In re Estate of Green

• Decision Date: 30 January 2003
• Docket Number: No. 01-PR-1247.,01-PR-1247.
• Citation: 816 A.2d 14
• Parties: In re ESTATE OF Louise GREEN, Old Republic Surety Company, Appellant.
• Court: D.C. Court of Appeals

816 A.2d 14

In re ESTATE OF Louise GREEN,

Old Republic Surety Company, Appellant.

No. 01-PR-1247.

District of Columbia Court of Appeals.

Argued January 9, 2003.

Decided January 30, 2003.

Andrew J. Terrell, Washington, DC, for appellant.

Anne Meister, pro se, for appellee.

Before SCHWELB, REID and WASHINGTON, Associate Judges.

REID, Associate Judge:

Appellant Old Republic Surety Company ("Old Republic"), surety for the original personal representative of the estate of Louise Green, seeks reversal of a trial court order requiring it to pay the fees of a special master, appointed by the Probate Division of the trial court at the request of the successor personal representative of Ms. Green's estate, after the original personal representative was removed by the court. Old Republic maintains that the trial court erred by not ruling that the special master's claim was barred by the statute of limitations. We hold, as a general rule, that a claim on a personal representative's bond accrues when the final account of the estate is filed and approved by the Probate Division of the trial court; and finding no error in this case, we affirm the judgment of the trial court.

FACTUAL SUMMARY

The record before us shows that Louise Green died on August 24, 1990, leaving a son, David Avery, whom she raised, and a daughter, Lanita Avery Madison, who was raised by the daughter's father. Mr. Avery was appointed personal representative of his mother's estate on December 24, 1990. He filed his first accounting on September 1, 1992, and his second accounting on May 21, 1993. Approximately three weeks after the second accounting was filed, Ms. Madison lodged a complaint in the trial court seeking to remove Mr. Avery as personal representative. She asserted that Mr. Avery had failed to arrange for sale of the estate's main asset, a house located as 1324 Michigan Avenue, in the Northeast quadrant of the District of Columbia; that he refused to close the estate, had moved to Maryland, and had rented the Michigan Avenue property.

Subsequently, Mr. Avery and Ms. Madison settled their differences. On October 26, 1993, Mr. Avery agreed to pay his sister $68,000 for her share of the Michigan Avenue property, and to divide funds in the estate account equally between brother and sister. The trial court entered a consent order on January 18, 1994, granting authority to Mr. Avery to sell the Michigan Avenue property without an additional undertaking, and specifying that Ms. Madison's complaint against Mr. Avery would be dismissed following sale of the property and disbursement of the assets of the estate.

Approximately one year later, the trial court removed Mr. Avery as personal representative of his mother's estate for failure to file the third account. The February 9, 1995 order removing Mr. Avery appointed Jerry Hunter as successor personal representative on condition that "he file an undertaking with surety approved by the Court in the sum of $17,000," and further ordered that:

[T]he undertaking given by [Mr. Avery] shall remain in full force and effect until such time as the total assets of the estate have been turned over to a duly appointed successor fiduciary and receipt filed therefor, and the surety upon said undertaking shall stand discharged from all liability under said undertaking except for prior defaults, if any....

No further action on the estate is reflected in the record until October 2000 when Mr. Hunter requested the "appointment of a special master to state an account for the administration of the removed personal representative." Anne Meister, Esq. was appointed on November 17, 2000, as "special master of the estate of Louise Green for the purpose of stating an account for the administration of the removed personal representative...." Ms. Meister filed her report on February 15, 2001, concluding that Mr. Avery "clearly failed to perform the duties of his office in proper fashion [because] [n]either the [f]irst nor the [s]econd [a]ccount was approved by the Court, and [Mr. Avery] failed to file the [t]hird or [f]ourth [a]ccount." The special master also determined that: "All of the assets of the estate have been distributed by either [Mr. Avery] or [Mr. Hunter]." Simultaneously with her report, the special master petitioned for compensation and sought payment from Old Republic's bond. Old Republic denied liability on the bond on the ground that the claim was barred under the applicable District of Columbia five-year statute of limitations.

On August 27, 2001, the trial court ruled that the statute of limitations did not bar the special master's claim because said claim did not accrue until the court's approval of the special master's report, since only "at that point is ... the cause of action against the removed personal representative and the surety ... fully known." Moreover, the trial judge concluded that the order removing Mr. Avery was the "law of the case" and that order extended the period of claims against the bond provided by Old Republic until "the final settlement between the successor personal representative and Mr. Avery's attorney,¹ or approval of the special master's report." The trial court confirmed and approved the special master's report and entered judgment in her favor in the amount of $3,197.48, based upon Ms. Meister's statement of services rendered and expenses, dated August 17, 2001. Old Republic filed a timely appeal.

