Beit Hanina Enters., Inc. v. Moffett (In re Estate of Graves)

• Decision Date: 20 December 2011
• Docket Number: No. S–11–0126.,S–11–0126.
• Citation: 2011 WY 165,267 P.3d 1070
• Parties: In the Matter of the ESTATE OF Andrew T. GRAVES, Deceased.Beit Hanina Enterprises, Inc., a California corporation, by and through its Chief Executive Officer, Sharif Silmi, Appellant (Claimant), v. J. Denny Moffett, as personal representative of the Estate of Andrew T. Graves, Appellee (Respondent).
• Court: Wyoming Supreme Court

2011 WY 165

267 P.3d 1070

In the Matter of the ESTATE OF Andrew T. GRAVES, Deceased.Beit Hanina Enterprises, Inc., a California corporation, by and through its Chief Executive Officer, Sharif Silmi, Appellant (Claimant),

v.J. Denny Moffett, as personal representative of the Estate of Andrew T. Graves, Appellee (Respondent).

No. S–11–0126.

Supreme Court of Wyoming.

Dec. 20, 2011.

Representing Appellant: Leonard R. Carlman of Hess Carlman & D'Amours, LLC, Jackson, WY.

Representing Appellee: Clay D. Geittmann of Mullikin, Larson & Swift, LLC, Jackson, WY.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

HILL, Justice.

[¶ 1] Creditor (California corporation “Beit Hanina Enterprises, Inc.,” hereinafter referred to as “BHE”) challenges a Wyoming probate court's “Order Finding Creditor Time Barred from Challenging Denial of Claim” and argues on appeal that the probate court erred in refusing to find peculiar circumstances entitling BHE to equitable relief from strict application of the Wyoming Probate Code's 30–day statute of limitations under Wyo. Stat. Ann. § 2–7–718 (LexisNexis 2011). We affirm.

ISSUE

[¶ 2] BHE presents one issue:

Whether the District Court erred when it declined to provide to [BHE] the equitable relief available at W.S. § 2–7–703(c), which states, “This section [regarding filing claims] shall not bar: (i) Claimants entitled to equitable relief due to peculiar circumstances, if so found by the court in adversary proceedings.” (Emphasis added.)

FACTS

[¶ 3] In 2008, the decedent, Andrew T. Graves, as CEO of Wireless Technology Solutions, Inc., purchased a cell phone retail outlet from BHE. As part of the purchase, BHE accepted a promissory note from Wireless Technology Solutions, in the amount of $663,563.00. Graves signed the note as personal guarantor, but he died one day before the first installment payment was due on the note.

[¶ 4] Two closely related legal actions followed—a California civil suit and this Wyoming probate action. On July 22, 2010, BHE filed a breach of contract action in California against Wireless Technology Solutions. BHE anticipated naming Graves' estate as a defendant, so BHE named “Does 1–10” as co-defendants.

[¶ 5] On June 10, 2010, the Wyoming probate court admitted Graves' estate to probate with J. Denny Moffett appointed as the personal representative. On August 25, 2010, “Notice of Probate” was mailed to BHE. On September 1, 8, and 15, 2010, public notice of the probate was published in the Jackson Hole News & Guide. Under § 2–7–703(a), BHE had three months after September 1, 2010, to file a claim with the Estate.

[¶ 6] In accordance with the statutory requirements, BHE filed a timely claim with the Estate. On September 21, 2010, the Estate's attorney mailed a “Notice of Rejection of the Claim.” After correcting a procedural flaw in the first claim, on October 4, 2010, BHE filed a second claim with the Estate. The Estate did not issue a separate rejection for the second claim. Under § 2–7–718, a creditor must “bring suit” within 30 days after the date of mailing of the claim rejection notice. If the creditor fails to do so, his claim is, according to the statute, “forever barred.” Here, the 30–day period for bringing suit expired on October 21, 2010—30 days after the rejection of the claim.

[¶ 7] Back in California, on October 15, 2010, BHE filed an “Ex Parte Application for Amendment to Complaint and [Proposed] Order.” Through that pleading, BHE sought to replace the fictitious name of “Doe 1” with “the Estate of Andrew T. Graves, by and through J. Denny Moffett, Personal Representative.” The California court did not sign the proposed order on October 15, 2010. Rather, a clerk of the California court indicated that BHE's pleading did not comply with court rule amendments that had gone into effect on January 1, 2010. The pleading apparently lacked a supporting declaration and the proper fee. On November 12, 2010, the California court held a hearing and entered an “Order Granting Plaintiff's Ex Parte Application to Amend Complaint,” which added the Estate as a defendant in the action.

