Oral Argument Preview: What Constitutes Proper Presentment of a Claim Against a Decedent’s Estate? James A. Wilson v. William Lawrence, Executor, et al.

Read an analysis of the oral argument here.

On January 11, 2017, the Supreme Court of Ohio will hear oral argument in the case of James A. Wilson v. William Lawrence, Executor, et al., 2016-Ohio-0180. At issue in this case is whether R.C. 2117.06 allows for substantial compliance in the presentment requirements of a claim against an estate. The case was accepted on jurisdictional appeal and certified conflict, and the cases were consolidated.

This is the certified conflict:

“Whether R.C. 2117.06 allows for substantial compliance in the presentment requirements of a claim against an estate. If so, whether a plaintiff with a claim against a decedent’s estate can meet his burden under R.C. 2117.06(A)(1)(a) to ‘present’ his claim ‘[t]o the executor or administrator in writing’ when the claimant presents the claim to someone other than the fiduciary, who then submits the claim to the fiduciary within the statutory time-frame under R.C. 2117.06.”

Votes to Take the Case

Yes: Chief Justice O’Connor, and Justices Lanzinger, Pfeifer, O’Neill, and Kennedy.

No: Justices O’Donnell and French.

Case Background

In September, 2011, Appellee James Wilson and Decedent Joseph Gorman entered into a contract in which Gorman agreed to purchase a 15% interest in Marine 1, LLC for $300,000, to be paid in a series of payments. The full purchase price was due on September 2, 2012, but Gorman did not maintain the payment schedule prior to his death. At the time of his death, Gorman owed Wilson a balance of $187,000 plus interest.

Gorman died on January 20, 2013. Appellant William Lawrence was named executor of Gorman’s estate. On or about July 12, 2013, Wilson sent a letter of notice of his claim to Gorman’s accountant and to his administrative assistant, neither of whom were the personal representatives for the estate. Both recipients forwarded the letter to the attorney for the estate, and one forwarded it directly to Lawrence. The attorney for the estate rejected the claim because of Wilson’s failure to timely present it to the executor of the estate.

In November, 2013, Wilson filed a breach of contract claim against Lawrence for monies due on the unpaid contract. Lawrence moved for summary judgment, arguing that Wilson’s complaint was time barred under R.C. 2117.06. Wilson cross-filed a motion for summary judgment on his breach of contract claim.

In January, 2015, the trial court granted Lawrence’s motion for summary judgment in favor of the estate, holding that Wilson failed to present his claim to the executor as required under R.C. 2117.06. The court held that Wilson’s letters did not constitute proper written notice of a claim to the executor of the estate.

In a split decision written by Judge Keough and joined by Judge Mays, the Eighth District reversed summary judgment in favor of the estate, finding that a claim could be deemed presented when received by individuals connected with the estate. Judge Boyle dissented, finding that the plain language of the presentment requirement under R.C. 2117.06 requires that a creditor present to the executor.

Certified Conflict Case

Jackson v. Stevens, 4th Dist. Scioto No. CA 1231, 4th Dist. Scioto, 1980 WL 350961 (Jan. 2, 1980). (there was no properly presented claim where a plaintiff sent a written notice of his claim to a third party who then forwarded it to the executor within the six-month deadline. The statute requires presentment “to the executor or administrator,” and therefore, presentment to a person other than the fiduciary fails to satisfy the statute.)

Key Precedent

R.C. 2117.06(A)(1)(a) (After the appointment of an executor or administrator and prior to the filing of a final account or a certificate of termination, “All creditors having claims against an estate . . . shall present their claims in one of the following manners (a) To the executor or administrator in a writing. . . ”)

R.C. 2117.06(B-C) (A claim not presented within six months after the death of the decedent shall be forever barred as to all parties.)

 Civ. R. 4.1 (Describing methods of service within Ohio)

Bell v. Midwestern Educ. Serv., Inc., 89 Ohio App. 3d 193, 203 (1993) (Where plaintiff fails to complete service of process by one of the methods in Civ. R. 4.1, it does not matter that a party has actual knowledge of the lawsuit.)

