In re Lionel D.
| Decision Date | 30 November 2022 |
| Docket Number | S-18008,S-18087 |
| Parties | In the Matter of the Estate of LIONEL D. |
| Court | Supreme Court of Alaska (US) |
UNPUBLISHED See Alaska Appellate Rule 214(d)
Appeal from the Superior Court of the State of Alaska No 3AN-18-00457 PR, Third Judicial District, Anchorage, Andrew Guidi, Judge.
John C. Pharr, Law Offices of John C. Pharr, P.C., Anchorage, for Cliff D. Cedar E. Polta, Assistant Public Advocate, and James Stinson, Public Advocate, Anchorage, for Nora D. Bruce F Stanford, Law Offices of Bruce F. Stanford, LLC, Seward, for Kevin W.
Before: Winfree, Chief Justice, Maassen, Carney, Borghesan and Henderson, Justices.
In this appeal from probate proceedings the primary issues are whether the superior court erred or abused its discretion by denying a request to compel discovery, by removing the estate's personal representative for self-dealing and conflict of interest, and by approving the successor personal representative's final distribution of the estate. Seeing no error, we affirm the court's orders and the estate's closure.
Lionel D.[1] died intestate in February 2018. He had no spouse and no children. He was survived by his mother, Nora; his siblings, Cliff and Naomi; his nephew, Naomi's son Kevin; and other family members not relevant to these proceedings. Relevant to the dispute before us, Lionel's estate included a valuable setnet fishing permit and related shore lease.
Having died intestate and without a spouse or descendants, Lionel's entire estate undisputedly passed to one heir-his surviving parent, Nora.[2] Nora had suffered a stroke in April 2016 resulting in cognitive and mobility impairments, and she had a court-appointed conservator when Lionel died.[3]
In March 2018 Cliff sought appointment as personal representative of Lionel's estate. On a form requesting to start informal probate, he failed to list Nora as a person with greater right to appointment. Documents nominating Cliff to serve as personal representative and demanding "notice of all proceedings" regarding Lionel's estate were allegedly filed by Nora; the documents listed an address that was outdated for her but current for Cliff.
Following a July 2018 hearing the superior court appointed Cliff as personal representative of Lionel's estate. The court ordered that Cliff s appointment be supervised and that he could "not make any distribution of the estate . . . without prior order of the court." In September Cliff sought to have the estate's setnet permit and shore lease changed into his own name. He went to the Department of Natural Resources (DNR), the Commercial Fisheries Entry Commission, and the court seeking the assignment. Acknowledging that it would be "in the best interests of the Estate for the [setnet] permit to be fished during the 2019 season," the court instructed Cliff to account for any income derived from fishing the permit. Cliff eventually received an emergency transfer granting a limited entry permit to fish the permit in 2018 and 2019.
Nora's permanent conservator later testified that Cliff had not informed the conservator about Cliffs intent to become the estate's personal representative, about the two documents Nora purportedly filed with the court, or about transferring the fishing permit and shore lease into his name. Cliff did not give the estate any fishing income.
In March 2020 Kevin sought "formal probate . . ., the removal of [Cliff] as Personal Representative of [Lionel's] estate," and appointment as personal representative. In May Kevin also sought an order allowing him to fish the setnet permit and shore lease for the 2020 season. Nora, "by and through her conservator," joined the motion to remove Cliff as personal representative of Lionel's estate.[4] Cliff opposed both of Kevin's motions. The court granted Kevin permission to "fish the estate's limited entry setnet permit and Naknek shore fisheries lease for the 2020 Bristol Bay commercial salmon season."[5]
In October Cliff moved to compel discovery from OP A, Kevin, and Naomi. After Cliff received interrogatory responses concerning negative statements about his actions as Nora's power of attorney and personal representative of Lionel's estate, Cliff had asked OPA to produce any supporting documents. One document OPA produced was redacted to omit what OPA described as "irrelevant information, communications protected by the attorney-client privilege, and attorney work products." Cliff requested an unredacted version of the document; he noted that "[n]o privilege log was supplied" and suggested that the document was strategically redacted to support the conservator's position. He asked the superior court to order OPA to submit a privilege log identifying which privilege applied for the redactions.
