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ESTATE OF NISTLER, A05-1956 (Minn.App. 9-12-2006)
The Estate of: Theodore B. Nistler, Decedent.
No. A05-1956.
Minnesota Court of Appeals.
Filed September 12, 2006.
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
This opinion will be unpublished and may not be cited except as
provided by Minn. Stat. § 480A.08, subd. 3 (2004).
Appeal from the District Court, StearnsCounty, File No.
P5-02-4784.
Douglas A. Ruhland, Ruhland Law Office, Ltd., (for appellant
Daniel Nistler).
Tim Sime, Rinke-Noonan, (for respondent StearnsCounty).
Considered and decided by Minge, Presiding Judge; Halbrooks,
Judge; and Parker, Judge.[fn*]
[fn*] Retired judge of the Minnesota Court of Appeals, serving by
appointment pursuant to Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
MINGE, Judge.
Appellant challenges the district court's order and judgment
allowing the respondent-county's claim for medical assistance
against his father's estate. Because this court previously
determined that appellant did not timely appeal the district
court's order allowing the county's claim, that issue has already
been resolved adversely to appellant and is not properly before
us. Because appellant similarly did not timely appeal the
district court's unjust-enrichment ruling, this court lacks
jurisdiction to reach that issue. Because the administration of
the estate is incomplete, because no claims (other than the
county's medical assistance claim) have been made and some may
not be made until the administration of the estate progresses,
and because the district court has not properly ruled on such
matters, we do not decide issues regarding expenses of
administration and claims by or against the estate (except to
conclude that such claims are not time-barred until they can be
made) and we remand. We deny the county's motion to strike
portions of appellant's brief.
FACTS
Theodore Nistler died in 1994. At the time of his death,
Nistler owned and lived in the home that is the focus of this
litigation, and he was married to his second wife. Pursuant to an
antenuptial agreement, they had agreed to retain their rights to
their respective property and not inherit from each other, except
that the second wife was allowed a life estate in the home until
she was no longer able to occupy the premises. The second wife
continued to occupy the home until she moved to a nursing home in
2002.
Appellant Daniel Nistler, son of the decedent, claims that he
and the other Nistler children mistakenly believed that their
father had conveyed the home to them during his life and reserved
a life estate for himself and his second wife. With this
understanding, the Nistler children spent almost $17,000
preparing the home for sale, and in September 2002, they agreed
to sell the home for $89,000. Appellant claims that the children
did not know that Nistler had actually left them the property in
his will. After it was determined that the property had not been
conveyed to them, the sale was closed with $2,700 escrowed to
cover the cost of obtaining a decree of descent. The remainder of
the sale proceeds was distributed as follows: to those who paid
for improvements, for the costs of the sale, and to the five
Nistler children equally as heirs.
On October 2, 2002, appellant filed a petition in Stearns
CountyDistrict Court for a decree of distribution. On November
12, 2002, StearnsCounty filed a medical-assistance claim for
$79,013.12. Subsequently, the county objected to the petition for
determination of descent and the estate objected to the county's
claim on the basis that it was time-barred by the statute of
limitations and, if not so barred, should be reduced due to
unjust enrichment.
On July 23, 2003, the district court rejected the estate's
objection to the county's claim and rejected the estate's
unjust-enrichment offset. On December 17, 2003, the district
court ordered payment of the county's claim. On March 15, 2005,
the county filed a petition for a second order directing payment.
On August 4, 2005, the district court administrator acted on the
December 17, 2003 order and erroneously entered judgment against
Daniel Nistler personally for the county's claim. On August 22,
2005, the district court denied the county's request for a second
order directing payment of the claim and also denied the estate's
request for a determination of descent.
Nistler's estate filed this appeal. In a special-term action,
this court dismissed the estate's challenge to the district
court's allowance of the county's claim on the basis that the
challenge was filed after the time for appeal had expired. The
special-term order granted the district court leave to correct
any error related to the judgment against Daniel Nistler
personally. The district court corrected the judgment to indicate
that it was against the Estate of Theodore B. Nistler.
