In re Conservatorship of Thomas Kimel.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-35

In re

Conservatorship of Thomas Kimel.

Filed December 9, 2003

Reversed and remanded

Lansing, Judge

Hennepin County District Court

File No. P6001276

Erick G. Kaardal, Mohrman & Kaardal, P.A., 4100 Multifoods Tower, 333 South Sixth Street, Minneapolis, MN  55402 (for appellant Louise Bouta)

Stephen C. Fiebiger, Stephen C. Fiebiger & Associates, Chartered, Suite 106, 2500 West County Road 42, Burnsville, MN  55337 (for respondent Thomas J. Kimel)

Mary Ferris Jensen, 270 Grain Exchange North, 301 Fourth Avenue South, Minneapolis, MN  55415-1032 (for respondent Karen Dove)

            Considered and decided by Schumacher, Presiding Judge, Lansing, Judge, and Poritsky, Judge.*

U N P U B L I S H E D   O P I N I O N

LANSING, Judge

            In an order on an account in a conservatorship, the district court surcharged conservator Louise Bouta and her surety for breach of a fiduciary duty in Bouta's management of Thomas Kimel's estate.  Bouta appeals on three grounds:  that inadequate notice of the nature of the alleged breach and potential personal liability violated her procedural-due-process rights, that the district court's findings of breach are factually unsupported, and that she is statutorily immune from personal liability for her inability to prevent the city from demolishing Kimel's home.  Because Bouta did not receive notice that her alleged breach of fiduciary duty and her personal liability for the breach would be adjudicated at the hearing on the account, we reverse and remand for rehearing.

F A C T S

The district court appointed Louise Bouta conservator for Thomas Kimel's estate in December 2000.  Kimel had been judicially committed to the Minnesota Security Hospital as mentally ill and dangerous in June 2000.  He had a limited estate consisting of a boarded-up house in substantial disrepair, personal possessions estimated at $300, and social security income.  Bouta, the seventy-six-year-old mother of a handicapped child and an advocate for the mentally impaired, learned about Kimel from a friend and petitioned pro se in an in forma pauperis proceeding to serve as his conservator. 

The district court initially declined to appoint Bouta because of questions of suitability.  Bouta is the executive director of a citizen's group that opposes the use of all neuroleptic medicines and claims to be "the only authentic voice" of people who are labeled "mentally ill."  But because no other person was available to serve as Kimel's conservator, the court granted Bouta's petition.  

            Bouta strongly believed that Kimel should be allowed to return to his home and expended a significant amount of Kimel's limited finances and a great amount of her personal time in an attempt to restore the home to habitability.  The home had sustained considerable damage when police forcibly removed Kimel from it prior to his commitment.  Despite Bouta's efforts, characterized by the court as "well intentioned" but "completely misguided," the condition of the home did not significantly improve, and the city razed it in 2001.

            A state ombudsman filed a petition to remove Bouta as conservator of Kimel's estate, alleging, in part, that Bouta mismanaged Kimel's real estate because she failed to try to sell the home before it was demolished.  Bouta then resigned as conservator of Kimel's estate.

The district court appointed a new conservator and issued an order for examination of Bouta's accounts on Kimel's estate.  Bouta received a regular-form notice of the order from the court and a list of concerns from the attorney for the successor conservator.  Bouta appeared at the hearing but was not represented by counsel.  Following the October 2002 hearing on the account, the district court concluded that Bouta's handling of issues relating to Kimel's home breached her fiduciary duty to Kimel.  The court, in the order on the account, surcharged Bouta and her surety $20,087.44.  Bouta now appeals from the district court order.

D E C I S I O N

            Bouta asserts that her procedural-due-process rights were violated because she did not receive adequate notice of allegations that she had breached a fiduciary duty to Kimel or notice that the issue of breach and personal liability would be adjudicated in the hearing on the account. 

The notice requirements for a hearing on a conservator's account, set forth in Minn. Stat. § 525.581, provide that "the [district] court … shall, fix the time and place for the hearing on [a conservator's] account, notice of which shall be given to the ward or conservatee and to other persons as the court may direct."  Minn. Stat. § 525.581 (2002).  The statute does not address what specific information should be contained in the notice of hearing.  Cf. Minn. Stat. § 525.55 (2002) (stating specifically that notice on a hearing to appoint a conservator must contain information on the nature, purpose, and legal effects of the conservatorship proceedings on the proposed conservatee).

