In Re Estate of Bartelson , 925 N.W.2d 416 ( 2019 )

Filed 4/11/19 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2019 ND 107
In the Matter of the Estate of Ralph Bartelson, deceased
Jean Valer and Jane Haught, Petitioners and Appellants
v.
Neil Bartelson, Steven M. Fischer, Personal
Representative of the Estate of Diane Fischer, Respondents and Appellees
and
William A. Chaussee, Personal Representative, Respondent
No. 20180255
Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable David E. Reich, Judge.
AFFIRMED.
Opinion of the Court by Tufte, Justice.
Laura C. Ringsak, Bismarck, N.D., for petitioners and appellants.
Clark J. Bormann, Bismarck, N.D., for respondents and appellees.
Estate of Bartelson
No. 20180255
Tufte, Justice.
[¶1] Jean Valer and Jane Haught appeal from a district court order denying their
motion for reconsideration of a judgment determining they failed to rebut the
presumption that they exercised undue influence over their father. We conclude the
court did not abuse its discretion in denying their motion for reconsideration, and we
affirm.
I
[¶2] This is the fourth appeal to this Court in proceedings involving the Estate of
Ralph Bartelson and his four adult children: Valer, Haught, Neil Bartelson, and Diane
Fischer. Estate of Bartelson, 2015 ND 147, 864 N.W.2d 441 (“Bartelson III”); Estate
of Bartelson, 2013 ND 129, 833 N.W.2d 522 (“Bartelson II”); Estate of Bartelson,
2011 ND 219, 806 N.W.2d 199 (“Bartelson I”).
[¶3] As Ralph Bartelson’s health declined, his children agreed that he would
live with Valer and that she and Haught would be paid to provide care for him. During
this time, Ralph Bartelson executed a power of attorney appointing Valer as his
attorney in fact and established a joint checking account, naming both Valer
and Haught co-owners with rights of survivorship and allowing them to issue
checks from the account. Neil Bartelson and Fischer claimed that Valer and Haught
misappropriated money from their father, and they petitioned for appointment of a
guardian and conservator for him. In July 2008, the parties stipulated to the
appointment of Valer as guardian for Ralph Bartelson and the appointment of
Guardian and Protective Services (“GAPS”) as conservator for him. The parties’
stipulation required GAPS to investigate and pursue the claimed misappropriation of
money from Ralph Bartelson.
1
[¶4] Ralph Bartelson died in August 2008. His will was ultimately admitted to
formal probate, and GAPS was appointed personal representative of his Estate. GAPS
subsequently moved for court approval of requests for payments from the Estate to
Valer and Haught. Neil Bartelson and Fischer objected to their siblings’ requests and
reasserted their allegation that Valer and Haught had misappropriated money from
their father. The parties agreed to the payments requested by Valer and Haught,
conditioned on a resolution of the misappropriation claim. GAPS retained a forensic
accountant to review transfers of Ralph Bartelson’s assets to family members, and the
accountant determined Valer had received funds in excess of $154,000 and Haught
had received funds in excess of $132,000. However, the accountant was not able to
ascertain the reasons for many of those transfers, because Valer and Haught failed to
provide documentation for the transfers.
[¶5] GAPS, as personal representative of the Estate, did not pursue a
misappropriation claim against Valer and Haught, and the parties were unable to
resolve that claim. After a bench trial in February 2011, the district court determined
it did not have jurisdiction over any alleged misappropriations before Ralph
Bartelson’s death. Neil Bartelson and Fischer appealed. In Bartelson I, 2011 ND 219,
¶¶ 1, 16, 806 N.W.2d 199, we reversed, holding the court erred as a matter of law in
determining it did not have jurisdiction over misappropriation claims allegedly
occurring before a guardian and conservator were appointed for Ralph Bartelson in
July 2008. We remanded for further proceedings to determine whether Neil Bartelson
and the Estate of Fischer1 had standing to assert misappropriation claims. Id. at ¶ 15.
