Estate of Hoffas, Matter of, s. 870192

• Decision Date: 18 April 1988
• Docket Number: 870206,Nos. 870192,s. 870192
• Parties: In the Matter of the Estate of Edwin O. HOFFAS, Deceased. Omar OLSON, Tenny Olson, Elvera Sophia Hextell, Alma Elizabeth Bell, and Carla Apanian, Appellants, v. ESTATE OF Edwin O. HOFFAS, Appellee. Civ.
• Court: North Dakota Supreme Court

Page 391

422 N.W.2d 391

In the Matter of the Estate of Edwin O. HOFFAS, Deceased.

Omar OLSON, Tenny Olson, Elvera Sophia Hextell, Alma

Elizabeth Bell, and Carla Apanian, Appellants, v. ESTATE OF Edwin O. HOFFAS, Appellee.

Civ. Nos. 870192, 870206.

Supreme Court of North Dakota.

April 18, 1988.

Caldis, Arneson & Tingum, Ltd., Grand Forks, for appellants; submitted on briefs.

Dosch Law Office, Devils Lake, for appellee; submitted on briefs.

LEVINE, Justice.

We consider consolidated appeals from an order of the Bottineau County court determining heirs, dated May 20, 1987, and judgment ordering repayment to the Estate of Edwin O. Hoffas for improper distributions. We affirm.

Edwin O. Hoffas died intestate on November 22, 1981, in Bottineau County, North Dakota. Hoffas, never having married, was survived only by lineal descendants of his maternal and paternal grandparents. Under NDCC Sec. 30.1-04-03, half of his estate was to pass to the issue of his maternal grandparents and half to the issue of his paternal grandparents. Distribution on the maternal side was accomplished without incident, and is not disputed. At issue is the procedure underlying the distribution to the descendants of the paternal grandparents.

Hoffas was survived by nine first cousins: Thomas Olson, Elvera Hextell, Alma Bell, Carla Apanian, Emma Hanson, Josie Rierson, Emma Osterlund, Ella Bakke, and John M. Hoffas. He was predeceased by twenty-five first cousins who left many descendants surviving him. The search for these individuals was not complete on October 8, 1985, when Wallace O. Nelson, the personal representative, petitioned the Bottineau County court for determination of Hoffas' heirs. Notice of the heirship hearing was published for three weeks in November in the weekly Bottineau County newspaper. A hearing was held in December 1985 and, on January 22, 1986, Bottineau County Court Judge A.S. Benson issued a memorandum opinion and order setting forth the general scheme of distribution and stating that distribution should be made after review by the county court. A list of over one hundred twenty names of Hoffas' first and second cousins, with accompanying addresses, was filed with the county court April 14, 1986.

On April 21, 1986, Judge Benson ordered that a final report and account, and a petition for distribution, be filed at the earliest possible time, and that notice of the final report and account be mailed to the heirs "determined" in the January 22 order. On April 22, 1986, Judge Benson ordered the attorney for the personal representative to file an affidavit naming the persons to whom distribution should be made, but to exclude from the affidavit all second cousins. ¹

Accordingly, the affidavit of heirship named the nine first cousins who survived Hoffas as well as Anna Larson, mistakenly believed to be a surviving first cousin. Thomas Olson (first cousin) died during probate proceedings, and was survived by two sons (second cousins), Omar Olson and Tenny Olson. Emma Hanson (first cousin) also died during probate and was survived by a son, Edward Hanson (second cousin). The affidavit stated that Edward Hanson should take the share of his parent, and Omar Olson and Tenny Olson should succeed to their parent's share. Thus the affidavit named eleven heirs: the seven living first cousins, the three second cousins whose parents died during probate, and Anna Larson.

A petition for an order of distribution was filed May 28, 1986. Notice of the hearing was mailed only to the eleven persons named in the affidavit of heirship.

Judge Benson divided the paternal side of the estate into five shares of $54,489.20, one share for each aunt and uncle who left issue that survived Hoffas. On June 20, 1986 distribution was ordered and pursuant to the order, Tenny Olson, Omar Olson, Elvera Hextell, Alma Bell, Carla Apanian and Edward Hanson each received $27,244.60. Josie Rierson, Emma Osterlund, Ella Bakke, and John M. Hoffas each received $13,622.30. There was no distribution to Anna Larson. Judge Benson approved the distribution July 29, 1986.

After Judge Benson retired in January 1987, Judge Thomas K. Metelmann was designated to preside over the Hoffas probate proceedings. Judge Metelmann suspended the authority of the personal representative and appointed as special administrator, attorney Ronald Dosch, of Devils Lake, North Dakota. The judge also scheduled a hearing to review the orders previously issued and the hearings previously held by Judge Benson. Judge Metelmann reviewed the record and concluded that it contained neither an order determining heirs nor sufficient evidence to determine Hoffas' heirs, and that improper distribution had been made. He ordered a hearing to determine heirship and directed the special administrator to seek recovery of all distributions.

