NO. 89-510
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
IN RE THE ESTATE OF RUTH L. NELSON, Deceased
MAE B. BROWN,
petitioner and Respondent,
v.
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GUY ROBBINS, Personal ~epresentativeof the $ : ;
Estate, individually, and ROBBINS, INC., CE
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a Montana corporation, C:
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STATE OF ~ : i ~ ; . j " ~ ~ p ~ ~
Respondent and Appellant.
APPEAL FROM: District Court of the Ninth Judicial District,
In and for the County of Glacier,
The Honorable R. D. Mc~hillips,Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Walter S. Murfitt and Dale E. Reagor, Luxan and
Murfitt, Helena, Montana
For Respondent:
David F. Stufft, Frisbee, Moore, Stufft & Olson,
Cut Bank, Montana
Submitted on Briefs: April 26, 1990
Decided: June 26, 1990
Filed:
Chief Justice J. A. Turnage delivered the Opinion of the Court.
Guy L. Robbins appeals the order of the Ninth Judicial
District Court, Glacier County, removing him for cause as the
personal representative of the estate of Ruth L. Nelson. We
affirm.
The appellant raises four issues:
1. Did the District Court err in removing the personal
representative for cause after receiving his letter of resignation?
2. Did the appellant receive sufficient notice of the removal
hearing when the notice did not specify the grounds for removal?
3. Was the District Court's order removing the personal
representative for cause barred by the automatic stay under 11
U.S.C. 5 362(1) after the appellant declared bankruptcy?
4. Does the record contain sufficient evidence to support the
District Court's conclusion that removal of the personal represen-
tative was in the best interest of the estate?
Ruth L. Nelson died on January 11, 1986. Nelson's will named
as heirs her sisters, Fern L. Caskey and Mae B. Brown, whom Nelson
had not seen in over fifty years. The will appointed Guy L.
Robbins, Nelson's financial adviser of thirty years, as personal
representative.
After Robbins settled the estate and submitted his final
accounting, Brown filed an objection to several claims made by
Robbins against the estate. She later charged Robbins with a
number of counts of self-dealing and filed a separate cause of
action against him, Brown v. Robbins, Cause No. DV-87-081. Brown
twice petitioned the District Court to remove Robbins, but the
court delayed acting on the petitions as the parties exchanged
procedural and discovery motions in the probate proceeding. The
court finally concluded that discovery would best proceed in a
separate action against Robbins.
Robbins subsequently moved to Arizona, filed bankruptcy, and
filed a letter of resignation as personal representative. Brown
then filed a third petition for removal. The District Court held
a show cause hearing which neither Robbins nor his counsel
attended. The court ordered Robbins' removal and replacement by
Brown. Robbins now appeals that order.
Robbins first argues that the District Court should not have
removed him for cause after he entered his letter of resignation
because it is an idle act not required by the law. See 5 1-3-223,
MCA. Removal of a personal representative for cause is within the
sound discretion of the district court. In re Estate of Stone
(1986), 223 Mont. 327, 330, 727 P.2d 508, 511. We can find no
principle of law or reason which would compel a district court to
accept a personal representative's voluntary resignation over three
petitions for removal. A voluntary resignation by a personal
representative "is effective only upon the appointment and
qualification of a successor representative and delivery of the
assets to him." Section 72-3-525, MCA. Robbins's resignation had
no effect since the District Court did not appoint a successor
until it ordered his removal for cause. The District Court did not
abuse its discretion in removing Robbins for cause rather than
accepting his resignation.
Robbins next argues that the notice of the removal hearing was
insufficient because it did not specify Brown's reasons for seeking
removal. He cites In re Estate of Counts for the proposition that
the notice must state the specific grounds of removal. Robbins
misreads the case. Counts held that the law did not require the
district court to convene a hearing on a petition for removal when
the court had twice before approved the personal representative's
actions and the petition stated no new grounds for removal. Counts
(1985), 217 Mont. 350, 354, 704 P.2d 1052, 1055. Even if some
particularity were required, Brown's two previous petitions
contained detailed allegations of misconduct. Those, along with
the separate cause of action filed against Robbins, provided
Robbins with actual notice of the grounds for the third petition.
Robbins next argues that his filing in bankruptcy automatical-
ly stayed any finding of misconduct including the District Court's
order of removal. We disagree. Only proceedings against the
debtor or his property are stayed by a bankruptcy petition. See
11 U. S.C. 5 362. Here the proceeding is the probate of the Nelson
estate. It is not an action against Robbins or his property even
though the removal order may help to preserve and determine Brown's
cause of action against Robbins following the bankruptcy proceed-
ings. See 11 U.S.C. § 523(4); § 26-3-201, MCA.
Finally, Robbins argues that the evidence does not support the
District Court's findings of fact and conclusions of law. For the
most part, we agree. The court's order includes numerous findings
supporting its conclusion that Robbins I1intentionally misrepre-
sented facts in [the probate] proceedings1'and engaged in I1conduct
amounting to fraud, bad faith, collusion, or breach of trust
. . . .I1 Most of those findings are not supported by the record
of In re Estate of Nelson, Cause No. DP 86-04, the only record
presently before this Court. In making its determination, the
District Court had before it both the record of this case and had
jurisdiction of the record of Brown's separate cause of action,
Brown v. Robbins, Cause No. DV 87-081. Had the latter record been
filed with this Court, we could have taken judicial notice of it.
See Rules 201 and 202(b)(6), M.R.Evid.; but see DIAgostino v.
Schaap (1988), 230 Mont. 59, 62, 748 P.2d 466, 468. Without the
record of the companion case, the question remains whether the
present record contains sufficient evidence to find that the
District Court did not abuse its discretion in removing Robbins for
cause. We conclude that it does on at least one point.
The record contains strong evidence that Robbins misap-
propriated estate funds for his personal benefit. The record
contains photocopies of three checks totaling $60,648.60 paid to
the Ruth Nelson Trust, a joint checking account in the names of the
decedent, Ruth L. Nelson, and the appellant, Guy L. Robbins. The
checks bear the date of January 10, 1986, and the signature of the
decedent. The record also contains photocopies of medical records
showing that on January 10, the decedent was comatose and incapable
of signing checks. The doctor's summary states, '!She became
disoriented and restless . . . on the evening of 01-09-86. On 01-
10-86 she was not responsive, would not take anything orally and
showed further deterioration . . . .I9 A nurse's note states that
the decedent was unable to sign an admittance form on January 7 and
that on January 10 she did not respond to verbal commands. She
passed away sometime before 2:45 a.m. on January 11. There is no
direct evidence that Robbins forged the decedent's signature on
the checks, but the circumstantial evidence is strong. The checks
transferred the $60,648.60 from the estate into an account
accessible onlytothe decedent and Robbins, thereby making Robbins
the direct beneficiary of the transfer.
The District Court has an obligation to oversee the probate
of the estate to prevent this type of abuse by the personal
representative. We will not overturn the court's orders protecting
the estate unless there is a clear abuse of discretion. Cause for
removal of a personal representative exists "when removal would be
in the best interests of the estate . . . . Section 72-3-
5 2 6 ( 2 ) (a), MCA. We hold that the District Court did not abuse its
discretion in determining that Robbins's removal for cause was in
the best interests of the Nelson estate.
Affirmed.
We concur: