Grenz v. Grenz (In re Grenz)

Decision Date31 August 2020
Docket NumberNo. 20190363,20190363
Citation948 N.W.2d 320
Parties In the MATTER OF the ESTATE OF Leo GRENZ, Deceased Kelly Grenz, personal representative of the Estate of Leo Grenz, deceased, Petitioner and Appellant v. Donavin Grenz, David Grenz, Respondents and Appellees and Lee Atta Horner and Kelly Grenz, personal representative of the Estate of Sally Grenz, Respondents
CourtNorth Dakota Supreme Court

Opinion of the Court by Tufte, Justice, in which Chief Justice Jensen and Justices VandeWalle and Crothers joined. Surrogate Judge Sandstrom filed a dissenting opinion.

Timothy D. Lervick, Bismarck, N.D., for petitioner and appellant and respondent Kelly Grenz.

Ronald H. McLean (argued) and Ian R. McLean (on brief), Fargo, N.D., for respondents and appellees Donavin Grenz and David Grenz.

Tufte, Justice.

[¶ 1] Kelly Grenz, as personal representative of the Estate of Leo Grenz, appeals from orders and judgments partially invalidating the will of Leo Grenz. The district court invalidated a portion of the will resulting from undue influence and gave effect to a portion of a contingent distribution clause the court found was consistent with Leo Grenz's testamentary intent. We affirm, concluding the court properly applied the equitable doctrine of partial invalidity.

I

[¶ 2] Leo Grenz died testate. Leo and his second wife, Sally Grenz, had one child together, Kelly Grenz. Leo also had three children with his first wife: Donavin Grenz, David Grenz, and Lee Atta Horner. Leo Grenz was survived by Sally Grenz and all of his children. Sally Grenz died during these proceedings. She has been replaced by Kelly Grenz as the personal representative of her estate.

[¶ 3] Leo Grenz's will disposes of his estate, and, as relevant to this appeal, the shares he owned in JT Ranch, via its residuary clause, which provides:

ARTICLE FIVE. RESIDUE.
A. Surviving Spouse. I give and devise all of the rest, residue and remainder of my property of every kind and description, wherever situated and whether acquired before or after the execution of this Will, to my spouse, Sally Grenz, if she shall survive me.
B. Children. In the event that my spouse does not survive me, I make the following bequests:
(1) I give and devise an undivided one-third of my stock in JT Ranch, Inc., to each of my sons, namely, Donavin Grenz, David Grenz and Kelly Grenz.
(2) I give and devise to my daughter, Leatta Horner, the sum of $10,000.00.
(3) I give and devise all of the rest, residue and remainder of my property of every kind and description, wherever situated and whether acquired before or after the execution of this Will, to my son and daughter-in-law, Kelly Grenz and Kelley Grenz, in equal shares.

[¶ 4] The will was admitted to probate, and Kelly Grenz was appointed personal representative. Donavin Grenz and David Grenz objected to the probate, arguing Leo Grenz intended to devise his ownership in JT Ranch to them but he was unduly influenced not to do so by Sally Grenz and Kelly Grenz.

[¶ 5] The district court held a hearing on the objection. On the basis of consistent statements over many years that Leo Grenz made to his family members and to an individual who rented a portion of JT Ranch, the court found Leo Grenz's testamentary intent was for the ranch shares to go to Donavin Grenz and David Grenz. The court found Leo Grenz was suffering from Parkinson's disease

and declining memory when he executed the will. The court also found Sally Grenz and Kelly Grenz isolated Leo Grenz from his other family members and they transported him to appointments with the attorney who prepared the will, which they also attended.

[¶ 6] The district court concluded that Sally Grenz and Kelly Grenz exercised undue influence over Leo Grenz and that the will's disposition of the JT Ranch shares was contrary to his testamentary intent. To accomplish Leo Grenz's testamentary intent, the court ordered the portions of the will's residuary clause to be struck to the extent they devised the JT Ranch shares to Sally Grenz and Kelly Grenz. The court gave effect to a portion of the contingent distribution clause that favored Donavin Grenz and David Grenz and ordered the JT Ranch shares be distributed to them.

II

[¶ 7] Kelly Grenz argues the district court improperly "rewrote" the will. He does not challenge the district court's finding regarding Leo Grenz's testamentary intent or the court's determination that he and Sally Grenz exercised undue influence. Nor does he challenge the court's decision to partially invalidate the will. However, he argues that because of his and Sally Grenz's undue influence, the will does not effectively dispose of the JT Ranch shares. He therefore claims the shares should be distributed according to intestate succession.

