Estate of Ewing

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME
COURT JULY 7, 2023
STATE OF NORTH DAKOTA
Corrected Opinion Filed 07/13/2023 by Clerk of the Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2023 ND 124In the Matter of the Estate of Chiyoko Ewing, Deceased
Michael B. Ewing, Personal Representative, Petitioner and Appellant
v.
Benjamin G. Ewing, Personal Representative
for the Estate of Jeffery Lee Ewing, Respondent and Appellee
and
Sherry Ewing, Nancy Burkhart, Respondents
and
Anne Askjem, legal guardian of J.B.A., Interested Party
No. 20220356
Appeal from the District Court of Grand Forks County, Northeast Central
Judicial District, the Honorable Lolita G. Hartl Romanick, Judge.
AFFIRMED.
Opinion of the Court by McEvers, Justice.
Chad E. Anderson, Bismarck, ND, for petitioner and appellant; submitted on
brief.
Scott J. Landa, Grand Forks, ND, for respondent and appellee; submitted on
brief.
Estate of Ewing
No. 20220356
McEvers, Justice.
[¶1] Michael Ewing, personal representative, appeals from a district court’s
judgment, amended judgment, and order on motion to show cause. On appeal,
Michael Ewing argues the court erred in finding an oral contract between the
parties, mutual assent on all terms of the contract, and partial performance of
an oral agreement sufficient to remove it from the statute of frauds. Michael
Ewing also argues the district court’s findings of fact regarding ownership of
personal property, whether the real property was maintained, responsibility
for administration costs, and the award and offset of damages were clearly
erroneous. We affirm.
I
[¶2] Michael Ewing is the personal representative of the estate of Chiyoko
Ewing, his mother. Chiyoko Ewing died in 1989 leaving a will devising all of
her property in equal shares to her four children: Michael Ewing, Jeffery
Ewing, Sherry Ewing, and Nancy Burkhart. At the time of her death, Chiyoko
Ewing owned a home in Grand Forks as well as various items of personal
property located within the home. Following her death, Jeffery Ewing lived in
and maintained the home, paid the real estate taxes and the mortgage, and
made substantial improvements to the home. Jeffery Ewing died in 2019.
[¶3] In March 2019, Michael Ewing filed an application for informal
appointment of a personal representative for Chiyoko Ewing’s estate. In
December 2019, the district court ordered the administration of Chiyoko
Ewing’s estate be supervised. On January 9, 2020, Michael Ewing filed an
“Inventory and Appraisement” identifying the property owned by Chiyoko
Ewing at the time of her death. The report included the home and some items
of personal property.
[¶4] In December 2020, an evidentiary hearing was held to determine
ownership of the property. The court found the siblings agreed they did not
want to sell the home to a stranger. The issues of whether oral agreements
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existed between Jeffery Ewing and the siblings were contested. All of the living
siblings testified, as did Jeffery Ewing’s son, Benjamin Ewing. Pennie Korynta,
Jeffery Ewing’s ex-wife, also testified to these agreements and the payments
made by Jeffery Ewing to the siblings for their shares of the home. The district
court found two of the siblings had an oral agreement that they would sell their
shares of the home to Jeffery Ewing. The price of the siblings’ individual
interest in the home was calculated by taking the assessed value of the home
less the unpaid mortgage and dividing that by four, the number of siblings.
The court found Jeffery Ewing and Sherry Ewing entered into a written
purchase agreement memorializing the agreement, while the agreements
between Michael Ewing and Jeffery Ewing and Nancy Burkhart and Jeffery
Ewing were verbal. No deeds transferring the property from the Chiyoko
Ewing estate to Jeffery Ewing were ever signed. While living in the home,
Jeffery Ewing made substantial improvements such as remodeling the main
floor, reconstructing the basement, improving the exterior, and upgrading the
mechanical systems. In March 2021, the district court entered a judgment,
finding the estate of Jeffery Ewing owned the home. Michael Ewing appealed.
This Court dismissed the appeal concluding the administration of the estate
was not complete because the personal property was not addressed.
[¶5] In January 2022, another evidentiary hearing was held to address
ownership of the items of personal property identified on the inventory list.
