Rennie v. Pozzi

Decision Date30 December 1982
Citation656 P.2d 934,294 Or. 334
PartiesRichard RENNIE, as administrator of the Estate of Eugene David Rennie, Petitioner on Review, v. Frank H. POZZI, Donald P. Wilson, Donald N. Atchison, Garry L. Kahn and Daniel O'Leary, a partnership; and David Hytowitz, Stephen Winfree and William L. Dickson, Respondents on Review. TC A7803-03703; CA 19044; SC 28521. *
CourtOregon Supreme Court

Magar E. Magar, Portland, argued the cause and filed the briefs for petitioner on review.

Elizabeth K. Reeve, Portland, argued the cause for respondents on review. With her on the petition was Schwabe, Williamson, Wyatt, Moore & Roberts, Ridgway K. Foley, Jr. and Kenneth E. Roberts, Portland.

ROBERTS, Justice.

We accepted review of these companion cases (see Rennie v. Freeway Transport 294 Or. 334, 656 P.2d 934 (1982)) to address an issue common to both: Where an action on behalf of a decedent's estate was timely commenced by one who had been appointed personal representative, but whose appointment was set aside and "held for naught" after the statute of limitations had run on the underlying cause of action, will a subsequent proper appointment relate back in time so as to preserve the estate's cause of action? Resolution of this issue necessitates a reexamination of our decision in Richard v. Slate, 239 Or. 164, 396 P.2d 900 (1964), in which we held on similar facts that there was no relation back.

In early 1976 Eugene Rennie died and his son Richard, the plaintiff herein, was appointed personal representative of the estate. The principal asset of the estate was ten shares of stock in Freeway Transport, a closely-held corporation. On the advice and with the assistance of his lawyers, the law firm named as defendant herein Richard Rennie as administrator of the estate sold the shares in March of 1976 to the defendants in the Rennie v. Freeway Transport case. Subsequently, Richard Rennie and his sister executed disclaimers of any and all interest they had in the estate and the entire assets were distributed to Ramona Rennie, the decedent's wife and the only other heir. In January, 1977, the estate was closed and Richard Rennie was discharged as personal representative.

Richard Rennie alleges that in December, 1977, he became aware that the Freeway Transport stock had been grossly undervalued and that the estate had been induced to sell the stock for only a fraction of its true value. For purposes of seeking redress for this alleged injury, Richard Rennie in January, 1978 petitioned to have his father's estate reopened and to have himself reappointed as personal representative. ORS 116.233. An ex parte order granting this petition was issued and soon thereafter Richard Rennie, as administrator of the estate, commenced these actions. The complaint against the Freeway Transport defendants stated causes of action in fraud and violations of Oregon securities law; the complaint against the defendants here stated a cause of action in legal malpractice.

Various motions and pleadings were interposed until, in mid-1979, the defendants in both cases filed their respective answers. Neither group of defendants challenged plaintiff's capacity or standing to bring the suits; in fact, the defendants here specifically admitted in their answer that "the plaintiff was appointed personal representative of the estate of Eugene David Rennie, deceased * * *." Both, however, through their answers set up general statute of limitations defenses.

In March, 1980, the defendants here filed a motion to set aside the January, 1978, order reopening the estate and appointing Richard Rennie personal representative. The motion was based on defendants' contention that Richard Rennie, having disclaimed all his interest in the estate prior to its original closing, was not an "interested person" empowered under the applicable statutes to petition for reopening. See ORS 116.233 and ORS 111.005(19). The court granted the motion and ordered that the reopening order be "set aside and held for naught." Plaintiff did not appeal this order; 1 instead Ramona Rennie immediately repetitioned for reopening. This petition was granted, the estate was ordered reopened, and Richard Rennie was again re-appointed personal representative.

Defendants in both actions then moved for summary judgment on their statute of limitations defense, 2 contending that since the original reopening order had been set aside and the subsequent proper one was issued after the statute of limitations had run on the underlying causes of action, the present actions were commenced after the running of the statute and were thus barred. These motions were granted and judgment was entered for defendants in both actions.

