Opinion
No. C7-99-963.
Filed December 7, 1999.
Appeal from the District Court, Ramsey County, File No. P7955275.
John G. Westrick, Brian J. Clausen, Westrick McDowall-Nix, P.L.L.P., (for appellant Empire Fire and Marine Insurance)
Megan L. Faricy, Faricy Law Firm, (for respondent Estate of Willie J. Moore)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant Empire Fire and Marine Insurance appeals from an order directing it to pay respondent, the estate of Willie James Moore, $40,000, the full amount of the bond. Because the trial court did not err in relying on the petition of Patricia Watson, the affidavit of Eva Z. Sipkins, and Cheryl Moore's opinion testimony in determining the value of the homestead, we affirm the trial court's decision.
DECISION
On appeal, this court reviews the factual findings of the district court using a clearly erroneous standard of review, giving due regard to the opportunity of the district court to judge the credibility of witnesses. Minn.R.Civ.P. 52.01. Clearly erroneous means not "reasonably supported by evidence in the record considered as a whole." Hubbard v. United Press Int'l, Inc., 330 N.W.2d 428, 441 (Minn. 1983) (citation omitted). Only where the appellate court is left with a "definite and firm conviction that a mistake has been made," will the district court's decision be overturned. Snesrud v. Instant Web, Inc., 484 N.W.2d 423, 428 (Minn.App. 1992) (citation omitted), review denied (Minn. June 17, 1992). Moreover, this court must view the evidence in the light most favorable to the district court's decision. Id .
A personal representative has a fiduciary duty to the represented estate. Goldberger v. Kaplan, Strangis Kaplan, P.A., 534 N.W.2d 734, 739 (Minn.App. 1995), review denied (Minn. Sept. 28, 1995). A fiduciary must exercise that degree of care that "[persons] of common prudence ordinarily exercise in their own affairs ." In re Estate of Janke, 193 Minn. 201, 204, 258 N.W. 311, 313 (1935) (quotation omitted). Personal representatives are liable for losses that result from a breach of these duties. In re Estate of Lund, 217 Minn. 617, 626, 15 N.W.2d 426, 431 (1944).
Here, Watson was the personal representative for Moore's estate. As such, she had a fiduciary duty to the estate to take care of the homestead. Nevertheless, Watson allowed the home to depreciate in value due to her lack of care. Appellant does not contest that Watson owed a fiduciary duty to Moore's estate and that she breached it. Instead, appellant argues that the trial court erred in its determination of the value of the homestead because evidence presented by respondent was not competent and the tax-appraised value, the only competent evidence, was not relied on.
I. Competency of Evidence
The determination of the value of a homestead is a question of fact that will not be reversed unless it is clearly erroneous. Maher v. Maher, 393 N.W.2d 190, 193 (Minn.App. 1986). The trial court relied on the following evidence in determining the value of the homestead: (1) an affidavit by Sipkins, a paralegal for a law firm, where she states that the value of the homestead is $77,000, based "apparently" on the insurance policy; (2) Moore's testimony, where she testifies that she believes that the value is $77,000; and (3) Watson's petition to be appointed personal representative of Moore's estate, where she sets the value of the homestead at $77,000. Appellant contends that this evidence was not competent.
A. Eva Z. Sipkins's Affidavit
Appellant argues that Sipkins's affidavit, where she values the homestead at $77,000, is not competent evidence. Appellant is correct. No foundation was laid for Sipkins's competence to value property. Nor does the record indicate that Sipkins has an interest in the property or has even seen it. In fact, the record does not indicate how Sipkins arrived at the $77,000 figure in valuing the homestead in her affidavit. Therefore, any reliance placed on the affidavit in finding the value of the homestead was improper.
B. Cheryl Moore's Testimony
Appellant argues that Moore was not competent to determine the value of the homestead and that any statement she gave at trial concerning its value was stricken by the trial court. An owner is competent to give opinion testimony as to the value of the property. Vreeman v. Davis, 348 N.W.2d 756, 757 (Minn. 1984); Peterson v. Schober, 192 Minn. 315, 329, 256 N.W.2d 305, 315 (1934) (stating that where an owner had not seen the property for 12-13 years, but had kept in touch with the property, she is competent to give her opinion as to its value). Any weakness in the foundation for that opinion goes to its weight, not its admissibility. Vreeman, 348 N.W.2d at 757 (citation omitted). But the owner's opinion, standing alone, is of little probative value in the absence of any showing that the owner was familiar with the market value of similar property. Id. Here, like in Vreeman, the record indicates that Moore had comparison-shopped and "this evidence affords sufficient foundation to give [the] opinion a measure of credibility and probative value." Id. It is clear that Moore was competent to testify as to the value of the property.
