Peterson v. Marston, C0-83-1888

• Decision Date: 08 February 1985
• Docket Number: No. C0-83-1888,C0-83-1888
• Citation: 362 N.W.2d 309
• Parties: Basil J. PETERSON and Gladys A. Peterson, Respondents, v. James B. MARSTON and Jeannine Rinde, Petitioners.
• Court: Minnesota Supreme Court

Page 309

362 N.W.2d 309

Basil J. PETERSON and Gladys A. Peterson, Respondents, v. James B. MARSTON and Jeannine Rinde, Petitioners.

No. C0-83-1888.

Supreme Court of Minnesota.

Feb. 8, 1985.

Syllabus by the Court

1. A letter sent to the attorney for decedent's estate, written in response to a published notice to creditors and referring to a contractual obligation of the decedent, constituted sufficient presentment of a claim to satisfy the requirements of Minn.Stat. Sec. 524.3-804(1) (1982).

2. The claim was allowed pursuant to Minn.Stat. Sec. 524.3-806 (1982) because it was not affirmatively disallowed within the time period specified in the statute.

David R. Von Holtum, Worthington, for petitioners.

C. Thomas Wilson, New Ulm, for respondents.

Heard, considered, and decided by the court en banc.

AMDAHL, Chief Justice.

We must determine whether a letter, written by respondents Basil and Gladys Peterson to the attorney for decedent Roger Lehman's estate, constituted presentment of a claim against the estate under Minn.Stat. Sec. 524.3-804(1) (1982). The trial court found that no claim was made by the Petersons' letter. The Court of Appeals disagreed and reversed, finding that the Petersons' letter did constitute a properly presented claim. 348 N.W.2d 814. We must decide whether the letter did present a claim against the estate and, if so, whether that claim was allowed. We affirm.

On August 30, 1978, Basil and Gladys Peterson entered into a contract for deed, selling a parcel of land in Mountain Lake, Minnesota, to James Marston and Roger Lehman. The price of the land was $8,500. Marston and Lehman each paid $250 at the time the contract was entered into. The remaining $8,000 was to be paid in equal installments on September 1, 1980, September 1, 1981, and September 1, 1982. The interest rate under the contract was 8% per year.

Roger Lehman died on September 14, 1978. L. Douglas Storey, the attorney for the estate, published a legal notice concerning the probate of Lehman's estate. The Petersons, who live in Arizona, learned of Lehman's death from the notice in the Mountain Lake Observer. They wrote a letter to Storey on October 18, 1978, in response to this notice. Storey was listed in the notice as attorney for the estate. In the letter, the Petersons said:

In regard to the contract for deed with Roger as part of the contract. We noticed by the paper that all debts of the estate must be turned in to the attorneys within 4 months. Does this affect our contract?

Would you please advise us if any action is necessary.

On October 24, 1978, Storey replied to the Petersons:

In answer to your letter of October 18, 1978, I can tell you that it is not necessary to file anything with the Probate Court in regard to the Contract for Deed. The Contract will continue under the same terms and conditions as set out. Roger's interest in the Contract for Deed will be spelled out in the estate and at the conclusion of the estate his interest will be decreed to Jen as the beneficiary, but as far as you the seller are concerned, nothing changes.

Storey testified that he responded to the Petersons in his capacity as attorney for the estate. Storey was aware of the contract for deed because his firm had drafted it and he signed it as notary. He was "generally aware" of the details of the contract. He said that when he wrote the letter, the contract was in full force and effect and the next payment was not due until September 1, 1980, almost 2 years in the future. Since there was no late payment, he saw no reason for the Petersons to make a claim.

On October 26, 1978, 2 days after Storey replied to the Petersons' letter, Jeannine Lehman (now Jeannine Rinde), the surviving spouse of Roger Lehman, was appointed personal representative of the estate. Jeannine Rinde was also the residual devisee of the estate.

Basil Peterson understood from Storey's letter that the contract for deed would be carried out and that there was no need to file a formal claim. He filed no formal written claim with the probate court because he understood that he did not need to do so. Storey never discussed the letter with the Petersons after it was sent. Peterson was never contacted by either Storey or Rinde telling him to do anything other than what Storey's letter had indicated. The Petersons had no other dealings with the contract for deed prior to the time the first payment was due in September of 1980. To date, the Petersons have received no principal or interest payments due under the contract.

