Abbott v. Sellon (In re Estate)

299 Neb. 596

910 N.W.2d 504

IN RE ESTATE OF Marcia G. ABBOTT-OCHSNER, deceased.

Mark D. Abbott, Personal Representative of the Estate of Marcia G. Abbott-Ochsner, deceased, appellant,

v.Cynthia J. Sellon and Russell G. Abbott, appellees.

No. S-17-528.

Supreme Court of Nebraska.

Filed April 13, 2018.

Michael F. Coyle, Elizabeth A. Culhane, and Jacqueline M. DeLuca, of Fraser Stryker, P.C., L.L.O., Omaha, for appellant.

John M. Lingelbach, James A. Tews, and Minja Herian, of Koley Jessen, P.C., L.L.O., Omaha, for appellees.

Heavican, C.J., Cassel, Stacy, and Funke, JJ., and Pirtle, Judge.

Heavican, C.J.

INTRODUCTION

This case involves the probate of Marcia G. Abbott-Ochsner's estate, most of which consists of a trust that was the subject of a previous appeal to this court in In re Conservatorship of Abbott ( Abbott I ).¹ Two siblings filed a petition in county court contesting the validity of the will presented for informal probate by their brother, who had been appointed by the county court as the personal representative of the estate.

Pursuant to Neb. Rev. Stat. § 30-2429.01(1) (Reissue 2016), the personal representative transferred his siblings' will contest to the district court. Afterward, pursuant to Neb. Rev. Stat. § 30-2425 (Reissue 2016), the county court granted the siblings' request to appoint a special administrator for the estate, pending resolution of the district court proceedings. The siblings had also sought appointment of a different personal representative, but the county court's order did not remove the brother as personal representative. The brother appeals, arguing that the county court lacked jurisdiction to appoint a special administrator, because the case had been transferred to the district court. The siblings disagree and assert, as a threshold matter, that an order appointing a special administrator pursuant to § 30-2425 is not a final order.

BACKGROUND

The "Abbott Living Trust" was created by Marcia G. Abbott-Ochsner (Marcia) and her first husband, George W. Abbott, in 1995. Marcia and George were cotrustees of the trust, which was divided into a revocable " 'Survivor's Trust' " and an irrevocable " 'Family Trust.' "² Marcia and George had three children—Russell G. Abbott, Cynthia J. Sellon (Cynthia), and Mark D. Abbott—who were beneficiaries.

George died in 1996. Marcia suffered a stroke in 2011. As a result of the stroke, Marcia suffered from expressive aphasia—a disorder that affects the brain's ability to use and understand language. In March 2015, Marcia appointed Mark as successor trustee to the living trust and Mark accepted the appointment.

At the behest of Russell and Cynthia, the county court ordered the appointment of a conservator and removed Mark as trustee. At that time, the living trust was valued at approximately $2 million.

As described in Abbott I , the county court considered evidence that Mark was hostile toward Cynthia. Mark accused Cynthia of murdering their aunt and receiving an unequal share of their aunt's estate. Mark repeatedly threatened to " 'make it even,' " using the assets of the trust.³ Mark described his relationship with Russell and Cynthia as " 'WWIII.' "⁴

The county court also considered evidence that Mark had refused to provide documentation concerning the trust and trust activities, had acted as trustee before being appointed, and had facilitated money transfers resulting in negative tax consequences.

The county court found that Mark had violated several of his duties under the Nebraska Uniform Trust Code, including his duty to administer the trust in good faith, his duty of loyalty, his duty of impartiality, and his duty to inform and report. On appeal, we affirmed Mark's removal as trustee, concluding that Mark's breach of his duty of impartiality was dispositive.⁵

In September 2015, several months after Marcia had appointed Mark as successor trustee, and apparently after a conservator had been appointed for Marcia, Marcia executed a pourover will. Marcia exercised her limited testamentary power in the family trust to change the default equal distribution between the three children to a 100-percent distribution to Mark and a 0-percent distribution to Russell and Cynthia. The pourover will provided that Mark was to be the estate's personal representative, with sole discretion to distribute Marcia's personal possessions.

