In the Matter of the Estate of: Rosalie S. Allard, Decedent. ( 2015 )

This opinion will be unpublished and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
A15-0296
In the Matter of the Estate of: Rosalie S. Allard, Decedent
Filed December 21, 2015
Affirmed in part, reversed in part, and remanded
Rodenberg, Judge
Hennepin County District Court
File No. 27-PA-PR-09-1585; 27-08-3379
Mary R. Allard, Prior Lake, Minnesota (pro se appellant)
Jon L. Farnsworth, Felhaber Larson, Minneapolis, Minnesota (for respondent Nicolas
Allard)
Paula Duggan Vraa, Larson King, LLP, St. Paul, Minnesota (for respondents Kim Tophen
and Senior Options, Inc.)
Considered and decided by Schellhas, Presiding Judge; Rodenberg, Judge; and
Reilly, Judge.
UNPUBLISHED OPINION
RODENBERG, Judge
On appeal from the probate court’s approval of the final accounting in her deceased
mother’s estate, appellant Mary Allard argues that the court (1) lacked authority to act
concerning the exempt homestead property, (2) improperly allowed estate administration
expenses to be charged against property subject to the homestead allowance, (3)
misconstrued decedent’s will, (4) clearly erred in determining that the personal
representative (PR) did not breach her fiduciary duties by improperly liquidating assets,
(5) failed to properly supervise the PR’s administration of the estate, (6) erred in failing to
make findings on the issue of unclean hands regarding the actions of respondent Nicolas
Allard, and (7) erred in failing to address her request for attorney fees pursuant to Minn.
Stat. §§ 524.3-712 and 524.3-720 (2014). Respondents and cross-appellants Kimberly
Tophen and Senior Options, Inc., argue that the probate court erred in determining that
decedent’s cooperative share was a “homestead” under Minn. Stat. § 524.2-402 (2014).
We affirm in part, reverse in part, and remand for further proceedings.
FACTS
Decedent Rosalie Statz Allard died testate on November 8, 2009. She was survived
by her two adult children, appellant and respondent Nicolas Allard. At the time of her
death, decedent lived in a condominium cooperative community located in Edina,
Minnesota.
Decedent validly executed her will on August 21, 1980. The will nominated
appellant as PR and directed the PR to pay all “funeral expenses, expenses of last illness,
other claims allowed in the administration of [the] estate [and] . . . all death taxes of any
character, including interest and penalties . . . .” The will directed the PR to “satisfy all
gifts contained in this Will as soon as deemed convenient by [the] executor” and gave
“equal shares” to decedent’s surviving children in “the interest [she] may have in household
goods and furnishings, books, works of art, jewelry, articles of personal use, automobiles,
and all other tangible personal property not otherwise disposed of by this Will.” The will
further gave decedent’s residuary estate in equal shares to decedent’s surviving children.
2
2008 Codicil
In 2008, appellant’s relationships with decedent and Nicolas Allard became
“contentious.” In April 2008, decedent appointed respondent and cross-appellant Kim
Tophen of Senior Options, Inc., as her attorney-in-fact under a power-of-attorney. On
September 12, 2008, decedent validly executed a codicil to her will designating Tophen as
her PR, Nicolas Allard as her first-alternate choice as PR, and appellant as her second-
alternate choice as PR. Decedent died fourteen months later.
The Probate Process
On December 10, 2009, Tophen petitioned to be formally appointed PR of
decedent’s estate. Appellant objected and requested that she be appointed PR. Appellant
later withdrew her objection to Tophen’s appointment, and Tophen was appointed PR in a
supervised administration as agreed by the parties.
In July 2010, the PR discovered that a significant amount of personal property had
been removed from decedent’s cooperative unit. The PR contacted police and learned that
appellant had removed the property over a three- or four-month period. Appellant had also
accessed decedent’s safety deposit box and removed some personal family documents,
jewelry, coins, and savings bonds. The missing personal property from the cooperative
unit were not returned to the estate until November 2010, and the items missing from the
safety deposit box were not returned until December 2011. The PR maintains that her
ability to timely complete an inventory was impaired because of these missing items.
3
In December 2010, appellant filed complaints with the Office of Lawyers
Professional Responsibility Board against the PR (a non-lawyer), the estate’s attorney, and
Nicolas Allard’s attorneys. These complaints were dismissed without investigation.
