Guardianship & Conservatorship of Thomas

• Decision Date: 20 October 2006
• Docket Number: No. 20050370.,20050370.
• Citation: 2006 ND 219,723 N.W.2d 384
• Court: North Dakota Supreme Court
• Parties: In the Matter of the GUARDIANSHIP AND CONSERVATORSHIP OF Lucille L. THOMAS, an Incapacitated Person. Harold Kolrud, Petitioner and Appellant, v. David Thomas, Respondent and Appellee.

723 N.W.2d 384

2006 ND 219

In the Matter of the GUARDIANSHIP AND CONSERVATORSHIP OF Lucille L. THOMAS, an Incapacitated Person.

Harold Kolrud, Petitioner and Appellant, v. David Thomas, Respondent and Appellee.

No. 20050370.

Supreme Court of North Dakota.

October 20, 2006.

Michael Geiermann, Schulz Geiermann & Bergeson Law Offices, P.C., Bismarck, N.D., for petitioner and appellant.

Robert G. Manly (argued), Vogel Law Firm, Moorhead, MN, and Daniel D. Narum (on brief), Kessel, Splitt and Narum, LaMoure, N.D., for respondent and appellee.

MARING, Justice.

[¶ 1] Harold Kolrud appealed from a district court order appointing David Thomas guardian and conservator for Lucille L. Thomas and from an order denying Kolrud's claim for wages and expenses incurred in assisting her. We conclude the district court did not abuse its discretion in appointing David Thomas guardian and conservator or in denying Kolrud's claim for wages and expenses. We affirm.

I

[¶ 2] Lucille Thomas was born in 1915 and lived in the LaMoure area until her husband died in 1987. She eventually moved to Jamestown. In 1992, Kolrud was introduced to Lucille Thomas by a friend who told him Lucille Thomas was concerned about her financial affairs and taxes. Lucille Thomas's husband had handled the couple's finances and Kolrud was licensed to sell insurance, annuities, and other financial products. Kolrud and Lucille Thomas developed a close friendship and Kolrud began handling her investments. Those assets have increased significantly since then.

[¶ 3] In 1997, Lucille Thomas executed a will leaving her estate to her son and only child, and naming Kolrud as an alternate beneficiary. She also executed a durable power of attorney appointing Kolrud to serve as her attorney in fact and nominating him to serve as guardian and conservator if she became incapacitated. After her son died in 1998, Lucille Thomas executed a codicil to the will naming Kolrud as a beneficiary. Between 1997 and 2000, Kolrud sold Lucille Thomas seven annuities for which he received commissions, and he also named himself the beneficiary on the annuities. According to Kolrud, he and Lucille Thomas agreed that he would care for her in return for receiving the balance of her estate when she died, and Kolrud cared for and assisted her throughout the years. In January 2003, Lucille Thomas began paying Kolrud $1,400 per month to care for her at her Jamestown apartment, and Kolrud quit his employment from which he had been earning $20 per hour. In October 2003, Lucille Thomas fell in her apartment and fractured her hip, necessitating her placement in a Jamestown nursing home. Kolrud and his family and friends cleaned out her apartment, stored and sold some of her belongings, and continued to take care of her needs.

[¶ 4] David Thomas is Lucille Thomas's nephew who resides in Owatonna, Minnesota, about 400 miles from Jamestown. He is retired, but continues to work, owns several businesses, and is financially secure. He visited Lucille Thomas about once each year, but became concerned about her situation after she entered the nursing home. David Thomas contacted Kolrud and asked about the contents of Lucille Thomas's will and power of attorney. Lucille Thomas granted her attorney authority to speak with David Thomas about her financial situation. In January 2004, Lucille Thomas met with her attorney and David Thomas at the nursing home. A new will was drafted removing Kolrud as a beneficiary, and a new power of attorney was drafted replacing Kolrud with David Thomas.

[¶ 5] After Kolrud learned of the changes to the will and power of attorney, he petitioned for appointment as Lucille Thomas's guardian and conservator. The district court appointed Kolrud emergency temporary guardian until a permanent guardian could be appointed, and also appointed a visitor, physician, and guardian ad litem and ordered reports to be filed with the court. In May 2004, Kolrud took Lucille Thomas to an attorney and she signed another will naming Kolrud as a beneficiary. Kolrud also submitted a $6,222.70 bill to Lucille Thomas for wages and expenses incurred for assisting in her transition to the nursing home. In September 2004, Kolrud paid himself $6,222.70 without seeking court approval. The court ordered the money held in an interest-bearing account until a final determination could be made on the validity of the debt. Following a series of hearings, the court found Lucille Thomas was an incapacitated person under N.D.C.C. § 30.1-26-01(2), appointed David Thomas guardian and conservator, and denied Kolrud's request for payment of the $6,222.70 bill.

