In re the Margaret A. Flolid Trust Agreement Dated December 12, 1994.

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A21-1720

In re the Margaret A. Flolid Trust Agreement Dated December 12, 1994.

Filed August 29, 2022
Affirmed in part, reversed in part, and remanded
Reilly, Judge

Morrison County District Court
File No. 49-CV-20-1663

Kay Nord Hunt, Michelle K. Kuhl, Lommen Abdo, P.A., Minneapolis, Minnesota; and

Luther M. Amundson, J. Noble Simpson, Maser, Amundson & Boggio, P.A., Richfield,
Minnesota (for appellants Luther M. Amundson, J. Noble Simpson, Amundson & Boggio,
P.A.)

Paul E.D. Darsow, Kevin A. Spellacy, Quinlivan & Hughes P.A., St. Cloud, Minnesota
(for respondent/cross-appellant Ronald W. Flolid)

Considered and decided by Frisch, Presiding Judge; Worke, Judge; and Reilly,
Judge.
NONPRECEDENTIAL OPINION
REILLY, Judge
Appellant-attorneys challenge the district court’s award of sanctions against them
and in favor of respondent/cross-appellant. We determine that the district court abused its
discretion by granting sanctions against appellants and we reverse that portion of the
district court’s order. Based on this determination, we reject respondent/cross -appellant ’s
argument that the district court should have awarded greater sanctions against appellants.
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And we affirm the district court’s denial of sanctions against attorneys’ client. Finally, we
remand to the district court with instructions to release the funds held on deposit to
appellants.
FACTS
This appeal arises out of a dispute over the Margaret A. Flolid Trust Agreement
Dated December 12, 1994 (the trust). Susan F. Pape and respondent/cross-appellant
Ronald W. Flolid are Margaret Flolid’s children. Appellant-attorneys Luther M.
Amundson and J. Noble Simpson from the law firm of Amundson & Boggio, P.A.
(collectively attorneys) represent Susan Pape in this appeal and represented her in the
district court proceedings.
In 1994, Margaret Flolid created the trust to provide for her own needs and to pass
along money and property to Susan Pape and Ronald Flolid upon her death. The trust was
established as a revocable trust and is governed by a trust agreement , which appointed
Margaret Flolid and Ronald Flolid as co -trustees. In 2020, Margaret Flolid’s doctor
provided an opinion that she had suffered from mental decline for many years and lacked
the capacity t o manage her finances or make informed decisions . During the same time,
Susan Pape became worried about several transactions involving Ronald Flolid. In
particular, Susan Pape learned that Margaret Flolid and Ronald Flolid signed a warranty
deed in November 2018 transferring the family farm —which had been owned by the
trust—to Ronald Flolid personally. Susan Pape then inquired into other transfers from the
trust to Ronald Flolid, including annual mone tary gifts and payments for Ronald Flolid’s
personal expenses.
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In November 2020, Susan Pape petitioned the district court for an order appointing
her as the emergency guardian and conservator for Margaret Flolid. The district court
granted the petition and appointed Susan Pape as an emergency guardian and conservator.
Susan Pape filed a petition seeking Ronald Flolid’s removal as trustee and for other forms
of relief. Susan Pape and Ronald Flolid reached an agreement on some of the issues alleged
in the petition. The parties agreed that Presbyterian Family Foundation Inc. (PFF) would
be appointed as Margaret Flolid’s permanent general guardian. The parties also agreed
that Security Bank & Trust Co. (SBTC) would be appointed as the professional trustee of
the trust. Based on these stipulations, the district court appointed PFF as Margaret Flolid’s
permanent general guardian and appointed SBTC as the trust’s permanent professional
trustee. Further, because Margaret Flolid was incapacitated, her trust became irrevocable.
Susan Pape’s appointment as emergency guardian and conservator expired in January 2021
and was not renewed.
