In re Estate of Allmaras

• Decision Date: 22 August 2007
• Docket Number: No. 20060380.,20060380.
• Citation: 737 N.W.2d 612,2007 ND 130
• Parties: In the Matter of the ESTATE OF Margaret ALLMARAS, Deceased Anthony Allmaras, Daniel Allmaras, David Allmaras, Geri Allmaras, Russell Allmaras, Shelly Schullum, Timothy Allmaras and Todd Allmaras, Petitioners and Appellants, v. Robert E. Manly, Personal Representative of the Estate of Margaret Allmaras, and Linda Allmaras, Respondents and Appellees.
• Court: North Dakota Supreme Court

737 N.W.2d 612

2007 ND 130

In the Matter of the ESTATE OF Margaret ALLMARAS, Deceased

Anthony Allmaras, Daniel Allmaras, David Allmaras, Geri Allmaras, Russell Allmaras, Shelly Schullum, Timothy Allmaras and Todd Allmaras, Petitioners and Appellants, v. Robert E. Manly, Personal Representative of the Estate of Margaret Allmaras, and Linda Allmaras, Respondents and Appellees.

No. 20060380.

Supreme Court of North Dakota.

August 22, 2007.

David R. Bliss, David R. Bliss, P.C., Bismarck, ND, for petitioners and appellants.

Daniel J. Frisk (argued) and Don R. Grande (appeared), Don R. Grande, P.C., Fargo, ND, for respondents and appellees.

VANDE WALLE, Chief Justice.

[¶ 1] Anthony Allmaras, Daniel Allmaras, David Allmaras, Geri Allmaras, Russell Allmaras, Shelly Schullum, Timothy Allmaras, and Todd Allmaras ("the petitioners") appealed from a district court order denying their petition for allowance of a claim in Margaret Allmaras's estate. We conclude the record contains insufficient evidence about whether the conservator properly deposited the funds at issue into a general guardianship account. In particular, we cannot determine from the record whether the conservator appropriately considered any known estate plan of Margaret Allmaras as required by statute. Therefore, we reverse and remand for further proceedings.

I

[¶ 2] At the time of the events relevant to this dispute, Margaret Allmaras was an elderly woman in her early 80s. Although Margaret Allmaras never had any children, she had twenty-one nieces and nephews who were the children of her three brothers, Jerome Allmaras, Gerard Allmaras, and John Allmaras. Jerome Allmaras had thirteen children. Gerard Allmaras and John Allmaras had eight children between them, and these eight nieces and nephews of Margaret Allmaras are the petitioners in this case.

[¶ 3] On August 7, 2000, Margaret Allmaras executed a general durable power of attorney appointing her brother, Gerard Allmaras, and her sister-in-law, Lorraine Allmaras, as her agents. Lorraine Allmaras was the wife of Margaret's brother John Allmaras. In the appointment document, Margaret Allmaras granted her agents "full power and authority to act on [her] behalf," including the power to "[c]onduct any business with any banking or financial institution with respect to any of [her] accounts." Each agent was granted the power to act independently of the other.

[¶ 4] About a month later, on September 15, 2000, Margaret Allmaras executed a will. In the will, she acknowledged the existence of nonprobate cash accounts and investments. Her will gave "all of my cash accounts, insurance proceeds or investments which are not co-owned or jointly owned, in equal shares to the children of my deceased brother, Jerome Allmaras."

[¶ 5] In the twenty years before her death, Margaret Allmaras accumulated a large number of certificates of deposit ("CDs") at three different banks, Western State Bank in Devils Lake, Security State Bank in New Rockford, and Bremer Bank in Carrington. On December 12, 2000, she consolidated some of these CDs into a large CD account at Bremer Bank in Carrington. The CD was a single-party account worth $83,531.11, payable on death ("P.O.D.") to all twenty-one of Margaret Allmaras's nieces and nephews.

[¶ 6] Margaret Allmaras was admitted to a nursing home in early 2001. About six months later, Lorraine Allmaras began exercising her power of attorney to take funds from Margaret Allmaras's financial accounts, including the CD account at Bremer Bank. Between about June 2001 and June 2002, Lorraine Allmaras wrongfully withdrew the entire $83,531.11 in the Bremer Bank CD account for her own use. In early 2003, Gerard Allmaras, the other attorney-in-fact, discovered this misappropriation and reported it to Robert E. Manly, Margaret Allmaras's attorney. Later that year, in December 2003, a guardianship and conservatorship was established for Margaret Allmaras, and Guardian and Protective Services of Bismarck ("GAPS") was named her guardian and conservator. Lorraine Allmaras was criminally prosecuted for the theft, and in October 2004 she pled guilty and was ordered to pay $105,665.33 in restitution "to the Margaret Allmaras Guardianship/Conservatorship."

