December 19 2007
DA 06-0442
IN THE SUPREME COURT OF THE STATE OF MONTANA
2007 MT 354
IN THE MATTER OF THE ESTATE OF
MARY JANICE ANDERSON-FEELEY,
Deceased.
APPEAL FROM: District Court of the Twenty-Second Judicial District,
In and For the County of Carbon, Cause No. DP-03-11,
Honorable Blair Jones, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Mark D. Parker, Parker, Heitz & Cosgrove, PLLC, Billings, Montana
Richard W. Heard, Heard & Howard, PLLP, Columbus, Montana
For Appellee:
David L. Charles, Crowley, Haughey, Hanson, Toole & Dietrich,
P.L.L.P., Billings, Montana
Submitted on Briefs: February 22, 2007
Decided: December 19, 2007
Filed:
__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 William Feeley (Feeley) appeals from the order of the Twenty-Second Judicial
District Court, Carbon County, removing him as personal representative of the estate of
Mary Janice Anderson-Feeley (Jan) and appointing James Hadachek (Hadachek) as
personal representative.
¶2 Feeley raises the following issue on appeal: Did the District Court abuse its
discretion in concluding that good cause existed for the removal of Feeley as personal
representative of Jan’s estate? We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Jan married Feeley in early 1998. Jan was sixty-nine years old when she married
Feeley, who was in his early forties. Jan prepared a will in 1997, leaving three quarters
of her estate to her three children while leaving the final one quarter to Feeley. She also
designated Feeley as her attorney-in-fact. At the time Jan executed her will, she had
assets in excess of four million dollars. Jan’s will also provided that Feeley would serve
as the personal representative of the estate and that if Feeley was not able to serve,
Hadachek (Jan’s son) would act as personal representative. At the time of Jan’s death,
on February 18, 2003, the size of her estate had dissipated substantially. Feeley was
appointed to act as personal representative for Jan’s estate on March 14, 2003. Hadachek
later learned that “essentially all of the assets and money [Jan] had had disappeared
before she passed away.” Specifically, the value of Jan’s estate at the time of her death
was less than $30,000.
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¶4 Hadachek and his siblings filed suit against Feeley, and others, in the Thirteenth
Judicial District Court, Yellowstone County, asserting claims of undue influence, breach
of fiduciary duty, breach of express trust, constructive trust/unjust enrichment, and
conversion. Feeley moved to dismiss the claims, arguing that only Jan’s estate could
bring such claims. In response, Hadachek moved to remove Feeley as the personal
representative of Jan’s estate. The District Court, after hearing oral argument and
reviewing the parties’ briefs, granted Hadachek’s motion, removed Feeley as personal
representative, and appointed Hadachek as the personal representative of Jan’s estate.
Specifically, the court pointed to the following evidence in respect to Hadachek’s claims
against Feeley: (1) Jan expressed a clear desire to have each of her children receive one
quarter of her estate; (2) at the time her will was prepared, Jan’s estate was estimated to
be in excess of four million dollars; (3) Feeley had a power of attorney to act for Jan,
which created a fiduciary duty; (4) Feeley and Jan were married shortly before Jan’s
sixty-ninth birthday; (5) Jan’s medical records suggest that Jan may have suffered from
cognitive impairment as well as physical infirmities during the time her estate was
depleted; and (6) Feeley obtained significant transfers of assets from Jan, resulting in her
estate containing less than $30,000 at the time of her death.
¶5 Feeley appeals. Additional facts will be discussed herein as necessary.
STANDARD OF REVIEW
¶6 We review a district court’s decision regarding the removal of an estate’s personal
representative to determine whether the court abused its discretion. In re Estate of
Kuralt, 2001 MT 153, ¶ 11, 306 Mont. 73, ¶ 11, 30 P.3d 345, ¶ 11; In re Estate of
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Peterson, 265 Mont. 104, 108, 874 P.2d 1230, 1232 (1994); In re Estate of Obstarczyk,
141 Mont. 346, 352-53, 377 P.2d 531, 534-35 (1963).
DISCUSSION
¶7 Did the District Court abuse its discretion in concluding that good cause existed
for the removal of Feeley as personal representative of Jan’s estate?
¶8 In his petition for removal of Feeley as personal representative of Jan’s estate,
Hadachek argued that Feeley has a conflict of interest in that Feeley will not pursue
claims against himself, contrary to the best interests of the estate. After a hearing on May
31, 2006, to determine whether Feeley should be removed as personal representative of
Jan’s estate, the District Court determined that Feeley had a conflict of interest which
would not serve the best interests of the estate. The court expressed no views on
Hadachek’s claims against Feeley, focusing solely on the issue of whether Feeley should
be removed as personal representative of Jan’s estate. Based on the evidence presented,
which revealed Feeley’s conflict of interest, the District Court removed Feeley as
personal representative of Jan’s estate.
