Estate of Elliot

2022 MT 91N, 508 P.3d 1294
Montana Supreme Court·Decided May 12, 2022·No. DA 21-0343·Unpublished·Cited by 3 cases

Opinion

05/12/2022

DA 21-0343 Case Number: DA 21-0343

IN THE SUPREME COURT OF THE STATE OF MONTANA 2022 MT 91N

IN RE THE MATTER OF THE ESTATE OF

ADA E. ELLIOT,

Deceased.

APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DP 17-0036 Honorable Mary Jane Knisely, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Ian R. Elliot, Self-represented, Billings, Montana

For Appellee:

Michael Manning, Ritchie Manning Kautz PLLP, Billings, Montana (for Joseph V. Womack)

Joseph Andre Soueidi, Felt Martin PC, Billings, Montana (for Cindy Elliot)

Submitted on Briefs: May 11, 2022

Decided: May 12, 2022

Filed: q3,,---, 6mal•-.— 4( __________________________________________ Clerk Justice Jim Rice delivered the Opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating

Rules, this case is decided by memorandum opinion and shall not be cited and does not

serve as precedent. Its case title, cause number, and disposition shall be included in this

Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana

Reports.

¶2 Ian Elliot (Ian)1 appeals multiple orders of the Thirteenth Judicial District Court,

Yellowstone County, made throughout the probate of the Estate of Ada E. Elliott (the

Estate) and the associated dissolution of StarFire, L.P. (StarFire). He primarily contests

District Court rulings relating to actions taken by Joseph Womack (Womack) as the

Estate’s special administrator and liquidating partner of StarFire.

¶3 Ada E. Elliot (Ada) died on January 28, 2017, leaving a will that appointed her two

children, daughter Cindy Elliot (Cindy) and son Ian, as her co-personal representatives and

devised her property to them in equal shares. The Estate primarily consisted of Ada’s

96.34% interest in StarFire, a limited partnership that owned farmland properties in

Gallatin County, valued at approximately $5 million.2 StarFire had three partners, with

1 Ian unfortunately passed away on December 19, 2021, after he had filed his Opening Brief. In this Opinion, we refer to Ian in the present tense for consistency. Filings from two family members or heirs of Ian’s expressed an initial interest in substituting his Estate for purposes of filing a reply brief herein, and we entered an order granting time for the filing and stating that, failing such, we would decide the case on the briefing as filed. No reply brief was filed. 2 This is the value listed on the Inventory and Appraisement filed for the Estate. However, the parties dispute the value and offer estimates ranging from $2.5 million to $5.2 million.

2 Ada as limited partner and Cindy and Ian as general partners each owning a 1.83% interest.

The siblings disputed the management of StarFire’s assets in the years before Ada’s death.

In October 2014, Cindy filed a dissociation action in Gallatin County to remove Ian as a

general partner of StarFire (“Gallatin Litigation”). In October 2015, Ian filed an action

against Cindy for fraud and breach of fiduciary duty in federal court, alleging she

misappropriated StarFire funds (“Federal Litigation”).3 Both the Gallatin Litigation and

the Federal Litigation were pending when Ada died.

¶4 In February 2017, Ian petitioned for probate of Ada’s will and to be appointed as

personal representative of the Estate. The District Court denied Ian’s petition and granted

Cindy’s request to appoint a special administrator, due to the sibling’s strained and litigious

relationship. Ian appealed the decision to this Court, and we affirmed in July 2018. In re

Estate of Elliot, No. DA 17-0618, 2018 MT 171N, ¶ 9, 2018 Mont. LEXIS 231.

¶5 The District Court appointed Womack, a Billings attorney, as special administrator

of the Estate on May 28, 2019. Womack was granted the powers of a personal

representative, with several enumerated exceptions. The District Court, following a

hearing held on July 8, 2019, issued an order granting two motions by Womack to modify

the court’s restrictions on his authority as special administrator. The Order allowed

Womack to terminate the Gallatin Litigation and gave him discretion to continue or

3 StarFire contracted with Cindy and her management company to manage its financial affairs from 2005-2019.

3 withdraw from the Federal Litigation.4 The District Court also gave Womack permission

to initiate a judicial dissolution of StarFire under § 35-12-1202, MCA.

¶6 Womack then filed a “Motion for Order Enforcing Agreement,” stating that, directly

following the July 8 hearing, Ian, Cindy, and Womack held a partner meeting at which they

unanimously agreed to judicially dissolve StarFire, appoint Womack as liquidating partner,

and conduct an accounting of its financial records (“Liquidation Agreement”). Womack

prepared a consent pleading to dissolve StarFire at the meeting, but Ian refused to sign it.

The District Court held a hearing on August 13, 2019, where Womack and Ian presented

testimony and evidence about the June 8 meeting and Liquidation Agreement. Womack

asked to be appointed as liquidating partner of StarFire, and Ian objected. Cindy consented

to Womack’s appointment, testifying that she could “[a]bsolutely not” work with Ian to

administer the Estate or manage StarFire. Womack had also filed an August 2019 motion

for permission to sell two 20-acre tracts of StarFire’s land. All parties, including Ian,

agreed to the sale at the hearing. Initially ruling from the bench, the District Court granted

Womack’s motions, noting his impartiality and experience in such matters. In a following

written order, the District Court found the partners unanimously agreed to the Liquidation

Agreement at the July 8 meeting and that a “comprehensive accounting and investigation

of partnership transactions has not yet been completed, and must be done so that the Probate

4 Womack was granted dismissal of the Gallatin Litigation and eventually settled the Federal Litigation with Cindy. The settlement agreement allowed Womack to collect from Cindy’s StarFire shares for any financial irregularities discovered through an independent accounting of the partnership.

4 Estate may be administered.” It also found good cause existed for judicial dissolution of

StarFire pursuant to § 35-12-1205(4)(b), MCA, and for the appointment of Womack as

liquidating partner. The court also gave Womack permission to sell the two tracts of land

described in his motion.

¶7 On July 6, 2020, Womack asked to sell two additional StarFire properties, known

as the Farmhouse and the Modular Home. He stated that “anticipated expenses and claims

against the [E]state far exceed the current funds of StarFire,” and he produced a budget

overview evidencing the significant shortfall. He estimated the court-ordered accounting

would cost at least $150,000, and he stated his administration costs were increasing in large

part because of “the high litigation costs that must be incurred due to Ian’s continued

litigation regarding his claim against Cindy.”5 Womack argued the sale of the Farmhouse

and Modular Home would enable him to cover expenses and pay Ian and Cindy their

remaining distributions from the first sale.6 Cindy agreed to the sale, but Ian objected.

¶8 Ian filed a “Motion for Injunction and Sanction” (“Contempt Motion”) on July 16,

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