Ader v. Estate of Felger , 240 Ariz. 32 ( 2016 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
MICHELE ADER, AN UNMARRIED WOMAN,
Plaintiff/Appellant,
v.
THE ESTATE OF DAN FELGER AND
CAROLYN FELGER, A WIDOW,
Defendants/Appellees.
No. 2 CA-CV 2015-0170
Filed May 27, 2016
Appeal from the Superior Court in Pima County
No. C20140037
The Honorable D. Douglas Metcalf, Judge
AFFIRMED
COUNSEL
Thompson∙Krone, P.L.C., Tucson
By Russell E. Krone and Evan L. Thompson
Counsel for Plaintiff/Appellant
Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C.,
Tucson
By Corey B. Larson and Ariel E. Henderson
Counsel for Defendants/Appellees
ADER v. ESTATE OF FELGER
Opinion of the Court
OPINION
Presiding Judge Vásquez authored the opinion of the Court, in
which Chief Judge Eckerstrom and Judge Howard concurred.
V Á S Q U E Z, Presiding Judge:
¶1 Michele Ader appeals the trial court’s entry of summary
judgment in favor of the Estate of Dan Felger and his widow
Carolyn Felger and its subsequent denial of her motion for a new
trial. The primary issue presented in this appeal requires us to
interpret A.R.S. § 14-3803 and A.R.S. § 14-3108 to determine whether
Ader’s claims against the Estate are time-barred because no probate
proceeding was initiated in Arizona within two years following Dan
Felger’s death. For the reasons stated below, we affirm.
Factual and Procedural Background
¶2 We view the facts and all reasonable inferences
therefrom in the light most favorable to Ader, the party against
whom summary judgment was entered. See Delo v. GMAC Mortg.,
L.L.C., 232 Ariz. 133, ¶ 2, 302 P.3d 658, 659 (App. 2013). However,
the relevant facts are undisputed. In 1974, Ader began investing in
commercial properties with Dan Felger. Ader helped fund the
purchase of the properties, and Dan Felger rehabilitated, managed,
and eventually refinanced or sold them. Starting in the mid-1990s,
Dan Felger created separate limited liability companies for each of
the investment properties. The members of those companies were
Ader and the Felger Family Trust, for which Dan Felger served as
trustee. In 2007, Dan Felger was diagnosed with cancer and started
training his son-in-law, Michael Rosberg, to take over the business.
Dan Felger died in November 2010. Less than two years later, Ader
stopped receiving her monthly interest payments for two properties
in southern Arizona, Bella Vista Townhomes, L.L.C. and MV
Apartments, L.L.C.
¶3 In January 2014, Ader filed a lawsuit against various
defendants, including Bella Vista Townhomes, the Felger Family
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ADER v. ESTATE OF FELGER
Opinion of the Court
Trust, Rosberg, and, as relevant to this appeal, “the Estate of Dan
Felger” and “Carolyn Felger, a widow.” Ader alleged numerous
claims, such as breach of contract, breach of fiduciary duty,
fraudulent concealment, negligent misrepresentation, conversion,
and racketeering. Six months later, Carolyn Felger and the Estate of
Dan Felger (collectively hereinafter Felger) filed a motion for
summary judgment, arguing that, because Ader’s claims against the
Estate were based on Dan Felger’s actions before his death, they
were time-barred. Felger similarly asserted that the claims against
Carolyn Felger were time-barred because Ader alleged her liability
“for community property reasons.” With her response, Ader
requested that the trial court defer ruling on the motion for
summary judgment and allow additional time to conduct discovery.
After requesting supplemental briefing and hearing oral argument,
the court granted the motion for summary judgment and entered a
final judgment pursuant to Rule 54(b), Ariz. R. Civ. P. Ader
subsequently filed a motion for a new trial, which the court denied.
This appeal followed. We have jurisdiction pursuant to A.R.S. §§ 12-
120.21(A)(1) and 12-2101(A)(1), (5).
Additional Discovery
¶4 Ader first contends the trial court “should have
deferred ruling on . . . Felger’s motion for summary judgment” and
should have granted additional time for discovery pursuant to
Rule 56(f), Ariz. R. Civ. P. 1 We review a trial court’s Rule 56(f)
determination for an abuse of discretion. Lewis v. Oliver, 178 Ariz.
330, 338, 873 P.2d 668, 676 (App. 1993).
¶5 Rule 56(f)(1)(A) provides:
If a party opposing summary judgment
files a request for relief and expedited
1 Although the trial court did not explicitly deny Ader’s
Rule 56(f) motion, it implicitly did so by entering summary
judgment in favor of Felger. See Atchison, Topeka & Santa Fe Ry. Co.
v. Parr, 96 Ariz. 13, 15, 391 P.2d 575, 577 (1964) (motions not ruled
upon deemed denied by operation of law).
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ADER v. ESTATE OF FELGER
Opinion of the Court
hearing under this Rule, along with a
supporting affidavit showing that, for
specified reasons, it cannot present
evidence essential to justify its opposition,
the [trial] court may, after holding a
hearing[,] . . . defer considering the motion
for summary judgment and allow time to
obtain affidavits or to take discovery before
a response to the motion is required.
However, the court has no discretion and must “grant summary
judgment if the moving party shows that there is no genuine dispute
as to any material fact and the moving party is entitled to judgment
as a matter of law.” Ariz. R. Civ. P. 56(a).
¶6 As part of her Rule 56(f) request, Ader sought
additional information regarding Dan Felger’s separate property,
which she alleged passed to different trusts upon his death, as well
as “the trust documents, the trust funding documents, trust and
personal banking records and trust and personal tax returns.” She
also wanted information concerning any loans made by Dan Felger
or the Felger Family Trust to the limited liability companies. She
argued this information was “essential to understanding the
financial arrangements” between the various defendants.
