In re Estate of Ongaro
| Decision Date | 13 March 2000 |
| Docket Number | No. 98SC435.,98SC435. |
| Parties | In the Matter of the ESTATE OF Veronica C. ONGARO, Deceased. Denver Water Department Credit Union, Petitioner, v. The Estate of Veronica C. Ongaro Respondent. |
| Court | Colorado Supreme Court |
Rehearing Denied April 10, 2000.1
Beck & Cassinis, P.C., Howard J. Beck, Diana J. Payne, Aurora, Colorado, Attorneys for Petitioner.
James D. Osborne, Craig, Colorado, Attorney for Respondent.
Berenbaum, Weinshienk & Eason, P.C., Robert G. Wilson, Jr., Daniel S. Duggan, Denver, Colorado, Attorney for Amicus Curiae Colorado Credit Union League.
The Denver Water Department Credit Union (the Credit Union) appeals the court of appeals' decision in In re Estate of Ongaro, 973 P.2d 660 (Colo.App.1998), affirming the probate court's dismissal of the Credit Union's claim against the estate (Estate) of Veronica Ongaro (Decedent). We granted certiorari to determine whether the court of appeals erred by determining that the Credit Union's claim against the Estate is barred because the Credit Union failed to comply with the reasonable notice and proper presentation requirements of section 15-12-803(1)(a)(III), 5 C.R.S. (1999). We now affirm the court of appeals' decision.
This case arises from a loan transaction that occurred prior to the Decedent's death.
In October 1992, Arthur Watson (Watson), an employee of the Denver Water Department and member of the Credit Union, applied for a loan to purchase a 1990 Plymouth Voyager station wagon. Based on Watson's credit history, the Credit Union denied the loan application. Thereafter, Watson's wife, Mary Ongaro-Watson (Ongaro-Watson), attempted to co-sign the loan on behalf of her mother, the Decedent, pursuant to authority granted in several powers of attorney. The Credit Union, however, declined to recognize Ongaro-Watson as the Decedent's authorized agent.
The Decedent eventually appeared in person at the Credit Union to help her son-in-law obtain the loan. In exchange for the loan, the Decedent and Watson signed and delivered a promissory note in the amount of $14,881.45 to the Credit Union. The note was payable in semimonthly installments of $190.51 and was secured by the 1990 Plymouth Voyager station wagon that Watson purchased with the loan.
Payments on the note were deducted from Watson's paycheck until the summer of 1993, when he ended his employment with the Denver Water Department. Thereafter, Watson fell behind on his payments, and on March 23, 1994, the Credit Union sent notices of default to Watson and the Decedent.
On March 31, 1994, the Decedent tendered enough money to the Credit Union to bring the payments on the note current. Subsequent payments were made by Ongaro-Watson from a joint checking account owned with the Decedent. After each payment, the Credit Union sent identical receipts to Watson and the Decedent.
On May 13, 1994, the Decedent died, survived by Ongaro-Watson and her other daughter, Elizabeth Ongaro-Ruhl (Ongaro-Ruhl). The Moffat County District Court (probate court) admitted the Decedent's estate to probate and appointed Ongaro-Watson personal representative of the Estate.
Ongaro-Watson advised the Estate's attorney of the Decedent's liability on the note but was informed that she did not need to notify the Credit Union of the Decedent's death or of the deadline for presenting claims against the Estate. Ongaro-Watson published a notice in the Northwest Colorado Daily Press providing creditors an October 11, 1994 deadline for filing claims against the Estate but did not provide the Credit Union with actual notice of the Decedent's death or of the deadline for filing claims.
In November 1994, Joseph Janosec (Janosec) replaced Ongaro-Watson as the Estate's personal representative. At that time Janosec had no knowledge of the Decedent's liability on the note.
Ongaro-Watson continued to make payments on the note from the joint account until January 1995. In April 1995, the Credit Union repossessed Watson's station wagon. The Credit Union subsequently sold the station wagon for $6,000. The proceeds from the sale only partially satisfied the debt remaining on the note.
On May 24, 1995, the Credit Union first learned of the Decedent's death. The following day, a year and twelve days after the Decedent's death, the Credit Union presented a formal claim against the Estate for the amount remaining on the note.
On June 9, 1995, Janosec notified the Credit Union that the Estate was disallowing the claim. The Credit Union responded by submitting a second formal claim to Janosec and filing a petition for allowance of claim in the probate court.
