Harris v. Harris (In re Estate of Harris)

• Decision Date: 28 February 2017
• Docket Number: No. 20160084, No. 20160085,20160084
• Citation: 890 N.W.2d 561
• Parties: In the MATTER OF the ESTATE OF Steven H. HARRIS Bruce G. Harris, Petitioner and Appellant v. Mary K. Harris, Respondent and Appellee In the Trust of Steven H. Harris Testamentary Trust Bruce G. Harris, Petitioner and Appellant v. Mary K. Harris, Respondent and Appellee
• Court: North Dakota Supreme Court

890 N.W.2d 561

In the MATTER OF the ESTATE OF Steven H. HARRIS

Bruce G. Harris, Petitioner and Appellant

v.Mary K. Harris, Respondent and Appellee

In the Trust of Steven H. Harris Testamentary Trust

Bruce G. Harris, Petitioner and Appellant

v.Mary K. Harris, Respondent and Appellee

No. 20160084

No. 20160085

Supreme Court of North Dakota.

Filed February 28, 2017

Zachary E. Pelham, 314 E. Thayer Ave., P.O. Box 400, Bismarck, N.D. 58502–0400, for petitioner and appellant.

David A. Tschider, 418 E. Rosser Ave., Ste. 200, Bismarck, N.D. 58501–4046, for respondent and appellee.

McEvers, Justice.

[¶ 1]Bruce Harris appeals a district court's order denying his N.D.R.Civ.P. 60(b)motion to vacate a judgment entered consistent with stipulations Bruce Harris entered into with the trustee and personal representative of Steven Harris's trust and estate.Bruce Harris argues the district court abused its discretion by not vacating the judgment for lack of mutual assent, misrepresentation, and fraud.He also argues the district court failed to apply a rebuttable presumption of undue influence when a trustee engages in a transaction with a trust beneficiary under N.D.C.C. § 59–18–01.1.We conclude the district court did not abuse its discretion by denying Bruce Harris's motion to vacate, and affirm the district court's order.

I

[¶ 2]These cases relate to the estate and trust of Steven Harris.Steven Harris's Last Will and Testament was probated in Burleigh County district court in 2001.Steven Harris's Will created the "Steven H. Harris Trust A" and the "Steven H. Harris Trust B."Trust A was funded with various assets including interests in oil and gas and is the focus of this appeal.Under the terms of the trust, Mary Harris, Steven Harris's wife, was to receive all of the income for her support and maintenance and, upon her death, the remaining principal of the trust would be distributed to Steven Harris's children or their issue.Steven Harris's surviving children, Terry, Wayne, and Bruce Harris, and Kyle Harris, the child of a deceased sibling, are beneficiaries of the trust.Mary Harris was nominated and appointed as personal representative of the estate.Mary Harris was subsequently appointed trustee.

[¶ 3] In July 2010, Bruce Harris petitioned for a trust accounting and for the appointment of a successor trustee.Bruce Harris also started a separate action for a probate matter involving Steven Harris's estate.In the trust case, Bruce Harris claimed the trustee failed to provide trust financial documents to the beneficiaries, Mary Harris was incompetent to act as trustee, and Terry Harris's company had engaged in an improper transaction with the trust by leasing oil and gas interests held by the trust.A hearing was originally scheduled for December 11, 2013, but it was continued until December 4, 2014.At the hearing, the parties put in the record two stipulations entered into pertaining to Steven Harris's estate and trust.Under the terms of the stipulations, Bruce Harris was authorized to retain a professional to review and perform examinations of financial and other records of the trust, subject to signing a confidentiality agreement.At the December 4, 2014, hearing, the district court asked Bruce Harris if he understood and agreed with the terms of the stipulations he had signed.Bruce Harris stated on the record he understood the terms and understood he had the right to review the documents he was concerned with under the stipulated terms.The district court entered an order on stipulation for the estate case, and a judgment on stipulation for the trust case.

[¶ 4] In February 2015, Bruce Harris, self-represented, moved to vacate the judgment.After he moved to vacate, Bruce Harris filed a substitution of counsel on February 24, 2015.At the June 10, 2015, hearing, represented by new counsel, Bruce Harris requested the trust and estate cases be heard together, and the trustee did not object.After the hearing, the district court denied Bruce Harris's motion to vacate, stating he failed to provide clear and convincing evidence of fraud or misrepresentation that induced him to sign the stipulations.Bruce Harris appealed.

II

[¶ 5]Bruce Harris argues the district court abused its discretion by denying his motion to vacate under N.D.R.Civ.P. 60(b)(3) and (6).According to Bruce Harris, his motion to vacate should have been granted on the grounds he established a lack of mutual assent, misrepresentation, and fraud.