¶7 However, the issue presented in the motion for
summary judgment—whether Ader’s claims were time-barred—was
a pure question of law. Cf. Montano v. Browning, 202 Ariz. 544, ¶ 4,
48 P.3d 494, 496 (App. 2002) (describing statute of limitations and
accrual of action as question of law). The additional discovery Ader
sought had no bearing on that issue and would have only delayed
the inevitable result. See Josue v. Isuzu Motors Am., Inc., 958 P.2d 535,
540 (Haw. 1998) (“Because this is solely a question of law, the
discovery requested was not only irrelevant, but would have
subjected the parties to unnecessary cost and expense.”); United Sav.
Bank v. State, 823 A.2d 873, 876 (N.J. Super. Ct. App. Div. 2003) (if
summary judgment turns on question of law, additional discovery
unnecessary and summary judgment need not be delayed). We
therefore cannot say the trial court abused its discretion. See Lewis,
178 Ariz. at 338, 873 P.2d at 676.
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ADER v. ESTATE OF FELGER
Opinion of the Court
Summary Judgment
¶8 Ader next contends the trial court erred in granting
summary judgment in favor of the Estate. 2 Specifically, she
maintains the court erroneously interpreted § 14-3803 and § 14-3108
to bar her claims against the Estate when no personal representative
had been appointed and her claims “did not arise and had been
concealed for more than two years after [Dan Felger’s] death.” We
review de novo a grant of summary judgment. Cohen v. Lovitt &
Touche, Inc., 233 Ariz. 45, ¶ 6, 308 P.3d 1196, 1198 (App. 2013).
¶9 The issue here turns on the interpretation and
application of § 14-3803 and § 14-3108, which are questions of law
that we review de novo. See Moore v. Browning, 203 Ariz. 102, ¶ 21,
50 P.3d 852, 858 (App. 2002). We construe statutes to fulfill the
intent of our legislature. First Credit Union v. Courtney, 233 Ariz. 105,
¶ 9, 309 P.3d 929, 931 (App. 2013). “When interpreting a statute, we
look first to the plain language because that is ‘the best and most
reliable index of a statute’s meaning.’” City of Tucson v. Clear
Channel Outdoor, Inc., 218 Ariz. 172, ¶ 6, 181 P.3d 219, 225 (App.
2008), quoting N. Valley Emergency Specialists, L.L.C. v. Santana, 208
Ariz. 301, ¶ 9, 93 P.3d 501, 503 (2004). In doing so, we “give words
their ordinary meaning and may look to dictionary definitions.”
DBT Yuma, L.L.C. v. Yuma Cty. Airport Auth., 238 Ariz. 394, ¶ 9, 361
2 As to Carolyn Felger, the trial court found, “Because the
claims against the Estate of Dan Felger are barred, including the
claims against his community property assets, the claims against
[Carolyn] that are asserted against her under the community
property laws are likewise barred.” In support of its reasoning, the
court relied on A.R.S. § 14-3101(A), which provides that “the
surviving spouse’s share of the community property is subject to
administration until the time for presentation of claims has expired,
and thereafter only to the extent necessary to pay community
claims.” Ader does not contest the court’s grant of summary
judgment in favor of Carolyn and instead focuses on her claims
against the Estate. See Dawson v. Withycombe, 216 Ariz. 84, ¶ 91, 163
P.3d 1034, 1061 (App. 2007) (argument not raised in opening brief
waived). We therefore do not address it.
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ADER v. ESTATE OF FELGER
Opinion of the Court
P.3d 379, 381 (2015) (internal citation omitted). And we construe
statutes “in conjunction with other statutes that relate to the same
subject or purpose.” Johnson v. Mohave County, 206 Ariz. 330, ¶ 11,
78 P.3d 1051, 1054 (App. 2003).
¶10 Section 14-3803 provides the time limits for creditors to
present their claims against an estate. Subsection (A) applies to
claims that “arose before” the decedent’s death, while subsection (C)
applies to claims that “arise at or after” the decedent’s death. The
first issue here is whether subsection (A) or (C) applies to Ader’s
claims against the Estate. For the reasons discussed below, we
conclude that subsection (A) applies. The second issue is how to
calculate the time limits in § 14-3803(A) when no personal
representative was ever appointed for the estate and, consequently,
the creditors received no notice to present their claims. For this
answer, we turn to § 14-3108, which generally requires a personal
representative to be appointed within two years of a decedent’s
death. For the reasons discussed below, we conclude that § 14-
3803(A) bars Ader’s claims against the Estate because no personal
representative was appointed within two years.
¶11 At the outset, we note that both § 14-3803 and § 14-3108
are part of Arizona’s probate code, which was modeled after the
Uniform Probate Code. In re Estate of Winn, 214 Ariz. 149, n.4, 150
P.3d 236, 240 n.4 (2007). Consistent with the Uniform Probate Code,
our probate code “was designed to ‘promote a speedy and efficient
system for liquidating the estate of the decedent and making
distribution to his successors.’” Id. ¶ 20, quoting A.R.S. § 14-
1102(B)(3); see also Unif. Prob. Code § 1-102(b)(3).
A.R.S. § 14-3803
¶12 In relevant part, § 14-3803 provides:
A. All claims against a decedent’s
estate that arose before the death of the
decedent, including claims of the state and
any of its political subdivisions, whether
due or to become due, absolute or
contingent, liquidated or unliquidated,
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ADER v. ESTATE OF FELGER
Opinion of the Court
founded on contract, tort or other legal
basis, if not barred earlier by any other
statute of limitations or nonclaim statute,
are barred against the estate, the personal
representative and the heirs and devisees
of the decedent, unless presented within
the earlier of either:
1. Two years after the decedent’s
death plus the time remaining in the period
commenced by an actual or published
notice pursuant to [A.R.S.] § 14-3801,
subsection A or B.
2. The time prescribed by § 14-3801,
subsection B for creditors who are given
actual notice and within the time
prescribed in § 14-3801, subsection A for all
creditors barred by publication.3
....