[¶6] On remand, the district court ruled that Neil Bartelson did not have
independent standing to assert misappropriation claims against Valer and Haught.
Neil Bartelson and Fischer then petitioned to remove GAPS as personal representative
of the Estate. The court denied the petition without a hearing and denied a motion to
vacate on the ground that Neil Bartelson was not an interested person. Neil Bartelson
1
While Bartelson I was pending, Diane Fischer died and her estate was
substituted as a party in this action.
2
appealed, and we reversed, holding the court erred as a matter of law in concluding
he was not an interested person and the court abused its discretion in denying the
petition to remove GAPS as personal representative without a hearing. Bartelson II,
2013 ND 129, ¶¶ 17-18, 21-22, 833 N.W.2d 522.
[¶7] At a hearing on remand, Neil Bartelson and Fischer argued the district court
was required to rule on the misappropriation claim by applying the presumption of
undue influence in N.D.C.C. § 59-18-01.1. They claimed that Valer and Haught failed
to rebut the presumption of undue influence by providing an accurate accounting of
withdrawals from Ralph Bartelson’s checking account and that any withdrawals were
presumed to be made as a result of undue influence. The court denied the petition to
remove GAPS as personal representative of the Estate.
[¶8] We reversed the district court’s decision and remanded, holding the court
misapplied the statutory presumption of undue influence in denying the petition to
remove GAPS as personal representative. Bartelson III, 2015 ND 147, ¶¶ 1, 19, 864
N.W.2d 441. We explained that to properly apply the presumption, the court must first
determine whether Valer and Haught had a confidential relationship with their father.
Id. at ¶ 17. We said the court must make a finding about whether Haught had a
confidential relationship with her father, and if the court found the existence of that
relationship, it must apply the presumption of undue influence to benefits Haught
obtained during the relationship. Id. at ¶ 18. We also concluded the record established
that Valer had a confidential relationship with her father as a matter of law and the
court must apply the presumption of undue influence to Valer’s withdrawals from his
checking account. Id. at ¶ 19. We explained Valer had the burden of developing a
record sufficient to prove any withdrawals were not received without sufficient
consideration or under undue influence. Id. We noted the judge presiding over the
original proceeding had retired, and the court on remand must make a certification of
familiarity with the record under N.D.R.Civ.P. 63, or alternatively order a new trial.
Bartelson III, at ¶ 20.
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[¶9] On remand, a new district court judge certified familiarity with the record and
determined Haught had a confidential relationship with Ralph Bartelson. The court
also decided Valer and Haught failed to provide documentation for withdrawals from
their father’s account to rebut the presumption of undue influence attributable to their
confidential relationship with their father. The court determined the amounts of the
withdrawals from their father’s account that Valer and Haught were unable to account
for were summarized in an attachment to a closing brief submitted by counsel for Neil
Bartelson and Fischer after the February 2011 hearing. The court decided the amounts
in the attachment were correctly summarized from the forensic accountant’s report
and testimony introduced into evidence at trial and adopted those amounts as an
accurate summary of the amounts Valer and Haught owed the Estate for their failure
to rebut the presumption of undue influence. The court’s decision required Valer to
remit $76,413.15 to the Estate and Haught to remit $97,838.80 to the Estate.
[¶10] Valer and Haught moved for reconsideration under N.D.R.Civ.P. 60(b),
arguing they did not have an opportunity to rebut the presumption of undue influence.
They claimed the document attached to counsel’s closing brief after the February
2011 hearing was not an “exhibit offered, entered or testified” to in court and was not
accurate. The district court denied their motion, determining they failed to allege a
factual or legal basis for relief under N.D.R.Civ.P. 60(b). The court rejected their
claim that the presumption of undue influence had not been raised in prior
proceedings and that they were entitled to a hearing to present evidence to rebut the
presumption. The court also determined the document that counsel attached to the
post-hearing brief contained three clerical errors and corrected those errors. The court
found it was otherwise an accurate summary of the forensic accountant’s report and
testimony describing the amounts Valer and Haught were unable to substantiate. As
a result, the district court concluded Valer and Haught failed to rebut the presumption
of undue influence. After those corrections, Valer was required to remit $77,413.15
to the Estate and Haught was required to remit $86,554.26 to the Estate.
