In the Matter of the Trust Created Under Agreement By and Between Eugene V. Stowell and Shirley Marie Stowell, Settlor, and Richard Stowell and Gary Stowell, Trustee, dated June 23, 1998

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1167

In the Matter of the Trust
Created Under Agreement By and Between
Eugene V. Stowell and Shirley Marie Stowell, Settlor,
and Richard Stowell and Gary Stowell, Trustee,
dated June 23, 1998

Filed April 2, 2018
Affirmed
Rodenberg, Judge

Carlton County District Court
File No. 09-CV-16-1720

Stephanie M. Balmer, Falsan i, Balmer, Peterson & Qui nn, Duluth, Minnesota (for
appellant Linda Boyer)

Frank Yetka, Rudy, Gassert, Yetka, Pritchett & Helwig, P.A., Cloq uet, Minnesota (for
respondents Richard Stowell and Gary Stowell)

Considered and decided by Rodenberg, Presiding Judge; Bjorkman, Judge; and
Smith, Tracy M., Judge.
U N P U B L I S H E D O P I N I O N
RODENBERG, Judge
Appellant Linda Boyer appeals from the di strict court’s order denying her objection
to, and approving of, the administration of the Stowell Family Trust. We affirm.

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FACTS
Eugene and Shirley Stowell had five chil dren: Richard Stowell, Gary Stowell,
Daniel Stowell, Randall Stowell, and appellant. Shirley Stowell created a trust on June 23,
1998, naming all of the Stowell children as beneficiaries, and de signating herself and
Eugene as trustees. The trust was amended and superseded a number of times, culminating
in the Fifth Complete and Superseding Amendment to Re vocable Trust Agreement of
Shirley Marie Stowell dated November 29, 2010. 1 Her sons Richar d and Gary Stowell
were identified as the trust’ s successor co-trustees in an amendment dated November 29,
2012.
Eugene died on August 12, 2012. Shirley died on September 4, 2014, and Richard
and Gary began administering th e trust. When Shirley died , the trust assets included a
shopping center that Eugene had purchased years earlier. The trust provided that any real
property held by the trust “be sold as soon as reasonably possible” after Shirley’s death.
The trust directed the trustees to informally contact Shirley’s children to determine if any
were interested in purchasing trust real prope rty, and that the children be given “a first
opportunity to purchase said pr operty.” The trustees were required to poll the children,
and “approval by a majority of [Shirley’s] surviving children as to the terms and sale price
of a piece of real estate shall absolutely authorize the trustee to sell on such terms.” Other
sections of the trust repeated the requirement that consent of a majority of the surviving

1 Our references to the trust herein are to the fifth amendment of it, which the parties agree
was operative at all times pertinent to the appeal.

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children be obtained to sell the trust’s real pr operty. Richard sent a number of updates to
his siblings regarding the status of the trust property and distributions.
Shortly after Shirley’s death, Richard sent ballots to his siblings concerning the
potential sale of trust assets to family members. Daniel pur chased one of Eugene’s rings
and appellant purchased one of Shirley’s rings and a necklace. Both of these sales were
approved by all five of the siblings. Daniel bought the family’s hunting shack, which had
an appraised value of $114,000, for $100,000; this sale was also unanimously approved by
the siblings. The homestead was sold to a non-family member on terms to which all
siblings agreed.
On December 12, 2015, Richar d proposed to purchase the shopping center—then
the sole remaining trust asset. His proposal was designed to permit winding up the trust.
Richard hoped to complete the transaction be fore the end of 2015 to avoid negative tax
consequences for the trust. The shopping-center sale is central to this appeal.2
Richard had the shopping center appraised in November 2014. The appraisal valued
the shopping center at $2.4 milli on as of the time of Shirley’s death. In December 2015,
the shopping center’s debt was $2,275,000. Richard’s proposal began with the appraised
value3 and assumed that the trust would have to accept a lower price for the shopping center
if it was sold to a third party. Richard al so subtracted $124,500 from the appraised value

2 The purchase was of G & R Development LLC, which managed the shopping center. We
refer to the purchase in questio n as being of “the shopping center,” consistent with the
briefing and argument on appeal.

3 The initial appraisal originally had a typog raphical or transposition error, listing the
appraised value at $2.54 million. Richard used this higher value in his initial proposal.