C. All claims against a decedent’s
estate that arise at or after the death of the
decedent, including claims of the state and
any political subdivision, whether due or to
become due, absolute or contingent,
liquidated or unliquidated, founded on
3 Pursuant to § 14-3801(A), a personal representative must
“publish a notice to creditors once a week for three successive weeks
in a newspaper,” and that notice must inform “creditors of the estate
to present their claims within four months after the date of the first
publication of the notice or be forever barred.” Section 14-3801(B)
requires a personal representative to give all known creditors
written notice “to present the creditor’s claim within four months
after the published notice, if notice is given as provided in
subsection A, or within sixty days after the mailing or other delivery
of the notice, whichever is later, or be forever barred.”
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ADER v. ESTATE OF FELGER
Opinion of the Court
contract, tort or other legal basis, are barred
against the estate, the personal
representative and the heirs and devisees
of the decedent, unless presented as either
of the following:
1. A claim based on a contract with
the personal representative, within four
months after performance by the personal
representative is due.
2. Any other claim, within the later
of four months after it arises or the time
specified in subsection A, paragraph 1 of
this section.
¶13 As argued by the parties and addressed by the trial
court, the issue here is: Which subsection of § 14-3803 applies. Ader
maintains that subsection (C) governs this case because “she did not
discover her claims against the Estate” until after Dan Felger’s
death. Felger, however, contends that § 14-3803(A) is the relevant
subsection because Ader’s claims against the Estate arose prior to
Dan Felger’s death.4
4Felger alternatively contends that California rather than
Arizona law applies, asserting that “any proceedings . . . concerning
the administration of Dan Felger’s estate should have been brought
in California” because “Dan and Carolyn were, at all times,
California residents, and because Dan Felger died in California.” In
support of this argument, Felger cites Cal. Civ. Proc. Code § 395,
which provides:
Except as otherwise provided by law
and subject to the power of the court to
transfer actions or proceedings as provided
in this title, the superior court in the county
where the defendants or some of them
reside at the commencement of the action is
the proper court for the trial of the action.
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ADER v. ESTATE OF FELGER
Opinion of the Court
¶14 In granting the motion for summary judgment, the trial
court found § 14-3803(A) applicable. Reciting Ader’s claims against
the Estate, as identified in her amended complaint, the court
reasoned that, “even if [Ader] did not discover the claims against
Dan Felger until after his death, the claims against him arose prior to
his death.”
¶15 In her opening brief, Ader maintains she “did not learn
of her potential claims against the Estate until financial documents
were received on September 17, 2013 and she did not discover that
the representations and statements made by Dan Felger to [her]
were false, untrue, or negligently made until after September 17,
2013.” Specifically, she argues she was unaware of Dan Felger’s
misrepresentations concerning Bella Vista Townhomes and MV
Apartments until after his death. She therefore reasons that § 14-
However, according to the Code Commission Notes for the statute,
“[t]his section does not apply to probate proceedings.” With a
probate, there may be ancillary proceedings in multiple states. See
Restatement (Second) of Conflict of Laws § 342 (1971); see also Leiby
v. Superior Court of Maricopa Cty., 101 Ariz. 517, 518-19, 421 P.2d 874,
875-76 (1966); In re Reynolds’ Estate, 20 P.2d 323, 324-25 (Cal. 1933).
Nevertheless, our legislature has adopted the law of a
decedent’s domicile if outside of Arizona in § 14-3803(B), which
provides: “A claim that is described in subsection A of this section
and that is barred by the nonclaim statute of the decedent’s domicile
before the giving of notice to creditors in this state is barred in this
state.” Felger argues that Cal. Civ. Proc. Code § 366.2(a) bars Ader’s
claims against the Estate in California. But that statute is not a
nonclaim statute. The California statutory scheme and case law
consistently refer to Cal. Civ. Proc. Code § 366.2 as a “statute of
limitations.” See, e.g., Cal. Prob. Code § 9100(c); Cal. Fam. Code
§ 914(c)(1); Bradley v. Breen, 86 Cal. Rptr. 2d 726, 732 (Ct. App. 1999);
Battuello v. Battuello, 75 Cal. Rptr. 2d 548, 549-50 (Ct. App. 1998); see
also In re Estate of Van Der Zee, 228 Ariz. 257, ¶ 18, 265 P.3d 439, 442
(App. 2011) (defining nonclaim statute and distinguishing statute of
limitations). Accordingly, Cal. Civ. Proc. Code § 366.2(a) does not fit
within the scope of § 14-3803(B) and does not bar Ader’s claims.
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ADER v. ESTATE OF FELGER
Opinion of the Court
3803(C) applies and she “timely filed” this lawsuit “within the four
month time limit” provided therein.5
¶16 The plain language of § 14-3803 indicates that claims
against an estate must be presented within certain time limits based
on when those claims “arise.” See City of Tucson, 218 Ariz. 172, ¶ 6,
181 P.3d at 225. “Arise” has an ordinary meaning. See DBT Yuma,
238 Ariz. 394, ¶ 9, 361 P.3d at 381. It generally means “[t]o come into
being; originate.” The American Heritage Dictionary 95 (5th ed. 2011);
see also Arise, Black’s Law Dictionary (10th ed. 2014) (“To originate; to
stem (from).”). Applying that meaning to § 14-3803, a claim arises
when it comes into being, for example, when a decedent commits
the act that is the basis of the claim. Thus, under § 14-3803, it makes
no difference when the plaintiff learns of or discovers the claim.
¶17 Ader nevertheless urges us to apply the discovery rule
to § 14-3803. Under that doctrine, “a plaintiff’s cause of action does
not accrue until the plaintiff knows or, in the exercise of reasonable
diligence, should know the facts underlying the cause.” Gust,
Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 182 Ariz. 586, 588,
898 P.2d 964, 966 (1995); see also Wyckoff v. Mogollon Health All., 232
Ariz. 588, ¶ 9, 307 P.3d 1015, 1018 (App. 2013) (statute of limitations
does not run from moment of defendant’s injurious conduct but
from when claimant knows or should know of injury and facts
underlying cause).
