Estate of Decker v. Farm Credit Services of Mid-America, ACA

• Citation: 684 N.E.2d 1137
• Decision Date: 04 September 1997
• Docket Number: No. 71S03-9511-CV-01317,P,MID-AMERIC,AC,71S03-9511-CV-01317
• Parties: In the Matter of the ESTATE OF Charles Earnest DECKER, Deceased, Defendant-Appellant, v. FARM CREDIT SERVICES OFlaintiff-Appellee.
• Court: Indiana Supreme Court

Page 1137

684 N.E.2d 1137

In the Matter of the ESTATE OF Charles Earnest DECKER Deceased, Defendant-Appellant, v. FARM CREDIT SERVICES OF MID-AMERICA, ACA, Plaintiff-Appellee.

No. 71S03-9511-CV-01317.

Supreme Court of Indiana.

Sept. 4, 1997.

Robert E. Canfield, South Bend, for Defendant-Appellant.

Jere L. Humphrey, Mark E. Wagner, Kizer & Neu, Plymouth, for Plaintiff-Appellee.

ON PETITION TO TRANSFER

DICKSON, Justice.

This case involves the continued litigation surrounding the plaintiff-appellee's, Farm Credit Services ("FCS"), ¹ attempt to file a claim against the defendant-appellant, Estate of Decker, more than one year after the decedent had died, in violation of Indiana Code Section 29-1-7-7(e) (1993). ² The trial court denied the claim as untimely filed, notwithstanding the fact that FCS did not receive actual notice of the estate as required by Indiana Code Section 29-1-7-7(d). ³ The Court of Appeals reversed, finding that the provision in question was a statute of limitation, not a nonclaim statute, and therefore equity may allow an extension of time. Farm Credit Services of Mid America, ACA v. Estate of Decker, 624 N.E.2d 491 (Ind.Ct.App.1993). The court remanded, instructing the probate court to determine whether equity permitted FCS to assert a claim against the estate. Transfer to this Court was not sought and the probate court found in favor of FCS. Upon appeal by the estate, the Court of Appeals affirmed. Estate of Decker v. Farm Credit Services of Mid America, ACA, 653 N.E.2d 534 (Ind.Ct.App.1995). Having granted transfer, we are called upon to decide whether equity should prevent the filing of this claim. We conclude that it should not because Indiana Code Section 29-1-7-7(e) is a strict nonclaim statute rather than a statute of limitations subject to equitable tolling.

The statute in question prescribes a time limit of one year after the death of the decedent for the filing of claims against the estate. IND.CODE § 29-1-7-7(e) (1993); IND.CODE § 29-1-14-1(d) (1993). This one-year limitation period applies whether the creditor has received proper notice, improper notice, or no notice at all, and it is this provision which is at issue. Accord Estate of Jenkins v. Guyton, 912 S.W.2d 134, 138 n. 3 (Tenn.1995).

We disagree with the Court of Appeal's conclusion that this one-year limitation provision is a statute of limitation rather than a nonclaim statute. The distinction between nonclaim statutes and statutes of limitation is explained in Donnella v. Crady, 135 Ind.App. 60, 185 N.E.2d 623 (1962):

[A] nonclaim statute ... grants to every person having a claim of any kind or character against a decedent's estate, the right to file the same in the court having jurisdiction thereof and have the same adjudicated, provided such claim is filed within the time specified in the statute. Unless such claim is filed within the time so allowed by the statute, it is forever barred. The time element is a built-in condition of the said statute and is of the essence of the right of action. Unless the claim is filed within the prescribed time set out in the statute, no enforceable right of action is created.

While such statutes limit the time in which a claim may be filed or an action brought, they have nothing in common with and are not to be confused with general statutes of limitation. The former creates a right of action if commenced within the time prescribed by the statute, whereas the latter creates a defense to an action brought after the expiration of the time allowed by law for the bringing of such an action.

Id. at 62-63, 185 N.E.2d at 624. Thus, the statute is a nonclaim statute when "there is clearly evidenced a legislative intent in [the] statute to not merely withhold the remedy, but to take away the right of recovery where a claimant fails to present his claim as provided in the statute." Rising Sun State Bank v. Fessler, 400 N.E.2d 1164, 1166 (Ind.Ct.App.1980). While equitable principles may extend the time for commencing an action under statutes of limitation, nonclaim statutes impose a condition precedent to the enforcement of a right of action and are not subject to equitable exceptions. See Id.; Anson v. Anson's Estate, 399 N.E.2d 432, 435 (Ind.Ct.App.1980); Donnella, 135 Ind.App. at 63-64, 185 N.E.2d at 625.

Prior to the amendments in 1990, the statutes in question were unequivocally nonclaim statutes, Anson, 399 N.E.2d at 434, with the time element a built-in condition of the right of action. The pertinent amendments to Indiana Code Section 29-1-7-7 include the addition of subsection (e), which establishes the time frame within which notice must be given:

Notice ... shall be served within three (3) months after the first publication of notice [of estate administration] or as soon as possible after the elapse of three (3) months. If the personal representative or the personal representative's agent fails to give notice to a known or reasonably ascertainable creditor of the decedent ... within three (3) months after the first publication of notice [of estate administration], the period during which the creditor may submit a claim against the estate includes the period specified under IC 29-1-14-1 and an additional period ending two (2) months after the date notice is given to the creditor ... However, a claim subject to this subsection may not be filed more than one (1) year after the death of the decedent.

IND.CODE § 29-1-7-7(e) (1993). Amendments to Indiana Code Section 29-1-14-1 included the change in subsection (d) from "All claims barrable ... shall in any event be barred if administration of the estate is not commenced within one (1) year after the death of the decedent" to "All claims barrable ... shall be barred if not filed within one (1) year after the death of the decedent." IND.CODE § 29-1-14-1(d) (1993) (emphasis added).

These additions and changes do not transform the one-year time limitation from a prerequisite condition for asserting claims (nonclaim) to a defense when an action is brought after the expiration...