No. 80-88
IN THE SUPREME COURT OF THE STATE OF MONTANA
1980
IN THE MATTER OF THE ESTATE
OF EMMA SAUTER,
Deceased.
leal from: District Court of the Ninth Judicial District,
In and for the County of Glacier
Honorable B. W. Thomas, Judge presiding.
Counsel of Record:
For Appellant:
R. V. Bottomly, Great Falls, Montana
For Respondent :
Wilbur P. Werner, Cut Bank, Montana
Barney Reagan, Cut Bank, Montana
Submitted on briefs: July 11, 1980
Filed: ~
- ~ %@J
1 3
Mr. J u s t i c e John C. Sheehy d e l i v e r e d t h e Opinion of t h e C o u r t .
he a p p e a l i s by JoAnn Palmer, t h e d a u g h t e r of Emma
S a u t e r , d e c e a s e d , from a n o r d e r o f t h e D i s t r i c t C o u r t , N i n t h
~ u d i c i a l i s t r i c t , G l a c i e r County, denying JoAnn P a l m e r ' s
D
p e t i t i o n t o remove Wilbur Werner a s p e r s o n a l r e p r e s e n t a t i v e
of h e r m o t h e r ' s e s t a t e , o r i n t h e a l t e r n a t i v e t o a p p o i n t a
special administrator t o administer the e s t a t e .
The s i n g l e i s s u e t o be r e s o l v e d i s whether Wilbur
Werner, a n a t t o r n e y , may p r o p e r l y a c t a s p e r s o n a l r e p r e s e n -
t a t i v e of t h e e s t a t e when a p o t e n t i a l a s s e t of t h e e s t a t e i s
a c l a i m a g a i n s t d e c e d e n t ' s o t h e r d a u g h t e r and h e r husband,
M a r g a r e t and Wayne Simonson, and where W e r n e r ' s law p a r t n e r ,
James Nelson, was r e p r e s e n t i n g t h e Simonsons i n o p p o s i n g t h e
c l a i m a t t h e t i m e of W e r n e r ' s a p p o i n t m e n t a s p e r s o n a l r e p r e -
sentative.
JoAnn Palmer c o n t e n d s t h a t t h e D i s t r i c t C o u r t s h o u l d
e i t h e r have r e q u i r e d Werner's removal o r else a p p o i n t e d a
special administrator for the estate. W determine t h a t t h e
e
a p p o i n t m e n t of a s p e c i a l a d m i n i s t r a t o r i s n e c e s s a r y under
t h e c i r c u m s t a n c e s of t h i s c a s e .
The f a c t s g l e a n e d from t h e D i s t r i c t C o u r t r e c o r d s
showed t h a t on J u l y 28, 1978, d u r i n g t h e l i f e t i m e of Emma
S a u t e r , a p e t i t i o n f o r t h e a p p o i n t m e n t of a c o n s e r v a t o r of
h e r a s s e t s w a s f i l e d by h e r d a u g h t e r , JoAnn Palmer, s e e k i n g
t h e a p p o i n t m e n t of Dwaine I v e r s o n . The o n l y o t h e r n e x t of
k i n o f Emma S a u t e r was a n o t h e r d a u g h t e r , M a r g a r e t Simonson.
On September 2 0 , 1978, Dwaine I v e r s o n was a p p o i n t e d
c o n s e r v a t o r of t h e e s t a t e of Emma S a u t e r , and t h e r e a f t e r
l e t t e r s of c o n s e r v a t o r s h i p w e r e i s s u e d t o ~ w a i n eI v e r s o n .
