Kolouch v. First Sec. Bank of Idaho

• Decision Date: 19 January 1996
• Docket Number: No. 21508,21508
• Citation: 128 Idaho 186,911 P.2d 779
• Parties: In the Matter of the Estate of Helen Margaret (Peggy) Kolouch, Deceased, Helen P. KOLOUCH, Appellant-Appellant on Appeal, v. FIRST SECURITY BANK OF IDAHO, N.A., Ron Youtz and Karena Youtz, Forrest P. Hymas, Respondents.
• Court: Idaho Court of Appeals

Page 779

911 P.2d 779

128 Idaho 186

In the Matter of the Estate of Helen Margaret (Peggy) Kolouch, Deceased,

Helen P. KOLOUCH, Appellant-Appellant on Appeal, v. FIRST SECURITY BANK OF IDAHO, N.A., Ron Youtz and Karena Youtz, Forrest P. Hymas, Respondents.

No. 21508.

Court of Appeals of Idaho.

Jan. 19, 1996.

Rehearing Denied Feb. 26, 1996.

Petition for Review Denied March 8, 1996.

Lloyd J. and Curtis R. Webb, Lawyers, Twin Falls, for appellant. Lloyd J. Webb argued.

Elam & Burke, P.A., Boise, for respondents. Sandra L.U. Clapp argued.

PERRY, Judge.

Helen P. Kolouch (Helen) was the personal representative of the estate of her daughter, Helen Margaret (Peggy) Kolouch. Helen appeals from the district court's order affirming several rulings by the magistrate. Helen claims that the magistrate erred in: (1) failing to resolve each of the issues in the case in a separate proceeding; (2) removing Helen as personal representative of Peggy's estate; (3) ordering Helen to pay the attorney's fees

[128 Idaho 190] Peggy's estate incurred during the removal proceedings; (4) ordering Helen to return funds to the estate that she expended in a lawsuit in which she had a personal interest; (5) awarding interest on funds ordered reimbursed to the estate by Helen; (6) imposing on Helen the extraordinary costs incurred by the trustee of the estate trust which arose due to Helen's management of Peggy's estate; (7) charging the homestead and exempt property allowances for Peggy's children to the estate as it existed prior to the satisfaction of any devise; and (8) denying Helen a fee for serving as personal representative. Helen and the respondents both seek an award of attorney fees incurred in this appeal.

I. FACTS AND PROCEDURE

Helen was appointed the personal representative of Peggy's estate. Peggy's will provided that her children were to receive any of her personal effects which they may choose. The remaining personal effects were to be given to Helen. The will then devised gifts of $1,000 to each of Peggy's surviving siblings and to an unrelated individual. Peggy's house and all accounts receivable from her accounting practice were to pass to Helen. The rest of Peggy's estate and her life insurance proceeds constituted the corpus for a testamentary trust which was to be held for the benefit of Peggy's two minor children. Twin Falls Bank and Trust Company was appointed trustee of the trust. ¹

Prior to Peggy's death, there were several transactions involving three pieces of real property held in whole or in part by the Kolouch family. As a result of these transactions, at the time of her death, Peggy was a tenant in common, with two of her brothers and her sister, in the Kolouch Subdivision. ² These four individuals also owned, as joint tenants with a right of survivorship, a partial interest in what has been referred to as the pool property. The four Kolouch siblings, along with Helen, also owned, as tenants in common, the Jefferson House Condominium in Summit County, Utah. After Peggy's death, and contrary to the provisions of the will, Helen conveyed Peggy's interest in the Kolouch subdivision and the pool property to three of Peggy's siblings. Helen also conveyed Peggy's interest in the Jefferson House equally to three of Peggy's siblings and herself. Helen claims to have mistakenly believed that the properties were all held as joint tenancies with a right of survivorship, and that the estate therefore had no further interest in the properties. In addition, lots in the Kolouch subdivision were subsequently sold by the family to parties unconnected to this litigation. The estate received none of the sale proceeds. After the initiation of proceedings against her, Helen reimbursed the estate for Peggy's share of the proceeds from the sale of these lots. Helen and Peggy's siblings also reconveyed to the estate Peggy's interest in the Jefferson House and the Kolouch subdivision. The disposition of the pool property is not at issue.