Plaintiff has advanced a number of alternative arguments in support of his contention that the trial court erred in dismissing these actions as time-barred. Because we find his argument based on relation back dispositive, it is unnecessary for us to address his other arguments.

Plaintiff's "relation back" argument is that even if due to technical defects and honest mistake he was without capacity to sue at the time these actions were commenced, 3 the second order reopening the estate and reappointing him personal representative should relate back in time, for purposes of the statute of limitations, to the commencement of these actions. Defendants argue that such a "relation back" is precluded by the rule pronounced by this court in Richard v. Slate, supra.

In Richard, a nonresident of Oregon had been killed in an automobile accident in Yamhill county. Richard applied for and was appointed administrator of the decedent's estate by Multnomah county probate court. He then, as administrator, filed a wrongful death action against the defendants. The defendants challenged Richard's appointment and, after the time limitation had run on the wrongful death action, the probate court set aside the appointment on the ground that it was without jurisdiction over the estate since the decedent was a nonresident with no assets in Multnomah county. Richard immediately applied for and was properly appointed administrator of the estate in Yamhill county. He then filed an amended complaint setting forth his new appointment. The trial court dismissed the case on the ground that it was time-barred and this court affirmed:

"The attempted appointment of Richard in Multnomah county was utterly void. No action could be taken by any court that would validate those proceedings so they could be related back to the commencement of this action.

" * * *

"In the matter before us, no personal representative existed within the two year period who could maintain the action, nor were there any proceedings commenced for the appointment within that time that could be validated.

"We are, therefore, constrained to hold that, since no personal representative was appointed within the two year period, the attempt to substitute one who had been appointed personal representative after the period had expired was the commencement of a new action." 239 Or. at 175, 396 P.2d 900.

Plaintiff, to avoid the Richard result, argues that Richard is distinguishable, or that it has since been legislatively overruled.

The Court of Appeals, based on its conclusion that Richard is distinguishable, held that the subsequent reopening order here did relate back and that plaintiff's actions were thus not time barred. In distinguishing Richard the court relied on two factors: that Richard was a wrongful death case and that the original appointment order there was void for being issued by a court without subject matter jurisdiction over the estate. Rennie v. Freeway Transport, 55 Or.App. 1008, 1011-1013, 640 P.2d 704 (1982).

We need not decide whether Richard is distinguishable since we conclude that, even if it is on point, it has been legislatively limited or overruled. In particular, we find ORS 114.255, which was enacted subsequent to the Richard decision, dispositive:

"The duties and powers of a personal representative commence upon the issuance of his letters. The powers of a personal representative relate back in time to give his acts occurring prior to appointment the same effect as those occurring thereafter. A personal representative may ratify and accept acts on behalf of the estate done by others where those acts would have been proper for a personal representative."

This statute was enacted as part of a major revision of Oregon's probate code and not specifically in reaction to Richard. The source of the provision was Uniform Probate Code § 3-701 (formerly U.P.C. § 3-401).

We have not had occasion to apply or interpret ORS 114.255 and the legislative history is not helpful here. The evident purpose of the statute, however, is to facilitate and legitimate beneficial acts done on behalf of the estate which by their nature are necessary or expedient to do in the interim between the decedent's death and the appointment of a personal representative. See official comment to U.P.C. § 3-701. The few reported cases involving such a provision deal with acts of this nature. See, e.g., Brown v. Brown, 43 Colo.App. 535, 608 P.2d 840, cert. den. (1980). To the extent the statute was intended to have this effect, it appears to be largely a codification of the common law. See Murray's Estate, 56 Or. 132, 136-137, 107 P. 19 (1910); Casto v. Murray, 47 Or. 57, 65-66, 81 P. 388, 81 P. 883 (1905); Annot., 3 A.L.R.3d 1234 (1965) and 26 A.L.R. 1359 (1923); 31 Am.Jur.2d, Executors and Administrators § 162 (1967).

It is not at once clear whether the statute was meant by the legislature to have a broader reach than this. Here, the problem is not that it was necessary or expedient to commence these actions before a proper appointment could be effected; rather, it is that the reopening and reappointment were improperly accomplished and thereafter set aside. Moreover, these actions...

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