On October 4 , 1978, Dwaine J . I v e r s o n , a s c o n s e r v a t o r ,
e n t e r e d i n t o a c o n t i n g e n t f e e a r r a n g e m e n t w i t h R. V. ~ o t t o m l y ,
a Great F a l l s a t t o r n e y , concerning a l l e g e d claims of t h e
e s t a t e of Emma S a u t e r a g a i n s t Margaret Simonson and Wayne
Simonson, h e r husband. I t i s unnecessary t o d e t a i l t h e fac-
t o r s of t h e a l l e g e d c l a i m h e r e , e x c e p t t o s t a t e t h a t t h e
c o n s e r v a t o r s o u g h t $300,000 i n a c t u a l damages and $50,000
i n exemplary damages from t h e Simonsons.
On November 1 8 , 1978, Emma S a u t e r d i e d . Her l a s t W i l l
and Testament, e x e c u t e d A p r i l 17, 1962, nominated Wilbur P.
Werner, a t t o r n e y , o f C u t Bank, Montana, a s h e r p e r s o n a l r e p r e -
s e n t a t i v e , and e x c e p t f o r two s m a l l d e v i s e s , d i s t r i b u t e d h e r
e s t a t e t o h e r d a u g h t e r s , M a r g a r e t Simonson and JoAnn Palmer
a s e q u a l d e v i s e e s and l e g a t e e s .
The L a s t W i l l and Testament w a s o f f e r e d f o r p r o b a t e i n
i n f o r m a l p r o c e e d i n g s on November 24, 1978, and Wilbur P .
Werner was a p p o i n t e d p e r s o n a l r e p r e s e n t a t i v e of t h e dece-
dent's estate.
On December 8, 1978, Dwaine J . I v e r s o n , a s c o n s e r v a t o r ,
f i l e d h i s p e t i t i o n f o r f o r m a l p r o b a t e of t h e W i l l , d e t e r -
m i n a t i o n of h e i r s and t e s t a c y , and a p p o i n t m e n t o f p e r s o n a l
representative. T h a t p e t i t i o n s o u g h t t h e removal o f Wilbur
Werner a s p e r s o n a l r e p r e s e n t a t i v e and t h e a p p o i n t m e n t of
Dwaine J. I v e r s o n as p e r s o n a l r e p r e s e n t a t i v e . The p e t i t i o n
was based on t h e c o n t e n t i o n t h a t Werner w a s u n a b l e t o a c t
a s p e r s o n a l r e p r e s e n t a t i v e b e c a u s e of a c o n f l i c t of i n t e r e s t .
I n t h e c i v i l s u i t f i l e d by I v e r s o n , a s c o n s e r v a t o r ,
a g a i n s t t h e Simonsons, t h e Simonsons had r e t a i n e d a s t h e i r
a t t o r n e y t o r e p r e s e n t them i n t h e m a t t e r , James Nelson, a
law p a r t n e r of Wilbur Werner.
M a r g a r e t Simonson and Wilbur Werner e a c h f i l e d o b j e c -
t i o n s t o t h e p e t i t i o n of Dwaine J. I v e r s o n t o be a p p o i n t e d
a s personal representative. Eventually, t h e D i s t r i c t Court
d i s m i s s e d I v e r s o n ' s p e t i t i o n f o r f o r m a l p r o b a t e and h i s ap-
pointment a s personal r e p r e s e n t a t i v e because of h i s l a c k
of p e c u n i a r y i n t e r e s t i n t h e e s t a t e o f Emma S a u t e r .
On J u l y 11, 1979, JoAnn Palmer f i l e d h e r p e t i t i o n f o r
f o r m a l p r o b a t e o f t h e W i l l , f o r t h e removal of Werner a s
p e r s o n a l r e p r e s e n t a t i v e , and f o r t h e a p p o i n t m e n t of a spe-
c i a l a d m i n i s t r a t o r t o h a n d l e a l l of t h e a f f a i r s of t h e
estate. She nominated Dwaine J. I v e r s o n a s s u c h s p e c i a l
administrator .
