In re Estate of Macormic

• Decision Date: 31 January 2008
• Docket Number: No. 28528.,28528.
• Citation: In re Estate of Macormic, 244 S.W.3d 254 (Mo. App. 2008)
• Parties: In the ESTATE OF George MACORMIC, Deceased State of Missouri, Department of Social Services, Division of Medical Services, Appellant, v. Cecilia Stogsdill, et al., Respondents.
• Court: Missouri Court of Appeals

244 S.W.3d 254

In the ESTATE OF George MACORMIC, Deceased State of Missouri, Department of Social Services, Division of Medical Services, Appellant, v. Cecilia Stogsdill, et al., Respondents.

No. 28528.

Missouri Court of Appeals, Southern District, Division Two.

January 31, 2008.

Jeremiah W. (Jay) Nixon, Atty. Gen. & Paul Harper, Asst. Atty. Gen., Jefferson City, for Appellant.

Gwen Froeschner Hart, Shurtleff, Froeschner & Bunn, L.L.C., Columbia, for Respondent.

ROBERT S. BARNEY, Presiding Judge.

The State of Missouri, Department of Social Services, Division of Medical Services ("the State") appeals two orders of the probate division ("the probate court"), one of which dismissed its petitions for discovery of assets and accounting and the other which discharged the personal representatives and closed the estate of George Macormic ("Decedent"). The State alleges four points of probate court error.

The record reveals Decedent died on April 11, 2005. Prior to this time he had been receiving public assistance benefits through the Medicaid program. Decedent's Will provided that the entirety of his estate be devised to "the George S. Macormic Revocable Trust" ("the Trust"). The Trust named as trustees Decedent's children, Lance Macormic ("Mr. Macormic") and Cecilia Stogsdill ("Ms. Stogsdill").

On December 2, 2005, the State filed its "Application of Interested Party for Order to Require Supervised Administration" of Decedent's estate pursuant to section 473.020.¹ The petition stated, inter alia,

The general nature and approximate value of the [D]ecedent's estate so far as is known to the [State] is as follows:

A. Personal Property: Certificates of Deposit and other personal property [t]ransferred into a trust triggering the application of [section] 461.300[.][²]

B. Real Property: Real property located at 214 S. Patton, Newburg, Missouri, 65550-9135, Value $44,400.00 or more.

The State also claimed in its petition that under section 473.398 it "has the right to recover its public assistance expenditures from the above estate" and it "is interested in said estate as a creditor of [Decedent]."³

Then, on December 13, 2005, Mr. Macormic and Ms. Stogsdill filed a "Petition for Probate of Will and for Letters Testamentary" in which they, asserted they were designated as personal representatives in Decedent's Will; there was no real or personal property in Decedent's estate; and "No the best of [their] knowledge there is no property subject to administration."

On January 13, 2006, the probate court entered an order admitting the Will to probate; granting letters testamentary; appointing as personal representatives of Decedent's estate Mr. Macormic and Ms. Stogsdill ("Personal Representatives"); and ordering "[t]he estate will be a supervised administration."

On February 8, 2006, the State sent a demand pursuant to section 461.300.2 to Personal Representatives for an "accounting against the beneficiaries of recoverable transfer executed by [Decedent]."

On March 13, 2006, Personal Representatives filed an inventory of the estate which recited the sole asset of the estate was $6,384.62 from the sale of Decedent's personal property at auction.

On April 24, 2006, the State filed a petition against Ms. Stogsdill for discovery of assets per section 473.340 and a petition for accounting per section 461.300. Ms. Stogsdill then filed a motion to dismiss the State's petition for failure to name Mr. Macormic as a party to the petition. The State thereafter filed amended petitions for discovery of assets and accounting.⁴

In its amended petition for discovery of assets the State asserted it was a creditor of the estate and all assets disposed of by the Trust should be assets of the estate. The State maintained that the Personal Representatives "are unlawfully withholding property that they should rightfully pay and/or transfer to the estate," and pointed to a provision in the Trust relating to the payment of "Debts and Expenses."⁵ The petition also noted that "an auction to sell assets belonging to [Decedent]" had been held on October 1, 2005, and "[i]t is believed that one or more of the [beneficiaries] received money and/or property as a result of the auction." The State's petition for accounting requested the probate court enter a judgment against the beneficiaries who received property of the Trust to the extent necessary to recover the amounts owed to the State.

