Ohnstad Twichell, P.C. v. Treitline

• Decision Date: 20 January 1998
• Docket Number: No. 970154,970154
• Citation: 574 N.W.2d 194
• Parties: Ohnstad TWICHELL, P.C., Plaintiff and Appellee, v. Karen TREITLINE and Curtis Suhr, Defendants and Appellants. Civil
• Court: North Dakota Supreme Court

Page 194

574 N.W.2d 194

1998 ND 10

Ohnstad TWICHELL, P.C., Plaintiff and Appellee, v. Karen TREITLINE and Curtis Suhr, Defendants and Appellants.

Civil No. 970154.

Supreme Court of North Dakota.

Jan. 20, 1998.

Rehearing Denied Feb. 12, 1998.

Michael D. Nelson (argued), of Ohnstad Twichell, West Fargo, for plaintiff and appellee.

David A. Garaas (argued), of Garaas Law Firm, Fargo, for defendants and appellants.

NEUMANN, Justice.

¶1 Karen Treitline and Curtis Suhr appealed from a summary judgment awarding Ohnstad Twichell, P.C., $2,553.92 in legal fees plus interest. We conclude summary judgment was appropriately granted, and we affirm.

I

¶2 Gerald Suhr served as personal representative of the estate of his mother, Idella Suhr. Gerald Suhr's brothers are Curtis and Kenneth Suhr, and his sister is Karen Treitline. Ohnstad Twichell served as attorney for the estate. After Gerald Suhr distributed property to the devisees designated in the will and attempted to close the estate informally, Treitline and Curtis Suhr filed six motions attacking, among other things, proposed attorney fees and personal representative fees. The probate court denied four of the six motions and advised the personal representative he could petition for discharge.

¶3 Gerald Suhr petitioned for a formal order determining testacy and settling the estate. He also requested approval of payment of $5,107.84 to Ohnstad Twichell, which represents closing fees, costs and additional attorney fees incurred by the estate in responding to the six motions filed by Treitline and Curtis Suhr. A proposed order determining testacy and settling the estate included the following provision:

"There remains due and payable to Ohnstad Twichell, P.C., the attorneys for the Personal Representative, the following attorney's fees and costs: $2,794.10 in Karen Treitline motion fees and costs, and $2,313.74 in closing fees and costs, for a total of $5,107.84, which are reasonable in amount. This sum is and shall remain a claim against the estate."

¶4 The probate court signed the proposed order, but deleted the last sentence stating the law firm's attorney fees would "remain a claim against the estate." The probate court, in its final discharge of the personal representative, also said Gerald Suhr "has paid all sums of money and delivered all property of said estate to the persons entitled thereto, ..." ¶5 Because all estate assets had been distributed leaving no money in the estate to pay the legal fees, Ohnstad Twichell sued distributees Treitline and Curtis Suhr under N.D.C.C. §§ 30.1-21-04 (U.P.C.3-1004) and 30.1-21-06 (U.P.C.3-1006) for $2,553.92, one-half of the attorney fees the probate court had found "reasonable" in its earlier order. The other two residuary distributees, Gerald and Kenneth Suhr, had voluntarily paid their share of the outstanding attorney fees. The judge, who was not the same judge who signed the formal order determining testacy and settling the estate, granted summary judgment for the law firm, and Treitline and Curtis Suhr appealed.

II

¶6 Summary judgment is a procedural device for the prompt and expeditious disposition of a controversy without trial if either party is entitled to judgment as a matter of law, if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts would not alter the result. Ohio Farmers Ins. Co. v. Dakota Agency, 551 N.W.2d 564, 565 (N.D.1996). On appeal, we review the evidence in the light most favorable to the party opposing the motion for summary judgment. Johnson Farms v. McEnroe, 1997 ND 179, p 2, 568 N.W.2d 920.

A

¶7 In certain circumstances, distributees may be liable to claimants of an estate under N.D.C.C. § 30.1-21-04 (U.P.C.3-1004):

"After assets of an estate have been distributed and subject to section 30.1-21-06, an undischarged claim, not barred, may be prosecuted in a proceeding against one or more distributees. No distributee shall be liable to claimants for amounts received as exempt property, homestead or family allowances, or for amounts in excess of the value of the distributee's distribution as of the time of distribution. As between distributees, each shall bear the cost of satisfaction of unbarred claims as if the claim had been satisfied in the course of administration...."

