In re Estate of McDermott

• Decision Date: 25 July 2002
• Docket Number: No. 01-434.,01-434.
• Citation: 310 Mont. 435,2002 MT 164,51 P.3d 486
• Parties: In the Matter of the ESTATE OF Leo E. McDERMOTT, Sr., Deceased, and In the Matter of the Estate and Guardianship of Alan J. McDermott, an incompetent person.
• Court: Montana Supreme Court

51 P.3d 486

2002 MT 164

310 Mont. 435

In the Matter of the ESTATE OF Leo E. McDERMOTT, Sr., Deceased, and

In the Matter of the Estate and Guardianship of Alan J. McDermott, an incompetent person.

No. 01-434.

Supreme Court of Montana.

Submitted on Briefs December 13, 2001.

Decided July 25, 2002.

Alan F. Blakley, Blakley & Velk, Missoula, Montana, For Appellant.

D. Patrick McKittrick, McKittrick Law Firm, Great Falls, Montana, For Respondents.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Appellant Leo E. McDermott Jr. appeals from an order issued by the Third Judicial District Court, Anaconda-Deer Lodge County, which consolidated two causes of action, ordered proceedings from the sale of real estate be deposited into a guardianship account, and awarded attorney fees and costs to Respondents Patricia Raunig and Helen Ricci. We affirm.

¶ 2 We address the following restated issues on appeal:

¶ 3 1. Did the District Court err when it consolidated the probate and guardianship proceedings?

¶ 4 2. Did the District Court err when it ruled that the 1973 transaction concerning Leo E. McDermott Sr.'s residence created a constructive trust for the benefit of Alan McDermott?

¶ 5 3. Did the District Court err when it awarded attorney fees to Respondents Patricia Raunig and Helen Ricci?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 Decedent Leo E. McDermott Sr. ("Senior") fathered six children, four of which are involved in this action: Alan McDermott ("Alan"); Appellant Leo E. McDermott Jr. ("Junior"); and Respondents Patricia Raunig and Helen Ricci. In 1972, Alan sustained a serious brain injury as a result of a motorcycle accident. Following the accident, Junior was appointed as Alan's legal guardian in December of 1972. In December of 1973, Junior filed an annual accounting which valued Alan's estate at approximately $62,000. However, Junior neglected to file another accounting until 1999.

¶ 7 From 1972 until 1998, Alan lived with his father at Senior's residence in Sunnyside Addition near Anaconda, Montana. In July of 1973, Senior executed a deed which conveyed the Sunnyside residence to Junior. Junior recorded this deed on February 25, 1975. In 1986, Junior purportedly executed a deed which conveyed the Sunnyside residence back to Senior. However, Junior vehemently disputes the validity of the alleged re-conveyance and contends that someone forged his signature on the 1986 deed.

¶ 8 In 1991, Senior executed a will which devised the Sunnyside residence, together with its contents and personal belongings, to Alan, Junior, Patricia, and Helen. Then, on September 23, 1992, Senior executed a deed to the Sunnyside residence which purportedly retained a life estate for himself and conveyed a future interest in the residence to Junior, Patricia, and Helen as joint tenants with right of survivorship.

¶ 9 On December 21, 1998, Senior died and Alan moved in with Patricia. On January 29, 1999, Patricia, appointed as personal representative of Senior's estate, filed a petition for informal probate of Senior's will in Cause Number DP-99-4. Shortly thereafter, Patricia and Helen learned that Junior had not filed an accounting on Alan's behalf since 1973. Therefore, in an action separate from DP-99-4, on February 24, 1999, Patricia and Helen requested that the District Court substitute them as Alan's co-guardians in the place of Junior. Patricia and Helen also requested that the District Court order Junior to file a contemporaneous accounting of Alan's estate. On May 12, 1999, the District Court granted both of the requests in the guardianship action, Cause Number 5838.

¶ 10 On July 1, 1999, in the probate proceeding (DP-99-4), Patricia informed the District Court that the Sunnyside residence had been sold and moved the District Court to deposit the proceeds in an account monitored by the Court, pending resolution of Junior's obligations in the guardianship action. On July 6, 1999, the Court granted Patricia's motion, subject to Junior's obligations in Cause Number 5838. On September 23, 1999, Junior filed what the District Court described as a "woefully inadequate" accounting of Alan's estate in Cause Number 5838.

