In re H.D.K.

• Decision Date: 05 October 2021
• Docket Number: DA 21-0011
• Citation: 497 P.3d 1171,405 Mont. 479
• Parties: In the MATTER OF the CONSERVATORSHIP OF: H.D.K., a Protected Person.
• Court: Montana Supreme Court

405 Mont. 479

497 P.3d 1171

In the MATTER OF the CONSERVATORSHIP OF: H.D.K., a Protected Person.

DA 21-0011

Supreme Court of Montana.

Submitted on Briefs: September 8, 2021

Decided: October 5, 2021

Rehearing Denied: November 9, 2021

For Appellant: Elliott Dugger, Dugger Law Firm, PLLC, Missoula, Montana

For Appellee: Trent N. Baker, Datsopoulos, MacDonald & Lind, P.C., Missoula, Montana, Julie R. Sirrs, Boone Karlberg, P.C., Missoula, Montana

Justice Laurie McKinnon delivered the Opinion of the Court.

¶1 Appellant T.K. (Tony) appeals the Findings of Facts, Conclusions of Law, and Order issued by the Fourth Judicial District Court, Missoula County, concerning the conservatorship and estate planning efforts of his elderly mother, H.D.K. Appellees H.D.K. and her daughter, S.K.H. (Sofeea), submitted briefs in response. We affirm.

¶2 We restate the following issues on appeal:

1. Whether the District Court deprived Tony of procedural due process or abused its discretion by declining to issue a scheduling order, quashing a subpoena for the file of H.D.K.’s attorney, and concluding the conservatorship hearing after three days.

2. Whether the District Court erred in finding that H.D.K. intended to allocate 60 percent of her estate to Tony and 40 percent of her estate to Sofeea.

3. Whether the District Court erred by not determining the present values of the properties in H.D.K.’s estate.

4. Whether the District Court erred in finding that H.D.K. had testamentary capacity.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 H.D.K. is an 85-year-old woman who, along with her late husband, Jim, acquired several properties in and around Missoula. The value of these properties exceeds three million dollars, including several rental properties which provide H.D.K. with substantial monthly income. H.D.K. has two children, Tony and Sofeea. To put it mildly, Tony and Sofeea do not get along. H.D.K. lives with Tony's daughter in Missoula. Tony, his wife, and his son also reside in Missoula. Sofeea and her family live outside of Montana, and Sofeea returns to visit H.D.K. several times per year.

¶4 H.D.K. and Jim's estate planning began in 2009, when the couple met with Dirk Williams (Williams) to discuss estate planning. During these sessions, H.D.K. articulated that, following the death of the last surviving spouse, 60 percent of their assets should go to Tony and 40 percent to Sofeea (the 60/40 Plan). In his Initial Report (Report) to the District Court, Williams noted that H.D.K. never wavered from her desire to implement the 60/40 Plan. H.D.K. and Jim intended to leave more to Tony in recognition of his assistance managing the properties.

¶5 In 2014, Jim and H.D.K. executed a trust (Trust) and pour-over wills. The Trust would hold the membership interests of three limited liability companies (LLCs). Two LLCs, Dara Properties and South First 615, would transfer to Tony upon the death of H.D.K. and Jim. The remaining LLC, Victor Properties, would pass to Sofeea. Around the time of the Trust's execution, H.D.K. prepared the following list of properties each child's LLC would receive:

                Tony: Sofeea
                  320 S. 6th St. W.             330 Tremont
                  302 S. 6th St. W.             710 Edith
                  612 S. 1st St. W.             400 Rollins
                  535 S. 2nd St. W.             418 Hazel
                  410 Hazel                 800 Chestnut
                  615 S. 1st St. W.             Cramer Creek
                  Mountain Shadows lot1         Mountain Shadows lot
                

[Editor's Note: The preceding image contains the reference for footnote¹ ].

H.D.K.’s home at 307 S. 6th Street West would be held in the Trust to pass equally upon her death to Sofeea and Tony.

¶6 In 2015, H.D.K. deeded the following properties to each LLC:

                Dara:                                Victor
                  241 S. 2nd St. W. (aka 410 Hazel)           535 S. 2nd St. W
                  302 S. 6th St. W.                     330 Tremont
                  320 S. 6th St. W.                     710 Edith2
                  612 S. 1st St. W.                     400 Rollins
                  800 Chestnut
                  418 Hazel
                

[Editor's Note: The preceding image contains the reference for footnote² ].

Shortly after the deeds to Victor Properties were recorded, Williams learned that another entity had already registered the LLC's name. The District Court concluded that, but for this error, H.D.K.’s intended 60/40 Plan would have been achieved. Regardless, H.D.K. subsequently executed a deed transferring the same properties to a new LLC. Williams later reported that H.D.K. refused to allow him to file the articles of organization for the new LLC. H.D.K. also refused to allow Williams to record the new deed. Jim died in 2016, leaving H.D.K. to resume the estate planning. After Jim's death, Williams believed Tony was influencing H.D.K. and opposed her estate planning efforts.³ Because H.D.K. refused to transfer the properties to the new LLC, the deeded properties would remain in H.D.K.’s residuary estate. As a result, Williams indicated that, absent remedial action, Tony would receive nearly 73 percent of H.D.K.’s estate. H.D.K. cancelled several meetings with Williams until July 2018, when H.D.K. sent a letter, written by Tony, terminating Williams's services.

