This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A16-0504
In the Matter of:
Trust Agreement of Don D. Henyan
Created Under Agreement
Dated May 1, 2006, as Amended.
Filed November 21, 2016
Affirmed
Johnson, Judge
Ramsey County District Court
File No. 62-TR-CV-15-9
Melissa Henyan, Franklin, Tennessee (pro se appellant)
Eric J. Lindstrom, Lindstrom Law Offices, Edina, Minnesota (for respondent trustee
Molly S. Baglio)
Considered and decided by Reilly, Presiding Judge; Halbrooks, Judge; and Johnson,
Judge.
UNPUBLISHED OPINION
JOHNSON, Judge
The parties to this case are two sisters who are the beneficiaries of a trust established
by their father, who now is deceased. One sister challenged actions taken by the other
sister as attorney-in-fact for their father during his lifetime and as trustee of the trust after
their father’s death. The district court rejected the challenge on a motion for summary
judgment. We affirm.
FACTS
In 2006, Don D. Henyan (decedent) established a revocable living trust. He
appointed himself and his wife to serve as co-trustees. His wife died in 2012. He later
appointed a daughter, Molly S. Baglio (Baglio), to be a co-trustee.
In January 2013, decedent amended the trust instrument. As amended, the trust
instrument provides that, upon decedent’s death, the trustee “may, directly or through the
Personal Representative of my estate, pay . . . the expenses of my last illness and funeral,
valid debts and expenses of administering my estate, including my non-probate assets.”
The amended trust instrument also provides that, upon decedent’s death, the trustee shall
distribute tangible personal property in the manner specified in a document written or
signed by decedent or, if unspecified, to Baglio. The amended trust instrument further
provides that Baglio is to receive $250,000 “because of all the care, affection and attention
she has provided to me over the years.” And the amended trust instrument provides that,
upon decedent’s death, all remaining trust assets should be distributed in equal shares to
Baglio and decedent’s other daughter, Melissa A. Henyan (Henyan). At the same time that
he amended the trust instrument, decedent executed a bill of sale by which he conveyed all
of his tangible personal property to the trust.
In January 2013, decedent also executed a statutory short-form power-of-attorney
document in which he authorized Baglio to act as his attorney-in-fact with respect to all
matters specified in the form. Baglio’s authority was to remain effective if decedent were
to become incapacitated or incompetent. The power-of-attorney document states that
Baglio was not required to provide an accounting unless requested by decedent or required
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by section 523.21 of the Minnesota Statutes. At the same time that he executed the power-
of-attorney document, decedent executed a will in which he named Baglio as his personal
representative.
Decedent died on February 25, 2013. On that date, he owned a Bremer Bank
checking account with a balance of $45,481.97. After decedent’s death, Baglio made
expenditures with funds in the Bremer Bank checking account. In November 2013, Baglio
transferred the balance of the account, then $11,099.64, to the trust by way of an affidavit
for collection of personal property. See Minn. Stat. § 524.3-1201(a) (2014).
Approximately a year after decedent’s death, Baglio, with the assistance of counsel,
prepared a final accounting for the trust in preparation for the termination of the trust. On
February 12, 2014, Baglio’s attorney sent the final accounting to Henyan by mail. Section
6.3.6 of the amended trust instrument provides that if a beneficiary does not object to a
trustee’s accounting within 90 days, the lack of an objection “shall constitute a valid and
effective release of the Trustee with respect to all transactions disclosed by the accounts.”
Henyan did not object to the final accounting within 90 days of February 12, 2014.
On October 23, 2014, an attorney retained by Henyan sent a five-page letter to
Baglio’s attorney. The letter alleged that Baglio had breached her fiduciary duty as trustee
and had failed to properly administer the trust in several ways. Henyan’s attorney
requested additional information and documents. The letter does not expressly refer to the
February 12, 2014 final accounting, though it refers to some of the transactions disclosed
in it.
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In February 2015, Henyan commenced this action by filing a petition pursuant to
section 501B.16 of the Minnesota Statutes. In March 2015, Baglio responded to Henyan’s
petition and, separately, petitioned the district court for approval of a supplemental final
accounting, the payment of professional fees, and the termination of the trust. The
supplemental final accounting differed from the original final accounting by using a
different method to value bonds owned by the trust and by including a gift of a vehicle
from the trust to Baglio pursuant to decedent’s written instructions concerning tangible
personal property. The supplemental final accounting also revised the amounts of interest
income, trustee fees, attorney fees, and accountant fees and showed a corresponding
decrease in cash.