In December 2010, the PR attempted to arrange an estate sale with the cooperative
community’s authorized company. In January 2011, she sent a letter to both appellant and
Nicolas Allard informing them of the estate sale and allowing them to go through a pre-
sale to select items of interest. The pre-sale was intended to allow the beneficiaries to
“purchase” items for a determined value. Because the estate was then solvent, any
payments the beneficiaries made or owed would be accounted for in the final account and
in the final distribution.
On February 4, 2011, appellant moved for a temporary restraining order (TRO) to
prohibit the PR from selling, donating, or disposing of decedent’s personal property and
gold coins. Appellant demanded that all of the personal property be professionally
evaluated before an estate sale was held. That same day, the probate court issued a TRO
prohibiting the PR from selling, donating, or disposing of decedent’s coins until she
provided an inventory of the estate pursuant to Minn. Stat. § 524.3-706 (2010) and until
the probate court determined the assets’ fair market value, the administration’s reasonable
expenses, and the necessity to sell devised assets to pay the reasonable expenses. On
February 11, 2011, the PR objected to the TRO and filed the completed inventory. On
February 22, 2011, the probate court issued an order determining that the coins were
tangible personal property, enjoining the PR from selling or otherwise disposing of the
coins without further court order, and reserving any issues of abatement of specific devises.
4
On March 15, 2011, appellant moved to remove the PR. Nicolas Allard opposed
the motion. On June 15, 2011, the probate court issued an order prohibiting the PR “from
performing any acts or activities as the personal representative,” except for preparing to
liquidate the estate’s stock shares, preparing a final account, and to preserve the estate’s
assets until an evidentiary hearing on appellant’s petition. The record does not reflect that
any hearing was held until November 21, 2011.
Between April and November 2011, appellant and Nicolas Allard attempted to
mediate their differences. Mediation failed, because appellant maintained that the
beneficiaries needed to remove items from the unit before continuing the mediation
process. On November 1, 2011, the PR petitioned to withdraw due to non-payment of fees
and because of her belief that “[appellant] will never cooperate with [her] in the
administration of her mother’s estate.” Appellant responded on November 18, 2011,
agreeing with the PR’s request for withdrawal, but claiming that she had tried to cooperate
and that the PR was merely trying “cut bait and run.” Nicolas Allard objected to the PR’s
withdrawal and requested that any excess attorney or PR fees and expenses be charged
against appellant because of her “bad faith actions.” At the November 21, 2011 hearing,
the probate court ordered that: (1) the beneficiaries pay their own appraiser fees; (2) the
PR’s time be charged to the estate; (3) all appraisals, the selection of sentimental property,
and appellant’s return of the still-missing jewelry occur by December 31, 2011; and (4) the
PR file an amended final account.
On January 19, 2012, the PR filed a petition to approve the sale and distribution of
personal property and liquidation of the remaining estate assets. On February 15, 2012,
5
the probate court held a bench trial to determine the value of personal property, determine
the distribution of sentimental property, and authorize the PR’s sale of the personal
property. On February 28, 2012, the probate court issued an order dividing the requested
sentimental property and permitting the PR to sell and dispose of the remaining personal
property at her sole discretion. In April 2012, the cooperative share was sold. The
remaining personal property was moved to a different location for an estate sale that was
held in June 2012. The remaining coins were sold on September 21, 2012.
On February 14, 2013, appellant commenced a civil lawsuit against Nicolas Allard,
the PR, the estate’s attorney, and others not associated with this probate matter (Hennepin
County file number 27-CV-13-2714). The district court granted summary judgment to the
PR on appellant’s claims for alleged violation of Minn. Stat. § 523.21 (2012) (breach of
fiduciary duty under a power-of-attorney), intentional infliction of emotional distress,
negligence, fraud, conspiracy, and aiding or abetting tortious conduct. The district court
also granted summary judgment to Nicolas Allard on appellant’s claims against him for
intentional infliction of emotional distress, conspiracy, and aiding or abetting tortious
conduct. The district court allowed appellant’s claims for trespass and vicarious liability
to continue. Appellant did not appeal the district court’s order in that case, and the record
on appeal does not reflect what became of appellant’s remaining claims in that case.
On August 6, 2013, the probate court ordered the PR to file the final account, which
was done on September 24, 2013. On October 24, 2013, appellant moved for a continuance
to complete discovery regarding the final account. On October 28, 2013, appellant
6
requested a hearing concerning her claims against the PR for breach of her fiduciary duties
and against Nicolas Allard for “unclean hands.”
