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In re Estate of Brandt

Supreme Court of North Dakota

March 18, 2019

In the Matter of the Estate of Ann Biel Brandt, Deceased
v.
Thomas Biel and Marilyn Knudson, Respondents and Appellants Kathleen Bouchard, as personal representative of the Estate of Ann Biel Brandt, Petitioner and Appellee and Kathleen Bouchard, in her individual capacity as an interested person, Petitioner

          Appeal from the District Court of Divide County, Northwest Judicial District, the Honorable Joshua B. Rustad, Judge.

          Robert G. Manly (argued), and Andrew D. Smith (appeared), Fargo, ND, for petitioner and appellee Estate of Ann Biel Brandt.

          Kirsten Tuntland (argued), and Patrick W. Durick (appeared), Bismarck, ND, for respondents and appellants.

          OPINION

          JENSEN, JUSTICE.

         [¶1] Thomas Biel and Marilyn Knudson appeal from a judgment entered after the probate court approved a final accounting and distribution in the supervised administration of the Estate of Ann Biel Brandt. Biel and Knudson assert that the probate court erred in allowing Kathleen Bouchard to participate in the supervised probate administration as both the personal representative of the Estate and as an interested person, that the court erred in assuming jurisdiction over a separate civil action and deciding the merits of that action, that the court's final distribution is inconsistent with Ann Biel Brandt's testamentary intent to equally distribute her property to her three children, that the court erred in not awarding them attorney fees, in awarding Bouchard certain expenses, and awarding attorney fees to the Estate's attorneys. We affirm.

         I

         [¶2] Biel, Knudson, and Bouchard are the three children of the decedent, Ann Biel Brandt. The children's father died in 1974, and Ann Biel Brandt later married Robert Brandt, who died in 2007. Over an objection by Biel and Knudson, Bouchard was appointed the personal representative for the supervised administration of the Estate.

         [¶3] Biel and Knudson claim that Bouchard, acting in her capacity as both an interested person and as the personal representative of the Estate, administered the Estate to further her personal interests. They challenge the probate court's final distribution of the Estate awarding Bouchard cash and awarding them the value of the Estate's interest in a separate civil action for recovery of payments related to Ann Biel Brandt's life estate in mineral interests. They assert the probate court erred in including land in the Estate from the Ann Biel Brandt Legacy Trust. They also contend the probate court erred in approving the reimbursement of Bouchard's expenses and attorney fees from Estate assets, erred in denying their request for attorney fees, and they request this Court to order assignment of a different judge for proceedings on remand.

         II

         [¶4] Ann Biel Brandt owned surface and mineral interests in land in Mountrail, Divide, and Burke Counties. In 1996, Robert and Ann Biel Brandt executed a warranty deed granting their surface rights and "all of their right, title, and interest to any and all oil, gas, coal, and other minerals in, under, or upon" a tract of land in Divide County to Knudson's son and daughter-in-law, "subject, however, to a life estate to the Grantors and the survivor thereof." In 2009, Knudson's son and daughter-in-law leased their interest in the minerals in that Divide County land to LoneTree Energy & Associates, LLC, and that lease was subsequently assigned to Hess Corporation.

         [¶5] In 2010, LoneTree caused a death certificate for a different Ann Brandt to be recorded and indexed against Ann Biel Brandt's life estate in the Divide County land. In September 2010, a well operated by Hess started producing oil and gas from that land, and royalty payments from the well were paid to Knudson's son and daughter-in-law presumably because of the erroneously filed death certificate. In 2013, Bouchard advised Hess that Ann Biel Brandt was still alive and royalty payments to Knudson's son and daughter-in-law were placed in suspense. As a result of the mineral lease, Knudson's son and daughter-in-law received $43, 780 in bonus payments, $83, 834.11 in royalties, and $18, 197.34 was placed in suspense.

         [¶6] In 2007, Ann Biel Brandt executed a durable power of attorney naming Biel, Knudson, and Bouchard jointly and severally as her attorneys in fact. In May and June 2013, Bouchard relied on that power of attorney to take several actions regarding her mother's property and to revoke Knudson's power of attorney for their mother. Knudson objected to Bouchard's actions and subsequently obtained injunctive relief after establishing Bouchard had exceeded her authority. The injunctive relief restored Knudson's authority under the 2007 power of attorney.

         [¶7] In November 2013, Biel and Knudson acted under the 2007 power of attorney to establish the Ann Biel Brandt Legacy Trust and subsequently conveyed Ann Biel Brandt's interests in real property to the Trust. Under the Legacy Trust, Brandt was the sole beneficiary during her lifetime, and upon her death, the trust property was to be distributed equally to her three children. Biel and Knudson claim the property transferred to the Legacy Trust should not have been part of the probate proceedings and should have been distributed under the terms of the Trust.

         [¶8] Ann Biel Brandt died in May 2014. Her will devised the residuary of her estate equally to her three children. In October 2015, Bouchard was appointed personal representative in the supervised administration of Brandt's estate over the objection of Biel and Knudson. Before being appointed personal representative, Bouchard submitted twelve claims to the probate court for reimbursement of a total of $47, 414.43 from the Estate for her claimed out-of-pocket expenses for the benefit of Ann Biel Brandt or the Estate.