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to account for the five-percent commission that would be expect ed if a realtor sold the
shopping center. The resulting offer, taking in to account the gross proceeds after these
deductions, was $2,365,500, which would have resulted in $90,500 in net proceeds to the
trust after Richard’s assumption of the loan. Richard then added $37,500 to the gross offer
to account for other assets (such as cash a nd receivables) owned by the shopping center,
bringing the total net to the trust under his offer to $128,000. Richard proposed to pay the
trust that amount and assume the shopping center’s debt.
Richard’s initial offer also included a provi sion for other siblings to participate in
the purchase, in part because he was leery of assuming the entire mortgage balance.
Appellant indicated some interest in partic ipating, and Richard exchanged emails with
appellant regarding the shopping center and its value. Richard also provided a number of
financial documents in response to appellant’s questions. Richard eventually rescinded the
offer for his siblings to join in the purchase as partners. The four Stowell brothers
submitted ballots authorizing the sale of the shopping center to Richard for $128,000 plus
his assumption of the shopping center’s debt . Appellant did not return a ballot on this
proposal. Richard purchased the shopping center from the trust on December 31, 2015.
Richard then petitioned to terminate the trust. Appellant objected. After a hearing,
the district court denied appe llant’s objection, approved the sa le to Richard, and ordered
appellant to pay the trustees’ costs and disbursements.
This appeal followed.

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D E C I S I O N
Appellant originally challenged the distri ct court’s order on six grounds. She argued
that the district court erred by: (1) finding that Richard acted in good faith and with due
regard for the interests of the beneficiaries in his purch ase of the shopping center;
(2) concluding that the shopping-center sale complied with the te rms of the trust;
(3) considering extrinsic evid ence about the agre ement resulting in lower property taxes
and common-area maintenance (CAM) fees be ing paid to the shopping mall; (4) finding
that Richard complied with his statutory duties; (5) excluding evidence of communications
between the parties’ attorneys regarding appellant’s requests for information; and
(6) ordering appellant to pay the trustees’ co sts and disbursements. At oral argument,
appellant withdrew her challenge to the distri ct court’s exclusion of the attorneys’ email
communications. Additionally, the parties agre ed at oral argument that the costs-and-
disbursements issue is not properly before us because no costs have yet been taxed by the
district court. We address the remaining issues.
I. The district court did not err in findi ng that Richard Stowell complied with the
terms of the trust.

We first address appellant’s argument that the district court erred in finding that
Richard’s purchase of the shopping center complied with the terms of the trust. Appellant’s
argument is without merit.
“The terms of a trust prevail over any provision of” chapter 501C except in certain
enumerated areas, including the trustee’s duty to act in good faith a nd in the interests of
the beneficiaries and the effect of an exculp atory provision. Minn . Stat. § 501C.0105(b)

6
(2016). Section 6.2.1 of the trust directs that the real property, except for one house, be
sold as soon as reasonably possible after Shir ley’s death. It directs the trustees to
informally contact the Stowell children to determine which, if any, have an interest in
purchasing trust property and directs that the Stowell children shall have the first
opportunity to purchase the property if possibl e and reasonable. The trust requires a poll
of the children, “and approval by a majority of [Shirley’s] surviving children as to the terms
and sale price of a piece of real estate shall absolutely authorize the trustee to sell on such
terms.” Additionally, section 8.3.2 authorizes the trustees, in the exercise of their
administrative powers, to sell trust property under the condition that “[c]onsent of a
majority of [Shirley’s] survivi ng children must be obtained to authorize the sale of real
estate or the sale of an interest in a business.”
Appellant agreed at oral argument that the trust authorized the sale of trust property
to a sibling upon a majority vote. Indeed, the trust not only permits the sale of trust property
to a child of Shirley, such a sale is prefe rred. This provision resulted in the unchallenged
sale of other trust assets to family members.
Shortly after Shirley’s death, Richard asked his siblings to indicate their interest in
the shopping center. None initially indicated any interest. Then, in 2015, Richard proposed
to buy the shopping center un der the terms described above. He sent ballots seeking
approval to his siblings. The initial proposal indicated that Richar d might be willing to
accept his siblings as partners in this purc hase. While appellant argues that Richard
violated the terms of the trust by purchasing the shopping center alone after she expressed
interest in allowing others to join in the purchase, nothin g in the trust requires that a

