In re Estate of Hass, 20010233.

• Decision Date: 14 May 2002
• Docket Number: No. 20010233.,20010233.
• Citation: 643 N.W.2d 713,2002 ND 82
• Parties: In the Matter of the ESTATE OF Francis HASS, Deceased. Dallas Hass, Lloyd Hass, and Shirley Puppe, Appellants, v. Kenneth W. DeKrey, Personal Representative, Wayne Hass and Louis Hass, Appellees.
• Court: North Dakota Supreme Court

643 N.W.2d 713

2002 ND 82

In the Matter of the ESTATE OF Francis HASS, Deceased.

Dallas Hass, Lloyd Hass, and Shirley Puppe, Appellants, v. Kenneth W. DeKrey, Personal Representative, Wayne Hass and Louis Hass, Appellees.

No. 20010233.

Supreme Court of North Dakota.

May 14, 2002.

Monty G. Mertz, Mertz Law Office, Fargo, ND, for appellants.

Steven K. Aakre, Serkland Law Firm, Fargo, ND, for appellees.

MARING, Justice.

[¶ 1] Dallas Hass, Lloyd Hass, and Shirley Puppe appealed from a July 19, 2001 order, approving the administration of the intestate estate of Francis Hass. We hold the trial court did not abuse its discretion in approving the personal representative's administration of the estate, approving the personal representative's fees and attorney fees, approving the sale of the real estate and personal property, or in denying the appellants' requests for supervised administration and for removal of the personal representative and the estate's attorney. We affirm.

[¶ 2] Francis Hass died in 1997 at the age of 86. He was survived by four sons—Dallas, Lloyd, Wayne, and Louis—and a daughter, Shirley Puppe. Dallas and Lloyd Hass petitioned to probate a will, which had been executed by Francis Hass less than four weeks before his death, and which named them as personal representatives. The will gave $300 each to Shirley, Wayne, and Louis, and gave the remainder of Francis Hass's estate to Dallas and Lloyd.

[¶ 3] Wayne and Louis Hass and Shirley Puppe retained attorney Erik R. Johnson to challenge the will. The trial court set aside the will after a jury found it was executed under the undue influence of Dallas and Lloyd Hass upon Francis Hass. While the will contest was being litigated, all five children of Francis Hass entered a stipulation agreeing to the appointment of Kenneth DeKrey as special administrator of the estate. When the will was set aside, the court appointed DeKrey to serve as personal representative of the intestate estate.

[¶ 4] DeKrey filed an inventory showing the total net value of the estate was $87,414.21, and the primary asset was a quarter section of farmland near Valley City. An appraiser valued the farmland at $72,000. DeKrey sold the farmland to its current tenants for their bid price of $62,000. He also sold the personal property of the estate at auction, and he filed a final accounting proposing to divide the estate's net assets equally among the five children.

[¶ 5] On December 27, 2000, Dallas and Lloyd Hass filed an objection to the personal representative's proposed distribution and also filed a petition requesting that the court remove DeKrey as personal representative, discharge Johnson as the attorney for the estate, and order a supervised administration of the estate. After an evidentiary hearing, the trial court entered the July 19, 2001 order approving administration of the estate by DeKrey, setting attorney and personal representative fees, and denying the requests for removal of the personal representative and the estate attorney and for supervised administration.

[¶ 6] On appeal Dallas and Lloyd Hass and Shirley Puppe request this Court to vacate the lower court's order, to direct an independent accounting of the estate, to remove DeKrey as the personal representative and Johnson as the estate's attorney, and to appoint "an independent, neutral fiduciary to complete the administration of the estate."

I

[¶ 7] Although neither party has questioned the appealability of the court's order, the right to appeal is jurisdictional, and we may consider appealability on our own initiative. Matter of the Estate of Stensland, 1998 ND 37, ¶ 10, 574 N.W.2d 203. This case involves an unsupervised administration of an intestate estate. Because each proceeding in an unsupervised probate is considered independent of other proceedings involving the same estate, there need be finality, for purposes of appealability, only as to the proceeding being appealed, not as to the entire estate. Schmidt v. Schmidt, 540 N.W.2d 605, 607 (N.D.1995). The trial court's July 19, 2001 order constituted a final approval of the estate administration and resolved all claims of interested parties pending at that time. We, therefore, conclude the court's order is appealable and this Court has jurisdiction of the appeal under N.D. Const. art. VI, § 6 and N.D.C.C. § 28-27-01.

