Preview
81-CV-23-104
Filed in District Court
State of Minnesota
6/28/2023 8:31 AM
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1 STATE OF MINNESOTA IN DISTRICT COURT
2 COUNTY OF WASECA THIRD JUDICIAL DISTRICT
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4 IN RE THE MATTER OF THE RONALD R. MOTION
ROEHRS File No. 81-CV-23-104
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7 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
8 The above entitled matter came on for hearing before the
9 Honorable Carol M. Hanks, Judge of District Court, by Zoom
10 video, on the 5th day of April, 2023.
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12 A P P E A R A N C E S
13 Barbara Podlucky Berens,Berens & Miller, P.A., 80 South
8th Street, 3720 IDS Center, Minneapolis, MN 55402 appeared
14 by Zoom video, representing the Petitioner.
15 Madeleine Haberman, Einhaus, Mattison, Carver & Haberman,
202 N. Cedar Avenue, Owatonna, MN 55060, appeared by Zoom
16 video, representing Trustee Marvel Roehrs.
17 John Robert Keena, Hellmuth & Johnson PLLC, 8050 West
78th Street, Edina, MN 55439 appeared by Zoom video,
18 representing Beneficiary Janet Tharp, Rhonda Conrath, and
Daniel Roehrs.
19
Bethany J. Rubis, Messick Law, PLLC, 7595 Currell Blvd,
20 Woodbury, MN 55125, appeared by Zoom video, representing
Objector Sandra Walstrom.
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81-CV-23-104
Filed in District Court
State of Minnesota
6/28/2023 8:31 AM
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1 THE COURT: Looks like there may be some
2 that still have not connected to audio. Court is
3 going to proceed and call the case, in the Matter of
4 the Ronald E. Roehrs Trust. This is Waseca County
5 file 81-CV-23-104. This matter is on the calendar for
6 a motion for a preliminary injunction matter. We have
7 many people appearing by Zoom, either as parties or
8 interested parties to this action. Of note is
9 attorney Barbara Berens, who represents petitioner
10 Michael Roehrs. We have attorney Rob Keena, who
11 represents beneficiary Janet Tharp. We have attorney
12 Madeleine Haberman, who represents Trustee Marvel
13 Roehrs. And let me see, do we have Mr. Messick?
14 MS. RUBIS: Bethany Rubis.
15 THE COURT: I'm sorry?
16 MS. RUBIS: Bethany Rubis here from Messick
17 Law on behalf of Sandra Walstrom.
18 THE COURT: Okay. We're getting some
19 feedback from you, Ms. Rubis. Bethany Rubis from the
20 Messick firm is appearing representing Sandra
21 Walstrom. I see we have many of the children
22 beneficiaries appearing for this hearing. As I
23 indicated, this is a hearing on the preliminary
24 injunction matter. The Court has spent some time
25 reviewing the documents filed in this case, including
81-CV-23-104
Filed in District Court
State of Minnesota
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1 the Petition for Removal of Trustee, Appointment of
2 Successor Trustee, for an accounting and other relief.
3 I've reviewed the objections filed by Sandra Walstrom,
4 as well as her counter petition, the objection filed
5 by Janet Tharp, Rhonda Conrath and Daniel Roehrs.
6 Also, I've reviewed the motion by petitioner for the
7 preliminary injunction, as well as the objection to
8 that motion, as well as all the supporting documents
9 for this matter. Since we are just dealing with the
10 preliminary injunction action, Ms. Berens, this is
11 your motion, you may proceed.
12 MS. BERENS: Thank you, your Honor. My
13 client, by the way, Michael Roehrs, is also in the
14 room. He's just not on the camera because we're
15 afraid we are going to get feedback. He is bringing
16 this motion for a preliminary injunction to ensure
17 that the farmland which is owned by the Trust, of
18 which the six siblings are the beneficiary, as well as
19 the current Trustee, is rented out at a rate that is
20 comparable to the prevailing market rates in the
21 community. For a number of years one of the siblings
22 has been, with her husband, or technically under a
23 husband's name, renting the farmland for about $100 an
24 acre. That rent is substantially below current market
25 rates and as a result of that favorable treatment by
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1 the Trustee as regards this one beneficiary, as a
2 result of that, Sandra Walstrom is being unfairly and
3 impermissibly favored, when the Trust documents make
4 clear that all of the sibling beneficiaries, or
5 children beneficiaries, if you will, are to take
6 equally, and it has come to Mr. Michael Roehrs'
7 attention that this has been going on for a number of
8 years, and he was under the presumption that the
9 current Trustee, Mrs. Marvel Roehrs, had a life
10 estate, but she does not, and once he learned of that
11 he realized that this kind of rental arrangement
12 should not be occurring and he contends that the
13 Dahlberg factors support the issuance of a preliminary
14 injunction to ensure that the Trust's asset is
15 properly flowing money back into the Trust as opposed
16 to favoring one of the children beneficiaries over the
17 others. The reason there's irreparable involved harm
18 here is because it involves a breach of fiduciary duty
19 that the current Trustee does owe all of the children
20 beneficiaries, just not one to the exclusion of or
21 detriment of the other trustee.
22 Secondly, there's a likelihood of success
23 on the merits of this because it is clear that this
24 farmland has been rented way under current rental
25 levels in this community. Mr. Michael Roehrs has
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1 offered to lease the land himself for substantially
2 more. He contends that the current rate should be
3 $400 per acre, but he is not wedded to the idea of him
4 being the one who leases the land. He would be
5 willing to have it go out on the open market for bid,
6 but his position is that this impermissible
7 favoritism, which is not allowed under the clear terms
8 of the Trust agreement, is irreparably harming him
9 because it is a breach of the current Trustee's
10 fiduciary duties because the handling of the farmland
11 is contrary to the terms of the Trust. There's a
12 likelihood of success on the merits. The relationship
13 of the parties favors a grant of a preliminary
14 injunction because, as Trustee, Mrs. Roehrs owes a
15 fiduciary duty to all of the beneficiaries equally and
16 she's not allowed to favor one to the exclusion of
17 others. Public policy favors a grant of preliminary
18 injunctive relief because Minnesota has an interest in
19 making sure that Trust documents are enforced as
20 written, and there have been some allegations that
21 there was some verbal agreement between Ronald Roehrs,
22 the original, the father of all these children, and
23 the husband of Mrs. Roehrs, that while he was still
24 alive he said that Sandra should be allowed to rent
25 the farmland for about $100 an acre. That's not
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1 allowed to change the clear terms of a Trust and the
2 Court should reject that argument. And the balance of
3 the harms favors the grant of a preliminary injunction
4 because the level of the rent -- and we acknowledge
5 that the Walstroms have offered to pay $200 an acre
6 now, but even at that rate, it's still substantially
7 below market rate and we would encourage the Court to
8 allow that -- the principal asset of the Trust to be
9 maximized to the benefit of all of the beneficiaries.
10 And as regards the request for the removal
11 of the Trustee, this is not a personal issue. There
12 was a police report filed that Mrs. Roehrs' son, Mr.