¶7 A few weeks later, H.D.K. and Sofeea reestablished services with Williams to complete H.D.K.’s estate planning. After reengaging with Williams, H.D.K. began an extended visit with Sofeea and, between October 2018 and February 2019, only briefly returned to Missoula twice. In December 2018, H.D.K. wrote a letter to Tony and Sofeea indicating the properties she intended for each child in 2014 had changed, but her desire to implement the 60/40 Plan remained. The letter referenced an updated list of properties and indicated Tony would receive H.D.K.’s home at 307 S. 6th Street West and Sofeea would receive the property at Cramer Creek.⁴ During the conservatorship proceedings, H.D.K. authenticated the letter and testified that it reflected her current wishes. The updated list reflected the following distribution:

800 Chestnut

Tony:	Sofeea:
320 S. 6th St. W.	330 Tremont
302 S. 6th St. W.	612 S. 1st St. W.
418 Hazel	535 S. 2nd St. W.
410 Hazel	400 Rollins
*485 615 S. 1st St. W.
307 S. 6th St. W.	Cramer Creek
Mountain Shadows lot	Mountain Shadows lot

¶8 In May 2019, H.D.K. executed two beneficiary deeds to bring the estate distribution closer to the 60/40 Plan. The first deed was recorded on May 10, 2019, and named Sofeea as the beneficiary upon H.D.K.’s death of the home at 307 S. 6th Street West and the rental properties 330 Tremont and 400 Rollins. The second deed would have transferred 615 South 1st Street West to Tony, but the deed has not been recorded. Williams later reported that, had both deeds been recorded, the estate would distribute 64 percent to Tony and 36 percent to Sofeea.

¶9 Sofeea filed a petition for the appointment of a temporary conservator in July 2019, citing the need to protect H.D.K. from the influence of other family members during her estate planning. The District Court issued an order appointing the Western Montana Chapter for the Prevention of Elder Abuse (Conservator) as H.D.K.’s temporary conservator and naming Williams as H.D.K.’s attorney. H.D.K. was examined by a court-appointed neuropsychologist, Dr. Loretta Bolyard, in August 2019, who determined H.D.K. met diagnostic criteria for a major neurocognitive disorder, possibly Alzheimer's disease

. Dr. Bolyard expressed grave concerns about H.D.K.’s financial, estate, and legal matters and recommended the District Court appoint a new attorney for H.D.K. and name the Conservator as full guardian and conservator. Dr. Bolyard also indicated that H.D.K. was easily persuaded by both children, and that her beliefs could vary depending on who she was communicating with.

¶10 Tony filed a notice of appearance as an interested person in September 2019. Williams filed his Report shortly after. The Report noted that H.D.K. was susceptible to influence by her children, depending on which child was last with her. Williams also included an exhibit he believed closely represented the original intentions of H.D.K. and Jim, which would result in 62 percent of the estate passing to Tony and 38 percent passing to Sofeea. The exhibit provided the following distribution:

Tony:	Sofeea:
241 S. 2nd St. W./410 Hazel	800 Chestnut
302 S. 6th St. W.	535 S. 2nd St. W.
320 S. 6th St. W.	330 Tremont
612 S. 1st St. W.	400 Rollins
418 Hazel	Cramer Creek
*486 919 Simons	923 Simons
615 S. 1st St. W.
307 S. 6th St. W.

Williams also recommended that, due to his personality clash with Tony and the likelihood that Williams would have to testify during the proceedings, the District Court appoint a different attorney to represent H.D.K. Tony and Sofeea stipulated to this recommendation, and the District Court appointed new counsel for H.D.K. Tony later moved to strike Williams's Report, arguing that Williams could not serve as an advocate and a witness in the same case, that Williams had a conflict of interest with Tony, and that Williams lacked credibility. The District Court denied Tony's motion to strike, finding Tony's discontent with the Report was an invalid reason to strike the Report, that any conflict between Tony and Williams was a personality conflict and not a conflict of interest, that the absence of supporting documents did not invalidate the Report, and that H.D.K.’s rights of confidentiality may not be abrogated lightly.

¶11 One year after the initial petition, the court-appointed visitor met with H.D.K. The visitor found that H.D.K. exhibited mild cognitive impairment. The visitor noted that H.D.K.’s 60/40 Plan remained consistent through 2014 when the Victor Properties, LLC mistake occurred. The visitor noted that H.D.K.’s mind appeared made up for many years and recommended that the District Court implement H.D.K.’s estate plan from when her mental status was intact.

¶12 Neither Tony nor Sofeea contested the appointment of the Conservator or the examinations by the neuropsychologist and the visitor. The only contested issue was H.D.K.’s testamentary capacity and estate...