Warkentin v. Shirey ( 2020 )

1
Submitted July 29, 2019; affirmed December 16; appellant’s petition for recon-
sideration filed December 29, 2020, allowed by opinion February 10, 2021
See 309 Or App 314, 481 P3d 444 (2021)
In the Matter of the
Estate of Lois Irene Gould, Deceased.
Bradley R. WARKENTIN,
former Personal Representative,
Appellant,
v.
Corina SHIREY,
Personal Representative,
Petitioner-Respondent.
Deschutes County Circuit Court
17PB08036; A167535
480 P3d 289
In this probate case, respondent appeals a limited judgment that, among
other things, removed him as personal representative of the decedent’s estate. He
argues that the probate court erred in removing him as personal representative
and replacing him with petitioner, waiving petitioner’s bond requirement, and
awarding a division of personal representative fees solely on equitable grounds.
Held: The probate court did not err in removing respondent as personal repre-
sentative of the decedent’s estate because it was within the court’s discretion to
do so. Further, the court did not err in waiving petitioner’s bond requirement
because it was a permissible waiver under ORS 113.105(4)(b). Finally, the Court
of Appeals concluded that the claim of error regarding personal representative
fees is unreviewable because the requirements of a limited judgment under ORS
111.275(1)(e) have not been met.
Affirmed.
Walter Randolph Miller, Jr., Judge.
Marc K. Miller, Anthony V. Albertazzi, and Albertazzi
Law Firm filed the brief for appellant.
No appearance for respondent.
Before Ortega, Presiding Judge, and Egan, Chief Judge,
and Powers, Judge.
EGAN, C. J.
Affirmed.
2 Warkentin v. Shirey
EGAN, C. J.
Respondent appeals a limited judgment arising
from a probate proceeding removing him as personal rep-
resentative from the decedent’s estate. Respondent’s first
contention is that the probate court erred in removing
him as personal representative and substituting petitioner
to that position. His second contention is that the court
erred in waiving the bond requirement for petitioner, con-
trary to ORS 113.105. In his third contention, respondent
argues that the court erred in awarding a division of per-
sonal representative fees on purely equitable grounds. We
conclude that the court did not err and, accordingly, we
affirm.
The relevant background facts are largely proce-
dural and undisputed.1 The decedent, Lois Irene Gould,
passed away on November 7, 2013. At that time, her clos-
est living relatives were her nieces and nephews, with peti-
tioner, the decedent’s niece, among them. Respondent was
the decedent’s neighbor. On August 29, 2017, almost four
years after the decedent’s passing, respondent was assigned
a judgment awarding him $562.45 of the decedent’s debt,
which he purchased, in order to become a creditor of her
estate. On October 17, respondent filed a petition to become
the personal representative of the estate. Approximately
two weeks later, respondent was appointed as personal
representative.
After discovering that respondent had been appointed
as personal representative, in January 2018, petitioner filed
a “petition to revoke letters of administration” and for the
“appointment of substitute personal representative.” In the
petition, she argued that respondent should be removed as
personal representative, because he was a stranger to the
family and “his purpose in being appointed as personal rep-
resentative of [the] Estate is unknown to” them. Petitioner
1
Respondent requests de novo review but does not identify any factual mat-
ters in dispute nor does he explain why this is an exceptional case that merits
de novo review. See ORAP 5.40(8)(c). Accordingly, we deny that request and, to
the extent that there are any factual disputes, state the facts consistent with the
court’s ultimate ruling. See Kotler and Winnett, 282 Or App 584, 597, 385 P3d
1200 (2016) (“We assume that the trial court found the facts in a manner consis-
tent with its ultimate conclusion.”). (Emphasis in original.)
Cite as 308 Or App 1 (2020) 3
further asserted that, because she is the decedent’s niece,
she has “priority for appointment as personal representa-
tive.” In response, respondent argued that petitioner was
seeking his removal as personal representative under an
inapplicable statute, ORS 113.085, which concerns prefer-
ences for “appointing a personal representative,” not remov-
ing them. Rather, he contended, that the court should refer
to ORS 113.195, which provides the statutory bases for
removal of a personal representative.