In April 2015, Baglio served and filed a second supplemental final accounting. The
second supplemental final accounting differed from the previous accounting by allocating
to Baglio the estate taxes incurred on life insurance proceeds that she had received. The
second supplemental final accounting also revised the amount of attorney fees that had
been incurred since the previous accounting and showed a corresponding decrease in cash.
On May 5, 2015, Henyan served and filed a response to Baglio’s second
supplemental final accounting. Henyan asserted objections to Baglio’s actions as trustee
pursuant to section 501B.16 of the Minnesota Statutes and objections to Baglio’s actions
as attorney-in-fact pursuant to section 523.26 of the Minnesota Statutes. More specifically,
Henyan objected to certain payments made by Baglio from the Bremer Bank checking
account, certain distributions made by Baglio from the trust, and certain transactions
disclosed in the second supplemental final accounting.
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In November 2015, Baglio moved for summary judgment on Henyan’s petition and
her own petition. In January 2016, the district court granted Baglio’s motion. Henyan
appeals.
DECISION
Henyan argues that the district court erred by granting Baglio’s motion for summary
judgment.1 A district court must grant a motion for summary judgment if the “pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any material fact and that either party is
entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. A genuine issue of
material fact exists if a rational trier of fact, considering the record as a whole, could find
for the nonmoving party. Frieler v. Carlson Mktg. Grp., 751 N.W.2d 558, 564 (Minn.
2008). This court applies a de novo standard of review to the district court’s legal
conclusions on summary judgment and views the evidence in the light most favorable to
the party against whom summary judgment was granted. Commerce Bank v. West Bend
Mut. Ins. Co., 870 N.W.2d 770, 773 (Minn. 2015).
I. Objections to Actions of Trustee
Henyan first argues that the district court erred by granting Baglio’s summary
judgment motion with respect to her objections to Baglio’s actions as trustee.
1
Henyan was represented by counsel in the district court and in earlier stages of this
appeal. Her attorneys withdrew from representation after submitting appellant’s principal
brief on her behalf.
5
The district court rejected Henyan’s objections primarily on the ground that her
objections were untimely. The district court relied on section 6.3.6 of the amended trust
instrument, which provides that a beneficiary’s failure to object to a trustee’s accounting
within 90 days constitutes a release of any objections to the accounting. The district court
stated that Henyan did not object to the original final accounting until October 2014, which
was far more than 90 days after Baglio’s attorney sent the original final accounting to
Henyan. The district court further reasoned that Henyan’s opportunity to object was not
revived by the supplemental final accounting or the second supplemental final accounting
because the transactions disclosed in the original final accounting “were not substantively
changed” in the subsequent accountings.
Henyan contends that the district court erred on the ground that a separate 90-day
period applies to the original final accounting and also to each subsequent accounting.
Henyan’s argument requires us to interpret the amended trust instrument. In doing so, “our
purpose . . . is to ascertain and give effect to the grantor’s intent.” In re Stisser Grantor
Trust, 818 N.W.2d 495, 502 (Minn. 2012). The grantor’s intent is “determined from the
document as a whole.” Norwest Bank, N.A. v. Beckler, 663 N.W.2d 571, 581 (Minn. App.
2003). If the language of the trust instrument is unambiguous, we determine the grantor’s
intent without resorting to extrinsic evidence. Stisser, 818 N.W.2d at 502. If the language
of the trust instrument is ambiguous, however, we consider extrinsic evidence to resolve
the ambiguity. In re Estate of Arend, 373 N.W.2d 338, 342 (Minn. App. 1985). We apply
a de novo standard of review to a district court’s interpretation of an unambiguous trust
instrument. Stisser, 818 N.W.2d at 502.
