State v. Cue

• Decision Date: 31 December 2014
• Docket Number: A155531.,13CV03100
• Citation: 342 P.3d 98,268 Or.App. 350
• Parties: STATE of Oregon, acting by and through the OREGON HEALTH AUTHORITY, Plaintiff–Appellant, v. Lynda S. CUE, Defendant–Respondent.
• Court: Oregon Court of Appeals

268 Or.App. 350

342 P.3d 98

STATE of Oregon, acting by and through the OREGON HEALTH AUTHORITY, Plaintiff–Appellant

v.Lynda S. CUE, Defendant–Respondent.

13CV03100

A155531.

Court of Appeals of Oregon.

Submitted Sept. 09, 2014.

Decided Dec. 31, 2014.

Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Cecil A. Reniche–Smith, Senior Assistant Attorney General, filed the briefs for appellant.

Robert W. Good filed the brief for respondent.

Before SERCOMBE, Presiding Judge, and HADLOCK, Judge, and TOOKEY, Judge.

Opinion

TOOKEY, J.

Plaintiff, the State of Oregon by and through the Oregon Health Authority (OHA), brought a claim against the estate of Deane Preston Cloud to recover $666,187.40 for care and services rendered to Cloud by the Oregon State Hospital before his death. Defendant, the personal representative of Cloud's estate, disallowed OHA's claim as untimely. See ORS 115.005(2) (setting forth time limitations for presenting claims against the estate of a decedent). OHA initiated this action against defendant, arguing that its claim qualified for an exception to the time limitation under ORS 115.005(3). Defendant moved for summary judgment, arguing that OHA's claim did not satisfy one of the conditions of the exception—that the claim must be “presented by a person who did not receive a notice under ORS 115.003 [.]” ORS 115.005(3)(b). The trial court granted defendant's motion for summary judgment and dismissed OHA's complaint with prejudice. We conclude that the trial court erred when it granted summary judgment in favor of defendant for the reason that OHA had failed to satisfy the condition of ORS 115.005(3)(b). Accordingly, we reverse and remand.

For clarity, we begin with an overview of the procedures and statutes relevant to our consideration of this case. Generally, when a person dies and there is a will that has been proved, upon the filing of a petition, the probate court will appoint a personal representative to administer the decedent's estate. ORS 113.085. The personal representative's responsibilities include, among other things, sending specified information to certain persons who might have an interest in the probate proceedings and administration of the decedent's will. Two statutes that set forth those duties, ORS 113.145 and ORS 115.003, are at issue in this case.

ORS 113.145 sets forth the personal representative's responsibility to, among other things, send specific information to certain persons who might have an interest in the estate. First, upon appointment, the personal representative must “deliver or mail to the devisees, heirs and the persons described in ORS 113.035(8) and (9) who were required to be named in the petition for appointment of a personal representative,”¹ information that includes:

“(a) The title of the court in which the estate proceeding is pending and the clerk's file number;

“(b) The name of the decedent and the place and date of the death of the decedent;

“(c) Whether or not a will of the decedent has been admitted to probate;

“(d) The name and address of the personal representative and the attorney of the personal representative;

“(e) The date of the appointment of the personal representative;

“(f) A statement advising the devisee, heir or other interested person that the rights of the devisee, heir or other interested person may be affected by the proceeding and that additional information may be obtained from the records of the court, the personal representative or the attorney for the personal representative;

“(g) If information under this section is required to be delivered or mailed to a person described in ORS 113.035(8), a statement that the rights of the person in the estate may be barred unless the person proceeds as provided in ORS 113.075 within four months of the delivery or mailing of the information; and

“(h) If information under this section is required to be delivered or mailed to a person described in ORS 113.035(9), a statement that the rights of the person in the estate may be barred unless the person proceeds as provided in ORS 112.049 within four months of the delivery or mailing of the information.”

ORS 113.145(1).² Second, within 30 days after appointment, the personal representative must send that same information, along with a copy of the death record of the decedent, to the Department of Human Services and OHA. ORS 113.145(6). Third, before the final account is filed, if the personal representative has actual knowledge that the petition did not include the name and address of any person “described in ORS 113.035(4), (5), (7), (8) or (9),”³ the personal representative must make reasonable efforts to identify and locate that person, and then send that person the same information described above. ORS 113.145(5).