During the hearing on the removal petition, the
probate court inquired what authority it had to remove a
personal representative:
“Let’s assume for a moment that the Court did something
that as it sits here today thinks it shouldn’t have done. I’m
devil’s advocate. This is obviously what the moving party’s
asking me to do. What’s done is done * * *. Is there a statute
or some source of law apart from what it should have done,
which is what I hear you say, apart from that, is there a
separate statute or some other authority that allows this
court in equity to come in and say I’m going to do it.”
Petitioner responded that the court possesses an equitable
power to remove respondent as personal representative. She
further asserted that the “goal of [the equitable power] is
[sic] to get an individual who’s [not] going to be self-dealing.”
The court then turned to respondent and asked: “My ques-
tion is really two-fold. You say I don’t have authority. I don’t
have the equitable power to make this change. That may
be the argument. Let’s assume for a minute I did. Why
wouldn’t I?” Respondent gave two reasons. First, he argued
that it “would penalize [respondent] because he’s no longer
going to get his personal representative’s fee.” Second, he
argued that it “wouldn’t be fair * * * for the Court to use its
equitable powers in these circumstances because [its] been
four years, and the Court has an interest in the efficient
administration of estates.”
Next, the court asked the parties how they planned
to handle the estate. Respondent stated the next step was
to sell the house. Petitioner responded, without clarifying,
that she would handle the estate differently. Respondent
confirmed, when asked by the court, that his main concern
4 Warkentin v. Shirey
was that a delay in selling the assets of the estate—namely
the house—could risk respondent’s personal representative
fee.
The probate court concluded that it possessed the
general equitable power to remove a personal representa-
tive, removed respondent from that position, and substi-
tuted petitioner, to serve without bond. The court’s rea-
soning relied on the parties’ recitation of how they might
proceed and which party would be more efficient. However,
in removing respondent, the court noted that it was not
implying that respondent had done anything wrong or
unlawful as the personal representative. Next, the court
decided to restrict the personal representative from selling
the real property without further order of the court. In doing
so, the court added an additional requirement of having to
give “notice to all heirs.” Lastly, the court ordered petitioner
to inform respondent of the disposition of the estate so that
respondent “will get paid a percentage of his fees.” The court
did not make a final order awarding fees. In deciding that
respondent would receive a percentage of the fees, the court
relied on both its statutory and equitable powers, but specif-
ically stated in its written judgment: “Upon final disposition
of the estate the Court will divide the personal representa-
tive’s fee between [respondent] and [petitioner] in the man-
ner it deems fair and equitable.”
On appeal, respondent challenges his removal as
personal representative. Respondent argues that the court
erred to the extent that it relied on ORS 113.085, which
states the statutory preferences for the appointment of a
personal representative, as a basis for removal, rather than
ORS 113.195, which governs the removal of a personal rep-
resentative.2 We have reviewed the record and conclude
without further discussion that the court did not rely on
ORS 113.085 in determining to remove respondent.
2
Additionally, respondent argues that even if the probate court has equitable
powers to remove a personal representative, the court misapplied those powers
because it failed to consider the two equitable principles of “unclean hands” and
that “he who seeks equity must do equity.” Those contentions are unpreserved,
and we decline to consider them. See John Hyland Const., Inc. v. Williamsen &
Bleid, Inc., 287 Or App 466, 470-74, 402 P3d 719 (2017) (specifying the require-
ments for preservation).
Cite as 308 Or App 1 (2020) 5
Respondent next contends that the probate court
mistakenly relied on its general equitable powers in remov-
ing respondent rather than ORS 113.195, the controlling
statute. He argues that when “statutes govern [the] removal
and appointment” of a personal representative, a court sit-
ting in probate cannot use its equitable powers if in doing so
it “disregards [its] statutory requirements.”
In arguing that the court erred, respondent cites
several cases that he claims support his assertion that a
court cannot exceed its statutory authority. See, e.g., C. P. v.
Bernstein, 259 Or App 512, 518, 314 P3d 707 (2013) (conclud-
ing that when a court is acting under its statutory author-
ity to award fees, it is bound to award fees as the statute
requires, and not what it deems equitable). As we under-
stand respondent’s argument, he essentially posits that the
probate court violated the maxim aequitas sequitur legem—
that equity must conform to and only supplement the law.