On January 29, 2014, the probate court dismissed appellant’s claims as collateral
attacks on the district court’s order in appellant’s civil lawsuit against the PR, Nicolas
Allard, and others not involved with this appeal. Appellant appealed that order, and, after
informal memoranda addressing the immediate appealability of the January 29, 2014 order,
we issued a special term order dismissing appellant’s appeal as taken from an interlocutory,
nonappealable order. See In re the Estate of Rosalie S. Allard, Deceased, No. A14-0511
(Minn. App. Apr. 29, 2014).
The probate court suspended the proceedings during appellant’s first appeal and
ordered the PR to file and serve an amended final account and complete responses to
discovery requests by April 4, 2014. On April 4, 2014, the PR filed the amended final
account. A second amended final account was filed on June 30, 2014.
Appellant objected to the second amended final account, arguing that the PR (1) did
not act in the estate’s best interest; (2) “egregiously” erred in the administration, causing
substantial losses of estate assets; (3) used estate assets to “wage a personal vendetta”
against appellant; (4) impermissibly allowed tax liabilities and penalties to the estate; (5)
overstated the value of miscellaneous personal property; (6) failed to consider the
cooperative share under the homestead exemption in Minn. Stat. § 524.2-402 (2012) and
allowed the value of the cooperative share to be reduced by various expenses; (7) failed to
properly value decedent’s savings bonds and shares; and (8) improperly incurred over
$65,000 in professional fees. Appellant also requested attorney fees.
7
Trial and Order
On October 27-29, 2014, the probate court held a bench trial on the second amended
final accounting and appellant’s breach-of-fiduciary-duty claims against the PR. The
parties disagreed concerning the nature and character of decedent’s cooperative share.
According to cooperative documents, the cooperative holds title to the entire project,
including the individual dwelling units and common areas. Cooperative members hold
both a membership in the form of shares in the cooperative corporation and an occupancy
agreement (comparable to a lease) for the individual dwelling unit. The cooperative’s
information bulletin states: “Member owns Membership and Occupancy Agreement. Such
ownership interest constitutes personal property.” The cooperative requires that the shares
only be transferred or sold either to the cooperative or to an individual approved by the
cooperative.
On December 17, 2014, the probate court issued an order determining that the PR
had not breached her fiduciary duties and that appellant’s actions had caused the five-year
delay in the estate’s administration. The probate court found that the estate incurred the
following expenses: (1) $43,416.39 to the estate’s attorney (plus $242.11 as a pre-death
expense); (2) $8,284.50 to the estate’s secondary attorney; (3) $13,550.50 to the PR;1 (4)
$2,350 to the accounting firm; (5) federal taxes of $3,694; and (6) state taxes of $864 for a
total of $72,401.50. The probate court determined that only $34,228.69 remained for
1
This number appears to come from the PR’s post-trial briefing. The PR’s testimony at
trial was that she had incurred $13,492.61 in fees at the time of the October 27-29 trial.
The difference is de minimus, in context.
8
distribution. The probate court therefore ordered that the remaining funds on hand be
distributed 64 percent to the estate’s attorney, 12 percent to the estate’s secondary attorney,
20 percent to the PR, and 4 percent to the accounting firm.
The probate court also determined that decedent’s cooperative share was a
“homestead” under Minn. Stat. § 524.2-402 (2014), and therefore exempt from
administrative expenses. Decedent’s cooperative share was sold in April 2012, and the
estate received a “net share value refund” of $6,080.20. The refund of the share was less
than its full value of $35,910 on the date of death due to the following expenses: unpaid
monthly charges from November 2009 until April 2012 of $26,511.80; required
refurbishing costs of $2,600, and a transfer fee of $718. The probate court ordered that the
net refund be divided equally between appellant and Nicolas Allard. This appeal followed.
DECISION
We evaluate a probate court’s findings concerning wills and trusts under a clearly
erroneous standard, and we review its conclusions of law de novo. In re Trust Created
Under Agreement with Lane, 660 N.W.2d 421, 425-26 (Minn. App. 2003) (citation
omitted). “A finding is clearly erroneous if the reviewing court is left with a definite and
firm conviction that a mistake has been made.” In re Estate of Neuman, 819 N.W.2d 211,
215 (Minn. App. 2012) (citation omitted).
I. Homestead Status of Cooperative Share
The PR argues by cross-appeal that the probate court erred in determining that the
cooperative share is a homestead under Minn. Stat. § 524.2-402 (2014). The term
“homestead” is not defined in that statute or elsewhere in the Uniform Probate Code.