Cliff also had asked Kevin and Naomi to produce documents and communications relating to an alleged bribery scheme in which Kevin was to pay Nora $ 10,000 in exchange for use of, or possibly the ability to buy, the permit and shore lease. They responded that there was no signed written agreement but that Kevin had discussed with OPA that he would pay Nora the greater of either "$10,000 after the 2020 fishing season or" a figure calculated "by subtracting [Nora's] half of the startup expenses from the total income from the 2020 fishing season and then multiplying] it by 1/3." Cliff argued in his motion to compel that this payment was suspicious - of what, he did not specify - and that because Kevin's and Naomi's discovery responses were "evasive," they "should be ordered to produce any writings in any form, including but not limited to emails, pertaining to the $10,000 agreement."
The superior court found "that the discovery responses were adequate, that the privilege claims were sufficiently documented and supported and that there [was] no basis to move to compel."
Trial was held over three days in November and December. Cliff testified that in 2018 and 2019 he wanted to put the fishing permit and shore lease in his name so he could transfer them into the family trust he had created for Nora's assets. He said that when he fished those two seasons he received 40% of the proceeds, although he was inconsistent about whether there were any net profits. Cliff explained that he did not know what he was supposed to do with the fishing proceeds. He testified that he spent some of the proceeds "[b]uying things for [Nora]" but spent most of the money on himself. Cliff generally acknowledged that: Nora stood to inherit Lionel's assets, Nora had been under a conservatorship since 2018, his appointment as personal representative was supposed to be supervised, he never informed Nora's conservator about the setnet permit or the shore lease, and he had been informed he "could no longer handle any of [his] mother's financial affairs." He repeatedly asserted that he did not know what his duties as personal representative entailed.
Nora's former temporary conservator testified that when he was first appointed to the case, Nora "was in arrears to her current assisted living home and had been presented a 30-day notice." Yet her funds were being used to pay for a vehicle that was in her name but being used by Cliff, as well as space rent and utilities for a trailer Cliff was living in. The conservator recalled asking Cliff whether Lionel's death would "affect [Nora]'s financial situation," and that in response Cliff failed to mention the setnet permit and shore lease. The conservator explained about not having notice from Cliff when he became Lionel's estate's personal representative, about Cliff transferring the shore lease and setnet permit into his own name, about Cliff receiving fishing proceeds, and about the two documents purportedly filed on Nora's behalf supporting Cliffs appointment as personal representative.
At the end of trial the superior court found "substantial evidence of self-dealing [by Cliff] and of actions that were detrimental to the estate and inconsistent with [Cliff s] fiduciary obligations as personal representative." The court concluded that Cliff should be removed as personal representative and that Kevin - "the only other option" - should be appointed. The court asked Nora's counsel to "submit proposed findings of fact and conclusions of law" in accord with its oral findings and conclusions and counsel's closing arguments.[6]
The superior court adopted Nora's written proposed findings of fact and conclusions of law largely without alteration. In addition to its oral findings after trial, the court found that Cliff: "committed a fraud upon this court" when he caused Nora to file "a demand for notice and a waiver of bond and priority for appointment ... in support of Cliff s . . . application to become personal representative"; failed to make necessary disclosures to OPA about the estate; "[b]y his own admission applied to become [p]ersonal [Representative with the explicit goal of permanently transferring the permit and shore lease into his ownership"; was "ignorant of the distributive obligations of a [p]ersonal [Representative"; "failed to account to this court for the two fishing seasons that he fished," despite grossing "approximately $ 180,000 over two years," and used the profits "to his own advantage and conveyed no significant benefit to Nora... or to this estate"; and "knew that those assets were intended...
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