Wilbur Werner, a s p e r s o n a l r e p r e s e n t a t i v e , and
M a r g a r e t Simonson, a s t h e o t h e r h e i r of t h e e s t a t e , o b j e c t e d
to this petition. A f t e r a h e a r i n g , t h e D i s t r i c t C o u r t judge
d e n i e d JoAnn P a l m e r ' s p e t i t i o n . I t i s from t h a t o r d e r o f
d e n i a l , d a t e d November 5, 1979, t h a t JoAnn Palmer a p p e a l s .
With r e s p e c t t o t h e s u i t commenced by t h e c o n s e r v a t o r
a g a i n s t t h e Simonsons, i t a p p e a r s t h a t on October 2 5 , 1979,
James Nelson, W e r n e r ' s law p a r t n e r , a p p e a r e d on b e h a l f of
t h e Simonsons and moved t o d i s m i s s t h e c l a i m . The motion
w a s o v e r r u l e d on November 8 , 1978. Emma S a u t e r ' s d e a t h , a s
we have s a i d , o c c u r r e d on November 1 8 , 1978. On November
24, 1978, James Nelson, on b e h a l f o f t h e Simonsons, f i l e d
a motion f o r e x t e n s i o n of t i m e t o f i l e a n answer, i n t h e
c i v i l action. O n December 1 2 , 1978, a f t e r t h e f i l i n g o f t h e
p e t i t i o n by I v e r s o n i n t h e e s t a t e p r o c e e d i n g s , t h e law f i r m
o f Werner and Nelson withdrew from d e f e n s e of t h e c i v i l
a c t i o n b r o u g h t by t h e c o n s e r v a t o r . Barney Reagan w a s sub-
s t i t u t e d a s c o u n s e l o f r e c o r d f o r t h e Simonsons.
A t t o r n e y James Nelson h a s a p p e a r e d i n t h e e s t a t e p r o -
ceedings representing t h e personal representative i n b r i e f s
f i l e d i n o p p o s i t i o n t o JoAnn P a l m e r ' s p e t i t i o n and a s
Werner's a t t o r n e y i n t h e h e a r i n g b e f o r e t h e c o u r t .
I n t h e meantime, t h e b u s i n e s s of t h e e s t a t e i s s u f f e r -
ing. Beyond t h e a p p o i n t m e n t of t h e p e r s o n a l r e p r e s e n t a t i v e
and t h e p u b l i c a t i o n of t h e n o t i c e t o c r e d i t o r s , n o t h i n g
f u r t h e r h a s been done. The e s t a t e w i l l r e q u i r e a f e d e r a l
e s t a t e t a x r e t u r n and t h e r e a r e b i l l s t o be p a i d , and sub-
s t a n t i a l a s s e t s t o be a c c o u n t e d f o r . Werner h a s p o s t e d a
bond a s p e r s o n a l r e p r e s e n t a t i v e . He t e s t i f i e d t h a t h e
r e a l i z e d a c t i n g a s t h e p e r s o n a l r e p r e s e n t a t i v e h e was " s t e p -
p i n g i n t o something," and a d v i s e d t h e Simonsons t h a t he and
Nelson c o u l d n o t c o n t i n u e t o r e p r e s e n t them i n t h e c i v i l
a c t i o n i f t h e W i l l was o f f e r e d f o r p r o b a t e and h e was p e r -
sonal representative. However, Werner h a s no r e s e r v a t i o n s
a b o u t h i s n e u t r a l i t y i n h a n d l i n g t h e pending c i v i l c l a i m
a g a i n s t t h e Simonsons a s an a s s e t of t h e e s t a t e .
The c o n s e r v a t o r h a s f i l e d a n i n v e n t o r y i n t h e c o n s e r -
v a t o r s h i p p r o c e e d i n g s acknowledging r e c e i p t of c e r t a i n i t e m s
of p e r s o n a l p r o p e r t y , o u t l i n i n g t h e r e a l p r o p e r t y h e l d by
t h e d e c e a s e d a t t h e t i m e of h e r d e a t h , and l i s t i n g a l s o a s
a n a s s e t t o be a c c o u n t e d f o r by him, t h e c l a i m a g a i n s t t h e
Simonsons.
