Estate of Bartelson
2015 ND 147
| N.D. | 2015Background
- Decedent Ralph Bartelson lived with daughter Jean Valer; he gave Valer a durable power of attorney and she and sister Jane Haught were co-owners of a joint checking account with rights of survivorship.
- After concerns about large withdrawals, Guardian and Protective Services (GAPS) was appointed conservator and later successor personal representative of the estate by stipulation.
- Forensic accountant Daffinrud found substantial withdrawals to Valer (~$154,000) and Haught (~$133,000) between 2003–2008, but could not determine their propriety because Valer and Haught failed to produce documentation.
- Neil Bartelson and Diane Fischer (later substituted by Fischer’s estate) alleged misappropriation, sought removal of GAPS for failing to pursue claims, and argued the statutory presumption of undue influence applied to transactions by Valer and Haught.
- The district court denied removal, reasoning (among other things) that Ralph had been lucid and thus there could be no undue influence; it also ordered some dollar offsets for identified double-reimbursements.
- The Supreme Court reversed and remanded, holding the district court misapplied the law by presuming lucidity precludes undue influence and failing to apply N.D.C.C. § 59-18-01.1 to transactions by fiduciaries/confidential relationships.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court must apply statutory presumption of undue influence to transactions between fiduciaries/confidential relations and the decedent | Neil: presumption applies to Valer/Haught transactions; they must account for withdrawals and rebut presumption; unaccounted amounts presumed undue influence | GAPS/others: no basis for misappropriation because decedent was lucid; GAPS adequately investigated and should not be removed | Reversed and remanded: court must apply N.D.C.C. § 59-18-01.1; lucidity alone does not negate presumption; fiduciary/confidential-relationship findings required and burden shifts to beneficiaries to rebut |
| Whether GAPS breached its fiduciary duty by not pursuing misappropriation claims and whether that justified removal | Neil: GAPS had duty to pursue recovery given forensic report and stipulations; failure to act warrants removal | GAPS: acted appropriately given lack of documentation and prior court rulings; removal unwarranted | Court did not decide on removal merits—remanded for proper application of undue-influence law and reconsideration (including potential removal) |
| Whether Valer (as agent) and Haught assumed confidential relationships triggering the presumption | Neil: Valer (POA) and likely Haught (authorized withdrawals/care) had confidential relations, so presumption applies | Valer/Haught: argued lack of wrongful conduct and adequate explanation for withdrawals | Court: Valer assumed confidential relationship as a matter of law; trial court must determine whether Haught assumed such a relationship and then apply the presumption where appropriate |
| Whether the district judge may decline relief because the decedent’s testamentary wishes excluded Neil | GAPS/other parties: decedent intentionally excluded Neil from will; appointing him would contravene decedent’s wishes | Neil: exclusion from will does not bar him from seeking removal or protecting estate assets | Court: District court erred to rely on decedent’s wishes as dispositive; must follow law on undue influence and duties before denying removal |
Key Cases Cited
- Estate of Robinson, 2000 ND 90, 609 N.W.2d 745 (presumption of undue influence applies when trustee gains advantage)
- Estate of Vizenor, 2014 ND 143, 851 N.W.2d 119 (statutory presumption applies to transactions by agents/attorneys-in-fact in confidential relationships)
- Allard v. Johnson, 2006 ND 243, 724 N.W.2d 331 (POA/agent fiduciary relationship triggers presumption; burden to account)
- Estate of Wenzel-Mosset, 1998 ND 16, 575 N.W.2d 425 (presumption applied to caregiver transactions)
- Estate of Zins, 420 N.W.2d 729 (definition of confidential relationship and shifting burden)
- Mehus v. Mehus, 278 N.W.2d 625 (fiduciary who benefits must develop record to rebut presumption)
- Estate of Shubert, 2013 ND 215, 839 N.W.2d 811 (removal of personal representative is discretionary but must be based on correct application of law)