September 2 2008
DA 07-0696
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 304
IN THE MATTER OF THE ESTATE OF
CLIFFORD CONRAD HAUGEN, DECEASED,
LINDA A. BALEK and MARILYN M. HAUGEN,
Appellants,
v.
AUDREY A. HAUGEN,
Appellee.
APPEAL FROM: District Court of the Tenth Judicial District,
In and For the County of Fergus, Cause No. DP-1998-040
Honorable E. Wayne Phillips, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Timothy J. Wylder, Attorney at Law, Great Falls, Montana
For Appellee:
John R. Christensen, Timothy A. Filz, Ragain Christensen Fulton
& Filz, PLLC, Billings, Montana
Submitted on Briefs: August 6, 2008
Decided: September 2, 2008
Filed:
__________________________________________
Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.
¶1 Appellants Linda A. Balek (Linda) and Marilyn M. Haugen (Marilyn) appeal an
order issued by the District Court in the Tenth Judicial District Court, Fergus County,
which denied a motion filed by Linda and Marilyn to substitute District Court Judge E.
Wayne Phillips. This motion to substitute was filed after appellee Audrey A. Haugen
(Audrey) filed a verified petition in the District Court before Judge Phillips seeking to
have herself replaced as the trustee of the Clifford C. Haugen testamentary trusts (Haugen
Trusts). Because the District Court lacked subject matter jurisdiction over Audrey’s
petition, we reverse its decision and remand for further proceedings consistent with this
Opinion.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Clifford C. Haugen (Clifford) died on May 7, 1998. After his death, his estate was
probated informally in the Tenth Judicial District, Fergus County in Cause No. DP 98-40.
Audrey, Clifford’s surviving spouse, served as the personal representative of the estate
during probate, and then was appointed as trustee of the Haugen Trusts upon the closing
of Clifford’s estate. Linda and Marilyn are both daughters of Clifford. Under the
testamentary instruments, they were named beneficiaries of the Haugen Trusts and also
nominated as successor trustees in the event that Audrey was unable to serve as trustee.
¶3 Linda and Marilyn claim that Clifford’s estate was valued at $2,854,222.00 when
it was closed on April 7, 2000. As of October 17, 2007, the aggregate value of the
Haugen Trusts was $1,775,298.84. Linda and Marilyn claim that the Haugen Trusts have
lost approximately $1 million due to Audrey’s mismanagement and improper handling.
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On May 22, 2007, Linda and Marilyn made a demand on Audrey for breach of trust.
Subsequently, they filed a verified petition and complaint against Audrey in the Tenth
Judicial District, under Cause No. DP 07-08. In their complaint, Linda and Marilyn
alleged manifold breaches of trust by Audrey, and sought to remove her as trustee and
recover damages for her actions in administering the Haugen Trusts.
¶4 On October 26, 2007, Audrey filed a verified petition in the Tenth Judicial District
Court under the closed probate proceeding in Cause No. DP 98-40, with Judge Phillips
presiding. In her verified petition, Audrey sought to have herself removed as the trustee
of the Haugen Trusts, and asked the District Court to appoint a corporate trustee
successor. In her petition, Audrey explicitly referenced the complaint filed by Linda and
Marilyn in Cause No. DP 07-08, and addressed the allegations contained in that
complaint. Linda and Marilyn claim that she filed this petition in order to quit her role as
trustee before she could be removed under Linda and Marilyn’s previously-filed action in
Cause No. DP 07-08.
¶5 On November 5, 2007, Linda and Marilyn filed a motion to dismiss Audrey’s
verified petition in Cause No. DP 98-40 for lack of subject matter jurisdiction, and a
motion for substitution of District Court Judge Phillips. On November 9, 2007, Judge
Phillips denied the motion for substitution. Though he did not formally deny the motion
to dismiss, Judge Phillips concluded that Audrey’s verified petition was properly filed
under the original probate Cause No. DP 98-40 because it dealt “with issues pertaining to
both the probate of the estate and the administration of the trusts. The District Court has
concurrent jurisdiction over matters pertaining to both the probate and the administration
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of the trusts pursuant to § 72-35-101(2)(c), MCA.” Judge Phillips went on to observe
that Linda and Marilyn failed to file for a substitution of judge in 1998, and thus their
present motion for substitution was untimely under § 3-1-804(1)(c), MCA.
¶6 Linda and Marilyn now appeal this decision of the District Court. They argue, in
part, that Judge Phillips was without subject matter jurisdiction to entertain Audrey’s
verified petition due to the limited subject matter jurisdiction of district courts sitting in
probate under § 72-1-202, MCA, of the Montana Probate Code. Linda and Marilyn
maintain that Judge Phillips did not have jurisdiction over Audrey’s petition because her
petition concerned a trust proceeding and not the closed probate of Clifford’s estate. We
agree with Linda and Marilyn and find this issue to be dispositive. See Stanley v. Lemire,
2006 MT 304, ¶ 31, 334 Mont. 489, ¶ 31, 148 P.3d 643, ¶ 31 (quotation omitted)
(“[O]nce a court determines that it lacks subject matter jurisdiction, it can take no further
action in the case other than to dismiss it.”) Thus, we state the sole issue on appeal as
follows:
¶7 Did the District Court have subject matter jurisdiction to entertain Audrey’s
verified petition?
