Opinion
No. C8-02-644.
Filed December 24, 2002
Appeal from the Rice County District Court, File No. P200001380.
Gary M. Peterson, (for appellant Kathryn McFadden Hopkins)
R. Glenn Nord, (for respondents Margory M. Boss and Carol M. Cherpelis)
Considered and decided by Anderson, Presiding Judge, Stoneburner, Judge, and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
In this probate matter, appellant challenges the district court's (1) authority to reduce appellant's inheritance by the value of decedent's coin collection, (2) finding that her share of the estate includes the coin collection's value, and (3) valuation of the coin collection. We affirm the district court's inclusion of the coin collection in appellant's share of the estate and remand the valuation determination to the district court for further findings not inconsistent with this opinion.
FACTS
Appellant Kathryn McFadden Hopkins and respondents Carol Cherpelis and Margory M. Boss are sisters. Their father, William McFadden, died intestate on September 18, 2000, at the age of 87. Respondents are the co-personal representatives of their father's estate. The first inventory and appraisal valued McFadden's estate at $97,020 without reference to a coin collection. In an addendum to the inventory, respondents claimed that, because their father's lifetime coin collection was in appellant's possession, the final appraisal could not be completed until the value of the "missing assets" was determined.
In July 2001, upon motion by respondents, the district court ordered appellant to deliver the coin collection to respondents. When appellant did not deliver the coin collection, the district court ordered appellant to show cause why she should not deliver custody of the coin collection along with the inventory to respondents. Appellant testified in an affidavit that McFadden transferred the coin collection to her in 1978 and, after obtaining his permission, she sold the coin collection in 1986.
On December 17, 2001, at the hearing on the order to show cause, Cherpelis and appellant were the only witnesses. Appellant testified via telephone from her home in California. Their testimony conflicted greatly as to the value of the coin collection and whether McFadden had given the coin collection to appellant in 1986.
According to Cherpelis, the coin collection contained valuable coins that her father had painstakingly collected over the years. Cherpelis testified that McFadden paid close attention to minting and rarities. Cherpelis also testified that her father was sad and angry that appellant had "muscled [the coin collection] away" from him. According to Cherpelis, McFadden said the coin collection would be worth $30,000-$40,000 one day and that appellant would return it so that the sisters could share it equally upon his death.
Appellant testified that McFadden gave her the coin collection in 1979. She brought the coin collection to her home, inventoried it, and kept it in a box in her closet. Appellant stated that in 1986 she telephoned her father to ask what he wanted her to do with the coin collection. She testified that McFadden indicated it was a gift and she should cash it in. Appellant then took the coin collection to a coin dealer and sold it at face value for $570.
The district court concluded that appellant was the "agent, bailee, and fiduciary [of McFadden] for the purpose of safeguarding the [coin] collection," and that she was therefore responsible for it. The district court valued the coin collection at $30,000 and awarded it to appellant, thereby reducing her equal share of the estate by that amount. This appeal followed.
DECISION I.
Appellant argues that the district court has no authority to reduce her share of McFadden's estate absent a specific request for such relief from respondents followed by an evidentiary hearing. Because appellant's arguments regarding the need for a "full evidentiary hearing" are closely tied to the issue of valuation, we will address them together after first addressing the district court's authority in probate matters and its factual findings. See Section III.
The district court is vested with plenary and exclusive original jurisdiction over every matter relating to the complete administration of a deceased person's estate. Minn. Const. art. VI, § 11; see also Minn. Stat. § 524.1-302(a) (2000) ("the court has jurisdiction over all subject matter relating to estates of decedents"); In re Estate of Sangren, 504 N.W.2d 786, 789 (Minn.App. 1993) ("[t]he probate court has jurisdiction over all problems that arise in resolving an estate except those issues excluded by statute"), review denied (Minn. Oct. 28, 1993). This jurisdiction includes both settlement and determination of the person to whom property passes by will or descends by statutory inheritance. Minn. Const. art. VI, § 11. Because it is within the jurisdiction of the district court to determine and distribute the assets of an estate, the district court's authority to gather McFadden's assets and make distributions to his heirs is well settled.
II.
Appellant next argues that the district court's finding that she was the "agent, bailee, and fiduciary of [McFadden] for the purpose of safeguarding the [coin] collection" was not supported by the evidence. The district court made this finding based on credibility determinations after hearing conflicting testimony of appellant and Cherpelis. This court does not reconcile conflicting evidence, but gives great deference to the district court's factual findings. Porch v. Gen. Motors Acceptance Corp., 642 N.W.2d 473, 477 (Minn.App. 2002), review denied (Minn. June 26, 2002). Factual findings "shall not be set aside unless clearly erroneous." Minn.R.Civ.P. 52.01. In applying Minn.R.Civ.P. 52.01, "we view the record in the light most favorable to the judgment of the district court." Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999). This court will not reverse the district court's judgment merely because we view the evidence differently. Id. The district court's factual findings must be clearly erroneous or "manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole" to warrant reversal. Id. (quotation omitted). Findings of fact are clearly erroneous if this court is left with a "definite and firm conviction that a mistake has been made." Prahl v. Prahl, 627 N.W.2d 698, 702 (Minn.App. 2001) (quotation omitted). Moreover, we give great deference to the district court's determination of witness credibility because
it has the advantage of hearing the testimony, assessing relative credibility of witnesses and acquiring a thorough understanding of the circumstances unique to the matter before it.
Hasnudeen v. Onan Corp., 552 N.W.2d 555, 557 (Minn. 1996). See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating appellate courts defer to district court credibility determinations).
