In re the Estate of: Mary Ann Nething

This opinion will be unpublished and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UNPUBLISHED OPINION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.
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§ 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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