Thomas Hager, Appellant,

This opinion is nonprecedential except as provided by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
A25-0714

Thomas Hager,
Appellant,

vs.

Cletus Schroepfer, et al.,
Respondents.

Filed December 15, 2025
Affirmed
Worke, Judge

Nicollet County District Court
File No. 52-CV-22-390

Kevin A. Velasquez, Blethen Berens, Mankato, Minnesota (for appellant)

Lorie S. Gildea, Hannah R. Conrad, Greenberg Traurig, LLP, Minneapolis, Minnesota (for
respondents)

Considered and decided by Worke, Presiding Judge; Bjorkman, Judge; and
Cochran, Judge.
NONPRECEDENTIAL OPINION
WORKE, Judge
In this trust dispute, appellant argues that the district court erred by refusing to
remove the trustee because the trustee (1) breached his duty to keep appellant informed of
the trust, (2) unilaterally lowered the sale price of farmland, and (3) failed to impartially
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administer the trust. Appellant also argues that the district court erred in its interpretation
of the trust. We affirm.
FACTS
Eugene Hager (Gene) created the Eugene N. Hager Trust Agreement dated
January 4, 2006 (the trust). The trust named Gene’s living children as beneficiaries:
appellant Thomas Hager (Tom)1 and Tom’s four sisters.
After the trust was executed, Gene amended it three times.2 In 2009, Gene excluded
Tom as a beneficiary. The 2009 amendment stated: “I have intentionally omitted [Tom]
. . . from this distribution, not out of lack of love or affection, but as a part of a carefully
considered estate plan.” In 2017, Gene reinstated Tom as a beneficiary but the 2017
amendment provided that any distribution to Tom “shall be reduced and offset . . . by debts
owed to [Gene].” The amendment lists the debts as a $400,000 promissory note, a
$500,000 payment to the bank, and “costs and attorney fees reasonably incurred in
connection with repossession of land.”
The Debts
In 2005, Tom and his wife purchased Gene’s interest in farmland through a contract
for deed, which required annual payments through December 31, 2034, and contained an
acceleration clause in case of default. In 2014, Tom experienced financial problems and
borrowed $400,000 from Gene. A promissory note to Gene was executed “documenting
the indebtedness.” The note called for interest at 3.25% and promised repayment on

1 Due to having the same surname, we use Tom’s and Gene’s first names.
2 The first amendment is not relevant to this appeal.
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December 31, 2014. In 2015, Tom obtained a $500,000 loan from the bank. To secure the
loan, Gene subordinated his vendor’s interest in the 2005 contract for deed.
By the end of 2016, Tom needed more financing for the following year. The bank
requested that Gene subordinate more of his vendor’s interest in the 2005 contract for deed
as a condition for ongoing financing. Tom defaulted on the 2005 contract for deed on
December 31, 2016. Gene then offered $500,000 to the bank to satisfy Tom’s loan and to
release the subordination.
Agreements and Releases with the Bank
The bank refused Gene’s payment and sued Gene, Tom, and Tom’s wife (the
Hagers). In March 2018, the parties reached a mediated agreement.3 Under the agreement,
the Hagers deeded 155 acres to the bank, and the bank agreed to accept Gene’s $500,000
payment along with an additional $17,500 payment. Additionally, Gene transferred land
to Tom and his wife as “homestead property, ” and Tom agreed to transfer his remaining
real estate, minus one farm, back to Gene. Tom’s previously unsecured $400,000
promissory note was secured via mortgage on the homestead property.
The March agreement included language in which the Hagers agreed to release the
bank, and the bank released the Hagers . There was no language included suggesting a
release of any claims among the Hagers themselves.

3 Distel Grain Systems, Inc., also sued over bills Tom allegedly had not paid; the matter
was resolved through this same mediated agreement. The release language included Distel
Grain as a plaintiff.
4
In October 2018, the bank and the Hagers entered a second mediated agreement.4
The October agreement replaced the terms reached between the bank and the Hagers in the
March agreement. The agreement retained the same obligations by Gene to pay the bank
and the mutual releases. Like the March agreement, the October agreement did not contain
language implying the Hagers released any claims against each other.
Current Litigation
Following Gene’s death, respondent5 Cletus Schroepfer (trustee), Gene’s longtime
friend, was appointed as the estate trustee. In 2022, Tom filed a petition under Minn. Stat.
§§ 501C.0202, .0706 (2024), seeking (1) an accounting of the t rust, (2) a declaration that
the trustee incorrectly interpreted the trust by offsetting his share for the $500,000 debt,
(3) removal of the trustee for alleged breaches of the trust, and (4) other appropriate relief.
The district court held a three-day bench trial before denying the petition.
This appeal followed.
DECISION
Trustee Removal
Tom first argues that the district court abused its discretion by refusing to remove
the trustee. A district court may remove a trustee if the trustee has committed a serious
breach of trust. Minn. Stat. § 501C.0706(b)(1). Identifying “[t]he correct legal standard
to remove a trustee under the Minnesota Trust Code presents a question of law, which

4 Distel Grain was not a party to the October agreement.
5 Tom’s four sisters —Michelle Rodning, Vickie Hager, Kelly Runkel, and Sherry
Dee Ye—are also respondents in this appeal.