[¶ 6]"[R]elief from judgment under N.D.R.Civ.P. 60(b) is extraordinary relief and should be granted only in exceptional circumstances."Grinaker v. Grinaker , 553 N.W.2d 204, 207(N.D.1996)(citingSoli v. Soli , 534 N.W.2d 21, 23(N.D.1995) )."[A] Rule 60(b) motion‘is not to be used to relieve a party from free, calculated, and deliberate choices,’ and ‘a party remains under a duty to take legal steps to protect his own interests.’ "Kukla v. Kukla , 2013 ND 192, ¶ 25, 838 N.W.2d 434(quotingFollman v. Upper Valley Special Educ. Unit , 2000 ND 72, ¶ 11, 609 N.W.2d 90 )." ‘A mere recitation of the grounds set forth to Rule 60(b), N.D.R.Civ.P., without specific details underlying such assertions, is not sufficient to afford relief.’ "Hatch v. Hatch , 484 N.W.2d 283, 286(N.D.1992)(quotingFleck v. Fleck , 337 N.W.2d 786, 790(N.D.1983) )."We will not overturn a trial court's decision on a motion for relief from judgment absent an abuse of discretion."North Shore, Inc. v. Wakefield , 542 N.W.2d 725, 727(N.D.1996)."A court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, when it misinterprets or misapplies the law, or when its decision is not the product of a rational mental process leading to a reasoned determination."Rebel v. Rebel , 2013 ND 164, ¶ 13, 837 N.W.2d 351.

[¶ 7]"If the judgment sought to be set aside is entered pursuant to a stipulation of the parties, the party challenging the judgment under Rule 60(b), N.D.R.Civ.P., has the additional burden of showing that under the laws of contract there is justification for setting the contract aside."Peterson v. Peterson , 555 N.W.2d 359, 361(N.D.1996)(citingSoli , 534 N.W.2d at 23 ).The court may vacate a judgment under N.D.R.Civ.P. 60(b)(3), if the stipulation on which the judgment relies was induced by fraud, misrepresentation or other misconduct of an adverse party.Id. at 362.The court may also vacate a judgment under N.D.R.Civ.P. 60(b)(6) for any other reasons justifying such relief.Id.In clarifying the interpretation of the language of a stipulation incorporated into a consistent judgment, we held: "When a settlement agreement is merged into a judgment, the agreement is interpreted and enforced as a final judgment and not as a separate contract between the parties."Silbernagel v. Silbernagel , 2011 ND 140, ¶ 11, 800 N.W.2d 320(citingSilbernagel v. Silbernagel , 2007 ND 124, ¶ 10, 736 N.W.2d 441 ).

[¶ 8]"To create an enforceable contract, there must be a mutual intent to create a legal obligation."Lire, Inc. v. Bob's Pizza Inn Restaurants, Inc. , 541 N.W.2d 432, 434(N.D.1995)(citingN.D.C.C. §§ 9–01–02;9–03–01)."A valid contract requires parties capable of contracting, consent, a lawful object, and sufficient consideration."Valentina Williston, LLC v. Gadeco, LLC , 2016 ND 84, ¶ 16, 878 N.W.2d 397(citingN.D.C.C. § 9–01–02;Lund v. Lund , 2014 ND 133, ¶ 10, 848 N.W.2d 266 )."The parties' consent must be free, mutual, and communicated to each other."Valentina , 2016 ND 84, ¶ 16, 878 N.W.2d 397(citingN.D.C.C. § 9–03–01;Lund , 2014 ND 133, ¶ 10, 848 N.W.2d 266 ).

A

[¶ 9] Under N.D.R.Civ.P. 60(b)(3), Bruce Harris had the burden "to establish, by clear and convincing evidence, that the adverse party obtained the judgment through fraud, misrepresentation, or misconduct."SeeDvorak v. Dvorak , 2001 ND 178, ¶ 10, 635 N.W.2d 135.Under his N.D.R.Civ.P. 60(b)(3) argument, Bruce Harris challenges the actions of the parties leading up to the formation of the stipulations, not the language of the stipulations themselves.Bruce Harris claims he was induced into signing the stipulations by misrepresentations and fraud.He argues the district court erred by not concluding he established a lack of mutual assent to the stipulations.According to Bruce Harris, his lack of assent is evidenced through his statements expressing he had not received requested documents provided for in the stipulations.

[¶ 10]The district court considered the transcript of the December 2014 hearing when it asked Bruce Harris if he understood the terms of the stipulations, and that he had a right to review the trust records:

The Court: And, Bruce, you are represented by Mr. Delmore.You can certainly ask him any questions, but you understand the terms of the stipulation, and you're in agreement with the stipulation that's been signed?

Mr. Harris: I understand the terms of it, yes.My concern was that I have not been provided records and requested repeatedly the information that we were provided was never the entire information related to the topic that we asked for, and it's just been like pulling teeth to try [sic] get in, understand what's happening, review.

The Court: Okay—

Mr. Harris: We're all in the same business the three of us, and we're all in our areas of expertise recognize but my concern is that after repeated requests for accountings, repeated requests for things, they were not being provided even in discovery or what happened.

The Court: Without knowing or getting into the nature and extent of the types of records you're talking about, you do understand, I think everybody understands, that you do have a right to review the records under the stipulation.

Mr. Harris: Yes, I do.The problem in part is I live in Montana now.It's very expensive for me to come back here and after much trips back to do the reviews, I have not reviewed anything yet in spite of what's been represented by the other side.

The Court: Okay.

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