Guardianship and Conservatorship of S.M.H.

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
JUNE 3, 2021
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2021 ND 104In the Matter of the Guardianship and Conservatorship of S.M.H., an
incapacitated person
K.S., Petitioner and Appellant
and
B.J.S., Petitioner
v.
S.M.H., ward, Respondent
Lutheran Social Services of Minnesota, Respondent and Appellee
and
M.M.H., P.E.H., and P.S., Interested Parties
No. 20200239
Appeal from the District Court of Benson County, Northeast Judicial District,
the Honorable Donovan J. Foughty, Judge.
AFFIRMED.
Opinion of the Court by Jensen, Chief Justice.
K.S., Gilbert, AZ, petitioner and appellant.
Scott J. Landa, Grand Forks, ND, for respondent and appellee.
Guardianship and Conservatorship of S.M.H.
No. 20200239
Jensen, Chief Justice.
[¶1] K.S. appeals from a district court order approving the sale of S.M.H.’s
interest in real property and striking from the court record an affidavit filed
by K.S. K.S. argues the court erred by determining that a document K.S.
claimed transferred a majority of S.M.H.’s interest in the real property to K.S.
failed to meet the statutory requirements for a valid conveyance under
N.D.C.C. §§ 47-10-01 and 47-10-05; the court erred in striking her affidavit
from the record; and the court erred in awarding attorney’s fees to Lutheran
Social Services. We affirm.
I
[¶2] S.M.H. is an 84-year-old incapacitated person. In April 2019, Lutheran
Social Services was appointed S.M.H.’s permanent guardian and conservator.
In October 2019, Lutheran Social Services filed with the district court a
petition to sell S.M.H.’s interest in various parcels of real property to cover
expenses incurred for S.M.H.’s care at an assisted living facility. The district
court granted Lutheran Social Services’ petition, provided that S.M.H.’s family
members were given notice of sale and the first option to purchase the property
at appraised value.
[¶3] On May 13, 2020, subsequent to the district court’s approval of Lutheran
Social Services’ petition to sell the real property, K.S., an adult child of S.M.H.,
filed an affidavit with the court alleging Lutheran Social Services was failing
to uphold its fiduciary duties owed to S.M.H. and was attempting to sell K.S.’s
interest in real property. Attached as an exhibit to the affidavit was a type-
written document entitled “Warranty Deed.” The document purportedly
conveyed ninety percent (90%) of S.M.H.’s interest in all her real property to
K.S. and purported to grant to K.S. a right of first refusal. Incorporated into
the document was a separate hand-written document that purported to convey
to K.S. a portion of S.M.H.’s one-third interest in undescribed real property in
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Pierce County, North Dakota. When the affidavit was filed, there were no
pending motions before the court.
[¶4] On June 3, 2020, after receiving purchase offers and inquiring with K.S.
whether she sought to enter into a purchase agreement under the same terms
as the other offers, Lutheran Social Services filed a motion to approve of the
sale of S.M.H.’s interest in the real property and to strike K.S.’s affidavit. In
its motion, Lutheran Social Services argued the “Warranty Deed” document
was not a valid conveyance and did not prevent the sale of S.M.H.’s interest in
the real property because the document had not been signed by S.M.H. and
had not been properly witnessed. Lutheran Social Services further argued K.S.
waived any purported right of first refusal by not entering into a purchase
agreement under the same terms as the other offers. Lutheran Social Services
also sought to have the district court strike K.S.’s affidavit from the record as
an unauthorized court filing. Finally, Lutheran Social Services sought an
award of attorney’s fees. K.S. opposed the motion.
[¶5] After both parties had filed their briefs on the June 3, 2020 motion,
Lutheran Social Services filed a proposed order including proposed findings of
fact, conclusions of law, and order for judgment. K.S. objected to the proposed
order arguing, in part, that the “Warranty Deed” document was a valid
conveyance without S.M.H.’s signature because K.S. was designated as
S.M.H.’s power of attorney and an agent authorized to sign the document on
behalf of S.M.H. K.S. included an exhibit purporting to designate K.S. as
S.M.H.’s power of attorney. K.S. did not, at any point, request an evidentiary
hearing on Lutheran Social Services’ motion.
