Estate of Decker v. Farm Credit Services of Mid America, ACA
| Decision Date | 28 July 1995 |
| Docket Number | No. 71A03-9410-CV-389,71A03-9410-CV-389 |
| Parties | In the Matter of the ESTATE OF Charles Earnest DECKER, Deceased, Appellant-Defendant, v. FARM CREDIT SERVICES OF MID AMERICA, ACA, Appellee-Plaintiff. |
| Court | Indiana Appellate Court |
Farm Credit Services of Mid-America, ACA (hereinafter FCS) filed a claim against the Estate of Charles Decker which the probate court disallowed as untimely. FCS appealed, claiming that the personal representative induced the delay in bringing its action. The Court of Appeals found that equity may require extension of the statute of limitations, and remanded for a determination of whether the equities here demanded that the statute of limitations be extended to allow FCS to file its claim against the estate. Upon remand, the probate court found in FCS's favor. The estate now appeals.
Whether the probate court's determination that equity demanded extension of the statute of limitations, thus allowing FCS to file its claim against the estate, amounted to clear error.
The stipulated facts show that Charles Decker died on July 4, 1990. Approximately seven years prior to his death, Decker had become indebted to the Federal Land Bank of Louisville Kentucky, now known as FCS. On September 25, 1990, an attorney for the decedent sent a letter to FCS advising it of Decker's death, indicating that an estate might be opened in the future, and requesting information concerning the deficiency judgment. An estate was opened on October 3, 1990 and Michael Decker, son of the deceased, was appointed as personal representative. Although further correspondence between the parties occurred, neither the personal representative nor his attorney provided actual notice to FCS that an estate had been opened, as required by Ind.Code § 29-1-7-7(d). FCS received actual notice of the estate in September, 1991, and filed the claim at issue on September 5, 1991.
The probate court dismissed FCS's claim against the estate because it was filed outside the one year statute of limitations. 1 This court found that equity may require extension of the statute of limitations, and reversed the lower court's decision. See Farm Credit Services of Mid America, ACA v. Estate of Decker (1993), Ind.App., 624 N.E.2d 491. Upon remand, the probate court concluded that the attorney for the personal representative should have notified FCS that an estate had been opened and that equity demanded extending the statute of limitations in this case.
Standard of Review.
We review cases in which a trial court has entered requested findings of fact and conclusions of law, as it did in this case, in a two-step process. First, we determine whether the evidence supports the trial court's findings of fact. Second, we determine whether those findings of fact support the trial court's conclusions of law. Estate of Reasor v. Putnam County (1994), Ind., 635 N.E.2d 153, 158, reh'g denied. We will not set aside the court's judgment unless it is clearly erroneous. Id.; DeHaan v. DeHaan (1991), Ind.App., 572 N.E.2d 1315, 1320, reh'g denied, trans. denied. Findings are clearly erroneous only if the record contains no facts supporting them either directly or by inference. A judgment is clearly erroneous when it is unsupported by the findings of fact and the conclusions relying on those findings. We may not reweigh the evidence or judge the credibility of witnesses. Estate of Reasor, 635 N.E.2d at 158. Additionally, we may not search outside the trial court's findings for evidence which supports the judgment. Id., n. 3.
Appellant's Claim.
The estate contends that the probate court erred by allowing FCS to file its claim more than one year after the death of Charles Decker. Under these circumstances, this court has held that the statute of limitations may be extended where conduct of the personal representative for the estate prevented a party from commencing an action or induced the party to delay beyond the time allowed by law. 2 Farm Credit Services, 624 N.E.2d at 496. The estate claims the single alleged inducement was a letter from the estate's attorney to FCS describing the estate as having minimal assets and abundant debts. The estate argues that the term "minimal assets" was not misleading but was, in fact, accurate. Moreover, the estate construes the term as subjective in nature and argues that it may not be used as the basis of reliance in claiming fraud.
