Conway v. Parker, 9243

• Decision Date: 27 January 1977
• Docket Number: No. 9243,9243
• Citation: 250 N.W.2d 266
• Parties: Eileen CONWAY, Petitioner and Appellant, v. Lorraine PARKER et al., Respondents and Appellees. Civ.
• Court: North Dakota Supreme Court

Page 266

250 N.W.2d 266

85 A.L.R.3d 1108

Eileen CONWAY, Petitioner and Appellant, v. Lorraine PARKER et al., Respondents and Appellees.

Civ. No. 9243.

Supreme Court of North Dakota.

Jan. 27, 1977.

Syllabus by the Court

1. Personal representatives may employ agents, including accountants, to assist them in performance of administrative duties.

2. Generally, corepresentatives act jointly in administration and distribution of the estate.

3. The probate court may make an order to secure proper performance of duties by nonconcurring and uncooperative corepresentatives if it appears that some person's interest in the estate will otherwise be jeopardized and the action is necessary for expeditious settlement of the estate.

4. Fees paid to an attorney separately employed by one corepresentative are reimbursable out of the estate if the services performed were beneficial to the estate as a whole and necessary for protection of the estate.

5. The determination of what are reasonable attorney's fees rests largely in the trial court's discretion.

6. When an appeal is taken generally from county court to district court, all issues must be tried and determined anew in district court.

7. The burden of proof on appeal from county court to district court remains on the original petitioner.

8. Application for partial distribution of an estate may be granted whenever it appears the distribution can be made without loss to creditors, and such showing does not require a full accounting.

Tenneson, Serkland, Lundberg & Erickson, Fargo, for petitioner and appellant; Armond G. Erickson, Fargo, moved that Terence Doyle of Briggs & Morgan, St. Paul, Minn., be permitted to appear and argue the case, which motion was granted.

Pearson & Christensen, Grand Forks, for respondents and appellees; argued by Garry Pearson, Grand Forks.

SAND, Justice.

Eileen Conway, one of two personal representatives for the estate of Selma Kjorvestad, appeals from an order of the district court of Nelson County which affirmed the judgment of the Nelson County probate court and authorized an additional amount for partial distribution.

Three issues are presented on this appeal:

'(1) Was the district court's order requiring the joint personal representatives to execute a power of attorney to an accounting firm, E. W. Brady & Co., Ltd., to represent to estates of Guy Kjorvestad and Selma Kjorvestad before the Internal Revenue Service clearly erroneous?

(2) Was Lorraine Parker, as joint personal representative, entitled to reimbursement from the estate for attorney's fees paid to an attorney hired by her but without the consent of the other personal representative, Eileen Conway?

(3) Was the district court in error in ordering partial distribution of $35,000 from the estate to each personal representative?

The personal representatives, Eileen Conway and Lorraine Parker, are the surviving daughters of Guy and Selma Kjorvestad. Guy Kjorvestad died on January 27, 1973, leaving his wife and two daughters, a son having predeceased him. All property was left, by the effective provisions of his will, to his wife. He also appointed his wife as executrix if she survived him; and if she did not, his daughter Eileen Conway. His wife Selma refused to act and requested that both daughters be appointed. On March 15, 1973, the will was admitted to probate and Eileen and Lorraine were appointed by the court as coexecutrixes.

On October 1, 1973, Selma executed an instrument disclaiming all her real estate inheritance from the estate of Guy Kjorvestad. On January 7, 1974, she executed a codicil to her will, which will was dated December 3, 1972. Selma died on May 15, 1974, leaving her property, if her husband did not survive her, to her two daughters, share and share alike, and appointing them coexecutrixes of her estate. Selma's will was admitted to probate in April of 1975.

In early 1975 a petition for accounting in the estate of Guy Kjorvestad was filed by Eileen Conway. The petition was granted and an accounting was filed by Lorraine Parker in April of 1975.

Lorraine Parker, by her attorney, Garry Pearson, filed a petition in probate court on August 12, 1975, requesting relief on nine different counts. Those material to this appeal were: (1) a request that power of attorney be given to the E. W. Brady & Co., Ltd., to represent both estates before the Internal Revenue Service and in particular to obtain any necessary extensions of time in order to file the income and estate tax returns; (2) request for an order directing payment of all attorney's fees for attorneys acting for the estate or the coexecutrixes; and (3) a request for approval of partial distribution from the Selma Kjorvestad estate of $35,000 each of Eileen Conway and Lorraine Parker.