[¶6] On July 13, 2020, the district court entered an order approving the sale
of S.M.H.’s interest in any real property owned by S.M.H. The court found the
“Warranty Deed” document lacked the signature of S.M.H. and was not
properly witnessed. The court concluded the document failed to meet the
statutory requirements necessary to convey S.M.H.’s interest in the described
properties or grant K.S. a right of first refusal. The court also struck K.S.’s
affidavit from the record and ordered K.S. to pay Lutheran Social Services’
attorney’s fees. K.S. appeals.
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II
[¶7] Lutheran Social Services asserts this Court lacks jurisdiction over K.S.’s
appeal. It argues the July 13, 2020 order is interlocutory, and K.S. was
required to obtain certification under N.D.R.Civ.P. 54(b).
[¶8] “The right to appeal is statutory.” Wilkinson v. Board of Univ., 2020 ND
179, ¶ 11, 947 N.W.2d 910. If there is no statutory basis for appeal, this Court
lacks jurisdiction and must dismiss the appeal. Id. “Only judgments and
decrees which constitute a final judgment of the rights of the parties and
certain orders enumerated by statute are appealable.” Holverson v. Lundberg,
2015 ND 225, ¶ 6, 869 N.W.2d 146. This Court’s two-step analysis for
evaluating jurisdiction has been explained as follows:
First, the order appealed from must meet one of the statutory
criteria of appealability set forth in [N.D.C.C. §] 28-27-02. If it does
not, our inquiry need go no further and the appeal must be
dismissed. If it does, then Rule 54(b), N.D.R.Civ.P., [if applicable,]
must be complied with. If it is not, we are without jurisdiction.
Id. at ¶ 9 (quoting Matter of Estate of Stensland, 1998 ND 37, ¶ 10, 574 N.W.2d
203) (quotation marks omitted).
[¶9] K.S. appeals from the district court’s July 13, 2020 order which approved
the sale of S.M.H.’s interest in real property. An order approving a sale of
interest in real property is a final order for purposes of appeal under N.D.C.C.
§ 28-27-02. See Farm Credit Bank of St. Paul v. Rub, 478 N.W.2d 279, 280
(N.D. 1991) (citing N.D.C.C. § 28-27-02(2) which provides a “final order
affecting a substantial right made in special proceedings or upon a summary
application in an action after judgment” is appealable); Geigle v. Geigle, 261
N.W.2d 399, 400 (N.D. 1977) (citing N.D.C.C. § 28-27-02(2) and (5) which
provide a “final order affecting a substantial right made in special proceedings
or upon a summary application in an action after judgment” and “an order
which involves the merits of an action or some part thereof” are appealable);
Fettig v. Fettig, 176 N.W.2d 523, 525 (N.D. 1970) (citing N.D.C.C. § 28-27-02(5)
which provides “an order which involves the merits of an action or some part
thereof” is appealable). The first step of the jurisdiction analysis is satisfied.
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[¶10] Since the order from which this appeal was taken is appealable, the next
inquiry is whether N.D.R.Civ.P. 54(b) applies. Rule 54(b), N.D.R.Civ.P.,
preserves our long-standing policy against piecemeal appeals and states:
If an action presents more than one claim for relief, whether as a
claim, counterclaim, crossclaim, or third-party claim, or if multiple
parties are involved, the court may direct entry of a final judgment
as to one or more, but fewer than all, claims or parties only if the
court expressly determines that there is no just reason for delay.
Otherwise, any order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before the entry
of a judgment adjudicating all the claims and all the parties’ rights
and liabilities.
See Matter of Curtiss A. Hogen Tr. B, 2018 ND 117, ¶ 10, 911 N.W.2d 305; see
also N.D.R.Civ.P. 54, Explanatory Note (“A party seeking to appeal must wait
until the end of the case, when all claims have been resolved and final
judgment has been entered, before filing an appeal.”).