Appellant challenges the finding that she was an "agent," "bailee," or "fiduciary" of McFadden. Whether an agency relationship exists is a question of fact. Vacura v. Haar's Equip., Inc., 364 N.W.2d 387, 391 (Minn. 1985). An agency relationship is established when a person or principal consents to another acting on behalf of and under the control of the principal. Frank v. Winter, 528 N.W.2d 910, 914 (Minn.App. 1995), review denied (Minn. Apr. 27, 1995). When the agent has specific orders to perform a task, actual authority exists. Winkel v. Eden Rehab. Treatment Facility, Inc., 433 N.W.2d 135, 138 (Minn.App. 1988). Apparent authority exists when the principal holds the agent out as having authority, or when the principal knowingly permits the agent to act on its behalf. Id. at 139. Bailment is
the contract or legal relation which is constituted by the delivery of goods without a transference of ownership, on an agreement, expressed or implied, that they be returned or accounted for.
Dennis v. Coleman's Parking Greasing Stations, Inc., 211 Minn. 597, 600-01, 2 N.W.2d 33, 34-35 (1942) (quotation omitted); see also Wallinga v. Johnson, 269 Minn. 436, 438, 131 N.W.2d 216, 218 (1964); Nat'l Fire Ins. Co. v. Commodore Hotel, Inc., 259 Minn. 349, 351, 107 N.W.2d 708, 709 (1961). The existence of a fiduciary relationship is also a question of fact. May v. First Nat'l Bank, 427 N.W.2d 285, 289 (Minn.App. 1988), review denied (Minn. Oct. 26, 1988). The supreme court stated that
[a] fiduciary relationship exists "when confidence is reposed on one side and there is resulting superiority and influence on the other; and the relation and duties involved in it need not be legal, but may be moral, social, domestic or merely personal."
Toombs v. Daniels, 361 N.W.2d 801, 809 (Minn. 1985) (quotations omitted).
The district court heard conflicting testimony about the circumstances of the coin collection transfer. Appellant testified that she received the coin collection in 1979, but was unsure of McFadden's reason for transferring it to her. Appellant claims that, when she called McFadden in 1986 to verify his intentions in transferring the collection to her, McFadden told her she could cash it in. In contrast, according to Cherpelis, McFadden told her that appellant had taken the coins out of fear that her father's new wife would get them. In assessing witness credibility, the district court considered an August 14, 1979, letter appellant wrote to her father about the coin collection in which she falsely claimed that she had taken the collection to a safe deposit box. In this letter appellant also wrote, "we want you to know that we consider this money yours; if you ever want it just say the word."
Based on our careful review of the evidence, we conclude that the district court did not clearly err when it found that appellant, safeguarding McFadden's coin collection, was acting in a fiduciary capacity as agent and bailee. The district court did not specifically find the appellant to be in possession of the collection. Rather, the district court found that, since appellant had not "turned over the subject collection, or the proceeds thereof" to the representatives of the estate, "she is liable and responsible for the same." The weight of the evidence supports this determination. The district court chose to believe the testimony of Cherpelis over appellant. The district court's conclusions and the credibility determinations underlying those conclusions were not clearly erroneous. We, therefore, affirm the district court's determination that appellant is liable for the coin collection and that her equal share of the estate includes the coin collection's value.
III.
Appellant next argues that the district court's valuation of the coin collection is not supported by credible evidence. This court will reverse the district court's valuation of property only if it is clearly erroneous. Spinnaker Software Corp. v. Nicholson, 495 N.W.2d 441, 445 (Minn.App. 1993), review denied (Minn. Mar. 30, 1993); Lammi v. Lammi, 348 N.W.2d 372, 374 (Minn.App. 1984). We will not find error in the district court's valuation of the coin collection if it is supported by substantial evidence in the record, within a reasonable range of values. Thedens v. Thedens, 400 N.W.2d 821, 824 (Minn.App. 1987).
The district court valued the coin collection at $30,000 "based upon the comments of [McFadden]." Both appellant and Cherpelis testified that the collection consisted of circulated coins that had never been professionally valued. They also agreed that McFadden knew the coin collection's value based on his extensive knowledge gained from coin collecting books and magazines. Cherpelis testified that her father estimated that his coin collection would be worth $30,000 to $40,000 "one day." She also identified coins that she believed were in the collection and their value based on McFadden's assessment. The district court weighed this testimony against appellant's statements that she inventoried the collection in 1979 and its face value was approximately $570. Appellant offered a bank statement showing that she deposited $574.10 in her account in 1986, but she did not recall if the deposit resulted from cashing in the collection.
Based on our careful review of the record, we conclude that the district court's valuation is not supported by substantial evidence. The record in its current state is distinguishable from that of Schmalz v. Maxwell, 354 N.W.2d 549 (Minn.App. 1984), in which this court ruled that substantial evidence supporting the assets' value existed in the form of an assessment by a "disinterested person who was familiar with the item * * * and because of her own antique business, had knowledge of their value." Id. at 552. In Schmalz, decedent's sister and niece sold a Steinway piano for less than its true value. Id. at 551. Decedent's close friend testified that the piano was worth $4,500 based on the third party's knowledgeable valuation. Id. The district court in that case found the third party's valuation credible and added the amount to the estate's inventory. Id. This court affirmed, stating that "[b]ased on the record there is ample evidence to support the court's award." Id. at 556. In contrast, here, there is no evidence in the record that McFadden's alleged estimation that the coin collection would be worth $30,000 to $40,000 "one day" represents the coin collection's present value.
Appellant argues persuasively that, because the hearing was to show cause why the coin collection should not be produced for inventory and appraisal, she was not prepared to present evidence relating to the present value of the coin collection. A hearing or any other means deemed appropriate by the district court to enhance the record will facilitate the district court's determination of the value of the coin collection based on substantial evidence. We, therefore, remand the valuation determination to the district court with instructions to reopen the record on this issue and make further findings not inconsistent with this opinion.