In re Estate of: Alice I. Engman, Decedent. ( 2017 )


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  •                           This opinion will be unpublished and
                              may not be cited except as provided by
                              Minn. Stat. § 480A.08, subd. 3 (2016).
    
                                   STATE OF MINNESOTA
                                   IN COURT OF APPEALS
                                         A16-0805
    
                            In re Estate of: Alice I. Engman, Decedent.
    
                                     Filed January 30, 2017
                                            Affirmed
                                         Johnson, Judge
    
                                 St. Louis County District Court
                                    File No. 69DU-PR-15-54
    
    James W. Balmer, Falsani, Balmer, Peterson & Quinn, Duluth, Minnesota (for appellant
    Dean Korach)
    
    Michael E. Orman, Orman Nord & Hurd, P.L.L.P., Duluth, Minnesota (for respondents
    Lois LeBlanc and Karon Engman)
    
          Considered and decided by Reyes, Presiding Judge; Tracy M. Smith, Judge; and
    
    Johnson, Judge.
    
                             UNPUBLISHED OPINION
    
    JOHNSON, Judge
    
          The primary issue in this case is whether an elderly woman’s daughter or daughter-
    
    in-law exerted undue influence over her when she executed a will that excluded another
    
    daughter who had been included in an earlier will. We conclude that the district court did
    
    not err by determining, on a motion for summary judgment, that the latest will is valid. We
    
    also conclude that the district court did not err by denying a motion for sanctions.
    
    Therefore, we affirm.
                                               FACTS
    
           This appeal concerns the estate of Alice Engman, who died in 2013 at the age of 99.
    
    She had three children from her marriage to John Engman: Bernice Korach, Lois LeBlanc,
    
    and Jack Engman. When Alice and John were divorced in 1962, Alice was awarded five
    
    parcels of rural property in Duluth on Munger Shaw Road. She sold the three western
    
    parcels and conveyed an eastern parcel to her son, Jack, and his wife, Karon Engman, who
    
    established their residence there. Alice moved into a trailer home on the other eastern
    
    parcel, where she lived for nearly 50 years. In the last stages of her life, that 36-acre parcel
    
    of property was her only significant asset.
    
           Jack died in 1993. After his death, Alice and Karon had a joint bank account, which
    
    Karon used to pay Alice’s bills. In 2010, Alice slipped and fell in her home, which
    
    prompted her to move in with Lois, her daughter. A year later, Alice moved into the
    
    Carefree Living assisted-living facility in Silver Bay. Lois visited Alice at Carefree Living
    
    nearly every day. Alice granted Lois a power of attorney, and Lois paid Alice’s bills out
    
    of the joint checking account that Alice shared with Karon.
    
           Alice executed three wills during her lifetime, all of which were drafted by the same
    
    attorney. Her first will, dated March 11, 2008, would have bequeathed her property in
    
    three equal shares to Bernice and Lois (her two daughters) and Karon (her daughter-in-law,
    
    who had survived her son Jack). Her first will specified that a grandson, Dean Korach, one
    
    of Bernice’s four children, would serve as personal representative of the estate, for which
    
    he would have received a gift of $2,000.
    
    
    
    
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           Shortly after Alice executed her first will, Dean expressed his preference to not serve
    
    as personal representative. Accordingly, Alice executed a second will on July 9, 2008,
    
    which specified that a different grandson, Guy LeBlanc, a child of Lois, would serve as
    
    personal representative of the estate. Her second will also would have bequeathed her
    
    property in three equal shares to Bernice, Lois, and Karon, and it provided that if any of
    
    the three beneficiaries were to predecease Alice, that beneficiary’s children would inherit
    
    their mother’s share.
    
           In May 2012, Alice contacted her attorney for the purpose of making another change
    
    to her will. Alice met with her attorney at Carefree Living. The attorney testified in
    
    deposition that Alice told him that she did not want to leave any property to Bernice
    
    because Bernice was ill and was applying for medical assistance and that she did not want
    
    one-third of her estate to be subject to a medical-assistance lien. In addition, Alice told the
    
    attorney that she was upset with Bernice’s children because they had attempted to pressure
    
    her into selling her real property to them for less than what it was worth. The attorney
    
    testified that he prepared a new will in accordance with Alice’s wishes.
    
