In re Lentz

In the Matter of the Estate of Lanny Lentz.

No. 118, 307

Court of Appeals of Kansas

August 13, 2021

NOT DESIGNATED FOR PUBLICATION

Appeal from Shawnee District Court; Frank J. Yeoman Jr., judge.

Jonathan Sternberg, of Jonathan Sternberg, Attorney, P.C., of Kansas City, Missouri, for appellant Diann Wyatt.

Alan V. Johnson and Aaron R. Bailey, of Sloan, Eisenbarth Glassman, McEntire & Jarboe, L.L.C., of Topeka, for appellees Lana Kennedy and Marilyn Lentz.

Before Arnold-Burger, C.J., Gardner and Isherwood, JJ.

MEMORANDUM OPINION

PER CURIAM.

This appeal arises from the district court's distribution of Lanny Lentz' estate among his three daughters. The contentious probate process is before our court for the second time.

Diann Wyatt is one of three heirs to Lentz' estate, which owns several properties in Topeka. The other two heirs-Lana Kennedy and Marilyn Lentz (referred to individually by their first names and collectively as Appellees)-sequentially served as executors of the estate. During their respective times in that role, Appellees petitioned to settle Lentz' estate. Diann alleged mismanagement of the estate successfully opposed Lana's petition, and sued for damages. But after Lana resigned as executor, Diann withdrew her claim for damages.

Marilyn replaced Lana as executor and filed an amended inventory and proposed settlement. Diann objected again, challenging the accuracy of Marilyn's valuations of the real properties. The district court approved a modified final settlement. Diann moved posttrial to set aside or reconsider the final order and to reinstate her damages claim against Lana. She also objected to Marilyn's request to be discharged as the executor and asked the district court to disgorge her executor fees back to the estate. The district court denied Diann's posttrial motions. Diann appealed, arguing the property values for four properties in the final settlement were not supported by substantial competent evidence.

A panel of this court dismissed Diann's appeal as untimely finding Diann's posttrial motions could not be construed as motions to reconsider under K.S.A. 2019 Supp. 60-259(f) and thus did not toll her time to file her appeal. In re Estate of Lentz, No. 118, 307, 2019 WL 494098, at *7 (Kan. App. 2019) (unpublished opinion). But our Supreme Court granted review and reversed. It held that a motion timely filed under K.S.A. 60-259(f) and not completely devoid of merit should be construed as a motion to reconsider. So Diann's posttrial petitions were motions to reconsider that tolled the time to appeal the final order, rather than motions for relief from judgment that did not toll the time to appeal. The court remanded the appeal to us with directions to consider the merits of Diann's appeal. In re Estate of Lentz, 312 Kan. 490, 504, 476 P.3d 1151 (2020). We do so now yet find no reason to reverse.

Factual and procedural background

Lentz died in 2012. His will directed that his estate be distributed equally between his three daughters: Lana, Marilyn, and Diann. Lentz also executed a document in September 2007 directing that some of the estate's real properties be given to specific heirs.

Lana petitioned to admit the will into probate; the district court granted her petition and issued her testamentary letters to administer the estate under the Kansas Simplified Estates Act, K.S.A. 59-3201 et seq.

In 2013, Lana filed an inventory and valuation of the decedent's probate assets, including 12 real properties. The value given to four of those properties leads to this appeal. Lana valued those properties as: (1) 605 S.W. Lindenwood Ave. - $83, 680; (2) 613 S.W. Lindenwood Ave. - $61, 150; (3) 517 S.W. Polk - $17, 640; and (4) 2723 S.E. Monroe St. - $17, 000. Lana did not explain how she made these valuations.

In 2014, the three heirs signed a family settlement agreement (FSA), agreeing to dispose of the property as directed in Lentz' 2007 document. Lana alleged that the FSA would fulfill the intent of Lentz' will because the properties would be divided using their fair value and any offset in the total value distributed to each heir would be evened by other means.

In September 2015, Lana filed the FSA and her accounting of the estate with a petition for a final settlement, asking the district court to approve the distribution of the estate per the terms of the FSA. As a part of her proposal, Lana elected to sell the 613 S.W. Lindenwood property and to split the proceeds equally with her sisters. But Diann objected, claiming that Lana had mismanaged the estate. Diann claimed that after the heirs had signed the FSA, she learned that Lana had not addressed all the estate's assets. Lana responded by submitting a "revised accounting" of the estate assets, still requesting a final settlement.