II

[¶ 8] After Erik Johnson represented some of the heirs in their successful challenge of the will, the trial court appointed DeKrey as personal representative to administer the intestate estate, and DeKrey retained Johnson to assist with that administration. The appellants claim the trial court erred in refusing to remove Johnson as the attorney for the estate because of the "inherent conflict of interest Mr. Johnson has had from the beginning of this entire case." The appellants argue "[i]t is nearly beyond [the appellants'] comprehension that [Johnson] could presume to advise Mr. DeKrey in how to administer the estate in a fair and impartial manner, when he has continued to represent the opposite parties throughout, even dating before their father died ... A simple reading of Rule 1.7, of the North Dakota Rules of Professional Responsibility and the commentary thereto make it nearly beyond debate that Mr. Johnson has been operating under a fundamental conflict of interest throughout the entire case."

[¶ 9] Rule 1.7, N.D.R. Prof. Conduct, provides in relevant part:

(a) A lawyer shall not represent a client if the lawyer's ability to consider, recommend, or carry out a course of action on behalf of the client will be adversely affected by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests.

(b) A lawyer shall not represent a client when the lawyer's own interests are likely to adversely affect the representation.

(c) A lawyer shall not represent a client if the representation of that client might be adversely affected by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests....

[¶ 10] Other than the cursory reference to Rule 1.7, counsel cites no authority to support his position that Johnson has an "inherent conflict" which mandates the trial court to remove Johnson from providing legal services for the estate. This action is not a disciplinary action, and we have said a violation of a Rule of Professional Conduct does not itself provide the basis for a recognized claim for relief. See Olson v. Fraase, 421 N.W.2d 820, 828 (N.D.1988)

and cases cited therein. The appellants have failed to show how Johnson's alleged conflict has rendered him unable to fairly represent the intestate estate and DeKrey as its personal representative. Furthermore, they have failed to show how they have been prejudiced by the legal services provided to the estate by Johnson. Under N.D.C.C. § 30.1-18-15(18) and (21), the personal representative is empowered to employ attorneys and others to assist and advise him and to have the estate pay compensation for those services. Matter of Estate of O'Connell, 476 N.W.2d 8, 11 (N.D.1991). The decision whether to remove a person from duties associated with management of an estate lies within the discretion of the trial court. See Brugger v. Stroh, 503 N.W.2d 848 (N.D.1993) (denial of petition to remove personal representative not an abuse of discretion). We conclude the trial court did not abuse its discretion in denying the appellants' request to remove Johnson as attorney for the estate.

III

[¶ 11] The appellants claim the trial court erred in refusing to remove DeKrey as personal representative, in approving DeKrey's administration of the estate, and in approving DeKrey's fees.

A

[¶ 12] The appellants claim the trial court erred in refusing to remove DeKrey as personal representative of the estate. Under N.D.C.C. § 30.1-17-11, a person interested in an estate may petition for removal of a personal representative for cause, which exists when removal would be in the best interest of the estate, or the personal representative has mismanaged the estate or failed to perform a duty pertaining to the office. The removal of a personal representative for cause involves the exercise of discretion by the trial court, and the court's decision will not be set aside on appeal absent an abuse of discretion. In re Estate of Howser, 2002 ND 33, ¶ 16, 639 N.W.2d 485. The appellants never made a formal objection to DeKrey's appointment as personal representative and did not object to his administration of the estate until he filed the proposed final accounting. The appellants have failed to show specifically how DeKrey has failed to perform a duty pertaining to the office or how he has mismanaged the estate, so as to require his removal. Consequently, we conclude the trial court did not abuse its discretion in refusing to grant the appellants' request that DeKrey be removed as personal representative.

B

[¶ 13] The appellants claim DeKrey did not act reasonably in selling the farmland to the tenants for $62,000 when the appraised price of the property was $72,000. Under N.D.C.C. § 30.1-18-03(2), the personal representative is empowered to administer the estate and to distribute the assets of an intestate estate to the heirs. Under N.D.C.C. § 30.1-18-15(6), the personal representative has the specific authority to "dispose of an asset, including land ... at public or private sale." The personal representative's decision to take possession of estate property is conclusive against the heirs and devisees. Schmidt v. Schmidt, 1997 ND 44, ¶ 5, 560 N.W.2d 886 (N.D.1997); N.D.C.C. § 30.1-18-09. [¶ 14] DeKrey testified that he believed the $62,000 offer made by the tenants was a fair price for the property, even though an appraiser had valued it at a higher price. DeKrey testified he believed the sale of the property was reasonable considering there would be no sale's commissions, advertising fees, or other expenses...