Hanrahan v. Sims

• Decision Date: 19 July 1973
• Docket Number: No. 2,CA-CIV,2
• Citation: 20 Ariz.App. 313,512 P.2d 617
• Parties: Helen HANRAHAN, Executrix of the Estate of Eugene T. Sims, Deceased, Appellant, v. Laura K. SIMS, widow of Eugene T. Sims, Deceased, Appellee. 1372.
• Court: Arizona Court of Appeals

Page 617

512 P.2d 617

20 Ariz.App. 313

Helen HANRAHAN, Executrix of the Estate of Eugene T. Sims, Deceased, Appellant, v. Laura K. SIMS, widow of Eugene T. Sims, Deceased, Appellee.

No. 2 CA-CIV 1372.

Court of Appeals of Arizona, Division 2.

July 19, 1973.

D'Antonio & Videen by Garven W. Videen, Tucson, for appellant.

A. Alan Hanshaw, and R. Douglas Zirkle, Tucson, for appellee.

HATHAWAY, Chief Judge.

This lawsuit is a sequel to our decision in the case of In re Estate of Sims, 13 Ariz.App. 215, 475 P.2d 505 (1970), wherein we affirmed a probate court order awarding a homestead in the decedent's separate property to his surviving spouse. Thereafter the instant litigation was commenced by the surviving spouse, appellee herein, seeking reimbursement from the proceeds derived from the sale of the subject property, to the extent of one-half of mortgage payments out of community funds during the decedent's lifetime and during the probate of his estate.

The responsive pleading of the appellant-executrix admitted the estate had been making the monthly payments on the mortgage since the decedent's death, affirmatively alleged inter alia appellee's failure to present a creditor's claim, and counterclaimed for the reasonable rental value of the premises and damages for the removal of carpeting therefrom. Appellee's reply to the counterclaim admitted removal of the carpeting.

The case was submitted to the court on the following stipulation.

'1. Counsel stipulate that the court may consider that portion of the pretrial order under Nature of the Action as being stipulated facts.

2. Counsel stipulate that a reasonable rental value of the premises will be $150 per month.

3. Defense counsel states that he has no evidence to present to the court in an attempt to show that any of the payments were made from separate assets of the decedent.

4. Counsel stipulate that the court take judicial notice of the probate file number 42489.

5. Counsel stipulate that from March 1965 through October 1965 the mortgage payments were made from payments of third parties and the court may take judicial notice of case number 86908, Sims v. Lespron.

6. Counsel stipulate that a copy of the bank accounts and mortgage payments may be attached to the Plaintiff's Memorandum to be filed and may be considered by the court as in evidence before the court.

7. The court may consider all stipulations and admissions as set out in the pretrial order.

8. Counsel stipulate that the value of the wall-to-wall carpeting which the Plaintiff removed was $900.'

The pretrial order sets forth the following stipulations:

'The parties stipulate that the decedent and the plaintiff resided in the premises from August 1959 through August 1964, and that the premises were the sole and separate property of the decedent.

Parties stipulate that a tentative sale of the premises was made during 1964, which was never consummated, and that plaintiff and decedent went back into possession in August 1966 and resided together therein until December 1968 when a divorce suit was filed.

Thereafter the plaintiff resided in the decedent's sole and separate home until July 1971.

Parties stipulate that the estate made mortgage payments from estate funds from July 1969 and through the date of sale in October 1971.

Counsel admit the plaintiff and decedent were married in August 1959 and that a divorce was filed by the plaintiff against the decedent in December 1969 and that no judgment has been entered thereon. Counsel admit the decedent died on July 10, 1969.'

The court found that appellee was entitled to recover $8,503.05, one-half of the mortgage payment made by the community on the separate property of the husband and that appellant was entitled to an offset of $450, one-half of the value of the carpet taken from the premises. Judgment was entered in appellee's favor in the sum of $8,053.05.

Appellant initially contends that appellee's failure to file a creditor's claim brought into play the bar of A.R.S. § 14--570, subsec. A:

'All claims arising upon contracts, whether due, not due or contingent, shall be presented to the executor or administrator within the time limited in the notice to creditors, and any claim not so presented is barred forever. . . .'

We do not agree with appellant's arguements. A 'claim' is a debt or demand on the Estate, Fox v. McCreary, 103 Ohio App. 73, 144 N.E.2d 546 (1957), and the term 'arising upon contract' refers to a contract to which the decedent was a party. Nat. Auto and Casualty Ins. Co. v. Ainge, 34 Cal.2d 806, 215 P.2d 13 (1950). The substance of appellee's claim for relief, although inartfully pleaded, was that community funds had been expended for the benefit of the decedent's separate estate and therefore the community was entitled to reimbursement from the proceeds of the sale of the separate property to the extent of such expenditures. Such claim for reimbursement is in the nature of an equitable lien. 42 C.J.S. Husband and Wife § 688(a). The non-claim statute does not apply to claims of equitable ownership of assets being administered, Fernandez v. Garza, 88 Ariz. 214, 354 P.2d 260 (1960); Lecky v. Staley, 6 Ariz.App. 556, 435 P.2d 63 (1967). Appellee was claiming property as her own and therefore her claim was not one against the estate but rather one against the executrix. In re Connor's Estate, 240 Iowa 479, 36 N.W.2d 833 (1949); In re Dabney's Estate, 37 Cal.2d 672, 234 P.2d 962 (1951). One seeking judicial declaration of an equitable lien and enforcement thereof is not required to file a creditor's claim as a condition precedent to maintaining the action. Grant v. De Otte, 122 Cal.App.2d 724, 265 P.2d 952 (1954).

We summarily dispose of appellant's collateral estoppel and res judicata arguments--res judicata is an affirmative defense and must be pleaded and proved. Lakin Cattle Co. v. Engelthaler, 101 Ariz. 282, 419 P.2d 66 (1966). Appellant's failure to raise such defense constituted a waiver thereof. Reed v. Frey, 10 Ariz.App. 292, 458 P.2d 386 (1969).

We do believe, however, the monetary judgment is erroneous. Appelee's position below was that she was entitled to recover from the executrix of the decedent's estate one-half of the total mortgage payments made from community funds for the benefit of the decedent's separate property. These mortgage payments, however, included not only payment on principal, but also interest, taxes and insurance. Appellant's position, on the other hand, was that since appellee and decedent had utilized the subject property as a family residence, thereby benefiting the community, a reasonable rental value should have been offset or, in the alternative, appellee was entitled to no more than one-half of the community funds expended to reduce the principal balance of the decedent's obligation.

Appellant relies upon the case of Lawson v. Ridgeway, 72 Ariz. 253, 233 P.2d 459 (1951) for the proposition that when community funds have been used to place improvements upon the separate property of one of the spouses, the community is entitled to reimbursement for the enhancement in value occasioned by such improvements. She argues, therefore, that appellee failed to sustain her burden since she presented no evidence of enhancement in vlaue. Appellee cites the cases of Kingsbery v. Kingsbery, 93 Ariz. 217, 379 P.2d 893 (1963); Rothman v. Rumbeck, 54 Ariz. 443, 96 P.2d 755 (1939) and Flynn v. Allender, 75 Ariz. 322, 256 P.2d 560 (1953) to support her position that she was entitled to recover one-half of the total amount contributed by the community. We find the factual situations in these Arizona cases readily distinguishable from the factual situation presented here. Although all reiterate the general principle that the community, when it advances funds to improve the separate property of one of the spouses, is entitled to reimbursement, following the rule laid down in the Washington case of Legg v. Legg, 34 Wash. 132, 75 P. 130 (1904), the...