The district court held a hearing on Diann's objections. The district court found that by Lana's "own testimony" Lana had:

• failed to complete and accurately inventory the estate's property;

• distributed estate assets without authority, including payments to herself;

• breached her duty to care for the assets by failing to make timely deposits and failing to file tax returns;

• engaged in self-dealing by making loans to herself and distributing assets to herself without approval; and

• delayed estate obligations to distribute assets.

The district court thus rejected Lana's proposed settlement.

Diann then sued Lana for damages and petitioned to remove her as executor; and Lana moved the court to determine the validity of the FSA. Lana argued that if the district court rejected the FSA, then under Lentz' will the estate assets should be distributed to Lentz' revocable trust and dispersed to the heirs according to the trust's terms. The district court set the matter for a settlement conference and ordered Lana to give the parties an updated accounting. Lana did so in December 2015 but also moved to resign as executor.

The district court held that it could not approve the FSA because Lana had mismanaged the estate. The district court scheduled another hearing to allow the parties to respond to several pending issues, including the appointment of a successor executor, approval of Lana's amended accounting of the estate's assets, and consideration of Diann's petition for damages.

In March 2016, the district court allowed Lana to withdraw as executor and appointed Marilyn in her place. The district court approved Lana's revised inventory and valuations of the estate assets and Lana's request for executor fees. Diann then withdrew her petition for damages.

In December 2016, Marilyn, as executor, petitioned for a new final settlement. Although she did not request approval of the FSA, her proposal was similar in that it followed Lentz' will and the 2007 document. She asked the district court to allocate the Lindenwood properties to her and Lana as joint tenants in common and to award the Polk and Monroe properties to Diann. Marilyn valued 605 S.W. Lindenwood at $55, 000; 613 S.W. Lindenwood at $30, 000; and 517 S.W. Polk and 2723 S.E. Monroe at $17, 000 each. Altogether, the properties designated for Lana and Marilyn were valued at $102, 000. Diann's two properties totaled $34, 000. To achieve a more equal distribution, Lana and Marilyn agreed to take title of the properties as joint tenants in common and to include the obligations owed to each of them as executors. Marilyn also requested $12, 000 in executor fees.

Diann objected again. Among other issues, she claimed that the values listed for the Lindenwood properties were inaccurate and the values of the four properties differed from the values in the appraisals Marilyn had given the parties. Marilyn responded that her proposed values reflected the appraised values minus the costs of repairs necessary for sale of the properties.

At a hearing on Marilyn's proposed settlement, Diann suggested that all the properties be sold at auction or on the open market and their proceeds divided equally. Marilyn requested that they follow the terms of the proposal, arguing that Lentz' intent would be best fulfilled by distributing the properties according to the proposed settlement.

As support for the property values she had provided, Marilyn testified that she was qualified to provide Certified Market Analyses (CMA) of the estate's properties because of her licenses and certifications, and she explained how she had valued each property. The record shows that she valued the nonappraised properties at the lower of the original inventory valuation or at the value provided by third-party discussions to purchase the properties. Marylin testified that she had hired someone to appraise 613 S.W. Lindenwood and that Lana had paid for an appraisal of 605 S.W. Lindenwood. Although the parties received copies of those appraisals, no one included them in the record before the district court, so the appraisals are not a part of the record on appeal. And the record does not show that anyone requested an appraisal of property through a motion to the district court as permitted under K.S.A. 59-1202.

Marilyn testified that the appraised value of 613 S.W. Lindenwood less the approximate costs of mandatory repairs, was $34, 000. 605 S.W. Lindenwood appraised at $60, 000, but Marilyn testified that the property required $4, 000-$5, 000 in repairs. She thus asked the district court to value the property at $55, 000. Marilyn based her $17, 000 valuation for 517 S.W. Polk on an offer by Rick Ramirez to purchase the property for $15, 000-$18, 000. And although she believed the CMA value of 2723 S.E. Monroe was $5, 000, Marilyn asked the district court to accept the proposed value of $17, 000 because the tenant had offered to purchase the property for that amount. Marilyn...