Jarmin v. Shriners Hospitals for Crippled Children

• Decision Date: 18 January 1990
• Docket Number: No. 890207,890207
• Citation: 450 N.W.2d 750
• Parties: Carl JARMIN, Appellant, v. SHRINERS HOSPITALS FOR CRIPPLED CHILDREN and Faith United Methodist Church of Williston, Appellees. Civ.
• Court: North Dakota Supreme Court

Page 750

450 N.W.2d 750

Carl JARMIN, Appellant, v. SHRINERS HOSPITALS FOR CRIPPLED CHILDREN and Faith United Methodist Church of Williston, Appellees.

Civ. No. 890207.

Supreme Court of North Dakota.

Jan. 18, 1990.

Brenda M. Zent of Farhart, Lian, Maxson, Howard & Sorensen, Minot, for appellant.

Vern C. Neff of Bjella, Neff, Rathert, Wahl & Eiken, Williston, for appellees.

VANDE WALLE, Justice.

Carl Jarmin appealed from a county court order removing him as personal representative of the estate of Doris D. Corrie. Jarmin contends that there was no "cause" shown to justify his removal as personal representative. We affirm.

Doris D. Corrie died testate on June 21, 1988. Her will was admitted into informal probate in the county court for Williams County on June 27, 1988. Corrie's will nominated Carl Jarmin to be the personal representative of her estate. Jarmin was appointed personal representative, and he was subsequently issued letters testamentary.

While acting as personal representative, Jarmin filed an objection in the county court to a final accounting issued by the First National Bank & Trust Company of Williston as Doris Corrie's conservator. ¹ The final accounting showed that approximately $313,000 in cash was being held by the Bank in its capacity as Corrie's conservator. The money held by the Bank represented the total assets of Doris Corrie's estate. Jarmin objected to the final accounting on the ground that he was entitled to money from an account which was held by Doris Corrie and himself in joint tenancy. ² Specifically, Jarmin claimed that he had a right to approximately $49,898.77 of the funds held by the conservator, plus interest accumulated during the period of the conservatorship.

Jarmin, acting pursuant to his powers as personal representative, subsequently withdrew the $313,000 from the First National Bank & Trust Company of Williston. At the time of the withdrawal, Jarmin was accompanied by his personal attorney from Minot, North Dakota. Jarmin did not consult with the attorney for the estate prior to the withdrawal, nor did he notify the estate's devisees and legatees of his action. Furthermore, Jarmin offered no explanation to the Bank for his withdrawal of the funds. The withdrawal was made after Jarmin had filed his objection to the Bank's final accounting, but before the county court had an opportunity to render a decision regarding the accounting. According to the testimony in the record, Jarmin stated that he deposited the money at a bank in Minot. No individual or organization with any interest or involvement in Corrie's estate resides in Minot and, in fact, most of the participants live in the city of Williston. Under the terms of Corrie's will, Jarmin was not required to furnish a bond as personal representative and, accordingly, Jarmin was acting without a bond at the time of the withdrawal.

The Shriners Hospitals for Crippled Children and the Faith United Methodist Church of Williston are residuary legatees and devisees of the entire estate of Doris Corrie. On March 29, 1989, the Shriners Hospitals and Faith United petitioned the county court to remove Carl Jarmin as personal representative. Noting Jarmin's potential conflict of interest and actions with regard to the estate funds, the Shriners Hospitals and Faith United argued that Jarmin should be removed "for cause" pursuant to NDCC Sec. 30.1-17-11 (UPC 3-611), on the basis that his "removal would be in the best interests of the estate." After a hearing on the petition, the county court entered an order removing Jarmin as personal representative. A successor personal representative was appointed by the court. Jarmin subsequently filed a timely notice of appeal from the county court's order. ³

The only issue on appeal is whether the county court erred in removing Jarmin as personal representative of Doris Corrie's estate. Jarmin argues that the county court erred in its conclusion of law that "cause" existed for removal and that his removal would be in the best interest of the estate.

