Younggren v. Younggren, C7-96-334
| Decision Date | 26 November 1996 |
| Docket Number | No. C7-96-334,C7-96-334 |
| Citation | 556 N.W.2d 228 |
| Court | Minnesota Court of Appeals |
| Parties | Luther YOUNGGREN, Respondent, v. Duane L. YOUNGGREN, et al., Appellants. |
Syllabus by the Court
An attorney-in-fact is required to exercise his/her power in the same manner as an ordinarily prudent person of discretion and intelligence would exercise in the management of that person's own affairs and must have the interests of the principal utmost in mind.
Kenneth F. Johannson, Johannson, Taylor, Rust, Tye & Fagerlund, Crookston, for Respondent.
Jeffrey W. Hane, Brink, Sobolik, Severson, Malm & Albrecht, P.A., Hallock, for Appellant.
Considered and decided by HUSPENI, P.J., and AMUNDSON and THOREEN *, JJ.
Duane Younggren and Fay Ryden appeal from the denial of their motion for a new trial. Respondent filed a notice of review, raising a number of issues. We affirm.
Appellants Duane Younggren and Fay Ryden are the children of respondent Luther Younggren. During most of respondent's life he was self-employed as a farmer. In addition, respondent ran an aerial crop-spraying business and a trucking business. Since 1974, respondent has farmed in cooperation with his son, Duane. They maintained separate farms and accounts, but shared labor, machinery, and some expenses.
In the late 1980s, respondent started to get out of the crop-spraying and trucking businesses. He continued to farm, but became less active in the daily, physical work of the farm.
On February 24, 1992, respondent suffered a stroke while in the hospital recovering from prostate surgery. After a period of recovery in the hospital in Fargo, respondent was transferred to the local hospital and placed in a "swing" bed. "Swing" beds are used by patients awaiting placement in the nursing home facility.
Shortly after being placed in the nursing home, appellants approached respondent's attorney and inquired about the best way to take care of respondent's business affairs. The attorney recommended that respondent sign a power of attorney. The attorney drafted the document, went to the nursing home, explained it to respondent, and obtained respondent's signature. The attorney testified that respondent was alert and able to communicate.
Pursuant to the power of attorney, appellants took over the management of respondent's affairs, including operating his farm and paying his debts. Appellants visited respondent frequently and kept him informed of their actions. Respondent contends that he had no knowledge of what appellants were doing and that they never asked his permission to do anything; respondent did testify, however, that he remembered his son telling him about the account (entitled "LDR account") which appellants had set up.
During this time, appellants learned that respondent had two large debts, totalling approximately $200,000. In an attempt to protect respondent's assets and still provide respondent with cash for his personal needs, appellants, in conjunction with respondent's attorney, established a long-term financial plan. The plan included the liquidation of some of respondent's old farming and airspraying equipment. The plan also included granting respondent's land to appellants, but reserving a life estate for respondent.
Pursuant to this plan and the power of attorney, appellants began to transfer the bulk of respondent's liquid assets to themselves. The assets were placed in an account entitled the "LDF account," to which only appellants were signatories. This account was set up in May of 1993. In addition, appellants set up a separate account for respondent in his own name.
Also in May 1993, respondent signed deeds conveying his property to appellants, reserving a life estate for himself. The deeds were drafted by respondent's attorney.
At around this same time, appellants refused respondent's request for money to play the Canadian lottery. Appellants, who had now transferred most of respondent's cash to themselves, testified that they felt they had an obligation to spend that money responsibly.
In June 1993, respondent left the nursing home and moved in with his longtime companion, Grace Brown. Appellants testified that they were not informed of respondent's move until after it was complete. They further testified that it was after that move that their relationship with respondent began to deteriorate.
On September 30, 1994, respondent revoked the power of attorney. At that time, $55,128.54 remained in the LDF account. Six weeks later, appellants took the money that remained in the LDF account and applied it to respondent's outstanding debts.
In his suit, respondent claimed that the deeds and the power of attorney were signed when he was incompetent. He also claimed that appellants failed to provide an accounting and failed to return the money that remained in the LDF account after the power of attorney was revoked.
