In Matter of Estate of Zenisek, No. 9-052/08-0938 (Iowa App. 5/6/2009), 9-052/08-0938

• Decision Date: 06 May 2009
• Docket Number: No. 9-052/08-0938,9-052/08-0938
• Parties: IN THE MATTER OF THE ESTATE OF BRUCE ZENISEK, Deceased, BRAEDEN LEE KOSS ZENISEK, by his Mother and natural guardian and by his Conservator TIFFANY KOSS, Beneficiary-Appellant.
• Court: Iowa Court of Appeals

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IN THE MATTER OF THE ESTATE OF BRUCE ZENISEK, Deceased BRAEDEN LEE KOSS ZENISEK, by his Mother and natural guardian and by his Conservator TIFFANY KOSS, Beneficiary-Appellant.

No. 9-052/08-0938

Court of Appeals of Iowa.

Filed May 6, 2009

Appeal from the Iowa District Court for Johnson County, Marsha A. Bergan, Judge.

The conservator for the minor child of the decedent appeals from a district court ruling denying her petition to remove the administrators of the decedent's estate. AFFIRMED.

Joseph Johnston of Johnston & Nathanson, Iowa City, for appellant.

Dennis J. Mitchell and V. Jean Bartley of Meardon, Sueppel & Downer P.L.C., Iowa City, for appellee.

Considered by Mahan, P.J., and Miller and Doyle, JJ.

MILLER, J.

Tiffany Koss, the conservator for her minor child with the decedent, Bruce Zenisek, appeals from a district court ruling denying her petition to remove Andrew Zenisek and James Zenisek as administrators of the decedent's estate. She claims the court erred in not removing the administrators due to a conflict of interest and in not removing the guardian ad litem for the child. We affirm the judgment of the district court.

Bruce Zenisek was killed in a forklift accident on June 9, 2007. He died intestate and was survived by his ten-year-old son, Braeden. Zenisek's brothers, Andrew and James, were appointed as administrators of his estate. They filed a report and inventory in November 2007, which listed seventy acres of farmland owned by Bruce as the primary asset of the estate. That land, on which a partially constructed three-bedroom house is located, was appraised at $252,000 as of the date of Bruce's death.

Two claims totaling $49,440 were filed against the estate by Hills Bank and Trust Company for loans made to Bruce. A mechanic's lien for approximately $81,000 was also filed against the farmland by the construction company that had been building Bruce's house.

In January 2008, Andrew and James offered to purchase the farmland for its appraised value in order to satisfy the claims against the estate. They filed an application for the appointment of a special administrator "to investigate and make recommendations to the Court in relation to [their] Offer, or to a public offering" and sought appointment of an attorney for the minor child to represent his interests in the proceeding. Notice of the hearing on the administrators' application was sent to the child's mother, Tiffany Koss, but neither she nor her attorney appeared at the hearing.

Following the hearing, the district court entered an order appointing Iowa State Bank and Trust Company as a special administrator "to serve without bond for the purpose of evaluating the offer to buy real estate and to make a written recommendation to the Court prior to any hearing on any purchase." The court also appointed an attorney to represent the minor child. Koss filed a motion requesting the district court to reconsider its appointment of the special administrator and guardian ad litem for the child. The court denied her motion after a hearing, finding both appointments were appropriate.

Koss then filed a petition requesting that Andrew and James be removed as the administrators of Bruce's estate and that she be appointed in their place. As grounds for their removal, Koss alleged in relevant part that she did not believe it was in her son's best interest to sell the farmland and that the administrators ignored requests to investigate a wrongful death action on behalf of the estate. The district court denied the petition, finding the grounds for removal under Iowa Code section 633.65 (2007) had not been proved at the hearing. Koss appeals.

Claims for the removal of an administrator are tried in equity. In re Estate of Atwood, 577 N.W.2d 60, 63 (Iowa Ct. App. 1998); see also Iowa Code § 633.33. We review equitable proceedings de novo. Iowa R. App. P. 6.4. The district court has broad discretion in deciding whether to remove a fiduciary¹ pursuant to section 633.65. In re Estate of Cutler, 368 N.W.2d 724, 728 (Iowa Ct. App. 1985). We therefore "examine the record de novo to determine whether an abuse of discretion can be found." Estate of Randeris v. Randeris, 523 N.W.2d 600, 606 (Iowa Ct. App. 1994).

The grounds for removal of a fiduciary are statutory and include mismanagement of the estate and failure to perform any duty imposed by law. Iowa Code § 633.65; Atwood, 577 N.W.2d at 63-64. A conflict of interest or evidence that the fiduciary is using his or her position for personal advantage may also serve as grounds for removal. Atwood, 577 N.W.2d at 64. The burden to show wrongful conduct that suffices to remove a fiduciary is upon those so asserting. In re Estate of Phoenix, 493 N.W.2d 79, 81 (Iowa Ct. App. 1992).

Koss claims the district court erred in denying her petition to remove the administrators due to the conflict of interest and self-dealing created by their offer to purchase the farmland from the estate. She argues that "[i]f trying to buy the main asset of the estate at a questionable value is not a conflict of interest, then no conflict of interest can exist which would disqualify an administrator." We conclude otherwise.

The administrators sought the appointment of a special administrator after offering to purchase the farmland for its appraised value. The district court granted their application and appointed a special administrator "for the purpose of evaluating the offer to buy real estate and to make a written recommendation to the Court prior to any hearing on any purchase." Following the hearing on Koss's petition to remove the administrators, the court additionally authorized the special administrator "to obtain an updated appraisal and to investigate methods of marketing the real estate so as to maximize its value to the heir."

We believe the appointment of the special administrator alleviated any potential conflict of interest created by the administrators' offer to purchase the farmland. See In re Estate of Jarvis, 185 N.W.2d 753, 755 (Iowa 1971) (approving appointment of temporary administrator due to possible conflict of interest between the interests of the executor and the estate). We find no evidence to support Koss's claim of self-dealing on the part of the administrators as they have...