[¶ 8] Donavin Grenz and David Grenz argue the district court properly applied the doctrine of partial invalidity to avoid an unjust result. They note that under the laws of intestacy, Sally Grenz's estate would acquire the majority of the shares, and Kelly Grenz would be entitled to a share as Leo Grenz's descendant plus the interests he inherits from Sally Grenz. They claim the court properly applied its equitable powers to accomplish Leo Grenz's testamentary intent and to prohibit the wrongdoers from benefitting from their misconduct.

A

[¶ 9] Although neither party objects to the district court's application of the doctrine of partial invalidity, we must determine whether it is a remedy available under North Dakota law. The answer to that question, which we have not decided, is necessary for us to determine whether the relief granted by the district court was proper.

[¶ 10] The doctrine of partial invalidity allows a court to separate a portion of a will that is the product of undue influence from other portions of the will that are valid:

[T]he great majority of American jurisdictions have endorsed the view that where a part of a testamentary instrument is shown to have been the result of undue influence and therefore not the testator's will, other portions of the instrument may nevertheless be given effect, at least if such other portions are separable from the concededly invalid ones.

Alan R. Gilbert, Annotation, Partial Invalidity of a Will, 64 A.L.R.3d 261 (1975). Courts do not apply the doctrine when it will "defeat the manifest intent of the testator, interfere with the general scheme of distribution, or work an injustice to other heirs." 79 Am. Jur. 2d Wills § 357 (2d ed. 2020). See also Estate of Lloyd , 189 N.W.2d 515, 520 (S.D. 1971).

[¶ 11] Prior to North Dakota's adoption of the Uniform Probate Code, this Court applied the doctrine of partial invalidity in Black v. Smith , 58 N.D. 109, 224 N.W. 915 (1929). The testator and his wife became severely ill, and the testator's wife died. Id. at 917. Shortly after her death, the testator executed a will. Id. There was a factual dispute concerning whether the beneficiaries allowed the testator to execute the will while concealing from him the fact that his wife had died. Id. at 923-24. Because she had predeceased him, he had inherited her property and his will governed its disposition. Id. at 920. The will was challenged, and on appeal this Court explained that even if the beneficiaries’ motive for concealing the wife's death was not malicious, their behavior was still fraudulent. Id. at 924. The Court then held the fraud could only invalidate the portion of the will that was fraudulently induced:

[T]he effect of any fraud resulting from an innocent concealment of the fact of [the wife's] death would ... extend no further than to render void the will in so far as it would operate upon the property which the deceased had inherited from his wife almost immediately before the making of the will. A majority of the court is agreed that it was error to submit the question of fraud to the jury in such a manner as to warrant the setting aside of the will altogether on that account, and that at most it could have had but the limited effect indicated.

Id. at 925.

[¶ 12] Although our common law recognizes the doctrine of partial invalidity, "there is no common law in any case in which the law is declared by the code." N.D.C.C. § 1-01-06. The Uniform Probate Code now governs probate proceedings in North Dakota. See N.D.C.C. tit. 30.1. We must therefore determine whether it has supplanted our common law rule.

[¶ 13] In Estate of Conley , 2008 ND 148, 753 N.W.2d 384, we were tasked with determining whether the Uniform Probate Code displaced the common law presumption of animo revocandi , which assumes a lost will was intentionally revoked. We noted that the Uniform Probate Code did not provide specific guidance on the issue. Id. at ¶¶ 18-20. Citing N.D.C.C. § 1-01-03(7), which incorporates North Dakota's common law into its general body of law, we reasoned the common law presumption applied "because there is no express law regarding the animo revocandi presumption." Id. at ¶¶ 25, 27.

[¶ 14] Similar to Estate of Conley , North Dakota's Uniform Probate Code is silent on the issue of whether it supplanted the prior common law rule of partial invalidity. There is no provision expressly allowing it; nor is there one expressly prohibiting it. Given this uncertainty, we look to our neighboring jurisdiction of South Dakota, which is a Uniform Probate Code state and has faced a similar issue. N.D.C.C. § 1-02-13 (stating a "uniform statute must be so construed ... to make uniform the law of those states which enact it"); Estate of Zimmerman , 2001 ND 155, ¶ 14, 633 N.W.2d 594 (considering Uniform Probate Code editorial board comments and decisions of other uniform jurisdictions for guidance).

[¶ 15] In Estate of O'Keefe , 1998 S.D. 92, 583 N.W.2d 138, the beneficiaries of a will inflicted fraud upon the testator while he was alive. Id. at ¶ 3. After he died, the testator's estate sued the beneficiaries and was awarded damages. Id. An innocent beneficiary petitioned the court to prohibit the wrongdoers from sharing in the award, a portion of which t...

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