The inventory and appraisement of the estate was completed by Jeannine Lehman Rinde on May 30, 1979, and filed with the court on August 20, 1979. The inventory did not include either the contract for deed or the property. The final account hearing was held on October 11, 1979. The estate stayed open, however, because the Minnesota inheritance tax had not yet been paid. The tax was paid on an installment basis, and the estate was closed on January 24, 1983. The property involved in the contract for deed was not included in the decree of distribution of the estate. The net assets of the estate exceeded the outstanding debt on the contract for deed.

Jeannine Lehman Rinde testified that she did not know of the contract for deed at the time of her husband's death, or when the inventory was prepared. She never received a copy of the Petersons' letter to Storey, and Storey never brought the letter to her attention. She first learned of the contract when Gladys Peterson wrote to inform her that payments were in default. The Lehman estate never sent the Petersons a disallowance of the claim based on the contract for deed.

The Petersons commenced this action in district court for specific performance of the contract. The trial court rendered judgment for Jeannine Rinde, finding that no claim was made by the Petersons' letter. The Petersons appealed, contending that their letter to Storey did sufficiently present a claim against the estate. The Court of Appeals reversed the trial court, finding that the Petersons' letter did constitute a properly presented claim. The Court of Appeals also found that the claim had been allowed due to the failure of the personal representative to disallow the claim.

1. Minn.Stat. Sec. 524.3-801 (1982) provides that upon filing of a petition for appointment of a personal representative, notice shall be published which gives the

name and address of the personal representative and notifies creditors of the estate to present their claims within 4 months of the publication or be forever barred from asserting them against the estate. A claim may be presented to the personal representative of the estate or filed with the court. Minn.Stat. Sec. 524.3-804(1) (1982) provides that the claim indicate "its basis, the name and address of the claimant, and the amount claimed." The claim should also describe when it shall become due if not yet due, the nature of its uncertainty if a contingent claim, and any security if the claim is secured. Failure to describe the due date, security or contingency of a claim "does not invalidate the presentation made." Minn.Stat. Sec. 524.3-804(1) (1982).

While it is important that the 4-month limit on filing of claims be strictly observed in order to encourage the speedy disposition of estates, it is not as important that the required manner of giving notice of a claim be strictly followed. As long as the estate receives reasonable notice of the claim by the required time, the claim should be deemed submitted to further both speedy disposition of the estate and the meeting of bargained-for obligations. See Strong Bros. Enterprises, Inc. v. Estate of Strong, 666 P.2d 1109 (Colo.Ct.App.1983) (interpreting Colo.Rev.Stat. Sec. 15-12-804(1) (1973), which is identical to Minn.Stat. Sec. 524.3-804(1) and 3-804 of the Uniform Probate Code).

The Petersons' letter must therefore meet the requirements of Minn.Stat. Sec. 524.3-804(1) in order to be a properly presented claim: a claim must be made, presented to the personal representative, and identify its basis, its amount, and the claimant.

The trial court ruled that the language of the letter could not be interpreted as a claim by the Petersons. First, the trial court found that the question "what do we have to do, if anything?" in the letter indicated that it was merely a letter of inquiry. Second, the final line, "would you please advise us if any action is necessary," indicated to the trial court that the Petersons had no present intent to act. The trial court thus determined that the letter was not a claim. The Court of Appeals disagreed, finding that the trial court placed undue emphasis upon the Petersons' request for advice and that the Petersons did intend to make a claim. The Court of Appeals noted that Storey's reply letter treated the Petersons' letter as a claim, and that the Petersons relied on Storey's letter to mean that no further action was necessary.

A claim is a demand, an assertion of the right to payment. The trial court focused on the Petersons' request about what to do, and their inquiry as to whether any action was necessary, in finding no intent to make a claim. The letter did not explicitly demand payment of the contract. In the context of the letter as a whole, however, the Petersons' inquiry about what to do is evidence of present intent to make a claim. The letter was expressly written in response to the published notice to make claims and the Petersons were expressly concerned about turning in debts to the estate in 4 months. The Petersons were acting with the intent to protect their right to payment under the contract for deed. The requests for advice did not indicate a lack of intent to pursue the claim, but merely indicated that the Petersons did not know how to go about making the claim. The letter as a whole indicates their intent to receive payment under the terms of the contract, and their concern to preserve their...