Schurman v. Lieske (In re Estate)
| Decision Date | 19 October 2021 |
| Docket Number | No. A-20-750.,A-20-750. |
| Parties | IN RE ESTATE OF Victor SCHURMAN, deceased. Michael D. Schurman, appellant, v. Thomas G. Lieske, Successor Personal Representative and Special Administrator of the Estate of Victor Schurman, appellee, and Patricia L. Harris and Jeffrey R. Harris, Successor Cotrustees of the Christine J. Schurman Revocable Trust, intervenors-appellees. |
| Court | Nebraska Court of Appeals |
Bradley D. Holbrook and Elizabeth J. Klingelhoefer, of Jacobsen, Orr, Lindstrom & Holbrook, P.C., L.L.O., Kearney, for appellant.
Richard Calkins, Alma, and Patrick J. Calkins, of Calkins Law Office, for appellee.
Kevin A. Brostrom, of Lauritsen, Brownell & Brostrom, P.C., L.L.O., Grand Island, for intervenors-appellees.
Michael D. Schurman appeals the decision of the county court for Adams County, ordering him to return $160,000 to his father's estate. Finding that the intervenors who requested the relief were without standing to do so, we vacate the county court's order on this issue. Other portions of the county court's order are vacated for jurisdictional reasons, as set forth below. The order is otherwise affirmed.
Victor Schurman died on April 23, 2012, and was survived by two biological children, Michael and James V. Schurman. Their mother, who was Victor's first wife, predeceased him. Victor's second wife, Christine Schurman, survived him and had four children, two of which are involved in this action as intervenors, Patricia L. Harris and Jeffrey R. Harris (the intervenors). On May 1, Christine filed an application for informal probate of will and informal appointment of personal representative, asking the court to conduct an informal probate of Victor's will, dated July 5, 2011.
The will instructs that after paying funeral and estate administration costs, four of Victor's grandchildren should receive specific amounts of cash. The remainder of the cash assets was granted to Michael and James in equal shares. Christine was granted a vehicle and agricultural real estate, and one of the grandsons was granted mineral interests. The remainder of the estate, not specifically bequeathed, was granted to Michael. The will designated a personal representative; however, in August 2012, he filed a petition for leave to withdraw and for the appointment of a successor personal representative. In October, a successor personal representative was appointed.
Michael and Victor had entered into a farm lease in February 2012 by which they leased out six parcels of land (the Six Parcels) for an annual fee of $114,000. On March 1, Michael received the first installment payment on the lease of $57,000. However, according to Michael, the second installment of $57,000 on September 1 was paid to Victor's estate to cover Victor's funeral costs. In 2013, Michael negotiated a new lease for the Six Parcels for an annual fee of $120,000, all of which Michael received. The lease renewed for 2014 and 2015. The estate never demanded that Michael remit the rental payments from the Six Parcels to the estate.
This estate has a lengthy history of civil proceedings initiated by Michael. Shortly after Christine moved for informal probate of the will, Michael filed a claim of undue influence, which he dismissed in December 2014 after considerable discovery. Michael also filed a petition for allowance of claim in August 2012, claiming that he had a life estate in some of Victor's property and thereby was the rightful recipient of rental income from the property. Michael requested that the probate court allow him to recoup $612,000 from the estate, but the personal representative denied the claim. Following discovery and the retention of expert witnesses, Michael dismissed that petition in April 2014. In addition to the undue influence lawsuit, Michael filed two other actions in the district court for Adams County, one involving a certificate of deposit owned by Victor and the other involving a promissory note allegedly owed to Victor. The district court dismissed Michael's complaint in the case involving the certificate of deposit following trial and entered summary judgment against Michael in the promissory note case.
In August 2013, Michael filed a motion to remove the successor personal representative, claiming that he failed to (1) file a statutorily required inventory, (2) diligently investigate the assets and liabilities of the estate, and (3) fulfill his duties as personal representative in a timely and proper manner.