9
However, the statute provides that homestead includes a “manufactured home which is the
family residence.” Id. (a). Homestead is also referred to as “real estate.” Id. (b) (stating
that the “homestead . . . descends as other real estate”). Moreover, Minnesota cooperative
law recognizes cooperative shares as real property in some instances, see Minn. Stat. §
515B.3-116(h)(2) (concerning foreclosure of association’s lien where “unit owners’
interests are real estate”), and as personal property in other instances, see Minn. Stat. §
515B.3-116(h)(3) (concerning foreclosure of association’s lien where “unit owners’
interests are personal property”).
“[T]he underlying rationale of [Minn. Stat. § 524.2-402 is] that ‘the surviving
spouse and children have an emotional attachment to their home and a strong economic
interest in either its continued occupancy or its availability as an asset.’” In re Estate of
Bonde, 694 N.W.2d 74, 77 (Minn. App. 2005) (quoting In re Estate of Riggle, 654 N.W.2d
710, 714 (Minn. App. 2002)). We have previously looked to debtor-creditor law in
considering whether property has homestead status for purposes of treatment of that
property under the probate code, because debtor-creditor law “more closely parallels the
objective of the probate code provisions for descent of the homestead.” Id.2 Minn. Stat. §
510.01 (2014) defines a homestead as “[t]he house owned and occupied by a debtor as the
debtor’s dwelling place, together with the land upon which it is situated to the amount of
area and value hereinafter limited and defined . . . .”
2
We note that the probate court considered Minnesota’s tax statutes rather than debtor-
creditor law to determine the homestead issue. Our review is de novo and we give no
deference to the probate court’s legal analysis, which departs from Minnesota’s debtor-
creditor homestead law.
10
Minnesota appellate courts have historically taken a liberal view concerning
homestead claims. See, e.g., Denzer v. Prendergast, 267 Minn. 212, 126 N.W.2d 440(1964) (holding that an owner of a remainder in fee subject to a life estate is entitled to an
exemption when he is in possession of the house under an oral agreement); In re Emerson,
58 Minn. 450, 60 N.W. 23 (1894) (holding that a person with a leasehold interest is entitled
to the exemption when in possession during his tenancy); Kaser v. Haas, 27 Minn. 406, 7
N.W. 824 (1881) (holding that an owner with an undivided interest in land occupied as a
homestead is entitled to the homestead exemption); Cargill, Inc. v. Hedge, 358 N.W.2d
490, 492 (Minn. App. 1984) (holding that individuals are entitled to claim a homestead
exemption against land assigned to their family farm corporation), aff’d, 375 N.W.2d 477(Minn. 1985).
Members in the cooperative where decedent lived hold shares in the cooperative
corporation and have an occupancy agreement (comparable to a lease) for the individual
dwelling unit. That members occupy units under a lease arrangement is not inconsistent
with the units’ status as homesteads. The Minnesota Supreme Court has determined that
an individual who holds a leasehold interest and resides on the property is entitled to the
homestead exemption. Emerson, 58 Minn. at 453, 60 N.W. at 23. There is no dispute that
decedent resided in her cooperative unit for many years until her death. It is also
undisputed that appellant and Nicolas Allard have a “strong economic interest in . . . [the
cooperative share’s] availability as an asset.” Bonde, 694 N.W.2d at 77. Moreover, and
mindful that Minnesota tax statutes are not determinative of this issue, it is notable that
11
Minn. Stat. § 273.124 (2014) grants homestead status to cooperative units occupied by the
shareholder.
Based on the record in this case, the PR has not shown that the district court erred
in treating decedent’s cooperative share as a homestead under the Uniform Probate Code.3
II. Jurisdiction to Address the Homestead Property
Appellant argues that the probate court lacked jurisdiction over the disposition of
the cooperative share because it is a homestead property under Minn. Stat. § 524.2-402.
Although appellant did not raise this argument before the probate court,4 and although the
probate court did not address the issue in the appealed-from order, appellant appears to be
arguing that the probate court lacked subject-matter jurisdiction. Because subject-matter
jurisdiction goes to a court’s authority to hear a particular class of actions, lack of subject-
matter jurisdiction can be raised at any time, including for the first time on appeal. Minn.
R. Civ. P. 12.08(c); Cochrane v. Tudor Oaks Condo. Project, 529 N.W.2d 429, 432 (Minn.
App. 1995), review denied (Minn. May 31, 1995).