In March 2021, Susan Pape filed an amended petition against Ronald Flolid
challenging Ronald Flolid’s past trust administration . Ronald Flolid object ed to the
amended petition and argued that Susan Pape lacked standing to pursue her claims. Ronald
Flolid also filed a notice of motion and motion for judgment on the pleadings under
Minnesota Rule of Civil Procedure 12.03. Ronald Flolid later moved for sanctions under
Minnesota Rule of Civil Procedure 11 against Susan Pape personally and against her
attorneys.
The district court granted Ronald Flolid’s motion for judgment on the pleadings and
determined that Susan Pape lacked standing to sue Ronald Flolid because SBTC had been
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appointed as Margaret Flolid’s trustee and Susan Pape was no longer Margaret Flolid’s
guardian or conservator. Susan Pape did not appeal from the ruling dismissing her claims
for lack of standing. The district court denied Ronald Flolid’s motion to impose sanctions
against Susan Pape personally but granted the motion to award sanctions against attorneys.
Attorneys now appeal and seek review of the district court order awarding sanctions
against them. Ronald Flolid cross -appeals, arguing that the district court should have
awarded greater sanctions against attorneys. Ronald Flolid also cross -appeals the district
court order denying his motion for sanctions against Susan Pape personally .
DECISION
By presenting a document to a court, an attorney certifies that the document is not
offered for an improper purpose , is properly motivated, and that the assertions in the
document are warranted and have, or are likely to have, evidentiary support. Minn. R. Civ.
P. 11.02(a) -(c). Unwarranted claims or those that are intended to harass, delay, or
needlessly increase the cost of litigation expose the attorney, law firm, or party to sanctions.
Minn. R. Civ. P. 11.03. If, after notice and a reasonable opportunity to respond, the district
court determines that rule 11.02 has been violated, it may impose an appropriate sanction.
Id.
We review an award of sanctions under rule 11 for an abuse of discretion. Collins
v. Waconia Dodge, Inc., 793 N.W.2d 142, 145 (Minn. App. 2011), rev. denied (Minn. Mar.
15, 2011). A district court abuses its discretion if a sanctions award is based on an
erroneous view of the law or if no reasonable person would agree that sanctions were
appropriate. Miller v. Lankow , 801 N.W.2d 120, 127 (Minn. 2011) . “The purpose of
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sanctions is deterrence rather than punishment or cost -shifting.” Wolf v. Oestreich , 956
N.W.2d 248, 256 (Minn. App. 2021), rev. denied (May 18, 2021). As a result, we “construe
rule 11 narrowly.” Id.; see also Radloff v. First Am. Nat ’l Bank , 470 N.W.2d 154, 157
(Minn. App. 1991) (providing that sanctions are not appropriate simply because a party
does not prevail on the merits), rev. denied (Minn. July 24, 1991).
I. We reverse the district court’s award of rule 11 sanctions against attorneys.
The district court granted sanctions against attorneys on the ground that Susan Pape
lacked standing to pursue the claims asserted in the amended petition. The district court
reasoned that attorneys should have known that she lacked standing to proceed with her
claims. Attorneys argue that the district court’s reasoning const itutes error because they
presented nonfrivolous arguments about standing.1 “Standing is a legal requirement that a
party have a sufficient stake in a justiciable controversy to seek relief from a court.”
McCaughtry v. City of Red Wing, 808 N.W.2d 331, 338 (Minn. 2011) (citation omitted) .
Standing may be conferred upon a party in one of two ways: either the plaintiff has suffered
an injury-in-fact, or the plaintiff maintains a statutory right to sue. Nash v. Wollan, 656
N.W.2d 585, 588 (Minn. App. 2003), rev. denied (Minn. Apr. 29, 2003) . “The lack of
standing bars judicial consideration of a claim.” Scheffler v. City of Anoka , 890 N.W.2d
437, 451 (Minn. App. 2017), rev. denied (Apr. 26, 2017). Because standing is a