While it was disputed at the evidentiary hearings, the district court found the
siblings already divided the personal property amongst themselves by
agreement. The district court entered an amended judgment finding all items
of personal property, with two exceptions not at issue here, were assets of the
estate of Jeffery Ewing and ordered Michael Ewing to return those items to
the estate. The district court ordered the distribution of the real estate and
personal property, and determined what expenses were to be reimbursed to
Micheal Ewing as the personal representative. The court divided the expenses
for administration of the Chiyoko Ewing estate equally among the three
remaining siblings and the Jeffery Ewing estate.
[¶6] In July 2022, the estate of Jeffery Ewing moved for an order to show
cause as to why Michael Ewing should not be held in contempt for failure to
2 Filed by Clerk of Supreme Court 07/13/23
deliver the items of personal property. That motion was amended in September
2022 to address damage to the home while in custody of the personal
representative, Michael Ewing. In October 2022, the court issued its order on
motion for order to show cause finding Michael Ewing to be in contempt of
court and awarding damages of $17,915.35 and attorney’s fees of $1,000.00 as
a sanction. The court then offset the amount owed by the Jeffery Ewing estate
to the Chiyoko Ewing estate for administrative expenses by amounts owed to
the Jeffery Ewing estate by Michael Ewing. Michael Ewing appeals.
II
[¶7] Michael Ewing asserts the district court made various errors regarding
the formation of contracts between Jeffery Ewing and himself and his siblings
for the conveyance of their interests in Chiyoko Ewing’s home. We will address
each contractual formation issue in turn.
A
[¶8] Michael Ewing argues the district court erred in finding contracts
existed between Jeffery Ewing and his siblings because the parties were not
capable of contracting. Michael Ewing argues he and his siblings never owned
any interest in the real property and thus were incapable of contracting.
Michael Ewing argues that upon the death of Chiyoko Ewing, the real property
was owned by the estate of Chiyoko Ewing.
[¶9] The standard of review for capacity to contract is well-established:
A district court’s finding on capacity, or lack of capacity, is a
question of fact. We will not set aside a district court’s finding of
fact unless it is clearly erroneous. A finding of fact is clearly
erroneous if it is induced by an erroneous view of the law, if no
evidence supports it, or if, on the entire record, we are left with a
definite and firm conviction a mistake has been made. In a bench
trial, the district court determines credibility issues, which we will
not second-guess on appeal. We do not reweigh evidence or
reassess credibility, nor do we reexamine findings of fact made
upon conflicting testimony. We give due regard to the trial court’s
opportunity to assess the credibility of the witnesses, and the
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court’s choice between two permissible views of the evidence is not
clearly erroneous. A court’s findings of fact must reflect the basis
of its decision and enable this Court to understand its reasoning.
Findings of fact are adequate if we can discern the court’s rationale
for its decision.
Hartman v. Grager, 2021 ND 160, ¶ 14, 964 N.W.2d 482. All persons are
capable of contracting except minors and persons of unsound mind. N.D.C.C. §
9-02-01. See Grager, 2021 ND 160, ¶ 15. A person’s real and personal property
devolves upon death to the persons to whom it is devised subject to
administration. N.D.C.C. § 30.1-12-01. Therefore, property interests pass upon
death, not distribution. Feickert v. Frounfelter, 468 N.W.2d 131, 132 (N.D.
1991). Michael Ewing presented no evidence that he was a minor or of unsound
mind at the time of contracting, nor does the record show he or any of his
siblings were incapacitated in any way. While the record title did not reflect
Michael Ewing and his siblings as owners in 1991, their equal share interests
in the home passed to them upon the death of Chiyoko Ewing in 1989.
Therefore, Michael Ewing and his siblings had a valid interest in the home
upon her death, and no evidence was presented to suggest they were otherwise
incapable of contracting. The district court did not clearly err in finding
Michael Ewing and his siblings were capable to contract.
B
[¶10] Michael Ewing next argues there was insufficient evidence to find the
payment of consideration because no written documentation was provided to
corroborate that Jeffery Ewing had made any payments to Michael Ewing or
Nancy Burkhart for their respective interests in the property.
[¶11] The existence of an oral contract and the extent of its terms are questions
of fact subject to the clearly erroneous standard of review. WFND, LLC v. Fargo
Marc, LLC, 2007 ND 67, ¶ 38, 730 N.W.2d 841. The existence of consideration
is a question of law, but whether consideration has failed is a question of fact.
In re Estate of Jorstad, 447 N.W.2d 283, 285 (N.D. 1989). In the context of a
contract, consideration means any benefit conferred or detriment suffered.