13 Abraham, admitted she was having memory issues. There
14 is a Power of Attorney that Mr. Roehrs, Michael
15 Roehrs, contends is probably being misused so that
16 people other than Mrs. Marvel Roehrs are probably
17 running the assets of the Trust, which is
18 impermissible, and the Trust documents clearly state
19 that, in the event a successor Trustee should be
20 appointed, it designates by name Steven Roehrs, so Mr.
21 Michael Roehrs would ask the Court to ultimately
22 remove as Trustee Mrs. Marvel Roehrs and appoint as
23 Trustee Steven Roehrs. Thank you, your Honor.
24 THE COURT: Mr. Keena?
25 MR. KEENA: Your Honor, thank you very much
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Filed in District Court
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1 for the opportunity to appear, your Honor. For the
2 record, I represent Rhonda Conrath, Janet Tharp and
3 Daniel Roehrs. My young colleague, Ian McCoy, is
4 appearing behind me. He may not be able to be seen by
5 the Court, but he's also appearing here with me today.
6 I will do something that I hope is perhaps unusual but
7 also the best thing to do in a circumstance like this,
8 because I understand there is a lot of history, a lot
9 of emotion, and even perhaps a lot of -- many
10 allegations which simply are unsupportable in this
11 case. So what I will do is the easiest thing for the
12 Court to analyze, the very easiest thing. I will
13 limit my arguments to the Trust, because if the Court
14 considers my arguments, and I expect my
15 co-respondent's counsel will have other arguments, but
16 I'll limit mine strictly to the terms of the Trust.
17 Petitioner has extended their argument as
18 if this Trust relates to something beyond what it
19 does. Kindly they have attached a complete copy of
20 the Trust to their petition. If you read the
21 petition, the petition asset is the farm. I would
22 submit that no where, absolutely no where in the Trust
23 does it refer to the funds from the Trust being an
24 asset for the beneficiaries. It does not. I looked
25 for it many, many times. Instead, what it says is
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1 that the Trustee, who is currently Marvel, must take
2 revenues from the Trust and pay taxes and pay
3 maintenance. And interestingly, she can then invest
4 any remaining funds or she may pay them to herself as
5 salary. In other words, she gets to keep the money.
6 So whether she charges a million dollars rent or
7 whether she charges one dollar rent, as long as she
8 maintains the farm and as long as she pays the taxes,
9 she has satisfied her obligations, which are to
10 preserve the Trust asset. That is the farm. The farm
11 is the Trust asset. This is obviously a circumstance
12 where dad wanted the farm preserved. This is not a
13 Trust that anywhere on its terms at all states that
14 the money from the Trust asset goes to the
15 beneficiaries. It goes to the Trustee. Right on its
16 explicit terms. So objections to how and what she's
17 doing with the money, the Trustee, how much she's
18 charging for it, or any of those issues, are actually
19 irrelevant. It would only -- the only thing that
20 would be relevant is, is she not paying the taxes, is
21 she not maintaining the farm? Those are her
22 obligations under the Trust.
23 I next move to the next question. What
24 does the Trust say about successor trustees? And the
25 petitioner also misstates what the Trust says about
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1 that. It does state that Steven would be named as the
2 successor trustee in certain circumstances, however,
3 it also identifies Marvel, the current Trustee, as a
4 successor trustee. And the reason it identifies
5 Marvel has a successor trustee is because it
6 identifies the grantor, dad, as the original Trustee.
7 And so what the Trust says then is that, in the event
8 that, at the time of dad's death, Marvel is unwilling
9 or unable to accept the role of Trustee, in case dad
10 lives a long time and Marvel can't take it or she's
11 passed away, then the Trustee position goes to Steven
12 at that occasion. It says it on its terms, your
13 Honor. You can read it, it's included in many of the
14 language, including the petitioner's own language; it
15 says it explicitly that death or disability of the
16 grantor as trustee, the grantor is dad, if at any time
17 the grantor has a disability or death of the grantor,
18 Marvel B. Roehrs is designated as the successor
19 trustee. Such designee shall become the successor
20 trustee upon the terms and conditions of the Trust.
21 If successor trustee, i.e. Marvel, is unable or
22 unwilling to serve, Steven Roehrs is designated as the
23 alternative successor trustee. In other words, Steven
24 becomes the successor trustee if Marvel couldn't do
25 the job upon dad's death. He was not named as the
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1 successor trustee once Marvel no longer can accept it.
2 There is an explicit term for what happens when
3 Marvel's role and time as Trustee is over. There's an
4 explicit term. Now, we disagree that Marvel is not
5 doing her job as Trustee. Her job is to maintain the
6 farmland and to pay the taxes, and her job is to do
7 with the money whatever she wants. She can pay it to
8 herself in salary or she can invest it, under the
9 clear written terms of the Trust. The fact that
10 Michael, a man who has sued his family repeatedly,
11 doesn't like the fact that one of his own siblings is
12 getting a good deal is too bad. Frankly, Sandra is
13 not my client, but my three sibling clients are
14 perfectly fine with it. But what happens under the
15 terms of the Trust when Marvel is unable to complete
16 her role or continue her role as the successor trustee
17 is this: It says, D, successor trustee. If the
18 Trustee, i.e. Marvel, is forced to resign as Trustee,
19 the successor trustee should be designated by the
20 beneficiaries of the Trust. Well, that is Sandra,
21 Rhonda, Janet, Daniel, Steven, and Michael. Well,
22 that's going to be bad news for Michael and Steven.
23 That's going to be bad news for the petitioner,
24 because I expect that Sandra, Rhonda, Janet and Daniel
25 will vote together, and Steven and Michael will find
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1 that one of them are named as Trustee. And guess
2 what? Under the explicit terms of the Trust, who ever
3 is named as Trustee can pay themselves a salary out of
4 the Trust. This notion of unequal treatment, this
5 notion of one beneficiary does better than the other
6 is not allowed, it's not included in the Trust. In
7 fact, it's written specifically out of the Trust. And
8 here's why, your Honor. The Trust is a farm Trust.
9 It's not a Trust that says the farm will generate
10 money and then the beneficiaries divide up the money.
11 That's not what this Trust said. It's dad's Trust to
12 protect the farm. So my request for you is quite
13 simple. I don't care about the fighting, I don't care
14 about the he said she said, I don't care about all of
15 the history, I don't care about anything other than
16 the simple reading of the Trust. The simple reading
17 of the Trust says the Trust asset is the farm. The
18 Trustee must maintain and pay the taxes. Done, done
19 and done. It also says the Trustee may invest the
20 money, or left-over money after they pay the taxes and
21 maintain the farm, or they may pay it to themselves as
22 salary. Fine. The Trust says if Marvel had not
23 accepted her role as successor trustee to dad, then
24 Steven could have jumped in. Guess what? Marvel did
25 accept her role as Trustee. Now, if Michael is
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Filed in District Court
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1 successful in kicking Marvel out as Trustee, in other
2 words, if she is fired under the specific terms of the
3 Trust and it says, if Trustee is forced to resign as
4 Trustee, that successor trustee should be designated
5 by the beneficiaries of the Trust. That's me reading
6 from the Trust, your Honor. In other words, all the
7 trustees will vote on it. It isn't Steven named by
8 Michael, it's the six of them voting. That will not
9 be good news for the petitioner. That will not be the
10 petitioner's motion for injunctive relief being
11 granted. It will be the six of them voting. In other
12 words, there is no likelihood of success with regard
13 to this motion for injunctive relief because all we
14 have to do is follow the terms of the Trust. It has
15 the remedies in place, it's that simple.
