Town-Statham v. Johnson (In re Colby)

• Decision Date: 11 March 2021
• Docket Number: Court of Appeals No. 19CA1132
• Citation: 486 P.3d 466
• Parties: IN RE the ESTATE OF Carol Ann COLBY, deceased. Kathryn Gail Town-Statham, Appellant, v. Kellie Marie Johnson, in her fiduciary capacity as Personal Representative, Appellee.
• Court: Colorado Court of Appeals

486 P.3d 466

IN RE the ESTATE OF Carol Ann COLBY, deceased.Kathryn Gail Town-Statham, Appellant,

v.Kellie Marie Johnson, in her fiduciary capacity as Personal Representative, Appellee.

Court of Appeals No. 19CA1132

Colorado Court of Appeals, Division V.

Announced March 11, 2021

The Law Office of Loren Randall & Associates LLC, Loren Randall, Denver, Colorado, for Appellant

The Blattner Law Firm LLC, Lisa T. C. Blattner, Colorado Springs, Colorado, for Appellee

Opinion by JUDGE NAVARRO

¶ 1 Appellant, Kathryn Gail Town-Statham, challenges the district court's order approving the final settlement of decedent Carol Ann Colby's estate. Town¹ is Colby's daughter. Colby's will provides that her primary residence, if not "claimed" by a family member, is to be sold and the proceeds evenly distributed to her two daughters. The district court decided that Town did not make a valid claim for the residence because her demand did not comply with section 15-12-804, C.R.S. 2020. We conclude that the court erred. As a matter of first impression, we hold that section 15-12-804 applies only to a creditor's claim against an estate and does not apply to a devisee's demand for a devise under a will. Accordingly, we reverse and remand for further proceedings.

I. Facts and Procedural History

¶ 2 The following evidence was presented to the district court.

¶ 3 Colby died on January 18, 2018, and was survived by her two daughters (Town and Lisa Smith) and several grandchildren. Colby left a valid will naming her granddaughter, Kellie Marie Johnson, as "executor." Colby's will (the Will) devises specific personal property to her children and grandchildren. The Will devises her primary residence somewhat differently. With respect to the residence, the Will provides as follows:

VI. ADDITIONAL POWERS OF THE EXECUTOR ....

My executor will have the power and authority to pay all debts in my name and pertaining to my home ..., to pay all medical bills, to sell my home ... (if not claimed by family) .

My home ..., remaining assets, personal items and any property that are not claimed by children and grandchildren are to be sold by the Executor Kellie Johnson[;] she is to evenly distribute the remaining monies after financial obligations have been met with debts, funeral costs, selling fees and other financial obligations in my name to my daughters Kathryn Town-Statham and Lisa Smith if they survive me out right and free of trust.

(Emphasis added.)

¶ 4 On February 12, 2018, Johnson applied for informal probate of the Will and informal appointment as personal representative. She also distributed copies of the Will to Town, Smith, and others.

¶ 5 Town later testified that, on February 27, 2018, she sent Johnson an email saying that she "wanted a fair share of the home." But Johnson testified that she could not recall Town's claiming a share of the home's value in that email. The email itself was not admitted into evidence, and the district court did not make a finding as to its contents. Sometime after this email, Johnson and Town's attorney had a conversation in which Johnson was apparently informed that Town would be satisfied with receiving half of the house's value plus an additional $10,000. Town also requested an appraisal of the residence. Johnson, however, did not consider any of those communications to be a "formal claim" for the home.

¶ 6 In March 2018, Johnson petitioned for formal probate of the Will and formal appointment as personal representative. She retained counsel. Shortly thereafter, Johnson's attorney received a communication from Town claiming "half of what the house is worth." Johnson's attorney passed along this message to Johnson, but again Johnson did not consider it to be a "formal claim" for half of the home's value.

¶ 7 In July 2018, Johnson was appointed as personal representative. At some point between August and November 2018, Smith (Johnson's mother) delivered a written request for the residence to Johnson's attorney. No one disputes that Smith's request was a claim for the residence.

¶ 8 On November 27, 2018, Johnson filed a petition for final settlement of Colby's estate. According to the petition, Smith would receive the residence, and Town would receive two items of Colby's personal property. In February 2019, Town filed an objection to the will and inventory. Additionally, Town filed three motions to set aside the Will and probate the estate under the laws of intestacy. Town did not make a demand for Colby's residence in any of those motions. Those motions were denied for Town's failure to prosecute.