Teigen v. State, 2008 ND 88, ¶ 30, 749 N.W.2d 505. A finding of fact is clearly
4
erroneous if it is not supported by any evidence or 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 view of the law. WFND, 2007 ND 67, ¶ 13.
[¶12] The district court specifically found that all the siblings, including
Michael Ewing, testified that they knew it was Jeffery Ewing’s intent to
purchase their shares of the home. The court found the siblings agreed Jeffery
Ewing would purchase their shares for $7,437.50 each. This value was
calculated by subtracting the balance of the unpaid mortgage from the
assessed value of the home and dividing the difference by the number of
siblings. Although the court found no written documentation was provided to
corroborate that Jeffery Ewing had made any payments to Michael Ewing for
his interest in the home, this issue came down to the credibility of the
witnesses at trial. The district court specifically found the testimony of Pennie
Korynta to be credible regarding payments Jeffery Ewing made for the
property to the other siblings. Korynta testified Jeffery Ewing made payments
to his siblings for their shares in the property. We will not reassess the
credibility determinations made by the court regarding Korynta’s testimony of
the payments made by Jeffery Ewing to the siblings for the home. See Grager,
2021 ND 160, ¶ 14. We will not second-guess the district court on its credibility
determinations made during a bench trial. Miller v. Nodak Ins. Co., 2023 ND
37, ¶ 12, 987 N.W.2d 369. The court found credible the testimony presented by
the estate of Jeffery Ewing that all the siblings agreed to sell their interests in
the home and that each was paid, thus creating a benefit conferred in selling
their share of the home to Jeffery Ewing for payment. The court did not find
Michael Ewing’s testimony to the contrary as credible. The court did not err in
finding consideration existed for the contract.
C
[¶13] Michael Ewing next argues the district court erred in finding mutual
assent to all essential terms of the contract because the testimony from the
siblings was that they never agreed on a purchase price.
5
[¶14] There must be mutual intent to create a legal obligation. Lire, Inc. v.
Bob’s Pizza Inn Restaurants, Inc., 541 N.W.2d 432, 434 (N.D. 1995). Under
some circumstances, an inference of assent is necessary. B.J. Kadrmas, Inc. v.
Oxbow Energy, L.L.C., 2007 ND 12, ¶ 13, 727 N.W.2d 270. When there is a
voluntary acceptance of the benefit of a transaction it is the equivalent to
consent to the obligations arising from it so far as the facts are known or ought
to be known to the person accepting. Id. (citing N.D.C.C. § 9-03-25). As
discussed in detail in the previous section, all the siblings, including Michael
Ewing, testified that they knew it was Jeffery Ewing’s intent to purchase their
shares of the home. The district court found the siblings came to the agreed
upon purchase price based on the value of the house less the unpaid mortgage,
divided by the number of siblings. The court found that although there was not
a written contract between Michael Ewing and Jeffery Ewing, the two had
agreed upon the value of Michael Ewing’s share and the sale of that share to
Jeffery Ewing. While the siblings may have testified differently than Pennie
Korynta, these findings are supported by the record and we will not reweigh
the evidence. The court’s finding that mutual assent existed between the
parties for the contract was not clearly erroneous.
D
[¶15] Michael Ewing next argues the district court erred in finding partial
performance of an oral agreement sufficient to remove it from the statute of
frauds.
[¶16] An agreement for the sale of real property, or of an interest therein, must
generally be in writing under the statute of frauds. N.D.C.C. § 9-06-04(3). The
statute of frauds makes a contract for the sale of real property invalid unless
it is in writing. Lund v. Swanson, 2021 ND 38, ¶ 9, 956 N.W.2d 354. However,
part performance may remove an agreement from the statute of frauds. City of
Glen Ullin v. Schirado, 2021 ND 72, ¶ 15, 959 N.W.2d 47. In order to succeed
on a claim of part performance, the claimant must show that the alleged part
performance is consistent only with the existence of the alleged oral contract.
Trosen v. Trosen, 2014 ND 7, ¶ 24, 841 N.W.2d 687. The acts relied upon must
be such that they “change the plaintiff ’s position and would result in fraud or
6
hardship upon the plaintiff if the contract were not executed or enforced.” Id.Valuable, substantial, and permanent improvements may be considered part
performance. Broten v. Broten, 2015 ND 127, ¶ 10, 863 N.W.2d 902.
[¶17] Michael Ewing claims a finding of partial performance removing an oral
agreement from the statute of frauds is a question of law. The authority he
relied on does not support his argument. Part performance is an equitable
argument which was tried to the district court. See Trosen, 2014 ND 7, ¶ 20.
