Uzzle v. Estate (In re Hirning)

• Decision Date: 10 November 2020
• Docket Number: Docket No. 47449
• Citation: Uzzle v. Estate (In re Hirning), 167 Idaho 669, 475 P.3d 1191 (Idaho 2020)
• Court: Idaho Supreme Court
• Parties: In the MATTER OF the ESTATE OF: Eric Milo HIRNING, Deceased. Cindy Louise Uzzle, John E. White, and Jodi Hirning, Plaintiffs-Appellants, v. The Estate of Eric Milo Hirning, Vicki D. Berryman, and Rodney J. Jacobs, Co-Personal Representatives, Defendants-Respondents.

167 Idaho 669

475 P.3d 1191

In the MATTER OF the ESTATE OF: Eric Milo HIRNING, Deceased.

Cindy Louise Uzzle, John E. White, and Jodi Hirning, Plaintiffs-Appellants,

v.The Estate of Eric Milo Hirning, Vicki D. Berryman, and Rodney J. Jacobs, Co-Personal Representatives, Defendants-Respondents.

Docket No. 47449

Supreme Court of Idaho, Boise, September 2020 Term.

Opinion Filed: November 10, 2020

May, Rammell & Wells, Chtd., Pocatello, for Appellants.Kyle R.May argued.

Baker & Harris, Blackfoot, for Respondents.Dwight E. Baker argued.

BURDICK, Chief Justice

This appeal arises out of the probate of Eric Milo Hirning's will ("the Will") and concerns a magistrate court's authority to conduct formal probate proceedings and approve an estate's final accounting and distribution.In an appeal from the Bingham County district court, acting in its appellate capacity, three beneficiaries of the Will, Cindy Louise Uzzle, John E. White, and Jody Hirning("the Appellants"), challenge the procedural underpinnings of the district court's decision on appeal, the propriety of a magistrate court's order approving the estate's final accounting and proposed distribution, and the district court's award of attorney's fees.We affirm the decision of the district court in all respects except for its attorney's fees award.

I.FACTUAL AND PROCEDURAL BACKGROUND

In February 2015, Mr. Hirning died testate leaving the residue of his estate to his children and stepchildren.At the time of his death, Mr. Hirning had three biological children—Vicki Dian Berryman, Jody Hirning, and Cindy Louise Uzzle—as well as one stepchild—John E. White—from his first marriage.In addition, Mr. Hirning shared a close personal relationship with his second wife's two children, Rodney Jacobs and Debi Sanders, considering them family for all practical purposes.The six children and stepchildren—Vicki, Jody, Cindy, John, Rodney, and Debi—are the sole beneficiaries of the Will.

Under the Will, one biological child, Vicki, and one stepchild, Rodney, were designated as co-personal representatives of Mr. Hirning's estate.The Will directed that Mr. Hirning's personal property be sold to any interested beneficiary or, if more than one beneficiary expressed interest, to be sold at a family auction to the highest bidder.Further, the Will provided for a potential specific bequest to Rodney, giving him the option to purchase Mr. Hirning's residence, a manufactured home¹ situated on approximately twelve acres in Bingham County, within one year of Mr. Hirning's death for $10,000 less than the fair market value.Rodney had the additional right to live in Mr. Hirning's home rent-free during that year.

1.The proceedings before the magistrate court.

On March 10, 2015, Vicki and Rodney filed for an informal probate of the Will, seeking to have themselves appointed as co-personal representatives.The next day, the Appellants² retained independent counsel and filed a motion to remove Vicki as a personal representative and substitute Cindy in her stead.The Appellants claimed that Vicki had personal animosity toward the other beneficiaries and that her travel costs—she lived in Arizona—would be disproportionate to the modest value of Mr. Hirning's estate.

Faced with this motion, Vicki and Rodney decided to petition the magistrate court for a formal probate of the Will to resolve the disputes between them and the Appellants.Following a hearing on April 6, 2015("the April hearing"), the magistrate court denied the Appellants’ motion and appointed Vicki and Rodney as co-personal representatives.

For roughly the next year and a half, Vicki and Rodney (now acting on behalf of "the Estate") went about winding-up, including disposing of Mr. Hirning's remaining personal property³ and home.In June 2015, the Estate conducted an auction of the remaining personal property.The Appellants had filed a motion to continue the auction the day before it was scheduled.However, this motion was not calendared for a hearing and the magistrate court never ruled on it.The Estate prepared a list of items sold at the auction, the winning bidder, and the amount of each winning bid.