The probate court interpreted section 15-12-803(1)(a)(III) as a nonclaim statute that required all creditors to present claims against the Estate within one year of the Decedent's death. Finding that the Credit Union had failed to present its claim against the Estate within one year of the Decedent's death, the probate court dismissed the Credit Union's claim as time-barred. The probate court rejected the Credit Union's arguments that Ongaro-Watson had wrongfully concealed the fact of the Decedent's death and that the one-year period for presenting claims under section 15-12-803(1)(a)(III) was tolled by Ongaro-Watson's conduct. The probate court further rejected the Credit Union's assertions that Ongaro-Watson's personal knowledge of the Decedent's liability on the note excused the Credit Union's duty to present its claims against the Estate.
The court of appeals affirmed the probate court's decision. This appeal followed.
Section 15-12-804 sets forth three methods of presenting a claim against an estate.2 See § 15-12-804(1), (2); In re Estate of Hall, 948 P.2d 539, 541-42 (Colo.1997). First, a claimant may mail or deliver a written statement to the estate's personal representative. See § 15-12-804(1); Estate of Hall, 948 P.2d at 541-42. Second, a claimant may file its written claim with the clerk of the court where the estate is being probated. See § 15-12-804(1); Estate of Hall, 948 P.2d at 542. Third, a claimant may commence litigation against the personal representative to obtain payment of its claim against the estate. See § 15-12-804(2); Estate of Hall, 948 P.2d at 542.
If a claimant opts to use either the first or the second method, the written claim must state the basis of the claim, the name and address of the claimant, and the amount claimed. See § 15-12-804(1). Additionally, the written claim must indicate the nature of any uncertainty or contingency of the claim, any property securing the claim, and, if not yet due, the date on which the claim will become due. See id. A claim is deemed presented when the claimant complies with one of these three methods for presenting the claim. See § 15-12-804(1), (2).
The Credit Union maintains that under Colorado law a claimant need not file a formal claim against an estate when the estate's personal representative has knowledge of the claim. The Credit Union urges us to consider the totality of the circumstances when analyzing whether the Credit Union provided Ongaro-Watson with reasonable notice of its claim against the Estate. According to the Credit Union, Ongaro-Watson's participation in the loan application process, the payments on the note made by Ongaro-Watson from the joint checking account, and a single payment receipt addressed to the Decedent and mailed to Ongaro-Watson's residence provided sufficient notice of the Credit Union's claim against the Estate. Thus, the Credit Union argues that it is excused from the formal presentation requirements of section 15-12-804.
We agree with the Credit Union that a creditor need not comply strictly with each of the formal requirements of section 15-12-804. The General Assembly has not required creditors to describe their claims with absolute precision. "Failure to describe correctly the security, the nature of any uncertainty, and the due date of a claim not yet due does not invalidate the presentation made." § 15-12-804(1).
Nevertheless, we find that section 15-12-804 does require that a creditor provide a personal representative with reasonable notice that it is making a claim against an estate. Notice to a personal representative that a creditor could bring a claim against an estate is different from notice that the creditor in fact is bringing that claim. At a minimum a written claim must contain (1) a request or demand for payment from the estate, and (2) sufficient information to allow the personal representative to investigate and respond to the claim. The Credit Union relies heavily on Strong Bros. Enterprises, Inc. v. Estate of Strong, 666 P.2d 1109 (Colo.App.1983), for the proposition that a claimant need not formally present a claim where the personal representative has sufficient personal knowledge of the estate's liability to the claimant. According to the Credit Union, section 15-12-804(1) requires only substantial compliance when the personal representative has personal knowledge of the facts underlying the claim.
In Strong, the court of appeals considered whether a letter addressed to the personal representative's attorney presented a claim against the estate. See id. at 1110-11. The letter notified the attorney of a contingent claim against the estate and included a copy of the contractual agreement between the claimant and the decedent on which the claim was based. See id. The personal representative's attorney had drafted the agreement. See id.
The estate argued that the letter failed to satisfy the presentation requirements of section 15-12-804(1) because the information provided in the letter would not have been sufficient to explain the nature of the claim to a stranger to the transaction and because the claimant addressed the letter to the personal representative's attorney, not the personal representative. See id. at 1111-12. The court of appeals disagreed,...
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