Moe v. Almer (In re Almer)

1

2024 ND 102

In the Matter of the Estate of Merle M. Almer a/k/a Merle Marvin Almer, Deceased

Linda R. Moe, Personal Representative, Petitioner and Appellee v. Merle C. Almer, Respondent and Appellant and Alexander Almer, Cindy Almer, Marvin D. Almer, Angel Pederson, Personal Representative of Steven W. Almer, Wesley Dean Almer, Ramona F. Barmoen, Martin Candia, First Lutheran Church of Tioga, Angela Holte, Jennifer Knudson, Jonathan McGregor, Jeffery Allen Moe, Sr., Jeffrey Allen Moe, Jr., Joe Ramos, Curtis Vande Sandt, Landon Stern, Diana Rae Thompson and Gary Zenker, Respondents

No. 20230365

Supreme Court of North Dakota

May 30, 2024

Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Kirsten M. Sjue, Judge.

AFFIRMED.

Aaron J. Weber (argued), Watford City, ND, and Jenna McPherson (appeared), Casselton, ND, for petitioner and appellee.

Bruce A. Schoenwald, Moorhead, MN, for respondent and appellant.

OPINION

CROTHERS, JUSTICE.

[¶1] Casey Almer appeals from a judgment entered in a probate case. He argues the district court misinterpreted a will and erred when it found the personal representative did not breach her fiduciary duties. Almer also argues the court erred when it approved attorney's fees. We affirm the judgment.

I

[¶2] Merle Almer died in 2016 at the age of 89. Among other endeavors during his life, he owned and operated a construction business and a farm totaling roughly 2,800 acres. He owned all of his assets individually and operated a sole proprietorship throughout his life. His wife predeceased him. Linda Moe is one of his children. Casey Almer is one of his grandchildren. Moe is Casey Almer's aunt.

[¶3] Merle Almer's will named Moe his personal representative. The will contains bequests to various individuals. Some are cash, but the will nonetheless refers to them as "specific devises." Other bequests are particular property but are not referred to as specific devises. The bulk of Merle Almer's wealth is distributed in three categories: the construction business, the farm and farming assets, and oil and gas interests. The construction business is devised 52% to Moe with the rest to others who were involved in the business. The will devises a life estate in the farm and farming assets to Casey Almer. The will sets out a testamentary trust for the oil and gas interests. Moe is named the trustee. She, Casey Almer, and others are beneficiaries.

[¶4] The will directs the personal representative to use "harvested and unharvested grain" to pay costs of administration and taxes for the estate. The will contains contingent instructions in the event the grain is insufficient to cover the estate's liabilities. At the time of Merle Almer's death in February 2016, he had no crop in the ground. The grain discovered in his grain bins was less than expected, and the proceeds from selling it were anticipated to be short of the predicted estate tax liability. These circumstances resulted in a dispute between the personal representative and Casey Almer that ultimately lead to a separate lawsuit. The personal representative sued Almer for conversion of grain and other farm assets, and Almer brought conversion and breach of fiduciary duty counterclaims. Almer's counterclaims were dismissed, and a jury found he did not convert property.

[¶5] During the course of administration, the personal representative paid the estate tax, which was roughly $2 million more than the proceeds of grain harvested before the decedent's death. After the personal representative paid the estate tax and distributed the farm assets, Almer filed a petition for surcharge alleging the personal representative breached her fiduciary duties. The personal representative filed a response and a cross motion requesting an order approving an inventory and appraisement, final report and accounting, and approval of final distribution. The district court heard testimony and took evidence over five days.

[¶6] The district court issued a lengthy order with findings of fact and conclusions of law. The court held abatement provisions in the will were ambiguous due to the will's nonstandard use of the term "specific devise." The court made findings concerning the testator's intent based on testimony from the attorney who prepared the will. The court found the testator intended for an abatement procedure that prioritized construction business assets over most other assets. The court also found the personal representative did not breach her fiduciary duties while administering the estate. The court denied Almer's application for surcharge, and granted the personal representative's motion to approve final distribution. The court denied about $35,000 in attorney's fees and approved approximately $760,000 in attorney's fees. The court entered judgment staying its orders pending appeal.