On March 6, 1987, notice of the heirship hearing was mailed to all living descendants of Hoffas' maternal and paternal grandparents whose names and addresses were known. One hundred sixty-one notices were mailed. On May 20, 1987, after the heirship hearing, Judge Metelmann issued an order containing the names and addresses of the seven first cousins, one hundred twenty-eight second cousins, and sixty-two third cousins entitled to inherit from Hoffas' estate. ² He also ordered the ten distributees to show cause why the court should not order them to repay their distributions. Edward Hanson repaid the estate prior to the hearing to show cause and was discharged from further obligation.

On June 29, 1987, Judge Metelmann ordered judgment against the nine remaining distributees in the amounts of their respective distributions. Judge Metelmann concluded that recovery of the improper distributions was not barred. He directed entry of a final judgment against the nine distributees and made a Rule 54(b) certification that the judgment was final and appealable. Omar Olson, Tenny Olson, Elvera Hextell, Alma Bell, and Carla Apanian appealed.

The sole issue is whether Judge Metelmann was authorized to reconsider Judge Benson's order determining heirship (January 22, 1986) and orders for and approving distribution (June 20 and July 29, 1986).

1. Order Determining Heirship

Appellants argue first that Judge Benson's court gained personal jurisdiction over all Hoffas' heirs by notice mailed to all heirs known at the time of the heirship hearing, and by published notice of the hearing for the benefit of heirs whose names or addresses were unknown, and that because no appeal was taken from the order determining heirs, the order of heirship is res judicata.

However, the order of January 22, 1986 did not determine Hoffas' heirs. It stated only that:

"All aunts and uncles on the maternal and paternal sides who left issue, shall receive equal shares and the share of each deceased aunt or uncle, who left issue, shall be left to the issue of that deceased person in equal shares by right of representation."

The order merely recites the statutory direction for inheritance by representation contained in NDCC Sec. 30.1-04-06 (UPC 2-106). The order does not determine the heirs. Heirs are defined as those persons entitled under the statutes of intestate succession to the property of a decedent. NDCC Sec. 30.1-01-06(18). A person, as defined in Sec. 30.1-01-06(30) is "an individual, a corporation, an organization, or other legal entity." Instead of determining the individuals who are heirs, the order provides a generic scheme for distribution, but leaves unanswered which individuals shall inherit. See 2 UPC Practice Manual, Form 33 (2d ed. 1977).

We agree with Judge Metelmann's conclusion that there was no prior order determining heirs. We conclude that Judge Metelmann was authorized to determine heirs. ³

2. Distribution

Appellants defend Judge Benson's orders of June 20 and July 29, 1986, relating to distribution. They contend Judge Metelmann was without authority to alter those orders because of the doctrine of res judicata. Res judicata means that a valid, existing final judgment from a court of competent jurisdiction is conclusive, with regard to the issues raised, or those that could have been raised, and determined therein, as to the parties and their privies in all other actions. See, e.g., Schiele v. First National Bank of Linton, 404 N.W.2d 479 (N.D.1987); Peacock v. Sundre Township, 372 N.W.2d 877 (N.D.1985). The question becomes whether the Benson court acquired jurisdiction over the omitted heirs. Appellants argue that the court did through notice by publication, or vicariously through its jurisdiction over second cousins Omar Olson, Tenny Olson, and Edward Hanson under NDCC Sec. 30.1-03-03(2)(c), or vicariously through its jurisdiction over personal representative Nelson, under NDCC Sec. 30.1-03-03(2)(b).

In all formal estate proceedings, ⁴ the notice prescribed in NDCC Sec. 30.1-03-01 must be given to every interested person, or to one who can bind an interested person as provided in NDCC Sec. 30.1-03-03(2)(a) and (b). NDCC Sec. 30.1-03-03(3)(a) (UPC 1-403). "Interested person" includes heirs. NDCC Sec. 30.1-01-06(21). After notice to all interested persons and hearing, the court may enter an order determining the persons entitled to distribution of the estate and directing distribution. NDCC Sec. 30.1-21-01(1) (UPC 3-1001). See also NDCC Sec. 30.1-01-06(16). Thus, notice is required prior to any formal hearing or order.

Where notice is required, interested persons notified in conformity with NDCC Sec. 30.1-03-01 are bound by orders of the court even though less than all interested persons are notified. NDCC Sec. 30.1-12-06. A formal proceeding which is to be effective on all interested persons must follow reasonable notice to such persons. NDCC Sec. 30.1-15-02 (UPC 3-402), Editorial Board Comment. Thus, proper notice gives the court jurisdiction over persons notified, and interested persons not notified of formal proceedings are not bound.

Under NDCC Sec....