16 I appreciate the Court's time and I'm open
17 for questions if you have any.
18 THE COURT: Mr. Keena, I want to thank you
19 because your reading of this Trust is exactly how I
20 read it, and I was questioning why we are here. Ms.
21 Haberman, do you wish to make any arguments?
22 MS. HABERMAN: Yes, your Honor. Thank you.
23 I'm joined by my client, Marvel Roehrs, here today as
24 well, she goes by Bonnie. She is the current Trustee
25 of this Trust. Your Honor, we agree with everything
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1 that Mr. Keena has said so far. We believe that, to
2 the best of her ability so far, Marvel has been -- is
3 the Trustee, has been doing her job to maintain and
4 preserve the Trust as it has been stated and as her
5 husband left it for them to go about. We have
6 objected to this motion from a point of maintenance of
7 the status quo. This motion would completely disrupt
8 the status quo here under those Dahlberg factors. It
9 would disrupt how this farm has operated for the past
10 20 some years, and it would cause great economic harm
11 both to the Trust and to others as well, to the
12 beneficiaries themselves, if this Trust land were not
13 to be farmed this year or if the Trust were to -- if
14 Mr. Walstrom, who has a valid contract to continue
15 leasing this farmland for this year, were to have any
16 sort of liability claim against the Trust for, you
17 know, breach of their contract that they had in place.
18 So we agree with Mr. Keena's -- how he has presented
19 the Trust and how Ms. Roehrs has been operating as the
20 Trustee. We'd also like to add just those two
21 arguments as far as this motion is concerned. Thank
22 you for the Court's time.
23 THE COURT: Ms. Rubis?
24 MS. RUBIS: Thank you, your Honor. I just
25 want to check, are you still getting feedback from my
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1 microphone?
2 THE COURT: We are.
3 MS. RUBIS: Are you now?
4 THE COURT: That's better.
5 MS. RUBIS: Okay. Thank you. Your Honor, I
6 just have a couple of points as well. I agree with
7 the points made by attorney Keena and Haberman and I
8 just want to also state that it's my client's position
9 that this motion has been filed untimely as well and
10 should be denied for that purpose. The petitioner
11 filed this motion on March 22, just 14 days ago, and
12 obviously that is less than the 21 days required by
13 the rules. This alone is a proper basis for the
14 denial, but it's also our position that the motion
15 should be denied on its merits. As you've said, you
16 have reviewed the submissions, so I just want to use
17 this time to address the petitioner's lack of support
18 for granting the injunctive relief here. In order to
19 grant the temporary injunction, the Court has to look
20 to those Dahlberg factors, and first, the parties
21 relationship for purposes of this matter at least is
22 that of Trustee and beneficiary and the purpose in
23 granting a temporary injunction is to preserve that
24 status quo. Granting this relief here would not
25 obtain that result, it would have the opposite effect.
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1 The Trustee has managed the Trust and Sandra
2 Walstrom's husband has farmed the Trust property for
3 the last 23 years. Petitioner's injunction is
4 contradictory to preserving the status quo and the
5 same can be said about appointing Steven Roehrs as the
6 successor trustee.
7 In looking at the balancing of harms here,
8 the Trust would be irreparably harmed if the
9 injunction was issued. The Trust property is already
10 being rented for the 2023 crop year to my client's
11 husband, Garry Walstrom. If petitioner's injunction
12 is granted, it puts the Trust at risk that it will sit
13 fallow for this crop year and consequently it opens
14 the Trust up to further litigation for breach of that
15 lease. There is no harm to Michael in denying the
16 injunction here. He remains the beneficiary, the land
17 will be farmed and rented for the 2023 crop year, and
18 the Trust will receive the rent pursuant to the lease
19 agreement.
20 And third, the Court must consider the
21 likelihood that one party will prevail. As Mr. Keena
22 pointed out, it is very unlikely that Mr. Roehrs would
23 prevail on the merits here. He's relying on his own
24 interpretation, or rather misinterpretation, of the
25 events in his personal opinion and his efforts to
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1 remove Bonnie as the Trustee here. The evidence shows
2 that Bonnie has always been entirely proper in her
3 duties in administering the Trust here. He has not
4 provided any support of his accusations and it's
5 unlikely he will prevail on his merits.
6 Then looking at the public policy here,
7 again, as we've said, there is a valid contract.
8 Garry Walstrom entered into a written lease with
9 Bonnie, and requiring the Trust cancel and therefore
10 breach that contract would have also great impact on
11 Garry Walstrom as a farmer who has invested,
12 significantly improving the Trust farmland for
13 decades, and for preparing the farmland for the crop
14 year 2023. So therefore, public policy would favor
15 upholding this valid contract.
16 And finally, your Honor, the Court must
17 consider the administrative burdens in granting the
18 temporary injunction. While Mr. Roehrs argues issuing
19 the injunction will require minimal court interaction,
20 we find this highly unlikely. The likelihood of
21 success in finding a proper tenant by way of opening
22 the farmland up to bids is low. Like Mr. Walstrom,
23 most farmers have already purchased input for this
24 year. Any farmers willing to farm new farmland with
25 less than a month from the planting season will
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1 require a significant discount in rent. Further, in
2 light of Michael's litigious history with his family,
3 if the Court required written consent of all the
4 beneficiaries in renting the land, it would be
5 unlikely that Michael, or Steven Roehrs for that
6 matter, could agree with any proposals the siblings
7 might consent to. This would require the continued
8 intervention of the Court until final adjudication of
9 this case on the merits.
10 Lastly, Michael suggests the farmland be
11 rented for the 2023 year by court order pending the
12 resolution of this petition. In order for the Court
13 to issue that, they would have to invalidate the
14 contract between the Trustee and Garry Walstrom
15 without an evidentiary hearing and receive evidence
16 and testimony regarding the fair market rent for the
17 particular land involved in this matter. Moreover,
18 issuing the removal of Bonnie as Trustee with
19 replacement of Steven Roehrs is not supported by four
20 of the beneficiaries and would also likely result in
21 further court intervention. Therefore, Ms. Walstrom
22 is respectfully requesting the Court deny the motion
23 for injunction and set the matter out for an
24 evidentiary hearing. Thank you, your Honor.