5 At oral argument, Ader maintained that “a claim is not
actionable until all the elements of the claim exist.” And she
specifically asserted that the element of damages for her fraud claim
could not be determined until after Dan Felger’s death. Although
Ader alleged she did not discover her claims until after Dan Felger’s
death, she did not present this “elements” argument in her opening
brief. Instead, she argued that, because the defendants had
concealed their conduct, she did not become aware of her claims
until she received certain financial documents. We therefore do not
address this “elements” argument further. See Mitchell v. Gamble,
207 Ariz. 364, ¶ 16, 86 P.3d 944, 949-50 (App. 2004) (“Generally,
issues and arguments raised for the first time at oral argument on
appeal are untimely and deemed waived.”).
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Opinion of the Court
¶18 However, § 14-3803 is a nonclaim statute. In re Estate of
Barry, 184 Ariz. 506, 508, 910 P.2d 657, 659 (App. 1996). A nonclaim
statute is “‘[a] law that sets a time limit for creditors to bring claims
against a decedent’s estate. Unlike a statute of limitations, a
nonclaim statute is usu[ally] not subject to tolling and is not
waivable.’” In re Estate of Van Der Zee, 228 Ariz. 257, ¶ 18, 265 P.3d
439, 442 (App. 2011), quoting Black’s Law Dictionary 1449 (8th ed.
2004) (second alteration in Estate of Van Der Zee). Thus, by its very
definition, a nonclaim statute is generally not subject to the
discovery rule, which tolls the period for bringing a claim. See ELM
Ret. Ctr., LP v. Callaway, 226 Ariz. 287, ¶ 11, 246 P.3d 938, 941 (App.
2010) (discovery rule tolls limitations period); see also 51 Am. Jur. 2d
Limitation of Actions § 3 (2016) (“The time element is a built-in
condition of a nonclaim statute and is of the essence of the right of
action . . . .”). Other states have also determined that the discovery
rule does not apply to their comparable nonclaim statutes. See
Phillips v. Quick, 731 S.E.2d 327, 329-30 (S.C. Ct. App. 2012); In re
Estate of Peterson, 9 P.3d 845, 849 (Wash. Ct. App. 2000).
¶19 Moreover, where the discovery rule applies, our
legislature generally uses the term “accrue” to describe when the
statute of limitations begins to run. See Gust, Rosenfeld & Henderson,
182 Ariz. at 588, 898 P.2d at 966 (interpreting A.R.S. § 12-548, which
uses “accrue”); Anson v. Am. Motors Corp., 155 Ariz. 420, 424, 747
P.2d 581, 585 (App. 1987) (under A.R.S. § 12-542, two-year statute of
limitations “does not begin to run until the cause of action ‘accrues,’
which means that the discovery rule applies”). However, § 14-3803
uses the term “arise,” not “accrue.” Contrary to Ader’s suggestion
otherwise, these two terms do not “mean the same thing.” In this
context, “accrue” has a special legal meaning. “[A] cause of action
accrues, and the statute of limitations commences, when one party is
able to sue another.” Gust, Rosenfeld & Henderson, 182 Ariz. at 588,
898 P.2d at 966. By contrast, as stated above, in the context of a
nonclaim statute, “arise” refers to the decedent’s act or conduct
upon which a claim is based. We “will not read into a statute
something that is not within the manifest intent of the legislature as
indicated by the statute itself, nor will [we] inflate, expand, stretch,
or extend a statute to matters not falling within its express
provisions.” Cicoria v. Cole, 222 Ariz. 428, ¶ 15, 215 P.3d 402, 405
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ADER v. ESTATE OF FELGER
Opinion of the Court
(App. 2009). This is particularly true given that our legislature has
used the term “accrue” elsewhere. See Hughes v. Jorgenson, 203 Ariz.
71, ¶ 11, 50 P.3d 821, 823 (2002) (we assume legislature said what it
means). The discovery rule therefore does not apply to § 14-3803.
¶20 Here, Ader is alleging claims based on
misrepresentations by Dan Felger. Such claims necessarily arose
before his death. We therefore conclude that § 14-3803(A) applies.
¶21 In her reply brief, Ader nonetheless maintains that
“[s]pecific paragraphs in the Amended Complaint clearly alleged
that the Felger Estate had engaged in tortious conduct after Dan
Felger’s death and that the tortious conduct was continuing.” She
therefore reasons that § 14-3803(C) must apply to those claims. But
Ader misapprehends the concept of a decedent’s estate.
¶22 An estate is a collection of the decedent’s assets and
liabilities. See A.R.S. § 14-1201(17) (defining “estate” as “the
property of the decedent”); see also In re Johnson’s Estate, 129 Ariz.
307, 310, 630 P.2d 1039, 1042 (App. 1981). As such, it has no capacity
to bring or defend a lawsuit. Simply put, an estate cannot “act.”
Rather, it can only sue and be sued through its personal
representative, who “acts” on behalf of the estate. See A.R.S. § 14-
3701 (duties and powers of personal representative). Accordingly,
when an estate is involved in litigation, the personal representative
is the proper named defendant. See A.R.S. § 14-3110; see also Ariz. R.
Civ. P. 17(c); In re Balcomb’s Estate, 114 Ariz. 519, 521, 562 P.2d 399,
401 (App. 1977). Moreover, personal representatives can be
personally liable for their actions. See A.R.S. § 14-3935. For example,
“[a] personal representative is individually liable for obligations
arising from ownership or control of the estate or for torts
committed in the course of administration of the estate . . . if he is
personally at fault.” A.R.S. § 14-3808(B). Heirs or devisees of a
decedent can also be liable, for example, for improper distributions.