See John Norton Pomeroy, 2 Pomeroy’s Equity Jurisprudence
§ 425 (5th ed 1941) (stating such). Thus, as respondent
frames his argument, the real question is whether, in
removing respondent and appointing petitioner as personal
representative in his place, the court exceeded its statutory
authority.3
Respondent is correct that ORS 113.195 provides
the only statutory authority for removal of a personal repre-
sentative. ORS 113.195 provides that removal of a personal
representative is appropriate,
“(1) [w]hen a personal representative ceases to be
qualified as provided in ORS 113.095, or becomes incapable
of discharging duties, the court shall remove the personal
representative.
“(2) When a personal representative has been unfaith-
ful to or neglectful of the trust, the court may remove the
personal representative.
3
Respondent also argues that courts do not have a “general equitable”
authority to remove a personal representative. We conclude, without discussing
the extent of that authority, that a “general equitable” authority to remove a per-
sonal representative does exist. For example, in Roley v. Sammons, 215 Or App
401, 412, 170 P3d 1067 (2007), we recognized a court’s equitable authority to
remove a personal representative “when the personal interests of the personal
representative conflict with a substantial and legitimate interest of a beneficiary
of the estate.”
6 Warkentin v. Shirey
“(3) When a personal representative has failed to com-
ply with ORS 113.092, the court may remove the personal
representative.
“(4) For other good cause shown, the court may remove
the personal representative.”
ORS 113.195(1) to (3) list several grounds for removal based
on circumstances that result in the personal representa-
tive’s disqualification. ORS 113.195(4) additionally allows a
court to remove a personal representative “[f]or other good
cause shown.” Respondent argues that our case law requires
that removal can occur for “other good cause shown” under
ORS 113.195(4) only when “the personal representative
has a beneficial interest adverse to the estate or a benefi-
ciary thereof, and is not merely a creditor, as is the case
here.” The two cases on which respondent relies, Roley v.
Sammons, 215 Or App 401, 170 P3d 1067 (2007), and Wharff
v. Rohrback, 152 Or App 68, 952 P2d 87 (1998), predate the
enactment of ORS 113.195(4),4 and we therefore disagree
with respondent’s contention that the court’s authority to
remove a personal representative under the subsection is
limited by those cases. In determining whether respondent’s
removal was in error, we examine the statute’s text and con-
text to determine the meaning of “other good cause shown,”
in accordance with principles of interpretation provided in
PGE v. Bureau of Labor and Industries, 317 Or 606, 610-12,
859 P2d 1143 (1993), and State v. Gaines, 346 Or 160, 171-
73, 206 P3d 1042 (2009). We then proceed to consideration of
legislative history, to the extent that we find it to be helpful.
Gaines, 346 Or at 171-72.
The text and context is the “best evidence” of legis-
lative intent. Papworth v. DLCD, 255 Or App 258, 265, 296
P3d 632 (2013). ORS 113.195 lists four grounds for which
a probate court may remove a personal representative.
4
The legislature added ORS 113.195(4) to the statute in 2017, as a part of an
effort to modernize and clarify the probate code. Exhibit 15, House Committee
on Judiciary, HB 2986, Mar 27, 2017 (accompanying statements by three repre-
sentatives from the Oregon Law Commission). The amendment became effective
on January 1, 2018. Or Laws 2017, ch 169, § 19. Petitioner filed her petition to
remove respondent as personal representative on January 8, 2018, and the lim-
ited judgment was entered on March 16, 2018. Thus, ORS 113.195(4) is applicable
to this case.
Cite as 308 Or App 1 (2020) 7
As relevant to this case, ORS 113.195(4) allows a court to
remove a personal representative “[f]or other good cause
shown.” “Good cause” is a legal term of art. Thus, we do not
use the term’s “ordinary meaning”; rather, we seek to deter-
mine its legal meaning. Dept. of Transportation v. Stallcup,
341 Or 93, 99, 138 P3d 93 (2006) (“[W]e give words that have
well-defined legal meanings those meanings.”) Legal dictio-
naries can help us determine the meaning of a legal term
of art. State v. Hess, 342 Or 647, 650, 159 P3d 309 (2007)
(resorting to Black’s Law Dictionary to define a “legal term”).
