IN THE EST OF GEORGE VAN KULA SR DEC
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STATE OF MICHIGAN
COURT OF APPEALS
In re Estate of GEORGE VAN KULA, SR., Deceased.
DAVID VAN KULA and ROSEMARY JOHNS,
UNPUBLISHED
October 10, 2000
Petitioners-Appellees,
v
No. 211708
Macomb Probate Court
LC No.
93-133689-IE
ANNE MARGARET MRAUNAC,
Respondent-Appellant.
Before: O’Connell, P.J., and Kelly and Whitbeck, JJ.
PER CURIAM.
Respondent, Anne Margaret Mraunac, the independent personal representative of the decedent’s estate,
appeals as of right from the probate court order granting petitioners’ objections to the final account. The petitioners,
David Van Kula and Rosemary Johns, objected to deductions from their shares of decedent’s estate. We affirm.
Decedent had six children, including respondent and petitioners. In May 1993, decedent became ill and a
conservatorship was established. Respondent served as the conservator. The conservatorship lasted until
decedent’s death in November 1993. Thereafter, respondent filed a final account for the conservatorship which
reflected “Notes Receivable” in the amount of $27,067.75. There was no breakdown of this figure in the
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conservatorship’s final account. Petitioners signed waiver/consent forms to close the conservatorship. A separate
independent probate file was then opened. Respondent was named personal representative of decedent’s estate.
Decedent’s will provided that his estate be distributed equally between his children. There was no indication in the
will that decedent had loaned money to any of the children or that he expected repayment of any loans he might have
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made. In spite of this, respondent subtracted certain amounts from the shares due and owing to petitioners.
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Specifically, with regard to Rosemary Johns’ share of the estate, respondent deducted $6,422.10 for rent, $4,202.37
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On the form signed by petitioner Rosemary Johns the box indicating consent to the petition for the final account
was not checked. Only the box waiving notice of hearing on the final account was checked.
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A ledger was found among decedent’s belongings. According to respondent, she assumed that this ledger
reflected loans made to petitioners and the other siblings. The alleged loans stretched back to 1984.
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Respondent also subtracted “loan” amounts from Tom Van Kula and Jim Van Kula’s shares of the estate. However,
those deductions were not disputed below.
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Rosemary Johns lived with and cared for decedent for the last two years of his life. He did not charge her rent.
After decedent died, Johns lived in decedent’s condominium for approximately one year before it was sold. It is for
this period of time that respondent sought rent from Johns. Respondent admitted, however, that although she
broached the subject of rent with Johns, no agreement regarding rent was ever reached, no written agreement was
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for credit card purchases, and $899.01 for loans allegedly made by decedent to Johns. With regard to David Van
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Kula’s share of the estate, respondent deducted $14,204.50 for loans allegedly made by decedent to him. Petitioners
objected to almost all of the subtractions. A bench trial was held on petitioners’ objections and the trial court
determined that respondent did not meet her burden of proof for the subtractions, except with regard to the $3,200
debt owed by David Van Kula, which he acknowledged. Respondent then filed the instant appeal.
Respondent argues that because she presented evidence which established the challenged deductions, the
probate court erred in granting petitioners’ objections to the final account. We disagree.
A probate court’s findings of fact will not be set aside unless they are clearly erroneous. MCR 2.613(C); In
re Estes Estate, 207 Mich App 194, 208; 523 NW2d 863 (1994). This Court should give special deference to the
probate court’s findings when they are based upon its assessment of the witnesses’ credibility. In re Erickson
Estate, 202 Mich App 329, 331; 508 NW2d 181 (1993). A court’s findings of fact are clearly erroneous when, although
there is evidence to support them, the reviewing court on the entire evidence is left with the definite and firm
conviction that a mistake has been committed. Estes, supra, 207 Mich App at 208.
“It is a recognized doctrine that the distributive share due an heir from [a] personal estate may be applied by
the administrator in payment of a debt due the estate by the heir.” Marvin v Bowlby, 142 Mich 245, 248; 105 NW 751
(1905). See Mannausa v Mannausa, 370 Mich 180, 187; 121 NW2d 423 (1963). However, the fiduciary has the burden
of sustaining and establishing the correctness of his account. In re Jobe Estate, 165 Mich App 774, 776; 419 NW2d
65 (1988). As a contract, a prima facie case of a loan is established by showing: parties competent to contract; a
proper subject matter; legal consideration; mutuality of agreement; and, mutuality of obligation. Detroit Trust Co v
Struggles, 289 Mich 595, 599; 286 NW 844 (1939); Thomas v Leja, 187 Mich App 418, 422; 468 NW2d 58 (1991).