Section 30.1-17-11(1), NDCC, allows any person interested in an estate to petition a court for the removal of the personal representative for cause. Under Sec. 30.1-17-11(2), cause exists "when removal would be in the best interests of the estate." In the instant case, the county court entered findings of fact which stated that Jarmin believed he was the joint owner with Doris Corrie of a $49,898.77 account; that Jarmin believed he was entitled to the interest accumulated on the account from the date of its establishment; that Jarmin knew the residuary devisees and legatees claimed the account to be part of the estate of Doris Corrie; that Jarmin understood that there would be a conflict of interest between his fiduciary duty and obligation as personal representative and his personal claim to the proceeds; that Jarmin, as personal representative, withdrew all of the assets of the estate from the conservator and testified that he deposited the funds in a Minot bank; and that Jarmin had not furnished any bond as personal representative because none was required by the terms of Corrie's will. From these findings, the county court concluded that the removal of Jarmin as personal representative would be in the best interests of the estate, and that cause sufficient to satisfy Sec. 30.1-17-11 existed for his removal.

Jarmin does not argue that the findings of fact entered by the county court were clearly erroneous. See Rule 52(a), NDRCivP. Rather, Jarmin contends that the court erred in concluding that the facts constituted sufficient cause to justify his removal as personal representative. In this regard, Jarmin claims that the joint ownership of estate property by a personal representative is not a sufficient conflict of interest to justify the removal of the personal representative.

Initially, we note that a trial court's conclusions of law are not subject to the clearly erroneous rule applicable to findings of fact, and are thus fully reviewable upon appeal. Norden Laboratories, Inc. v. Rotenberger, 358 N.W.2d 518 (N.D.1984); Jamestown Sand v. Tri-County Elec. Co-op, 351 N.W.2d 727 (N.D.1984); In Interest of Kupperion, 331 N.W.2d 22 (N.D.1983); E.E.E., Inc. v. Hanson, 318 N.W.2d 101 (N.D.1982). However, we also recognize that the removal of a personal representative necessarily involves the use of discretion by the trial court, and that an order removing a personal representative will not be set aside on appeal absent an abuse of discretion. See Matter of Estate of Sumpter, 166 Mich.App. 48, 419 N.W.2d 765 (1988); In re Finizie's Appeal From Probate, 6 Conn.App. 115, 503 A.2d 623 (1986); Matter of Estate of Humphrey, 141 Mich.App. 412, 367 N.W.2d 873 (1985); Matter of Estate of Counts, 217 Mont. 350, 704 P.2d 1052 (1985); Estate of Jaworski v. Jaworski, 479 N.E.2d 89 (Ind.Ct.App.1985); Matter of Estate of Lovell, 344 N.W.2d 576 (Iowa App.1983); In re Estate of Moss, 183 Neb. 71, 157 N.W.2d 883 (1968). See also 31 Am.Jur.2d Executors and Administrators Sec. 277 (1989).

The mere fact that a personal representative has an interest in the estate he or she is administering is, generally, an insufficient conflict of interest to justify the removal of the personal representative. See 31 Am.Jur.2d Executors and Administrators Sec. 281 (1989). Thus, courts have held the removal of an executor to be improper when the executor was simply a creditor of the estate, or had an interest in personal property of the estate, or had developed some hostilities with estate heirs. See, e.g., Tyson v. North Carolina Nat. Bank, 53 N.C.App. 189, 280 S.E.2d 478 (1981), mod. on other grounds, 305 N.C. 136, 286 S.E.2d 561 (1982) [no conflict of interest is created by mere fact that executor is also an estate creditor]; Johnson v. Macaboy, 226 Md. 23, 171 A.2d 474 (1961) [executor's claim to personal property of estate was not grounds for removal]; In re Estate of Miles, 632 S.W.2d 323 (Mo.App.1982) [hostile relationship between heirs and executor was insufficient grounds for removal]. In accordance with this general principle, it has also been held that a personal representative should not be removed merely because he or she claimed joint ownership of certain estate property with the decedent. See, e.g., In re Meyer's Estate, 130 Cal.App.2d 145, 278 P.2d 471 (1955); aff'd 159 Cal.App.2d 764, ...