On May 18, 2015, the successor personal representative deeded two parcels of land to Christine as bequeathed by the will. Also on May 18, he deeded an undivided one-half interest in the Six Parcels to Michael, pursuant to the will's residual clause. From the time of Victor's death until the distribution of these parcels of land, the successor personal representative retained all of the income from Christine's parcels of land to pay estate expenses. The successor personal representative testified that the income from the Six Parcels went directly to Michael and that he never asked Michael to remit that income to the estate.
In July 2015, Michael filed an amended motion to remove the successor personal representative, adding to the original allegations that he failed to file an inheritance tax return and failed to file legal actions to recover assets owed to the estate, among others.
On March 6, 2018, the successor personal representative filed a confession of judgment to be removed as the successor personal representative. The parties filed a joint stipulation assenting to the confession of judgment and to remove him as the successor personal representative. The court approved the joint stipulation; however, the successor personal representative remained the special administrator of the estate for limited purposes, including signing and filing tax returns, receiving rents, and paying expenses for the estate's oil interests. He filed his last accounting of Victor's estate on May 7.
In September 2018, Michael filed an application for appointment of a special administrator, nominating himself, for the purpose of making a claim on behalf of the estate against the estate of Christine, who had since passed away. The intervenors objected. The court denied Michael's application.
The intervenors filed a complaint to intervene in January 2019. They claimed that after Christine's death in August 2018, they became the successor cotrustees of the "Christine J. Schurman Revocable Trust" (Trust) pursuant to the Trust's terms. They also claimed that as a result of Michael's actions, the Trust incurred expenses and/or was denied assets from Victor's estate, and that they should be allowed to intervene to protect the interests of Christine, her Trust, and its beneficiaries.
Our record does not include an order allowing the intervenors to intervene, but they filed a motion of intervenors in May 2019. In their motion, they set forth three "claims." First, they alleged that Christine and her Trust incurred unnecessary attorney fees and costs defending against various claims Michael filed in both the probate court and the district court, and they sought reimbursement from Michael. Next, they asserted that Victor's estate incurred fees and costs for the successor personal representative and his two attorneys resulting from Michael's "frivolous claims" and requested that these amounts be assessed against Michael. Finally, they claimed that farm income to which Christine was entitled was used to pay estate expenses, whereas Michael retained all of the rental income from the Six Parcels. They requested that Christine be reimbursed for excess contributions and that Michael be ordered to remit to the estate the income he received. They further requested that the court complete a full accounting.
A hearing was scheduled on the intervenors’ motion. After the intervenors presented their evidence, Michael's counsel moved for a directed verdict, raising the issue of standing. He stated:
I'm still unsure as to how an interested party makes a claim against another interested party, which is basically what they're trying to do, and/or trying to ask for an asset to be put back into the estate. That's what a [personal representative] does. And the intervenors are not the personal representative. So, I'm uncertain of the fact that they have any authority whatsoever, but even if they did, they've absolutely proven nothing today.
The court denied Michael's motion. In a subsequent written order, the probate court found that Michael had retained $160,000 of assets from the estate between rent proceeds and government payments and ordered Michael to turn over to the special administrator that $160,000 within 30 days of its order. Regarding the intervenors’ claim for attorney fees incurred in the district court proceedings, the court found that the evidence presented did not warrant reimbursement of such fees. As to fees incurred in the probate proceeding, the court found that the "extensive investigation and discovery" was "instigated and perpetuated by Michael and for the primary (if not the exclusive) purpose of pursuing Michael's personal interests in this estate"; however, it declined to award attorney fees. The court did not perform an accounting and initially held in abeyance the intervenors’ claim for reimbursement of estate expenses, but subsequently denied that request without prejudice to refiling at a later date. Michael appeals.
Michael assigns that the probate court's orders should be (1) vacated because the intervenors lack standing to seek redress as set forth in their motion of intervenors; (2) reversed because even if the personal representative had brought an action to recover rental income from Michael, the personal representative never demanded that Michael return rental income and issued a deed of distribution to Michael; and (3) remanded...
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