With regard to the alleged loans made by decedent to petitioners, the probate court found that respondent
presented no evidence of a written or oral contract. The probate court found that the only evidence of any loans was
a ledger kept by decedent listing amounts and testimony by respondent and brother George Van Kula, Jr. that
decedent made loans to petitioners and expected repayment. The probate court noted that this testimony was
disputed by petitioners. The probate court also noted that decedent did execute a promissory note on one occasion
(with regard to the $3,500 loan to David Van Kula) and, therefore, did understand how to execute an enforceable loan.
For those reasons, the probate court held that respondent did not meet her burden of proof to establish the
deduction for the alleged loans.
The record supports the probate court’s findings. It is clear from the testimony presented at the bench trial
that respondent did not meet her burden of proving that monies given to petitioners over the years were, in fact,
loans. Respondent claimed that the amounts reflected on the ledger sheet were loans. However, she admitted that
she had no personal knowledge of any loans made to petitioners and that she just assumed that the figures on the
ledger sheets were loans that decedent expected to be repaid. Petitioners disputed that the amounts reflected on the
ledger sheets were loans. They testified that, with the exception of the $3,500 loan to David Van Kula reflected in the
promissory note executed by decedent and David Van Kula, decedent had given them money over the years but had
never demanded or expected repayment.
Under these circumstances, the probate court did not clearly err in granting petitioners’ objections to the
deductions of the alleged loans from their share of the estate. The evidence in support of respondent’s claim that the
amounts were loans was weak and contradicted by petitioners. Respondent did not sustain her burden of proving
the debt. In re Jobe Estate, supra, 165 Mich App at 776.
ever entered into, and she never attempted to collect rent from Johns.
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David Va n Kula admitted to receiving a loan from decedent in the amount of $3,500. This loan was reflected in a
promissory note found among decedent’s possessions. No other promissory notes were discovered. David Van
Kula admitted that he still owed $3,200 on this loan when decedent died.
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We also find respondent’s equitable estoppel argument unpersuasive. The elements of equitable estoppel
are: “(1) a party, by representations, admissions, or silence intentionally or negligently induces another party to
believe facts, (2) the other party justifiably relies and acts on that belief, and (3) the other party is prejudiced if the
first party is allowed to deny the existence of those facts.” Conagra, Inc v Farmers Bank, 237 Mich App 109, 141;
602 NW2d 390 (1999). Here, even if petitioners’ action in failing to contest the conservatorship inventory was a
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silence regarding the debt which induced respondent to believe that petitioners acknowledged the debt, and even if
respondent justifiably relied on that silence, she has not shown that any prejudice resulted. As we have already
indicated, it was respondent’s burden to prove the debt. Whether she was required to prove the debts earlier (in the
conservatorship) or at the time of the objections, she did not have access to less information because of the delay.
Respondent has not shown that she was prejudiced by petitioners’ failure to deny the debt in the conservatorship
estate; therefore, her equitable estoppel argument must fail.
Next, with regard to the deduction from Johns’ share for rent, the probate court held that respondent did not
present sufficient evidence to establish a rental agreement between respondent and Johns. The evidence presented
at the bench trial supports this finding. Johns disputed the existence of the alleged rental agreement and claimed she
would have moved from decedent’s condominium if she was charged rent. Although respondent claimed that she
broached the subject of rent with Johns, she admitted that Johns never actually agreed to pay rent and that there was
no rental agreement, written or otherwise. Moreover, respondent admitted that she never received any rent from
Johns, she never attempted to collect rent from Johns, and initiated no proceedings to evict Johns from the
condominium. This evidence supports the probate court’s finding that no rental agreement existed.
The burden of proof rested with respondent and she was not able to produce evidence of a rental
agreement. “Mere discussions and negotiations cannot be a substitute for the formal requirements of a contract.”
Thomas, supra, 187 Mich App at 422. The probate court did not clearly err in finding that respondent did not
establish that Johns owed rent to the estate.
With regard to the deduction from Johns’ share of the estate for the credit card “debt,” respondent did not
sustain her burden of establishing that this was a debt of the estate. There is no dispute that the credit card debt was
covered by credit life insurance and that the amount outstanding on decedent’s Visa card was never charged to the
estate. Respondent, herself, admitted that the entire credit card balance was paid by credit life insurance and that the
estate was not responsible for and did not pay the debt. Therefore, there was no “debt” to be recovered from Johns.
In summary, the probate court did not clearly err in finding that respondent failed to meet the burden of
proof to establish the deductions from petitioners’ share of decedent’s estate.
Affirmed.
/s/ Peter D. O’Connell
/s/ Michael J. Kelly
/s/ William C. Whitbeck
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We note that the final account in the conservatorship only reflected “Notes Receivable” in the amount of $27,067.75
and that it did not contain a breakdown of this figure. There is no explanation for this figure in the final account, no
designation as to the source of the “Notes Receivable,” and no indication that the “Notes Receivable” pertain in any
way to petitioners. Under these circumstances, petitioners could not have been expected to object to this amount or
to understand that the amount reflected a debt allegedly owed by them.
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