25 THE COURT: Ms. Berens, anything further?
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1 MS. BERENS: Yes, your Honor. First of
2 all, I respectfully disagree with both the Court and
3 the other parties about what the Trust says and what
4 it means. First of all, independent of the Trust, as
5 Trustee Marvel Roehrs has duties that are owed that
6 are independent of the four corners of that Trust
7 document, and one of them is set forth in Minnesota
8 Statute 501C.0803, and it requires a trustee to be
9 impartial, and I would draw the Court's attention to
10 the Stuchlik case, where the facts were exactly as
11 they are here, which is when the Trustee was renting
12 out some of the assets of the Trust at a more
13 favorable rate to one of the beneficiaries. It
14 doesn't say that in the Trust agreement, you're right,
15 it does not, but the Trust agreement does say clearly
16 that all of the children beneficiaries take equally,
17 and I think it is an extraordinarily narrow reading of
18 the Trust to say the only thing that matters is the
19 farmland. First of all, under the Trust, paragraph
20 VI.C, there is a standard of care that's set forth for
21 the Trustee and they are supposed to act prudently and
22 reasonably as fiduciaries, and by taking an asset of
23 the Trust and, as Mr. Keena said, the only asset of
24 the Trust and not maximizing its value is neither
25 prudent nor reasonable. So in addition to being
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1 improper favoritism, it's also in violation of the
2 Trustee's duties as a fiduciary. And whether or not
3 that, you know, that standard of care was set forth in
4 the Trust agreement, still, Marvel Roehrs is bound by
5 the fiduciary duties that the Trustee owes its
6 beneficiaries or the beneficiaries independent of what
7 the Trust agreement says.
8 THE COURT: Ms. Berens, a question for you.
9 My reading of the first amendment to the Trust is that
10 Marvel Roehrs basically is the beneficiary of the
11 Trust assets so long as she continues to reside in the
12 farm house and she continues to use the Trust income
13 to pay real estate taxes, insurance, maintenance and
14 necessary improvement costs to the farmland. So the
15 six children are not beneficiaries until such time as
16 Marvel Roehrs is not. Do you agree with that?
17 MS. BERENS: No, your Honor, I don't.
18 THE COURT: All right. Tell me what
19 specific paragraph of the Trust is saying otherwise.
20 MS. BERENS: I would say it's the thing
21 that we cited, your Honor. Let me give you exactly
22 where I think within the document, and thanks for the
23 opportunity to do this. So what the first amendment
24 says is she can occupy the house. That includes the
25 house and the acreage. Occupy. And then the Trust
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1 farmland rent should had been made available. That
2 doesn't say anything that contradicts the underlying
3 Trust agreement that requires her to act as a prudent
4 person under VI.C.
5 THE COURT: Right, but if she's acting as
6 her own benefit, I mean, if she's choosing to take a
7 less than fair market rental rate, that's only
8 affecting her at this point, correct? How is that
9 affecting the six children that wouldn't benefit from
10 the farm income while Marvel is still receiving the
11 benefit of it?
12 MS. BERENS: Your Honor, I don't read it
13 that narrowly, because at the end of the day they are
14 like subsidiary beneficiaries and I think they all
15 have a right to have that Trust asset managed
16 prudently, as set forth in the underlying Trust
17 agreement. It doesn't say she's not the Trustee. She
18 can't trump her Trustee duties simply because she's a
19 beneficiary of those assets at the time, and I don't
20 think it's prudent -- and I understand that -- I
21 understand what the Court is saying, but I disagree
22 because I think she has independent duties that aren't
23 set forth in that Trust agreement, and we cited a
24 number of cases to the Court, one of which says a
25 trustee cannot administer a Trust for their own
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1 benefit. I believe that the Avis versus Cordes case,
2 and if she is essentially managing the Trust for her
3 own benefit by renting to the Walstroms, and that is
4 to the detriment of the other beneficiaries, that runs
5 counter -- I mean, she can't wear both hats in that
6 sense. She has independent duties as a trustee and
7 all the duties. I mean, if you look at all the duties
8 under what the Trustee can and can't do, for example,
9 the Trustee is not allowed to make a loan to the
10 beneficiary. That's essentially what she's doing.
11 She is giving them value that they are not entitled to
12 to the extent of what that farmland would otherwise
13 rent for. So I disagree with the Court on the reading
14 of the Trust because the Trust also has independent
15 duties under statutory and other sources of common
16 law.
17 THE COURT: And I would agree that a
18 trustee has independent duties to all beneficiaries,
19 but the children of his Trust are not beneficiaries
20 yet, in my reading of it, and also refer to the first
21 amendment, subparagraph 2, that specifically says,
22 upon the death of Marvel Roehrs or at such time as she
23 elects to no longer reside in the residence, the
24 Trustee shall distribute said building site and Trust
25 farmland to the six children. That hasn't happened
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1 yet. So I'm missing your connection of how the six
2 children would get income benefits from the farmland
3 if Marvel still lives there and she has the right to
4 live off the income benefits of the Trust.
5 MS. BERENS: Again, your Honor, the way I
6 read this is that they are beneficiaries in waiting
7 and that under VI, for example, she is supposed to
8 retain assets. You know, all of these things is
9 residual beneficiaries of the Trust. The children
10 don't even know or at least Michael Roehrs doesn't
11 know, you know, where the money is going and I think
12 at the end of the day she has duties that are broader
13 than just what she had as a beneficiary.
14 THE COURT: I agree with you that the six
15 children are basically beneficiaries in waiting. I'm
16 not seeing that this is -- Well, maybe it is an action
17 claiming that Marvel Roehrs has failed to pay real
18 estate taxes, insurance, maintenance and necessary
19 improvement costs for the Trust assets. If that's the
20 claim, then maybe we have something here, but I did
21 not see that as a claim in the paperwork.
22 All right. Moving on, Mr. Keena, anything
23 further? You're on mute.
24 MR. KEENA: Okay. Thank you. It seems
25 academic, but counsel cited the provision that the
81-CV-23-104
Filed in District Court
State of Minnesota
6/28/2023 8:31 AM
23
1 Trustee may not make loans to the beneficiaries. In
2 the paragraph immediately following that, this
3 Trustee, Marvel, also known as Bonnie, also has the
4 power to make uneven distributions to any of the
5 beneficiaries. So their objection to the fact that
6 Sandra is getting maybe a favorable rent is even
7 specifically allowed under the Trust if she were
8 wanting to. But with regard to the fiduciary duties,
9 the statutory fiduciary duties of a trustee, they do
10 apply, and those statutory fiduciary duties in this
11 circumstance relate to the preservation of the farm,
12 so that is what her duties are here. I have nothing
13 further, your Honor.
14 THE COURT: All right. Anything further,
15 Ms. Haberman?
16 MS. HABERMAN: We have nothing further,
17 your Honor.
18 THE COURT: Anything further, Ms. Rubis?
19 MS. RUBIS: No, your Honor.
20 THE COURT: All right. Court will take the
21 matter under advisement, issue a written order within
22 90 days. I recognize that there is an urgency because
23 it deals with 2023 farm rental assets, so I do hope to
24 get that out as soon as possible. That will conclude
25 this hearing. Thank you.
81-CV-23-104
Filed in District Court
State of Minnesota
6/28/2023 8:31 AM
24
1 MS. BERENS: Thank you, your Honor.
2 (End of record.)
