District Court Did Not Err in Ruling Against Executor

Elder Law Answers Case summary.The North Dakota Supreme Court affirms an order issued by the District Court of Grand Forks County finding a valid and enforceable oral contract between heirs to an estate, removing it from the statute of frauds, determining ownership of personal property, holding a personal representative liable for the consequences of poor administration of real property, and offsetting amounts owed to the personal representative to cover damages. The Court concludes that the District Court did not err in any part of its decision and affirms the entire ruling. In Estate of Ewing (N.D., No. 20220356, July 13, 2023).

At the heart of this case is the property left by Chiyoko Ewing in her will, upon her passing in 1989, to her four children. Her son Michael was appointed the personal representative of her estate. When she died, she owned a home and personal property in that home. After her death, one of her other children, Jeffery Ewing, lived in the home. He maintained it, paid real estate taxes and the mortgage, and made significant improvements to the home. Jeffery died in 2019. Thereafter, in late 2019, Michael filed an application to administer Chiyoko’s estate. In this application, he sought to include the home and her personal property as part of her estate.

The District Court conducted multiple evidentiary hearings to determine ownership and found that the Estate of Jeffery Ewing owned the real and personal property. It based this decision on its conclusion that there was evidence supporting the conclusion that there were agreements between Jeffrey and each of his siblings. These agreements were that they would sell their shares of the home to him in exchange for payments he made. In addition, the Court found that the personal property had already been divided between the siblings at Chiyoko’s death. The Court also determined Michael was entitled to reimbursement for certain administration expenses. The rest of the expenses were to be divided equally between the living siblings and Jeffrey’s estate.

Subsequently, in July 2022, the Court found Michael in contempt of an order that he return certain items to Jeffery’s estate and responsible for damage to the home. The court awarded damages and attorney’s fees against Michael and offset the amount Jeffrey’s estate owed to Michael for his services as personal representative by this amount. Michael appealed all of these findings.

The Supreme Court considered each of his arguments and affirmed the district court’s findings, in their entirety. First, it found that the district court did not err in finding the formation of a contract between Jeffery and his siblings to purchase the home. Contrary to Michael’s arguments, the Court found the parties were capable of entering into a contract. They had conveyable interests in the home, and payments for an agreed amount and other considerations were given by Jeffrey to his siblings in return for their shares. The lower court’s finding that testimony and evidence substantiating this was credible was not erroneous.

Second, the Supreme Court concluded that the lower court’s finding that there was mutual assent to the agreement was not erroneous. The evidence considered supported a finding that the siblings agreed on a purchase price and knew Jeffery intended to purchase their shares of the home.

Third, the Supreme Court found that the lower court’s ruling that there was partial performance of the oral agreement, thus exempting it from the statute of frauds, was not erroneous. Jeffrey made payments to his siblings, made substantial improvements to the home, paid insurance, utilities, real estate taxes, and the mortgage on the property. This was done without protest from his siblings.

Fourth, the Supreme Court determined that the lower court’s finding that the personal property remaining in the home became property of the Jeffery Ewing estate was not erroneous. The district court engaged in fact finding and concluded that the siblings had already divided the personal property in the home four ways after Chiyoko’s death. The items listed at issue were items the siblings previously agreed to assign to Jeffery.

Fifth, the Supreme Court found that the district court properly concluded Michael failed to properly maintain the home as the estate’s personal representative. This was based on testimony and evidence presented to the lower court. The conclusion that he was responsible for damages was not clearly erroneous.

Sixth, the district court determination regarding fees and expenses Michael could be reimbursed for as the personal representative of Chiyoko’s estate was not erroneous. Michael failed to provide evidence or receipts for every expense he claimed.

Seventh, the district court properly determined the estate of Jeffery Ewing could offset the amounts it owed Michael Ewing, as personal representative for attorney’s fees, real estate taxes, and utilities paid by Michael Ewing, and for mileage incurred by Michael Ewing on making trips to the home by the amount of damages for which the court found Michael liable. The court had the power to make an offset because there was a finding of a breach of fiduciary duty. This was supported by a detailed record.

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