¶8 The limitations on actions and proceedings against distributees are set forth in N.D.C.C. § 30.1-21-06 (U.P.C.3-1006):

"Unless previously adjudicated in a formal testacy proceeding or in a proceeding settling the accounts of a personal representative or unless otherwise barred, the claim of any claimant to recover from a distributee who is liable to pay the claim, and the right of any heir or devisee, or of a successor personal representative acting in their behalf, to recover property improperly distributed or the value thereof from any distributee is forever barred at the later of:

"1. Three years after the decedent's death.

"2. One year after the time of distribution thereof.

"This section does not bar an action to recover property or value received as the result of fraud."

¶9 The purpose of these provisions is explained in 1 Uniform Probate Code Practice Manual, at p. 394 (1977):

"Normally, of course, assets will not be distributed until all known claims are disposed of. If partial or complete distribution occurs prematurely, this section adds meaning to the Section 3-101 concept that assets descend subject to claims. Section 3-1006 describes a personal liability to unpaid and unbarred creditors that is owed by distributees who are not protected by an adjudication that shows that what the distributees are receiving has been discharged of all creditors' claims."

B

¶10 The appellants assert the trial court exceeded its jurisdiction when it entered summary judgment against them. They argue because the attorney fees owed are administrative expenses of the estate and the estate has been closed, only the probate court had jurisdiction over the law firm's action. According to the appellants, there is a distinction between the probate and original jurisdiction of the district court, and here, the law firm invoked the district court's original jurisdiction rather than the probate jurisdiction under N.D.C.C. § 30.1-12-05 (U.P.C.3-105). They rely on Kerrigan & Line v. Foote, 5 Neb.App. 397, 558 N.W.2d 837, 841 (1997), where the court held:

"[T]he proper manner to obtain payment of a claim that has been allowed, but not paid, is to file a petition in the county court requesting an order that the personal representative pay the claim. The code does not provide an alternative manner in which a claimant may seek payment of an allowed claim not yet reduced to an order. Because there is no statute allowing an action for payment of an allowed claim not yet reduced to an order in a court other than the county court, the county court has exclusive original jurisdiction over such an action."

¶11 We reject the appellants' argument. First, unlike Nebraska, district courts in this state have had probate jurisdiction since county courts were abolished in 1995. See N.D.C.C. §§ 27-05-00.1 and 30.1-02-02; 1991 N.D. Sess. Laws Ch. 326. Nebraska vests county courts with exclusive probate jurisdiction. See Neb.Rev.Stat. §§ 30-2209(5) and 30-2211 (1995). Moreover, the appellants' distinction between the probate and original jurisdiction of the district court is unpersuasive under the circumstances. Even if the law firm invoked the "original jurisdiction" of the district court, subject matter jurisdiction can be conferred by statute, see Kopperud v. Reilly, 453 N.W.2d 598, 600 (N.D.1990), and the probate code under N.D.C.C. § 30.1-21-04 (U.P.C.3-1004) specifically authorizes the procedure used by the law firm in this case. The appellants' argument the trial court lacked jurisdiction is without merit.

C

¶12 The appellants assert the distribution approved in the formal order determining testacy and settling the estate was not "improper," so the law firm cannot attack it in this separate proceeding. The premise of their argument is, under N.D.C.C. §§ 30.1-20-08 (U.P.C.3-908) and 30.1-20-09 (U.P.C.3-909), a personal representative is limited to recovering distributed assets only if the distribution was "improper." They argue the law firm, as a claimant, also has no right against a distributee unless there has been an "improper" distribution.

¶13 The appellants' argument ignores N.D.C.C. §§ 30.1-21-04 (U.P.C.3-1004) and 30.1-21-06 (U.P.C.3-1006). We interpret statutes to be in harmony, not to be in conflict. See Nelson v. Gillette, 1997 ND 205, p 34 571 N.W.2d 332. The statutes cited by the appellants merely authorize a personal representative to recover assets from distributees if there has been an improper distribution and are not the exclusive method for recovering distributed assets. Sections 30.1-21-04 (U.P.C.3-1004) and 30.1-21-06 (U.P.C.3-1006), N.D.C.C., also authorize claimants to obtain distributed assets from distributees under certain circumstances. There is no conflict between the statutes.

D

¶14 The appellants also assert summary judgment cannot be granted against them because the attorney fees were previously adjudicated by the probate court, and this action is barred under the doctrines of res judicata and collateral estoppel. We reject this argument as well.

¶15 The appellants' argument centers on the contents of the probate court's final orders approving distribution and discharging the personal representative. They argue the probate court determined the estate was not responsible for the attorney fees, and that the law firm is not a claimant of the estate because the court determined all entitled persons had been paid by the estate. According to the appellants, the law firm's failure to appeal that order bars it from attacking the order in this separate proceeding, and the law firm's sole recourse is to sue the personal...