II

[¶ 6] Kolrud argues the district court erred in appointing David Thomas guardian and conservator.

[¶ 7] Although we apply the clearly erroneous standard under N.D.R.Civ.P. 52(a) when reviewing findings of fact in a guardianship proceeding, see, e.g., Matter of Guardianship of Larson, 530 N.W.2d 348, 351 (N.D.1995); Matter of Guardianship of Nelson, 519 N.W.2d 15, 17 (N.D.1994); Matter of Guardianship of Renz, 507 N.W.2d 76, 77 (N.D.1993), courts in Uniform Probate Code jurisdictions apply the abuse of discretion standard when reviewing a trial court's selection of a guardian and conservator. See, e.g., In re Guardianship of Kowalski, 382 N.W.2d 861, 864 (Minn.App. 1986); Matter of Guardianship of Nelson, 204 Mont. 90, 663 P.2d 316, 318 (1983); In re Guardianship of Blare, 1999 SD 3, ¶ 9, 589 N.W.2d 211; Peter G. Guthrie, Annotation, Priority and preference in appointment of conservator or guardian for an incompetent, 65 A.L.R.3d 991, 995 (1975). A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support the finding, or if, on the entire record, we are left with a definite and firm conviction a mistake has been made. In re E.G., 2006 ND 126, ¶ 7, 716 N.W.2d 469. A court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, its decision is not the product of a rational mental process leading to a reasoned determination, or it misinterprets or misapplies the law. City of Bismarck v. Mariner Constr., Inc., 2006 ND 108, ¶ 8, 714 N.W.2d 484.

[¶ 8] Kolrud argues the district court erred in appointing David Thomas as guardian and conservator because the court misapplied the statutory priorities under N.D.C.C. §§ 30.1-28-11(3) and 30.1-29-10(3). However, N.D.C.C. § 30.1-29-10(4), relating to conservators, provides that "[t]he court, for good cause, may pass over a person having higher priority and appoint a person having lower priority or no priority." Section 30.1-28-11(4), N.D.C.C., relating to guardians, similarly provides that "[t]he court, acting in the best interest of the incapacitated person, may pass over a person having priority and appoint a person having a lower priority." The court found "good cause" under N.D.C.C. § 30.1-29-10(4), and that it would be in Lucille Thomas's "best interest" under N.D.C.C. § 30.1-28-11(4), to pass over Kolrud and appoint David Thomas "even if Kolrud and Thomas were considered equal priority or Kolrud was of a higher priority." Therefore, the dispositive issue is whether the court erred in finding good cause and that it would be in Lucille Thomas's best interest to select David Thomas rather than Kolrud as the guardian and conservator.

[¶ 9] The court found that Lucille Thomas was "generally aware" of the guardianship and conservatorship proceedings and that "she expresses varying positions depending on who she wants as guardian depending on who she is speaking with," which is consistent with the physician's report that she is "a `people pleaser' who has trouble saying no to people and would be vulnerable to . . . `arm twisting' when faced with someone who is in her thoughts placing pressure on her." The court noted "she is forgetful at times and has not been consistent in stating her desires regarding her understanding of her financial affairs or how she wishes her financial and legal affairs to be carried out and by whom she wishes that to be done. What she says and expresses in the areas of financial and legal affairs varies depending on who she is speaking with."

[¶ 10] Kolrud is sixty-nine years old, lives in Jamestown, is in good health, and Lucille Thomas's assets have nearly doubled under his supervision. The court found that "Kolrud and his family care about Lucille and have spent a considerable amount of their time and energy in helping her." David Thomas is seventy years old, is in good health, and is Lucille Thomas's nephew. The court noted that "Lucille expresses love for him and wished he lived closer to her." The court was also concerned about the annuities Kolrud sold to Lucille Thomas on commission and his being named the beneficiary on all of them, many of which were purchased before her son died. The court noted that David Thomas had no ownership or beneficiary interest, and would not accept any, in Lucille Thomas's assets, and had said he would waive his right to compensation if appointed. Kolrud was willing to waive his right to compensation as guardian and conservator, but was not willing...