Diotallevi v. Sierra Development Co.
| Decision Date | 28 February 1979 |
| Docket Number | No. 10463,10463 |
| Citation | 591 P.2d 270,95 Nev. 164 |
| Parties | Pietro DIOTALLEVI, Appellant, v. SIERRA DEVELOPMENT COMPANY, a Nevada Corporation, d/b/a Club Cal Neva, First National Bank of Nevada, a National Banking Association, and Rae Zetoony Kahan, Respondents. |
| Court | Nevada Supreme Court |
This is an appeal from an order confirming sale of trust property. We affirm.
This is the second time the case has been before us. In Diotallevi v. District Court, 93 Nev. 633, 572 P.2d 214 (1977), appellant Diotallevi's petition for a writ of prohibition was denied on the ground that he had an adequate remedy by appeal. This appeal is brought as a result of that ruling.
The underlying facts are set forth in our previous opinion. In brief, appellant challenges an order entered by the court below on April 15, 1977, which confirmed a lease-sale of property held in trust by respondent First National Bank of Nevada (Bank) to respondent Sierra Development Corporation (Cal Neva), subject to receipt of higher bids at an oral bidding conducted in open court. Appellant suggests that the court was bound to confirm his prior bid of $51,000 annual rent, submitted pursuant to a court-authorized sale. The authorization, and subsequent proposed contract, however, were expressly made subject to confirmation by the lower court.
In-court bidding was later conducted, pursuant to notice, by the court on February 23, 1978, following our denial of appellant's petition for a writ of prohibition. Cal Neva submitted the high bid of $150,000 annual rent. The court ordered the lease-purchase agreement confirmed with Cal Neva, at that rate. This appeal resulted.
As a threshold issue, respondent Cal Neva urges that since appellant argued the issue of the court's jurisdiction in the petition for a writ of prohibition, which this court denied in Diotallevi v. District Court, supra, appellant is now precluded from raising that issue again on this appeal. This contention is meritless. Appellant's petition was denied on the ground that he had an adequate remedy at law under NRS 155.190. The issue of the jurisdiction of the lower court to refuse to confirm appellant's bid was not ruled upon in Diotallevi v. District Court, supra. Appellant may therefore raise the issue on this appeal.
Appellant suggests that the order conditionally confirming the bid of Cal Neva, and refusing to confirm his bid, was beyond the subject matter jurisdiction of the lower court, sitting as a probate court, under NRS Ch. 153. We believe, however, that the probate court had jurisdiction under NRS Ch. 153 to issue the order in question. 1
Since its adoption in 1941, NRS Ch. 153 has permitted probate courts to retain jurisdiction over testamentary trusts "for the purpose of the settlement of accounts . . . and for the distribution of the residue to those entitled to it." NRS 153.020(1); 1941 Nev.Stats. ch. 107, § 244, p. 217. By amendment in 1947, the statute also permits a trustee to "petition the court, from time to time, for instructions as to the administration of the trust." NRS 153.040(1); 1947 Nev.Stats. ch. 22, § 1, p. 39.
Appellant relies heavily on In re Devincenzi's Estate, 65 Nev. 158, 190 P.2d 842 (1948), for the proposition that Chapter 153 does not confer upon the probate court jurisdiction to refuse to confirm the lease-sale to him. The Devincenzi case dealt with the predecessor of NRS 153.020, regarding settlement of accounts. In that case, the beneficiaries objected to an already completed sale, which the trustees had Not brought to court for prior approval. California cases, as noted in Devincenzi, had interpreted the comparable provision of their probate code quite narrowly, so as to limit the ability of beneficiaries to challenge, in probate court, the administration of a testamentary trust. E. g., In re Hubbell's Estate, 121 Cal.App. 38, 8 P.2d 530 (1932); Johnson v. Superior Court, 77 Cal.App. 599, 247 P. 249 (1926); Parkman v. Superior Court, 77 Cal.App. 321, 246 P. 334 (1926).
Since those California cases were decided, two changes have been made in the comparable section of the California probate code, now § 1120. See 1931 Cal.Stats. ch. 281, § 1120, at 659. The first, for which there has been no comparable change in NRS Ch. 153, provides that the probate court retains jurisdiction for the purpose not only of settling accounts and distribution but also of "passing upon the acts of the trustees." The second addition to the California section provides that "The trustee may also petition such court, from time to time, for instructions as to the administration of the trust." For this addition, Nevada Does have a comparable provision, NRS 153.040(1), providing that trustees may "petition the court, from time to time, for instructions as to the administration of the trust." (added 1947 Nev.Stats. ch. 33, § 1, at 39). This provision of the California statute has been interpreted by the California courts as conferring upon probate courts jurisdiction over administration of trust matters when such matters are brought to the court by the trustees themselves. See In re Keet's Estate, 15 Cal.2d 328, 100 P.2d 1045 (1940); In re Smith's Estate, 4 Cal.App.2d 548, 41 P.2d 565 (1935).