We disagree with the estate's position that FCS must prove fraud induced its delay. While a showing of fraud on the part of the estate's personal representative would clearly support extension of the statute of limitations, proof of other misconduct will also suffice. See Donnella v. Crady (1962), 135 Ind.App. 60, 63, 185 N.E.2d 623, 625, trans. denied (1963) 244 Ind. 205, 191 N.E.2d 499, ( "[e]quity will estop a party from setting up the statute of limitations as a defense in an action where such party by fraud or other misconduct has prevented a party from commencing his action or induced him to delay the bringing of his action beyond the time allowed by law.") (Emphasis added). In Farm Credit Services, this court specifically stated that if the personal representative knew of a creditor's claim against the estate and simply ignored the claim until the statute of limitations ran, then such action would amount to misconduct which could extend the running of the statute. 624 N.E.2d at 495. We held that counsel's knowledge of FCS's claim against the estate was imputed to the personal representative. Id. at 496. Therefore, the question presented for review today is whether this misconduct induced FCS to delay in filing its claim against the estate.
The estate contends the trial court erred in finding that the September 25, 1990 letter from the estate's attorney induced FCS to delay beyond the running of the statute of limitations. This letter contained the following relevant language As I told you on the telephone, I may be opening up an estate for Mr. Charles E. Decker as my office has been contacted by his son, Michael. Charles Decker had minimal assets but, in checking the records, it appears that he had abundant debts.
One of the judgments that shows up on Mr. Decker's record, is the above-referenced cause which reflects a judgment in favor of the Federal Land Bank of Louisville in the sum of $92,721.30.
....
Basically, we have no desire to open up an estate to transfer whatever assets there may be to the Federal Land Bank of Louisville but if we could determine exactly how much money the Federal Land Bank of Louisville is out considering their ultimate disposition of the property we might be able to work something out.
The probate court specifically found that (1) the attorney for the estate wrote a letter to FCS on October 8, 1990 which failed to notify FCS that an estate had been opened on October 3, 1990; (2) the personal representative knew that FCS was a creditor before opening the estate and at the time of sending the letter dated October 8, 1990; and (3) that neither the personal representative nor counsel provided actual notice to FCS as required by statute. Record at 31. The court also found that prior to receiving actual notice in September, 1991, FCS was not aware that an estate had been opened and took at face value the representation by counsel for the estate that he may or may not open an estate because of "minimal assets" and "abundant debts." Record at 31. These factual findings are amply supported by the stipulated facts and testimony provided in the record.
The court then concluded that counsel for the personal representative could have and should have notified FCS in his letter of October 8, 1990, that the estate had been opened. The court determined that equity demanded an extension of the statute of limitations to allow FCS to file its claim against the estate. Record at 32. The court's specific findings of fact provide considerable support for these conclusions and the court's judgment.
The estate failed to give FCS notice of administration of the estate as mandated by IC 29-1-7-7. It totally failed to mention that administration had been commenced in correspondence with FCS despite its earlier assertion that the estate was debt ridden and formal administration was doubtful. Additionally, when FCS did learn of the administration, it promptly filed its claim. The court committed no clear error in determining that the statute of limitations should be extended. 3
Judgment is AFFIRMED.
STATON, J. dissents and files separate opinion.
I dissent because the findings of the trial court are clearly erroneous for two reasons:
1. FCS had actual notice of Decker's death and the probable administration of his estate, precluding the application of equitable tolling.
2. IND.CODE § 29-1-7-7(e) is a nonclaim statute not subject to equitable tolling.
The record in this case contains ample evidence that FCS received actual notice of Decker's death, as well as actual notice of the probable administration of his estate. On September 25, 1990, the Estate's attorney sent a letter to FCS informing FCS of Decker's death and requesting the amount of FCS's claim. Shortly thereafter, FCS responded by informing the Estate's attorney that should he fail to open an estate, FCS could do so within a year. The subsequent correspondence between the parties could not have induced FCS's failure to commence an action beyond the one-year nonclaim period in IC 29-1-7-7(e): FCS was well aware of Decker's death and its statutory right to commence an action to collect its judgment. FCS took no action to protect its interest. Equitable principles are intended to aid the vigilant, not those who slumber on their rights. Cook v....
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