¶9 A personal representative may be removed for cause in certain situations under
§ 72-3-526, MCA, which provides in pertinent part:
72-3-526. Termination of appointment -- removal for cause. (1)
A person interested in the estate may petition for removal of a personal
representative for cause at any time. Upon filing of the petition, the court
shall fix a time and place for hearing. Notice shall be given by the
petitioner to the personal representative and to other persons as the court
may order. . . .
(2) Cause for removal exists:
(a) when removal would be in the best interests of the estate; or
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(b) if it is shown that a personal representative or the person seeking
h i s appointment intentionally misrepresented material facts in the
proceedings leading to his appointment or that the personal representative
has disregarded an order of the court, has become incapable of discharging
the duties of his office, or has mismanaged the estate or failed to perform
any duty pertaining to the office.
(Emphasis added.) Removal of a personal representative for cause pursuant to § 72-3-
526, MCA, is within the discretion of the district court, and we will not overturn a
removal unless there is clear abuse of discretion. Peterson, 265 Mont. at 108, 874 P.2d at
1232 (citing In re the Estate of Nelson, 243 Mont. 276, 278, 794 P.2d 677, 678 (1990)).
¶10 In Peterson, we held that the district court did not abuse its discretion in the
removal of the estate’s personal representative and explained that “[a] conflict of interest
is sufficient for removal of the personal representative for cause under § 72-3-526,
MCA.” Peterson, 265 Mont. at 109, 874 P.2d at 1233. There, the decedent, Justin
Peterson, was rendered a quadriplegic as a result of a swimming accident. Justin retained
Ernest F. Boschert and Michael J. Whalen to represent him in his personal injury action
against the owners of the property on which he was swimming. Justin signed a
contingency agreement providing Mr. Boschert and Mr. Whalen with 40 percent of any
recovery if the case was set for trial or was tried. Peterson, 265 Mont. at 106, 874 P.2d at
1231. Mr. Boschert and Mr. Whalen filed a two-page complaint against the owners of
the property, requested and acquired a trial date from the court, and then settled the case.
As a result, Mr. Boschert and Mr. Whalen were entitled to 40 percent of Justin’s
$3,125,000 recovery pursuant to the contingency agreement. Peterson, 265 Mont. at
106-07, 874 P.2d at 1231.
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¶11 Following Justin’s death, Mr. Whalen was appointed as Justin’s personal
representative pursuant to a will he had drafted for Justin shortly after the settlement.
Justin’s brother, David Peterson, thereafter filed a petition to have Mr. Whalen removed
as personal representative, alleging that the attorney fees Mr. Whalen and his co-counsel
received were excessive in relation to the amount of work done in connection with
Justin’s personal injury claim. Peterson, 265 Mont. at 107, 874 P.2d at 1232. We
affirmed the District Court’s determination that Mr. Whalen should be removed for cause
since he could not be expected to pursue a claim against himself on behalf of Justin’s
estate. We held that the potential claim against Mr. Whalen was sufficient to create a
conflict of interest, and such conflict of interest was sufficient for removal of Mr. Whalen
as personal representative. Peterson, 265 Mont. at 109, 874 P.2d at 1233.
¶12 Here, the District Court pointed to evidence that Feeley may have transferred
significant assets from Jan for his personal benefit, as Jan’s estate had been devalued
from over four million dollars to less than thirty thousand dollars. Moreover, the court
took note of the power of attorney between Jan and Feeley, which created a fiduciary
duty on the part of Feeley towards Jan. Finally, the District Court pointed out the
differences between Jan’s and Feeley’s respective ages at the time of their marriage and
that Jan’s cognitive and physical condition had deteriorated at the time she was
transferring assets into Feeley’s name.
¶13 Based on our review of the record and the findings of the District Court, it is clear
that sufficient evidence of a conflict of interest existed to justify removal of Feeley as
personal representative of Jan’s estate, pursuant to § 72-3-526, MCA. The existence of a
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potential claim against Feeley is sufficient to create a conflict of interest, and such
conflict of interest is sufficient for removal of Feeley as personal representative of Jan’s
estate. Peterson, 265 Mont. at 109, 874 P.2d at 1233. Like the District Court, we are
making no determination as to the merit of Hadachek’s underlying claims against Feeley.
Rather, we simply agree with the District Court that Hadachek has presented sufficient
evidence that a claim or claims against Feeley may exist. Applying the standard set forth
in Peterson, we conclude the District Court did not abuse its discretion in removing
Feeley as personal representative of Jan’s estate.
¶14 The judgment of the District Court is affirmed.
/S/ JIM RICE
We concur:
/S/ KARLA M. GRAY
/S/ W. WILLIAM LEAPHART
/S/ PATRICIA COTTER
/S/ JAMES C. NELSON
/S/ JOHN WARNER
/S/ BRIAN MORRIS
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