Herman v. Herman , 2019 ND 248 ( 2019 )

Filed 10/29/19 by Clerk of Supreme Court
I N T H E S U P R E M E C O U R T STATE
OF NORTH DAKOTA
2019 ND 248Paul E. Herman, Plaintiff and Appellant
v.
Holly Herman and Harris Widmer, as
Co-Trustees of the Herman Family Trust,
u/a/d/ February 3, 1993, Holly Herman,
individually, Defendants and Appellees
and
Villa Nazareth d/b/a Riverview Place,
The Salvation Army, Dakota Boys and Girls Ranch,
Alzheimer's Disease and Related Disorders
Association, Hamline University, Bethany Homes,
Great Plains Food Bank, Ada Public School
System, Emily Herman, Leah Herman, and Michelle
Herman, Defendants
No. 20190150
Appeal from the District Court of Cass County, East Central Judicial District,
the Honorable Susan Lynne Bailey, Judge.
REVERSED AND REMANDED.
Opinion of the Court by Jensen, Justice.
Sean Foss, Fargo, ND, for plaintiff and appellant.
Andrew Cook, West Fargo, ND, for defendants and appellees.
Herman v. Herman, et al.
No. 20190150
Jensen, Justice.
[¶1] Paul Herman appeals from a judgment entered in favor of the trustees
of a family trust [collectively the Trustees] following the district court’s
granting of the Trust’s motion for summary judgment. Herman asserts the
district court erred by finding the 120 day period to challenge the actions of the
Trustees expired before he initiated these proceedings without providing him
an opportunity to conduct discovery. We conclude the 120 day limitation period
under N.D.C.C. § 59-10.1-03(1) does not begin until receipt of the notice of the
Trustees actions, reverse the judgment of the district court, and remand with
instructions to allow Herman additional time to conduct discovery pursuant to
his request under N.D.R.Civ.P. 56(f).
I
[¶2] Herman is a beneficiary of a family trust. On June 23, 2018, under
N.D.C.C. § 59-10.1-03(1), the Trustees sent Herman notice of proposed
amendments to the family trust and a proposed distribution of the trust’s
assets. The notice was sent to Herman at his last known address. Having
moved in September of 2017, Herman no longer resided at the address where
the notice was sent. Delivery to the address to which the notice was addressed
and from which Herman had moved was confirmed to have occurred on June
25, 2018. Herman concedes he received a copy of the notice, but he does not
recall when he received the notice.
[¶3] Herman commenced this action on October 25, 2018. Four days later, on
October 29, 2018, the Trustees moved for summary judgment arguing the 120
day time limitation provided by N.D.C.C. § 59-10.1-03(1) to challenge the trust
had lapsed. Herman responded to the motion for summary judgment, in part,
by requesting additional time to conduct discovery to obtain information to
rebut the presumption he received the notice from the trust on the date it was
delivered to his last known address. The district court granted summary
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judgment after finding the 120 day limitation period had expired before
Herman initiated this action.
[¶4] Herman agrees N.D.C.C. § 59-10.1-03(1) creates a presumption he
received the notice sent by the Trustees on the date it was delivered to his last
known address. He also concedes the 120 day limitation period expired before
this action was started if the period begins to run from the date delivery was
made to his last known address. He argues the presumption he received the
notice on the date of delivery is rebuttable, he should be allowed to rebut the
presumption by establishing when he received notice, and if the notice was
received after the date the notice was delivered to his former address his action
was timely. He contends the district court abused its discretion in denying his
request to conduct discovery to obtain information regarding when he received
the notice.
II
[¶5] In response to the motion for summary judgment, Herman requested
additional time to conduct discovery, under N.D.Civ.P. 56(f), to establish the
date he received notice from the Trustees. The district court denied the request
for additional time to conduct discovery after finding “[f]actual questions
concerning what date Plaintiff actually received notice of his right to contest
the Trust or why the Trustees addressed the notice to a prior address are
immaterial to the calculation of the time within which Plaintiff was required
to commence action here.”
[¶6] A person seeking to challenge the modification of a trust must commence
an action at the earliest of the following: 120 days after being notified of the
modification, three years after the settlor’s death, within the time in which a
petition for review of a will could be filed under state law for some revocable
trusts, or the date an individual's right to contest was precluded by
adjudication, consent, or other limitation. In this case, the Trustees seek to
apply the first period of limitation which is governed by N.D.C.C. § 59-10.1-
03(1) and reads as follows:
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A proceeding under this chapter may not be commenced later than
the earliest of the following:
1. One hundred twenty days after the date the trustee notified
the individual contesting the trust of the trust's existence or
amendment. The notice must include the trustee's name and
address and a copy of the trust instrument with
amendments, if any, and must inform the recipient of the
time allowed under this section for initiating a proceeding to
contest the trust. A trustee may not have any liability under
the governing instrument, to a third party, for failure to
provide a notice under this subsection. Service of this notice
is presumed to have been received upon delivery of the notice
to the last known address of the individual to whom the
notice is addressed;
[¶7] The district court found the 120 day limitation period, under N.D.C.C. §
59-10.1-03(1), began to run from June 25, 2018, the date the notice was
delivered to Herman’s prior address and was presumed to have been received
by Herman. The district court denied Herman’s request to conduct discovery
to rebut the presumption he received the notice on the day it was delivered.
