In re Estate of Paroda

• Decision Date: 12 April 2004
• Docket Number: No. 2002-675-Appeal.,2002-675-Appeal.
• Citation: 845 A.2d 1012
• Parties: In re ESTATE OF Milton PARODA.
• Court: Rhode Island Supreme Court

845 A.2d 1012

In re ESTATE OF Milton PARODA.

No. 2002-675-Appeal.

Supreme Court of Rhode Island.

April 12, 2004.

Richard G. Riendeau, Providence, for Plaintiff.

James T. Higgins, for Defendant.

Present: WILLIAMS, C.J., FLANDERS, GOLDBERG, FLAHERTY, and SUTTELL, JJ.

OPINION

PER CURIAM.

Barbara Kusnierz (Kusnierz), appeals from a Superior Court order denying her appeal from an order of the Central Falls Probate Court. An earlier order of said Probate Court had diminished her responsibilities and duties as co-administratrix of the estate of Milton Paroda (Paroda or decedent). Kusnierz seeks a de novo trial in the Superior Court to determine her competence to serve as co-administratrix of the estate.

This case came before the Supreme Court for oral argument pursuant to an order directing the parties to show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments of counsel and examining the record and the memoranda that the parties filed, we are of the opinion that cause has not been shown, and we proceed to decide the appeal at this time. We reverse the judgment of the Superior Court and remand the record in this case for further proceedings in line with this opinion.

Facts and Travel

Milton Paroda died intestate on April 23, 1998, survived by four heirs at law: two sisters, Catherine Kudzma and Emily Nowak, a brother, Theodore Paroda, and a niece, Barbara Kusnierz (collectively, the heirs at law or next of kin). At the time of his death, Paroda had assets of nearly $1,000,000, including real estate, bank accounts, bonds, treasury bills, certificates of deposit, and a stock portfolio. A significant portion of these assets was held jointly with one or more of the heirs at law, not including Kusnierz. The disposition of these joint assets is the source of contention between the parties.

On September 1, 1998, Catherine Kudzma fired the opening salvo in this feud when she filed a petition seeking to have her husband, Walter Kudzma, appointed administrator of her brother's estate. The battle was joined when on September 21, 1998, Kusnierz filed an objection to Kudzma's petition and a counterpetition seeking her own appointment as administratrix of her uncle's estate. Catherine Kudzma then filed an objection to Kusnierz's counterpetition. By a decree entered on September 28, 1998, both Walter Kudzma and Barbara Kusnierz were appointed co-administrators of the estate.

Unfortunately, this co-administration proved to be impracticable, and led to both co-administrators filing cross-petitions seeking to remove the other. Walter Kudzma accused Kusnierz of wasting the estate by "failing to co-operate in the filing of estate tax returns and failing to communicate with the co-administrator in a timely manner." The remaining heirs at law consented to his petition in a letter to Walter Kudzma's counsel, citing Kusnierz's delays and obstructionist tactics in blocking Kudzma from taking any action to settle obligations of decedent's estate. On March 3, 1999, Kusnierz filed an objection to the petition, denying a lack of cooperation, but noting her objection to paying surety on a joint bond out of her personal funds. Apparently believing the best defense to be a good offense, she filed a petition on June 8, 1999, seeking to remove Kudzma as co-administrator of the estate, and alleging that Kudzma had wasted Paroda's estate "by failure to represent the estate in ascertaining the interest of the estate[,] if any, in some $500,000 worth of assets due to personal conflict of interest, as the said assets would * * * inure to his wife, Catherine Kudzma * * *." Walter Kudzma objected to the petition to remove him as co-administrator.

The cross-petitions to remove the other as co-administrator were heard before the Probate Court and an order was entered that provided as follows:

"1. The petition of Walter Kudzma is granted in part.

"2. Walter Kudzma shall be solely responsible for the day to day functioning of the estate, including, by [sic ] not limited to, handling all of the financial affairs of said estate. Mr. Kudzma shall be responsible for obtaining a taxpayer identification number, for the opening and handling of all bank accounts and stock accounts, for the payment of bills of the estate, and any other activity necessary to administer said estate.