In September 2015, Mr. Hirning's home was appraised for $72,500.Although Rodney intended to exercise his option to purchase the home for $62,500, he was ultimately unable to obtain financing within a year of Mr. Hirning's death and the other beneficiaries refused to grant an extension.Subsequently, the Estate listed Mr. Hirning's property for $72,500 in late March or early April 2016.Three offers were made on the property, two of which failed because the offerors could not obtain financing.The property finally sold to the third offeror for $50,000 cash in August 2016.

Finally, in January 2017, the Estate petitioned the magistrate court for an order approving its final accounting and proposed distribution.The Estate initially scheduled a hearing on its petition for early February, but that hearing was continued by stipulation of the parties to allow the Appellants time to review additional accounting information.Shortly after the continuance, the Appellants objected to the final accounting and requested additional information from the Estate.A few weeks later, the Estate provided additional documentation to the Appellants about Mr. Hirning's bank account and line of credit, the Estate's bank account, utility bills, rental and grazing fee receipts, and the co-personal representatives’ fees and expenses.The Estate then scheduled a hearing on its petition for approval of the final accounting and proposed distribution for March 27, 2017("the March hearing").

Three days before the March hearing, the Appellants filed another motion to continue and requested additional accounting information.They did not calendar a hearing for this motion.At the March hearing, however, the magistrate court heard the Appellants’ concerns expressed in their motion to continue.

During the March hearing, the Estate presented the Appellants with more documentation and the magistrate court allowed a recess so that the Appellants could review and discuss the additional documents with the Estate's counsel.The Estate also filed its final inventory with the magistrate court.The magistrate court denied the Appellants’ request for a continuance, explaining that it had wide authority under the Uniform Probate Code("UPC") and the Trust and Estate Dispute Resolution Act ("TEDRA") to resolve the estate in a timely and efficient manner.The magistrate court noted that the administration of Mr. Hirning's estate had "some rough edges" but that those imperfections were not significant enough to require its intervention.Accordingly, the magistrate court granted the petition and approved the Estate's final accounting and proposed distribution.The Appellants retained a new attorney and timely appealed the magistrate court's order to the district court.

2.The proceedings before the district court.

After briefing, the district court heard oral argument on appeal on July 30, 2018.The Appellants challenged the Estate's closing, alleging that the inventory and accounting were incomplete and that the sale of Mr. Hirning's home was not commercially reasonable.Before issuing its decision on appeal, the district court determined that the magistrate court had not executed a final judgment that complied with Idaho Rule of Civil Procedure 54(a)(1).The district court subsequently stayed the appellate proceedings and remanded the matter to the magistrate court for it to draft a final judgment.The magistrate court then directed the Estate's counsel to draft the subsequent final judgment for submission to the district court.On November 19, 2018, the magistrate court entered its first final judgment ("Final Judgment I").However, the district court found that Final Judgment I did not comply with Rule 54(a)(1) and issued another order staying the appeal and remanding the matter to the magistrate court.

On January 17, 2019, the magistrate court filed an amended final judgment ("Final Judgment II") which the district court rejected because it contained findings of fact and conclusions of law in direct contravention of Rule 54(a)(1).The district court again issued a stay and remand order.

Finally, on February 19, 2019, the magistrate court entered a second amended final judgment ("Final Judgment III") which the district court accepted.At that time, the district court took the matter under advisement.

Final Judgment I, Final Judgment II, and the district court's two orders to stay and remand that resulted in the creation of those documents, were never served on the Appellants’ new counsel on appeal.Both Final Judgment I and Final Judgment II, however, were served personally on two of the Appellants and their previous attorney.Final Judgment III and the third stay and remand order were served on the Appellants’ new counsel.

On April 19, 2019, the district court issued its Decision and Order on Appeal.The district court affirmed the magistrate court's order in nearly every respect, but remanded the matter to the magistrate court to make formal findings of fact and conclusions of law regarding the co-personal representative's fees and expenses.The district court did not award attorney's fees to either party on appeal.

Following the district court's decision, the Estate filed a petition for rehearing on the narrow issue of attorney's fees, arguing that the district court had mistakenly overlooked the portion of the Estate's brief where it requested fees.The district court agreed and, on rehearing, awarded the Estate attorney's fees under Idaho Code section 12-121, explaining, "[u]pon review of the record in this matter, this court is left with the firm belief that [the Appellants] brought this appeal frivolously, unreasonably, and without foundation."

The Appellants timely appealed, challenging the validity of the district court's decision based on the procedural missteps in service...