The o r d e r of t h e D i s t r i c t C o u r t d e n y i n g JoAnn P a l m e r ' s
p e t i t i o n f o r t h e removal of Werner i s n o t w i t h o u t l o g i c .
The c o u r t p o i n t e d o u t t h a t Werner w a s d e s i g n a t e d by t h e W i l l
o f Emma S a u t e r a s p e r s o n a l r e p r e s e n t a t i v e and t h a t h e was
a l o n g t i m e c o u n s e l o r and f r i e n d of t h e S a u t e r f a m i l y .
T h e r e i s no q u e s t i o n a b o u t t h e v a l i d i t y of t h e W i l l nor
t h e q u a l i f i c a t i o n s of Werner e x c e p t f o r t h e p o s s i b l e b i a s
o r c o n f l i c t t h a t m i g h t e x i s t i n h i s h a n d l i n g of t h e c l a i m
a g a i n s t t h e Simonsons, s a i d t h e c o u r t . The c o u r t f u r t h e r
s t a t e d t h a t t h e r e w a s no c o n f l i c t which was s o a n t a g o n i s t i c
t o the interests of t h e e s t a t e t h a t Werner would b e
u n a b l e t o do j u s t i c e , and f u r t h e r s a i d t h a t i f JoAnn Palmer
was d i s s a t i s f i e d w i t h t h e p e r s o n a l r e p r e s e n t a t i v e ' s e f f o r t s ,
h e r remedy w a s t o commence a n a c t i o n a g a i n s t t h e Simonsons
and t h e p e r s o n a l r e p r e s e n t a t i v e , c i t i n g I n R e E s t a t e o f
Graf ( 1 9 6 8 ) , 150 Mont. 577, 437 P.2d 371.
The f a c t o r s which l e a d u s t o o v e r r u l e t h e November 5,
1979 o r d e r of t h e D i s t r i c t C o u r t a r e t h e s e : L e t t e r s were
i s s u e d t o Wilbur Werner a s p e r s o n a l r e p r e s e n t a t i v e of t h e
e s t a t e on November 24, 1978. On t h a t d a t e , and u n t i l December
1 2 , 1978, Werner's l a w p a r t n e r , James Nelson, was t h e a t t o r n e y
o f r e c o r d i n t h e c i v i l a c t i o n d e f e n d i n g t h e Simonsons a g a i n s t
a c l a i m which i s now p u r p o r t e d t o be an a s s e t o f t h e e s t a t e .
Werner, i f no s p e c i a l a d m i n i s t r a t o r i s a p p o i n t e d , w i l l b e
c a l l e d upon a s p e r s o n a l r e p r e s e n t a t i v e t o d e t e r m i n e what
d i s p o s i t i o n s h o u l d be made of t h e c l a i m o f t h e Simonsons
and whether t h e l i t i g a t i o n s h o u l d be c o n t i n u e d . The com-
p e t i n g i n t e r e s t s of JoAnn Palmer, who would b e t h e b e n e f i c i a r y
i f t h e c l a i m r e s u l t e d i n a judgment a g a i n s t t h e Simonsons
and t h e Simonsons, whose i n t e r e s t i s t o d e f e a t t h e c i v i l
l i t i g a t i o n , a r e a t stake. The s i t u a t i o n i s c o v e r e d by t h e
Canons of P r o f e s s i o n a l E t h i c s , a d o p t e d by t h i s C o u r t on
May 1, 1973, and a p p e a r i n g i n Vol. 160 of t h e Montana R e -
p o r t s , i n S e c t i o n DR 5-105. In pertinent part, that section
provides :
"(B) A lawyer s h a l l n o t c o n t i n u e m u l t i p l e
employment i f t h e e x e r c i s e of h i s i n d e p e n d e n t
p r o f e s s i o n a l judgment i n b e h a l f of a c l i e n t
w i l l be o r i s l i k e l y t o be a d v e r s e l y a f f e c t e d
by h i s r e p r e s e n t a t i o n of a n o t h e r c l i e n t , ex-
c e p t t o t h e e x t e n t p e r m i t t e d under DR 5-105(C).