In this case, the matter was before the court as a result of a trustee's petition. Therefore, NRS 153.040 provided the predicate for the court's jurisdiction.
Since the lower court had jurisdiction to authorize the lease-sale under NRS 153.040, it also had jurisdiction to require the trustees to return to it for confirmation. Having subject matter jurisdiction, the court could bring to bear its full equitable powers. See In re Charters' Estate, 46 Cal.2d 227, 293 P.2d 778, 784 (1956); In re Evans' Estate, 62 Cal.App.2d 249, 144 P.2d 625, 629-30 (1944). Courts of equity have traditionally had the power to authorize a trustee's sale subject to a requirement that the proposed sale be submitted to the court for approval. 7 Bogert, Trusts § 742, pp. 587-88 (2d ed. 1960). In confirming the sale, the court simply borrowed a procedure from statutes governing estate sales for receipt of higher bids in open court, a practical and fair method for determining the best price available. See In re De La Montanya's Estate, 83 Cal.App.2d 322, 188 P.2d 494 (1948). Therefore, the order entered April 15, 1977, was within the jurisdiction of the probate court under the provisions of NRS 153.040.
We turn to consider whether the court abused its discretion in refusing to confirm appellant's bid. In claiming that the court did so, appellant urges this court to follow In re Strass' Trust Estate, 11 Wis.2d 410, 105 N.W.2d 553 (1960), where the court reversed a lower court confirmation of a subsequent higher bid following a trustee sale.
In Strass, the testamentary trustee petitioned the court for permission to vacate an agreement for sale of trust property made pursuant to court authorization. The agreement provided that it was subject to court confirmation. The trustee alleged that he had received and accepted an offer of $16,000 for the property, only to receive an offer of $17,000 a few days later. The property had been appraised at $15,000, and the beneficiaries had consented to a sale at $16,000 or more. The lower court refused to confirm the original agreement, and conducted an auction in open court that produced a high bid of $18,300, which the court confirmed.
The Supreme Court of Wisconsin reversed, holding that the facts were insufficient to sustain an order setting aside the original sale or refusing to confirm it. The court noted that 105 N.W.2d at 555.
Respondents, on the other hand, urge this court to follow In re De La Montanya's Estate, supra, in which the California appellate court sustained a similar lower court order. In Montanya, the testamentary trustee applied to the court for an order confirming its sale of trust property under a trust instrument which granted it full discretionary power to do so. The contract for purchase provided for a full price of $130,000, of which a portion of the payment was to be made on court confirmation. During the confirmation hearing, a bidder offered $150,000. The court, after inquiring whether there were any further bids, ordered the sale to the second bidder confirmed.
The appellate court upheld the trial court's determination that "the original sale (was) not for the best interests of the trust nor for its advantage and benefit." 188 P.2d at 498. It emphasized that In the court's view, "the determinative question on this appeal is whether the evidence supports the findings in the order." It concluded that "As a matter of law we are not in a position to say that the trial court erred in determining that the sale (to the highest bidder) was in the best interests of the trust." Id.
The most clear-cut distinguishing feature between the authority cited by appellant and that cited by respondents is the courts' respective policy concerns. Those jurisdictions which stress the importance of upholding trustee's contracts and the finality of trustee sales tend to uphold the original agreement. See Evans v. Hunold, 393 Ill. 195, 65 N.E.2d 373 (1946); Gilden v. Harris, 197 Md. 32, 78 A.2d 167 (1951); In re...
To continue reading
Request your trial
-
King v. King (In re King)
...court may compel "redress of a breach of trust," NRS 153.031(I)(m), using its "full equitable powers," Diotallevi v. Sierra Dev. Co. , 95 Nev. 164, 591 P.2d 270, 272 (1979) (probate court’s "full equitable powers" include the power to apply a "practical and fair method" for protecting the i......
-
McGuire v. Lear
...may exercise the full panoply of its equitable powers in a case where it has subject matter jurisdiction. Diotallevi v. Sierra Development Co., 95 Nev. 164, 591 P.2d 270, 272 (1979). It is uncontroverted that the Nevada district court had subject matter jurisdiction re the sale of the NRCP ......
- Sparks v. State
-
Hannam v. Brown
...of trust funds will generally not be disturbed unless it clearly demonstrates an abuse of discretion. See, e.g., Diotallevi v. Sierra Dev. Co., 95 Nev. 164, 591 P.2d 270 (1979); Abel v. Lowry, 68 Nev. 284, 231 P.2d 191 (1951). Because the district court offered no basis for its refusal to r......