3
4 STATE OF MINNESOTA
5 CERTIFICATE
6 COUNTY OF WASECA
7
8 I, Jane T. Hofmeister, Court Reporter, do hereby certify
9 that the foregoing pages 1 - 24 are a true and correct
10 transcript of my stenographic notes taken in the above
11 entitled matter on the 5th day of April, 2023 before the
12 Honorable Carol M. Hanks, Judge of District Court.
13
14
15 __________________________
Jane T. Hofmeister, RPR
16 District Court Reporter
Waseca County Courthouse
17 Waseca, MN 56093
(507)308-7011
18
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81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 1 1 STATE OF MINNESOTA IN DISTRICT COURT 2 COUNTY OF WASECA THIRD JUDICIAL DISTRICT 3 4 IN RE THE MATTER OF THE RONALD R. MOTION ROEHRS File No. 81-CV-23-104 5 6 7 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 8 The above entitled matter came on for hearing before the 9 Honorable Carol M. Hanks, Judge of District Court, by Zoom 10 video, on the 5th day of April, 2023. 11 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 12 A P P E A R A N C E S 13 Barbara Podlucky Berens,Berens & Miller, P.A., 80 South 8th Street, 3720 IDS Center, Minneapolis, MN 55402 appeared 14 by Zoom video, representing the Petitioner. 15 Madeleine Haberman, Einhaus, Mattison, Carver & Haberman, 202 N. Cedar Avenue, Owatonna, MN 55060, appeared by Zoom 16 video, representing Trustee Marvel Roehrs. 17 John Robert Keena, Hellmuth & Johnson PLLC, 8050 West 78th Street, Edina, MN 55439 appeared by Zoom video, 18 representing Beneficiary Janet Tharp, Rhonda Conrath, and Daniel Roehrs. 19 Bethany J. Rubis, Messick Law, PLLC, 7595 Currell Blvd, 20 Woodbury, MN 55125, appeared by Zoom video, representing Objector Sandra Walstrom. 21 22 23 24 25 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 2 1 THE COURT: Looks like there may be some 2 that still have not connected to audio. Court is 3 going to proceed and call the case, in the Matter of 4 the Ronald E. Roehrs Trust. This is Waseca County 5 file 81-CV-23-104. This matter is on the calendar for 6 a motion for a preliminary injunction matter. We have 7 many people appearing by Zoom, either as parties or 8 interested parties to this action. Of note is 9 attorney Barbara Berens, who represents petitioner 10 Michael Roehrs. We have attorney Rob Keena, who 11 represents beneficiary Janet Tharp. We have attorney 12 Madeleine Haberman, who represents Trustee Marvel 13 Roehrs. And let me see, do we have Mr. Messick? 14 MS. RUBIS: Bethany Rubis. 15 THE COURT: I'm sorry? 16 MS. RUBIS: Bethany Rubis here from Messick 17 Law on behalf of Sandra Walstrom. 18 THE COURT: Okay. We're getting some 19 feedback from you, Ms. Rubis. Bethany Rubis from the 20 Messick firm is appearing representing Sandra 21 Walstrom. I see we have many of the children 22 beneficiaries appearing for this hearing. As I 23 indicated, this is a hearing on the preliminary 24 injunction matter. The Court has spent some time 25 reviewing the documents filed in this case, including 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 3 1 the Petition for Removal of Trustee, Appointment of 2 Successor Trustee, for an accounting and other relief. 3 I've reviewed the objections filed by Sandra Walstrom, 4 as well as her counter petition, the objection filed 5 by Janet Tharp, Rhonda Conrath and Daniel Roehrs. 6 Also, I've reviewed the motion by petitioner for the 7 preliminary injunction, as well as the objection to 8 that motion, as well as all the supporting documents 9 for this matter. Since we are just dealing with the 10 preliminary injunction action, Ms. Berens, this is 11 your motion, you may proceed. 12 MS. BERENS: Thank you, your Honor. My 13 client, by the way, Michael Roehrs, is also in the 14 room. He's just not on the camera because we're 15 afraid we are going to get feedback. He is bringing 16 this motion for a preliminary injunction to ensure 17 that the farmland which is owned by the Trust, of 18 which the six siblings are the beneficiary, as well as 19 the current Trustee, is rented out at a rate that is 20 comparable to the prevailing market rates in the 21 community. For a number of years one of the siblings 22 has been, with her husband, or technically under a 23 husband's name, renting the farmland for about $100 an 24 acre. That rent is substantially below current market 25 rates and as a result of that favorable treatment by 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 4 1 the Trustee as regards this one beneficiary, as a 2 result of that, Sandra Walstrom is being unfairly and 3 impermissibly favored, when the Trust documents make 4 clear that all of the sibling beneficiaries, or 5 children beneficiaries, if you will, are to take 6 equally, and it has come to Mr. Michael Roehrs' 7 attention that this has been going on for a number of 8 years, and he was under the presumption that the 9 current Trustee, Mrs. Marvel Roehrs, had a life 10 estate, but she does not, and once he learned of that 11 he realized that this kind of rental arrangement 12 should not be occurring and he contends that the 13 Dahlberg factors support the issuance of a preliminary 14 injunction to ensure that the Trust's asset is 15 properly flowing money back into the Trust as opposed 16 to favoring one of the children beneficiaries over the 17 others. The reason there's irreparable involved harm 18 here is because it involves a breach of fiduciary duty 19 that the current Trustee does owe all of the children 20 beneficiaries, just not one to the exclusion of or 21 detriment of the other trustee. 22 Secondly, there's a likelihood of success 23 on the merits of this because it is clear that this 24 farmland has been rented way under current rental 25 levels in this community. Mr. Michael Roehrs has 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 5 1 offered to lease the land himself for substantially 2 more. He contends that the current rate should be 3 $400 per acre, but he is not wedded to the idea of him 4 being the one who leases the land. He would be 5 willing to have it go out on the open market for bid, 6 but his position is that this impermissible 7 favoritism, which is not allowed under the clear terms 8 of the Trust agreement, is irreparably harming him 9 because it is a breach of the current Trustee's 10 fiduciary duties because the handling of the farmland 11 is contrary to the terms of the Trust. There's a 12 likelihood of success on the merits. The relationship 13 of the parties favors a grant of a preliminary 14 injunction because, as Trustee, Mrs. Roehrs owes a 15 fiduciary duty to all of the beneficiaries equally and 16 she's not allowed to favor one to the exclusion of 17 others. Public policy favors a grant of preliminary 18 injunctive relief because Minnesota has an interest in 19 making sure that Trust documents are enforced as 20 written, and there have been some allegations that 21 there was some verbal agreement between Ronald Roehrs, 22 the original, the father of all these children, and 23 the husband of Mrs. Roehrs, that while he was still 24 alive he said that Sandra should be allowed to rent 25 the farmland for about $100 an acre. That's not 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 6 1 allowed to change the clear terms of a Trust and the 2 Court should reject that argument. And the balance of 3 the harms favors the grant of a preliminary injunction 4 because the level of the rent -- and we acknowledge 5 that the Walstroms have offered to pay $200 an acre 6 now, but even at that rate, it's still substantially 7 below market rate and we would encourage the Court to 8 allow that -- the principal asset of the Trust to be 9 maximized to the benefit of all of the beneficiaries. 