"(C) I n t h e s i t u a t i o n c o v e r e d by DR 5-105
... ( B ) , a lawyer may r e p r e s e n t m u l t i p l e
c l i e n t s i f i t i s o b v i o u s t h a t he c a n a d e q u a t e l y
r e p r e s e n t t h e i n t e r e s t of e a c h and i f e a c h con-
sents to the representation a f t e r f u l l disclo-
s u r e of t h e p o s s i b l e e f f e c t of s u c h r e p r e s e n -
t a t i o n on t h e e x e r c i s e of h i s i n d e p e n d e n t
p r o f e s s i o n a l judgment on b e h a l f of e a c h .
"(D) I f a lawyer i s r e q u i r e d t o d e c l i n e
employment o r t o withdraw from employment
under DR 5-105, no p a r t n e r o r a s s o c i a t e o f
h i s o r h i s f i r m may a c c e p t o r c o n t i n u e such
employment. "
From t h e f a c t s f o r e g o i n g , i t i s c l e a r t h a t James Nelson,
a t t h e t i m e of t h e a p p o i n t m e n t of t h e p e r s o n a l r e p r e s e n t a t i v e ,
c o u l d n o t have been a p p o i n t e d b e c a u s e of a c o n f l i c t of i n t e r -
e s t t h a t would a r i s e o u t of h i s r e p r e s e n t a t i o n of M a r g a r e t
Simonson a g a i n s t t h e claimed i n t e r e s t of t h e e s t a t e i n t h e
civil litigation. Under DR 5-105(D) above, i f one lawyer
i s r e q u i r e d t o d e c l i n e employment b e c a u s e of such p o s s i b l e
c o n f l i c t , no p a r t n e r o r a s s o c i a t e may a c c e p t o r c o n t i n u e
such employment. A c c o r d i n g l y , Werner i s w i t h i n t h e r u l e
and c a n n o t h i m s e l f a c t a s p e r s o n a l r e p r e s e n t a t i v e , e x c e p t
upon f u l l d i s c l o s u r e and c o n s e n t of a l l i n t e r e s t e d p a r t i e s
as t h e Rule p r o v i d e s . I t makes no d i f f e r e n c e t h a t h e r e
Werner i s a c t i n g a s a p e r s o n a l r e p r e s e n t a t i v e r a t h e r t h a n
a s an attorney. Even a s a p e r s o n a l r e p r e s e n t a t i v e , h i s
a t t o r n e y i s James Nelson, and t h e problem p e r s i s t s u n a b a t e d .
Nothing w e s a y h e r e impugns t h e i n t e g r i t y of Wilbur P .
Werner. The i n t e n t of t h e Canons of P r o f e s s i o n a l E t h i c s
i s n o t o n l y t o a v o i d i m p r o p r i e t y , b u t even t h e a p p e a r a n c e
of i m p r o p r i e t y . Lawyers i n t h e c o n d u c t o f t h e i r b u s i n e s s ,
o r m a t t e r s r e l a t i n g t o t h e i r l e g a l b u s i n e s s must, l i k e
Mrs. C a e s a r , be beyond s u s p i c i o n .