III
[¶8] The interpretation of a statute is a question of law, fully reviewable on
appeal. State v. Bearrunner, 2019 ND 29, ¶ 5, 921 N.W.2d 894. This Court’s
primary purpose when interpreting a statute is to determine legislative intent.
Id. Words in a statute are given their plain, ordinary, and commonly
understood meaning, unless defined by statute or unless a contrary intention
plainly appears. N.D.C.C. § 1-02-02.
[¶9] The presumption in N.D.C.C. § 59-10.1-03(1) reads as follows: “[s]ervice
of this notice is presumed to have been received upon delivery of the notice to
the last known address of the individual to whom the notice is addressed.”
(emphasis provided). The presumption created within the statute relates to a
determination of when the notice is received. The statute therefore requires
receipt of the notice to start the 120 day limitation period; there would be no
need to provide a presumption to determine when the notice is received if
receipt has no significance in determining when the 120 day limitation period
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begins. We conclude, as a matter of law, N.D.C.C. § 59-10.1-03(1) requires
receipt of the notice, proven through the presumption or otherwise, to begin
the 120 day limitation period.
[¶10] Even if there is a conflict between the various provisions of N.D.C.C. §
59-10.1-03(1), the provision in the last order or position in the statute prevails.
N.D.C.C. § 1-02-08. The presumption here appears at the end of N.D.C.C. § 59-
10.1-03(1). Similarly, we cannot ignore the clear and unambiguous language of
the presumption relating to determining when the notice was “received” under
the pretext of pursuing what we believe to be the spirit of the law. N.D.C.C. §
1-02-05.
IV
[¶11] Having concluded N.D.C.C. § 59-10.1-03(1) requires receipt of the notice
to start the 120 day limitation period, it is necessary to consider whether
Herman may rebut the presumption he received the notice upon delivery of the
notice to his last known address. Our law recognizes relatively few conclusive
presumptions. N.D.C.C. § 31-11-02. All other presumptions, unless expressly
made conclusive by statute, are rebuttable. N.D.C.C. § 31-11-03. The
presumption in N.D.C.C. § 59-10.1-03(1) is not one of the conclusive
presumptions provided for in N.D.C.C. § 31-11-02, and the statute does not
otherwise make the presumption conclusive. Whether “a letter duly directed
and mailed was received in the regular course of the mail” is a rebuttable
presumption. N.D.C.C. § 31-11-03(24). We conclude the presumption in
N.D.C.C. § 59-10.1-03(1) is a rebuttable presumption.
V
[¶12] The parties agree the record, as it currently exists, supports the district
court’s conclusion the 120 day limitation period expired. The current record
establishes the notice was delivered to Herman’s last known address on June
25, 2018, the statute creates a presumption he received the notice on the date
of delivery, and he started his action more than 120 days after he was
presumed to have received the notice. However, Herman requested additional
time to conduct discovery pursuant to N.D.R.Civ.P. 56(f) on the issues of when
4
he received notice and why the Trustees used an address where he was no
longer residing. The district court denied his request to conduct discovery.
[¶13] “Under N.D.R.Civ.P. 56(f), a court may order a continuance to allow
additional discovery before deciding a motion for summary judgment.” Horob
v. Farm Credit Servs. of N.D. ACA, 2010 ND 6, ¶ 20, 777 N.W.2d 611. This
Court has recognized that “[s]ummary judgment is appropriate only after the
non-moving party has had a reasonable opportunity for discovery to develop
his position.” Choice Fin. Grp. v. Schellpfeffer, 2006 ND 87, ¶ 9, 712 N.W.2d
855. We review a district court’s decision on whether to allow additional time
for discovery under N.D.R.Civ.P. 56(f) for an abuse of discretion. Horob, at ¶
20. A district court “abuses its discretion when it acts in an arbitrary,
unreasonable, or unconscionable manner, it misinterprets or misapplies the
law, or its decision is not the product of a rational mental process leading to a
reasoned determination.” Desert Partners IV, L.P. v. Benson, 2019 ND 19, ¶ 10,
921 N.W.2d 444.
[¶14] We have concluded the district court misinterpreted N.D.C.C. § 59-10.1-
03(1) by not allowing Herman an opportunity to rebut the presumption of when
he received notice. Also, the time limitation for initiating a claim is relatively
short, 120 days, and the filing of the motion for summary judgment within four
days of the service of the complaint prevented any discovery from being
initiated. Finally, the motion for summary judgment was resolved as the result
of a material fact established through a rebuttable presumption. Under these
circumstances, we conclude it was an abuse of discretion to deny Herman’s
request for additional time to conduct discovery to obtain evidence to challenge
the presumption he received notice on June 25, 2018, the date the notice was
delivered to his prior address.
[¶15] N.D.C.C. § 59-10.1-03(1) requires notice to be received by the individual
challenging the trustees actions to start the 120 day limitations period, and
creates a rebuttable presumption notice was received on the date of delivery to
the individual’s last known address. The denial of Herman’s request for
additional time for discovery to gather information to rebut the presumption
he received notice on the date of the delivery of the notice to his last known
5
address, which was more than 120 days prior to his initiation of this case, was
an abuse of discretion. We reverse the judgment and remand this case to
provide Herman with an opportunity to conduct discovery.
[¶16] Jon J. Jensen
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
Gerald W. VandeWalle, C.J.
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