           Alice executed the third will on June 1, 2012, at Carefree Living. The third will was
    
    different from the second will in that it bequeathed Alice’s property to only Lois and Karon
    
    and specifically excluded Bernice and her children. Two employees of Carefree Living
    
    testified in depositions that their supervisor asked them to serve as witnesses to Alice’s
    
    execution of the will, that Alice appeared to be competent, and that Lois was not in the
    
    room when Alice executed the documents.
    
    
    
    
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           Bernice died in October 2012. Alice died in January 2013. Approximately two
    
    years later, in March 2015, Dean filed a petition for formal adjudication of intestacy. In
    
    April 2015, Lois and Karon moved for summary judgment, arguing that Alice’s June 2012
    
    will conclusively establishes that she did not die intestate. In May 2015, Lois and Karon
    
    moved for sanctions on the ground that Dean petitioned for an adjudication of intestacy
    
    despite knowing that Alice had executed a will. In July 2015, the district court denied Lois
    
    and Karon’s motion for summary judgment on the ground that Dean may attempt to prove
    
    his claims of lack of capacity and undue influence. At the same time, the district court
    
    denied Lois and Karon’s motion for sanctions. In February 2016, Lois and Karon again
    
    moved for summary judgment, arguing that there is insufficient evidence to support Dean’s
    
    allegations that Alice lacked testamentary capacity or that Lois or Karon exerted undue
    
    influence on Alice. In April 2016, the district court agreed with Lois and Karon’s argument
    
    and granted their second motion for summary judgment.
    
           Dean seeks review of the district court’s grant of the second summary-judgment
    
    motion by way of a notice of appeal. Lois and Karon seek review of the district court’s
    
    denial of the sanctions motion by way of a notice of related appeal.
    
                                          DECISION
    
                                        I. Undue Influence
    
           Dean argues that the district court erred by granting Lois and Karon’s second motion
    
    for summary judgment.
    
           A district court must grant a motion for summary judgment if the “pleadings,
    
    depositions, answers to interrogatories, and admissions on file, together with the affidavits,
    
    
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    if any, show that there is no genuine issue as to any material fact and that either party is
    
    entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. A genuine issue of
    
    material fact exists if a rational trier of fact, considering the record as a whole, could find
    
    for the nonmoving party. Frieler v. Carlson Mktg. Grp., 
    751 N.W.2d 558
    , 564 (Minn.
    
    2008). This court applies a de novo standard of review to the district court’s legal
    
    conclusions on summary judgment and “view[s] the evidence in the light most favorable
    
    to the party against whom summary judgment was granted.” Commerce Bank v. West Bend
    
    Mut. Ins. Co., 
    870 N.W.2d 770
    , 773 (Minn. 2015).
    
           Undue influence is “influence of such a degree exerted upon the testator by another
    
    that it destroys or overcomes the testator’s free agency and substitutes the will of the person
    
    exercising the influence for that of the testator.” In re Wilson’s Estate, 
    223 Minn. 409
    ,
    
    413, 
    27 N.W.2d 429
    , 432 (1947). A party seeking to prove undue influence must prove
    
    that the influence “was so dominant and controlling of the testator’s mind that, in making
    
    the will, [she] ceased to act of [her] own free volition and became a mere puppet of the
    
    wielder of that influence.” In re Reay’s Estate, 
    249 Minn. 123
    , 126-27, 
    81 N.W.2d 277
    ,
    
    280 (1957). “Evidence which raises merely a suspicion and shows no more than a motive
    
    for exerting and an opportunity to exert undue influence is insufficient proof thereof,
    
    though coupled with proof of inequality in the terms of the will.” In re Mardsen’s Estate,
    
    
    217 Minn. 1
    , 10, 
    13 N.W.2d 765
    , 770 (1944). Undue influence may be proved by either
    
    direct evidence or circumstantial evidence. Agner v. Bourn, 
    281 Minn. 385
    , 392, 
    161 N.W.2d 813
    , 818 (1968). The supreme court has identified several forms of circumstantial
    
    evidence that may be introduced to prove undue influence:
    
    
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                   the opportunity to exercise it, active participation in the
                   preparation of the will by the party exercising it, a confidential
                   relationship between the person making the will and the party
                   exercising the influence, disinheritance of those whom the
                   decedent probably would have remembered in his will,
                   singularity of the provisions of the will, and the exercise of
                   influence or persuasion to induce him to make the will in
                   question.
    