[¶11] This Court has adopted a flexible case-by-case approach to determine
whether a Rule 54(b) certification is required to confer jurisdiction on this
Court. Gissel v. Kenmare Twp., 463 N.W.2d 668, 671 (N.D. 1990). In In re
Guardianship of R.G., 2016 ND 96, 879 N.W.2d 416, we considered an appeal
from an order appointing a conservator and co-guardians of an incapacitated
person. We concluded the appeal was authorized under N.D.C.C. § 28-27-02
without a certification of finality under N.D.R.Civ.P. 54(b) because the court’s
order settled all existing claims in the petition and did not “necessarily
contemplate further proceedings about the appointment.” Id. at ¶ 13; cf. Snider
v. Dickinson Elks Bldg., LLC, 2016 ND 162, ¶¶ 11-12, 883 N.W.2d 475(concluding an order was not appealable without a Rule 54(b) certification
where a claim remained unresolved after the order was entered and the court
anticipated further proceedings on the unresolved claim).
[¶12] The order entered on July 13, 2020, is appealable without a certification
under N.D.R.Civ.P. 54(b). At the time the order was entered, there were no
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other pending or unadjudicated claims remaining to be resolved by the district
court. Moreover, the order was not dependent on potential future proceedings
brought by Lutheran Social Services on behalf of S.M.H., the protected person.
See R.G., 2016 ND 96, ¶ 13 (speculation of future claims did not affect
appealability of an order appointing a guardian and conservator); In re Estate
of Eggl, 2010 ND 104, ¶ 9, 783 N.W.2d 36 (speculation of future claims did not
affect appealability of order interpreting will). The order approving the sale of
S.M.H.’s interest in real property and striking K.S.’s affidavit settled all
existing claims and did not contemplate further proceedings. As such, we have
jurisdiction to consider the July 13, 2020 order because it is a final order and
does not require a Rule 54(b) certification.
III
[¶13] K.S. raises procedural challenges to the district court’s determination on
the validity of the “Warranty Deed” document in its July 13, 2020 order. K.S.
argues the court erred because the issue concerning the document’s validity
had not properly been placed before the court, and the court erred by failing to
hold an evidentiary hearing regarding the validity of the document.
[¶14] In its motion seeking the district court’s approval of the sale of S.M.H.’s
interest in real property, Lutheran Social Services attached as an exhibit to an
affidavit the “Warranty Deed” document and argued that the document did not
prevent the sale. K.S. opposed the motion arguing the sale did not conform to
the terms of the document. Upon filing her brief in opposition to the motion,
K.S. did not request an evidentiary hearing.
[¶15] The validity of the “Warranty Deed” document was raised within
Lutheran Social Services’ motion when Lutheran Social Services asserted the
document did not prevent the sale. K.S responded by asserting the terms of the
warranty deed were being ignored. We conclude the validity of the document
had been placed at issue and was properly before the district court for
resolution.
[¶16] Rule 3.2, N.D.R.Ct., applies to all motion practices, unless a conflicting
rule governs the matter. Hageness v. Davis, 2017 ND 132, ¶ 9, 896 N.W.2d 251.
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“Under N.D.R.Ct. 3.2(a)(3), a court may decide routine motions on briefs
without holding a formal hearing, unless a party requests one.” Discover Bank
v. Bolinske, 2020 ND 228, ¶ 7, 950 N.W.2d 417 (quoting Desert Partners IV,
L.P. v. Benson, 2014 ND 192, ¶ 18, 855 N.W.2d 608). “If a party who timely
served and filed a brief requests a hearing on a motion, then such a hearing
must be held and it is not discretionary with the trial court.” Id. (quoting Desert
Partners IV, L.P., at ¶ 18) (internal quotation marks omitted).
[¶17] Our rules of court, N.D.R.Ct. 3.2, placed the burden of requesting an
evidentiary hearing on the parties. K.S. did not request an evidentiary hearing.
We conclude the district court did not err by making a determination on
whether the document was a valid conveyance without holding an evidentiary
hearing.
IV
[¶18] K.S. also raises substantive challenges to the district court’s
determination that the “Warranty Deed” document was not a valid conveyance
of S.M.H.’s interest in the real property to K.S. or a valid grant of a right of
first refusal. K.S. asserts the court erred in concluding the document was not
a valid conveyance because S.M.H. had not signed the document and the
document had not been properly witnessed. K.S. contends the court failed to
consider evidence designating her as S.M.H.’s power of attorney, which she
claims negated the necessity of S.M.H.’s signature on the document. She also
argues the document was a contract that did need not to be witnessed.
