Opinion
A23-1065
02-22-2024
In re the Estate of Arnold D. Lillo, Deceased.
Blue Earth County District Com! File No. 07-PR-22-80
Considered and decided by Ross, Presiding Judge; Larkin, Judge; and Bjorkman, Judge.
ORDER OPINION
MICHELLE A. LARKIN, JUDGE
BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND BECAUSE:
1. This probate appeal is taken from an order of the district court denying appellants' petition to reopen an estate.
2. Appellants Tammy Jo Klahn and Mark Lillo are the surviving children of decedent Arnold Lillo, who died in 2021. Decedent's wife predeceased him. Decedent left a will designating respondent Robyn Block, his friend and assistant, as the beneficiary of the will and personal representative. The will designated Ermias Asfaw as an alternative beneficiary. The will contained the signatures of respondent and Asfaw as witnesses and a notary signature and stamp by a Good Thunder city clerk. The will expressly omitted appellants. In January 2022, respondent petitioned the district court for formal probate of the will and appointment as personal representative. The district court granted respondent's petition, without objection by appellants.
3. On September 30, 2022, respondent filed a final inventory and a statement to close the estate. The inventory listed a total of $279,383.69 in estate assets, including a promissory note from respondent with a fair market value of $25,000, and three vehicles with unknown values. The district court closed the estate that same day. Appellants did not object. In December 2022, appellants petitioned the district court to reopen the estate, alleging that respondent fraudulently caused decedent's will to be executed and submitted to the court. The district court denied appellant's petition. We review a district court's denial of a request to vacate a probate order based on fraud for an abuse of discretion. In re Est. of Weber, 418 N.W.2d 497, 502 (Minn.App. 1988), rev. denied (Minn. Apr. 4, 1988).
4. Minnesota's probate code provides:
Whenever fraud has been perpetrated in connection with any proceeding or in any statement filed under this chapter or if fraud is used to avoid or circumvent the provisions or purposes of this chapter, any person injured thereby may obtain appropriate relief against the perpetrator of the fraud or restitution from any person, other than a bona fide purchaser, benefiting from the fraud, whether innocent or not.
Minn. Stat. § 524.1-106 (2022).
5. The probate code further provides that the district court shall have the power to correct, modify, vacate, or amend its orders "within two years after petitioner's discovery thereof, for fraud, whether intrinsic or extrinsic, or misrepresentation unless petitioner be a party to such fraud." Minn. Stat. § 524.1-304 (2022). However, "the petitioner must proceed with due diligence and may be barred by laches or the court may deny relief where it appears that the granting thereof would be inequitable in view of all the facts and circumstances appearing." Id.
6. In denying appellants' petition to reopen the estate, the district court relied primarily on the doctrine of laches. A district court's decision to apply laches "lies within the district court's discretion and will be reversed only for an abuse of that discretion." Jacket v. Brower, 668 N.W.2d 685, 690 (Minn.App. 2003), rev. denied (Minn. Nov. 25, 2003). A district court abuses its discretion "if it makes findings of fact that are not supported by the record, misapplies the law, or resolves the matter in a manner that is contrary to logic and the facts on record." Madden v. Madden, 923 N.W.2d 688, 696 (Minn.App. 2019).
7. "Laches is an equitable doctrine which applies to prevent one who has not been diligent in asserting a known right from recovering at the expense of one who has been prejudiced by the delay." Clark v. Reddick, 791 N.W.2d 292, 294 (Minn. 2010) (quotations omitted). "In evaluating a claim of laches, the practical question in each case is whether there has been such an unreasonable delay in asserting a known right, resulting in prejudice to others, as would make it inequitable to grant the relief prayed for." Id. at 295 (quotation omitted); see Olson v. Simon, 978 N.W.2d 269, 271 (Minn. 2022) ("[W]e must assess whether that delay results in prejudice to others, as would make it inequitable to grant the relief." (quotation omitted)).
8. "Delay must be culpable in order to become laches, and prejudice must result." Haatajav. Saarenpaa, 136 N.W. 871, 873 (Minn. 1912). Delay does not become inequitable until the situation has changed such that the responding party cannot be restored to his former state. Briggs v. Buzzell, 204 N.W. 548, 549-50 (Minn. 1925); see Klapmeier v. Town of Center, 346 N.W.2d 133, 137 (Minn. 1984) ("Because there was absolutely no evidence or testimony taken at trial concerning prejudice to the town, we must reverse the [district] court's conclusion that appellant's delay was unreasonable."). "[T]o prevail on a defense of laches, prejudice must be shown." City of Cloquet v. Cloquet Sand &Gravel, Inc., 251 N.W.2d 642, 645 (Minn. 1977); see also Lemmer v. BatzliElec. Co., 125 N.W.2d 434, 439 (Minn. 1963) ("Moreover, prejudice must be shown to one party before laches will apply to preclude the other party from a remedy.").