1 Ronald Flolid notes that Susan Pape did not appeal the district court’s judgment -on-the-
pleadings order. The decision whether to appeal the district court’s order belonged to
Susan Pape, rather than to her attorneys. Her decision not to appeal the judgm ent-on-the-
pleadings order does not bar our consideration of attorneys’ challenge to the rule 11
sanctions.
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jurisdictional issue, we evaluate standing determinations de novo. In re Gillette Child .’s
Specialty Healthcare, 883 N.W.2d 778, 784 (Minn. 2016) .
Attorneys argue that Susan Pape had a statutory right to sue. Standing may be
acquired “when a party is the beneficiary of some legislative enactment granting standing.”
Citizens for a Balanced City v. Plymouth Congregational Church, 672 N.W.2d 13, 18
(Minn. App. 2003). Attorneys argue that they presented nonfrivolous arguments that Susan
Pape had statutory standing as an interested person. Section 501C.0201 provides that:
(a) An interested person may petition the district court and
invoke its jurisdiction as provided in sections 501C.0201 to
501C.0208 for those matters specified in section 501C.0202.
(b) As used in sections 501C.0201 to 501C.0208, “interested
person” includes an acting trustee, any person named as
successor trustee under the trust instrument, any person
seeking court appointment as trustee whether or not named in
the trust instrument, a beneficiary, a credito r, and any other
person having a property or other right in or claim against the
assets of the trust.
Minn. Stat. § 501C.0201 (2020). The statute also provides that, “ [t]he meaning of
interested person, as it relates to a particular person, may vary from time to time and must
be determined according to the particular purposes of, and matter involved in, any
petition.” Id. (b).
Attorneys argue that Susan Pape is an interested person under Minn. Stat.
§ 501C.0201(b). This section provides that an “interested person” includes “a beneficiary”
of the trust. Id. Chapter 501C further defines “beneficiary” as a person who “has a present
or future beneficial interest in a trust, vested or contingent .” Minn. Stat. 501C.0103(c)(1)
(2020); see also Restatement (Third) of Trusts § 94 cmt. b (2012) (“The beneficiaries of a
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trust include any person who holds a beneficial interest, present or future, vested or
contingent.”).
When interpreting a statute, we construe words and phrases “according to rules of
grammar and according to their common and approved usage.” Minn. Stat. § 645.08(1)
(2020); see In re Pamela Andreas Stisser Grantor Tr., 818 N.W.2d 495, 502 (Minn. 2012)
(citing Minn. § 645.08(1) (2010) in a trust dispute) . “[I]f a statute i s susceptible to only
one reasonable interpretation, then we must apply the statute ’s plain meaning.” County of
Dakota v. Cameron, 839 N.W.2d 700, 705 (Minn. 2013) (quotation omitted). Here, by its
plain language, section 501C.0201(b) grants interested parties —including trust
beneficiaries—the power to petition the court. The district court ruled that Susan Pape was
a “contingent beneficiary of the Trust.” Despite this determination, the district court ruled
that she lacked standing because Ronald Flolid did not owe a duty to Susan Pape before
2020. The district court noted that the conduct alleged in the amended petition occurred
before November 2020, while the trust was still revocable. The district court reasoned that
at that time, Ronald Flolid only owed a fiduciary duty to Margaret Flolid, the settlor. The
district court held that Susan Pape lacked “any valid legal basis for asserting that Ronald
Flolid owed any fiduciary duty to her for the alleged conduct.”
No Minnesota caselaw directly addresses whether a contingent beneficiary of a
revocable trust has standing under the statute to assert a claim related to the administration
of the trust.2 However, at the time in question, there was a good-faith argument that Susan

2 The parties relied on caselaw from other jurisdictions about whether a beneficiary of a
revocable trust has standing to pursue a claim. These cas es are not directly applicable ,
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Pape had standing. Attorneys asserted that section 501C.0201 grants Susan Pape standing
as an interested person because she is a beneficiary and nothing in the section limits this
grant to only irrevocable trusts. Chapter 501C sometimes distinguishes between revocable
and irrevocable trusts. See, e.g., Minn. Stat. §§ 501C.0411 (modification or termination of
noncharitable irrevocable trust by consent ); 501C.0505 (distinguishing between revocable
and irrevocable trusts for creditor’s claims against settlor); 501C.0813 (discussing duty to
inform and report for irrevocable trusts); 501C.1206 (distinguishing between revocable and
irrevocable trusts for public health care programs and certain trusts ) (2020). At the same
time, the legislature did not expressly limit section 501C.0201 to irrevocable trusts. And
generally, “[w]hen the Legislature uses limiting or modifying language in one part of a
statute, but omits it in another, we regard that omission as intentional and will not add those
same words of limitation or modification to parts of the statute where they were not used.”
General Mills, Inc. v. Comm ’r of Revenue, 931 N.W.2d 791, 800 (Minn. 2019) .
We do not, with this opinion, settle the issue of whether a contingent beneficiary of
a revocable trust has statutory standing under section 501C.0201. But by their plain
language, sections 501C.0201(a), (b) and 501C.0103(c)(1) arguably apply to Susan Pape.
We therefore determine that attorneys’ interpretation of this section is reasonable. A
district court should not impose rule 11 sanctions “when an attorney has an objectively
reasonable basis for pursuing a factual or legal claim or when a competent attorney could
form a reasonable belief that a pleading is well -grounded in fact and law.” Gibson v.