The term “good cause” is broadly defined as “a legally suffi-
cient reason.” Black’s Law Dictionary 274-75 (11th ed 2019).
That broad definition, standing alone, does not provide
clear guidance in determining the meaning of the phrase
“other good cause shown.” However, we do not “simply con-
sult dictionaries and interpret words in a vacuum.” Alfieri v.
Solomon, 358 Or 383, 393, 365 P3d 99 (2015).5 We also look
at context for clues as to its meaning. Subsection (4) refers
to “other good cause shown,” suggesting that the criterion
might be intended to encompass reasons for removal similar
to those described in the other subsections of ORS 113.195,
all of which involve some legal shortcoming on the part of
the personal representative. But that is not the only plausi-
ble interpretation of the broadly worded provision. It could
also be understood to authorize removal for reasons other
than those described in the previous subsections. Thus, we
turn to the legislative history for further guidance. See, e.g.,
State v. Blair, 348 Or 72, 80, 228 P3d 564 (2010) (follow-
ing Gaines, “we may always consider pertinent legislative
history”).
House Bill (HB) 2986 (2017), introduced by the
Oregon Law Commission (OLC) in 2017, proposed many
revisions to the Oregon Probate Code, the addition of ORS
5
We note that good cause has been defined in other statutes, but those
statutes’ contexts are distinct from the context of ORS 113.195(4). See ORS
135.763 (requiring a trial of the accused to be administered within 90 days, with
an exception that allows a court to grant a continuance “on motion of the dis-
trict attorney or on its own motion, for good cause shown”); State v. Tatarinov,
211 Or App 280, 285-86, 155 P3d 67, rev den, 342 Or 727 (2007) (noting that
in the context of ORS 135.765, “no precise, all-encompassing, definition of ‘good
cause’ exists,” but listing instances where we have found good cause to con-
tinue a trial); see ORS 657.176 (using the term “good cause” in an employment
context).
8 Warkentin v. Shirey
113.195(4) among them.6 The OLC explained that, once a
personal representative has been appointed, there is a
“presumption of suitability,” and that ORS 113.195(4) was
included to address a concern expressed by probate judges
that ORS 113.195 was too restrictive in authorizing courts
to remove a personal representative. Exhibit 15, House
Committee on Judiciary, HB 2986, Mar 27, 2017 (accom-
panying statements by Professor Susan Gary, Oregon Law
Commission Reporter on HB 2986). Circumstances would
arise when “a personal representative may not have been
neglectful to the extent that would allow removal,” but was
acting in a way that created “discord” and a high likeli-
hood of problems during the administration of an estate.
Audio Recording, House Committee on Judiciary, HB
2986, Mar 27, 2017, at 58:18 (statement of Professor Susan
Gary, Oregon Law Commission Reporter on HB 2986),
https://olis.leg.state.or.us (accessed Dec 4, 2020). The testi-
mony shows that subsection (4) was proposed to provide the
court with discretion to remove a personal representative for
reasons other than the types of legal failings described in
subsections (1) to (3), so that the court may step in to remove
a personal representative “before the problems become too
great.” Exhibit 15, House Committee on Judiciary, HB 2986,
Mar 27, 2017 (accompanying statements by Professor Susan
Gary).
The legislative testimony concerning the purpose of
ORS 113.195(4) is consistent with the dictionary definition
of the term “good cause.” Together they lead us to conclude
that “other good cause shown” under ORS 113.195(4) is not
limited to the types of wrongful acts on the part of the per-
sonal representative described in ORS 113.195(1) to (3), but
authorizes the court in its discretion to remove a personal
representative to prevent problems from arising in the pro-
bate, including discord between the personal representative
and the beneficiaries of the estate. Thus, contrary to respon-
dent’s argument, under the statute, the court had authority
to remove respondent as personal representative based on
6
Most of the legislative history consists of testimony of nonlegislators. We
give that testimony the weight to which it is entitled. See, e.g., Ram Technical
Services, Inc. v. Koresko, 346 Or 215, 234-35, 208 P3d 950 (2009) (relying on tes-
timony from the Oregon Law Commission).
Cite as 308 Or App 1 (2020) 9
the type of good cause considerations presented to it as the
hearing.
Given that conclusion, we next address whether the
record was sufficient to allow the court to exercise its dis-
cretion to remove respondent for “other good cause shown.”
