Estate of Lindvig , 2020 ND 236 ( 2020 )


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  •                                                                           20200135 & 20200136
    FILED
    IN THE OFFICE OF THE
    CLERK OF SUPREME COURT
    NOVEMBER 19, 2020
    STATE OF NORTH DAKOTA
    IN THE SUPREME COURT
    STATE OF NORTH DAKOTA
    
    2020 ND 236
    In the Matter of the Estate of Ralph H. Lindvig, deceased
    Milton Lindvig, Personally and as
    Successor Personal Representative,                  Petitioner and Appellant
    v.
    Patricia Jellum, Personal Representative
    of the Estate of Dorothy Jo Lindvig,                Respondent and Appellee
    and
    Gail Howard and Bruce Lindvig,                  Respondents and Appellants
    No. 20200135
    In the Matter of the Estate of Dorothy Jo Lindvig, deceased
    Patricia Jellum, Personal Representative
    of the Estate of Dorothy Jo Lindvig,                 Petitioner and Appellee
    v.
    Edward Hilmer,                                                  Respondent
    and
    Milton Lindvig, Bruce Lindvig, and Gail
    Howard,                                            Claimants and Appellants
    No. 20200136
    Appeal from the District Court of Williams County, Northwest Judicial
    District, the Honorable Benjamen J. Johnson, Judge.
    AFFIRMED.
    Opinion of the Court by Crothers, Justice.
    Monte L. Rogneby, Bismarck, ND, for petitioner and appellant and claimant
    Milton Lindvig, and respondents and appellants and claimants Bruce Lindvig
    and Gail Howard; submitted on brief.
    Charles L. Neff, Williston, ND, for respondent and appellee and petitioner
    Patricia Jellum; submitted on brief.
    2
    Estate of Lindvig
    Nos. 20200135 and 20200136
    Crothers, Justice.
    [¶1] Gail Howard, Bruce Lindvig, and Milton Lindvig, personally and as
    Successor Personal Representative to the Estate of Ralph H. Lindvig, (together
    “the estate of Ralph Lindvig”) appeal from a judgment entered in consolidated
    formal probate proceedings. We affirm.
    I
    [¶2] Ralph and Dorothy Lindvig, now deceased, were married for 25 years.
    They had no children. Dorothy Lindvig suffered from childhood polio and
    required support and special accommodations for her lack of mobility. Ralph
    Lindvig was a farmer. He received the majority of the land he farmed from his
    parents, and he owned it jointly with his two brothers. Ralph Lindvig also
    solely owned land he purchased prior to the couple’s marriage, which the
    parties refer to as the Wattam land. In 1982, roughly two years after the couple
    married, Ralph Lindvig executed a will. It left Dorothy Lindvig a life estate in
    all of his land, and after her death equally to his brothers or to their
    descendants.
    [¶3] In 2006, Ralph Lindvig fell and broke his hip. He never fully recovered.
    He spent the remainder of his days in care facilities until his death in 2008. In
    June of 2006, Ralph Lindvig executed a durable power of attorney naming
    Dorothy Lindvig as his agent. The power of attorney contained a general grant
    of power and enumerated specific powers, including authority to transfer real
    estate, as well as two sections titled “estate planning” and “advanced estate
    planning.” The former section provides authority to “make gifts for estate
    planning purposes, including gifts to my attorney-in-fact.” The latter section
    provides authority to make gifts “after obtaining approval of a court of
    competent jurisdiction” and notes the intent of the section is to give notice of
    “my desire to minimize the obligation of my estate to pay taxes and maximize
    the value of my estate for the benefit of the beneficiaries of my estate.”
    1
    [¶4] In 2007, due to financial concerns related to paying for Ralph Lindvig’s
    care, Dorothy Lindvig, acting as Ralph Lindvig’s attorney in fact, sold portions
    of Ralph Lindvig’s interests in the land he received from his parents to Milton
    Lindvig, Ralph Lindvig’s brother. The transfers were made by two warranty
    deeds, each of which severed the minerals and reserved them to Ralph and
    Dorothy Lindvig as joint tenants. In May of 2007, Dorothy Lindvig, again
    acting as Ralph Lindvig’s attorney in fact, conveyed the Wattam land to herself
    by warranty deed.
    [¶5] When Ralph Lindvig died Dorothy Lindvig was the personal
    representative of his estate. After her death in 2009, she was replaced by
    Milton Lindvig. Dorothy Lindvig died intestate, survived by a brother and her
    sister, Patricia Jellum, who is the personal representative of Dorothy Lindvig’s
    estate. The estate of Ralph Lindvig filed a petition in Dorothy Lindvig’s
    probate proceedings to set aside the intestate distribution of the minerals she
    severed and the Wattam land she conveyed to herself. The estate of Ralph
    Lindvig argued the transfers were beyond Dorothy Lindvig’s authority because
    they diminished the size of his estate and were not approved by a court, all in
    contravention of the power of attorney’s gifting provisions. The parties
    stipulated to consolidating the two probates as formal administrations.
    [¶6] On June 6, 2011, the district court held an evidentiary hearing on the
    petition. At the conclusion of the hearing the court made rulings from the
    bench. The court found the transfers were within Dorothy Lindvig’s authority
    under the power of attorney and were valid and enforceable. On June 10, 2013,
    the court entered a written order with findings and conclusions. Over the next
    several years the parties litigated other issues related to the estate. Judgment
    was entered in each case on March 30, 2020.
    II
    [¶7] 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. Stuber v. Engel, 
    2017 ND 198
    , ¶ 10, 900
    