In addition, ORS 115.003 sets forth the personal representative's responsibility to identify and send information to any person who has or asserts a claim against the estate. During the three months following appointment (or a longer time, if allowed by the probate court), the personal representative must “make reasonably diligent efforts to investigate the financial records and affairs of the decedent and shall take such further actions as may be reasonably necessary to ascertain the identity and address of each person who has or asserts a claim against the estate.”ORS 115.003(1). Then, within 30 days after that three-month period expires (including any extensions), the personal representative must “cause to be delivered or mailed to each person known by the personal representative during such period to have or assert a claim against the estate a notice containing the information required in [ORS 115.003(3) ],” except that it is not necessary to give notice “on account of a claim that has already been presented, accepted or paid in full or on account of a claim that is merely conjectural.” ORS 115.003(2). Pursuant to ORS 115.003(3), the information that must be contained within that notice includes:

“(a) The title of the court in which the estate proceeding is pending;

“(b) The name of the decedent;

“(c) The name of the personal representative and the address at which claims are to be presented;

“(d) A statement that claims against the estate not presented to the personal representative within 30 days of the date of the notice may be barred; and

“(e) The date of the notice, which shall be the date on which it is delivered or mailed.”

ORS 115.005 sets forth the time limitations within which claims against the estate must be presented to the personal representative. ORS 115.005(2) provides,

“Except as provided in subsection (3) of this section, a claim is barred from payment from the estate if not presented within the statute of limitations applicable to the claim and before the later of:

“(a) Four months after the date of first publication of notice to interested persons; or

“(b) If the claim was one with respect to which the personal representative was required to deliver or mail a notice under ORS 115.003(2), 30 days after a notice meeting the requirements of ORS 115.003(3) is delivered or mailed to the last-known address of the person asserting the claim.”

An exception to the time limitations for claims is set forth in ORS 115.005(3), which provides,

“A claim against the estate presented after claims are barred under subsection (2) of this section shall be paid from the estate if the claim:

“(a) Is presented before the expiration of the statute of limitations applicable to the claim and before the personal representative files the final account;“(b) Is presented by a person who did not receive a notice under ORS 115.003 mailed or delivered more than 30 days prior to the date on which the claim is presented and who is not an assignee of a person who received such notice; and

“(c) Would be allowable but for the time at which the claim is presented.”

With that background in mind, we turn to the relevant facts of this case, which are undisputed. Cloud died in August 2011, leaving a will. At a hearing on November 1, 2012, the probate court admitted Cloud's will to probate and named defendant as personal representative. King, a professional fiduciary who had served as payee of Veterans Affairs benefits for Cloud before his death, had also petitioned for appointment as personal representative and was present at the hearing. During the hearing, King testified that Cloud's estate owed more than $666,000 to the State of Oregon for care and services that Cloud had received in the state hospital before his death. King was represented by an attorney who represented both King and the State of Oregon.

On November 16, 2012, defendant, through her attorney, mailed a letter to OHA, which began, “The following information is given to you as required by ORS 113.145 [.]” The letter included the information set forth under ORS 113.145(1), including a statement that

“any interested person may contest the probate of the will or the validity of the will or assert an interest in the will for any reason specified in ORS 113.075(1), but such an action must be commenced within four months after the date of delivery or mailing of the information described in ORS 113.145, or four months after the first publication of notice to interested persons, whichever is later. If you contemplate asserting any of the rights described in this paragraph, those rights may be barred unless you proceed as provided in ORS 113.075 within the specified time period.”

Defendant did not send OHA notice that “claims against the estate not presented to the personal representative within 30 days of the date of the notice may be barred.” ORS 115.003(3)(d).

On April 25, 2013—more than five months after defendant sent that letter—OHA submitted its claim to defendant. On or about May 15, 2013, defendant disallowed OHA's claim as untimely.

As noted, OHA initiated this action to collect on its claim. See ORS 115.145(1)(b) (when a claim is disallowed, the claimant may “[c]ommence a separate action against...