[¶ 8] Returning to the Wyoming probate action, the Estate, on December 30, 2010, filed a “Notice of Claim Dispositions.” The Estate persisted in its denial of BHE's claim. The same day, the Estate also filed a “Motion for Hearing on Creditor's Capacity to Challenge Denial of Claim.” On February 4, 2011, the probate court held a hearing on that motion, and on April 11, 2011, entered its “Order Finding Creditor Time Barred from Challenging Denial of Claim.” First, the court ruled BHE's

attempt to include the Estate in its ongoing lawsuit on October 15, 2010, was in compliance with Wyo. Stat. § 2–7–717, which requires that a claimant not bring or pursue a suit to judgment until the claim has been filed and rejected by the personal representative.

Second, the court ruled BHE had not complied with § 2–7–718, which requires that a claimant must bring suit within 30 days after mailing of the claim rejection notice, and that the Estate “was not added to the ongoing California lawsuit until November 12, 2010—after the filing window had closed.” Both of those rulings go unchallenged before this Court.

[¶ 9] In its ruling, the court considered whether BHE should receive equitable relief from strict application of § 2–7–718. The court noted that sections of the Probate Code, as well as this Court's rulings, suggest that equitable relief may be available, and stated as follows:

In considering the entire circumstances of the case, the Court finds no “peculiar” occurrences or any situation that would warrant equitable relief for [BHE]. It appears that attorneys for [BHE] made procedural errors in amending [BHE's] claim in the California court by not complying with the 2010 rules. These errors—and not an unusual happenstance or some action attributable to the personal representative—led to the potential bar to [BHE's] suit in California. In the absence of some peculiar circumstance or evidence of manipulation on the part of the personal representative in this case, the Court holds attorneys for [BHE] to strict compliance with the Probate Code.

[¶ 10] This appeal followed.

STANDARD OF REVIEW

[¶ 11] We review this case for an abuse of discretion because rather than looking at statutory construction, this Court is reviewing the appealable order through an equitable lens. An abuse of discretion occurs when a court acts in a manner which exceeds the bounds of reason under the circumstances. Steiger v. Happy Valley Homeowners Ass'n, 2010 WY 158, ¶ 9, 245 P.3d 269, 273 (Wyo.2010). In determining whether there has been an abuse of discretion, the ultimate issue is whether or not the court could reasonably conclude as it did. Id.

DISCUSSION

[¶ 12] BHE argues on appeal that the probate court erred in declining to provide equitable relief due to peculiar circumstances under Wyo. Stat. Ann. § 2–7–703(c) (LexisNexis 2011). BHE concedes that the probate court was correct in ruling that BHE did not bring suit within 30 days of claim denial, as required by § 2–7–718, but BHE argues that the probate court abused its discretion when it found no peculiar circumstances that would warrant relief for BHE. BHE complains that the probate court's focus was too narrow, in that it examined only whether there was some unusual action attributable to the Estate. BHE insists peculiar circumstances existed because the Estate was aware of the California litigation, that the California court provided little notice of its rule changes and even continued with the old procedures after the rule changes took effect.

[¶ 13] In response, the Estate addresses both of BHE's claims, and asserts that the first claim was timely filed and timely rejected. As to the second claim, the Estate argues the probate court was correct that the second claim had no effect on the statutory time for filing suit, inasmuch as the same claim had been earlier and timely rejected. The Estate argues that the peculiar circumstances provision of § 2–7–703(c) does not apply to § 2–7–718. The Estate points out that § 2–7–703 pertains to the original filing of a creditor claim whereas § 2–7–718 is a statute of limitations for bringing a suit.

[¶ 14] We agree with the Estate. In doing so, we begin by looking to the Wyoming statutes. The requirements of the probate code are of paramount importance here. Wyo. Stat. Ann. § 2–7–718 (LexisNexis 2011) states:

When a claim is rejected and notice given as required, the holder shall bring suit in the proper court against the personal representative within thirty days after the date of mailing the notice, otherwise the claim is forever barred.

Once notice of probate has been provided, Wyo. Stat. Ann. § 2–7–703 (LexisNexis 2011) sets forth filing requirements for creditors wishing to make a claim against a probate estate:

(a) Except as otherwise provided in this section, all claims whether due, not due or contingent, shall be filed in duplicate with the clerk within the time limited in the notice to creditors and any claim not so filed is barred forever. Any claimant to whom the personal representative has mailed a notice pursuant to W.S. 2–7–205(a)(ii) shall file his claim within three (3) months after the date of first publication of the notice in the newspaper, or before the expiration of thirty (30) days after the mailing, whichever date is later, and any claim not so filed is barred forever. If only one (1) copy of a claim is filed, the clerk shall make a duplicate and shall charge the claimant a reasonable fee not to exceed two dollars ($2.00) per page.

(b) The clerk shall forthwith transmit to the personal representative one (1) copy of each claim when and as filed.

(c) This section shall not bar:

(i) Claimants entitled to equitable relief due to peculiar circumstances, if so found by the court in adversary proceedings; or

(ii) A claimant to whom no notice was mailed pursuant to W.S. § 2–7–205(a)(ii)...