Ader v. Estate of Felger (CA2 5/27/16)

This case principally presents an issue of probate limitations. We will skip other, less important or case-specific, issues. We also skip an issue that the court, after addressing it in a lengthy footnote, announces that “we will not address.”

Felger flipped commercial properties; Plaintiff financed his operations. Felger eventually died but his son-in-law took over the business. When Plaintiff stopped getting certain payments owed her she looked into the matter and discovered documents allegedly showing that Felger had not acted properly. She sued his estate, four years after his death, for breach of contract and a number of torts. The estate moved for summary judgment on the statute of limitations; the trial court granted it. Plaintiff appealed; the Court of Appeals affirms.

14-3803A says that claims “that arose before death” must be presented in two years plus the time for notice to creditors. 14-3803C sets a four-month limit for claims arising after death. “As argued by the parties and addressed by the trial court, the issue here is: Which subsection of §14-3803 applies.” Plaintiff argued for the discovery rule,  contending that C applies because she found the smoking-gun documents, and thereby discovered her claim, after the death and less than four months before suit. But the court explains that a time limit for creditors’ claims is a “nonclaim statute” rather than a statute of limitations; the discovery rule can’t apply because a nonclaim statute can’t be tolled or waived. We’re frankly not sure we were aware that the discovery rule is based on tolling or waiver.

The court also says that the discovery rule can apply to statutes of limitations because they say “accrue” but not to nonclaim statutes because they say “arise.” “Accrue” means “when one party is able to sue another”; “arise . . . refers to the decedent’s act or conduct upon which a claim is based.” Well, umm, okay, if you say so.

Plaintiff argued that “a claim is not actionable until all the elements of the claim exist.” That may seem part and parcel of a discovery-rule argument but it didn’t to the court. Plaintiff’s counsel apparently said it at oral argument, in the context of explaining that the element of damages couldn’t be determined until Plaintiff saw the documents. Because it wasn’t in the briefs the court declines to consider what it calls the “’elements’ argument.” Based on what’s in the opinion the argument may be wrong – it’s the knowledge that damages exist that’s the trigger, not the ability to calculate them, and Plaintiff had known for a few years that she hadn’t received some payments. But there may be more to it than that, otherwise we don’t know why the court would seize on such a restrictive interpretation of a rule its normally pretty lenient about.

Plaintiff argued that she had in part specifically alleged torts by the estate after Felger’s death, therefore 3803C applies at least to those claims. The court says that Plaintiff “misapprehends the concept of a decedent’s estate.” An estate is a “collection of . . . assets” that “cannot ‘act.’” So for post-death acts you have to sue the PR or the persons who committed the acts (which Plaintiff had apparently also done) and the estate isn’t liable for them.

(Put aside whether that’s right or wrong. We don’t know why courts must, every once in a while, indulge in the practice of gratuitously insulting the lawyers before them. To rule on the accuracy of an argument is one thing; that’s the court’s job. But to tell the world, and the lawyer’s client, that the lawyer doesn’t understand the law is quite another. Judges at the trial-court level who can’t do their jobs without announcing their own superiority and demeaning others aren’t respected; why should appellate opinions be held to a different standard? Experience, if nothing else, should have solved this problem: judges who pronounce the other guy the dummy turn out to be right about half the time. We hope it wasn’t a judge who wrote that line; we know it was a judge who should have edited it out.)

So, 14-3803A applies. But no PR was appointed, so no notice to creditors was sent or published. Since the 3803A period includes the time for notice to creditors, how do you figure it when there wasn’t one? The court agrees with the trial court that the answer is 14-3108, which says that probate can’t occur after two years (with inapplicable exceptions); that’s the “ultimate time limit” (the statute’s heading says that). Plaintiff cited Estate of Winn, in which the Supreme Court allowed a late-appointed PR to pursue a tort claim because the law is “intended to protect the decedent’s successors and creditors. The court distinguishes that case because it was the defendant there – not a successor or creditor – who wanted to invoke the time limitation. Although Plaintiff was a creditor the court explains that creditors are entitled only to timely claims, which is why Plaintiff’s is untimely. And if it seems to you that that doesn’t necessarily follow logically, you’re an idiot and your parents should be embarrassed.

(Opinion: Ader v. Estate of Felger)