Peggy was the manager and chief executive officer of Professional Business Services, Inc. (PBS), and Helen was the president. Both Peggy and Helen were shareholders. PBS was involved in lengthy litigation with a former client, Magic Valley Radiology Associates (MVRA). During the initial trial, the trial court found both PBS and Helen liable to MVRA. A letter of credit was posted in lieu of a supersedeas bond to stay enforcement of the judgment. Helen assumed personal liability to reimburse the issuing bank if payment on the letter of credit were ultimately required. On appeal, the Idaho Supreme Court reversed the judgment against Helen and remanded the case. Davis v. Professional Business Services, Inc., 109 Idaho 810, 712 P.2d 511 (1985). The case was retried and was again appealed to the Idaho Supreme Court. The Supreme Court again remanded the case. Magic Valley Radiology Associates, P.A. v. Professional In July 1991, the trustee of the testamentary trust established by Peggy petitioned for Helen's removal as personal representative and for an order requiring Helen to reimburse the estate for all losses caused by her misconduct. This action was joined by Peggy's children, Karena Youtz and Ron Youtz. The magistrate issued a memorandum decision and subsequent order removing Helen from the position of personal representative of Peggy's estate and appointing Forrest P. Hymas as the successor personal representative. The magistrate then ordered that several issues presented by the estate's claims against Helen would be individually ruled upon, but treated as part of a continuing proceeding. The magistrate also ordered that Helen pay attorney fees incurred during the proceedings for her removal, that she reimburse the estate for the lots in Kolouch subdivision that were sold to third parties and that she return to the estate Peggy's interest in the Kolouch subdivision and Jefferson House. The trustee, Peggy's children and Forrest Hymas (the respondents), moved for partial summary judgment, requesting reimbursement of the PBS litigation expenses. The magistrate entered summary judgment and ordered that Helen return estate funds spent in PBS's litigation with MVRA and pay prejudgment interest on that amount. The magistrate awarded the trustee extraordinary costs incurred in managing the trust, finding that they were attributable to Helen's mismanagement of the estate and therefore chargeable to Helen personally. The magistrate also denied Helen's request for a personal representative's fee. Helen appealed to the district court which affirmed the magistrate's rulings. Helen again appeals.

[128 Idaho 191] Business Services, Inc., 119 Idaho 558, 808 P.2d 1303 (1991). By the time the case returned to the trial court, PBS was defunct and had no assets. Prior to Peggy's death either PBS or Helen had paid all of the attorney fees incurred during this litigation. However, from the time of Peggy's death in 1988, Helen paid for litigation costs with estate funds, although neither Peggy, individually, nor the estate were parties to the litigation. In 1991, MVRA commenced a separate action to pierce the corporate veil and collect the judgment against PBS from Helen individually and from Peggy's estate. That case was also appealed to the Supreme Court, Magic Valley Radiology, P.A. v. Kolouch, 123 Idaho 434, 849 P.2d 107 (1993), which affirmed in part, vacated in part and remanded.

II. ANALYSIS

On review of a decision of the district court, rendered in its appellate capacity, we examine the record of the trial court independently of, but with due regard for, the district court's intermediate appellate decision. Hentges v. Hentges, 115 Idaho 192, 194, 765 P.2d 1094, 1096 (Ct.App.1988). Our standard for reviewing a trial court's findings and conclusions is to determine whether the findings of fact are supported by substantial, competent evidence, and to determine whether the trial court properly applied the law to the facts as found. Tri-Circle, Inc., v. Brugger Corp., 121 Idaho 950, 954, 829 P.2d 540, 544 (Ct.App.1992). Over questions of law, we exercise free review. Kawai Farms, Inc. v. Longstreet, 121 Idaho 610, 613, 826 P.2d 1322, 1325 (1992); Cole v. Kunzler, 115 Idaho 552, 555, 768 P.2d 815, 818 (Ct.App.1989).

A. Separate Proceedings

Helen cites Idaho Code Section 15-3-107(1) for the proposition that the magistrate should have required a separate proceeding for each issue decided below. Helen further argues that because multiple issues were decided in one proceeding, she lacked the appropriate notice and an opportunity to be heard. See 31 Am.Jur.2d, Executors & Administrators § 983 (1989).

Idaho Code Section 15-3-107 provides in pertinent part:

Unless supervised administration as described in ... this code is involved, (1) each proceeding before the court or registrar is independent of any other proceeding involving the same estate; (2) petitions for formal orders of the court may combine various requests for relief in a single proceeding This provision does not impose a requirement that every order of the court regarding the same estate must be made through an entirely new proceeding. In hearing the removal motion, the magistrate properly reviewed all of the alleged improper acts of Helen as personal representative and the consequences thereof to the estate. These issues were intertwined with the later rulings made by the magistrate and thus were properly combined into one proceeding. Peggy's will was admitted to probate in 1988. Helen was removed as personal representative in 1992. For nearly four years since her removal, this case has been at various levels of the court system. Requiring decisions to be made without reference to and in entirely separate proceedings from those integrally related, legally and factually, would have caused even more unnecessary delay and expense. The magistrate did not err in conducting one continuous proceeding to dispense with the many, related issues in this...