Justia Minnesota Supreme Court Opinion Summaries

Articles Posted in Trusts & Estates
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The case revolves around the beneficiaries of a trust established by John Demskie, the founder of Remote Technologies, Inc. (RTI). The trust's principal asset was John Demskie’s 90 percent ownership interest in RTI. After his death in 2016, the beneficiaries alleged that U.S. Bank, the sole trustee, became the controlling shareholder of RTI and took actions that severely diminished the value of RTI and frustrated their reasonable expectations as owners of beneficial interests in RTI. The beneficiaries brought claims against U.S. Bank for breach of fiduciary duty and unfairly prejudicial conduct under the Minnesota Business Corporation Act, seeking damages and a buy-out of their interests in RTI.The district court granted U.S. Bank's motion for judgment on the pleadings, ruling that the beneficiaries could not bring a shareholder action against U.S. Bank under the Minnesota Business Corporation Act because the allegations in the complaint were not sufficient to establish that either the beneficiaries or U.S. Bank were shareholders of RTI. The court of appeals affirmed the dismissal of both claims.The Minnesota Supreme Court affirmed in part and reversed in part. The court held that the beneficiaries sufficiently pleaded the shareholder status of U.S. Bank under the notice pleading standard, reversing the dismissal of their breach-of-fiduciary-duty claim. However, the court was evenly divided on the issue of whether owners of beneficial interests in a corporation may initiate an action for a buy-out of their interests, affirming the decision of the court of appeals dismissing their claim for buy-out relief. The case was remanded to the court of appeals for further proceedings. View "Demskie vs. U.S. Bank National Association" on Justia Law

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In Minnesota, a district court removed Brian Lipschultz as a trustee from the Otto Bremer Trust. This decision was based on his violation of Minnesota Statutes section 501C.0706(b)(1), which allows for the removal of a trustee for a “serious breach of trust.” The breaches included Lipschultz's misuse of trust resources for personal purposes, offensive behavior during a stock dispute, manipulation of a grantee, and failure to disclose his successor. Lipschultz appealed this decision, arguing that the district court and court of appeals applied an incorrect legal standard for removal and that they abused their discretion in removing him under section 501C.0706(b)(1). However, the Minnesota Supreme Court affirmed the decision of the court of appeals, stating that the district court did not abuse its broad discretion when it determined that Lipschultz committed “a serious breach of trust” under section 501C.0706(b)(1). The court concluded that Lipschultz breached the duty of loyalty and the duty of information, demonstrating a pattern of placing his personal priorities over the duties he owed to the Trust. View "In the Matter of the Otto Bremer Trust" on Justia Law

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The Supreme Court reversed the decision of the court of appeals reversing the judgment of the district court ruling that an alternative residuary clause in a will devising half of the testator's estate to his heirs-at-law and the other half to his wife's heirs-at-law failed as a matter of law, holding that the devise failed as a matter of law.The testator's will in this case named his wife, if she survived him, as the primary beneficiary of the residue of his estate with an alternate residuary clause devising one-half of the estate to his wife's "heirs-at-law." The couple's marriage was later dissolved, after which the testator died without having revised his will. When Appellant, the personal representative of the testator's estate, petitioned for formal probate of the will he identified only the testator's siblings as heirs and devisees. Respondents, the wife's parents, claimed that they were wrongfully omitted as devisees in the petition. The district court ruled that any purported devise to Respondents failed as a matter of law. The court of appeals reversed. The Supreme Court reversed, holding that a gift to a spouse's heirs, none of whom are identified by name, fails if the marriage dissolves after execution of the will. View "In re Tomczik" on Justia Law

Posted in: Trusts & Estates
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The Supreme Court affirmed the determination of the court of appeals, but on different grounds, determining that two amendments to the grantor's trust were validly executed and that the district court had properly reformed the trust, holding that the district court properly struck the part of the second trust amendment that was ambiguous and unenforceable.The Grantor in this case validly executed the trust, which was properly witnessed and notarized, and then executed two amendments that significantly increased the amount that Respondent would inherit. After the Grantor died, Appellant moved to invalidate the amendments. The district court granted the motion in part and struck a portion of the second trust amendment due to ambiguity but upheld the remaining terms of the amendment, including the increased amount inherited by Respondent. The court of appeals affirmed, holding that the amendments were validly executed and properly reformed under Minn. Stat. 501C.0415. The Supreme Court affirmed on other grounds, holding (1) the second trust amendment was validly executed; and (2) the district court properly upheld the portions of the second trust amendment governing asset distribution. View "In re Trust of Moreland" on Justia Law

Posted in: Trusts & Estates
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In this dispute among four siblings over the ownership of 200 acres of farmland the Supreme Court reversed the judgment of the court of appeals reversing the order of the district court that the farmland be distributed to Neal Johnson and Thomas Johnson, holding that the court of appeals failed to apply well-settled common law.This dispute stemmed from the last will and testament of the aunt of the four siblings in this case - Neal, Thomas, Sylvia Perron, and Lee Johnson. The aunt, Hazel Bach, devised the farmland to Neal and Thomas based on certain conditions that were resolved in an agreement between the parties. Although Lee, acting as co-personal representative, refused to honor the agreement, the district court ordered that the farmland be distributed to Neal and Thomas. The court of appeals reversed. The Supreme Court reversed, holding that Neal and Thomas were entitled to the 200 acres under Bach's will. View "In re Estate of Bach" on Justia Law