[¶19] Under N.D.R.Civ.P. 52(a), a district court’s findings of fact will not be set
aside unless the findings are clearly erroneous. Our review of a court’s findings
of fact have been summarized as follows:
A finding of fact is clearly erroneous under N.D.R.Civ.P. 52(a) if it
is not supported by any evidence, if, although there is some
evidence to support the finding, a reviewing court is left with a
definite and firm conviction a mistake has been made, or if the
finding is induced by an erroneous conception of the law.
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Tornabeni v. Creech, 2018 ND 204, ¶ 22, 916 N.W.2d 772 (quoting Pierce v.
Anderson, 2018 ND 131, ¶ 11, 912 N.W.2d 291). The legal conclusion of
whether a deed is void is a question of law, fully reviewable on appeal.
Gannaway v. Torres, 2017 ND 287, ¶ 12, 904 N.W.2d 317.
[¶20] The district court determined the “Warranty Deed” document failed to
meet the statutory requirements under N.D.C.C. §§ 47-10-01 and 47-10-05
because the type-written document did not contain S.M.H.’s signature, and
neither the handwritten document nor the typed document were properly
witnessed. Section 47-10-01, N.D.C.C., reads as follows:
An estate in real property, other than an estate at will or for a term
not exceeding one year, can be transferred only by operation of law
or by an instrument in writing, subscribed by the party disposing
of the same or by the party’s agent thereunto authorized by
writing. This does not abridge the power of any court to compel the
specific performance of any agreement for the sale of real property
in case of part performance thereof.
Section 47-10-05, N.D.C.C., reads as follows:
The execution of a grant of an estate in real property to entitle the
same to be recorded, if it is not acknowledged, must be proved by
a subscribing witness or as otherwise provided in sections 47-19-
23 and 47-19-24. The absence of the seal of any grantor or grantor’s
agent from any grant of an estate made in real property shall not
invalidate or in any manner impair the same.
[¶21] K.S. argues the district court’s finding that the document lacked S.M.H.’s
signature was erroneous based on her purported designation as S.M.H.’s power
of attorney which granted her authority to sign on behalf of S.M.H. However,
K.S. failed to make this argument in her principle briefings to the court. The
power of attorney exhibit was attached to K.S.’s objection to the proposed order.
The power of attorney exhibit was not provided to the court or to Lutheran
Social Services during the briefing on the motion to approve the sale of the real
property, was not subject to cross-examination, and was not properly placed
before the court as evidence.
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[¶22] Our rules do not permit the informal procedure used by K.S. to
supplement the record and introduce new issues and evidence after the parties
have rested. See e.g. Larson v. Larson, 1998 ND 156, ¶¶ 14-15, 582 N.W.2d
657. The proper procedure would have been to request an evidentiary hearing.
As provided in Section III above, K.S. did not make a request for an evidentiary
hearing to introduce the additional evidence. Submitting new evidence in this
manner denied Lutheran Social Services a full opportunity to challenge the
evidence through cross-examination and rebuttal witnesses in open court. As
such, the district court did not err by failing to find K.S. was designated as
power of attorney, and we do not consider the exhibit on appeal.
[¶23] Based on our review of the record, the district court did not clearly err in
finding the document lacks S.M.H.’s signature. In order to be an effective
transfer of an interest in real property under N.D.C.C. § 47-10-01, the
document was required to be signed by S.M.H. or S.M.H.’s authorized agent.
We conclude the document fails to meet the statutory requirements under
N.D.C.C. § 47-10-01 necessary to convey S.M.H.’s interest in the real property
or create an enforceable right of first refusal by K.S. Having concluded the
document lacked the required signature of S.M.H., it is unnecessary to reach
the issue of whether the document was properly witnessed under N.D.C.C. §
47-10-05. We affirm the court’s finding of fact the document lacked S.M.H.’s
signature and the subsequent conclusion of law the document was not a valid
conveyance of S.M.H.’s interest in the real property.
V
[¶24] K.S. argues the district court erred striking her affidavit from the record.
Under N.D.R.Civ.P. 12(f), the district court has discretion, either upon a
motion by a party or on its own, to strike an insufficient defense or any
redundant, immaterial, impertinent, or scandalous matter in a pleading. See
Dangerfield v. Markel, 222 N.W.2d 373, 376-77 (N.D. 1974). A court’s decision
to strike under Rule 12(f), N.D.R.Civ.P., is reviewed for an abuse of discretion.