The decision to remove a personal representative is a mat-
ter of discretion for the probate court, ORS 113.195(4) (“the
court may remove the personal representative”), thus, we
review for an abuse of discretion. See Wharff, 152 Or App at
72 (applying the abuse of discretion standard to the removal
of a personal representative).
In addressing how the probate might proceed,
respondent stated that he wished to sell the house and that
his reasons for doing so were to ensure that the creditors
(of which he was one) would be paid and that he received an
adequate personal representative fee. Respondent empha-
sized the need to protect himself and other creditors, and
appeared to be unmoved by the need to also protect the ben-
eficiaries’ interests. Petitioner testified that she sought to
maximize the benefit to the beneficiaries, and not just to
creditors. In evaluating this record, we cannot conclude that
the probate court abused its discretion in determining that
it was necessary to remove respondent, so as to avoid dis-
cord between the beneficiaries and the personal representa-
tive concerning the manner of disposition of the property of
the estate.
Respondent asserts in his second contention that
the probate court erred in waving the bond requirement for
petitioner to serve as personal representative, in violation of
ORS 113.105 (2017).7 ORS 113.105(1)(a) (2017) provides:
“Except as provided in subsections (2) to (4) of this sec-
tion, the personal representative may not act, and letters
may not be issued to the personal representative, until the
personal representative provides a bond to the clerk of the
court. The bond must be for the security and benefit of all
interested persons and must be conditioned upon the per-
sonal representative faithfully performing the duties of the
7
Although we refer to the 2017 version of ORS 113.105, we note that the
statute has been amended several times since 2017 in ways that do not change
the relevant substance.
10 Warkentin v. Shirey
position. The bond must be executed by a surety qualified
under ORCP 82 D to G.”
Subsections (2) to (4) provides exceptions to the bond-
ing requirement. Under ORS 113.105(4)(b), the court may
waive a bond if “[t]he court restricts the sale, encum-
brance or other disposition of property of the estate with-
out prior court approval.” Respondent notes that the court
restricted petitioner’s ability to dispose of the estate’s prop-
erty. Nevertheless, respondent asserts that, in considering
whether to waive the bond, the court should also have con-
sidered “the significant likelihood that [petitioner] would
abuse her charge as administrator or administer the estate
to the prejudice of [respondent] and/or other creditors.”
As we understand his argument, respondent requests
that we insert requirements into the statute, which we may
not do. ORS 174.010; see, e.g., Raudebaugh v. Action Pest
Control, Inc., 59 Or App 166, 171-72, 650 P2d 1006 (1982)
(reiterating ORS 174.010). ORS 113.105(1) explicitly provides
for an exception to the bond requirement as “provided in sub-
section (2) to (4).” Subsection (4) is an exception to the bond
requirement that the probate court imposed. Therefore, we
conclude that the probate court did not err in waving the
bond requirement.
Finally, respondent contends that the probate court
erred in “awarding” personal representative fees “purely on
equitable grounds.”8 We do not reach that argument, how-
ever, because it is not reviewable. In the limited judgment
on appeal, the court ordered: “Upon final disposition for the
estate the Court will divide the personal representative’s
fee between [respondent] and [petitioner] in the manner it
deems fair and equitable.” The court did not make an award.
A limited judgment awarding personal representative fees is
reviewable only after “[a] decision on a request for an award
of expenses under ORS 116.183.” ORS 111.275(1)(e). That
8
While we do not reach the merits of respondent’s contention, we do note that
respondent is not correct in his assertion that the court awarded personal repre-
sentative fees on “purely” equitable grounds. The court stated that the fee that
respondent would receive would be consistent with the personal representative
compensation statute, ORS 116.183. It appears the court used the term “equita-
ble” in the context of personal representative fees to mean fair and consistent
with the statutes that governs.
Cite as 308 Or App 1 (2020) 11
requirement had not occurred here. See ORS 116.183(1) (pro-
viding for the allowance of personal representative expenses
“in the settlement of the final account” or “prior to settle-
ment of the final account upon petition, showing that the
final account reasonably cannot be filed at that time, and
upon notice as directed by the court”). Respondent’s request
for relief is premature.
Affirmed.