Flaig v. Emert (In re Estate of Ramey)
| Decision Date | 23 January 2014 |
| Docket Number | A149671.,100190040 |
| Citation | 320 P.3d 586,260 Or.App. 652 |
| Court | Oregon Court of Appeals |
| Parties | In the Matter of the ESTATE OF Naida W. RAMEY, Deceased. Eldon Luvern Flaig, Appellant, v. Carin Sharlene Emert, Personal Representative of the Estate of Naida W. Ramey, Deceased, Respondent. |
OPINION TEXT STARTS HERE
Brooks F. Cooper argued the cause and filed the briefs for appellant.
Charles A. Kovas argued the cause and filed the brief for respondent.
Before SCHUMAN, Presiding Judge, and DUNCAN, Judge, and LAGESEN, Judge.*
When an estate's personal representative disallows a creditor's claim against the estate, the probate code—specifically, ORS 115.145—gives the creditor two avenues by which to contest the personal representative's decision. The creditor may file an appropriate action against the personal representative in a court of competent jurisdiction or, instead, may file a request for summary determination of the claim in the probate court. In this case, we address a question about the procedures that govern when a creditor opts to pursue summary determination of a disallowed claim: Can the personal representative assert counterclaims in a summary-determination proceeding? We hold that the answer to that question is no. Because the probate court concluded otherwise, we vacate the judgment and remand for further proceedings consistent with this opinion.
ORS chapter 115 governs “claims” 1 against estates. It sets forth the procedures by which an estate creditor must present any claim to the personal representative, as well as the procedures by which a creditor can obtain adjudication of the personal representative's disallowance of a claim in whole or in part. Under ORS 115.005, a creditor with a claim against an estate must present the claim to the personal representative within a specified time period. The personal representative may then disallow the claim in whole or in part. ORS 115.135. Upon receiving notice that the personal representative has disallowed a claim in whole or in part, the claimant then has two potential avenues for challenging the personal representative's decision in court. One option is to “[c]ommence a separate action against the personal representative on the claim in any court of competent jurisdiction.” ORS 115.145(1)(b). The other option is to file a request for summary determination of the claim by the probate court in the estate proceeding. ORS 115.145(1)(a).
When a claimant chooses to pursue summary determination, the personal representative can veto that choice. Under ORS 115.155, the personal representative “may notify the claimant in writing that if the claimant desires to prove the claim the claimant must commence a separate action against the personal representative within 60 days after the date of receipt of such notice.” The claimant then must comply with that demand, or the claimant's claim “to the extent disallowed by the personal representative, is barred.” Id. If the personal representative does not elect to force the creditor to bring a separate action, then the personal representative must respond to the claim in the summary-determination proceeding in probate court by “mov[ing] or plead[ing] to the claim as though the claim were a complaint filed in an action.” ORS 115.165(1). The probate court then must “hear the matter without a jury, * * * determine the claim in a summary manner and * * * make an order allowing or disallowing the claim in whole or in part.” ORS 115.165(2). The probate court's order on summary determination is not appealable. ORS 115.165(3).
In this case, claimant Eldon Flaig, the son of decedent Naida Ramey, timely made a claim against the estate for $8,136.20. The claim was for expenses that claimant had paid on behalf of decedent. The personal representative disallowed the claim. Claimant then filed a request for summary determination of the claim in the probate court. In response, the personal representative filed an “Answer and Counterclaim.” In it, the personal representative denied the claim and asserted a counterclaim. The personal representative alleged that claimant had received $30,000 in insurance proceeds belonging to the estate, “and has not responded to the personal representative's request for an accounting.” The personal representative requested entry of judgment declaring “that the $30,000 [insurance] proceeds is property of the estate,” and ordering “[c]laimant to provide an accounting of the $30,000 [insurance] proceeds[.]”
