may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re: Estate of Leonard A. Evanoff, Sr., Deceased.
In Re: LAE Properties, Inc.
In Re: Evanoff Properties, Inc.
Filed October 27, 1998
Dakota County District Court
File No. P2-92-8163
Robert A. Manson, 620 Civic Heights Drive, Suite 106, Circle Pines, MN 55014 (attorney for appellant David Evanoff)
Harry Eliason, 136A Ululani Street, Hilo, HI 96720 (attorney for Estate)
Raymond D. Rossini, 5353 Gamble Drive, Suite 150, Minneapolis, MN 55416 (attorney for respondent Kathleen Middlecamp)
James Michael Crist, 5200 Willson Road, Suite 314, Edina, MN 55424 (attorney for respondent Leonard Evanoff, Jr.)
Christine Evanoff, 2387 Shadowcreek Trail, Woodbury, MN 55125 (pro se respondent)
Penelope Brown, 1429 Windemere, Minneapolis, MN 55421 (pro se respondent)
Jeanne Chilton, 218 South Street West, South St. Paul, MN 55075 (pro se respondent)
Philip Evanoff, 206 South Street West, South St. Paul, MN 55075 (pro se respondent)
Considered and decided by Huspeni, Presiding Judge, Crippen, Judge, and Foley, Judge.*
Because the district court's findings are supported by the record and because its findings support its conclusions, we affirm.
At the time of his death, decedent Leonard A. Evanoff, Sr., owned stock in two corporations: L.A.E. Properties, Inc. (LAE) and Evanoff Properties, Inc. (EPI), two duplexes and cash accounts. The principal asset of LAE was an apartment complex known as Hillcrest. EPI owned two apartment buildings, referred to as "940" and "2008," and also owned undeveloped real estate. The decedent gave shares in one or both of the corporations to his children and grandchildren prior to his death. Decedent's will attempted to distribute his property to his children. The figures used in the will, however, did not correspond to the ownership of LAE and EPI believed to exist at the time of decedent's death.
Disputes arose among the children over control of the corporations, entitlement to stock, and distribution under decedent's will. The children and the estate representative mediated their corporate and estate disputes, but sought the district court's help to interpret the mediated settlement agreement entered into by all of the children. Under the settlement agreement, respondent Leonard Evanoff, Jr., became the owner of LAE, and the owner of several vacant lots to be deeded to him by EPI, in return he gave up all claim to EPI and agreed to pay $381,000 of cash receipts from LAE to the others who gave up their claims to LAE. Appellant David Evanoff agreed to receive a duplex granted to him by the will, negotiated the right to receive "940" in a tax-free spin-off by creating an EPI subsidiary and relinquished all his rights to EPI. The remaining five children -- respondents Kathleen Middlecamp, Penelope Brown, Jeanne Chilton, Christine Evanoff, and Phillip Evanoff (The Five) -- became the owners of EPI and "2008." The Five arrived at a separate agreement, providing for ownership of EPI and buy-outs. Under the settlement agreement, The Five had received the right to any estate tax refunds.
This court affirmed the district court's interpretation of the parties' settlement agreement, except for the calculation of the parties' share of estate expenses. In re Estate of Evanoff, No. C0-95-794 (Minn. App. Dec. 19, 1995), review denied (Minn. Feb. 27, 1996) (Evanoff I). While we approved the method adopted by the district court (assessment according to the proportion of property each party would have received under the will), we remanded for the district court to consider Kathleen Middlecamp's then pending motion to amend the percentages of estate expenses assigned to each party.
On remand, the district court amended its findings and corrected the percentages according to Middlecamp's motion. The amended percentages were affirmed in a second appeal. In re Estate of Evanoff, No. C0-96-2247 (Minn. App. June 17, 1997) (Evanoff II) (holding that the district court did not consider new evidence when it amended the parties' percentages and the district court's amended percentages were not clearly erroneous).
Appellant now challenges the district court's January 1998 orders escrowing $171,281.25 of appellant's distribution to pay his 43.5% share of estate expenses and ordering appellant to pay attorney fees of $20,986.16 incurred in connection with the 940 spin-off.