    Wilson’s Estate, 223 Minn. at 413, 27 N.W.2d at 432.
    
            In this case, the district court analyzed the parties’ arguments by discussing each of
    
    the forms of circumstantial evidence identified in Wilson’s Estate. Specifically, the district
    
    court reasoned that the evidence in the summary-judgment record, when viewed in the light
    
    most favorable to Dean, shows that Lois and Karon had an opportunity to exercise
    
    influence over Alice and that the provisions in Alice’s will were singular in that they
    
    “significantly and uniquely change[d] the disposition of Decedent’s estate.” But the district
    
    court also reasoned that the evidence in the summary-judgment record did not show that
    
    Lois or Karon actively participated in preparing the will, that they had a confidential
    
    relationship with Alice, that Bernice or her children would have inherited property from
    
    Alice in the absence of undue influence, or that Lois or Karon actually exercised influence
    
    or persuasion over Alice in her making of the third will. The district court concluded that
    
    Dean did not produce sufficient evidence to create a genuine issue of material fact as to
    
    whether Lois or Karon exercised undue influence over Alice when Alice executed her third
    
    will.
    
            Dean makes three specific arguments for reversal.
    
    
    
    
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                                                 A.
    
           Dean argues that the district court erred by considering the deposition testimony of
    
    the attorney who assisted Alice with her third will. He contends that the attorney’s
    
    testimony is not credible because the attorney recently was disciplined for professional
    
    misconduct, including the making of a knowingly false statement to a court.
    
           The district court considered and rejected this argument, which Dean did not include
    
    in his motion papers but presented to the district court orally at the summary-judgment
    
    hearing. In its order, the district court questioned whether Dean would be allowed to
    
    introduce extrinsic evidence of the attorney’s lack of credibility. See Minn. R. Evid.
    
    608(b). The district court also noted the absence of caselaw stating that the attorney’s
    
    testimony could not be considered in any way. And the district court noted that the
    
    attorney’s testimony was corroborated by other evidence. We note that Dean did not
    
    attempt to attack the credibility of Alice’s attorney when deposing him, which means that
    
    the summary-judgment record contained no impeachment evidence. We also note that
    
    Dean did not introduce any evidence that directly contradicts the attorney’s testimony.
    
           For all of these reasons, the district court did not err by considering the deposition
    
    testimony of Alice’s attorney.
    
                                                 B.
    
           Dean argues that the district court misanalyzed the question whether there was “a
    
    confidential relationship between the person making the will and the party exercising the
    
    influence.” See Wilson’s Estate, 223 Minn. at 413, 27 N.W.2d at 432. Dean further argues
    
    that, if his evidence of a confidential relationship is recognized, he will have established a
    
    
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    majority of the relevant factors, which he contends would warrant a trial or a judgment in
    
    his favor.
    
           Dean’s second argument is based on the mistaken premise that the various forms of
    
    circumstantial evidence identified in Wilson’s Estate constitute a multi-factor balancing
    
    test that requires consideration of each factor in every case and whose result depends on
    
    the number of factors implicated and the weight of the evidence supporting each factor.
    
    The district court’s analysis appears to be based on the same premise because the district
    
    court’s order discusses each of the items identified in Wilson’s Estate, regardless of
    
    whether Dean offered such evidence. The district court may have performed such an
    
    analysis because the supreme court has referred to the various forms of circumstantial
    
    evidence as “factors,” see id., and because this court subsequently has summarized the
    
    applicable law in a manner that could be read to suggest a multi-factor balancing test, see
    
    In re Estate of Opsahl, 
    448 N.W.2d 96
    , 100 (Minn. App. 1989); In re Estate of Ristau, 
    399 N.W.2d 101
    , 104 (Minn. App. 1987); In re Estate of Olsen, 
    357 N.W.2d 407
    , 411-12
    
    (Minn. App. 1984), review denied (Minn. Feb. 27, 1985). We read Wilson’s Estate to say
    
    that there are various ways in which a party might prove undue influence, depending on
    
    the facts of a particular case, and that a party seeking to prove undue influence may choose
    
    to introduce, among other things, any of the forms of circumstantial evidence identified in
    
    that opinion. See Wilson’s Estate, 223 Minn. at 413, 27 N.W.2d at 432.
    