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[appellate] court[s] review[] de novo.” In re Otto Bremer Tr., 2 N.W.3d 308, 316 (Minn.
2024). “The determination of what constitutes sufficient grounds for the removal of a
trustee is within the discretion of the [district] court.” Id. at 317 (quotation omitted).
“Accordingly, the decision whether to remove a trustee is reviewed on an abuse of
discretion standard.” Id.
Duty to Inform

Tom argues that the district court abused its discretion by determining that the
trustee did not violate his duty to inform and report to Tom on the administration of the
trust.
A trustee is required to keep “qualified beneficiaries of an irrevocable trust
reasonably informed about the administration of the trust and of the material facts
necessary to protect their interests.” Minn. Stat. § 501C.0813(a) (2024). A trustee is
required to “promptly respond to a beneficiary’s request for information related to the
administration of an irrevocable trust.” Id. Like removal of a trustee, we review a district
court’s decision regarding a trustee’s duty to inform and report for an abuse of discretion.
See Bremer Tr., 2 N.W.3d at 322.
The trustee assumed that Tom was not a beneficiary whom he was obligated to keep
informed of the administration of the trust because Tom was not entitled to a distribution.
We assume, without deciding, that the trustee had an obligation to keep Tom informed in
the administration of the trust and did breach the duty to keep Tom informed. We,
however, agree with the district court that the trustee’s failure to include Tom in certain
communications with Tom’s sisters was not a breach that rose to a serious level. “Serious
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breach of trust” is not defined within the statute, so we may look to the official comments
to the Uniform Trust Code for guidance. Id. at 317 (citing In re Trust of Moreland, 993
N.W.2d 80, 88 n.6 (Minn. 2023) (acknowledging that official comments to the Uniform
Trust Code are not binding but may be persuasive)). “A serious breach of trust may consist
of a single act that causes significant harm or involves flagrant misconduct or a series of
smaller breaches, none of which individually justify removal when considered alone, but
which do so when considered together.” Id. (quoting Unif. Tr. Code § 706 cmt.).
The trustee kept Tom reasonably informed about material facts necessary to protect
his interests. When Tom requested information regarding the trust’s administration, the
trustee promptly responded with the information he could reasonably provide him. And,
although Tom was not informed directly by the trustee of the proposed land sale, inquiries
made to the trustee show he was aware the real estate was being sold. Even if the trustee
breached his duty to keep Tom informed on the administration of the trust, the breach was
not serious, and Tom was not harmed. Therefore, the district court did not abuse its
discretion.
Prudent Administration
Tom argues that the district court erred by determining that the trustee did not breach
the duty of prudent administration by unilaterally lowering the sale price of farmland held
by the trust.
A trustee is required to “administer the trust as a prudent person would, by
considering the purposes, terms, and distribution requirements of the trust and all relevant
circumstances.” Minn. Stat. § 501C.0804 (2024). “In satisfying this standard, the trustee
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shall exercise reasonable care, skill, and caution.” Id. A trustee must invest and manage
trust assets “as a prudent investor would.” Norwest Bank Minn. N., N.A. v. Beckler ,
663 N.W.2d 571, 580 (Minn. App. 2003) (quotation omitted). A district court’s
determination on a breach of prudent administration is reviewed for abuse of discretion.
See generally Bremer Tr., 2 N.W.3d at 317. Findings of the district court are reviewed for
clear error, and its legal conclusions are reviewed de novo. In re Est. of Short, 933 N.W.2d
533, 537 (Minn. App. 2019).
Here, the trustee lowered the sale price before potential purchasers could reject the
offer. But, as the district court determined, the trustee only lowered the sale price after he
received advice from a CPA familiar with local land values, reviewed recent comparable
sales, and consulted with legal counsel. Consulting three experts before re-setting—albeit
here, by reducing—the sale price evinces the trustee’s diligence and dedication to the
prudent administration of the trust on behalf of the beneficiaries.
Therefore, the district court correctly concluded that the trustee did not breach the
duty to prudently administer the trust by unilaterally lowering the farmland’s sale price.
Duty of Impartiality
Tom next argues that the trustee breached the duty of impartiality by not crediting
him with a distribution in the form of an offset that applied his $400,000 promissory note,
which was the first and most specific debt itemized in the trust. He further argues that,
because the $400,000 promissory note is a specific devise, it must abate first and be fully
offset before the general offsets apply. We disagree.
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A trustee must “administer the trust impartially, giving due regard to the
beneficiaries’ respective interests.” Minn. Stat. § 501C.0803 (2024). As long as a trustee
acts in accordance with the settlor’s intent, and “in good faith, from proper motives, and
within the bounds of reasonable judgment, the court will not interfere with their decisions.”
Norwest Bank, 663 N.W.2d at 580-81 (quotation omitted).
The district court determined, and we agree, that the trust language controls here.
The trust makes clear that Tom is not entitled to any distribution until his debts are repaid.
Tom mischaracterizes the nature of the debt because it is not a devise; it is a liability to be
satisfied as provided by the trust. In administering the trust, the trustee was not required
to prioritize Tom’s preferences for debt repayment. In fact, as the district court noted, the
trust itself did not include any directive informing the trustee which of the three debts was
to be offset first. The trustee’s approach— applying Tom’s distribution offset to the
$500,000 first— added value to the trust for the benefit of the beneficiaries because the
$500,000 debt did not accrue interest, unlike the $400,000 debt. The trustee followed the
wishes of his late friend in administering the trust to the benefit of the trust and its
beneficiaries.
The district court correctly concluded that the trustee did not breach the duty of
impartiality and that the trustee acted in a manner that best served the interests of the trust
and its beneficiaries. Therefore, the district court did not abuse its discretion.
For the foregoing reasons, the district court did not abuse its discretion by
determining that the trustee’s actions did not rise to a serious breach warranting removal
of the trustee.
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The Trust and Settlement Agreement Interpretation
Appellate courts apply a de novo standard of review to a district court’s
interpretation of a trust agreement but “[e]extrinsic evidence is used to interpret a trust only
after a finding of ambiguity.” Moreland, 993 N.W.2d at 85. “A district court’s findings
of fact are given great deference and shall not be set aside unless clearly erroneous.” In re
Eva Marie Hanson Living Tr., 986 N.W.2d 1, 4 (Minn. App. 2023). When reviewing
factual findings for clear error, appellate courts (1) view the evidence in the light most
favorable to the findings; (2) do not find their own facts; (3) do not reweigh the evidence;
and (4) do not reconcile conflicting evidence. In re Civ. Commitment of Kenney, 963
N.W.2d 214, 221-22 (Minn. 2021); see also Bremer Tr., 2 N.W.3d at 319 (citing Kenney
in trust dispute).
Interpretation of the Trust

