The Estate of: Theodore B. Nistler, Decedent.

The Estate of: Theodore B. Nistler, Decedent A05-1956, Court of Appeals Unpublished, September 12, 2006.

 This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-1956

 

The Estate of:  Theodore B. Nistler, Decedent

 

Filed September 12, 2006

Affirmed in part, reversed in part and remanded; motion denied

Minge, Judge

 

Stearns County District Court

File No. P5-02-4784

 

 

Douglas A. Ruhland, Ruhland Law Office, Ltd., P.O. Box 439, 366 Church Street North, Eden Valley, MN 55329 (for appellant Daniel Nistler)

 

Tim Sime, Rinke-Noonan, P.O. Box 1497, 1015 West Germain Street, Suite 300, St. Cloud, MN 56302 (for respondent Stearns County)

 

            Considered and decided by Minge, Presiding Judge; Halbrooks, Judge; and Parker, Judge.*

U N P U B L I S H E D  O P I N I O N

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 County District Court for a decree of distribution.  On November 12, 2002, Stearns County 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. 

D E C I S I O N

            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.[1]  See Minn. Stat. § 524.3-803(b)(2) (2004).  The parties acknowledge that section 525.313 alters the time limitations for medical-assistance claims.  See Minn. 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.  See Minn. 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.[2] 

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.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] 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). 

[2] 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.