The trial court found that respondent was competent when he signed the deeds and the power of attorney. The court also found that appellants had acted properly while acting as attorneys-in-fact. Nonetheless, the trial court found that appellants had used the $55,128 for their own benefit and concluded that they had a legal obligation to return that money to respondent. Appellants' motion for amended findings or in the alternative, a new trial, was denied. This appeal followed. Respondent filed a notice of review.
1. Did the trial court err in concluding that appellants had a legal obligation to return the funds remaining in the LDF account after the power of attorney was revoked?
2. Was the trial court's finding that appellants used the remaining funds in the LDF account for their own benefit clearly erroneous?
3. Was the trial court's finding that respondent was competent when he signed the deeds and the power of attorney clearly erroneous?
4. Did the trial court abuse its discretion in allowing respondent's former attorney and his physician to testify regarding his competency?
5. Did the trial court err in determining that respondent was not entitled to a jury trial?
Generally, a trial court's decision to deny a new trial will not be disturbed absent an abuse of discretion. Halla Nursery v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn.1990). Where the trial court exercised no discretion but instead based its order upon an error of law, however, a de novo standard of review applies. Id.
Appellants argue that the trial court erred in concluding that they had a legal obligation to return the funds remaining in the LDF account after the power of attorney was revoked.
Appellants correctly note that the statute is silent as to whether an attorney-in-fact is required to return property transferred directly to himself. See Minn.Stat. ch. 523. They also correctly note that the statute only requires that they exercise "in the same manner as an ordinarily prudent person of discretion and intelligence would exercise in the management of the person's own affairs and shall have the interests of the principal utmost in mind." Minn.Stat. § 523.21 (1992). Appellants contend that they applied those funds to respondent's outstanding debts, which was in accordance with their statutory duties. The record indicates that the money was applied to respondent's debts. However, appellants used the funds to pay debts that were payable, but not due. The additional funds used to pay debts that were not yet due were not necessary to protect the interests of respondent. Thus, appellants were able to ensure that the money went toward something that benefitted themselves, i.e. protecting their interests as remaindermen, rather than being spent by respondent in a way that would not have benefitted them (he might have, for example, spent the money on his companion, Grace Brown). Thus, we conclude that the trial court properly determined that appellants had a legal obligation to return the funds remaining in the LDF account after the power of attorney was revoked.
Appellants contend that the trial court erred in finding that they used the remaining funds in the LDF account for their own benefit.
A trial court's findings of fact will only be set aside if they are clearly erroneous. Findings are clearly erroneous if they are not reasonably supported by the evidence. Citizens State Bank of Hayfield v. Leth, 450 N.W.2d 923, 925 (Minn.App.1990).
The record indicates that appellants spent the remaining money in the LDF fund on respondent's outstanding debts, loans on his property, and property taxes. However, the record also indicates that respondent signed a warranty deed granting that land to appellants and reserving a life estate to himself.
A life tenant has a duty to pay taxes and interest on the mortgage. Beliveau v. Beliveau, 217 Minn. 235, 242, 14 N.W.2d 360, 364 (1944). However, those duties are part of the life tenant's obligation to serve as a "quasi trustee" of the property and prevent injury to the remainderman. Id. If the life tenant fails to make those payments and loses the property, he breaches his obligation to the remainderman. Id. at 243, 14 N.W.2d at 365.
Because appellants are the remaindermen and respondent is the life tenant, respondent's duty to pay the taxes and mortgage are to prevent injury to appellants. Thus, the trial court's finding that appellants were benefitted by those payments was not clearly erroneous.
Respondent contends that the trial court erred in finding that he was competent when he signed the deeds and the power of attorney.
A person is considered competent if he has "enough mental capacity to understand, to a reasonable extent, the nature and effect of what he is doing." Rebne v. Rebne, 216 Minn. 379, 382, 13 N.W.2d 18, 20 (1944).
The record indicates that respondent's treating physician testified that he was alert and oriented upon...
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