    2 N.W.2d 230
    . “A factual finding is clearly erroneous if it is induced by an
    erroneous view of the law, if there is no evidence supporting it, or if, although
    there is some evidence to support it, on the entire record, we are left with a
    definite and firm conviction a mistake has been made.” Innis-Smith v. Smith,
    
    2018 ND 34
    , ¶ 7, 
    905 N.W.2d 914
    .
    A
    [¶8] The estate of Ralph Lindvig argues the transfers exceed the authority he
    granted Dorothy Lindvig in the power of attorney. His estate asserts the
    transfers were gifts and, under the power of attorney, the authority to gift is
    limited to maximizing the value of Ralph Lindvig’s estate and minimizing
    estate tax liability. His estate also asserts the power of attorney required court
    approval of gifts. Because the transfers diminished the estate and were not
    approved by a court, the estate of Ralph Lindvig argues the district court erred
    when it held the transfers were valid.
    [¶9] The estate of Dorothy Lindvig contends the transfers were made for
    consideration and thus were not gifts. Her estate asserts marriage is an
    economic partnership, and argues there was consideration in the form of
    marital contributions. Her estate claims North Dakota’s public policy
    recognizes this type of consideration as evidenced by the spousal elective share
    statute. See N.D.C.C. § 35.1-05-01.
    [¶10] A determination whether the transfers were gifts is necessary because
    the power of attorney contained a provision for gifts and a different provision
    for real estate transactions made for consideration. Section 47-10-23.1,
    N.D.C.C., provides a conclusive presumption that transfers of real estate
    between spouses are not gifts:
    “A nontestamentary transfer of real property between
    spouses shall be presumed to be for a consideration, and not a gift,
    unless otherwise stated in writing at the time of transfer. This
    presumption is conclusive.”
    3
    [¶11] Although neither the parties nor the district court identified this
    presumption, we retain the power to apply the correct law when an issue is
    properly before us. D.G.L. Trading Corp. v. Reis, 
    2007 ND 88
    , ¶ 7, 
    732 N.W.2d 393
    (citing Kamen v. Kemper Fin. Servs., Inc., 
    500 U.S. 90
    , 99 (1991)). In
    addition to the statutory presumption that transfers of real estate between
    spouses are made for consideration, spouses “have a mutual duty to support
    each other out of their individual property and labor.” N.D.C.C. § 14-07-03.
    [¶12] The district court did not provide a clear explanation whether it
    concluded the transfers were gifts. The court found the power of attorney
    contained “a deliberate and special provision allowing Dorothy Jo Lindvig, in
    her discretion, to make gifts of property to herself.” Yet the order concludes
    Dorothy Lindvig “held a marital interest in and to the land assets titled in the
    name of her husband Ralph Lindvig” and the transfers “reflected Dorothy Jo
    Lindvig’s interest in their joint marital estate.”
    [¶13] Based on the undisputed facts in this case, the transfers were not gifts.
    There is no assertion or evidence of the existence of a writing made at the time
    of either transfer stating it was a gift. Thus, the conclusive presumption in
    N.D.C.C. § 47-10-23.1 applies. In addition, a transfer made to satisfy a legal
    obligation to support a spouse or child is considered involuntary and does not
    constitute a gift. See Restatement (Third) of Property (Wills & Donative
    Transfers) § 6.1(d) (Am. Law Inst. 2003). It is undisputed that Dorothy Lindvig
    suffered from a chronic illness and she required support. Ralph Lindvig had a
    legal obligation to support her out of his individual property. See N.D.C.C. §
    14-07-03. Under these circumstances, as a matter of law the transfers do not
    constitute gifts.
    [¶14] Ralph Lindvig’s estate also asserts Dorothy Lindvig exceeded the
    authority granted to her by the power of attorney. The plain language of a
    power of attorney governs “except to the extent the fiduciary relationship
    requires a special rule.” Alerus Fin., N.A. v. W. State Bank, 
    2008 ND 104
    , ¶ 20,
    