9. In this case, the district noted that respondent "did not provide the court with a specific argument as to the prejudice that may result but did indicate it would cause great hardship to her." Despite respondent's failure to allege prejudice, the district court applied the doctrine of laches to bar appellants' fraud claim, reasoning that "[l]ogically the prejudice would be in having to reopen the estate and litigate the validity of the will after she relied on the probate matter being final at the time it was closed by the [c]ourt." But the mere fact that respondent was put in the position of having to litigate the validity of the will after the estate was closed does not show that she has been prejudiced in her defense of the will. For example, respondent does not allege that she has distributed the estate assets to third parties or that she has made any significant decisions based on the finality of the probate proceeding. Nor does respondent allege that evidence has been lost or that defenses are no longer available. Instead, respondent generally asserts that reopening probate would cause an undue burden on the estate, without specifying what that burden is or how that burden is any different than the burden that existed prior to closing the estate. In sum, when appellants petitioned to reopen the estate, respondent was in the same position that she was in prior to the estate closing three months earlier.
10. "[S]o long as the parties are in the same condition as they were before the delay occurred, it matters little whether the plaintiff presses his right promptly or slowly within the period allowed by law." Briggs, 204 N.W. at 549. There is no dispute that appellants moved for relief within the two-year period allowed by law. See Minn. Stat. § 524.1-304. And because the record does not show that respondent suffered legally cognizable prejudice as a result of appellants' petition to reopen the estate based on fraud, the district court abused its discretion by applying the doctrine of laches to bar appellants' petition.
11. Respondent notes that the district court also reasoned that reopening the estate would be "inequitable in view of all the facts and circumstances." See id. Respondent argues that because appellants have not challenged that aspect of the district court's ruling, we should affirm on that ground. Respondent's argument puts form over substance. Appellants thoroughly addressed the competing equities in this case, and their arguments are readily applicable to the district court's conclusion that reopening the estate would be inequitable in view of all the facts and circumstances. For example, appellants argue that they face a "great injustice" if their fraud claim is not decided on the merits because decedent's will denied them any inheritance and designated respondent as the sole beneficiary of the estate. Appellants further argue that if the estate is not reopened and they are not given an opportunity to prove the alleged fraud, they will suffer real and measurable harm because their inheritance will be lost.
12. As support for their fraud claim, appellants proffered the results of an investigation by the Blue Earth County Sheriff s Department. The investigation noted that on November 10, 2021, decedent was the victim of a violent assault that resulted in his hospitalization. On November 13, decedent was released to respondent's care. On December 10, the challenged will was signed and notarized.
13. The investigation began on April 12, 2022, after decedent's brother reported his concerns regarding the validity of decedent's will. Specifically, decedent's brother reported his belief that respondent organized the assault on decedent and forged decedent's signature on the will. He also reported that decedent was not present when the will was notarized.
14. On April 29, 2022, an investigator questioned the notary who allegedly witnessed decedent sign the will. The notary claimed that she witnessed decedent sign the will in his home and that she notarized the will at decedent's kitchen table. But on May 1, the notary emailed the investigator and admitted that she was not truthful on April 29. The notary reported that (1) respondent told the notary to say that the will was notarized at decedent's home, (2) the notary had never been to decedent's home to notarize any documents, (3) respondent brought the will to the city office with decedent's purported signature on it, (4) respondent signed the will in front of the notary at the city office, and (5) the will was notarized at that point in time, at the city office. When the investigator asked for clarification, the notary confirmed that she had never been to decedent's home to notarize anything. She also told the investigator that she is "a horrible liar," that she was "sick over this," and that she "couldn't lie to people who are just trying to protect people."
15. During the investigation, respondent and the alternative beneficiary made contradictory statements regarding the execution of the will. When the investigator attempted to schedule a follow-up interview with the notaiy, she refused, stating that the investigator "ran and told [respondent] I rolled on her." Finally, the investigative reports indicated that decedent's purported signature on the will "seemed nothing" like decedent's signature on a previous document. The investigator referred the matter to the Blue Earth County Attorney's Office requesting a charge of aggravated forgery, but charges were not filed.
16. As to the fraud allegation, the district court recognized that even though the will did not have to be notarized to be valid, the notaiy's recanted statement regarding the execution of the will "may, however, go to the believability and weight to be given to the various witnesses to the execution of the will." We agree. Appellants have raised a colorable claim of fraud, and given the absence of prejudice to respondent, the law favors a decision on the merits. See In re Est. of McCue, 449 N.W.2d 509, 510 (Minn.App. 1990) ("[A] hearing on allegations of undue influence and lack of testamentary capacity should be allowed where pleadings and affidavits present at least colorable claims.").
IT IS HEREBY ORDERED:
1. The district court's order is reversed and remanded for further proceedings consistent with this opinion.
2. Pursuant to Minn. R. Civ. App. P. 136.01, subd. 1(c), this order opinion is nonprecedential, except as law of the case, res judicata, or collateral estoppel.