DECISION
This controversy is triggered by an apparently unexpected
medical-assistance claim in a determination-of-descent
proceeding. Such a proceeding is conducted to determine the right
to inherit property when three years or more have passed since a
decedent died and no will has been probated. Minn. Stat. § 525.31
(2004). If the facts in the petition requesting such a
determination are proved, the district court enters a decree of
descent, assigning the property that is the subject of the
petition either according to the decedent's will or according to
the laws of intestate succession. Minn. Stat. § 525.312 (2004).
After filing a petition for a determination of descent, the
petitioner is required to apply to the county where the petition
is pending for a "clearance of medical assistance claims." Minn.
Stat. § 525.313(b) (2004). If there is a medical-assistance
claim, "the claim shall be a claim against the decedent's
property which is the subject of the petition" and "shall be an
unbarred and undischarged claim and shall be payable, in whole or
in part, from the decedent's property which is the subject of the
petition, including the net sale proceeds from any sale of
property free and clear of the claim under this section." Minn.
Stat. § 525.313(d)(1), (2) (2004). Filing the clearance for
medical-assistance claims in the decree-of-descent proceeding
constitutes presentation of such a claim, and the county agency
that issued the certificate is the claimant. Minn. Stat. §
525.313(d)(1).
I.
The first issue is whether the county's claim is time-barred.
The general rule in this state is that a claim against an estate
is barred unless brought within four months after the claim
arose.[fn1]SeeMinn. Stat. § 524.3-803(b)(2) (2004). The
parties acknowledge that section 525.313 alters the time
limitations for medical-assistance claims. SeeMinn. Stat. §
525.313 (providing that medical-assistance claims in
determination-of-descent proceedings are "unbarred," and that
decree of descent cannot issue until medical-assistance claim is
paid or otherwise resolved). However, section 525.313 was not
enacted until 2000. See 2000 Minn. Laws ch. 400, § 8, at
712-14. The session law enacting the new section 525.313 did not
provide an effective date; therefore, it became effective August
1, 2000. SeeMinn. Stat. § 645.02 (2004).
In February 2003, Nistler's estate objected to the county's
claim on the basis that it was time-barred, that the statute
extending the time to file a claim was not in effect at the time
of Nistler's death, that the statute was not retroactive, that
the heirs inherited their interest in the property at the time of
death, that they had a vested right in the property, and that
this vested right could not be taken. In its July 23, 2003 order,
the district court overruled the estate's objection to the claim.
On December 17, 2003, the district court ordered that the estate
pay the claim. Although the district court may not have
explicitly addressed the issue of the retroactive effect of Minn.
Stat. § 525.313 or certain other arguments now being pressed by
appellant, the timeliness and merits of the county's claims were
squarely before the district court and the claim was allowed.
In this court's order of November 15, 2005, we determined that
"[t]he part of the appeal from the July 23, 2003 and December 17,
2003 orders allowing respondent's medical-assistance claim is
dismissed as untimely." See Minn. R. Civ. App. P. 104.01, subd.
1 (providing that appeal from appealable order must be taken
within 60 days after any party serves written notice of its
filing); Minn. Stat. § 525.712 (2004) (providing that appeal must
be taken within six months after filing of order, judgment, or
decree under probate statute). As a result of our special-term
action, this court has decided that appellant cannot challenge
the county's claim. This includes appellant's arguments that
Minn. Stat. § 525.313 cannot be applied retroactively and other
theories asserted in this appeal. That earlier order is part of
the law of this case, and this court does not review its prior
rulings. See In re Estate of Sangren, 504 N.W.2d 786, 788 n. 1
(Minn.App. 1993), review denied (Minn. Oct. 28, 1993).
II.
The second issue is what portion of the proceeds from the sale
of the property can properly be used to pay the
medical-assistance claim. Appellant argues three bases for
limiting the county's claim. First, appellant argues that under
Minn. Stat. § 525.313(d)(2), an estate can only be required to
pay a claim from the net proceeds of the sale of property and
that the net proceeds would not include either the $2,700 held in
escrow to pay attorney fees or the nearly $17,000 the Nistlers
paid to prepare the property for sale. Second, appellant argues
that under Minn. Stat. § 524.3-807 (2004), an order requiring an
estate to pay a claim must be limited to the funds available,
which at this point consist only of the $2,700 held in escrow for
the payment of attorney fees. Finally, appellant argues that
based on Minn. Stat. § 524.3-805(a)(1), (4) (2004), the attorney
fees that Nistler's heirs have incurred relating to this
determination-of-descent proceeding are an expense of
administration and should be paid before the medical-assistance
claim.