Collection Ctr., Inc. v. Bydal, 2011 ND 63, ¶ 29, 795 N.W.2d 667. “A district
court abuses its discretion when it acts in an arbitrary, unreasonable, or
unconscionable manner, or when its decision is not the product of a rational
8
mental process leading to a reasoned determination.” Id. (quoting In re Estate
of Loomer, 2010 ND 93, ¶ 20, 782 N.W.2d 648) (quotation marks omitted).
[¶25] The district court found K.S.’s affidavit contained redundant,
impertinent, and scandalous allegations against Lutheran Social Services.
Additionally, the court determined the affidavit was immaterial because it was
not submitted in response to or in support of a pending motion. Under our
standard of review, we conclude the district court did not abuse its discretion
in striking K.S.’s affidavit from the record. The court’s findings are supported
by the record, and it did not act in an arbitrary, unconscionable, or
unreasonable manner in making its decision.
VI
[¶26] K.S. argues the district court erred in granting a recovery of reasonable
attorney’s fees incurred by Lutheran Social Services in responding to K.S.’s
affidavit. Specifically, she argues her affidavit was not frivolous, and Lutheran
Social Services unnecessarily incurred its own fees by filing the motion to
approve the sale of S.M.H.’s interest in real property. A court’s decision to
award attorney’s fees is within the district court’s discretion and will only be
disturbed on appeal if the district court abuses its discretion. Johnson v.
Menard, Inc., 2021 ND 19, ¶ 20, 955 N.W.2d 27.
[¶27] Under N.D.C.C. § 28-26-01(2), a court is authorized to award attorney’s
fees in a civil action upon finding a claim for relief was frivolous. Orwig v.
Orwig, 2021 ND 33, ¶ 47, 955 N.W.2d 34. “A claim for relief is frivolous for
purposes of N.D.C.C. § 28-26-01(2) if there is such a complete absence of facts
or law a reasonable person could not have expected a court would render a
judgment in that person’s favor.” Id. (quoting N.D. Private Investigative & Sec.
Bd. v. TigerSwan, LLC, 2019 ND 219, ¶ 20, 932 N.W.2d 756) (quotation marks
omitted).
[¶28] Section 28-26-31, N.D.C.C., also authorizes a court to award attorney’s
fees for “[a]llegations and denials in any pleadings in court, made without
reasonable cause and not in good faith, and found to be untrue.” While a court’s
award of attorney’s fees and costs under N.D.C.C. § 28-26-31 is discretionary,
9
the court’s exercise of that discretion must be based on evidence that the
pleadings were made without reasonable cause and not in good faith, and are
found to be untrue. Strand v. Cass Cty., 2008 ND 149, ¶ 14, 753 N.W.2d 872.
[¶29] The district court ordered K.S. to pay Lutheran Social Services’
attorney’s fees upon finding K.S.’s affidavit was frivolous and was not filed in
good faith or reasonable cause. In her affidavit, filed on May 13, 2020, K.S.
alleged Lutheran Social Services was failing to uphold its fiduciary duties owed
to S.M.H. The court determined these allegations were untrue. Less than two
months before K.S. submitted her affidavit, in an order entered on March 25,
2020, the court found Lutheran Social Services was fulfilling its fiduciary
duties and acting in a reasonable and prudent manner in managing S.M.H.’s
estate. The court determined the filing of K.S.’s affidavit was an attempt by
K.S. to further frustrate Lutheran Social Services’ efforts to sell S.M.H.’s
interest in real property for S.M.H.’s benefit.
[¶30] Under our standard of review, we conclude the district court did not
abuse its discretion in ordering K.S. to pay Lutheran Social Services’ attorney’s
fees. The court’s findings are supported by the record, and it did not act in an
arbitrary, unconscionable, or unreasonable manner in making its decision.
VII
[¶31] We conclude we have jurisdiction over this appeal; the “Warranty Deed”
document fails to meet the statutory requirements of N.D.C.C. § 47-10-01; the
district court did not err in striking K.S.’s affidavit; and the court did not err
by ordering K.S. to pay Lutheran Social Services’ attorney’s fees. We affirm the
order of the district court.
[¶32] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
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