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purchasing sibling take on partners. Eventually, Richard modified his offer to purchase
and proposed to buy the shop ping center himself. The tr ust requires that a proposed
purchase receive majority appr oval by the beneficiaries. Four of the five sibling
beneficiaries returned ballots approving the proposed sale to Richard. No sibling objected
to the purchase; appellant abstained by not re turning her ballot at all. Because the trust
authorized the sale to a beneficiary, the distri ct court did not err in finding that Richard’s
purchase complied with the terms of the trust agreement.
II. The district court did not err in conc luding that Richard Stowell complied with
his statutory duties as a trustee.

Appellant argues that Richard failed to comp ly with his statutory duties to act in
good faith, with due regard fo r the interests of the other beneficiaries, and to keep the
beneficiaries reasonably informed about the status of the trust.
A. The record supports the district court’s determinat ion that Richard
complied with the duty of good faith.

As the district court correctly noted, its proper role is not to determine the value of
the shopping center. Rather, the district c ourt’s role upon appella nt’s objection is to
determine whether the co-trust ees acted in good faith by se lling the shopping center to a
trust beneficiary by majority vote consistent with the terms of the trust. The district court
found that they did so act. We review that determinati on for abuse of discretion. In re
Estate of Sullivan, 868 N.W.2d 750, 754 (Minn. App. 2015) (quotation omitted).
A trustee’s duty to “act in good faith and in accordance with the terms and purposes
of the trust and the interests of the beneficiaries” is mandatory and cannot be eliminated by
the terms of the trust. Minn. Stat. § 501C.0 105(b)(2). This duty is concurrent with a

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trustee’s duty of loyalty, which requires that a trustee “not place the trustee’s own interests
above those of the beneficiaries.” Minn. Stat. § 501C.0802(a) (2016). “If a trust has two
or more beneficiaries, the trus tee shall administer the trust impartially, giving due regard
to the beneficiaries’ respectiv e interests.” Minn. Stat. § 50 1C.0803 (2016). The trustee
must “exercise reasonable care, skill, and cautio n” in prudently administering the trust.
Minn. Stat. § 501C.0804 (2016). “A trustee sh all . . . manage trust assets as a prudent
investor would,” and may consider “gen eral economic conditions.” Minn. Stat.
§ 501C.0901, subd. 2(a), (c)(1) (2016). “A trustee has the duty to exercise reasonable care,
skill, and caution in investing and managing tr ust assets as a prudent investor would, by
considering the purposes, terms, distribution requirements, and other circumstances of the
trust.” Norwest Bank Minn. N., N.A. v. Beckler, 663 N.W.2d 571, 580 (Minn. App. 2003)
(quotation omitted). “A trustee may not exercise its discretion in a manner that defeats the
settlor’s intent or the purposes of the trust.” Id. But “[so] long as the trustees act in good
faith, from proper motives, and within the bounds of reasonable judgment, the court will
not interfere with their decisions.” Id. at 580-81 (quotation omitted) (alteration in original).
In discussing these concepts in the context of a corporation, the supreme court has stated
that “[t]he essence of the test is whether or not under all the circumstances the transaction
carries the earmarks of an arm’s length bargain.” Westgor v. Grimm, 318 N.W.2d 56, 59
(Minn. 1982) (quoting Pepper v. Litton, 308 U.S. 295, 306, 60 S. Ct. 238, 245 (1939)).
Richard and appraiser Ann Heimbach, am ong other witnesses, testified that
Heimbach appraised the shopping center in 2014 to determine its value as of the date of
Shirley’s death. Heimbach was familiar with the shopping center, having appraised it

