In re: The Power of Attorney Granted by Virginia G. Taraldson dated August 23, 2007 to Kathleen P. Engstrom and First Successor Mary Ann E. Larson and Revoked January 10, 2012 In re: The Virginia Taraldson Revocable Trust Dated February 28, 2009.
A16-822
| Minn. Ct. App. | Dec 27, 2016Background
- Virginia Taraldson created a revocable trust naming nieces Kathleen Engstrom and Mary Ann Larson as co-trustees and had earlier granted them power of attorney; she later revoked the POA and removed them as trustees.
- Engstrom and Larson (represented by attorney Robert A. Gust) filed a Trust Action seeking approval of final accounts and review of the successor trustee; a referee was assigned and conducted proceedings beginning Sept. 2012.
- A scheduling order in July 2013 contemplated claims including capacity, undue influence, and accountings; Taraldson then filed a separate Power-of-Attorney Action (July 31, 2013) seeking an accounting and consolidation with the Trust Action.
- Engstrom and Larson filed a rule 107 objection to referee assignment in the new POA case; the district court consolidated the matters, reassigned them to the referee, and implicitly denied the removal as untimely because the POA action was a continuation of the Trust Action.
- Gust repeatedly argued lack of jurisdiction based on outdated caselaw; the district court issued a show-cause order and reprimanded Gust under Minn. R. Civ. P. 11.02 for pursuing legally unsupported, repetitive claims that caused delay and increased costs.
- On appeal Gust challenged (1) the timeliness/validity of the rule 107 removal and (2) the Rule 11 sanctions; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the rule 107 objection to referee assignment was timely | Gust/Engstrom argued POA Action was a new case, so objection was timely | Taraldson argued POA Action was a continuation of the Trust Action and removal was untimely because a referee had already presided | Court held POA Action was a continuation of the Trust Action; removal was untimely and referee could hear contested matters |
| Whether district court abused discretion in imposing Rule 11.02 sanctions | Gust argued he was preserving jurisdictional issue for appeal and POA action was invalid | Taraldson argued Gust repeatedly relied on outdated caselaw and ignored statutes, causing needless delay | Court held sanctions appropriate: Gust lacked objectively reasonable basis, repeatedly advanced untenable legal arguments, and reprimand was not an abuse of discretion |
Key Cases Cited
- Jones v. Jones, 242 Minn. 251 (Minn. 1954) (right to remove judge may be waived by failure to seasonably assert it)
- Citizens State Bank of Clara City v. Wallace, 477 N.W.2d 741 (Minn. App. 1991) (failure to honor a proper removal notice is reversible error)
- State v. Dahlin, 753 N.W.2d 300 (Minn. 2008) (one automatic removal before a judge presides on substantive issue; thereafter removal only for cause)
- McClelland v. Pierce, 376 N.W.2d 217 (Minn. 1985) (no right to remove when proceeding is a continuation of an earlier action)
- Omaha Fin. Life Ins. Co. v. Cont’l Life Underwriters, Ins. Co., 427 N.W.2d 290 (Minn. App. 1988) (right to remove revived only where second action is not a mere continuation)
- Cole v. Star Tribune, 581 N.W.2d 364 (Minn. App. 1998) (counsel has duty to investigate factual and legal bases; failure can support sanctions)
- Collins v. Waconia Dodge, Inc., 793 N.W.2d 142 (Minn. App. 2011) (standard of review for sanctions is abuse of discretion)
- City of N. Oaks v. Sarpal, 797 N.W.2d 18 (Minn. 2011) (district court abuses discretion when decision is against record facts)
- Rumachik v. Rumachik, 494 N.W.2d 68 (Minn. App. 1992) (attorney may be reprimanded for asserting positions contrary to existing law and not grounded in fact)