10 And as regards the request for the removal 11 of the Trustee, this is not a personal issue. There 12 was a police report filed that Mrs. Roehrs' son, Mr. 13 Abraham, admitted she was having memory issues. There 14 is a Power of Attorney that Mr. Roehrs, Michael 15 Roehrs, contends is probably being misused so that 16 people other than Mrs. Marvel Roehrs are probably 17 running the assets of the Trust, which is 18 impermissible, and the Trust documents clearly state 19 that, in the event a successor Trustee should be 20 appointed, it designates by name Steven Roehrs, so Mr. 21 Michael Roehrs would ask the Court to ultimately 22 remove as Trustee Mrs. Marvel Roehrs and appoint as 23 Trustee Steven Roehrs. Thank you, your Honor. 24 THE COURT: Mr. Keena? 25 MR. KEENA: Your Honor, thank you very much 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 7 1 for the opportunity to appear, your Honor. For the 2 record, I represent Rhonda Conrath, Janet Tharp and 3 Daniel Roehrs. My young colleague, Ian McCoy, is 4 appearing behind me. He may not be able to be seen by 5 the Court, but he's also appearing here with me today. 6 I will do something that I hope is perhaps unusual but 7 also the best thing to do in a circumstance like this, 8 because I understand there is a lot of history, a lot 9 of emotion, and even perhaps a lot of -- many 10 allegations which simply are unsupportable in this 11 case. So what I will do is the easiest thing for the 12 Court to analyze, the very easiest thing. I will 13 limit my arguments to the Trust, because if the Court 14 considers my arguments, and I expect my 15 co-respondent's counsel will have other arguments, but 16 I'll limit mine strictly to the terms of the Trust. 17 Petitioner has extended their argument as 18 if this Trust relates to something beyond what it 19 does. Kindly they have attached a complete copy of 20 the Trust to their petition. If you read the 21 petition, the petition asset is the farm. I would 22 submit that no where, absolutely no where in the Trust 23 does it refer to the funds from the Trust being an 24 asset for the beneficiaries. It does not. I looked 25 for it many, many times. Instead, what it says is 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 8 1 that the Trustee, who is currently Marvel, must take 2 revenues from the Trust and pay taxes and pay 3 maintenance. And interestingly, she can then invest 4 any remaining funds or she may pay them to herself as 5 salary. In other words, she gets to keep the money. 6 So whether she charges a million dollars rent or 7 whether she charges one dollar rent, as long as she 8 maintains the farm and as long as she pays the taxes, 9 she has satisfied her obligations, which are to 10 preserve the Trust asset. That is the farm. The farm 11 is the Trust asset. This is obviously a circumstance 12 where dad wanted the farm preserved. This is not a 13 Trust that anywhere on its terms at all states that 14 the money from the Trust asset goes to the 15 beneficiaries. It goes to the Trustee. Right on its 16 explicit terms. So objections to how and what she's 17 doing with the money, the Trustee, how much she's 18 charging for it, or any of those issues, are actually 19 irrelevant. It would only -- the only thing that 20 would be relevant is, is she not paying the taxes, is 21 she not maintaining the farm? Those are her 22 obligations under the Trust. 23 I next move to the next question. What 24 does the Trust say about successor trustees? And the 25 petitioner also misstates what the Trust says about 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 9 1 that. It does state that Steven would be named as the 2 successor trustee in certain circumstances, however, 3 it also identifies Marvel, the current Trustee, as a 4 successor trustee. And the reason it identifies 5 Marvel has a successor trustee is because it 6 identifies the grantor, dad, as the original Trustee. 7 And so what the Trust says then is that, in the event 8 that, at the time of dad's death, Marvel is unwilling 9 or unable to accept the role of Trustee, in case dad 10 lives a long time and Marvel can't take it or she's 11 passed away, then the Trustee position goes to Steven 12 at that occasion. It says it on its terms, your 13 Honor. You can read it, it's included in many of the 14 language, including the petitioner's own language; it 15 says it explicitly that death or disability of the 16 grantor as trustee, the grantor is dad, if at any time 17 the grantor has a disability or death of the grantor, 18 Marvel B. Roehrs is designated as the successor 19 trustee. Such designee shall become the successor 20 trustee upon the terms and conditions of the Trust. 21 If successor trustee, i.e. Marvel, is unable or 22 unwilling to serve, Steven Roehrs is designated as the 23 alternative successor trustee. In other words, Steven 24 becomes the successor trustee if Marvel couldn't do 25 the job upon dad's death. He was not named as the 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 10 1 successor trustee once Marvel no longer can accept it. 2 There is an explicit term for what happens when 3 Marvel's role and time as Trustee is over. There's an 4 explicit term. Now, we disagree that Marvel is not 5 doing her job as Trustee. Her job is to maintain the 6 farmland and to pay the taxes, and her job is to do 7 with the money whatever she wants. She can pay it to 8 herself in salary or she can invest it, under the 9 clear written terms of the Trust. The fact that 10 Michael, a man who has sued his family repeatedly, 11 doesn't like the fact that one of his own siblings is 12 getting a good deal is too bad. Frankly, Sandra is 13 not my client, but my three sibling clients are 14 perfectly fine with it. But what happens under the 15 terms of the Trust when Marvel is unable to complete 16 her role or continue her role as the successor trustee 17 is this: It says, D, successor trustee. If the 18 Trustee, i.e. Marvel, is forced to resign as Trustee, 19 the successor trustee should be designated by the 20 beneficiaries of the Trust. Well, that is Sandra, 21 Rhonda, Janet, Daniel, Steven, and Michael. Well, 22 that's going to be bad news for Michael and Steven. 23 That's going to be bad news for the petitioner, 24 because I expect that Sandra, Rhonda, Janet and Daniel 25 will vote together, and Steven and Michael will find 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 11 1 that one of them are named as Trustee. And guess 2 what? Under the explicit terms of the Trust, who ever 3 is named as Trustee can pay themselves a salary out of 4 the Trust. This notion of unequal treatment, this 5 notion of one beneficiary does better than the other 6 is not allowed, it's not included in the Trust. In 7 fact, it's written specifically out of the Trust. And 8 here's why, your Honor. The Trust is a farm Trust. 9 It's not a Trust that says the farm will generate 10 money and then the beneficiaries divide up the money. 11 That's not what this Trust said. It's dad's Trust to 12 protect the farm. So my request for you is quite 13 simple. I don't care about the fighting, I don't care 14 about the he said she said, I don't care about all of 15 the history, I don't care about anything other than 16 the simple reading of the Trust. The simple reading 17 of the Trust says the Trust asset is the farm. The 18 Trustee must maintain and pay the taxes. Done, done 19 and done. It also says the Trustee may invest the 20 money, or left-over money after they pay the taxes and 21 maintain the farm, or they may pay it to themselves as 22 salary. Fine. The Trust says if Marvel had not 23 accepted her role as successor trustee to dad, then 24 Steven could have jumped in. Guess what? Marvel did 25 accept her role as Trustee. Now, if Michael is 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 12 1 successful in kicking Marvel out as Trustee, in other 2 words, if she is fired under the specific terms of the 3 Trust and it says, if Trustee is forced to resign as 4 Trustee, that successor trustee should be designated 5 by the beneficiaries of the Trust. That's me reading 6 from the Trust, your Honor. In other words, all the 7 trustees will vote on it. It isn't Steven named by 8 Michael, it's the six of them voting. That will not 9 be good news for the petitioner. That will not be the 10 petitioner's motion for injunctive relief being 11 granted. It will be the six of them voting. In other 12 words, there is no likelihood of success with regard 13 to this motion for injunctive relief because all we 14 have to do is follow the terms of the Trust. It has 15 the remedies in place, it's that simple. 