           With that understanding, we consider Dean’s evidence of a confidential
    
    relationship. He points to evidence that Karon paid Alice’s bills using a joint checking
    
    account and evidence that Alice granted Lois a power of attorney. The district court
    
    
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    accepted that evidence as true but said that it did not go “beyond what could be expected
    
    in a close relationship between a mother and daughter or mother and daughter-in-law.”
    
    The district court also reasoned that “there is no evidence that either woman abused their
    
    responsibilities, or that [Alice] was sufficiently dependent on either woman as to suggest
    
    she was controlled by them.” For those reasons, the district court concluded that “there is
    
    insufficient evidence to support an inference that a confidential relationship existed”
    
    between Alice and Karon or Lois.
    
           A confidential relationship may exist if an elderly person relies on the assistance of
    
    another person in business and financial matters. See, e.g., Norlander v. Cronk, 
    300 Minn. 471
    , 475, 
    221 N.W.2d 108
    , 111 (1974). The existence of a confidential relationship may
    
    suggest that a confidante has exerted undue influence. See Marsden’s Estate, 217 Minn.
    
    at 11-12, 13 N.W.2d at 771. But the mere existence of a confidential relationship does not
    
    necessarily imply the exercise of undue influence. See Wilson’s Estate, 223 Minn. at 413,
    
    27 N.W.2d at 432. Indeed, if a confidential relationship exists between relatives, this fact
    
    tends to negate, rather than prove, undue influence. Marsden’s Estate, 217 Minn. at 11-
    
    12, 13 N.W.2d at 771; In re Estate of Larson, 
    394 N.W.2d 617
    , 619 (Minn. App. 1986),
    
    review denied (Minn. Dec. 12, 1986); In re Estate of Anderson, 
    379 N.W.2d 197
    , 201
    
    (Minn. App. 1985), review denied (Minn. Feb. 19, 1986). Accordingly, the evidence that
    
    Lois and Karon assisted Alice in financial matters is evidence of a confidential relationship,
    
    but that evidence is not, in itself, determinative of the question whether Karon or Lois
    
    unduly influenced Alice to execute the third will. See Wilson’s Estate, 223 Minn. at 413,
    
    
    
    
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    27 N.W.2d at 432. Whether the evidence is capable of proving undue influence in
    
    combination with other evidence is a question that we consider below.
    
          Thus, the district court did not commit reversible error in analyzing whether Dean
    
    introduced evidence of a confidential relationship between Alice and Karon or Lois.
    
                                                 C.
    
          Dean argues that the district court erred by not recognizing that the reasonable
    
    inferences from his evidence are capable of proving that Karon or Lois exercised undue
    
    influence over Alice.
    
          To prevail on a claim of undue influence, Dean must have “evidence that undue
    
    influence was in fact exerted.” See Reay’s Estate, 249 Minn. at 126-27, 81 N.W.2d at 280
    
    (emphasis added). Moreover, the evidence must show “not only that the influence was in
    
    fact exerted, but that it was so dominant and controlling of the testator’s mind that, in
    
    making the will, he ceased to act of his own free volition and became a mere puppet of the
    
    wielder of that influence.” Id. “Evidence which raises merely a suspicion and shows no
    
    more than . . . an opportunity to exert undue influence is insufficient . . . .” Marsden’s
    
    Estate, 217 Minn. at 10, 13 N.W.2d at 770.
    
          Dean’s circumstantial evidence is insufficient to create a genuine issue of material
    
    fact. In his deposition, he did not disclose any evidence that Karon or Lois actually
    
    influenced Alice to execute the third will. Dean suspects Lois of having done so, but he
    
    has nothing more than suspicion, which is insufficient by itself. See id. Likewise, Dean’s
    
    siblings are unaware of any facts that would suggest that Karon or Lois exercised undue
    
    
    
    
                                                 10
    influence over Alice. Lois and Karon denied any involvement in the preparation or
    
    execution of the third will, and Dean has no evidence to contradict their testimony.
    
