Knapp v. The Jones Financial Co.

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
NOVEMBER 10, 2022
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2022 ND 187David Knapp, Plaintiff and Appellant
v.
The Jones Financial Companies, L.L.L.P.
a Missouri Limited Liability Limited Partnership;
Edward D. Jones & Co., L.P., a Missouri Limited
Partnership a wholly owned subsidiary of The Jones
Financial Companies, L.L.L.P.; Edward Jones Trust Co.
a purported wholly owned subsidiary of The Jones
Financial Companies, L.L.L.P.; and a self-directed
individual retirement account described as Edward
Jones Trust Co. as Custodian FBO David N. Knapp
Account Number XXX-XX-18-1-6, Defendants and Appellees
No. 20220140
Appeal from the District Court of Grand Forks County, Northeast Central
Judicial District, the Honorable Jay D. Knudson, Judge.
APPEAL DISMISSED.
Opinion of the Court by McEvers, Justice.
DeWayne A. Johnston, Grand Forks, ND for plaintiff and appellant.
Monte L. Rogneby, Bismarck, ND for defendants and appellees.
Knapp v. The Jones Financial Co., et al.
No. 20220140
McEvers, Justice.
[¶1] Attorney DeWayne Johnston, on behalf of the late David Knapp, appeals
from a dismissal judgment entered after the district court denied a motion to
substitute Knapp’s widow as plaintiff under N.D.R.Civ.P. 25. The Appellees
(together “Edward Jones”) moved to dismiss the appeal. We grant Edward
Jones’ motion and dismiss the appeal.
I
[¶2] This litigation began after the Minnesota Department of Revenue issued
a third-party levy on securities held by Edward Jones for Knapp. Knapp sued
the Commissioner of the Minnesota Department of Revenue and Edward Jones
in North Dakota seeking dissolution of the levy. In Knapp v. Commissioner of
Minnesota Department of Revenue, 2018 ND 231, 918 N.W.2d 387, we affirmed
the district court’s judgment dismissing the case for lack of personal
jurisdiction over the Commissioner.
[¶3] Knapp subsequently commenced this lawsuit against Edward Jones
requesting dissolution of the levy or a declaration that his securities are
exempt from the levy. He also brought a conversion claim and requested
damages. The district court ordered the case stayed pending arbitration under
terms in Edward Jones account agreements. Knapp died during the stay.
Edward Jones served Knapp’s counsel, Attorney Johnston, with a statement
noting Knapp’s death. Attorney Johnston filed a motion on Knapp’s behalf
requesting Knapp’s widow, Cabrini Knapp, be substituted as plaintiff under
N.D.R.Civ.P. 25. The court held a hearing. There is no transcript of the hearing
in the record. After the hearing, the court denied the substitution motion and
dismissed the case with prejudice. The court noted that ownership of the
securities had transferred to Cabrini Knapp and her “rights are not
extinguished by this order and there is no prejudice to her in denying the
motion to substitute her as a party.”
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[¶4] Attorney Johnston filed a notice of appeal on David Knapp’s behalf. The
notice of appeal contains a footnote stating Cabrini Knapp filed the motion to
substitute. This is not supported by the record. The motion itself states “the
Plaintiff, by and through his attorney, DeWayne Johnston [ ] moves the court
for an Order substituting Cabrini Knap [sic] as the Successor Plaintiff.”
Attorney Johnston has not filed an appearance on behalf of Cabrini Knapp. At
oral argument, Attorney Johnston informed the Court he does not represent
Cabrini Knapp.
II
[¶5] Edward Jones moved to dismiss the appeal arguing Attorney Johnston
cannot appeal on behalf of a deceased person. Attorney Johnston responded
with a motion to substitute Knapp’s widow as the appellant under
N.D.R.App.P. 43.
If a party entitled to appeal dies before filing a notice of
appeal, the decedent’s personal representative, or, if there is no
personal representative, the decedent’s attorney of record, may file
a notice of appeal within the time prescribed by these rules.
N.D.R.App.P. 43(a)(3). Rule 43 is intended to provide a mechanism for
substitution of a party who dies after proceedings in the district court have
concluded. Hoffner v. Johnson, 2003 ND 79, ¶ 4 n.1, 660 N.W.2d 909. Under
the plain language of the rule, an attorney may file a notice of appeal on behalf
of a decedent if he or she was “entitled to appeal” before dying. If a party dies
during proceedings in the district court—i.e., before the party is entitled to
appeal—N.D.R.Civ.P. 25 applies. Ring v. N.D. Dep’t of Human Servs., 2020 ND
217, ¶ 7, 950 N.W.2d 142. Rule 25 contains various requirements for
substitution of a party. For example, Rule 25(a)(4), N.D.R.Civ.P., requires the
motion to substitute a party and notice of the motion be served on parties and
nonparties. The record does not show Cabrini Knapp, the nonparty purported
to be substituted, was served. It appears not all the requirements were met in
this case. See Giles v. Campbell, 698 F.3d 153, 158 (3d Cir. 2012) (service of
notice of death on decedent’s attorney is insufficient to acquire personal
jurisdiction over potential substitute); see also Atkins v. City of Chicago, 547
2
F.3d 869, 872 (7th Cir. 2008) (a motion for substitution filed by decedent’s
attorney is a nullity because the attorney is neither a party nor a successor or
personal representative of the estate); Fariss v. Lynchburg Foundry, 769 F.2d
958, 962 (4th Cir. 1985) (same; collecting cases).1
[¶6] David Knapp died while this case was pending in the district court. The
dismissal judgment was entered after David Knapp’s death. He was never
“entitled to appeal” under N.D.R.App.P. 43(a)(3). Attorney Johnston is
therefore not authorized to file this appeal on David Knapp’s behalf. We note
Cabrini Knapp has not filed a motion in this case. Nor does the record show
she has been served with any filings. Although the district court’s dismissal
order states Attorney Johnston appeared on behalf of Cabrini Knapp at the
motion hearing, he informed us at oral argument that the court’s statement is
inaccurate and he does not represent Cabrini Knapp. It is not apparent from
the record that either we or the district court have jurisdiction to order Cabrini
Knapp to serve as substitute. See Franciere v. City of Mandan, 2020 ND 143,
¶¶ 9-10, 945 N.W.2d 251 (valid service of process is necessary to effectuate
personal jurisdiction; absent jurisdiction no one is bound by anything a court
may say). We hold Attorney Johnston was not authorized to file this appeal,
and therefore his motion to substitute on appeal is moot.
III
[¶7] We grant Edward Jones’ motion. The appeal is dismissed.
[¶8] Jon J. Jensen, C.J.
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
David Nelson, S.J.
1The explanatory note to N.D.R.Civ.P. 25 states our rule is derived from Fed. R. Civ. P. 25. Federal
courts’ interpretation of a corresponding procedural rule are “highly persuasive in construing our rule.”
Kalmio v. State, 2018 ND 182, ¶ 11, 915 N.W.2d 655 (quoting Thompson v. Peterson, 546 N.W.2d 856,
860 (N.D. 1996)).
3
[¶9] The Honorable David Nelson, S.J., sitting in place of VandeWalle, J.,
disqualified.
4