[¶7] Almer appealed, and we temporarily remanded the case for the limited purpose of considering costs and disbursements. The district court entered an order denying costs and disbursements and the parties filed amended briefs. On appeal, Almer challenges the court's interpretation of the will, the court's findings concerning the personal representative's conduct during administration, and the court's approval of attorney's fees.

II

[¶8] Almer argues the district court misinterpreted abatement provisions in the will. He asserts the court erroneously read the term "specific devise" to create an abatement procedure that disfavored his bequests. He claims the will's abatement procedure is not ambiguous like the court determined, and even if it was, the court's consideration of extrinsic evidence was inappropriate because statutory defaults should apply in the case of ambiguity.

A

[¶9] When interpreting a will the primary objective is to determine the testator's intent. Estate of Grengs, 2015 ND 152, ¶ 23, 864 N.W.2d 424. Interpretation of an unambiguous will presents a question of law that is fully reviewable on appeal. Estate of Eagon, 2017 ND 243, ¶ 5, 902 N.W.2d 751. Whether ambiguity exists is a question of law. Ruud v Frandson, 2005 ND 174, ¶ 6, 704 N.W.2d 852. A will is ambiguous if its language is susceptible to more than one reasonable interpretation. Estate of Eggl, 2010 ND 104, ¶ 10, 783 N.W.2d 36. Extrinsic evidence may be considered to resolve an ambiguity. Estate of Brown 1997 ND 11, ¶ 15, 559 N.W.2d 818. The district court's resolution of an ambiguity is a question of fact reviewed under the clearly erroneous standard. Id. at ¶ 7. "A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, there is no evidence to support it, or when, although there is some evidence to support it, the reviewing court, on the entire evidence, is left with a definite and firm conviction that a mistake has been made." In re Matthew Larson Trust Agreement, 2013 ND 85, ¶ 9, 831 N.W.2d 388 (internal quotation marks omitted) (quoting Am. Bank Ctr v. Wiest, 2010 ND 251, ¶ 13, 793 N.W.2d 172).

B

[¶10] Almer argues the district court erred when it found the will's abatement provisions are ambiguous. Abatement, in the context of a will, means the "reduction of a legacy general or specific, as a result of the estate's being insufficient to pay all debts and legacies." Abatement, Black's Law Dictionary (11th ed 2019). The Uniform Probate Code, as adopted in North Dakota, provides default abatement provisions. See N.D.C.C. § 30.120-02. Under these rules, property not disposed of by a will is the first to abate, followed by residuary devises, then general devises, and then specific devises. N.D.C.C. § 30.1-2002(1). A general devise is "a specific amount of money or quantity of property, that is payable from the estate's general assets." Devise, Black's Law Dictionary (11th ed. 2019). A specific devise is a "devise that passes a particular piece of property." Id. The statutory abatement provisions do not apply if a will provides its own abatement procedure. N.D.C.C. § 30.1-20-02(2). If a will sets out its own procedure, "the shares of the distributees abate as may be found necessary to give effect to the intention of the testator." Id.

[¶11] Merle Almer provided an abatement procedure that differs from the statutory default. His will requires taxes, debts, and expenses to be paid "out of the residue of my estate, without apportionment." In the next sentence, the will states: "Upon my death, all of the harvested and unharvested grain which I may own at the time of my death . . . shall be sold in the ordinary course of business, and the proceeds therefrom shall be used to pay such taxes and expenses of administration . . ." The will then provides contingent instructions if "the proceeds from the grain are insufficient." In such case, "my liquid assets shall be used to pay them." The will references certain bank accounts as "liquid assets" and gives the personal representative "absolute discretion" to use funds from those accounts "and/or from any other liquid assets in my Estate." The next instruction is at the center of the dispute and provides: "If the liquid assets are insufficient to pay the taxes, debts, expenses of administration and specific devises, then my Personal Representative shall have the absolute discretion to sell any assets of my estate as may be necessary to pay them." (Emphasis added.)

[¶12] The parties advance differing abatement procedures based on their interpretation of the testator's use of the term "specific devises" in the preceding sentence. The personal representative asserts the testator intended the term "specific devise" to have a special meaning connoting bequests that are to be prioritized in the administration. The personal representative argues the testator "deviated from the traditional...