Appellant further argues that Moore's testimony regarding the value of the property was stricken from the record by the trial court judge. At trial, her attorney asked Moore the following question: "And in your opinion do you believe the house was worth $77,000.00?" Appellant objected, arguing hearsay and lack of foundation. The trial court sustained appellant's objection on the ground that it was a leading question, but allowed Moore to testify as to the value of the homestead. She estimated the value to be $77,000.
Nevertheless, appellant argues that the court struck Moore's valuation of the homestead because upon appellant's renewal of its objection, the trial court stated that it would strike it. Sometime after testifying about the value of the homestead, Moore was asked by her attorney: "And you didn't find it like looking at court documents or something like that?" Moore responded: "No." In response, appellant stated: "Given that, Your Honor, I am going to remake my objection as to hearsay and ask that the previous answer be stricken." The trial court stated: "Okay, well, I am going to sustain the objection at this point in time." Immediately thereafter appellant asked: "And strike it?" The court answered, "Yes."
It is clear that the trial court did not strike Moore's statement regarding the value of the homestead. Moore's valuation statement and the objection currently in question were 33 pages apart in the transcript. In between, Moore made many other statements. Moreover, regardless of what statement the trial court was striking, it was a conditional ruling and strike. When the trial court sustained it "at this time," appellant should have been on notice that it was not a final ruling.
The trial court relied on Moore's valuation in making its decision, and stated in its order and memorandum dated May 21, 1999, that it did not strike Moore's opinion evidence as to the value of the home. Therefore, it is clear that Moore's opinion testimony regarding the value of the homestead was not stricken from the record and was properly considered by the trial court.
C. Patricia Watson's Petition
Appellant further argues that Watson's statement in the petition was not competent evidence. To support its claim, appellant relies on Kelmar Corp. v. District Court of Fourth Judicial Dist., where the supreme court stated that "[a] statement is not conclusive as a judicial admission upon the party making it unless it is intentionally made as a waiver of the requirement that the other party submit proof on that point." 269 Minn. 137, 145, 130 N.W.2d 228, 233, (1964). However, there is other caselaw that seems to suggest that once filed, contents of a petition are an admission. See In re: Condemnation of Certain Lands in City of White Bear Lake by City of White Bear Lake Housing Redev. Auth., 555 N.W.2d 541, 543 (Minn.App. 1996) (stating that a condemnation petition must include a description of the land to be taken, and once filed, the petition represents an admission by the condemnor of its contents) (citation omitted). Moreover, Watson, who was seeking to be appointed personal representative of Willie J. Moore's estate, was familiar with the house. Her petition was not the only evidence, but instead, the trial court also considered Moore's opinion testimony as to the value of the homestead. Watson's petition, which provided her valuation of the homestead, served as some additional evidence regarding the value of the home and was competent evidence.
D. Tax-Appraised Value
Finally, appellant argues that the trial court should have used the tax-appraised value of the homestead when determining the surcharge. The tax-appraised value was $55,900. The trial court held that while interesting, this value is unreliable and need not be considered. The trial court is correct. The Minnesota Supreme Court has held that real estate tax appraisals are inexact value determinations. Harold Chevrolet, Inc., v. County of Hennepin, 526 N.W.2d 54, 59 (Minn. 1995); see also Thompson v. Thompson, 385 N.W.2d 55, 56 (Minn.App. 1986) (stating that property-tax valuation was unreliable and where there was no appraisal of the homestead, property-tax value was 91.5% of the actual value).
Moreover, appellant relies on the tax-appraised values for the wrong year. Here, Watson had a duty to take care of Willie J. Moore's estate, and she breached her fiduciary duty. In this situation, damages are calculated by determining the value of the property when Watson assumed her role as personal representative less the value of the property when she left this position . See Universal Leading Corp. v. Wirth Co., Inc., 392 N.W.2d 322, 324-25 (Minn.App. 1986) (holding that where majority partners breached their fiduciary duty, the diminution in value of the partnership property is determined by subtracting the outstanding mortgage and debts (the current value) from the original value of the property). Here, appellant relies on tax-appraised values for 1997 and 1998, which will inaccurately indicate the diminution in value of the property since Watson took over the property in 1995. The trial court was not clearly erroneous in relying on the $77,000 valuation of the property, and not the tax-appraised value, in determining the surcharge.
Appellant has to show that the trial court's decision was not reasonably supported by evidence in the record considered as a whole. Hubbard, 330 N.W.2d at 441. While the court improperly considered Sipkins's affidavit, Moore's opinion testimony about the value of the property and Watson's petition were competent evidence. Therefore, any related affidavit error was harmless. Given that appellant failed to provide any of its own competent evidence concerning what the value of the homestead should have been, the trial court's findings were not clearly erroneous.
II. Failure to Appeal from Judgment
Respondent argues that appellant's failure to appeal from the judgment bars its claim and, therefore, the outcome of this appeal is irrelevant. But this court has already resolved this issue in a special term order dated July 27, 1999, where it held that the order was appealable.