"3. Barbara Kusnierz, shall be allowed access to obtain any and all information concerning the estate from any third parties. She shall have no other duties as co-administrator, unless provided by further order of this Court."¹

Kusnierz objected to this order in Probate Court and filed a claim of appeal to the Superior Court on August 2, 1999, together with her reasons of appeal, in accordance with G.L.1956 § 33-23-1. She later moved to amend her reasons of appeal, which motion Was granted by rule of court on October 13, 1999. In count 1 of her reasons, as amended, Kusnierz sought to set aside the Probate Court order as contrary to law and the evidence. In count 2, she sought a judgment declaring that all sums in the joint accounts constitute property of the estate or, in the alternative, that these sums be held in constructive trust for the estate. In count 3, Kusnierz sought an injunction preventing the joint account owners, the remaining heirs at law, from removing any funds from the joint accounts. Finally, she demanded a trial by jury. Kudzma denied all allegations in Kusnierz's appeal.

This segment of the case lay dormant for nearly sixteen months² until February 7, 2001, when Kudzma filed an omnibus calendar assignment form and Kusnierz filed various requests for discovery. Our record is devoid of any orders that may have been issued as a result of the parties' discovery motions. Discovery ensued, however, and on May 10, 2001, Kusnierz filed motions for extension of time to file a pretrial memorandum and to compel answers to interrogatories and production of documents. Kudzma objected, but again there is no indication in the record what orders, if any, may have been issued.

On October 18, 2001, Kusnierz filed a pretrial memorandum and a memorandum to support summary judgment.³ At that point, the case went back into hibernation for another ten months⁴ until August 20, 2002, when Kudzma filed another omnibus calendar assignment form, assigning the "probate appeal" for hearing on September 25, 2002. In preparing for the hearing, Kusnierz submitted a memorandum of law to support her appeal from the Probate Court's order appointing Walter Kudzma as primary administrator of the estate. In her memorandum, Kusnierz argued inter alia that there is a statutory obligation to appoint the next of kin rather than a stranger to the estate. She cited several opinions of this Court for the proposition that such appointment is mandatory if such kin are suitable and competent. She further argued that Walter Kudzma has a conflict of interest as administrator because "half of the estate is being held in accounts formerly held by Milton jointly with Catherine Kudzma. [Walter] Kudzma stands to be a beneficiary of these accounts as Catherine's husband."

Kudzma replied with a pretrial memorandum and affidavit chronicling the expenses incurred by the estate because of Kusnierz's alleged delays and refusals to act in accord with the other heirs' wishes. He asserted that the order of the Probate Court should be affirmed because the order was entered with the "apparent consent" of Kusnierz and was "clearly supported by the facts and the evidence before the Probate Court." He further argued that Kusnierz's objection to Walter Kudzma's appointment as co-administrator because he is not next of kin was untimely. He denied Kusnierz's allegations about wasting the estate and conflict of interest, and requested that "a hearing be scheduled on these issues in the [Superior] Court as soon as possible."

The hearing on Kudzma's motion for assignment went as scheduled on September 25, 2002. However, the hearing justice did not assign the matter to either the continuous nonjury trial calendar, the continuous jury calendar, or the formal and special cause calendar pursuant to either § 33-23-9 or § 33-23-10. At the hearing, the parties presented their arguments, after which the hearing justice summarily denied the appeal and remanded the case to the Central Falls Probate Court "with just the determination that all reasonable requests of Miss Kusnierz to be kept abreast of the doings of Mr. Kudzma in his capacity as administrator should be complied with." The hearing justice cited as reasons for denying Kusnierz's request for a jury trial and a de novo hearing that "this Court finds that such an action would constitute a `piecemeal' appeal, which our Supreme Court has frowned upon * * *." Kusnierz timely appealed from the order of the Superior Court.

Discussion

Kusnierz contests the Superior Court order on a number of grounds. Her first argument on appeal is that the hearing justice erred in ruling on her probate appeal sua sponte when the hearing's purpose was to schedule the case on the appropriate calendar, and not to rule on the appeal. Furthermore, Kusnierz argues that probate appeals are to be heard de novo in Superior Court, and not as an appeal on error. In this case, Kusnierz argues, the fact-intensive nature of her competence to act as co-administratrix of the estate requires a jury trial. She contends that the ruling violated her right to notice because the hearing justice essentially transformed Kudzma's omnibus calendar assignment form into "a surprise motion for summary judgment." Finally, she renews her arguments that the law favors next of kin over strangers as administrators and that Walter Kudzma has a conflict of interest that would compromise his judgment in administering Paroda's estate.

Kudzma counters that not all probate appeals require a de novo hearing. He argues that the question of who should administer the estate can be...