See A.R.S. §§ 14-3909, 14-3936.
¶23 The causes of action described by Ader as arising after
Dan Felger’s death must be aimed at those individuals directly
responsible. See §§ 14-3808, 14-3909. Indeed, Ader’s amended
complaint seems to reflect this notion. Her claims against the Estate
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Opinion of the Court
for breach of fiduciary duty are premised on her belief that “the
Felger Trust allowed . . . the Estate of Dan Felger to act as the alter
ego of . . . the Felger Trust.” Thus, Ader is not alleging that the
Estate affirmatively committed any act constituting a breach of
fiduciary duty. Notably, Ader’s amended complaint also names
Rosberg, the Felger Family Trust, Bella Vista Townhomes, and
others as defendants; here, we are only concerned with the Estate.
And Ader’s claims against the Estate fall under § 14-3803(A).6
¶24 Turning to § 14-3803(A), it provides that claims against
an estate arising before the decedent’s death are barred if not
presented within certain time limits following the personal
representative’s notice to creditors. The parties do not dispute the
meaning of these provisions. Rather, the issue is: How does a court
calculate the time limits in § 14-3803(A) when no personal
representative has been appointed and, consequently, no notice has
been given to creditors? See A.R.S. § 14-3104 (“No proceeding to
enforce a claim against the estate of a decedent or his successors may
be revived or commenced before the appointment of a personal
6Ader additionally asserts that A.R.S. § 14-1106 allows her to
bring claims against the Estate after they were discovered.
However, Ader’s amended complaint did not rely upon § 14-1106 as
the basis for any of her claims, and she developed no argument in
her opening brief, as required by Rule 13(a)(7), Ariz. R. Civ. App. P.,
to explain how this statute applies. We therefore could deem the
argument waived. See In re Aubuchon, 233 Ariz. 62, ¶ 6, 309 P.3d 886,
888-89 (2013). But, even assuming it is not waived, we disagree with
Ader.
In relevant part, § 14-1106 explains, “If fraud has been
perpetrated in connection with any proceeding . . . under this
title . . . , any person injured thereby may obtain appropriate relief
against the perpetrator of the fraud . . . within two years after the
discovery of the fraud.” This statute is thus specifically directed at
the “perpetrator of the fraud” or “any person . . . benefiting from the
fraud,” not an estate generally. As discussed above, Ader must
direct her claims against those responsible individuals.
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ADER v. ESTATE OF FELGER
Opinion of the Court
representative.”). For the answer to this question, we turn to § 14-
3108.
A.R.S. § 14-3108
¶25 In relevant part, § 14-3108 provides:
An informal probate or appointment
proceeding or formal testacy or
appointment proceeding, other than a
proceeding to probate a will previously
probated at the testator’s domicile and
appointment proceedings relating to an
estate in which there has been a prior
appointment, shall not be commenced
more than two years after the decedent’s
death, except:
....
4. An informal probate or
appointment or a formal testacy or
appointment proceeding may be
commenced thereafter if no court
proceeding concerning the succession or
administration has occurred within the two
year period. If proceedings are brought
under this exception, the personal
representative has no right to possess estate
assets as provided in [A.R.S.] § 14-3709
beyond that necessary to confirm title
thereto in the rightful successors to the
estate. Claims other than expenses of
administration shall not be presented
against the estate.
¶26 After concluding that § 14-3803(A) applied, the trial
court noted that the time limit thereunder is “two years from the
date of death plus the time remaining of the four month period that
begins to run after the personal representative provides notice to
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ADER v. ESTATE OF FELGER
Opinion of the Court
potential creditors.” However, the court also pointed out that, as to
Dan Felger, “no probate has been opened, no personal
representative has been appointed, and no notice has been provided
to creditors.” Relying on § 14-3108, the court found “there is
generally a two year limit on the time to appoint a personal
representative” and the exception in subsection (4) does not apply to
Ader’s claims against the Estate. Accordingly, “because the time to
seek the appointment of a personal representative has passed,” the
court concluded that “the claims against the Estate of Dan Felger are
barred under . . . § 14-3803(A).”
¶27 The plain language of § 14-3108, which is titled
“ultimate time limit,” provides that a probate proceeding generally
must be brought within two years of a decedent’s death. See City of
Tucson, 218 Ariz. 172, ¶ 6, 181 P.3d at 225; see also A.R.S. § 14-
3301(B)(1)(f) (application for informal probate of will or
appointment of personal representative must include statement that
two-year “time limit . . . has not expired”). Indeed, the comment to
Unif. Prob. Code § 3-108, after which § 14-3108 was modeled,
indicates that probate proceedings “must be commenced” within the
“ultimate time limit” or “no administration could be opened.”
Other states have also described their comparable statutes as
providing a bar to late probate proceedings. See In re Estate of
Collopy, 88 A.3d 153, ¶ 6 (Me. 2014) (Maine’s equivalent
“unambiguously bars the commencement of all appointment
proceedings . . . three years after the decedent’s death”); In re Estate
of Taylor, 675 P.2d 944, 945 (Mont. 1984) (describing Montana’s
equivalent as “clear[ly] and unambiguous[ly]” providing “three-
year time limit on commencing a proceeding to probate a will”).
¶28 However, § 14-3108(4) allows for a late proceeding if no
earlier proceeding occurred within the two years following the
decedent’s death.7 Such is the case here, which means a personal
representative could still be appointed. But § 14-3108(4) contains a
7 Section14-3108 includes three other exceptions, but none
applies here. There was no “doubt about the fact of” Dan Felger’s
death, he was not “absent, disappeared or missing,” and there was
no “informally probated will.” § 14-3108(1)-(3).
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ADER v. ESTATE OF FELGER
Opinion of the Court
caveat: In a tardy proceeding, the personal representative can only
“confirm title” to estate assets, and “[c]laims other than expenses of
administration shall not be presented against the estate.” We thus
must determine this latter provision’s effect on Ader’s claims.