We review legal issues concerning jurisdiction de novo. McLain v. McLain, 569
N.W.2d 219, 222 (Minn. App. 1997), review denied (Minn. Nov. 18, 1997). Here,
3
The PR asks us to issue a rule of general future application regarding the homestead status
of all cooperative units. Whether other cooperative units are properly to be treated as
homestead property is not before us. Here, he PR has not affirmatively demonstrated error
in the probate court’s determination that this particular unit was decedent’s homestead. See
Loth v. Loth, 227 Minn. 387, 392, 35 N.W.2d 542, 546 (1949) (“It is well to bear in mind
that on appeal error is never presumed. It must be made to appear affirmatively before
there can be reversal.”). We limit our holding to the facts of this case.
4
To the contrary, appellant repeatedly requested that the district court address the
cooperative share.
12
however, there is no merit to appellant’s position. An interest in a homestead, remainder
or otherwise, is clearly subject to the jurisdiction of the probate court. See Minn. Stat.
§ 524.2-402(a) (providing for probate disposition of homestead property); Bengtson v.
Setterberg, 227 Minn. 337, 357-58, 35 N.W.2d 623, 635 (1949) (stating that a probate court
has jurisdiction over homestead property). Therefore, the probate court did not lack subject
matter jurisdiction to address the homestead property.
III. Expenses Charged against the Homestead Exemption
Appellant also argues that the probate court erred in permitting administrative costs
to be charged against the exempt homestead property. Minn. Stat. § 524.2-402(c) provides
that
If the homestead passes by descent or will to the spouse or
decedent’s descendants . . . it is exempt from all debts which
were not valid charges on it at the time of decedent’s death
except that the homestead is subject to a claim filed pursuant
to section 246.53 for state hospital care or 256B.15 for medical
assistance benefits.
(Emphasis added.) Here, the probate court did not expressly permit administrative costs to
be charged against the cooperative share. However, the cooperative share’s value of
$35,910 at the date of the sale was reduced by charges levied by the cooperative community
after November 2009. These post-death charges were not “valid charges . . . at the time of
decedent’s death.” Id.; see, e.g., Matter of Estate of Peterson, 365 N.W.2d 300, 302-03
(Minn. App. 1985) (holding that a bank’s advance of $8,420.12 to cover taxes and
insurance to protect the homestead during probate “is the responsibility of the estate, not
the beneficiary”). Therefore, we must reverse the probate court’s homestead disposition
13
and remand for the probate court to distribute the cooperative share’s value under Minn.
Stat. § 524.2-402(c). It is for the probate court on remand to determine the precise
distribution. The probate court may, in its discretion, reopen the record.5
IV. Decedent’s Will
Appellant argues that the probate court misconstrued decedent’s will. The legal
construction of an unambiguous written document is reviewed de novo. In re Trust
Created by Hill, 499 N.W.2d 475, 482 (Minn. App. 1993), review denied (Minn. July 15,
1993).
“The primary purpose of construing a will is to discern the testator’s intent.” In re
Estate & Trust of Anderson, 654 N.W.2d 682, 687 (Minn. App. 2002), review denied
(Minn. Feb. 26, 2003). “[W]e determine the testator’s intent from a full and complete
consideration of the entire will.” In re Estate of Lund, 633 N.W.2d 571, 574 (Minn. App.
2001); see In re Shields, 552 N.W.2d 581, 582 (Minn. App. 1996) (“In construing a will,
the cardinal rule is that the testator’s intention is to be gathered from the language of the
will itself.”), review denied (Minn. Oct. 29, 1996).
Extrinsic evidence of the meaning of a will is admissible only
when the text of the will is ambiguous. In re Will of Hartman,
347 N.W.2d 480, 483 (Minn. 1984); cf. Turner v. Alpha Phi
Sorority House, 276 N.W.2d 63, 66 (Minn. 1979) (stating that
the meaning of a written contract presents a question of law
unless there is ambiguity and construction depends on extrinsic
evidence, in which case it becomes a question of fact).
5
Appellant also asserts that she is entitled to “restitution” concerning the homestead, an
assertion unsupported by any legal authority. The probate court’s denial of “restitution”
relative to the homestead is affirmed.
14
In re Trusts A & B of Divine, 672 N.W.2d 912, 917 (Minn. App. 2004). A will is ambiguous
if “the language of the will, on its face, may suggest more than one interpretation,” or if,
despite being clear on its face, “surrounding circumstances reveal more than one
construction.” In re Estate of Arend, 373 N.W.2d 338, 342 (Minn. App. 1985).
