individual dwelling units and common areas. Cooperative members hold both a membership in the form of shares in the cooperative corporation and an occupancy agreement (comparable to a lease) for the individual dwelling unit. The cooperative’s information bulletin states: “Member owns Membership and Occupancy Agreement. Such ownership interest constitutes personal property.” The cooperative requires that the shares only be transferred or sold either to the cooperative or to an individual approved by the cooperative.
On December 17, 2014, the probate court issued an order determining that the PR had not breached her fiduciary duties and that appellant’s actions had caused the five-year delay in the estate’s administration. The probate court found that the estate incurred the following expenses: (1) $43,416.39 to the estate’s attorney (plus $242.11 as a pre-death expense); (2) $8,284.50 to the estate’s secondary attorney; (3) $13,550.50 to the PR;1 (4) $2,350 to the accounting firm; (5) federal taxes of $3,694; and (6) state taxes of $864 for a total of $72,401.50. The probate court determined that only $34,228.69 remained for This number appears to come from the PR’s post-trial briefing. The PR’s testimony at trial was that she had incurred $13,492.61 in fees at the time of the October 27-29 trial.
The difference is de minimus, in context.
distribution. The probate court therefore ordered that the remaining funds on hand be distributed 64 percent to the estate’s attorney, 12 percent to the estate’s secondary attorney, 20 percent to the PR, and 4 percent to the accounting firm.
The probate court also determined that decedent’s cooperative share was a “homestead” under Minn. Stat. § 524.2-402 (2014), and therefore exempt from administrative expenses. Decedent’s cooperative share was sold in April 2012, and the estate received a “net share value refund” of $6,080.20. The refund of the share was less than its full value of $35,910 on the date of death due to the following expenses: unpaid monthly charges from November 2009 until April 2012 of $26,511.80; required refurbishing costs of $2,600, and a transfer fee of $718. The probate court ordered that the net refund be divided equally between appellant and Nicolas Allard. This appeal followed.