870 N.W.2d 201
N.D.2015Background
- In 2013 the district court appointed a limited third-party guardian (Fiduciary & Advocacy Services) and limited conservator (First International Bank & Trust — “the Bank”) for 81-year-old V.A.M. pursuant to a family stipulation.
- By September 2014 the conservator said V.A.M.’s income was insufficient, sought court approval to sell or lease his farmstead, and asked permission to assign any potential legal claims (undue influence, lack of capacity, breach of fiduciary duty) to V.A.M.’s children so they could investigate/pursue them.
- Some children (T.M., K.J.) opposed assignment, arguing the conservator cannot carve out or delegate conservatorship powers to a “sub‑conservator” and that the assignment conflicted with V.A.M.’s wishes and estate plan; other parties (D.N., some children) supported authorization.
- The district court’s November 14, 2014 order authorized sale of the farmstead to T.M. and stated the limited conservator is authorized to assign any and all possible claims to V.A.M.’s children in equal shares, but the order gave no concrete terms for the assignment.
- The court later sent a letter saying assignees might be required to pay costs and must abide by the original conservatorship order, but the letter conflicted with the plain language of the order and left unclear whether this was an assignment of claims or a delegation of conservator duties.
- The Supreme Court reversed and remanded because the district court did not explain the legal basis or the terms (scope, type, and consequences) of the assignment/delegation.
Issues
| Issue | Petitioner (T.M./K.J.) Argument | Respondent (D.N./Bank/V.A.M.) Argument | Held |
|---|---|---|---|
| Whether the district court lawfully created a “sub‑conservator” or otherwise delegated conservator powers not authorized by statute | Such a delegation (creating sub‑conservators) is unauthorized and conflicts with the parties’ stipulation appointing a third‑party conservator | The court either authorized an assignment of choses in action to the children under statutory conservatorship powers or properly delegated investigatory/pursuit duties to assignees | Reversed and remanded: the court’s rationale is unclear; record does not show whether it authorized an assignment or a delegation and it failed to define scope/terms |
| Whether a conservator may assign a protected person’s legal claims | Assignment to third parties (children) improperly divests conservator duties and may conflict with protected person’s wishes/estate plan | A conservator has authority under N.D.C.C. ch. 30.1‑29 to assign choses in action; assignment would allow children to pursue claims at their expense | Assignment may be authorized in principle but district court must specify the type and terms; present order deficient |
| Whether an assignment must specify who bears costs, control, and effect on estate/estate plan | Assignment without terms unfairly burdens protected person and may contravene the will/estate plan | Assignee‑litigation could restore assets to the estate; parties can be required to follow conservatorship limits | Court must consider estate plan and specify whether assignees bear costs, how proceeds/rescission affect estate, and what “equal shares” means |
| Whether appellate review is possible given the district court’s explanations | Court abused discretion by creating novel status without statutory authority and without clear findings | District court acted within broad discretion to manage estate and may delegate or assign under statutes | Reversed because appellate court cannot understand district court’s rationale; remand for clarification and defined terms |
Key Cases Cited
- Strankowski v. Strankowski, 447 N.W.2d 323 (N.D. 1989) (a chose in action is property)
- United Bank of Bismarck v. Glatt, 420 N.W.2d 743 (N.D. 1988) (recognizing chose in action as property)
- Willow City Farmers Elevator v. Vogel, Vogel, Brantner & Kelly, 268 N.W.2d 762 (N.D. 1978) (generally permits assignment of legal claims)
- Schmidt v. Grand Forks Country Club, 460 N.W.2d 125 (N.D. 1990) (noting some claims, e.g., rescission, may be nonassignable)
- Forbes Equity Exch., Inc. v. Jensen, 841 N.W.2d 759 (N.D. 2014) (assignee steps into assignor’s shoes; assignee gains no greater rights)
- Collection Ctr., Inc. v. Bydal, 795 N.W.2d 667 (N.D. 2011) (distinguishing assignment types and effects)
- In re Guardianship and Conservatorship of V.J.V.N., 750 N.W.2d 462 (N.D. 2008) (standard of appellate review for conservatorship decisions)
- In re Conservatorship of T.K., 775 N.W.2d 496 (N.D. 2009) (abuse of discretion framework)
- In re Estate of Nelson, 863 N.W.2d 521 (N.D. 2015) (appellate review requires discernible district court rationale)
- Empower the Taxpayer v. Fong, 838 N.W.2d 452 (N.D. 2013) (appellate courts need trial court reasoning to review issues)