In re Estate of Egeland

• Decision Date: 27 November 2007
• Docket Number: No. 20070075.,20070075.
• Citation: 2007 ND 184,741 N.W.2d 724
• Parties: In the Matter of the ESTATE OF Mary M. EGELAND, Deceased. Monte Dean Egeland, Personal Representative of the Estate of Mary M. Egeland, Deceased, Petitioner and Appellee v. Ronald Egeland, Respondent and Appellant.
• Court: North Dakota Supreme Court

741 N.W.2d 724

2007 ND 184

In the Matter of the ESTATE OF Mary M. EGELAND, Deceased.

Monte Dean Egeland, Personal Representative of the Estate of Mary M. Egeland, Deceased, Petitioner and Appellee v. Ronald Egeland, Respondent and Appellant.

No. 20070075.

Supreme Court of North Dakota.

November 27, 2007.

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

John J. Petrik (argued) and Kari R. Reichert (on brief), Vogel Law Firm, Bismarck, N.D., for respondent and appellant.

MARING, Justice.

[¶ 1] Ronald Egeland appealed from a judgment approving a petition for allocation of funds by the personal representative of the estate of Mary M. Egeland, asserting the court erred in allowing the estate to offset Ronald's inheritance by the amount the estate paid to satisfy a debt on a promissory note under which Ronald and Mary were co-makers. We hold the offset was in accordance with the law, and we affirm.

I

[¶ 2] Mary M. Egeland, the deceased, was the mother of five children, including Ronald. On September 30, 2003, Mary and Ronald, as joint obligors, executed a promissory note with Dakota Western Bank to borrow $236,084.92 for the purchase of land in Bowman County and to refinance a delinquent 2001 promissory note for the purchase of a tractor. Ronald owns the tractor, and the purchased property was ultimately placed in a trust under which Ronald is the sole beneficiary.

[¶ 3] Mary died on August 17, 2004. Under her will, her son, Monte Dean Egeland, was appointed the personal representative. He subsequently used certificates of deposit, payable on Mary's death to Ronald, as payment on the 2003 promissory note and also paid out of estate funds $205,083.53 as final payment on the note. The combination of these payments completely satisfied the debt on the note. The personal representative asked the district court to approve the allocation of estate funds, including a $205,083.53 offset against Ronald's inheritance from the estate, effectively reimbursing the estate for the amount it paid to satisfy the 2003 promissory note. The court approved the allocation of estate funds and the offset against Ronald's inheritance.

II

[¶ 4] Ronald asserts the district court erred in granting the estate an offset against his inheritance for payment by the estate on the 2003 promissory note, because Mary and Ronald had an oral agreement that the entire indebtedness under the note would be paid from "South Dakota oil royalty money" received by Mary.

[¶ 5] The district court essentially determined Ronald's testimony that Mary had orally agreed to pay the entire indebtedness under the promissory note was not credible. With regard to this issue the court made the following findings of fact:

In 2001, Ron and Mary allegedly agreed that any loan to purchase the Bowman County land from the Monte A. Egeland Trust would be paid for by South Dakota oil royalty money paid to Mary. These mineral interests were owned solely by Mary. Pursuant to the verbal agreement, Ron would have no obligation to pay for the purchase of the Bowman County land. There was no written agreement or contract in this regard.

. . . . The alleged oral contract between Ron and Mary in which Ron would have no financial obligation for repayment for the purchase of the Bowman County land as repayment was supposedly to come solely from Mary's South Dakota oil royalty money is in direct conflict of Ron's status as a joint obligor on the September 30, 2003 note.

. . . . The Court finds that Mary's intention as to Ron's obligation for repayment on the Dakota Western Bank loan is found in the September 30, 2003 note itself as Ron agreed to be a co-obligor.

[¶ 6] In actions tried without a jury, a district court's findings of fact are governed by the clearly erroneous standard of review under N.D.R.Civ.P. 52(a). In re Estate of Elken, 2007 ND 107, ¶ 4, 735 N.W.2d 842. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exits to support the finding, or if, on the entire record, we are left with a definite and firm conviction the trial court made a mistake. Id. We give due regard to the trial court's opportunity to assess the credibility of the witnesses, and the court's choice between two permissible views of the evidence is not clearly erroneous. Landers v. Biwer, 2006 ND 109, ¶ 20, 714 N.W.2d 476. The court found Mary's intention that Ronald incur an obligation for payment of the debt was obvious on the face of the note under which Mary and Ronald were co-makers. The court also expressly found that Ronald's testimony of a prior oral agreement between himself and Mary that she would be solely liable for any loan to purchase the property was inconsistent with the promissory note, and that testimony was disregarded by the court. We conclude there is evidence to support the district court's findings on this issue and they are not clearly erroneous.

III

[¶ 7] Ronald argues in the alternative that he and Mary were jointly obligated as co-makers on the note to each pay one-half of the indebtedness for the purchase of the tractor and the property. According to the terms of the 2003 promissory note, Ronald and Mary Egeland were "jointly and severally" obligated on the loan.

[¶ 8] The right to contribution between joint obligors is provided under N.D.C.C. § 9-01-08:

A party to a joint obligation or to a joint and several obligation who satisfies more than that party's share of the claim against all obligors may require a proportionate contribution from all the parties joined with that party.

Under this statute, Ronald asserts he and Mary were, as a matter of law, jointly liable to each pay one-half of the indebtedness. The estate asserts that under the statute "a proportionate contribution" from joint obligors depends upon the benefit received. The estate asserts it is entitled to a 100 percent contribution from Ronald, because he received the entire benefit of the loan proceeds when he obtained the tractor and all the property purchased with the borrowed money.

[¶ 9] This Court has not addressed the issue of what constitutes a proportionate contribution under N.D.C.C. § 9-01-08. The rule regarding contribution among co-makers of a negotiable instrument is stated in 12 ...