Bouta received two written notices of the October 2002 hearing on her accounts.  Initially, the court mailed Bouta an order for examination of her first annual and final accounts.  This order provided the time and place of the hearing.  Additionally, the successor conservator's attorney sent a copy of the order, advising Bouta in a cover letter that she intended to file a list of concerns to be raised at the hearing, and that a copy of this list would be mailed to her.  The list of concerns that Bouta received stated that she "mismanaged the conservatee's real estate," and that the court "should review what portion of the fees and expenses of the conservatorship are attributable to substandard and/or ill-advised efforts on the part of the conservator."  The list of concerns concludes by stating "[i]t should be noted, among other things, that on 8/27/01 Ms. Bouta paid herself $1,374.97 from the conservatorship for ‘hours fixing house.'"

Aside from establishing the time and place for the hearing, the list of concerns indicates that Bouta's expenditures, as Kimel's conservator, should be closely reviewed at the hearing on her accounts.  While this notice may have alerted Bouta that her accounts might not be allowed, it did not inform her that she could be personally held liable if the court determined that she mismanaged Kimel's estate.  See Minn. Stat. § 525.582(b) (2002) (stating that a conservator may be surcharged if misconduct is determined after a hearing on account).  Bouta acted pro se throughout the proceedings and was relatively inexperienced in conservatorship proceedings.

In its order on the account, the district court stated that it had orally warned Bouta that several expenditures listed on her accounts appeared to be improper and that she could be surcharged if she could not adequately explain the expenditures.  The statutory provisions for adjudication on the account permit surcharge on a determination of misconduct after hearing "on notice as the court may require to the guardian, conservator and any surety . . . ."  Minn. Stat. § 525.582(b).  Neither section 581 nor section 582 specifies whether oral or written notice is required for a hearing on a conservator's accounts or whether it is oral or written notice that is required before a determination of mismanagement or misconduct.

It is well settled in Minnesota that "when a statute requires notice to be given in judicial proceedings, it must be in writing unless otherwise provided."  Swanson v. Swanson, 352 N.W.2d 508, 510 (Minn. App. 1984) (citing Singer v. Mandt, 211 Minn. 50, 53, 299 N.W. 897 898 (1941)).  Due process requires notice "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity" to be heard.  Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 315, 70 S. Ct. 652, 657 (1950).  The notice must convey the required information and must afford a reasonable time for those interested to prepare adequately and to make their appearance.  Id.; Bliek v. Palmer, 102 F.3d 1472, 1475 (8th Cir. 1997) (stating notice must apprise affected individual of, and permit adequate preparation for, impending hearing).  The means employed to provide notice must be reasonably certain to inform those affected.  Mullane, 339 U.S. at 315, 70 S. Ct. at 657.

Written notice comports with due process, definitely and unambiguously establishes that notice was given, provides a uniform system, and facilitates judicial review.  The district court's oral warnings to Bouta were beneficial in directing her attention to the necessity of remedial action, but did not formally advise her that her personal liability for breach of fiduciary duty would be adjudicated in the hearing on the account.  The lack of written notice to Bouta had a strong potential for confusion because the 2002 version of section 582 did not indicate whether a hearing on mismanagement or misconduct would be separate from, or part of, a hearing on the account.  See Minn. Stat. § 525.582(b) (allowing entry of judgment on determination of mismanagement or misconduct after notice and hearing); cf. Minn. Stat. § 524.5-420 (Supp. 2003) (legislative amendment clarifying that an order issued after a hearing on a conservator's accounts adjudicates all unsettled liabilities relating to the conservatorship); Minn. Stat. § 524.5-430 (Supp. 2003) (stating that "a question of liability between the estate and the conservator personally may be determined in a proceeding for accounting, surcharge, or indemnification, or in another appropriate proceeding").

On the facts and circumstances of this case, Bouta was not properly notified that she could be held personally liable for misconduct or mismanagement of Kimel's estate.  Bouta has now obtained counsel to represent her in any further proceedings relating to the conservatorship and her personal liability for surcharge.  We reverse the district court order surcharging Bouta and her surety and remand for rehearing on Bouta's accounts.  Because we are remanding for rehearing we do not address Bouta's substantive arguments on the propriety of the surcharge.

            Reversed and remanded.

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