4
II
[¶11] Valer and Haught appeal only from the order denying their motion for
reconsideration under N.D.R.Civ.P. 60(b), arguing the district court abused its
discretion in denying their motion for relief from the judgment. They assert the court
abused its discretion in adopting calculations from a document attached to a post-
hearing brief to establish the amount they owed the Estate. They argue the document
was not introduced into evidence at the February 2011 evidentiary hearing under the
requirements of N.D.R.Ev. 1006, or subject to cross-examination. They claim the
summaries were not accurate and contradicted the testimony of the forensic
accountant. They also argue they were not afforded their due process right to notice
and a hearing to rebut the presumption of undue influence.
[¶12] Valer and Haught have appealed only from the order denying their motion for
reconsideration, and our review is limited to that order. See Kautzman v. Doll, 2018
ND 23, ¶¶ 5, 8, 15, 905 N.W.2d 744 (stating appeal only from a denial of a motion to
reconsider under N.D.R.Civ.P. 60(b) does not permit appellant to attack the
underlying order from which an appeal could have been taken but was not brought).
North Dakota law does not formally recognize motions to reconsider, and motions for
reconsideration are treated as motions to alter or amend a judgment under
N.D.R.Civ.P. 59(j), or motions for relief from a judgment under N.D.R.Civ.P. 60(b).
Kautzman, at ¶ 9.
[¶13] The motion for reconsideration by Valer and Haught cited N.D.R.Civ.P.
60(b)(1) and (6), which authorize relief from a judgment for mistake, inadvertence,
surprise, or excusable neglect, or for any other reason that justifies relief. On appeal
from the denial of their motion for reconsideration, Valer and Haught argue the
district court erred in denying their motion under N.D.R.Civ.P. 60(b)(6). A court’s
denial of a motion for reconsideration under N.D.R.Civ.P. 60(b)(6) will not be
reversed on appeal absent an abuse of discretion. Kautzman, 2018 ND 23, ¶ 13, 905
N.W.2d 744. A court abuses its discretion when it acts in an arbitrary, unreasonable,
or unconscionable manner, when it misapplies or misinterprets the law, or when the
5
decision is not the product of a rational mental process leading to a reasoned decision.
J.B. v. R.B., 2018 ND 83, ¶ 5, 908 N.W.2d 687. In Kautzman, at ¶ 14, we explained
our review of the denial of a motion for reconsideration under N.D.R.Civ.P. 60(b)(6):
“Rule 60(b)(6), N.D.R.Civ.P., is a ‘catch-all’ provision that
allows a district court to grant relief from a judgment for ‘any other
reason that justifies relief.’” Rule 60(b)(6), N.D.R.Civ.P., “should be
invoked only when extraordinary circumstances are present.” This
Court previously described the limitations of N.D.R.Civ.P. 60(b)(6):
[T]he use of the rule is limited by many considerations.
It is not to be used as a substitute for appeal. It is not to
be used to relieve a party from free, calculated, and
deliberate choices he has made. It is not to be used in
cases where subdivisions (1) to (5) of Rule 60(b) might
be employed—it and they are mutually exclusive. Yet
60(b)(6) can be used where the grounds for vacating a
judgment or order are within any of subdivisions (1) to
(5), but something more or extraordinary which justifies
relief from the operation of the judgment must be
present.
Hildebrand v. Stolz, 2016 ND 225, ¶ 16, 888 N.W.2d 197 (citations
omitted). “The moving party bears the burden of establishing sufficient
grounds for disturbing the finality of the judgment, and relief should be
granted only in exceptional circumstances.” Anderson [v. Baker], 2015
ND 269, ¶ 10, 871 N.W.2d 830 (quoting Shull v. Walcker, 2009 ND
142, ¶ 14, 770 N.W.2d 274).