¶ 9 The district court set a hearing on Town's February 2019 objection. After receiving the evidence discussed above, the court consulted section 15-12-804, which governs claims by creditors of an estate. The court concluded that Town had failed to comply with section 15-12-804 because she presented her "purported claim" for Colby's residence (or a share of it) to Johnson in February 2018, which was before Johnson had been appointed as personal representative. The court also decided that Town had not complied with the Will's terms, but the only reason the court gave for this decision was Town's failure to make a "valid claim" under the statute. The court thus concluded that only Smith had validly claimed Colby's home.

¶ 10 The court thereafter granted Johnson's petition for final settlement of Colby's estate.

II. The District Court Erred by Applying the Creditor Claims Provisions

¶ 11 We agree with Town that the district court erred by applying section 15-12-804 to her alleged claim for Colby's residence because that provision does not apply to distributions to beneficiaries under a will.²

A. Standard of Review and Pertinent Principles

¶ 12 We review de novo the district court's legal conclusions, including its interpretation of the probate statutes and the Will. See Sandstead-Corona v. Sandstead , 2018 CO 26, ¶ 38, 415 P.3d 310 ; Oldham v. Pedrie , 2015 COA 95, ¶¶ 9-10, 411 P.3d 933.

¶ 13 Our task in construing a statute is to ascertain and give effect to the intent of the General Assembly. People v. Dinkel , 2013 COA 19, ¶ 6, 321 P.3d 569. In determining legislative intent, our review begins with the statute's plain language. Id. at ¶ 7. We look to the statutory design as a whole, giving effect to the language of each provision and harmonizing apparent conflicts where possible. Id. In doing so, we read statutory words and phrases in context and construe them according to their common usage. Id. If the statute is clear and unambiguous, we need not engage in further analysis. Id.

¶ 14 This case requires us to consider sections of the Colorado Probate Code, §§ 15-10-101 to 15-17-103, C.R.S. 2020, which must be construed liberally to promote a speedy and efficient system for settling a decedent's estate and making distribution to their successors. § 15-10-102(2)(c), C.R.S. 2020; Oldham , ¶ 10. Because the Colorado Probate Code is adapted from the Uniform Probate Code (UPC), we can also consider the decisions of courts from other jurisdictions that have adopted the UPC. § 15-10-102(1)-(2)(e) ("This code shall be ... applied ... [t]o make uniform the law among various jurisdictions."); § 15-16-928, C.R.S. 2020; cf. People in Interest of G.C.M.M. , 2020 COA 152, ¶ 26, 477 P.3d 792 ("[W]e look to guidance provided by other states because, if a statute has been adopted from a uniform law, it should be construed to bring uniformity to the law in the various states that adopt it.").

¶ 15 Part 8 of Article 12 of Title 15 is titled "Creditors’ Claims" and includes section 15-12-803, C.R.S. 2020. That section is a "nonclaim statute" and sets forth time limits for "creditors" to present "claims" against a decedent's estate. § 15-12-803. Claims that are not timely presented are barred against, among others, the estate, the personal representative, and "the heirs and devisees of the decedent." § 15-12-803(1)(a), (2).

¶ 16 Section 15-12-804 lays out the manner of presentation of claims. As relevant here, a claim may be presented by delivering a written statement of the claim to the court-appointed personal representative.

§ 15-12-804(1)(b). If this method is selected, a claim is not validly presented unless delivered after the personal representative has been appointed. § 15-12-804(2). The personal representative's knowledge that a creditor could bring a claim is not a valid substitute for proper presentment of a written claim. § 15-12-804(3). A claim must contain a request or demand for payment and provide sufficient information to allow the personal representative to investigate and respond to the claim. § 15-12-804(4).

¶ 17 With some exceptions not relevant here, " ‘[c]laims’ " in this context "includes liabilities of the decedent ... whether arising in contract, in tort, or otherwise, and liabilities of the estate which arise at or after the death of the decedent ... including funeral expenses and expenses of administration." § 15-10-201(8), C.R.S. 2020. "Creditor" is not defined, but it is clear that the "UPC equates the term ‘creditor’ with one who holds a claim against the estate." Martel v. Stafford , 157 Vt. 604, 603 A.2d 345, 348 (1991).

B. Preservation

¶ 18 To reiterate, Town contends that the district court erred by applying the statutory provisions related to a creditor's claim against an estate because they are inapplicable to her purported demands for Colby's residence. Johnson says that Town did not preserve this claim because Town asked the court to interpret those statutory provisions broadly and to apply them here.

¶ 19 At the hearing, Town's counsel explained that the "Probate Code gives the deadline for creditors to file" but "we're not talking about a creditor claim in this case." He argued that, in the context of the Will, "claims should be interpreted more broadly than just the Probate Code." Counsel noted that the Will does not outline a format or a deadline for a beneficiary to claim property under the Will, and couns...