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previously, and was recommended to Richard as the most highly respected appraiser in the
area.
Heimbach testified that she used the income approach to appraisal, based on the
expected income to an investor purchasing the mall, and that it is the most reliable method
of appraising this type of property. Heimba ch testified that, using that approach, she
determined that the value of the shopping center at the time of Shirley’s death in September
2014 was $2.4 million. This value was lower than those dete rmined by Heimbach in her
2012 and 2013 appraisals. Heimbach explained the difference as being attributable to her
using the actual rental rates for the theater and liquor store spaces in the 2014 appraisal as
opposed to using the market-re ntal rates she used in 2012 and 2013. Heimbach also
testified that the rental rates she used were based on Premiere Theaters and a liquor store
in the mall having negotiated lowe r rental rates than those list ed in their leases, and were
based on an agreement reached during Eugene’s life that the theater did not have to pay
approximately $16,000 in annual property taxes.
Appellant’s expert witness, Gary Battuello, agreed that the income approach is the
appropriate method to appraise the shopping center. Battuello testified that the shopping
center’s value at the time of Shirley’s death was $2,777,777. He noted that, in reaching
that value, he added back the $25,000 of de ductions in property taxes and CAM fees that
the theater had not been paying.
Finally, David Holappa, a real estate br oker, prepared and signed an affidavit,
received without objection, based on his review of the 2014 appraisal and Richard’s offer
to purchase the shopping cente r. In his affidavit, Holappa stated that he saw nothing

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objectionable in Heimbach’s 2014 appraisal a nd opined that the purchase price paid by
Richard was reasonable, complied with “sta ndard practice,” and was “typical” for the
market.
Richard testified that, in proposing a purchase to his siblings for approval under the
terms of the trust, he starte d with Heimbach’s appraisal va lue of $2.4 milli on, and made
deductions and additions he thought to be reasonable, resulting in a final purchase price of
$2,365,000. Before making his calculations and his offer, Richard asked Heimbach if she
believed the market had changed, and Heimbach told him that she did not believe it had
changed. Richard also consulted with a ttorneys and accountant s before making any
decisions about whether to purchase the sh opping mall. According to Richard, no
transactions were ever entered into with out input from an atto rney and a vote by his
siblings.
The district court found Richard’s testimony to be credible, stating:
His openness and lack of defens iveness during his testimony
and in the submissions to the Court in which he advised his
siblings of the status of the trust lead the Court to the
conclusion that he acted in good faith. His regular contact with
lawyers and his accountant further demonstrates that he acted
in a reasonable and prudent manner.

We give due regard “to the opportunity of the trial court to judge the credibility of
the witnesses,” Minn. R. Civ. P. 52.01, and defer to district court credibility determinations,
Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Mi nn. 1988). On this reco rd, the district court
did not abuse its discretion in finding that Richard acted in good faith and with due regard
for the interests of the beneficiaries in purch asing the shopping center. The district court

11
clearly identified the reasons for its credibility determinati ons, and the record supports
those stated reasons.
B. The record supports the district cour t’s findings that Richard acted with
due regard for the interests of the other trust beneficiaries and kept
those beneficiaries reasonably informed.

Minnesota law requires a trustee to “keep the qualified beneficiaries of an
irrevocable trust reasonably informed about the administration of the trust and of the
material facts necessary to protect their interests.” Mi nn. Stat. § 501C.0813(a) (2016).
“Unless unreasonable under the circumstances, a trustee shall promptly respond to a
beneficiary’s request for information related to the administration of an irrevocable trust.”
Id. A trustee has a “duty to ‘disclose to the beneficiary fully, frankly, and without
reservation all facts pertaining to the trust.’” Norwest Bank, 663 N.W.2d at 581 (quoting
In re Enger’s Will , 225 Minn. 229, 239, 30 N.W.2d 694 , 701 (1948)). We again review
questions of law de novo, but review the district court’s ultimate conclusions for abuse of
discretion. Sullivan, 868 N.W.2d at 754.
Here, the record demonstrates that Richard provided regular and detailed updates to
the other beneficiaries. Richard sent upda tes to all of them on September 19, 2014,
October 7, 2014, December 18, 2014, February 11, 2015, June 18, 2015, November 29,
2015, December 12, 2015, and March 19, 2016. 4 Richard also sent updates to Shirley’s
grandchildren on November 26, 2014, and February 10, 2015.

4 The March 2016 update was addressed only to the four brothers, which Richard testified
was because he separately provided the update to appellant through her attorney.

