In the Matter of Curtiss A. Hogen Trust B, created under the Last Will and Testament of Curtiss A. Hogen
v.
Rodney Hogen, Co-Trustee, Respondent and Appellant Steven C. Hogen, Co-Trustee, Petitioner and Appellee
Appeal
from the District Court of Cass County, East Central Judicial
District, the Honorable Steven E. McCullough, Judge.
Sara
K. Sorenson (argued) and Stephen R. Hanson II (appeared),
West Fargo, ND, for petitioner and appellee.
Jonathan T. Garaas, Fargo, ND, for respondent and appellant.
OPINION
VandeWalle, Chief Justice.
[¶
1] Rodney Hogen appealed from an order granting Steven
Hogen's petition for approval of a final report and
accounting for the Curtiss A. Hogen Trust B. In his appeal,
Rodney Hogen raises multiple issues. For purposes of this
decision, we consolidate his issues into four related
subjects involving his claims the district court erred in
determining the Trust did not immediately terminate upon
Arline Hogen's death, the court erred in authorizing the
sale of Trust property and ordering an offset of more than
$300, 000 from his share of the property, the court erred in
awarding trustee's fees and attorney's fees, and the
court was not impartial. We affirm.
I
[¶
2] Curtiss and Arline Hogen were married, and they jointly
owned farmland in Barnes and Cass Counties. In the 1960s,
their son, Rodney Hogen, began farming the land with Curtiss
Hogen. When Curtiss Hogen died in 1993, his 1984 will devised
certain personal property to Arline Hogen and devised the
remainder of his property, including his roughly one-half
undivided interest in the farmland, to the trustee for the
Curtiss Hogen Trust B. Curtiss Hogen's will allowed the
Trust to continue the farming operation, appointed his two
children, Steven and Rodney Hogen, as co-trustees for the
Trust, and authorized the trustee to make payments to Arline
Hogen during her lifetime of all the Trust's net income
and any discretionary payments from principal necessary for
her medical care, education, support and maintenance. Curtiss
Hogen's will included the following language describing
the consequences of the death of the surviving spouse:
Upon the death of the survivor of my said spouse and me, my
Trustee shall divide this Trust into equal separate shares so
as to provide One (1) share for each then living child of
mine and One (1) share for each deceased child of mine who
shall leave issue then living.
(a) Each share provided for a living child of mine shall be
distributed to such child. Each share provided for a deceased
child of mine who shall leave issue then living, shall be
distributed by representation to such issue.
[¶
3] After Curtiss Hogen's death, Rodney Hogen continued
farming the land under a cash rent and crop-share arrangement
with the Trust and with Arline Hogen, the owner of the other
one-half undivided interest in the farmland. Arline Hogen
died on March 23, 2007, and her will equally devised all of
her property to Steven and Rodney Hogen.
[¶
4] In April 2007, Steven Hogen initiated informal probate
proceedings for Arline Hogen's estate, which led to
extensive litigation and this Court's decision in
Estate of Hogen, 2015 ND 125, 863 N.W.2d 876. In
that case, we rejected Rodney Hogen's argument that his
share of Arline Hogen's real property devolved to him
immediately upon her death. Id. at ¶¶
26-27. We concluded the district court did not err in
determining the devolution of Arline Hogen's real
property to Rodney Hogen was subject to the personal
representative's power during the administration of her
estate to seek a retainer for any noncontingent indebtedness
that Rodney Hogen owed her or her estate. Id. at
¶ ¶ 1, 27. Except for a calculation involving some
Barnes County land, we concluded that evidence in the record
supported the court's findings about the amount Rodney
Hogen owed to Arline Hogen and her estate for post-death cash
rent, crop-share proceeds, and conservation reserve program
payments and that the court's findings about those
amounts were not clearly erroneous. Id. at ¶
37. We upheld the court's rejection of the personal
representative's claim that Rodney Hogen purloined money
from the Trust, stating the court had explained the Trust
could bring a direct action against Rodney Hogen for any
money allegedly due the Trust. Id. at ¶ 40. We
held the court did not clearly err in finding Arline Hogen
waived any claims for pre-death cash rent and crop-share
proceeds owed by Rodney Hogen to her. Id. at ¶
43. We further held the court did not abuse its discretion in
awarding Steven Hogen $27, 500 in personal representative
fees, and ordering payment of $333, 272.23 in attorney's
fees, costs, and expert witness fees from Arline Hogen's
estate. Id. at ¶¶ 48, 51.