Here, the will by its terms gives “equal shares” to decedent’s surviving children in
“the interest [she] may have in household goods and furnishings, books, works of art,
jewelry, articles of personal use, automobiles, and all other tangible personal property not
otherwise disposed of by this Will.” The will further gives decedent’s residuary estate in
equal shares to the surviving children.
Appellant appears to argue that the probate court erred in allowing the PR to conduct
an estate sale before which the beneficiaries could “purchase” items. The estate’s attorney
testified that the process used by the PR is customary in similarly modest estates. The pre-
sale was intended to allow the beneficiaries to “purchase” items for a determined value to
assist in equalizing the overall distribution of personal property. Because the estate was
solvent at the time of the initial proposed estate sale in January 2011, any payments the
beneficiaries made or owed for such items would be accounted for in the final account and
in the final distribution.
Appellant also appears to argue that the probate court erred in determining that the
personal property items she requested were “sentimental property” pursuant to Minn. Stat.
§ 525.152(3)(b) (2012), which would require her to pay for the selected items or deduct
the value of the items from her share of the estate. Minn. Stat. § 525.152(5)(a). However,
appellant herself petitioned for the items to be considered sentimental property. Appellant
15
also waived this issue by taking the exact opposite position before the probate court to the
position she now takes on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988)
(stating both that this court will not address matters not argued to or considered by the
district court and that a party cannot argue a new theory on appeal).
Appellant also ignores the section of the will directing the executor or a court-
appointed PR to pay all “funeral expenses, expenses of last illness, other claims allowed in
the administration of [the] estate and . . . all death taxes of any character, including interest
and penalties . . . .” (emphasis added). This section corresponds with Minn. Stat. §§ 524.2-
403(e) and 524.3-805(a)(1-7) (2014), which provides that the rights of adult children to the
personal property exemption are subject to the costs and expenses of administration, debts,
and taxes. The will itself also directs the PR to “satisfy all gifts contained in this Will as
soon as deemed convenient.” Here, the PR was unable to “satisfy all gifts” quickly due to
appellant’s objection to her appointment, appellant’s removal of a significant amount of
decedent’s personal property, and appellant’s lengthy delay in returning that property. The
probate court did not err in subjecting decedent’s personal property to the estate’s
administrative expenses.
The probate court found that the estate incurred the following expenses:
(1) $43,416.39 to the estate’s attorney (plus $242.11 as a pre-death expense); (2) $8,284.50
to the estate’s secondary attorney; (3) $13,550.50 to the PR; (4) $2,350 to the accounting
firm; (5) federal taxes of $3,694; and (6) state taxes of $864, for a total of $72,401.50. On
appeal, appellant does not challenge the amount of these expenses. She argues only that
they were unnecessarily incurred because of the PR’s “multiple breaches of fiduciary
16
duties” and “uber-aggressive constant litigation with [appellant]” to “run[] up the costs of
administration [and do] every other conceivable thing to enlarge their fees to the tune of
bankrupting the estate and making the beneficiaries pay them even more.”
As discussed below, the probate court did not clearly err in determining that the PR
did not breach her fiduciary duties. Further, and considering appellant’s own testimony
that she incurred $217,926.26 in legal fees during the course of all of this, the probate court
did not err either in determining that the estate administration’s much smaller total
expenses were reasonable or in interpreting the will as requiring payment of those expenses
before the division of the remaining property.
V. Breach of Fiduciary Duties and Improper Liquidation of Assets
Appellant argues that the district court clearly erred in finding that the PR had not
breached any fiduciary duties or improperly liquidated assets.6 A PR owes a fiduciary duty
to the estate. Minn. Stat. § 524.3-703(a) (2014). As such, she must manage the estate’s
assets under the level of care of “a prudent person dealing with the property of another.”
Id. This requires a PR to settle and distribute the estate according to the testator’s will and
in the best interests of the estate. Id.Whether a fiduciary duty has been breached is a question of fact. See, e.g.,
Commercial Assocs., Inc. v. Work Connection, Inc., 712 N.W.2d 772, 778 (Minn. App.