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Richard emailed appellant on May 25, 2015 with information on the sale of the
hunting shack and future plans for the shopping center. After Richard proposed to purchase
the shopping center, Richard and appellant exchanged a number of emails in December
2015, in which appellant asked more questions regarding the shoppi ng center and other
property. Richard sent appellant an ema il attachment identified as “Stowell Shopping
Center.pdf,” which Richard testified was an electronic copy of the full appraisal from 2014.
Richard also attached profit-and-loss stat ements for G & R Development LLC in the
emails. In response to appellant’s request for Shirley’s bank statements, Richard emailed
numerous pages of attachments containing the requested information.
Record evidence su pports the district court’s finding that Richard acted with due
regard for the interests of the other beneficiaries and wa s diligent in keeping those
beneficiaries informed and updat ed about the status of the tr ust. We see no error in the
district court’s conclusion that Richard complied with his statutory duties.
III. The district court did not abuse its di scretion in considering testimony related
to the unpaid CAM fees and property taxes.

Finally, appellant argues that the district court erred when it considered the oral
agreement between Richard an d Eugene regarding the thea ter not having paid property
taxes and CAM fees as provided in the lease. Richard testified that he and his father agreed
on these taxes and fees after the lease was signed, and that the lease was never amended in
writing despite the agreement. Appellant did not object to th is testimony at trial, nor did
she move for a new trial after the district court decided the case.

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This court “may reverse, affirm or modify the judgment or order appealed from or
take any other action as the interest of justice may require,” and review any order affecting
the appealed-from order or the merits of the judgment. Minn. R. Civ. App. P. 103.04. We
also “may review any other matter as the interest of justice may require”; however, “[t]he
scope of review afforded may be affected by whether proper steps have been taken to
preserve issues for review on appeal, includ ing the existence of timely and proper post-
trial motions.” Id. The supreme court has held that rule 103.04’s broad language does not
change the longstanding general rule “that ma tters such as trial procedure, evidentiary
rulings and jury instructions are subject to appellate review only if there has been a motion
for a new trial in which such matters have been assigned as error.” Sauter v. Wasemiller,
389 N.W.2d 200, 201 (Minn. 1986) (citing Heise v. J.R. Clark, Co., 245 Minn. 179, 191,
71 N.W.2d 818, 826 (1955)). Such a motion “provides both trial court and counsel with a
unique opportunity to eliminate the need for appellate review or to more fully develop
critical aspects of the record in the event appellate review is sought.” Sauter, 389 N.W.2d
at 201. As such, “in order to preserve for appellate review issues arising during the course
of trial, counsel—in addition to taking the other requisite steps, including making a timely
objection—must move the trial c ourt for a new trial pursuant to Minn. R. Civ. App. P.
59.01.” Id. at 202.
Appellant did not object at trial to the evidence of Richard’s post-lease agreements
with Eugene. In fact, appellant’s trial c ounsel elicited testimony about these agreements
and the theater’s lease when questioning Richard on direct examination during appellant’s
case in chief. Appellant’s position at trial was that the Heimbach appraisal was entitled to

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less weight than the Battuello appraisal, because Heimbach determined income lower than
what was called for by the written lease. “It is well settled . . . that the trial court has the
discretion to refuse to receive inadmissible evidence offered without objection.” St. Croix
Eng’g Corp. v. McLay, 304 N.W.2d 912, 914 (Minn. 1981). Because both parties elicited
extrinsic evidence concerning the theater’s lease through Richard’s testimony, without
objection, the district court did not abuse its discretion in considering that evidence.
Even if the objection to this testimony had been preserved, the district court did not
err by considering it. Richard was completing a majority of the legal work for the shopping
center on his own and on a volunteer basis. We suppose that best practices might suggest
reducing to writing agreements su ch as those that he reache d with his father concerning
taxes and CAM fees. However, we see no a buse of discretion in the district court’s
admission of testimony regarding the theater’s unpaid CAM fees and property taxes.
Testimony concerning those agreements is relevant to the appraisals, and the district court
found that there was an agreement not contained in the written lease regarding these
expenses. Consideration of that agreement was relevant in analyzing the appraisals and in
determining whether Richard’s purchase of the shopping center was done in good faith.
In sum, the record supports the district court’s finding s that Richard’s purchase of
the shopping center complied w ith the terms of the trust and that Richard complied with
his statutory duties as a trustee. The district court did not err in admitting at trial evidence
concerning oral agreements between Richard and Eugene.
Affirmed.