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Section 6.3.6 of decedent’s amended trust instrument prescribes the manner in
which a beneficiary may object to a trustee’s accounting and the consequences of a failure
to make a timely objection:
Approval of Trustee’s Accounts if I am
Incapacitated or Deceased. If I am incapacitated or deceased,
the Trustee (or the Personal Representative of any deceased
Trustee) may render accounts to the persons who are currently
eligible to receive distributions. The approval of these
accounts or the failure to object to the accounts within 90 days
after the receipt of the accounts by those persons (or by those
authorized to act on behalf of any such person), in writings
delivered to any Trustee, shall constitute a valid and effective
release of the Trustee with respect to all transactions disclosed
by the accounts, and shall be binding and conclusive as to all
persons.
(Emphasis added.) The district court interpreted the word “accounts” in section 6.3.6 to
refer only to the original final accounting. But the use of the plural form of the word
indicates that the grantor contemplated that a trustee might issue more than one accounting
and, if so, that a beneficiary would have more than one opportunity to assert objections.
Also, the text of section 6.3.6 reveals that a failure to make a timely objection gives rise to
a release “with respect to all transactions disclosed by” an accounting, not to the entire
accounting. In this case, some transactions were disclosed in the original final accounting
and later were reiterated in subsequent accountings. Some transactions, however, were not
included in the original final accounting but were disclosed for the first time in the
supplemental final accounting or the second supplemental final accounting. We interpret
section 6.3.6 to allow a beneficiary 90 days to object to each new disclosure of a transaction
within 90 days of the disclosure. Given that interpretation, the district court correctly
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reasoned that Henyan was precluded from objecting to the transactions that were disclosed
in the original final accounting. But the district court incorrectly reasoned that Henyan was
precluded from objecting to the transactions that were not disclosed in the original final
accounting but were disclosed for the first time in the supplemental final accounting or the
second supplemental final accounting.2
Henyan asserted objections to certain transactions in the document she served and
filed on May 5, 2015, which was within 90 days of her receipt of both the supplemental
final accounting and the second supplemental final accounting. Specifically, Henyan
objected to ten items in Baglio’s second supplemental final accounting. Four of those items
(22a, 22e, 23a, and 23d) were disclosed in the original final accounting. Five items (22b,
22c, 23b, 23c, and 23e) were disclosed for the first time in the supplemental final
accounting or the second supplemental final accounting. One item (22d) was not disclosed,
according to Henyan. Henyan’s objections to six of the ten items (22b, 22c, 22d, 23b, 23c,
and 23e) were not untimely.
The district court also rejected Henyan’s objections to Baglio’s actions as trustee on
an alternative ground. The district court reasoned that, “even if” Henyan’s opportunity to
object was revived by the supplemental final accounting and the second supplemental final
2
Henyan argues in the alternative that the district court should have considered her
objections by applying equitable principles. We need not consider the alternative argument
because Henyan did not preserve it by presenting it to the district court. See Thiele v. Stich,
425 N.W.2d 580, 582-83 (Minn. 1988). In any event, the alternative argument is
superfluous because, in light of our interpretation of section 6.3.6, Henyan did not release
her objections to transactions that were disclosed for the first time in the supplemental final
accounting or the second supplemental final accounting.
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accounting, Henyan “fail[ed] to demonstrate” that the later-disclosed transactions were not
“ordinary, necessary and reasonable adjustments.” The district court’s alternative ground
for rejecting Henyan’s objections is valid. In both her objections and her memorandum of
law in opposition to Baglio’s motion, Henyan did not explain to the district court why the
claimed attorney fees (22b) or trustee fees (22c) are unreasonable. Henyan also did not
develop an argument why Baglio acted improperly with respect to alleged undisclosed
expenses related to decedent’s condominium (22d). Henyan also did not explain why
personal property distributed by the trust to her (23b and 23c) was inaccurately valued or
why she was prejudiced by the valuation. And Henyan did not explain why the allocation
to Baglio of estate taxes incurred on life insurance proceeds that she had received was
improper (23e). On appeal, Henyan either ignores these particular items or reiterates her
general argument that the disclosures raise questions about the propriety of the transactions.
Henyan has failed to identify any genuine issues of material fact with respect to these
disclosures that would warrant a trial.
Thus, the district court did not err by granting Baglio’s motion for summary
judgment with respect to Henyan’s objections to Baglio’s actions as trustee.