6
Appellant previously appealed the probate court’s January 29, 2014 order dismissing her
claims against the PR as collateral attacks on the district court’s order in appellant’s civil
lawsuit (Hennepin County file number 27-CV-13-2714). On April 29, 2014, we dismissed
appellant’s appeal as taken from an interlocutory, nonappealable order. See In re the Estate
of Rosalie S. Allard, Deceased, No. A14-0511 (Minn. App. Apr. 29, 2014). Appellant does
not appear to have raised those same issues here.
17
2006) (holding that the district court is “the trier of fact in determining the equitable remedy
for a breach of fiduciary duty . . .”); Christensen v. Bonnema, 395 N.W.2d 440, 442-43
(Minn. App. 1986) (holding that whether a surveyor breached his fiduciary duty by
disclosing information to other individuals was an issue of fact). A district court’s findings
of fact will not be overturned unless clearly erroneous. Minn. R. Civ. P. 52.01. We will
only find clear error if we are “left with the definite and firm conviction that a mistake has
been made.” Esselman v. Production Credit Ass’n, 380 N.W.2d 183, 186 (Minn. App.
1986), review denied (Minn. Mar. 21, 1986).
Here, the probate court found that appellant failed to prove that the PR breached any
fiduciary duty. The probate court also found as a fact that the delay in the estate’s
administration was attributable to appellant’s actions.
A. Bad Faith
Appellant argues that the PR acted in bad faith. Many of appellant’s claims of bad
faith arise from conduct of the PR before decedent’s death. Appellant also alleges that the
PR should have taken action concerning non-probate assets. However, appellant cites no
authority that would allow the PR to address non-probate assets.
Appellant further argues that the PR favored Nicolas Allard both by communicating
directly with him and by not contacting police after he had removed property from the
cooperative unit. However, the record indicates that it was appellant who, unlike her
brother, sought to communicate with the PR through counsel rather than directly.7
7
Appellant also sued the PR in a separate case, opposed the PR’s actions from the outset,
objected to the PR’s appointment, and complained to the Office of the Lawyers
18
Additionally, Nicolas Allard contacted the PR shortly after decedent’s death to inform her
that he had a small amount of decedent’s personal property in his possession and that he
had entered the cooperative unit to clean out the refrigerator. Conversely, appellant never
informed the PR that she had entered the cooperative unit and removed property over a
three- to four-month period. The PR discovered the missing property and contacted police
only after her appointment. The PR also discovered that appellant had accessed decedent’s
safety deposit box and removed some personal family documents, jewelry, coins, and
savings bonds. The record supports the probate court’s determination that the PR did not
act in bad faith.
B. Personal Property
Appellant argues that the PR ignored decedent’s will in dividing the personal
property of the estate by way of an estate sale. However, as discussed above, the estate’s
attorney testified that the process used is customary in similarly modest estates and was
intended to assist in equalizing the distribution of personal property as required by the will.
The probate court did not err in determining that the PR’s actions concerning personal
property were proper.
C. Timely Liquidation of the Cooperative Share
The probate court found as a fact that appellant’s conduct caused the delay in
liquidating the cooperative share. This finding is supported by the record. After decedent’s
Professional Responsibility Board about the PR (a non-lawyer), the estate’s attorney, and
Nicolas Allard’s attorneys. Given this level of acrimony and litigation, it is not surprising
that there was little, if any, direct communication between appellant and the PR.
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death in November 2009, appellant challenged the PR’s appointment, resulting in a seven-
month delay. Upon her appointment, the PR discovered that appellant had removed a
significant amount of personal property from the cooperative share unit. Appellant refused
to promptly return the personal property she had removed. When the PR scheduled an
estate sale in January 2011, appellant objected and demanded that all of the personal
property be professionally evaluated, which caused additional delay. Appellant also
attempted to remove the PR, resulting in the June 2011 order prohibiting the PR from doing
anything other than liquidating the estate’s stock and preparing a final account. Appellant
and Nicolas Allard then attempted mediation for seven months. A trial was held on
February 15, 2012 to determine the value of personal property, to award the sentimental
property, and to authorize the PR’s sale of the personal property. On February 28, 2012,
the probate court issued an order dividing the requested sentimental property and
permitting the PR to sell and dispose of the remaining personal property. The cooperative
unit was then sold in April 2012. The record substantially supports the probate court’s
determination that the PR did not fail to timely liquidate the cooperative share.
D. Tax Liability
The probate court determined that state and federal taxes owed for 2009 are valid
debts of the estate. Given its determination that the PR did not violate her fiduciary duties,
the probate court implicitly found that these debts were not incurred as a result of the PR’s
negligence or misconduct in administrating the estate. The PR testified that she was aware
of the potential tax issue. Upon her appointment, she requested 1099 forms from
decedent’s income source. Once the 1099s were gathered, the PR met with an accountant
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and with counsel, who opined that decedent had likely incurred no tax liability for 2009.