           Furthermore, the evidentiary record contains evidence that Alice had affirmative
    
    reasons for executing her third will. As her attorney testified in deposition, Alice wanted
    
    to avoid a situation in which the property she left to Bernice would be subject to a medical-
    
    assistance lien, and Alice was upset with Bernice’s children because they had attempted to
    
    pressure her into selling her property to them for less than it was worth. The evidentiary
    
    record corroborates both of these reasons. The record shows that Bernice was in declining
    
    health and on medical assistance in May 2012 and that she died in October 2012, three
    
    months before Alice died. The record also contains two letters that Dean wrote to Alice in
    
    March 2012 concerning Dean’s interest in purchasing Alice’s real property, and both letters
    
    reveal that the matter was somewhat contentious and had created friction between them.
    
    In addition, Dean’s sister Becky Korach stated in her deposition that Alice was “fiercely
    
    independent,” which tends to suggest that she would decide for herself whether to execute
    
    the third will. In short, Dean’s undue-influence argument is based solely on speculation,
    
    but “mere speculation, without some concrete evidence, is not enough to avoid summary
    
    judgment.” Osborne v. Twin Town Bowl, Inc., 
    749 N.W.2d 367
    , 371 (Minn. 2008)
    
    (quotation omitted).
    
           Thus, the district court did not err by granting Lois and Karon’s motion for summary
    
    judgment.
    
    
    
    
                                                 11
                                             II. Sanctions
    
            Lois and Karon argue that the district court erred by denying their motion for
    
    sanctions. They contend that sanctions are appropriate because Dean and his attorney filed
    
    a petition for a formal adjudication of intestacy despite knowing that Alice had executed a
    
    will.
    
            Lois and Karon sought sanctions under rule 11 of the Minnesota Rules of Civil
    
    Procedure and section 549.211 of the Minnesota Statutes. Under the rule, whenever an
    
    attorney files a pleading, motion, or other paper with the court, the attorney is “certifying
    
    that to the best of [his] knowledge, information, and belief, formed after an inquiry
    
    reasonable under the circumstances, . . . the allegations and other factual contentions have
    
    evidentiary support or . . . are likely to have evidentiary support after a reasonable
    
    opportunity for further investigation or discovery.” Minn. R. Civ. P. 11.02. An objective
    
    standard of reasonableness applies. Uselman v. Uselman, 
    464 N.W.2d 130
    , 142-43 (Minn.
    
    1990). A similar standard is imposed by the statute. See Minn. Stat. § 549.211 (2016). If
    
    an attorney violates the rule or the statute, a district court has discretion to impose
    
    sanctions. Kalenburg v. Klein, 
    847 N.W.2d 34
    , 41-42 (Minn. App. 2014). This court
    
    applies an abuse-of-discretion standard of review to a district court’s decision whether to
    
    impose sanctions. In re Progressive Ins. Co., 
    720 N.W.2d 865
    , 874 (Minn. App. 2006),
    
    review denied (Minn. Nov. 22, 2006).
    
            In this case, the district court ruled on the motion for sanctions shortly after the case
    
    was commenced and approximately nine months before granting Lois and Karon’s second
    
    motion for summary judgment.           The district court determined that sanctions were
    
    
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    inappropriate because Dean and his attorney were unaware of the June 2012 will when they
    
    commenced this action and because Dean’s attorney consulted with an attorney with more
    
    experience in probate matters, who advised that the petition that was filed would be an
    
    appropriate way to seek relief on the ground that the third will was invalid. The district
    
    court also reasoned that, even if Dean’s petition did not reflect the best form of pleading,
    
    it would effectively prompt a resolution of the parties’ dispute.
    
           We acknowledge some uncertainty in the record as to whether the district court was
    
    correct in stating that Dean and his attorney were unaware of the June 2012 will when they
    
    commenced this action. We also note that Dean was undoubtedly aware of Alice’s first
    
    will, which named him as personal representative, which caused him to request that she
    
    put those responsibilities on someone else, which she did in her second will. Nonetheless,
    
    the district court’s decision appears to be based primarily on Dean’s attorney’s reliance on
    
    another lawyer with expertise in probate law and on the observation that Lois and Karon
    
    were not prejudiced by the form and content of Dean’s pleading. The district court did not
    
    abuse its discretion by declining to impose sanctions for those reasons.
    
           Affirmed.
    
    
    
    
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