[¶ 7] On April 21, 2005, about one week prior to Margaret Allmaras's death, Lorraine Allmaras repaid the stolen funds. GAPS received the restitution and deposited it into Margaret Allmaras's guardianship account. GAPS did not return the money to the form it had been in before the theft, a CD account with Margaret Allmaras's twenty-one nieces and nephews as P.O.D. beneficiaries. Margaret Allmaras died on April 28, 2005, at the age of 84. Shortly thereafter, her will was admitted to probate, and attorney Robert Manly was appointed as personal representative of the estate.

[¶ 8] The eight petitioners filed a claim against the estate, seeking a share of the $83,531.11 which was stolen by Lorraine Allmaras. The petitioners claimed that the guardian and conservator should have returned the funds to their original form as a CD account with all twenty-one nieces and nephews named as P.O.D. beneficiaries, rather than allowing the funds to pass to only the thirteen nieces and nephews under Margaret Allmaras's will. The personal representative denied the claim.

[¶ 9] The petitioners requested a hearing before the district court on the matter. At the hearing, Robert Manly was the only witness. Manly was Margaret Allmaras's longtime attorney, and he drafted her power of attorney and her will. He testified that Margaret Allmaras was a very intelligent person who was in declining health by the year 2000. He stated that she was mentally competent at the time she executed her power of attorney and her will, but that she didn't have "quite as much fire and spunk." With regard to her estate plan, Manly explained that he only knew about Margaret Allmaras's will and not her other jointly owned accounts. In her will, Margaret Allmaras favored the thirteen children of her brother Jerome Allmaras because "[t]hey were a large family" and "[s]he felt that she should do something for them."

[¶ 10] When he was questioned about the CD accounts, Manly testified that Margaret Allmaras never consulted him about them, but that he knew some joint accounts existed. However, he did not know how much money she had in her nonprobate accounts or exactly whose names were on them. Manly explained that his clients usually discuss nonprobate property with him as part of their estate plan, but that Margaret Allmaras never did. He stated, "I didn't know what she was doing with her joint accounts, she never volunteered, I just felt it wasn't my business to ask." Petitioners' counsel asked Manly whether he ever notified the criminal court or GAPS that the restitution paid by Lorraine Allmaras came from a P.O.D. account. Manly gave the following response:

A. I didn't know, no, when it was paid. Although they knew that, I'm not sure if they would have had knowledge that the money they were getting back was, you know — They were more concerned I think with getting the money back in Margaret's account than worrying about, you know, where it came from. There was other funds that came in that were repaid. There was 110,000, approximately, and there was about 85,000 out of this certificate, so I don't know what they were thinking. They simply put it into Margaret's guardianship account without taking any action on it.

There was no testimony from any representative of GAPS about the manner in which the restitution funds were handled prior to Margaret Allmaras's death.

[¶ 11] After considering the evidence, the district court held that the personal representative properly denied the petitioners' claim to a share in Margaret Allmaras's estate. The district court found that the CD account, along with its P.O.D. provision, was destroyed when Lorraine Allmaras withdrew the money, and that GAPS properly deposited the restitution into an account for the benefit of Margaret Allmaras. The district court stated, "The conservators and guardians, once that agency became appointed those moneys easily could have been used to care for Margaret and they would have lost — they may have even been used in total for her care had she lived longer...." The district court concluded that because the funds were properly held in the guardianship account, they passed under Margaret Allmaras's will to the thirteen children of her brother Jerome Allmaras.

II

[¶ 12] The district court has discretionary authority regarding the management of a protected person's estate, and the court's decisions on those matters will only be reversed on appeal for an abuse of discretion. Guardianship of Thomas, 2006 ND 219, ¶ 13, 723 N.W.2d 384; Conservatorship of Stensland, 526 N.W.2d 485, 486 (N.D.1995). A district court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, or when it misinterprets or misapplies the law. Thomas, at ¶ 7.

[¶ 13] The interpretation and application of a statute is a question of law which is fully reviewable on appeal. Estate of Gleeson, 2002 ND 211, ¶ 7, 655 N.W.2d 69. We interpret uniform laws in a uniform manner, and we may seek guidance from decisions in other states which have interpreted similar provisions in a uniform law. N.D.C.C. § 1-02-13; see, e.g., Estate of Zimmerman, 2001 ND 155, ¶ 14, 633 N.W.2d 594.

[¶ 14] Petitioners argue that they should receive a share of the $83,531.11 which Lorraine Allmaras repaid as restitution because they were P.O.D. beneficiaries on the CD account bearing those funds prior to the theft. Essentially, petitioners claim that either the conservator or the supervising court should have returned the restitution money to its pre-theft form. The respondents, Linda Allmaras and Robert Manly, contend that the conservator acted properly when it deposited the restitution into the guardianship account for the benefit and care of ...