1. Appellant argues that the escrowed amount violates Minn. Stat. § 524.3-1004 (Supp. 1997), which states:
No distributee shall be liable to claimants for amounts in excess of the value of the distributee's distribution as of the time of distribution.
Appellant argued to the district court that his liability for expenses was capped at $66,000, the value of the duplex, the only estate asset he received under the will. The district court rejected appellant's argument, finding his $66,000 figure "fail[ed] to state the total assets [he] received" and undervalued the stock involved.
Credibility determinations are left to trial courts. Minn. R. Civ. P. 52.01. We will not disturb the court's findings, which effectively rejected appellant's affidavit testimony as not credible, unless appellant establishes that the findings are clearly erroneous. See id. Appellant also criticizes the district court for simply denying his motion on the basis that it was not supported by credible evidence, and argues that the district court was required to rule on the validity of his legal argument. However, the district court did rule on the validity of appellant's legal argument when it denied appellant's motion and ruled that he had not provided evidence that section 524.3-1004 was violated by the escrow order.
Appellant also argues that the district court's findings erroneously relied on the value of the 940 building, appraised at $415,000, by including this corporate asset to determine that appellant undervalued what he had received. Appellant cites foreign jurisdictions and relies on the general rule that corporate assets are not part of a personal estate. See, e.g., Diana v. Bentsen, 677 So. 2d 1374, 1376 (Fla. App. 1996) (affairs of corporation substantially owned by decedent not administered as assets of the estate). The general rule does not apply here, however.
A probate court has jurisdiction over all issues that arise when resolving an estate, except those issues specifically excluded by statute. In re Estate of Sangren, 504 N.W.2d 786, 789 (Minn. App. 1993) (distinguishing pre-Uniform Probate Code cases that limited probate jurisdiction), review denied (Minn. Oct. 28, 1993). In its order interpreting the settlement agreement, the district court found that the parties specifically agreed to submit their corporate disputes to the jurisdiction of the probate court, "waiving all * * * procedural requirements under Minn. Stat. [chapter] 302A [Minnesota business corporation act]." This agreement to broaden the probate court's jurisdiction to include the parties' corporate dispute is allowed by statute.
[C]ompetent successors may agree among themselves to alter the interests, shares, or amounts to which they are entitled under the will of the decedent, or under the laws of intestacy, in any way that they provide in a written contract executed by all who are affected by its provisions.
Minn. Stat. § 524.3-912 (1996). Once the parties agreed to submit their corporate disputes to the probate court's jurisdiction, the probate court had power "to take all * * * action necessary and proper to administer justice in the matters that c[a]me before it." Minn. Stat. § 524.1-302(b) (1996); Sangren, 504 N.W.2d at 788.
Here, the parties, including appellant, agreed to alter their interests under the will by including their corporate disputes in their settlement. The parties to the settlement agreement could not resolve estate issues without also resolving corporate issues. Appellant waived his right to have corporate assets considered separate from estate assets when assessing expenses and may not make that argument now. See Hauenstein & Bermeister, Inc. v. Met-Fab Indus., Inc., 320 N.W.2d 886, 892 (Minn. 1982) (waiver is intentional relinquishment of known right). Because appellant waived his right to keep corporate assets separate from estate assets, and because the parties submitted their corporate dispute to the jurisdiction of the probate court, the district court could properly consider the value of the 940 building to find that appellant understated the assets he received. Cf. Sangren, 504 N.W.2d at 788-89 (affirming probate court's interpretation of insurance contract between decedent and insurance company).
None of the concerns that underlie the rule separating corporate assets from a personal estate are present here. In the Diana case cited by appellant, "It [was] not clear * * * that the estate even control[led] the corporation." 677 So. 2d at 1376. The Florida appellate court reversed the probate court citing the following concerns:
[T]o include in a decedent's estate the assets of a corporation substantially owned by him would produce far reaching results. It would ignore the rights and interest of all other stockholders in the corporation. The creditors of the corporation might have to file claims against the estate of the principal stockholder. The board of directors and officers might be divested of all authority and their power taken over by the executor. The real and personal property of the corporation might have to be distributed among numerous beneficiaries.