ANALYSIS

Old Republic contends that under D.C.Code § 12-301(6) (1995),² which allows five years for filing a claim "on an executor's or administrator's bond," the time "beg[an] to [run] when [Mr. Avery] [was] removed from his position." Opposing an accrual rule based on the filing and approval of the final account of an estate, Old Republic asserts that: "The [s]uccessor [p]ersonal [r]epresentative could have taken 20 years to investigate the case and the statute of limitations would still not have accrued. If the trial court's decision is allowed to stand, [D.C.] Code § 12-301(6) is rendered virtually meaningless."

The special master maintains that the statute of limitations did not begin to run "until the approval of the report of the [s]pecial [m]aster on August 27, 2001." Further, she asserts that "an injured person could not have brought an action on the personal representative bond until the actual misdeeds of the personal representative, if any, were established by the court." In addition, she points to D.C.Code § 28-504 (1996) which provides, in pertinent part, that "[a fiduciary's] bond shall continue in force as against both principal and sureties until the funds or estate are fully accounted for and paid over or delivered to the parties interested herein, or their attorneys, other than himself."

Since the issue presented in this case involves the interpretation of D.C.Code § 12-301(6), our review is de novo. See Porter v. United States, 769 A.2d 143, 148 (D.C.2001)

(citing District of Columbia v. Jerry M., 717 A.2d 866, 868 (D.C.1998)). As we said in Farris v. Compton, 652 A.2d 49 (D.C.1994):

A civil action "may not be brought after expiration of [the period specified in the statute] from the time the right to maintain the action accrues." D.C.Code § 12-301 (1989). The statute does not define "accrues," and the task of identifying the moment of accrual has been left to the courts. Ehrenhaft v. Malcolm Price, Inc., 483 A.2d 1192, 1198 (D.C.1984).

Id. at 53 (footnote omitted). Under our case law, accrual is determined "on a case-by-case basis." Id. at 62 (quoting Ehrenhaft, supra, 483 A.2d at 1204). Moreover, "[a]s a general rule, an action accrues and the statute of limitations begins to run when the suit could first be initiated." Kerns v. Ameriprint, Inc., 621 A.2d 381, 383 (D.C.1993) (citing Toomey v. Cammack, 345 A.2d 453, 455 (D.C.1975)).

We are confronted with an issue of first impression in this jurisdiction that was raised but not decided in In re Estate of Spinner, 717 A.2d 362 (D.C.1998), because it was not broached in the Probate Division of the trial court. That issue is squarely presented here, and we must now decide when the statute of limitations starts to run on an action against a surety who has provided a bond for the personal representative of an estate.

Jurisdictions which have addressed this issue differ as to when a claim accrues on a personal representative's bond in an estate case. See W.J. Dunn, Annotation, When Statute of Limitations Begins to Run Against Action on Bond of Personal Representative, 44 A.L.R.2d 807 (1955). Most jurisdictions have concluded that the claim accrues either when: (1) the final order (e.g. a distribution order or an order approving the final accounting for the estate or an order of judgment on behalf of a creditor) determining the personal representative's liability has been entered by the court, see Toombs v. Daniels, 361 N.W.2d 801 (Minn.1985)

; Sherwood v. Merchants Mut. Bonding Co., 193 Neb. 262, 226 N.W.2d 761 (1975); Spencer v. Hamilton, 156 Okla. 194, 13 P.2d 81 (1932); Gronna v. Goldammer, 26 N.D. 122, 143 N.W. 394 (1913); or (2) the personal representative has been removed or has died, or a successor personal representative has been appointed by the court, see In re Estate of Ellen Lee, 193 Mich.App. 586, 484 N.W.2d 411 (1992); Duckett v. Pettee, 50 N.C.App. 119, 273 S.E.2d 317 (1980).³ The special master urges us to adopt the first approach, and Old Republic the second.

Because the governing limitations statute, D.C.Code § 12-301(6) does not define the word "accrue" and since we have said that the meaning of the word must be determined on a case-by-case basis, Farris, supra, 652 A.2d at 62 (quoting Ehrenhaft, supra, 483 A.2d at 1204), our decision concerning when the special master's claim in this case accrued on the removed personal representative's bond requires an interpretation of our probate statute and implementing rules, as well as the statute governing a fiduciary's bond. We...