T h i s i s n o t t o s a y t h a t Werner may n o t c o n t i n u e i n
a l l o t h e r matters except with respect t o t h e claim a g a i n s t
t h e Simonsons t o a c t as p e r s o n a l r e p r e s e n t a t i v e of t h e
e s t a t e , and t o t a k e c a r e of i t s b u s i n e s s . That obviously
was t h e i n t e n t of h i s d e c e a s e d c l i e n t . But i t i s p r o p e r
here t h a t t h e D i s t r i c t Court appoint a s p e c i a l administra-
t o r f o r t h e purpose of h a n d l i n g t h e d i s p o s i t i o n of t h e
claim against the Simonsons. No reason appears why Dwaine
J. Iverson could not act in that circumscribed capacity, but
who will be appointed special administrator is a matter for
the discretion of the District Court.
The situation presented here is contemplated by the
provisions of the Uniform Probate Code. Section 72-3-701,
MCA, provides for the appointment by the clerk in an informal
proceeding of a special administrator or by the court in a
. formal proceeding where the appointment is necessary to pre-
serve the estate or to secure its proper administration,
particularly where the general personal representative
cannot or should not act.
The matter of the fee for the attorney of the special
administrator would be a subject for negotiation between
the special administrator's attorney and JoAnn Palmer, the
beneficiary of the alleged claim. If, however, the estate
is benefited, and claim for attorney's fees is made against
the estate, then the subject of the special administrator's
attorney's fees would be a matter for determination by the
District Court in accordance with section 72-3-631(5), MCA,
and subject to the District Court's discretion.
With the appointment of a special administrator, whose
duties would be limited to the eventual disposition of the
suit against the Simonsons, there is no reason why Wilbur
Werner may not continue as the general personal representa-
tive of the estate. Since his law firm has withdrawn from
the representation of the Simonsons, there is no reason why
James Nelson may not serve as attorney representing Werner
in matters pertaining to the general handling of the estate,
exclusive of the claim against the Simonsons. The attorney
who will represent the special administrator is a matter
t o be d e c i d e d by t h e s p e c i a l a d m i n i s t r a t o r when he o r s h e
i s appointed.
The c a u s e i s t h e r e f o r e remanded t o t h e D i s t r i c t C o u r t
with t h e following i n s t r u c t i o n s :
1. Wilbur P . Werner may c o n t i n u e a s t h e g e n e r a l p e r s o n a l
r e p r e s e n t a t i v e of t h e e s t a t e , w i t h t h e e x c e p t i o n of t h e c l a i m
a g a i n s t t h e Simonsons, and may e n t e r upon t h e performance of
h i s d u t i e s o t h e r w i s e a s such p e r s o n a l r e p r e s e n t a t i v e .
2. The D i s t r i c t C o u r t s h a l l r e c o n s i d e r i t s o r d e r
denying JoAnn P a l m e r ' s p e t i t i o n f o r f o r m a l p r o c e e d i n g s i n
this estate.
3. The D i s t r i c t C o u r t s h a l l a p p o i n t a s p e c i a l admini-
s t r a t o r , whose d u t i e s s h a l l be c i r c u m s c r i b e d t o t h e e v e n t u a l
d i s p o s i t i o n of t h e a l l e g e d c l a i m of t h e e s t a t e a g a i n s t t h e
Simonsons.
4. Each p a r t y s h a l l b e a r h i s o r h e r own c o s t s w i t h
r e s p e c t t o t h i s l i t i g a t i o n r e l a t i n g t o t h e a p p o i n t m e n t of
t h e s p e c i a l a d m i n i s t r a t o r and t h i s a p p e a l , e x c e p t t h a t t h e
personal r e p r e s e n t a t i v e , i f t h e D i s t r i c t Court determines
t h a t he i s p r o c e e d i n g i n good f a i t h , s h a l l b e e n t i t l e d t o
r e c e i v e h i s n e c e s s a r y e x p e n s e s and d i s b u r s e m e n t s , i n c l u d i n g
r e a s o n a b l e a t t o r n e y ' s f e e s a s p r o v i d e d under s e c t i o n 72-3-
632, MCA.
Reversed and remanded w i t h i n s t r u c t i o n s .
W e concur:
(J
YChiefdJ &t iue &
A us c