16 I appreciate the Court's time and I'm open 17 for questions if you have any. 18 THE COURT: Mr. Keena, I want to thank you 19 because your reading of this Trust is exactly how I 20 read it, and I was questioning why we are here. Ms. 21 Haberman, do you wish to make any arguments? 22 MS. HABERMAN: Yes, your Honor. Thank you. 23 I'm joined by my client, Marvel Roehrs, here today as 24 well, she goes by Bonnie. She is the current Trustee 25 of this Trust. Your Honor, we agree with everything 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 13 1 that Mr. Keena has said so far. We believe that, to 2 the best of her ability so far, Marvel has been -- is 3 the Trustee, has been doing her job to maintain and 4 preserve the Trust as it has been stated and as her 5 husband left it for them to go about. We have 6 objected to this motion from a point of maintenance of 7 the status quo. This motion would completely disrupt 8 the status quo here under those Dahlberg factors. It 9 would disrupt how this farm has operated for the past 10 20 some years, and it would cause great economic harm 11 both to the Trust and to others as well, to the 12 beneficiaries themselves, if this Trust land were not 13 to be farmed this year or if the Trust were to -- if 14 Mr. Walstrom, who has a valid contract to continue 15 leasing this farmland for this year, were to have any 16 sort of liability claim against the Trust for, you 17 know, breach of their contract that they had in place. 18 So we agree with Mr. Keena's -- how he has presented 19 the Trust and how Ms. Roehrs has been operating as the 20 Trustee. We'd also like to add just those two 21 arguments as far as this motion is concerned. Thank 22 you for the Court's time. 23 THE COURT: Ms. Rubis? 24 MS. RUBIS: Thank you, your Honor. I just 25 want to check, are you still getting feedback from my 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 14 1 microphone? 2 THE COURT: We are. 3 MS. RUBIS: Are you now? 4 THE COURT: That's better. 5 MS. RUBIS: Okay. Thank you. Your Honor, I 6 just have a couple of points as well. I agree with 7 the points made by attorney Keena and Haberman and I 8 just want to also state that it's my client's position 9 that this motion has been filed untimely as well and 10 should be denied for that purpose. The petitioner 11 filed this motion on March 22, just 14 days ago, and 12 obviously that is less than the 21 days required by 13 the rules. This alone is a proper basis for the 14 denial, but it's also our position that the motion 15 should be denied on its merits. As you've said, you 16 have reviewed the submissions, so I just want to use 17 this time to address the petitioner's lack of support 18 for granting the injunctive relief here. In order to 19 grant the temporary injunction, the Court has to look 20 to those Dahlberg factors, and first, the parties 21 relationship for purposes of this matter at least is 22 that of Trustee and beneficiary and the purpose in 23 granting a temporary injunction is to preserve that 24 status quo. Granting this relief here would not 25 obtain that result, it would have the opposite effect. 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 15 1 The Trustee has managed the Trust and Sandra 2 Walstrom's husband has farmed the Trust property for 3 the last 23 years. Petitioner's injunction is 4 contradictory to preserving the status quo and the 5 same can be said about appointing Steven Roehrs as the 6 successor trustee. 7 In looking at the balancing of harms here, 8 the Trust would be irreparably harmed if the 9 injunction was issued. The Trust property is already 10 being rented for the 2023 crop year to my client's 11 husband, Garry Walstrom. If petitioner's injunction 12 is granted, it puts the Trust at risk that it will sit 13 fallow for this crop year and consequently it opens 14 the Trust up to further litigation for breach of that 15 lease. There is no harm to Michael in denying the 16 injunction here. He remains the beneficiary, the land 17 will be farmed and rented for the 2023 crop year, and 18 the Trust will receive the rent pursuant to the lease 19 agreement. 20 And third, the Court must consider the 21 likelihood that one party will prevail. As Mr. Keena 22 pointed out, it is very unlikely that Mr. Roehrs would 23 prevail on the merits here. He's relying on his own 24 interpretation, or rather misinterpretation, of the 25 events in his personal opinion and his efforts to 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 16 1 remove Bonnie as the Trustee here. The evidence shows 2 that Bonnie has always been entirely proper in her 3 duties in administering the Trust here. He has not 4 provided any support of his accusations and it's 5 unlikely he will prevail on his merits. 6 Then looking at the public policy here, 7 again, as we've said, there is a valid contract. 8 Garry Walstrom entered into a written lease with 9 Bonnie, and requiring the Trust cancel and therefore 10 breach that contract would have also great impact on 11 Garry Walstrom as a farmer who has invested, 12 significantly improving the Trust farmland for 13 decades, and for preparing the farmland for the crop 14 year 2023. So therefore, public policy would favor 15 upholding this valid contract. 16 And finally, your Honor, the Court must 17 consider the administrative burdens in granting the 18 temporary injunction. While Mr. Roehrs argues issuing 19 the injunction will require minimal court interaction, 20 we find this highly unlikely. The likelihood of 21 success in finding a proper tenant by way of opening 22 the farmland up to bids is low. Like Mr. Walstrom, 23 most farmers have already purchased input for this 24 year. Any farmers willing to farm new farmland with 25 less than a month from the planting season will 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 17 1 require a significant discount in rent. Further, in 2 light of Michael's litigious history with his family, 3 if the Court required written consent of all the 4 beneficiaries in renting the land, it would be 5 unlikely that Michael, or Steven Roehrs for that 6 matter, could agree with any proposals the siblings 7 might consent to. This would require the continued 8 intervention of the Court until final adjudication of 9 this case on the merits. 10 Lastly, Michael suggests the farmland be 11 rented for the 2023 year by court order pending the 12 resolution of this petition. In order for the Court 13 to issue that, they would have to invalidate the 14 contract between the Trustee and Garry Walstrom 15 without an evidentiary hearing and receive evidence 16 and testimony regarding the fair market rent for the 17 particular land involved in this matter. Moreover, 18 issuing the removal of Bonnie as Trustee with 19 replacement of Steven Roehrs is not supported by four 20 of the beneficiaries and would also likely result in 21 further court intervention. Therefore, Ms. Walstrom 22 is respectfully requesting the Court deny the motion 23 for injunction and set the matter out for an 24 evidentiary hearing. Thank you, your Honor. 25 THE COURT: Ms. Berens, anything further? 