Fortelka v. Meifert, 176 Ohio St. 476 (1964) (“The purpose and object of the law requiring the presentation of claims against an estate to the executor or administrator is manifestly to secure an expeditious and efficient administration of an estate by promptly providing such a fiduciary with necessary information relating to the existence, amount and character of all indebtedness of the estate.”)

Edens v. Barberton, 43 Ohio St.3d 176, 539 N.E.2d 1124 (1989) (“[W]here a statute such as R.C. 2305.11(B) is silent as to how notice is to be effectuated, written notice will be deemed to have been given when received.” (citing Moore v. Given, 39 Ohio St. 661 (1884)).

Lawrence’s Argument

The plain text and meaning of R.C. 2117.06(A)(1)(a) establish the specific ways by which a creditor must present claims against an estate. The language of “shall present their claims . . . [t]o the executor or administrator in a writing” imposes a mandatory obligation that can be fulfilled only by presentation to the executor—and no one else.

The statute read as a whole indicates that R.C. 2117.06(A)(1)(a) requires direct notice to the executor. R.C. 2117.06(A)(1)(c) allows for a claim to proceed if it is (1) sent by ordinary mail, (2) addressed to the decedent, and (3) actually received by the executor of the estate. While under R.C. 2117.06(A)(1)(c) the notice must be sent to the decedent and received by the executor, in contrast, under R.C. 2117.06(A)(1)(a), notice is specifically required to be presented directly to the executor “not ‘to the decedent’ or ‘to someone who forwards it on to the executor.’”

Civ. R. 4.1 is the civil rule analogue to R.C. 2117.06(A). Both describe effective methods of service. Under the civil rule, actual knowledge of a claim is not good enough.  There must also be service of process. The same should be true under the presentment of claims statute. Failure to serve the notice of claim as set forth in the statute is fatal.

The purpose of R.C. 2117.06 is to facilitate the prompt administration of the estate of a decedent. The Eighth District’s decision does not satisfy this purpose.

Wilson’s Argument

The notice letter sent by Wilson served as notice (1) to the heirs, administrators, executors, or any other creditors or interested persons, (2) that Wilson was the claimant, (3) of the contact information for Wilson’s counsel, (4) that the notice was provided pursuant to R.C. 2117.06, and (5) of information regarding the contract in question. It was transmitted to the trustee of Gorman’s trust as well as his business manager within 6 months. Because those parties immediately forwarded the notice, it was in the hands of Lawrence and his counsel within the statutorily-required six months.

The purpose of the notice requirement is to promptly provide the executor with the necessary information regarding the existence of a claim. Lawrence was promptly notified, and therefore, the effect of the statute is served by the holding of the Eight District.

Preventing service through third parties is a slippery slope, and Ohio Civ. R. 4.1 is not relevant to the analysis. R.C. 2117.06 is silent as to how notice should be effectuated, and therefore, it should be read as effectuated upon receipt of the notice by the proper party.

Lawrence’s Proposed Proposition of Law

A plaintiff with a claim against a decedent’s estate can meet his burden under Ohio Rev. Code § 2117.06(A)(1)(a) to “present” his claim “[t]o the executor or administrator in writing” only when he identifies the executor and delivers his claim to him; similarly, a claimant cannot meet his burden when he delivers his claim only to third parties, never appointed as executors, who then forward the claim to the court-appointed executor.

Wilson’s Proposed Counter Proposition of Law

A claimant meets his burden under R.C. 2117.06(A)(1)(a) when an executor, administrator or attorney for the estate receives written notice of the claim within the statutory time-frame under R.C. 2117.06(B).

Student Contributor: Connie Kremer

 

 

This entry was posted in Ohio Supreme Court Watch, Oral Argument Preview, Student Contributors and tagged , . Bookmark the permalink.