The standard of review of a bench trial is clear:
In an appeal from a bench trial, the trial court’s findings of fact are
reviewed under the clearly erroneous standard of N.D.R.Civ.P.
52(a) and its conclusions of law are fully reviewable. A finding of
fact is clearly erroneous if it is induced by an erroneous view of the
law, if there is no evidence to support it, or if, after reviewing all
the evidence, we are left with a definite and firm conviction a
mistake has been made. In a bench trial, the trial court is the
determiner of credibility issues and we do not second-guess the
trial court on its credibility determinations.
Id.[¶18] Partial payment of the purchase price alone is not justification for
enforcing an oral contract to convey land, but partial payment together with
other acts such as possession or the making of valuable improvements may be
sufficient to take a contract out of the statute of frauds. Schirado, 2021 ND 72,
¶ 15. The improvements made must be valuable, substantial, and permanent.
Id. In Williston Co-op Credit Union v. Fossum, we affirmed the district court
when it found constructing and operating a business on the property and
paying approximately $25,000 towards the purchase price of the property were
sufficient to find part performance. 459 N.W.2d 548, 552 (N.D. 1990).
[¶19] The district court here found it was undisputed Jeffery Ewing paid the
insurance, utilities, real estate taxes, and the mortgage on the property. The
court found credible Pennie Koynta’s testimony that Jeffery Ewing paid each
siblings’ share of the home, and the actions Jeffery Ewing took to substantially
improve the property demonstrated the parties had orally agreed to transfer
7
the property to him. The court found Jeffery Ewing substantially and
permanently improved the property by installing fencing, pavers, a deck, and
concrete. He also re-shingled the house, poured a new concrete driveway, and
built a substantial addition to the garage, expanding it from one or two stalls
to four stalls. He also lifted the home off its foundation, dug out the ground
beneath it, and increased the size of the basement. These improvements are
similar to the permanence and importance of the improvements made in
Fossum—constructing a new building on the property. The district court’s
finding that the improvements made by Jeffery Ewing were substantial and
permanent is supported by the evidence. The court specifically found “[t]he
actions taken in the improvements made to the Property with no protest by
Nancy Burkhart or by Michael Ewing clear[ly] and convincingly demonstrate
the parties had orally agreed to transfer the Property to Jeffery.” The court’s
findings regarding substantial performance removing the oral contract from
the statute of frauds are not clearly erroneous.
III
[¶20] Michael Ewing next argues the district court erred in finding the
personal property that remained in the home became property of the Jeffery
Ewing estate because Chiyoko Ewing’s will left the property equally to all four
of her children. In an appeal from a judgment entered after a bench trial, this
Court reviews the district court’s legal conclusions de novo and its factual
findings under the clearly erroneous standard. In re Estate of Lindvig, 2020
ND 236, ¶ 7, 951 N.W.2d 214.
[¶21] Michael Ewing claims various items of personal property identified in
the document he created entitled “Inventory and Appraisement” should have
been awarded to him rather than the estate of Jeffery Ewing. This assertion
ignores the district court’s finding of fact that the siblings already divided the
personal property in the home four ways after Chiyoko Ewing’s death and that
the items listed in the “Inventory” document were items the siblings agreed to
assign to Jeffery Ewing. Following the first evidentiary hearing, the district
court found that the children had, by agreement, divided the personal property
amongst themselves after Chiyoko Ewing’s death. At the second evidentiary
8
hearing, Pennie Korynta corroborated this and testified that, following
Chiyoko Ewing’s death, and while Korynta was living in the home, the siblings
met at the home and went through all the personal property and distributed it
equally. The court found Michael Ewing’s list of personal property did not
accurately reflect the personal property that was in Chiyoko Ewing’s estate at
the time of her death and does not reflect to whom the property was
distributed. The court found Michael Ewing’s testimony not credible. The court
found all personal property items, except two, belonged to the estate of Jeffery
Ewing per the distribution the siblings agreed to after Chiyoko Ewing’s death.
We are not convinced the court’s findings are clearly erroneous.