¶29 Admittedly, there is “scant case law on § 14-3108 in
Arizona and analogous Uniform Probate Code provisions in other
states.” Estate of Winn, 214 Ariz. 149, ¶ 20, 150 P.3d at 240.
However, the language of subsection (4) is plain and unambiguous.
See City of Tucson, 218 Ariz. 172, ¶ 6, 181 P.3d at 225; see also In re
Estate of Baca, 984 P.2d 782, ¶ 22 (N.M. Ct. App. 1999) (“Perhaps
because of its clarity, there is little case law interpreting this
provision of the Uniform Probate Code.”). Although a personal
representative can be appointed more than two years after the
decedent’s death if no prior proceeding occurred, in that late
proceeding, the personal representative can only settle claims for
“expenses of administration”8 because “[c]laims other than expenses
of administration shall not be presented against the estate.” Limiting
the claims to be brought in a tardy proceeding is consistent with the
purpose of Arizona’s probate code—it puts the burden on a creditor
to keep informed of the status of a debtor and to promptly pursue
his or her claims if the debtor dies. See § 14-1102(B)(3); see also Estate
of Baca, 984 P.2d 782, ¶¶ 24-25.
¶30 “Expenses of administration” are “[e]xpenses incurred
by a decedent’s representatives in administering the estate.”
Expenses of Administration, Black’s Law Dictionary (10th ed. 2014); see
also Garver v. Thoman, 15 Ariz. 38, 42, 135 P. 724, 725 (1913)
(describing “expenses of administration” as debts incurred while
locating and disposing of estate assets and obligations). Ader’s
claims for damages stemming from Dan Felger’s misrepresentations
do not fall within this definition. Therefore, even though a personal
representative could still be appointed for the Estate, Ader’s claims
8Pursuant to A.R.S. § 14-1201(7), “claims” includes “liabilities
of the decedent or the protected person, whether arising in contract,
in tort or otherwise, and liabilities of the estate that arise at or after
the death of the decedent or after the appointment of a conservator,
including funeral expenses and expenses of administration.”
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ADER v. ESTATE OF FELGER
Opinion of the Court
could not be presented. See In re Estate of Wood, 147 Ariz. 366, 367,
710 P.2d 476, 477 (App. 1985) (describing § 14-3108 as “statutory
limitation” on court’s power).
¶31 Construing these statutes together, we conclude that the
two-year time limit for appointing a personal representative in § 14-
3108 applies to § 14-3803(A). See Johnson, 206 Ariz. 330, ¶ 11, 78 P.3d
at 1054. Thus, despite the fact that a personal representative has not
been appointed because no probate proceeding was initiated, § 14-
3803(A) bars claims other than expenses of administration presented
more than two years after the decedent’s death. Without applying
the two-year time limit to § 14-3803(A), the time for presenting a
claim thereunder could continue indefinitely. This would be an
“absurd result,” Knight Transp., Inc. v. Ariz. Dep’t of Transp., 203 Ariz.
447, ¶ 22, 55 P.3d 790, 795 (App. 2002) (we attempt to give statutes
sensible meaning and avoid construction that produces absurd
result), particularly in light of our probate code’s stated purpose of
“speedy and efficient” estate administrations, § 14-1102(B)(3).
¶32 Ader nevertheless contends that, pursuant to Estate of
Winn, 214 Ariz. 149, ¶¶ 19-20, 150 P.3d at 240, “[t]he efficient
administration of estates is intended to benefit creditors as well as
successors.” She argues that, under the trial court’s summary-
judgment ruling, she was “denied the benefit of the Probate Code,”
while “the defendants, including Carolyn Felger, failed to open a
probate and seek to use the probate code as a sword to avoid
probating Dan Felger’s separate property.”
¶33 Estate of Winn is inapposite. There, our supreme court
had to determine whether a late-appointed personal representative
could pursue an elder-abuse claim, brought under the Adult
Protective Services Act, on behalf of a decedent’s estate, despite the
language in § 14-3108(4) indicating that, in tardy proceedings, a
personal representative can only “confirm title.” Estate of Winn, 214
Ariz. 149, ¶¶ 1, 5-6, 150 P.3d at 237-38. Although the court
recognized that “efficient administration and finality” under
Arizona’s probate code “are intended to protect the decedent’s
successors and creditors,” it was the putative tortfeasor in that case
that sought to “invoke this policy to protect itself from potential
liability.” Id. ¶ 20. And the court refused to so apply it. Id.
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ADER v. ESTATE OF FELGER
Opinion of the Court
¶34 Moreover, although the goals of “efficient
administration and finality” may be intended to benefit creditors,
their purpose is to secure a distribution from the decedent’s estate
and to resolve any further “disruptions to possession of the
decedent’s property.” Id.; see also § 14-3909 (liability of improperly
paid claimant). In other words, creditors are entitled to timely and
conclusively receive that which they are owed. However, that is not
the way in which Ader attempts to use this policy; rather, she is
trying to use it as a basis for allowing her untimely creditor claims to
proceed.
¶35 As mentioned above, creditors have a responsibility to
timely pursue their claims. See § 14-1102(B)(3); Estate of Baca, 984
P.2d 782, ¶¶ 24-25. The Joint Editorial Board of the Uniform Probate
Code recognized a problem similar to the one identified by Ader:
“Successors who are willing to delay receipt and enjoyment of
inheritances may consider waiting out the non-claim period running
from death simply to avoid any public record of an administration
that might alert known and unknown creditors to pursue their
claims.” Unif. Prob. Code § 3-803 cmt. However, the Board
concluded that this scenario was “unlikely” because “unpaid
creditors of a decedent are interested persons . . . who are qualified
to force the opening of an estate for purposes of presenting and
enforcing claims.” Id.; see also A.R.S. § 14-3203(A) (allowing “any
creditor” to seek appointment as personal representative). Ader
knew within a week of his death that Dan Felger had died. She had
an obligation to promptly pursue any potential claims but failed to
do so.
