Strong Bros. Enterprises, Inc. v. Estate of Strong
Decision Date | 03 February 1983 |
Docket Number | No. 82CA0512,82CA0512 |
Citation | 666 P.2d 1109 |
Parties | STRONG BROS. ENTERPRISES, INC., Plaintiff-Appellee, v. The ESTATE OF Frank Albert STRONG, Jr., Deceased, Defendant-Appellant. . I |
Court | Colorado Court of Appeals |
Sherman & Howard, Kenneth B. Siegel, Peter B. Nagel, Denver, for plaintiff-appellee.
Skelton, Oviatt & O'Dell, Carolyn R. Miller, Wheat Ridge, for defendant-appellant.
The probate court granted a petition for allowance of a claim to a creditor of the estate of Frank Albert Strong, Jr., notwithstanding the failure of the petitioner to comply strictly with the relevant sections of the Probate Code. The estate appeals and we affirm.
The claim was based on a stock redemption agreement executed by the decedent and the predecessor corporation of the petitioner, Strong Brothers Enterprises, Inc. (the Corporation), whereby the Corporation repurchased all of the decedent's stock in the Corporation. The agreement provided, inter alia, that the two parties to the agreement would share equally in any tax liability or benefit incurred by the Corporation prior to November 30, 1977. At the time of the agreement, decedent and his brother Charles were the sole shareholders of the Corporation. Following consummation of the redemption agreement, Charles became the sole stockholder.
The Corporation was notified by the Internal Revenue Service that the federal income tax return for its taxable year ending February 28, 1978, would be audited and was requested also to make available returns for the years 1976 and 1977. The attorney for the personal representative of decedent's estate was notified of the impending audit by letter from the Corporation's attorney dated December 26, 1978. That letter enclosed copies of the letter from the IRS and the provision of the redemption agreement wherein tax liability was to be shared by the parties. The letter itself referred to the agreement to share liability, although the parties were denominated by the personal nicknames "Chuck & Al," rather than as the Corporation and decedent.
When the personal representative did not respond to the letter, the Corporation petitioned the court for allowance of its claim. The petition alleged that notice of the claim had been mailed to the attorney for the estate; that that attorney had participated in negotiations regarding proposed assessments of income tax deficiencies with respect to taxable years ending on or before November 30, 1977; that the personal representative intended not to honor the decedent's obligation under the agreement; and that decedent's will expressly directed his personal representative to comply with the agreement.
In response, the estate filed a motion to dismiss the claim for lack of jurisdiction. The estate relied on §§ 15-12-803(1) and 15-12-804(1), C.R.S.1973, which set forth the time and manner for establishing a claim, arguing that strict compliance with the statute was a jurisdictional prerequisite to bringing a claim.
By affidavit, the Corporation asserted that the attorney for the personal representative had negotiated the redemption agreement. This fact was also mentioned by the Corporation during the hearing on the motion. The estate's attorney stated in rebuttal that she assumed that to be true, but questioned its relevance. This fact was among those found by the trial court, as was the fact that the attorney for the personal representative had communicated with the Corporation regarding the status of the audit.
The court allowed the claim. It concluded that the contents of the letter were adequate to inform the estate of the nature of the claim and any contingency, and that the claim was properly presented by notice to the attorney for the personal representative of the estate, by virtue of that attorney's authority to act for the personal representative. We agree with these conclusions.
The time limitation for presenting a claim is jurisdictional. In re Estate of Daigle, 634 P.2d 71 (Colo.1981); In re Estate of Randall v. Colorado State Hospital, 166 Colo. 1, 441 P.2d 153 (1968). As these cases explain, such a rule is necessary to promote the speedy and efficient settling of estates. In order to preserve the finality of distributions of the estate, § 15-12-803(1)(a), C.R.S.1973 (1982 Cum.Supp.) creates a jurisdictional bar to untimely claims. In re Estate of Daigle, supra. The period for presentation of claims expired on February 8, 1979, and the letter was mailed on January 26, 1978. Thus, if the letter to the attorney for the personal representative is not deemed sufficient notice, the claim would be barred as untimely.
A similar strict construction of the statute specifying the manner in which claims are to be presented, § 15-12-804(1), C.R.S.1973, is not necessary to promote the purposes of the Probate Code and, indeed, would exalt form over substance to the detriment of legitimate claims without any corresponding furtherance of the goals of speedy and efficient distribution. That statute provides:
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