IV
[¶22] Michael Ewing next argues the district court erred in finding he failed to
maintain the estate property as the personal representative. A personal
representative is a fiduciary who shall observe the standards of care applicable
to trustees. N.D.C.C. § 30.1-18-03(1). Whether a personal representative
breached a fiduciary duty is a question of fact. In re Estate of Gleeson, 2002 ND
211, ¶ 17, 655 N.W.2d 69. A trial court’s finding of fact will not be set aside
unless it is clearly erroneous. Id.[¶23] The district court found Michael Ewing failed to properly maintain the
home as personal representative. This finding was based on testimony at the
evidentiary hearing showing the home sustained damages of $10,987 for mold
remediation and $6,928.35 for restoration. The record supports the court’s
finding that Michael Ewing breached his duty on numerous occasions. He
failed to obtain insurance for the home. He did not care for the lawn or remove
snow. He did not keep up with payment for the utilities, which resulted in
water damage when excessive rain came and the sump pump did not operate.
Michael Ewing’s neglect of the property allowed mold to grow. The court’s
finding Michael Ewing failed to maintain the home as personal representative
is not clearly erroneous.
9
V
[¶24] Michael Ewing next argues the district court erred in finding the heirs
of the estate individually responsible for administration costs of the estate. He
argues he should have been reimbursed for these costs as the personal
representative.
[¶25] Under N.D.C.C. § 30.1-18-19, a personal representative may be entitled
to reasonable compensation for his services. In re Estate of Albrecht, 2020 ND
27, ¶ 31, 938 N.W.2d 151. The review of fees paid or taken by the personal
representative is left to the sound discretion of the district court. In re Estate
of Wicklund, 2014 ND 64, ¶ 16, 844 N.W.2d 565. This Court should not overturn
the district court’s decision on a personal representative’s compensation or fees
paid absent a showing of an abuse of discretion. Id. A court abuses its discretion
when it acts in an arbitrary, unreasonable, or unconscionable manner, it
misinterprets or misapplies the law, or when its decision is not the product of
a rational mental process leading to a reasoned determination. Puklich v.
Puklich, 2022 ND 158, ¶ 16, 978 N.W.2d 668.
[¶26] The district court explained that it denied Michael Ewing’s various
claims for reimbursement for his services as personal representative and costs
due to him failing to provide evidence and detailed receipts as to the expenses
he allegedly incurred as personal representative. He claimed to make trips
from Minot to Grand Forks to maintain the property; however, Michael Ewing
offered no evidence on what work was done on those alleged trips. Michael
Ewing did not provide sufficient evidence as to why he should be reimbursed
for all of his claimed expenses as personal representative. We conclude the
court’s findings determining the fees and expenses of the personal
representative are not clearly erroneous. Likewise, the court did not abuse its
discretion in assigning the costs of estate administration equally amongst the
siblings.
VI
[¶27] Michael Ewing next argues the district court erred in offsetting amounts
owed by the estate of Jeffery Ewing to him, as personal representative, based
10
on the remedial damages it ordered he pay. The estate of Jeffery Ewing owed
Michael Ewing, as personal representative, the amount of $11,627.34 for
attorney’s fees, real estate taxes, and utilities paid by Michael Ewing, and for
mileage incurred by Michael Ewing on making trips to the home.
[¶28] Section 30.1-18-12, N.D.C.C., provides that the personal representative
is liable to interested persons for damage resulting from a breach of fiduciary
duty. A district court may make an offset in the distribution of estate property
to compensate a party damaged by a breach of fiduciary duty. In re Estate of
Hogen, 2019 ND 141, ¶ 3, 927 N.W.2d 474. A court may also impose a remedial
or punitive sanction for contempt under N.D.C.C. § 27-10-01.2(1).
[¶29] As discussed in detail above, the district court found Michael Ewing
breached his duty as the personal representative of the estate by failing to
maintain the property. The district court found that as a result of Michael
Ewing’s failure to maintain the property as the personal representative, the
damages caused by Michael Ewing shall be offset against the amounts the
estate of Jeffery Ewing owes him. The court had the power to make an offset
because there was a finding of a breach of fiduciary duty. The court also found
Michael Ewing to be in contempt for failing to deliver the items of personal
property to the estate of Jeffery Ewing as required by the amended judgment.
These findings are supported by the record. Therefore, we conclude the district
court did not abuse its discretion in offsetting the amount owed to Michael
Ewing from the estate of Jeffery Ewing.
VII
[¶30] We have considered the remaining issues and arguments raised by
Michael Ewing and conclude them to be either without merit or unnecessary
to our decision. We affirm the district court’s order and judgment.
[¶31] Jon J. Jensen, C.J.
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
Douglas A. Bahr
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