Summary
¶36 Claims against an estate that arose before the decedent’s
death must be presented within the time limits of § 14-3803(A).
Because such claims cannot be presented until a personal
representative has been appointed for the estate, § 14-3104, the onus
is on creditors to initiate probate proceedings when none are
forthcoming, see § 14-3203(A)(7). Otherwise, if a personal
representative is not appointed within two years of the decedent’s
death, most claims cannot be presented against the estate. § 14-
3108(4). And, despite the fact that a personal representative has not
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ADER v. ESTATE OF FELGER
Opinion of the Court
been appointed, § 14-3803(A) bars most claims when brought more
than two years after the decedent’s death. See § 14-3108(4).
Accordingly, pursuant to § 14-3803(A) and § 14-3108(4), Ader’s
claims against the Estate are time-barred. The trial court therefore
did not err in granting summary judgment. See Cohen, 233 Ariz. 45,
¶ 6, 308 P.3d at 1198.
Motion for a New Trial
¶37 Ader lastly asserts the trial court erred in denying her
motion for a new trial. Specifically, she contends the court “erred by
entering judgment for the Estate of Dan Felger when it lacked
personal jurisdiction over that party.” We generally review a trial
court’s denial of a motion for a new trial for an abuse of discretion.
Sandretto v. Payson Healthcare Mgmt., Inc., 234 Ariz. 351, ¶ 8, 322 P.3d
168, 172 (App. 2014). However, jurisdiction is a question of law
subject to our de novo review. Duwyenie v. Moran, 220 Ariz. 501, ¶ 7,
207 P.3d 754, 756 (App. 2009).
¶38 As part of its summary-judgment ruling, the trial court
“note[d] that the estate of a deceased is not a proper party in a civil
matter” and “the personal representative of the estate is the proper
party.” See § 14-3110; Ariz. R. Civ. P. 17(c). However, relying on
Rule 17(a), the court stated, “[W]hen an action is not filed against the
real party in interest, the remedy is to allow the real party in interest
to be substituted in rather than dismissing the action.” And the
court concluded that “resolution of whether the nonclaim statute
bars the claims against the Estate should [not] be postponed until
after a personal representative is appointed” because “the claims are
time barred in part because the time to have a personal
representative appointed has passed.”
¶39 Ader apparently relied on this determination as the
basis for her motion for a new trial. She pointed out the trial court
“found that a personal representative can never be appointed [for
the Estate] under any circumstances because of the two year
limitation” in § 14-3108(4). She then reasoned that “there can never
be an appropriate real party in interest substituted in this case” and
“the Estate of Dan Felger” as named in her amended complaint “is
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ADER v. ESTATE OF FELGER
Opinion of the Court
obviously not a proper party.” She therefore concluded, “[I]t is error
and contrary to law to enter any type of judgment for the Estate.”
¶40 Ader seems to reurge this argument on appeal. She
maintains the trial court had “no personal jurisdiction to enter
judgment on behalf of the Estate.” She additionally asserts the court
did not have subject matter jurisdiction over the “probate claims.”
She therefore contends “the Rule 54(b) judgment is void.”9
¶41 We recognize the initial logic of Ader’s personal
jurisdiction argument. See Ariz. R. Civ. P. 54(b) (referring to
judgment involving “parties”); see also Ariz. R. Civ. P. 17(c).
However, improperly naming a defendant in a complaint does not
somehow defeat otherwise proper personal jurisdiction. See Ariz. R.
Civ. P. 10(f) (when name of defendant unknown to plaintiff,
defendant may be designated “by any name” and “amended
accordingly”); see also Morgan Bank (Delaware) v. Wilson, 164 Ariz.
535, 537, 794 P.2d 959, 961 (App. 1990) (personal jurisdiction may be
waived). As explained above, a personal representative can still be
appointed for the Estate; Ader’s claims, however, could not be
presented in that tardy proceeding. See § 14-3108(4). It would thus
be futile to name a personal representative for the sole purpose of
9Felger contends this argument is waived because it was first
asserted in Ader’s motion for a new trial. See Conant v. Whitney, 190
Ariz. 290, 293, 947 P.2d 864, 867 (App. 1997). In response, Ader
correctly points out that challenges to a court’s subject matter
jurisdiction can be asserted at any time. See Health for Life Brands,
Inc. v. Powley, 203 Ariz. 536, ¶ 12, 57 P.3d 726, 728 (App. 2002). But
the thrust of her argument appears to be one of personal jurisdiction,
which can be waived. See Morgan Bank (Delaware) v. Wilson, 164
Ariz. 535, 537, 794 P.2d 959, 961 (App. 1990). Moreover, we question
whether Ader can properly challenge the court’s personal
jurisdiction over a defendant she named in her amended complaint.
Cf. Bohreer v. Erie Ins. Exch., 216 Ariz. 208, ¶ 24, 165 P.3d 186, 193
(App. 2007) (when party consents to personal jurisdiction, party
estopped from later denying such jurisdiction). Nevertheless, we do
not resolve these issues and instead address the merits of Ader’s
argument.
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ADER v. ESTATE OF FELGER
Opinion of the Court
entering summary judgment in favor of the Estate. Cf. Yamamoto v.
Santa Cruz Cty. Bd. of Supervisors, 124 Ariz. 538, 539, 606 P.2d 28, 29
(App. 1979) (affirming entry of summary judgment in favor of
superior court because court not sui juris and not proper defendant).
¶42 Ader’s argument contesting the trial court’s subject
matter jurisdiction seems to be based on an imprecise understanding
of the concept. Older case law has used the phrase subject matter
jurisdiction “somewhat loosely,” for instance, to describe a “court’s
inability to enter a valid judgment.” State v. Maldonado, 223 Ariz.
309, ¶¶ 15-16, 223 P.3d 653, 655 (2010). This appears to be the basis
of Ader’s argument.