The probate court, by order dated September 19, 1975, granted relief on counts (1) and (2) listed above, but reserved ruling on the issue of partial distribution, count (3), pending receipt of a report from E. W. Brady & Co., Ltd. (hereinafter Brady & Co.). In addition, the court granted the request of Terence Devine, who had earlier been appointed by the court, to withdraw as counsel for the estate of Selma Kjorvestad. No one was appointed by the court to replace Devine as estate attorney. After the Brady & Co. report was received, another order was entered by the probate court on October 14, 1975, authorizing partial distribution in the amount of $35,000 to Lorraine Parker only.

Eileen Conway appealed to the district court from certain sections of the September 19th order and from the October order. The district court found that there was a good and sufficient reason to order the personal representatives to delegate a power of attorney to Brady & Co.; that services performed by attorney Garry Pearson were to the benefit of the estates of Guy and Selma Kjorvestad and were reasonable in amount; and that the estate of Selma Kjorvestad had sufficient assets to allow a partial distribution of $35,000 each to Lorraine Parker and Eileen Conway.

Eileen Conway appealed to this court from the judgment of the district court. We are primarily concerned on this appeal with the probate of Selma Kjorvestad's estate, although by the terms of the wills involved her estate and that of her husband are interrelated.

The written and oral arguments on appeal before this court left the impression that the district judge on appeal merely took judicial notice of the contents of the file of the probate court; whereas the transcript discloses that the trial court had offered to take judicial notice of the facts in the file to shorten the hearing, but after an objection was lodged, evidence was introduced on the different issues, and the court specified the items of which it was taking judicial notice.

POWER OF ATTORNEY

Eileen Conway asserts in this appeal that the district court improperly compelled her as joint personal representative to execute a power of attorney to Brady & Co. She claims the court gave no reason for the order, and in addition had no power to command her to exercise a discretionary power.

Personal representatives are not required to perform every act which may be necessary or proper in the administration of an estate, and may employ agents to perform tasks which they cannot reasonably be expected to perform personally. 33 C.J.S. Executors and Administrators § 146. Our statutes incorporate this view in § 30.1--18-- 'Except as restricted or otherwise provided by the will or by an order in a formal proceeding and subject to the priorities stated in section 30.1--20--02, a personal representative, acting reasonably for the benefit of the interested persons, may properly:

15(21), North Dakota Century Code, which provides:

'21. Employ persons, including attorneys, auditors, investment advisers, or agents, even if they are associated with the personal representative, to advise or assist the personal representative in the performance of his administrative duties, and act, without independent investigation, upon their recommendations. Instead of acting personally, he may employ one or more agents to perform any act of administration, whether or not discretionary.'

It is clear that Brady & Co., a firm of certified public accountants, would come within this provision as agents or auditors employed to assist in performance of administrative duties for the Kjorvestad estates. The purpose of the power of attorney given by the estate was to enable Brady & Co. to represent both estates before the Internal Revenue Service and to obtain any necessary extensions of time for filing of estate and income tax returns.

The problem arises because two personal representatives were appointed for the Kjorvestad estate, rather than one. From Conway's point of view, the order compelled her to perform an act she didn't wish to perform. From Parker's viewpoint the order was not a command, because it was she who requested that the power be executed to Brady & Co. Her request was based in part on the fact that a year earlier the estate had been faced with, and successfully resisted, a late filing penalty of $7,000 for late filing of a return on the Guy Kjorvestad estate. Parker was therefore attempting to ensure that all tax returns remaining would be timely prepared and filed.

The result was a direct conflict between the two personal representatives. In order to determine whether the district court was authorized to issue its order in spite of this conflict, we look to two statutory provisions. Section 30.1--18--17, NDCC, sets out the requirements for joint action in the case of corepresentatives:

'If two or more persons are appointed co-representatives and unless the will provides otherwise, the concurrence of all is required on all acts connected with the administration and distribution of the estate. This restriction does not apply when any co-representative receives and receipts for property due the estate, when the concurrence of all...