Marcia died in October 2016. Mark filed an application for informal probate of the 2015 pourover will and informal appointment of a personal representative of Marcia's estate. That same day, Mark accepted informal appointment as personal representative of the estate. He also filed a petition for declaratory judgment in the district court, seeking an order declaring Marcia's 2015 amendments to the living trust valid, including her distribution of 100 percent of the assets to Mark. The county court confirmed Mark's informal appointment and issued letters of personal representative. Russell and Cynthia filed a petition in the county court to set aside the informal probate of the will, for a formal testacy proceeding, and for appointment of a different personal representative in the formal proceedings. Russell and Cynthia alleged that the 2015 pourover will was not valid, because Marcia lacked the requisite capacity to execute the will, and that the will was the product of undue influence.

In their petition for formal proceedings, Russell and Cynthia also requested an order, pursuant to § 30-2425, restraining Mark from exercising any powers of a personal representative and appointing a special administrator.

Pursuant to § 30-2429.01(1), Mark filed a notice of transfer of Russell and Cynthia's petition to the district court and paid the required docket fee. After Mark filed his notice of transfer under § 30-2429.01(1), a hearing was held in the county court to determine Russell and Cynthia's request for the appointment of a special administrator during the pendency of the district court proceedings.

Mark argued at the hearing that the county court no longer had jurisdiction to appoint a special administrator, because the proceeding to determine whether Marcia left a valid will had been moved to the district court. Russell and Cynthia, in contrast, asserted that although the will contest had been transferred to the district court, the county court retained jurisdiction over the rest of the formal probate proceedings, such as claims by creditors.

Mark conceded that some "ancillary matters" were still to be handled by the county court, but that the appointment of a special administrator was part of the will contest proceedings in district court. When Mark pointed out that the request for the appointment of a special administrator had been made in the petition that was moved to district court, Russell and Cynthia offered to file a separate motion.

In support of their argument that a special administrator should be appointed, Russell and Cynthia offered Cynthia's affidavit. The affidavit was admitted over Mark's objections on the basis of subject matter jurisdiction, hearsay, foundation, speculation, and unfair surprise. Cynthia averred in her affidavit that she had reviewed the trust activity records and believed that approximately $800,000 was unaccounted for.

Russell and Cynthia also entered into evidence the county court's prior order appointing a conservator for Marcia and removing Mark as trustee, as well as this court's opinion in Abbott I affirming the county court's decision to remove Mark as trustee. Russell and Cynthia argued that a special administrator was appropriate, given Mark's past history of breaching his fiduciary duties as trustee.

On April 10, 2017, the county court issued an order appointing a special administrator. The court did not remove Mark as personal representative of the estate. Mark appeals from the April 10 order.

ASSIGNMENTS OF ERROR

Mark assigns that the county court erred in (1) failing to dismiss Russell and Cynthia's petition when the case had already been removed to district court; (2) failing to dismiss for lack of jurisdiction Russell and Cynthia's request for a special administrator when the case had already been removed to district court; (3) entering an order appointing a special administrator; (4) allowing Cynthia's affidavit into evidence; (5) ruling on the petition to set aside informal probate of the will, for formal adjudication of intestacy, determination of heirs, and appointment of personal representative without allowing Mark the ability to cross-examine Cynthia; and (6) failing to restrict the special administrator from acting during the pendency of the litigation in district court.

STANDARD OF REVIEW

A jurisdictional issue that does not involve a factual dispute presents a question of law.⁶

ANALYSIS

Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the appeal.⁷ Appellate review under the Nebraska Probate Code is governed by Neb. Rev. Stat. § 30-1601 (Reissue 2016), which states that appeals from a county court may be taken in the same manner as appeals from a district court and that "[a]n appeal may be taken by any party and may also be taken by any person against whom the final judgment or final order may be made or who may be affected thereby."

There has not yet been a final judgment in which the probate estate has been finally established.⁸ Thus, we must determine whether Mark appeals from a final order.⁹ Final orders are defined by Neb. Rev. Stat. § 25-1902 (Reissue 2016). As applicable here, the question is whether, under § 25-1902, the April 10, 2017, order "affect[ed] a substantial right" and was "made in a special proceeding."

A special proceeding includes every special statutory remedy that is not in itself an action, or an integral step to commence it, join issues in it, and conduct it to a final hearing and judgment.¹⁰ Neb. Rev. Stat. § 30-2457 (Reissue 2016) confers upon persons interested in an estate the...