[¶
5] Steven Hogen thereafter petitioned the district court for
the supervised administration of the Trust to compel an
accounting and recover an offset against Rodney Hogen's
share of the Trust for claimed breaches of fiduciary duties
to the Trust, to void deeds unilaterally issued by Rodney
Hogen as co-trustee to himself, to remove Rodney Hogen as
co-trustee, and for injunctive relief preventing Rodney Hogen
from contacting or receiving rent from renters of the Trust
land.
[¶
6] On cross-motions for summary judgment, the district court
granted Steven Hogen partial summary judgment, ruling the
Trust did not automatically and immediately terminate upon
Arline Hogen's death. The court construed the Trust
language, explaining the Trust did not explicitly say when it
would terminate and included language requiring the trustee
to divide and distribute the Trust property upon the death of
the surviving spouse. The court explained the Trust's
purposes were to provide income and support to Arline Hogen
during her lifetime and to equally divide and distribute the
corpus of the Trust among Curtiss Hogen's then-living
children or issue upon the surviving spouse's death. The
court concluded the entire fulfillment of the Trust objective
had not yet been achieved because the Trust property had not
been properly divided into equal shares and distributed. The
court rejected Rodney Hogen's arguments that the Trust
immediately terminated on Arline Hogen's death, that the
trustee's claims were barred by the statute of
limitations, and that Rodney Hogen's deeds to himself as
co-trustee were ministerial acts.
[¶
7] The district court thereafter entered an interim order for
supervised administration of the Trust, in part to avoid a
"plethora of appeals" and piecemeal litigation. The
court also denied Steven Hogen's interim request to
suspend Rodney Hogen as co-trustee and enjoined the brothers
from executing any documents on behalf of the Trust without
the agreement and signature of both co-trustees.
[¶
8] After a bench trial, the district court found that Rodney
Hogen breached certain fiduciary duties and obligations to
the Trust and that he owed the Trust $305, 961.65 for the
fiduciary breaches and for purloined assets. The court
permanently suspended Rodney Hogen as co-trustee of the Trust
and ordered Steven Hogen, as the remaining trustee, to divide
and allocate the Trust property for the benefit of the Trust
and the co-beneficiaries. The court authorized Steven Hogen
to sell sufficient Trust property in a commercially
reasonable manner to pay outstanding mortgages, debts, and
encumbrances on Trust land, to pay the Trust's
attorney's fees, and to pay equal shares to the
co-beneficiaries with $305, 961.65 first offset from Rodney
Hogen's share of the Trust property. Rodney Hogen
appealed.
[¶
9] Because the court explicitly reserved a decision on issues
about the amount of awarded fees, we temporarily remanded
Rodney Hogen's appeal for consideration of Steven
Hogen's petition for approval of a final trustee's
report and request for trustee's fees and attorney's
fees. On remand, the district court granted Steven
Hogen's petition for approval of the trustee's final
report and awarded trustee's fees in the amount of $13,
750, attorney's fees in the total amount of $401, 916.50,
with $208, 000 withheld from Rodney Hogen's share of
Trust assets, and associated litigation fees, costs, and
expenses in the amount of $26, 325.35. The court also
directed Steven Hogen to withhold $10, 000 from Trust
property for continuing fees and expenses and payment of
ongoing attorney's fees and capital gains taxes on the
land sale. Rodney Hogen also appealed from that order.
II
[¶
10] We initially discuss an issue about appealability in
trust proceedings to address the application of our finality
jurisprudence to these proceedings. The right to appeal in
this state is purely statutory, and if there is no statutory
basis for an appeal, we must dismiss it for lack of
jurisdiction. In re Estate of Hollingsworth, 2012 ND
16, ¶ 7, 809 N.W.2d 328. Only judgments and decrees
constituting a final judgment of the rights of the parties
and certain orders enumerated by statute are appealable.
Investors Title Ins. Co. v. Herzig, 2010 ND 138,
¶ 23, 785 N.W.2d 863. See Matter of Admin. by
Mangnall, 1997 ND 19, ¶ 18, 559 N.W.2d 221 (stating
policy of discouraging piecemeal litigation and requiring
complete accounting of ...