In January 2014, the PR consulted with an accounting firm during her preparation of the
final account, and it was then determined that the estate owed taxes for 2009. The record
supports the probate court’s implicit determination that the 2009 tax liability was not the
result of any misconduct by the PR.
VI. Supervision of the Estate’s Administration
Appellant argues that the probate court failed to supervise the PR, “to protect the
appellant and estate; to not cause the damages to the heirs and estate by failing to take
measures against the personal representative to stop or prevent the damages to the estate.”
The Minnesota Probate Code defines a supervised administration as
a single in rem proceeding to secure complete administration
and settlement of a decedent’s estate under the continuing
authority of the court which extends until entry of an order
approving distribution of the estate and discharging the
personal representative or other order terminating the
proceeding. A supervised personal representative is
responsible to the court, as well as to the interested parties, and
is subject to directions concerning the estate made by the court
on its own motion or on the motion of any interested party.
Except as otherwise provided in this part, or as otherwise
ordered by the court, a supervised personal representative has
the same duties and powers as a personal representative who is
not supervised.
Minn. Stat. § 524.3-501.
Appellant appears to dispute the probate court’s acceptance of the second amended
final accounting. She provides no caselaw supporting her claim, and her claims are
inconsistent with the record. Appellant has not shown that the probate court erred in its
approval of the estate’s final account.
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Moreover, the record clearly reflects that the probate court was involved in the
administration of this estate on a regular and almost continuous basis over five years. It
issued several orders restraining the PR’s activities on appellant’s motions. It issued
numerous orders requiring the PR to submit final accounts and amended final accounts.
Finally, the probate court held a three-day trial and allowed post-trial briefing concerning
the final account and appellant’s breach-of-fiduciary duty claims before approving the final
account. The record demonstrates that the probate court did not fail to supervise the PR’s
administration of the estate.
VII. Unclean Hands
Appellant argues that respondent Nicolas Allard should be restrained from “sharing
the remedies that [appellant] may recover for the benefit of the Estate due to his ‘Unclean
Hands.’” Appellant alleges that Nicolas Allard “thwarted” her efforts to preserve and
recover estate assets, contributed to the ongoing litigation proceedings by assisting the PR
to sell assets, and engaging in using the PR for “personal harassment efforts” against
appellant.
The doctrine of “unclean hands” bars a party who has acted inequitably from
obtaining equitable relief. See Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999). The
equitable defense of unclean hands is premised on withholding equitable relief from a party
guilty of illegal or unconscionable conduct. Fred O. Watson Co. v. U.S. Life Ins. Co., 258
N.W.2d 776, 778 (Minn. 1977). “Unclean hands” requires more than “improper purpose”
or recklessness; the doctrine requires illegal or unconscionable conduct or a showing of
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bad faith. Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d 438, 450 (Minn. App.
2001).
Here, the probate court made no findings of fact concerning this issue and appellant
failed to move for a new trial or for amended findings of fact. See Minn. R. Civ. P. 52.02,
59.02. Our caselaw provides that an appellant cannot raise the issue of a district court’s
failure to make factual findings for the first time on appeal. See Metro. Fed. Sav. & Loan
Ass’n v. Adams, 356 N.W.2d 415, 421 (Minn. App. 1984) (citing Nelson v. Nelson, 291
Minn. 496, 189 N.W.2d 413 (1971)), review denied (Minn. Jan. 2, 1985). Further,
appellant seems to be attempting to use “the equitable defense of unclean hands” as a cause-
of-action. See Fred O. Watson Co., 258 N.W.2d at 778 (emphasis added). Nothing in the
record indicates that Nicolas Allard is requesting “equitable relief.” Gully, 599 N.W.2d at
825. The doctrine of unclean hands has no application here.
VIII. Attorney Fees
The probate court did not address appellant’s request for attorney fees based on the
PR’s misconduct because it determined that there was no such misconduct by the PR.
Minn. Stat. §§ 524.3-712 and 524.3-720 permit an interested person to seek recovery for
damages the estate sustains from the PR’s improper exercise of power. Because the PR
did not breach any fiduciary duties, the probate court properly denied appellant’s request
for attorney fees.
Affirmed in part, reversed in part, and remanded.
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