STANDARD OF REVIEW
¶8 “Whether a court has subject matter jurisdiction is a question of law. We review a
district court’s conclusions of law to determine whether they are correct.” Boe v. Ct.
Adminstr. for the Mont. Jud. Branch of Personnel Plan and Policies, 2007 MT 7, ¶ 5, 335
Mont. 228, ¶ 5, 150 P.3d 927, ¶ 5.
DISCUSSION
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¶9 “A district court sitting in probate has only the special and limited powers
conferred by statute, and has no power to hear and determine any matters other than those
which come within the purview of the statute or which are implied as necessary to a
complete exercise of those expressly conferred.” In re Graff’s Estate, 119 Mont. 311,
316-17, 174 P.2d 216, 218 (1946) (quotation omitted). As Linda and Marilyn correctly
note, § 72-1-202, MCA, provides district courts with limited subject matter jurisdiction
over probate and conservatorship matters. This statute reads in pertinent part as follows:
Subject matter jurisdiction. (1) To the full extent permitted by the
constitution, the court has jurisdiction over all subject matter relating to:
(a) estates of decedents, including construction of wills and
determination of heirs and successors of decedents, and estates of protected
persons[.]
Section 72-1-202(1), MCA.
¶10 Conversely, § 72-35-101, MCA, of the Montana Trust Code provides as follows:
Subject matter jurisdiction. (1) The district court having jurisdiction
over the trust pursuant to chapters 33 through 36 has exclusive jurisdiction
of proceedings concerning the internal affairs of trusts.
(2) The district court having jurisdiction over the trust pursuant to
chapters 33 through 36 has concurrent jurisdiction of the following:
(a) actions and proceedings to determine the existence of trusts;
(b) actions and proceedings by or against creditors or debtors of
trusts; and
(c) other actions and proceedings involving trustees and third
persons.
¶11 Clearly, Audrey’s petition to have herself removed as trustee was a trust matter,
and not a matter relating to Clifford’s estate or the construction of his will, as
§ 72-1-202(1), MCA, requires. Although Audrey argues that the District Court’s initial
jurisdiction over the probate matter provided it with concurrent subject matter jurisdiction
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over the subsequent administration of the Haugen Trusts, this argument is unavailing.
Section 72-1-202(1), MCA, provides a district court with limited subject matter
jurisdiction over the probate matters related to an estate. See In re Estate of Pegg, 209
Mont. 71, 84, 680 P.2d 316, 322 (1984) (holding that limited grant of jurisdiction under
§ 72-1-202(1), MCA, did not extend to the approval of a settlement of a wrongful death
action which was pursued by the personal representative of the decedent’s estate); see
also In re Estate of Thomas, 216 Mont. 87, 89-90, 699 P.2d 1046, 1048 (1985) (holding
that a district court sitting in probate did not have jurisdiction to decide title to real
property).
¶12 Exclusive subject matter jurisdiction over trust proceedings is conferred upon
district courts pursuant to § 72-35-101, MCA. A trust proceeding brought pursuant to the
Montana Trust Code is a proceeding separate and apart from the probate of an estate.
Audrey has provided no authority for the proposition that a district court sitting in probate
has jurisdiction over testamentary trusts which come into being after probate has ended
and the decedent’s estate is closed. Linda and Marilyn correctly note that probate courts
once had such jurisdiction under § 72-12-101, MCA (1987); however, this statute was
explicitly repealed by the Legislature in 1989 when § 72-35-101(1), MCA, was enacted.
See 1989 Mont. Laws 1877. Thus, § 72-35-101(1), MCA, and not § 72-1-202(1), MCA,
confers upon district courts exclusive jurisdiction over trust proceedings pursuant to the
Montana Trust Code.
¶13 Audrey was not attempting to re-open the probate proceedings or re-litigate any
probate matter when she filed her petition in DP 98-40; rather, she was seeking relief
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under the Trust Code. Therefore, the district court sitting in probate lacked subject matter
jurisdiction to preside over her petition to have herself removed as trustee. This being so,
Judge Phillips should have granted Linda and Marilyn’s motion to dismiss for lack of
subject matter jurisdiction, and should not have even addressed the motion for
substitution of judge. Stanley, ¶ 31. Accordingly, we reverse the decisions of the District
Court, and remand for further proceedings consistent with this Opinion.
/S/ PATRICIA COTTER
We concur:
/S/ JOHN WARNER
/S/ W. WILLIAM LEAPHART
/S/ BRIAN MORRIS
/S/ JAMES C. NELSON
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