Id. (quoting In re Estate of Gettinger, 157 So. 2d 692, 695 (Fla. App. 1963), cert. dismissed, 165 So. 2d 757 (Fla. 1964)). Here, there is no dispute that the parties and their families were the only shareholders of the corporations, and that they protected their rights and interests through their negotiations. There is no record that creditors were negatively affected by the corporate restructuring that resulted from the settlement.
Neither is it relevant to appellant's argument that the settlement included shares he owned prior to decedent's death. All parties owned shares of LAE and EPI before decedent's death. Nevertheless, they agreed to submit their corporate dispute to the probate court and the resulting settlement required parties to relinquish their corporate interests, both those they owned before decedent's death and those they would have acquired under the will. Under the settlement agreement, appellant also waived his right to complain that the value of the assets he received was based on the share he owned before decedent's death. See Hauenstein, 320 N.W.2d at 892.
The district court's finding that appellant undervalued the stock is also supported by the record. The only specific valuation of stock made by the court was made in reference to the nonvoting shares of EPI. That finding was made to determine the amount borrowed from EPI to pay estate taxes. The record contains a wide range of values for the remaining shares. The parties assigned their own value by the terms of their settlement agreement and recognized the value of control by exchanging appellant's shares of LAE and EPI for a building worth $415,000. Based on this record, and aware of the disparity between minority and majority shareholders, the district court could find that appellant's evidence "fail[ed] to take into account the control which each corporation would have through its shares of stock."
2. Appellant argues that the district court erred when it ordered him to reimburse EPI for attorney fees incurred to spin off the 940 building. Appellant argues that the district court's finding that the fees were reasonable was not supported by the record. The district court found:
[I]n view of the work that I know Mr. Rossini has performed, I think he has really carried the ball on this thing. It seems to me, overall, his fees are more than justified and not only reasonable, but certainly well earned.
A district court's finding of fact regarding the reasonableness of an attorney fee award will not be set aside unless it is clearly erroneous. Bucko v. First Minn. Sav. Bank, F.B.S., 471 N.W.2d 95, 99 (Minn. 1991). Clearly erroneous means "manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole." Novack v. Northwest Airlines, Inc., 525 N.W.2d 592, 597 (Minn. App. 1995). A district court may base its finding of attorney fees on its observations of the attorney's performance. Larson-Roberts Elec. Co. v. B. C. Burdick, 267 Minn. 486, 489, 127 N.W.2d 163, 165 (1964). Here, the district court, through numerous hearings over a substantial period of time, had ample opportunity to observe the work that justified the fees, and its observation supports its finding that the fees were reasonable.
Respondent Middlecamp seeks attorney fees for this appeal. An award of attorney fees on appeal rests within the broad discretion of the appellate court. Van Vickle v. C. W. Scheurer & Sons, Inc., 556 N.W.2d 238, 242 (Minn. App. 1996). Fees may be recovered if specifically authorized by contract or statute. Id. Middlecamp relies on a district court order which provides for payment of attorney fees and argues that this appeal is a continuation of appellant's motion.
While this court may take cognizance of the trial court order, we are not bound by it. "Absent a specific delegation, an appellate court is the proper court to determine the propriety of an award of attorney fees on appeal." Vern Reynolds Constr., Inc. v. City of Champlin, 539 N.W.2d 614, 619 (Minn. App. 1995), review denied (Minn. Dec. 20, 1995). The district court's order does not deprive this court of its discretion to determine the propriety of awarding attorney fees on appeal. Cf. id. (holding that a statute allows for attorney fees at trial does not require fees on appeal absent language allowing fees on appeal). We decline to award attorney fees for this appeal.
*Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 The personal representative borrowed $101,000 from EPI to pay estimated estate taxes. Appellant claims that EPI received an estate tax refund and it is inequitable to allow EPI to recover its loan as an estate expense. We find no merit in this argument.
 The order reads in relevant part:
If any party initiates or pursues any motion, action or claim, based [on this provision] of attorney fees, such party shall pay all costs of defending such motion, action, or claim incurred by the party unless the moving party prevails on such motion, action or claim.