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In the Matter of the Estate

August 10, 2012

IN THE MATTER OF THE ESTATE OF LOUIS G. HANNUM, SR., DECEASED.


APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Sanders, Cause No. DP 10-23 Honorable Deborah Kim Christopher, Presiding Judge

The opinion of the court was delivered by: Michael E Wheat

August 10 2012

Submitted on Briefs: June 27, 2012

Filed:

Clerk

Justice Michael E Wheat delivered the Opinion of the Court.

¶1 Louis G. Hannum, Jr. (Louis Jr.) appeals from an Order issued by the Twentieth Judicial District Court, Sanders County, removing him for cause as the personal representative of the estate of Louis G. Hannum, Sr. (Louis Sr.). We affirm.

BACKGROUND

¶2 Louis Sr. passed away on August 12, 2010, and is survived by his children, Louis Jr., Mike and Mark; and his grandchildren, Monika, Veronica, Michelle, Naomi, Zachary, Esther and Jim. Louis Sr. was predeceased by his daughter, Cheryl Gallagher, who was Esther's and Jim's mother.

¶3 On October 6, 2005, Louis Sr. executed his Last Will and Testament (2005 Will). The 2005 Will specifically revoked Louis Sr.'s prior will from 1995, and appointed his son, Louis Jr., as the personal representative of Louis Sr.'s estate. Pursuant to the 2005 Will, each of Louis Sr.'s seven surviving grandchildren was to receive $1,000. The remainder of Louis Sr.'s estate was to be distributed equally between his four children, with Cheryl's share to be distributed equally to her children, Esther and Jim.

¶4 Louis Jr. filed an application for informal probate of will and appointment of personal representative of Louis. Sr.'s estate on September 2, 2010. The following day, Louis Jr. filed a pleading labeled "Notice and Information to Heirs and Devisees" to inform Louis Sr.'s surviving relatives that Louis Jr. had been appointed the personal representative of the estate. The notice was sent to Louis Jr., Mike, Mark, Esther and Jim, but not to the remaining grandchildren. Naomi did, however, know of Louis Jr.'s appointment because Naomi is Louis Jr.'s daughter and she is acting as his counsel. It is unclear whether Zachary, Louis Jr.'s son, was aware of these proceedings. Notably, Louis Jr. did not send notice to Louis Sr.'s grandchildren Monika, Veronica and Michelle.

¶5 The next document Louis Jr. filed, on July 20, 2011, was entitled "Final Accounting, Petition for Determination of Testacy, For Determination of Heirs, and For Settlement and Distribution of Testate Estate by Personal Representative" (Final Accounting). The Final Accounting was served on Louis Jr., Mike, Mark, Esther and Jim, but once again, Louis Jr. did not serve the remaining grandchildren. Louis Jr., however, affirmatively stated to the District Court that he had mailed the Final Accounting to all persons interested under the will.

¶6 Louis Jr. attached an Inventory to the Final Accounting that purportedly included everything to be disbursed under the 2005 Will. The Inventory included two promissory notes, valued at $625,000 total, that were allegedly owed to the estate. However, the Inventory contained no reference to the date, payment terms, balance actually due, interest rate or any other aspect of the notes. Significantly, the notes were not mentioned in Louis Sr.'s 2005 Will, but rather his 1995 will. According to Esther, Jim and Mike, the promissory notes had been fully paid off.

¶7 The Inventory also included 31 shares of Pitman Warehousing Stock*fn1 valued at $189,689. Louis Jr. unilaterally determined the stock was undervalued when it was sold by Louis Sr. in 2005, and because of this undervaluation, he increased the value of the estate by the amount of money Louis Sr. should have allegedly received from the sale of stock. Of the 31 shares, 15 had been sold to Esther, and 16 to William Messenger. William is Mike's ex-son-in-law and has no legal relationship to Esther.

¶8 Additionally, the Inventory included $542,500 worth of allegedly invalid gifts made by Louis Sr., out of his personal Vanguard account, to various family members. Louis Jr. unilaterally declared the gifts invalid, and made no attempt to invalidate the gifts through a court proceeding. These gifts included monies given to Esther, Jim and Mike, as well as gifts to Mike's wife, Mike's children and their spouses, a Bobby Doody, and a Teresa Gallagher.

ΒΆ9 In total, Louis Jr.'s unverified additions to the inventory increased its value by $1,357,189, and raised the total value of the probate assets to $1,624,959.84. Based upon this increase, Louis Jr. claimed and asked the court to approve $32,899.20 in personal representative ...


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