Tom argues that the district court incorrectly interpreted the trust, and that the
language in question is ambiguous. He argues that he does not owe the $500,000 debt
because the debt is atypical and falls under the concept of equitable subrogation, which
requires an equitable analysis.
“When the trust agreement is unambiguous, [appellate courts] will ascertain the
grantor’s intent from the language of the agreement, without resort[ing] to extrinsic
evidence.” In re Pamela Andreas Stisser Grantor Tr., 818 N.W.2d 495, 502 (Minn. 2012).
A grantor’s intent is determined by looking at the trust document as a whole and not
isolated words. Id.
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Here, the trust unambiguously states that any distribution to Tom “shall be reduced
and offset” by debts owed to Gene. The trust specifically lists the $500,000 debt
“memorialized by the payment of [Gene] to [the bank].” We need not rely on extrinsic
evidence or an equitable analysis, as Tom argues is necessary, because the trust clearly and
unambiguously establishes the debt. In addition to the trust’s plain language establishing
the owed debt, Tom was aware that Gene paid $500,000 to the bank. There is nothing in
the record indicating that Gene ever told Tom, or the trustee, any debts were forgiven or
discharged. Moreover, as the district court determined, the purpose of the equity transfer
was to address Tom’s default with Gene, not to satisfy his debt with the bank.
Therefore, Gene’s intent is clear, and the district court correctly determined that the
trust unambiguously provides that Tom still owes the estate $500,000.
Mediated Settlement Agreements
Lastly, Tom argues that the March 2018 settlement agreement released the $500,000
debt and that the October 2018 agreement did not revive it. Like interpreting a trust,
interpretation of a n unambiguous settlement agreement is reviewed de novo. Curtis v.
Altria Grp., Inc., 813 N.W.2d 891, 898 (Minn. 2012); see Turner v. Alpha Phi Sorority
House, 276 N.W.2d 63, 66 (Minn. 1979) (noting “where there is ambiguity and
construction depends upon extrinsic evidence and a writing, there is a question of fact for
the jury”).
Much like the district court, we are unpersuaded by Tom’s arguments as to the
release of debt owed between the Hagers themselves. The release language in the
settlement agreements unambiguously applies between the bank and the Hagers and not to
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the Hagers themselves. The March 2018 agreement, cited by Tom, separates the litigants
into categories of plaintiff (the bank and Distel Grain) and a defendant (the Hagers). The
March agreement contains the following mutual release: “It is the specific intent of the
parties to release and discharge the other from any and all claims and causes of action of
any kind or nature whatsoever.”6 Similarly, the October agreement provides: “[The bank]
shall release and forever discharge [the Hagers], and any entity owned or controlled by”
Tom. Conversely, the Hagers’s release “completely remises, releases, and forever
discharges [the bank].”
The language of both settlement agreements is clear and unambiguous. As the
district court noted, the March agreement’s language provides only for a limited release
between the adversarial parties, and the October agreement does not address waiver of
claims among the Hagers. Therefore, the district court correctly interpreted the settlement
agreements as not releasing the $500,000 debt.
Affirmed.

6 We agree with the district court’s analysis which relied on the March agreement’s use of
the singular “the other” versus plural “the others.” The singular use meant any claim that
a plaintiff could waive against a defendant, or vice versa, is waived. If a different
interpretation had been intended, like the release applying to claims among the defendants,
the agreement would have used the plural “the others” to denote the viability of such
claims.