Estate of Hogen
2015 ND 125
| N.D. | 2015Background
- Decedent Arline Hogen owned ~737 acres (Barnes and Cass Counties); her will devised property equally to sons Steven and Rodney.
- Steven was appointed personal representative and sought a retainer (offset) against Rodney’s devise for unpaid post-death cash rent, crop-share proceeds, and CRP payments (2004–2013), alleging ~ $123,387.44 total after interest.
- Rodney disputed liability, moved for summary judgment (statute-of-limitations defenses), sought removal of Steven as PR, and claimed his devised real property vested immediately at death.
- The district court allowed an offset for post-death obligations (2007–2013), declined to allow recovery for certain pre-death years (statute bar for 2003), awarded PR fees ($27,500) and attorney/expert fees ($333,272.23), but miscalculated by failing to account for ~81 acres of Barnes County CRP land in rent/cost computations.
- On appeal, the Supreme Court affirmed most rulings: PR can pursue an offset against devised real property for noncontingent debts, statutes cited did not bar the retainer claim, fee awards were not an abuse of discretion, but remanded limitedly to recalculate the retainer considering the Barnes County CRP acres.
Issues
| Issue | Plaintiff's Argument (Steven / Estate) | Defendant's Argument (Rodney) | Held |
|---|---|---|---|
| 1. Whether PR may offset a devisee's interest in real property for post-death farm obligations under U.P.C. § 3-903 (N.D.C.C. § 30.1-20-03). | PR: Yes — cash rent and crop-share are noncontingent debts and may be offset against successor’s interest during administration. | Rodney: No — devisee’s real property vests at death (N.D.C.C. § 30.1-12-01); debts must be collected in a separate action under common-law rule. | Held: PR may pursue an offset against devised real property for noncontingent indebtedness during administration; title is subject to PR’s power until distribution. |
| 2. Whether statutory time limits (U.P.C. § 3-803 and § 3-1006) bar the PR’s retainer claim. | PR: Time limits on claims against the estate do not bar the estate’s claim against a devisee for a retainer in probate settlement. | Rodney: Three-month and three-year statutes bar post-death claims or recovering property. | Held: Those statutes do not bar the PR’s retainer claim against a devisee under the plain language of the provisions. |
| 3. Whether the district court correctly calculated the retainer (accounting for CRP acreage). | PR: Court’s offset calculations were supported by evidence; any minor adjustments are permissible. | Rodney: Court failed to subtract ~81.3 CRP acres in Barnes County, affecting cash rent and per-acre cost calculations. | Held: Court erred to the limited extent it did not account for the Barnes County CRP acres; remand for recalculation on that point only. |
| 4. Whether the court abused its discretion in refusing to remove PR and in awarding PR and attorney fees. | PR: Fees and retention were reasonable; PR acted in good faith to benefit estate. | Rodney: PR pursued claim for personal benefit and should be removed; fees excessive. | Held: No abuse of discretion; denial of removal and awards of PR compensation and attorney/expert fees were reasonable. |
Key Cases Cited
- Stanton v. Stanton, 279 N.W. 336 (Neb. 1938) (common-law rule treating real property as vesting free of decedent’s debts unless statute provides otherwise)
- Stenson v. H.S. Halvorson Co., 147 N.W. 800 (N.D. 1914) (statutory alteration allowing retainer against heirs where real and personal property pass subject to administration)
- Graber v. Bontrager, 285 N.W. 865 (N.D. 1939) (definition of contingent claim: liability dependent on future event)
- Duchscherer v. W.W. Wallwork, Inc., 534 N.W.2d 13 (N.D. 1995) (litigant cannot vigorously defend and then complain about the time spent overcoming that defense)
- City of Riverside v. Rivera, 477 U.S. 561 (1986) (fee-shifting principle acknowledging aggressive defense increases needed attorney effort)