Personal Representatives then filed separate answers to the State's amended petition;⁶ however, both their answers included the same general allegations and defenses. Personal Representatives asserted in their answers and in this appeal that the State failed in its petitions to state a claim upon which relief can be granted in that the State is not a beneficiary of the Trust and "was not an ascertainable creditor during [Decedent's] life..." Accordingly, they asserted "any interest [the State] claim[s] in the res of the [T]rust fails because it did not vest prior to [Decedent's] death," and the State cannot enforce the terms of the Trust. Therefore, Personal Representatives maintained the State lacked standing to bring an action against the Trust and they requested the probate court dismiss the State's petitions for discovery of assets and accounting.⁷

On October 19, 2006, the State filed a response to Personal Representatives' motion to dismiss. On April 27, 2007, the probate court entered an order granting Personal Representatives' motion to dismiss the State's petition for discovery of assets and petition for accounting because the State "has no standing to file their Amended Petition against Respondents." Thereafter, on April 27, 2007, the probate court entered an Order of Discharge in which it found there were "[n]o assets to distribute" and discharged Personal Representatives. This appeal by the State followed.

In its first point of probate court error the State maintains the probate court erred in dismissing its petition for discovery of assets⁸ based on lack of standing because section 473.340 provides "that any `creditor, beneficiary or other person who claims an interest in property which is claimed to be an asset of an estate or which is claimed should be an asset of an estate' has standing to, file a petition for discovery of assets ...." The State asserts it "is a creditor of [Decedent] and a person who claims an interest in property which is claimed should be an asset of the estate by virtue of the State's asserted claim for Medicaid benefits paid during the life of [Decedent]."

Accordingly, the issue here is whether the State had standing to file its petition for discovery of assets against the personal representatives and heirs of Decedent's estate such that the probate court should not have dismissed its petition. The issue is not the substantive merits of the State's claim against Decedent's estate as argued by Respondents.

Quoting from State ex rel. Nixon v. Hutcherson, 96 S.W.3d 81, 83 (Mo. banc 2003), Respondents focus a great deal of their argument on the fact that "[i]n the case of a private trust no one except a beneficiary or one suing on his behalf can maintain suit to enforce their trust.'" We agree with that statement of law; however, in the present matter the State did not file suit against the Trust or even against the trustees of the Trust. The State filed suit against Personal Representatives and Decedent's heirs.⁹ With that being said, it is clear and Respondents concede, that "[i]t is established law in Missouri that the State may recover for Medicaid payments from [a decedent's] probate estate." Section 473.398.1 states in, pertinent part:

[u]pon the death of a person, who has been a participant of aid, assistance, care, services, or who has had moneys expended on his behalf by the department of health and senior services, department of social services, or the department of mental health, or by a county commission, the total amount paid to the decedent or expended upon his behalf shall be a debt due the state or county, as the case may be, from the estate of the decedent. The debt shall be collected as provided by the probate code of Missouri....

(Emphasis added); see Matter of the Estate of Thomas, 743 S.W.2d 74, 77 (Mo. banc 1988).

Section 472.010(3) defines claims as "liabilities of the decedent which survive whether arising in contract, tort or otherwise, funeral expenses, the expense of a tombstone, and costs and expenses of administration." Additionally, we observe that section 473.020 "makes no provision for determining whether the estate of a decedent has property before opening an estate in probate court and appointing an administrator where an interested party as defined by sections 472.010(15)[¹⁰] and 473.020.1 files application and satisfies the filing requirements of section 473.020." Missouri Dept. of Soc. Servs. v. Roper, 174 S.W.3d 563, 568 (Mo.App.2005). Further, "[d]etermination of the estate assets is made as provided by law after the estate has been opened." Id. "In addition, an estate can be opened at a creditor's request even where the estate has no assets." Missouri Dept. of Soc. Servs. v. Kramer, 215 S.W.3d 739, 741-42 (Mo.App. 2007).

In order to recover debts owed from an estate, a party may file a petition for discovery of assets with the probate court per. section 473.340.1. Section 473.340.1 states in pertinent part:

[a]ny ... person who claims an interest in property which is claimed to be an asset of an estate or which is claimed should be an asset of an estate may file a verified petition in the probate division of the circuit court in which said estate is pending seeking determination of the title, or right of possession thereto, or both. The petition shall describe the property, if known, shall allege the nature of the interest of the petitioner and that title or possession of the property, or both, are being adversely withheld or claimed.

Section 473.398.1 gives the State...