[¶14] Valer and Haught argue the district court erred in adopting calculations in a
summary attached to a closing brief submitted by counsel for Neil Bartelson and
Fischer after the February 2, 2011, hearing. They claim the summary was not
introduced into evidence at the February 2011 hearing under the requirements of
N.D.R.Ev. 1006. They also claim the summary was not accurate and contradicted the
testimony of the forensic accountant. Neil Bartelson and Fischer respond their
counsel’s calculations were summaries of evidence provided by the forensic
accountant at the February 2011 hearing, which established funds obtained by Valer
and Haught from their father without any documentation for the underlying purpose
and which were presumed to be obtained under undue influence.
6
[¶15] Rule 1006, N.D.R.Ev., authorizes the use of a summary to prove the content
of voluminous writings, recordings, or photographs that cannot be conveniently
examined in court and contemplates the introduction of secondary evidence to
summarize those voluminous writings, recordings, or photographs. Titan Mach., Inc.
v. Patterson Enters., Inc., 2016 ND 19, ¶¶ 10-11, 874 N.W.2d 317.
[¶16] Here, the attachment to the closing brief submitted by counsel for Neil
Bartelson and Fischer summarized the forensic accountant’s testimony and report as
part of counsel’s closing argument after the February 2011 hearing. The attachment
was not introduced as secondary evidence. Rather, the attachment was counsel’s
summation of the forensic accountant’s testimony and report, which had been
admitted into evidence at the February 2011 hearing. In determining the amounts
Valer and Haught were required to remit to the Estate, the district court decided
counsel’s summation accurately reflected the evidence introduced at the hearing. In
denying the motion for reconsideration, the court explained the attachment, with the
correction of the three clerical errors, was an accurate summary of the amounts Valer
and Haught were unable to account for. The court said the calculations of those
amounts in the attachment were derived from the forensic accountant’s report that was
admitted into evidence at the February 2011 hearing. The court’s denial of the motion
for reconsideration was the product of a rational mental process leading to a reasoned
decision, was not a misapplication of the law, and was not arbitrary, capricious, or
unreasonable. We therefore conclude the court did not abuse its discretion in denying
the motion for reconsideration on this ground.
[¶17] Valer and Haught also argue the district court’s decision denied them due
process because they were not provided notice and an opportunity to rebut the
presumption of undue influence.
[¶18] Due process requires a fair hearing, which includes reasonable notice of the
opposing party’s claims and an opportunity to rebut those claims. Holbach v. Dixon,
2007 ND 60, ¶ 7, 730 N.W.2d 613.
7
[¶19] Valer and Haught had notice of the misappropriation claims throughout these
protracted proceedings. Before the February 2011 hearing, Neil Bartelson and Fischer
filed a pretrial brief specifically citing the presumption of undue influence. In denying
the motion for reconsideration, the district court determined Valer and Haught had the
opportunity to present evidence rebutting the presumption of undue influence at the
February 2011 hearing and failed to do so. The record reflects that the
misappropriation claim and the issue about the applicability of the presumption were
raised throughout the proceedings in the district court and in this Court. See Bartelson
III, 2015 ND 147, ¶¶ 8, 16-19, 864 N.W.2d 441. On this record, the court’s denial of
the motion for reconsideration was not a misapplication or misinterpretation of the
law, was not arbitrary, capricious, or unreasonable, and was the product of a rational
mental process leading to a reasoned decision. We conclude the court did not abuse
its discretion in denying the motion for reconsideration on this ground.
III
[¶20] We affirm the order denying the motion for reconsideration.
[¶21] Jerod E. Tufte
Daniel J. Crothers
Lisa Fair McEvers
Jon J. Jensen
Gerald W. VandeWalle, C.J.
8