¶ 11 On November 15, 1999, Junior moved the District Court to release the proceeds of the residence's sale to him as he "held the real property in fee simple" pursuant to the terms of the 1973 conveyance. As the false signature on the 1986 deed "could not pass title even to a bona fide purchaser," Junior argued that Senior had no interest in the property to convey on September 23, 1992. Conversely, Patricia and Helen argued, in part, that "[w]hen [Senior] transferred the subject property to [Junior] in 1973, he did so for purposes of effectuating the Guardianship of Alan and to insure Alan had a home." While Patricia and Helen maintained that the subsequent conveyances were valid, they also argued that Senior conveyed the property to Junior for the benefit of Alan, thereby creating a constructive trust. Consequently, Patricia and Helen argued that Junior would "be unjustly enriched if he were allowed to retain the property or receive the sale proceeds."

¶ 12 In the ensuing months, the parties filed several documents in both actions, including a motion for fees and costs in the guardianship action, and motions for sanctions in the probate action. Finally, on November 28, 2000, the District Court issued its findings of fact, conclusions of law, and order in which it consolidated the two actions. The District Court found that the 1973 transaction established a constructive trust for the benefit of Alan. Therefore, the District Court ordered that all proceeds from the sale of the Sunnyside residence be deposited in the guardianship account for Alan. Further, the District Court ordered Junior to pay eighty percent of Respondents' attorney fees and costs, and Junior's attorney to pay the remaining twenty percent of their fees and costs. Junior appeals that portion of the District Court's order which consolidated the two actions, found that the 1973 transaction established a constructive trust, and awarded attorney fees.

DISCUSSION

ISSUE 1

¶ 13 Did the District Court err when it consolidated the probate and guardianship proceedings?

¶ 14 Consolidation rests in the discretion of the court and will not be overturned absent a clear abuse of discretion. Tribby v. Northwestern Bank of Great Falls (1985), 217 Mont. 196, 208, 704 P.2d 409, 417. To determine whether a district court abused its discretion, we review the case to ascertain whether the court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. In re Marriage of Moss, 1999 MT 62, ¶ 15, 293 Mont. 500, ¶ 15, 977 P.2d 322, ¶ 15.

¶ 15 The record provides little indication as to the specific date whereon the District Court consolidated the probate and guardianship matters. As Junior points out, on January 26, 2000, in an order utilizing a consolidated caption, the District Court ordered that "the outstanding issues in the above-captioned case shall be submitted to Mediation...." Then, on February 9, 2000, the District Court granted Respondents' motion to file discovery responses under an order which referred solely to the probate matter. Finally, on February 23, 2000, the District Court directed the parties to submit proposed findings of fact, conclusions of law, and supporting briefs in an order reverting back to the consolidated caption. While this inconsistent practice does create some confusion as to the initial status of the matters, the District Court, on November 28, 2000, found that "[t]he above two Causes are interrelated and therefore the Court will address both Causes within these Findings and Conclusions."

¶ 16 Junior argues that the two actions involve "clearly different parties" and contemplate entirely different legal and factual issues. Therefore, Junior urges us to remand the two causes for separate consideration as "[c]onsolidation of the two cases was clearly inappropriate." We disagree.

¶ 17 Rule 42(a), M.R.Civ.P., provides:

Consolidation. When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

¶ 18 We agree that the probate and guardianship proceedings did not contemplate similar issues at their inception. The guardianship action simply sought a substitution of Alan's legal guardian and an accounting of Alan's estate. On the other hand, the probate action sought to informally probate Senior's will. At this point, the only similarity enjoyed by the separate actions was the parties involved, i.e., each cause pitted Respondents against Junior and concerned Alan in some fashion or another.

¶ 19 However, as the arguments developed in the probate action, it became apparent that a common bond conjoined the two proceedings. That common bond was the ownership interest in the proceeds from the sale of the Sunnyside residence. In the probate action, the parties proffered evidence surrounding four alleged conveyances of the Sunnyside residence. Each respective conveyance contemplated a unique composition of grantees. At least two of the ownership theories implicated Alan's potential interest in the property. Therefore, the accounting and value of Alan's estate had a direct correlation to the District Court's determination regarding the Sunnyside residence. As such, the two actions shared common questions of both law and fact.

¶ 20 Like most discretionary matters, one could probably fashion an argument supporting either perspective. However, the District Court determined that the collective interests would be better served by consolidating the matters. Despite this conclusion, Junior...