         [¶9] Bouchard, in her capacity as personal representative, brought a separate civil action against Hess, LoneTree, the Legacy Trust, Biel, Knudson, Knudson's husband, and Knudson's son and daughter-in-law to determine Ann Biel Brandt's share of the mineral interests related to her life estate in the tract of land in Divide County. The complaint alleged claims against Hess and LoneTree for slander of title and negligence, against Hess and the Legacy Trust for declaratory relief, against Knudson's son and daughter-in-law for unjust enrichment, and against Biel, Knudson, and her husband for an accounting. Bouchard, as personal representative of the Estate, petitioned the probate court for a determination of Ann Biel Brandt's rights in the Divide County land and in the land in the Legacy Trust. Bouchard also filed several petitions as an interested person and devisee beneficiary to determine the title to the land in Burke, Divide, and Mountrail Counties and the value of the mineral interests in the separate civil action.

         [¶10] The probate court concluded it had exclusive jurisdiction in the formal supervised proceedings to determine the title to property allegedly belonging to the Estate. The court decided the Legacy Trust was void from its inception because it was created by Biel and Knudson to benefit their goals and was not created to benefit Ann Biel Brandt as required by the language of their power of attorney for her . After determining the Trust was void, the court concluded the land that had been transferred to the Trust was part of the Estate. The court also decided Ann Biel Brandt owned all the mineral revenue from her life estate in the Divide County land during her lifetime. In a separate order, the probate court decided her mineral rights involved in the separate civil action were Estate property and, for the purpose of the Estate administration, had a value of $197, 117.11. The court ordered an equal distribution of the value of the Estate's interest in the civil action to Biel and Knudson and required them to be substituted as plaintiffs for the personal representative in that action.

         [¶11] The probate court later issued an order allowing, settling, and confirming Bouchard's final inventory and accounting for the Estate. The court ordered distribution of property the court valued at $217, 206.45 to each of the three children, including allocation of $197, 117.11 to Biel and Knudson for the value of the separate civil action. The court also awarded Bouchard certain expenses and attorney fees and denied a request by Biel and Knudson for their attorney fees.

         III

         [¶12] Biel and Knudson argue N.D.C.C. §§ 30.1-18-03(1) and 30.1-18-13 prohibit Bouchard from acting simultaneously as the personal representative of the Estate and as an "interested person." Their argument requires examination of the statutory provisions of the Uniform Probate Code, N.D.C.C. title 30.1, adopted in North Dakota in 1973. See 1973 N.D. Sess. Laws ch. 257, § 1.

         [¶13] In Estate of Hogen, 2015 ND 125, ¶ 12, 863 N.W.2d 876, we described our rules for statutory interpretation:

Statutory interpretation is a question of law, fully reviewable on appeal. Estate of Elken, 2007 ND 107, ¶ 7, 735 N.W.2d 842. The primary objective in interpreting a statute is to determine the intent of the legislation. Id. The intent of legislation must be sought initially from the statutory language. Olson v. Job Serv., 2013 ND 24, ¶ 5, 827 N.W.2d 36. 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. Statutes are construed as a whole and are harmonized to give meaning to related provisions. N.D.C.C. § 1-02-07. We construe statutes to give effect to all of their provisions, so that no part of a statute is rendered inoperative or superfluous. N.D.C.C. § 1-02-38(2) and (4). Statutory provisions that are part of a uniform statute must be construed to effectuate their general purpose to make uniform the law of those states enacting them. N.D.C.C. § 1-02-13. In construing the U.P.C., we may also look to the Editorial Board Comment for guidance. In re Estate of Conley, 2008 ND 148, ¶ 15, 753 N.W.2d 384.

         [¶14] Section 30.1-18-03(1), N.D.C.C., provides that a personal representative is a fiduciary with a duty to settle and distribute the decedent's estate according to the decedent's will and the best interests of the estate. See Estate of Ridl, 455 N.W.2d 188, 192 (N.D. 1990). Section 30.1-18-13, N.D.C.C., provides that sales or encumbrances to a personal representative are voidable unless approved by the court. Section 30.1-13-03, N.D.C.C., describes the priorities for appointment as a personal representative of a decedent's estate, and lists those with priority as persons nominated in a will, a surviving spouse, devisees, other heirs, a trust company, and creditors. Section 30.1-01-06(26), N.D.C.C., defines an "interested person" to include heirs, devisees, spouses, creditors, and others having a property right in the decedent's estate, and includes persons having priority for appointment as personal representative.

         [¶15] The plain language of those provisions recognizes that a personal representative may be an interested person and does not preclude a personal representative from simultaneously being an interested person. Under N.D.C.C. § 30.1-12-05, interested persons may petition a court for orders in a formal probate proceeding and a personal representative is subject to the directions of the court on motion of an interested party. See also N.D.C.C. § 30.1-16-01 ("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.").

         [¶16] When the foregoing statutory provisions are considered together, we conclude Bouchard was not precluded from filing petitions as an interested person in this formal supervised probate administration while simultaneously performing her fiduciary duty to distribute the property according to Ann Biel Brandt's will and the best interests of the Estate. ...


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