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 18 1 MS. BERENS: Yes, your Honor. First of 2 all, I respectfully disagree with both the Court and 3 the other parties about what the Trust says and what 4 it means. First of all, independent of the Trust, as 5 Trustee Marvel Roehrs has duties that are owed that 6 are independent of the four corners of that Trust 7 document, and one of them is set forth in Minnesota 8 Statute 501C.0803, and it requires a trustee to be 9 impartial, and I would draw the Court's attention to 10 the Stuchlik case, where the facts were exactly as 11 they are here, which is when the Trustee was renting 12 out some of the assets of the Trust at a more 13 favorable rate to one of the beneficiaries. It 14 doesn't say that in the Trust agreement, you're right, 15 it does not, but the Trust agreement does say clearly 16 that all of the children beneficiaries take equally, 17 and I think it is an extraordinarily narrow reading of 18 the Trust to say the only thing that matters is the 19 farmland. First of all, under the Trust, paragraph 20 VI.C, there is a standard of care that's set forth for 21 the Trustee and they are supposed to act prudently and 22 reasonably as fiduciaries, and by taking an asset of 23 the Trust and, as Mr. Keena said, the only asset of 24 the Trust and not maximizing its value is neither 25 prudent nor reasonable. So in addition to being 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 19 1 improper favoritism, it's also in violation of the 2 Trustee's duties as a fiduciary. And whether or not 3 that, you know, that standard of care was set forth in 4 the Trust agreement, still, Marvel Roehrs is bound by 5 the fiduciary duties that the Trustee owes its 6 beneficiaries or the beneficiaries independent of what 7 the Trust agreement says. 8 THE COURT: Ms. Berens, a question for you. 9 My reading of the first amendment to the Trust is that 10 Marvel Roehrs basically is the beneficiary of the 11 Trust assets so long as she continues to reside in the 12 farm house and she continues to use the Trust income 13 to pay real estate taxes, insurance, maintenance and 14 necessary improvement costs to the farmland. So the 15 six children are not beneficiaries until such time as 16 Marvel Roehrs is not. Do you agree with that? 17 MS. BERENS: No, your Honor, I don't. 18 THE COURT: All right. Tell me what 19 specific paragraph of the Trust is saying otherwise. 20 MS. BERENS: I would say it's the thing 21 that we cited, your Honor. Let me give you exactly 22 where I think within the document, and thanks for the 23 opportunity to do this. So what the first amendment 24 says is she can occupy the house. That includes the 25 house and the acreage. Occupy. And then the Trust 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 20 1 farmland rent should had been made available. That 2 doesn't say anything that contradicts the underlying 3 Trust agreement that requires her to act as a prudent 4 person under VI.C. 5 THE COURT: Right, but if she's acting as 6 her own benefit, I mean, if she's choosing to take a 7 less than fair market rental rate, that's only 8 affecting her at this point, correct? How is that 9 affecting the six children that wouldn't benefit from 10 the farm income while Marvel is still receiving the 11 benefit of it? 12 MS. BERENS: Your Honor, I don't read it 13 that narrowly, because at the end of the day they are 14 like subsidiary beneficiaries and I think they all 15 have a right to have that Trust asset managed 16 prudently, as set forth in the underlying Trust 17 agreement. It doesn't say she's not the Trustee. She 18 can't trump her Trustee duties simply because she's a 19 beneficiary of those assets at the time, and I don't 20 think it's prudent -- and I understand that -- I 21 understand what the Court is saying, but I disagree 22 because I think she has independent duties that aren't 23 set forth in that Trust agreement, and we cited a 24 number of cases to the Court, one of which says a 25 trustee cannot administer a Trust for their own 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 21 1 benefit. I believe that the Avis versus Cordes case, 2 and if she is essentially managing the Trust for her 3 own benefit by renting to the Walstroms, and that is 4 to the detriment of the other beneficiaries, that runs 5 counter -- I mean, she can't wear both hats in that 6 sense. She has independent duties as a trustee and 7 all the duties. I mean, if you look at all the duties 8 under what the Trustee can and can't do, for example, 9 the Trustee is not allowed to make a loan to the 10 beneficiary. That's essentially what she's doing. 11 She is giving them value that they are not entitled to 12 to the extent of what that farmland would otherwise 13 rent for. So I disagree with the Court on the reading 14 of the Trust because the Trust also has independent 15 duties under statutory and other sources of common 16 law. 17 THE COURT: And I would agree that a 18 trustee has independent duties to all beneficiaries, 19 but the children of his Trust are not beneficiaries 20 yet, in my reading of it, and also refer to the first 21 amendment, subparagraph 2, that specifically says, 22 upon the death of Marvel Roehrs or at such time as she 23 elects to no longer reside in the residence, the 24 Trustee shall distribute said building site and Trust 25 farmland to the six children. That hasn't happened 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 22 1 yet. So I'm missing your connection of how the six 2 children would get income benefits from the farmland 3 if Marvel still lives there and she has the right to 4 live off the income benefits of the Trust. 5 MS. BERENS: Again, your Honor, the way I 6 read this is that they are beneficiaries in waiting 7 and that under VI, for example, she is supposed to 8 retain assets. You know, all of these things is 9 residual beneficiaries of the Trust. The children 10 don't even know or at least Michael Roehrs doesn't 11 know, you know, where the money is going and I think 12 at the end of the day she has duties that are broader 13 than just what she had as a beneficiary. 14 THE COURT: I agree with you that the six 15 children are basically beneficiaries in waiting. I'm 16 not seeing that this is -- Well, maybe it is an action 17 claiming that Marvel Roehrs has failed to pay real 18 estate taxes, insurance, maintenance and necessary 19 improvement costs for the Trust assets. If that's the 20 claim, then maybe we have something here, but I did 21 not see that as a claim in the paperwork. 22 All right. Moving on, Mr. Keena, anything 23 further? You're on mute. 24 MR. KEENA: Okay. Thank you. It seems 25 academic, but counsel cited the provision that the 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 23 1 Trustee may not make loans to the beneficiaries. In 2 the paragraph immediately following that, this 3 Trustee, Marvel, also known as Bonnie, also has the 4 power to make uneven distributions to any of the 5 beneficiaries. So their objection to the fact that 6 Sandra is getting maybe a favorable rent is even 7 specifically allowed under the Trust if she were 8 wanting to. But with regard to the fiduciary duties, 9 the statutory fiduciary duties of a trustee, they do 10 apply, and those statutory fiduciary duties in this 11 circumstance relate to the preservation of the farm, 12 so that is what her duties are here. I have nothing 13 further, your Honor. 14 THE COURT: All right. Anything further, 15 Ms. Haberman? 16 MS. HABERMAN: We have nothing further, 17 your Honor. 18 THE COURT: Anything further, Ms. Rubis? 19 MS. RUBIS: No, your Honor. 20 THE COURT: All right. Court will take the 21 matter under advisement, issue a written order within 22 90 days. I recognize that there is an urgency because 23 it deals with 2023 farm rental assets, so I do hope to 24 get that out as soon as possible. That will conclude 25 this hearing. Thank you. 81-CV-23-104 Filed in District Court State of Minnesota 6/28/2023 8:31 AM 24 1 MS. BERENS: Thank you, your Honor. 2 (End of record.) 3 4 STATE OF MINNESOTA 5 CERTIFICATE 6 COUNTY OF WASECA 7 8 I, Jane T. Hofmeister, Court Reporter, do hereby certify 9 that the foregoing pages 1 - 24 are a true and correct 10 transcript of my stenographic notes taken in the above 11 entitled matter on the 5th day of April, 2023 before the 12 Honorable Carol M. Hanks, Judge of District Court. 13 14 15 __________________________ Jane T. Hofmeister, RPR 16 District Court Reporter Waseca County Courthouse 17 Waseca, MN 56093 (507)308-7011 18 19 20 21 22 23 24 25