Estate of Richard E. Paul: Personal Representative’s Authority to Sell When Settlement Agreement Conditions Are Unmet

Introduction

In Estate of Richard E. Paul (2025 MT 86), the Montana Supreme Court addressed a dispute among four heirs over the disposition of a cabin in Lincoln, Montana, the primary asset of the intestate estate of Richard Edward Paul. After extensive negotiations and a mediated Settlement Agreement providing a multi-step procedure for heir purchase, none of the heirs submitted a qualifying bid within the allotted 30 days. The Personal Representative then listed the property at the appraised value less estimated repair costs and moved the District Court for approval of a buy-out sale to three of the four heirs. The remaining heir, Shelbi Paul, objected. The Supreme Court affirmed, holding that where a settlement agreement is silent as to a particular scenario—and its strict conditions remain unmet—the Personal Representative may rely on statutory authority under the Montana Probate Code to sell estate property in the estate’s best interests.

Summary of the Judgment

The Supreme Court consolidated the issues into whether the District Court erred in approving the sale of the cabin. It held:

The mediated Settlement Agreement set clear procedures for heir purchase of the cabin (appraisal, qualification, listing if more than one qualified, buy-out if some—but not all—qualified) but did not address what happens if no heir submits a qualifying bid within 30 days.
A court may not insert terms into an unambiguous contract; where the agreement is silent, it cannot govern that scenario (Martin v. Laurel Cable TV, Inc.).
The Personal Representative, under § 72-3-613(23), MCA, has statutory authority to sell estate real property “for cash, credit, or part cash and part credit” for the benefit of the estate and its successors.
The District Court’s factual findings—that the only viable offer was for $106,100 (the appraised value of $234,000 less $127,900 estimated repairs), and that such sale was reasonable and in the best interests of the estate—were neither clearly erroneous nor an abuse of discretion.
Accordingly, the order approving the sale to three heirs (with payment to the fourth heir for her 25% interest) was affirmed.

Analysis

Precedents Cited

In re Estate of Ayers, 2007 MT 155: standard of review for district court orders on estate distribution (abuse of discretion).
In re Estate of Barber, 216 Mont. 26 (1985): reaffirming review standard for probate distribution orders.
In re Estate of Williams, 2023 MT 72: clear-error review of factual findings in estate matters.
In re Estate of Kuralt, 2000 MT 359: evidentiary sufficiency in probate proceedings.
Kalispell Aircraft Co. v. Patterson, 2019 MT 142 & King Resources, Inc. v. Oliver, 2002 MT 301: contract interpretation is a question of law.
Jarussi v. Sandra L. Farber Tr., 2019 MT 181 & Dambrowski v. Champion Int’l Corp., 2003 MT 233: settlement agreements are contracts enforceable according to their terms.
Sayegusa v. Rogers, 256 Mont. 269 (1993) & First Security Bank v. Vander Pas, 250 Mont. 148 (1991): clear and unambiguous contract terms must be enforced as written.
Martin v. Laurel Cable TV, Inc., 215 Mont. 229 (1985): courts cannot supply omitted terms to a contract.
Hubbell v. Gull Scuba Ctr., LLC, 2024 MT 247: appellate courts affirm correct results even if based on alternative reasoning.
Nason v. Leistiko, 1998 MT 217: issues not raised in the district court are waived on appeal.

Legal Reasoning

The Court’s reasoning unfolded in two primary steps:

Contract Interpretation: The mediated Settlement Agreement prescribed a binding appraisal and a 30-day window for heirs to qualify and bid at the appraised value, with various fallback routes if some or all heirs qualified. Because none of the four heirs acted within 30 days, the Agreement’s explicit conditions went unfulfilled, and no provision governed that result. Under Montana law, an unambiguous agreement cannot be rewritten or supplemented by the Court (Martin; Sayegusa).
Statutory Authority: When heirs fail to purchase under a private agreement’s terms, the Personal Representative may resort to statutory powers granted by the Montana Probate Code. Section 72-3-613(23), MCA, authorizes sale of estate property “for cash, credit, or part cash and part credit” for the estate’s benefit. Section 72-3-610, MCA, requires an expedited administration “consistent with the best interests of the estate.” The District Court found a single viable offer—reflecting the appraised value less necessary repairs—reasonable and in the estate’s best interest. Under an abuse-of-discretion standard, these findings were upheld.

Impact

This decision clarifies important points in Montana probate practice:

Heirs’ settlement agreements must anticipate all potential outcomes—including total heir inaction—to avoid reversion to statutory administration.
Courts will enforce unambiguous agreement terms but will not supply omitted fallback mechanisms.
Personal Representatives retain broad statutory authority to sell estate assets when private‐party mechanisms fail, subject to court approval and the best‐interest standard.
Future disputes over heir agreements and sale procedures will likely turn on the precision of contract drafting and strict adherence to probate code provisions.

Complex Concepts Simplified

Intestate Estate: An estate where the decedent did not leave a valid will, so Montana’s intestacy laws govern distribution.
Personal Representative: The individual appointed by the court to administer the estate, collect assets, pay debts, and distribute property.
Settlement Agreement: A private contract among heirs to resolve disputes—treated like any other contract under state law.
Specific Performance: A remedy requiring a party to fulfill their contractual obligations when monetary damages are inadequate.
Statutory Authority (§ 72-3-613(23), MCA): Empowers personal representatives to sell estate property “for cash, credit, or part cash and part credit.”
Abuse of Discretion: An appellate standard asking whether the trial court’s decision was arbitrary, without evidence, or contrary to law.

Conclusion

The Estate of Richard E. Paul decision reinforces the interplay between heir settlement agreements and statutory probate authority. It underscores that Montana courts will enforce the plain terms of mediation agreements among heirs but will not fill gaps where those agreements fail to address every scenario. When heirs do not act within a private‐agreement framework, Personal Representatives may invoke their probate‐code powers to sell estate property in a manner consistent with the estate’s best interests. This ruling encourages precise contract drafting among heirs and affirms the Personal Representative’s duty and authority to administer the estate efficiently under Montana law.