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The Supreme Court affirmed the order of the court of appeals dismissing Appellant's appeal from the district court's denial of his petition to create a constructive trust, holding that the court of appeals did not err by dismissing the appeal for lack of appellate jurisdiction.Joseph Figliuzzi, who created a trust for holding wetland credits, sought to hold the credits in his own name rather than in the trust. After Figliuzzi died, Appellant brought this action seeking to confirm that the trust owned the subject credits and to establish a constructive trust over the disputed credits. The district court denied relief, concluding that Figliuzzi owned the credits at the time of his death. The court of appeals dismissed Appellant's ensuing appeal for lack of jurisdiction. The Supreme Court affirmed, holding (1) because the order being appealed from lacked finality, it could not be appealed under Minn. R. Civ. App. P. 103.03(g); and (2) the district court's order was not a denial of injunctive relief. View "In re Estate of Joseph Rocco Figliuzzi" on Justia Law

Posted in: Trusts & Estates
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The Supreme Court affirmed as modified as modified the decision of the court of appeals reversing the judgment of the district court denying Maria Molloy's motion to intervene in Pamela Spera's proceeding seeking enforcement of a divorce decree that dissolved her marriage to Rodney Miller, holding that Molloy had a right to intervene as to the valuation of Miller's retirement accounts.In the enforcement proceeding, Spera sought to have the retirement accounts she and Miller each held divided according to the terms of the divorce decree. Before Miller passed away, he named his four daughters - including K.M.M., the child he had with Molloy - as beneficiaries on his retirement accounts. Molloy sought to intervene in Spera's enforcement proceeding as a matter of right to assert K.M.M.'s interest in Miller's retirement accounts. The district court denied intervention. The court of appeals reversed, concluding that the four requirements under Minn. R. Civ. P. 24.01 for intervention were met. The Supreme Court affirmed as modified, holding that Molloy's right to intervene was limited specifically to the valuation of Miller's retirement accounts. View "Miller v. Molloy" on Justia Law

Posted in: Trusts & Estates
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The Supreme Court reversed the decision of the court of appeals affirming the district court's dismissal of Appellants' complaint against U.S. Bank on statute of limitations grounds, holding that Appellants' breach of fiduciary duty claim was timely.On January 24, 2017, Appellants filed their lawsuit, alleging breach of fiduciary duty and unjust enrichment. U.S. Bank moved to dismiss the claim, arguing that Appellants failed to satisfy the applicable six-year statute of limitations. In response, Appellants asserted that they had suffered no damages earlier than August 2012. The district court granted the motion to dismiss, concluding that Appellants could have raised their claims in April 2010. The court of appeals affirmed, concluding that "some damage" occurred on April 27, 2010. The Supreme Court reversed, holding that U.S. Bank failed to establish - based on the pleadings - that Appellants suffered "some damage" in the form of financial harm before August 2012, and therefore, the district court erred by granting the motion to dismiss. View "Hansen v. U.S. Bank National Ass'n" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals interpreting Minn. Rev. Stat. 524.3-101 to allow real property to devolve immediately upon a testator’s death to a residual devisee.Plaintiff, in her capacity as personal representative to her father’s estate, sued Defendants to quiet title to residential property owned by her father at his death. Plaintiff’s brother, John, conveyed his interest in the property by quitclaim deed to Minnesota Premier Properties a few days after Wells Fargo bought the foreclosed property at a sheriff’s sale after the decedent’s death. The district court granted summary judgment to Plaintiff, concluding that John did not have an interest to convey to Premier through the quitclaim deed. The court of appeals reversed, holding that, under section 524.3-10, a valid, transferable ownership interest in real property devolves immediately upon a testator’s death to a person to whom the property is devised by the testator’s will. The Supreme Court affirmed, holding that the court of appeals did not err in interpreting the statute. View "Laymon v. Minnesota Premier Properties, LLC" on Justia Law

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Prior to his death and after consulting a lawyer about divorcing Wife, Husband changed the beneficiary on his term life insurance policy from Wife to Respondents, his parents and sister. Less than four months before Husband’s death, Wife petitioned for dissolution of marriage to Husband. Following Husband’s death, the district court dismissed the dissolution proceeding. Wife subsequently filed suit against Respondents, alleging that Husband’s transfer violated Minn. Stat. 518.58(1)(a), which prohibits the transfer of “marital assets” by a party who contemplates commencing a marriage dissolution. The district court granted summary judgment to Respondents. The court of appeals affirmed, holding that section 518.58(1)(a) did not apply to Wife’s claim because her dissolution proceeding abated upon Husband’s death and the statute applies only in current dissolution proceedings. The Supreme Court affirmed, holding that because the language of section 518.58(1)(a) limits the statute’s application to pending dissolution proceedings, the statute did not provide Wife, who was no longer a party to a marital dissolution proceeding, a remedy in this case. View "Nelson v. Nelson" on Justia Law