Because there has been no action attempting to collect on the
judgment against the estate or to recover the proceeds from the
sale paid to Nistler's heirs and because there has been no
application for attorney fees or expense of administration, it is
premature to consider appellant's arguments on the funds
available to pay the county's claim. Furthermore, this court only
reviews issues both presented to and considered by the district
court. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988). There
is no evidence that the district court has considered the
estate's claim regarding the priority of attorney fees. Although
the estate presented its argument to the district court that
recovery should be limited to the funds now available, the
district court did not address the argument. Except as discussed
in our consideration of the third issue, the district court has
not directly ruled on appellant's three arguments as to the funds
available to pay the county's claim, we do not decide these
issues here and we remand.[fn2]
III.
The third issue is the status of the expenditure of almost
$17,000 for repairs to decedent's home. Appellant previously
argued that if the full county claim were to be allowed, the
county would be unjustly enriched because of these repairs. The
district court rejected this unjust-enrichment argument in its
July 23, 2003 decision. The decision on unjust enrichment was not
timely appealed and, similar to the dispute over the county's
claim, the unjust-enrichment defense cannot be raised in this
appeal.
We note that as part of the sale of decedent's home, the
Nistler heirs were reimbursed for their payment of repairs and
that any "claim" they might have related to this payment would
arise only if they are ordered to pay these funds back to the
estate or directly to the county. No such motion has been made or
order been entered. Until such an order is entered, the Nistler
heirs have no claim against the estate. In rejecting the
unjust-enrichment defense in its July 23, 2003 order, the
district court commented that a possible claim of the Nistler
heirs for the almost $17,000 in repairs would be barred by the
limitation period in Minn. Stat. § 525.3-803 and would not be a
cost of administration. However, since no such claim was before
the district court, its comments were neither appealable under
Minn. Stat. § 525.71, nor do they foreclose consideration of the
classification or payment of such costs if actually raised.
Further, to conclude that a claim is time-barred before it exists
is illogical. For this reason, we conclude that the heirs' claim
for reimbursement is not time-barred. With respect to the
priority of claims, we note that the repairs were made to
facilitate the sale of the property of the estate. Such repairs
appear to be an administrative expense if they were reasonable
and enhanced the value of the property. As a part of the remand,
an appropriate proceeding to settle the Nistler estate should be
undertaken and issues regarding expenses and payment of claims
should be decided.
IV.
The fourth issue is whether the district court erred in
entering judgment against appellant rather than against Nistler's
estate. Pursuant to this court's granting leave to the district
court to correct its error, the district court altered the
judgment in November 2005 to indicate that it is against
Nistler's estate. Appellant concedes that this issue is moot, and
we do not address it. The county requests that we strike the
portions of appellant's brief related to this moot argument and
to the timing of the county's claim. Because these sections do
not affect our decision, we decline to strike them. See Berge v.
Comm'r of Pub. Safety, 588 N.W.2d 177, 180 (Minn.App. 1999)
(finding it unnecessary to address merits of motion to strike
portions of brief that were not relied on in reaching decision).
Affirmed in part, reversed in part and remanded; motion
denied.
[fn1] Minn. Stat. § 256B.15, subd. 1a (2004), provides that
statutes of limitations do not apply to medical-assistance
claims. This court has held that the time limit provided in
section 524.3-803 is not affected by section 256B.15. In re
Estate of Myhre, 442 N.W.2d 356, 358 (Minn.App. 1989).
[fn2] We recognize that our determination extends what is already
a protracted controversy. However, without matters having been
raised in or addressed by the district court, we do not have full
briefing or consideration of issues. The question of what are
expenses of administration and their relationship to a
medical-assistance claim is addressed by Minn. Stat. § 524.3-805.
Presumably the costs of selling the home, including clearing
title, are part of the costs of administration. However, the
reasonableness of such costs, their allowance, and any priority
questions should be presented to and ruled on by the district
court in the course of administering the Nistler estate. As for
the liability of heirs and the interests of the purchaser of the
residence, they are not parties and there is no indication the
purchaser is even aware of the proceeding. We expect that on
remand all remaining issues can be considered in one proceeding.