II. Objections to Actions of Attorney-in-Fact
Henyan also argues that the district court erred by granting Baglio’s summary
judgment motion with respect to her objections to Baglio’s actions as attorney-in-fact,
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which are focused on expenditures Baglio made before decedent’s death using his Bremer
Bank checking account and his credit card.3
The district court again rejected Henyan’s objections primarily on the ground that
the objections were untimely. The district court again relied on section 6.3.6 of the
amended trust instrument and reasoned that the balance of the checking account was
disclosed in the original final accounting and that “[t]he fact that specific transactions . . .
were not disclosed . . . is not of consequence.” We question whether the amended trust
instrument was intended to preclude a beneficiary from objecting to an action taken by an
attorney-in-fact for the grantor. We also question whether the final accounting actually
disclosed the transactions to which Henyan objects. Nonetheless, the district court also
rejected Henyan’s objections to Baglio’s actions as attorney-in-fact on an alternative
ground. The district court reasoned that, “even if” the 90-day period did not apply,
“summary judgment would still be proper under the circumstances” because Henyan did
not have sufficient evidence to prove that Baglio breached her fiduciary duty or that she
acted in bad faith.
3
Henyan also contends that Baglio “abused her power as Decedent’s attorney-in-
fact after Decedent’s death” by making purchases with decedent’s Bremer Bank checking
account and credit card. This contention is without a legal basis because, as a matter of
law, Baglio’s attorney-in-fact status terminated on decedent’s death. See Minn. Stat.
§ 523.08 (2014). Henyan’s brief identifies only a few specific expenditures after
decedent’s death, which were for utilities for decedent’s condominium. Baglio was
appointed personal representative of decedent’s estate. “The powers of a personal
representative relate back in time to give acts by the person appointed which are beneficial
to the estate occurring prior to appointment the same effect as those occurring thereafter.”
Minn. Stat. § 524.3-701. The expenditures at issue surely were beneficial to decedent’s
estate. Henyan has not established that Baglio acted inappropriately in making those
expenditures.
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An attorney-in-fact shall exercise her authority “in the same manner as an ordinarily
prudent person of discretion and intelligence would exercise in the management of the
person’s own affairs.” Minn. Stat. § 523.21; see also Erickson v. Van Web Equip. Co., 270
Minn. 42, 49, 132 N.W.2d 814, 819 (Minn. 1964). “The attorney-in-fact is personally
liable to any person, including the principal, who is injured by an action taken by the
attorney-in-fact in bad faith under the power of attorney . . . .” Minn. Stat. § 523.21.
In her principal brief, Henyan contends that Baglio breached her fiduciary duty by
writing checks on decedent’s Bremer Bank checking account on nine occasions.
Specifically, Henyan states that Baglio wrote a check to herself for $1,200, a check to her
husband for $343, and seven checks to “cash” that total $1,740. In deposition, Baglio
testified that she wrote the first check because her father expressed a desire to make a gift
to her in that amount. She testified that she wrote the second check to her husband to
reimburse him for paying the license registration fees on her father’s vehicle. And she
testified that she used the cash derived from the remaining seven checks to make purchases
specifically requested by her father.
Henyan also challenges a few instances in which Baglio used decedent’s credit card
to make purchases during his lifetime. Specifically, Henyan states that Baglio used a credit
card to purchase an iPad as a gift from her father to herself, to purchase wine at a liquor
store, to pay for meals with friends, and to purchase groceries. In deposition, Baglio
testified that her father directed her to purchase the iPad as a gift for herself. She testified
that she purchased the wine for the benefit of guests who visited her father’s home during
his final illness. She also testified that her father approved of her taking her friends out to
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lunch because they had been helpful to her during his final illness. And she testified that
she purchased groceries for guests and family members who visited her father’s home.
Henyan’s examination of Baglio at her deposition did not effectively undermine her
testimony concerning the purposes of the purchases she made with the Bremer Bank
checking account and the credit card. Likewise, Henyan did not offer any evidence that
contradicts Baglio’s deposition testimony. Accordingly, the summary judgment record
contains only Baglio’s unrebutted testimony concerning her reasons for making those
expenditures. The undisputed facts lead to the conclusion that Baglio did not act in bad
faith when making those expenditures.
Thus, the district court did not err by granting Baglio’s motion for summary
judgment with respect to Henyan’s objections to Baglio’s actions as attorney-in-fact.
Affirmed.
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