given the differences in the statutory schemes. We therefore decline to rely on precedent
from other jurisdictions.
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Coldwell Banker Burnet, 659 N.W.2d 782, 787 (Minn. App. 2003) (quotation omitted). A
rule 11 violation does not require bad faith, but only a failure to “investigate the factual
and legal underpinnings of a pleading” for which “ the imposition of sanctions is
mandatory.” Uselman v. Uselman, 464 N.W.2d 130, 142 (Minn. 1990). But it is also true
that the rules for sanctions must be construed narrowly in order not to deter “legitimate or
arguably legitimate claims.” Id.
Attorneys had an “objectively reasonable basis” for their claim that Susan Pape had
statutory standing as a beneficiary under section 501C.0201. 3 In sum, because we
determine that there was an objectively reasonable basis for attorneys to believe that Susan
Pape had standing to assert her claims, the district court abused its discretion by awarding
rule 11 sanctions against attorneys. 4 Thus, we reverse the district court’s sanctions order
against attorneys and remand with instructions to release the funds held on deposit to
attorneys.5

3 Attorneys also argue that Susan Pape had standing (1) based on the parties’ stipulation
that she was an “ interested person ”; (2) because she moved to be appointed as special
trustee; and (3) because she suffered an injury -in-fact. Attorneys also argue that Susan
Pape had evidentiary support for her claims and could have provided more evidentiary
support duri ng the discovery process. Because we determine that the attorneys raised a
reasonably objective showing of statutory standing based on Susan Pape’s beneficiary, we
need not address these remaining arguments.
4 Ronald Flolid argues on cross-appeal that the district court should have awarded greater
sanctions against attorneys to account for the full amount of his litigation expenses.
Because we conclude the district court improperly awarded sanctions against attorneys, we
reject this argument.
5 Attorneys provided a check for $15,668 payable to SBTC, as trustee of the Margaret A.
Flolid Trust, as security pending the appeal pursuant to Minn. R. Civ. App. P. 108.02.
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II. We affirm the district court’s decision not to impose rule 11 sanctions against
Susan Pape personally.
Ronald Flolid argues on cross-appeal that the district court abused its discretion by
denying his request to sanction Susan Pape personally.
Rule 11 does not permit an award of monetary sanctions for frivolous claims and
defenses under rule 11.02(b), against a represented party. Minn. R. Civ. P. 11.03(b)(1) ;
see also Baertsch v. Baertsch , 886 N.W.2d 235, 238 (Minn. App. 2016). Ronald Flolid
acknowledges this principle but claims that Susan Pape is a sophisticated person becau se
she is an attorney and is married to an attorney. Ronald Flolid urges this court to “recognize
an exception to Rule 11.03(b)(1) in situations where a party is both sophisticated and
trained in the law, and the sanctionable conduct involves a straight -forward legal issue ,”
such as standing.
We are not persuaded. R onald Flolid cited no caselaw to support this position and
there is no authority in Minnesota creat ing such an exception. When interpreting the rules
of civil procedure, we look first to the plain language of the rule and its purpose. Walsh v.
U.S. Bank, N.A ., 851 N.W.2d 598, 601 (Minn. 2014). Rule 11.03(b)(1) states that a
represented person cannot be sanctioned for violating rule 11.02(b). This language is
unambiguous and is not subject to more than one interpretation. T he district court did not
abuse its discretion by refusing to apply the plain language of the rule and sanctioning
Susan Pape personally. We therefore affirm the district court order declining to im pose
sanctions against Susan Pape personally.
Affirmed in part, reversed in part, and remanded.