¶43 However, “‘[i]n current usage,’” subject matter
jurisdiction “‘refers to a court’s statutory or constitutional power to
hear and determine a particular type of case.’” In re Marriage of
Thorn, 235 Ariz. 216, ¶ 17, 330 P.3d 973, 977 (App. 2014), quoting
Maldonado, 223 Ariz. 309, ¶ 14, 223 P.3d at 655. The trial court had
jurisdiction over this civil action in which Ader sought damages for
various claims, including breach of fiduciary duty and fraudulent
concealment. See Ariz. Const. art. VI, § 14; Gatecliff v. Great Republic
Life Ins. Co., 154 Ariz. 502, 507, 744 P.2d 29, 34 (App. 1987). And,
although the probate of the Estate of Dan Felger is not the focus of
this action, the trial court also had subject matter jurisdiction over
probate-related issues. See A.R.S. § 14-1302(A)(1).
¶44 Ader nevertheless suggests the trial court should have
dismissed without prejudice her claims against Felger rather than
entering a judgment on the merits. “‘A judgment on the merits is
one which is based on legal rights as distinguished from mere
matters of practice, procedure, jurisdiction or form.’” Columbia
Parcar Corp. v. Ariz. Dep’t of Transp., 193 Ariz. 181, ¶ 15, 971 P.2d
1042, 1045 (App. 1999), quoting Fairmont Aluminum Co. v. Comm’r of
Internal Revenue, 222 F.2d 622, 625 (4th Cir. 1955). Whether Ader’s
claims against Felger are time-barred is a legal question, see Montano,
202 Ariz. 544, ¶ 4, 48 P.3d at 496, the answer to which resolves her
rights in this matter, cf. Albano v. Shea Homes Ltd. P’ship, 227 Ariz.
121, ¶ 24, 254 P.3d 360, 366 (2011) (“[A] statute of repose defines a
substantive right.”). Although the court’s summary judgment was a
final judgment on the merits, see El Paso Nat. Gas Co. v. State, 123
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ADER v. ESTATE OF FELGER
Opinion of the Court
Ariz. 219, 222, 599 P.2d 175, 178 (1979), we cannot say the court
abused its discretion in denying Ader’s motion for a new trial.10 See
Sandretto, 234 Ariz. 351, ¶ 8, 322 P.3d at 172; Duwyenie, 220 Ariz. 501,
¶ 7, 207 P.3d at 756; see also Pi’Ikea, LLC v. Williamson, 234 Ariz. 284,
n.7, 321 P.3d 449, 454 (App. 2014) (we may affirm trial court’s ruling
if correct for any legal reason).
Attorney Fees on Appeal
¶45 Felger has requested attorney fees on appeal pursuant
to A.R.S. § 12-341.01. That statute provides: “In any contested
action arising out of a contract, express or implied, the court may
award the successful party reasonable attorney fees.” § 12-
341.01(A). Felger has the burden of proving entitlement to an award
under § 12-341.01(A). See Woerth v. City of Flagstaff, 167 Ariz. 412,
419, 808 P.2d 297, 304 (App. 1990).
¶46 The “contract” on which Felger relies as the basis for the
award is presumably the operating agreements for the limited
liability companies. However, the parties to the operating
agreements for both Bella Vista Townhomes and MV Apartments
were Ader, Rosberg, and the Felger Family Trust—and Dan Felger
signed those agreements as trustee of the trust. Neither Dan Felger
in his individual capacity nor Carolyn Felger in her individual
capacity was a party to those agreements. And, as Ader points out,
she alleged no breach-of-contract claims against the Estate.
Accordingly, Felger has failed to show that Ader’s claims against the
Estate arose from the operating agreements. See Chaurasia v. Gen.
Motors Corp., 212 Ariz. 18, ¶¶ 25-27, 126 P.3d 165, 173 (App. 2006)
(§ 12-341.01(A) permits recovery for non-contract action if action
10 In her reply brief, Ader also asserts that “the entry of
judgment for Carolyn Felger, on community property grounds, was
invalid because the trial court did not have jurisdiction to enter a
judgment in favor of the Felger Estate.” But her argument was
raised too late. See Dawson v. Withycombe, 216 Ariz. 84, ¶ 91, 163
P.3d 1034, 1061 (App. 2007) (argument not raised in opening brief
waived). And, in any event, we disagree that the court lacked
jurisdiction to enter judgment in favor of the Estate.
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ADER v. ESTATE OF FELGER
Opinion of the Court
could not exist “but for” breach of contract; however, attorney fees
not recoverable if contract only serves as “factual predicate” for
action).
¶47 Felger nevertheless points out that Ader relied on § 12-
341.01 as a basis for attorney fees in her amended complaint. Felger
therefore reasons that they “are entitled to recover their attorney’s
fees for successfully defending against such claims.” But Felger has
cited no authority to support this proposition, and we are aware of
none. Notably, Ader’s amended complaint included breach-of
contract-claims as to other defendants.
¶48 In any event, “an award of fees under . . . § 12-341.01 is
discretionary; it is not an entitlement.” Munger Chadwick, P.L.C. v.
Farwest Dev. & Constr. of the Sw., LLC, 235 Ariz. 125, ¶ 14, 329 P.3d
229, 232 (App. 2014); see also Schwab Sales, Inc. v. GN Constr. Co., 196
Ariz. 33, ¶ 11, 992 P.2d 1128, 1132 (App. 1998) (even if claim arises
out of contract, award under § 12-341.01 is discretionary). We
therefore exercise our discretion and deny Felger’s request for
attorney fees.
Disposition
¶49 For the reasons stated above, we affirm the judgment
and the denial of the motion for a new trial. As the prevailing party,
Felger is entitled to costs on appeal, see A.R.S. § 12-341, contingent
upon compliance with Rule 21, Ariz. R. Civ. App. P.
23