Claimant moved to dismiss or strike the counterclaim. Claimant asserted that the probate code does not authorize counterclaims by a personal representative in a summary-determination proceeding under ORS chapter 115, and that the counterclaim should be stricken or dismissed on that basis. Claimant argued, among other things, that he wanted a jury trial on the counterclaim, and to retain the other procedural rights that would otherwise be available to claimant on the counterclaim, but would not be available in a summary-determination proceeding. In the alternative, claimant asserted that Hendrickson's Estate v. Warburton, 276 Or. 989, 557 P.2d 224 (1976), and Ledford v. Yonkers, 278 Or. 37, 562 P.2d 970 (1977), required dismissal of the counterclaim, because the personal representative did not allege that the estate was insolvent.
The probate court denied the motion. It ruled that the probate code permitted the personal representative to assert counterclaims in a proceeding for summary determination. The court then summarily determined both the claim and the counterclaim following a hearing at which the court heard testimony from several witnesses. At the close of the hearing, the court ruled that Hendrickson and Ledford did not bar the counterclaim, because the personal representative sought only a determination that the insurance proceeds were estate property, and was not seeking to set aside a transfer of estate property. The court then allowed the claim in part, for $7,273.39. On the counterclaim, the court declared that the $30,000 insurance proceeds were estate property and that claimant held those proceeds under a power of attorney; it ordered claimant to return the proceeds to the estate. Thereafter, the probate court entered a general judgment approving the estate's final accounting and authorizing final distribution of the estate. The judgment contained a money judgment against claimant for $22,726.61—the $30,000 that the court had ordered claimant to return to the estate, less the amount of the allowed claim.
Claimant timely appealed. On appeal, he asserts that the judgment must be reversed either for the reason that the probate code does not authorize counterclaims by the personal representative in summary-determination proceedings or for the reason that Hendrickson and Ledford barred the personal representative's counterclaim.
As a threshold matter, we must address whether we have jurisdiction over this appeal. Although the judgment below otherwise meets the criteria for our exercise of appellate jurisdiction pursuant to ORS 19.205, the personal representative contends that ORS 115.165(3) precludes jurisdiction. We disagree.
ORS 115.165 states:
“In a proceeding for summary determination by the probate court of a claim disallowed in whole or in part by the personal representative:
“(1) The personal representative shall move or plead to the claim as though the claim were a complaint filed in an action.
“(3) No appeal may be taken from the order of the court made upon the summary determination.”
By its terms, the statute bars appeal solely from one type of order: “ the order of the court made upon the summary determination.” ORS 115.165(3) (emphases added). Viewed in context, it is apparent that “the” order on summary determination to which ORS 115.165(3) refers is the order described by ORS 115.165(2): the order “allowing or disallowing the claim in whole or in part” that the probate court must enter upon summarily determining a claim that the personal representative previously disallowed. In other words, the statute bars appeals from a probate court order summarily determining a creditor's disallowed claim against an estate. It does not bar appeals from other types of orders or judgments.
Here, claimant is not appealing from the probate court's order allowing his claim in part on summary determination. That is, claimant is not appealing from the probate court's order summarily determining that he was entitled only to $7,273.39 of the total amount that he claimed against the estate. Instead, claimant is appealing from something else: the general judgment approving the estate's final account and authorizing final distribution and the money judgment against claimant. That judgment is appealable, and the probate court's denial of the motion to strike is reviewable under ORS 19.425. ORS 116.113(4); ORS 19.205(1); ORS 19.425. Consequently, ORS 115.165(3) does not bar this appeal.2
In reviewing the probate court's ruling on the motion to dismiss or strike the counterclaim, we review for legal error the court's determination that the probate code authorizes a personal representative to assert a counterclaim in a proceeding for summary determination under ORS chapter 115. State v. Rogers, 330 Or. 282, 312 n. 8, 4 P.3d 1261 (2000) (). We also review for legal error the probate court's determination that Hendrickson and Ledford do not bar the personal representative's counterclaim. Rennie v. Freeway Transport, 55 Or.App. 1008, 1014, 640 P.2d 704,rev'd on other grounds...
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