    750 N.W.2d 412
    ; see also Burlington N. and Santa Fe Ry. Co. v. Burlington
    Res. Oil & Gas Co., 
    1999 ND 39
    , ¶ 16, 
    590 N.W.2d 433
    . The power of attorney
    4
    granted Dorothy Lindvig the general power “to do everything necessary in
    exercising any of the powers herein granted as fully as I might or could do if
    personally present.” It also specifically provided her the power to “sell and
    convey real or personal property . . . on such terms and conditions as my agent
    shall deem proper.” Thus, the transfer was within the authority granted to
    Dorothy Lindvig under plain language of the power of attorney.
    [¶15] An agent acting under the authority of a power of attorney still must
    abide by his or her fiduciary duties to the principal. Burlington N., 
    1999 ND 39
    , ¶ 16; see also Alerus Fin., 
    2008 ND 104
    , ¶ 19. “[E]ven if the principal
    consents to self-dealing by the agent, the agent must fully and completely
    disclose all relevant facts to the principal unless the agreement provides
    otherwise.” Burlington N., at ¶ 21.
    [¶16] The attorney who prepared the warranty deeds in this case testified
    Dorothy Lindvig initiated contact with him “and wanted me to visit with Ralph
    about it—what I could do for him to help the two of them cope with the
    hardships that were going on in their life with the physical problems and the
    financial concerns.” The attorney testified he visited with Ralph Lindvig on
    two occasions, Ralph Lindvig was aware there would likely be a shortage of
    funds due to the couple’s medical needs, and Ralph Lindvig understood
    Dorothy Lindvig could make transfers to herself under the power of attorney.
    When asked whether the transfer was “contemplated and authorized by Ralph
    Lindvig,” he testified “I think everything that was done was in accordance with
    that type of a plan.”
    [¶17] The district court made the following findings: “After twenty-five years
    in a loving marriage” the transfer was a “normal, if not expected” deviation
    from Ralph Lindvig’s will, and “even more understandable where you consider
    the increased needs of a spouse in the advanced stages of disease induced
    disability.” The district court concluded Ralph Lindvig “did knowingly grant”
    Dorothy Lindvig the power to make transfers to herself and such power “was
    a reasonable accommodation for Ralph Lindvig to provide for his special needs
    wife and marriage of over 25 years.” Given these findings, which are supported
    5
    by the evidence, Dorothy Lindvig did not breach her fiduciary duties by
    engaging in improper self-dealing.
    [¶18] Because the transfers in this case were not gifts, the power of attorney’s
    gifting provisions do not apply. Dorothy Lindvig had authority to make the
    transfers under the power of attorney’s real estate transfer provision, and
    based on the district court’s findings, she did not breach a fiduciary duty.
    Although our reasoning is different than the district court’s reasoning, we
    affirm the result of its decision. See Sanders v. Gravel Prods., Inc., 
    2008 ND 161
    , ¶ 9, 
    755 N.W.2d 826
    (“we will not set aside a correct result merely because
    the district court’s reasoning is incorrect if the result is the same under the
    correct law and reasoning”).
    B
    [¶19] The estate of Ralph Lindvig argues that even if the power of attorney
    authorized Dorothy Lindvig to make the transfers, the district court erred
    because it did not apply a presumption of undue influence against her.
    [¶20] The issue of whether a presumption of undue influence applies to an
    individual acting as an attorney in fact for his or her spouse was not raised
    before the district court. The estate of Ralph Lindvig specifically advised the
    court that based on its theory of the case—that Dorothy Lindvig exceeded her
    authority as Ralph Lindvig’s attorney in fact—the doctrine of undue influence
    was “not relevant” and “has no bearing on this matter.” His estate now takes
    a contradictory position on appeal. Because the issue was not raised before the
    district court and the estate of Ralph Lindvig’s positions are wholly
    inconsistent, we will not decide it. See Schiele v. Schiele, 
    2015 ND 169
    , ¶ 16,
    
    865 N.W.2d 433
    (“If a party fails to properly raise an issue or argument before
    the trial court, the party is precluded from raising that issue or argument on
    appeal.”). See also Krenz v. XTO Energy, Inc., 
    2017 ND 19
    , ¶ 33, 
    890 N.W.2d 222
    (“Judicial estoppel prohibits a party from assuming inconsistent or
    contradictory positions during the course of litigation.”).
    6
    III
    [¶21] We affirm the judgment entered in these consolidated probate
    proceedings.
    [¶22] Jon J. Jensen, C.J.
    Gerald W. VandeWalle
    Daniel J. Crothers
    Lisa Fair McEvers
    Jerod E. Tufte
    7