Bozeman Deaconess Hospital v. Estate of Rosenberg ( 1987 )

No. 8 6 - 3 3 1
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
BOZEMAN DEACONESS HOSPITAL,
Petitioner and Appellant,
-vs-
IN RE THE MATTER OF THE ESTATE OF
OSCAR ROSENBERG, Deceased,
Defendant and Respondent.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Frank M. Davis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Morrow, Sedivy & Bennett; Edmund P. Sedivy, Jr. argued,
Bozeman, Montana
For Respondent:
Larry Moran argued, Bozeman, Montana
Submitted: December 2, 1 9 8 6
Decided: F e b r u a r y 3 , 1987
Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
Petitioner Bozeman Deaconess Hospital appeals the April
21, 1986, order of the Eighteenth Judicial District Court
awarding summary judgment in favor of the respondent. We
affirm.
This case is an action filed by the hospital against the
estate of Oscar Rosenberg seeking payment of $11,583.05 plus
interest for hospital services provided to Rosenberg prior to
his death.
Oscar Rosenberg was admitted to the Bozeman Deaconess
Hospital Extended Care Facility in 1976. In October of 1980,
Rosenberg nearly drowned in a bathtub at the facility.
Complications arising from the accident resulted in
Rosenberg's death November 4, 1980. Elwin Kundert,
Rosenberg ' s nephew, who had power of attorney for Rosenberg
since 1975, was appointed personal representative.
Two hospital bills amounting to nearly $28,000 were sent
to Kundert's address on November 9, 1980. The hospital
business office manager's affidavit states that Kundert was
in the business office several times during the two months
following Rosenberg's death to receive additional copies of
the bills. Kundert admits that he received the hospital
bills shortly after Rosenberg's death.
Publication of Notice to Creditors began on December 2,
1980. None of the creditors filed formal creditor's claim
forms; rather they sent their bills to Kundert. Kundert paid
all creditors except the hospital.
Section 72-3-805, MCA, provides that a claim against the
estate is disallowed if the personal representative fails to
take action on the claim within 60 days of receipt. In this
case, Kundert took no action on the hospital's bills.
However, the hospital apparently believed Kundert planned on
paying the bills because he had visited the hospital business
office several times to make sure he had all the bills and
said nothing about denying payment of any claim.
When Kundert failed to notify the hospital within 60
days of presentation of the bills, the hospital had another
60 days to petition the court to challenge the disallowance
pursuant to S 72-3-805, MCA. The hospital did not meet this
deadline.
Medicare covered $17,307 of Rosenberg's $27,290 hospital
bill. The remainder, $9,983, was listed by Kundert as an
expense of last illness on estate tax forms filed with the
State of Montana and the IRS. This representation conflicts
with Kundert's failure to pay the hospital.
Kundert, representing the estate, filed a wrongful death
action on June 17, 1982, against the hospital alleging the
hospital's negligence caused Rosenberg's death. The hospital
failed to counterclaim for expenses incurred in treating
Rosenberg. The jury found the hospital 100% negligent in
causing Rosenberg's death and awarded $31,247 to the estate.
On February 16, 1984, the hospital filed a formal
creditor's claim in district court against the estate for
$11,583. The estate filed a denial of the claim on March 1,
1984, which asserted such claim was barred by collateral
estoppel and statute of limitation. After denial of its
claim, the hospital petitioned district court for allowance
of the claim.
Following discovery, both parties moved for summary
judgment. The court awarded summary judgment in favor of the
estate, finding that the hospital's claim was barred for
failure to meet the time limits contained in 5 72-3-805. In
the court's supporting memorandum, the court noted that
non-action on a claim by a personal representative
conclusively establishes disallowance after 60 days and
estoppel may not run against the personal representative.
One week later, Northwestern Bank v. Coppedge (Mont. 1986),
713 P.2d 523, 43 St.Rep. 102, held that an estate may be
estopped from raising a non-claim defense if the estate made
representations to a creditor that a claim need not be filed.
Following the Coppedge decision, the hospital filed a
motion for reconsideration and to amend judgment. The
District Court denied the motion and this appeal followed.
On appeal, we address the following issue:
1) Whether the District Court erred in granting summary
judgment in favor of the estate?
The statute at the center of the parties' dispute is §
72-3-805(1), MCA, which provides:
As to claims presented in the manner described in
72-3-804 within the time limit prescribed in
72-3-803, the personal representative may mail a
notice to any claimant stating that the claim has
been disallowed. If, after allowing or disallowing
a claim, the personal representative changes his
decision concerning the claim, he shall notify the
claimant. The personal representative may not
change a disallowance of a claim after the time for
the claimant to file a petition for allowance or to
commence a proceeding on the claim has run and the
claim has been barred. Every claim which is
disallowed in whole or in part by the personal
representative is barred so far as not allowed
unless the claimant files a petition for allowance
in the court or commences a proceeding against the
personal representative not later than 60 days
after the mailing of the notice of disallowance or
partial allowance if the notice warns the claimant
of the impending bar. Failure of the personal
representative to mail notice to a claimant of
action on his claim for 60 days after the time for
original presentation of the claim has expired has
the effect of a notice of disallowance.
In this case, Kundert received copies of the hospital
bills. There is no dispute that the hospital properly filed
a claim. The estate contends 5 72-3-805, MCA, is a non-claim
statute not subject to equitable considerations. The
hospital argues that the estate should be estopped from
denying its claim in view of Kundert's representations and
subsequent acknowledgement of the debt on estate tax forms.
In Coppedge, supra, Northwestern Bank never filed a
creditor's claim with the estate nor did it commence a court
proceeding to protect its claim. Instead, bank
representatives negotiated with the estate's attorneys for
payment or renewal of the note owed the bank. In finding
that an estoppel issue had been raised, this Court stated:
Northwestern Bank contends and the trial judge
found that the estate, by and through its
attorneys, knew of the bank's claim against the
estate. Such knowledge, however, does not dispense
with Northwestern Bank's need to file a creditor's
claim. If Northwestern Bank can prove that the
attorneys for the estate represented that because
they knew of Northwestern Bank's claim, no
creditor's claim need be filed and if the Bank
relied on this representation, the estate could be
estopped from raising Northwestern Bank's failure
to file a creditor's claim as a defense. Norman v.
State (1979), 182 Mont. 439, 443-444, 597 P.2d 715,
718. We therefore remand for a hearing to
determine whether the estate, by or through its
attorneys, represented to Rank that it need not
file a creditor's claim.
Coppedge was issued the week following the District
Court order granting summary judgment to the estate. On
motion for reconsideration, a new judge assumed jurisdiction
and affirmed the summary judgment finding insufficient facts
to support estoppel. We agree that the facts do not raise
the issue of estoppel and summary judgment was properly
granted as a matter of law.
The elements of proof for equitable estoppel are:
1) false representation or concealment of facts;
2) made with actual/or constructive knowledge of the
facts;
3) to a party without knowledge, or means of knowledge
of the facts;
4) with intention or expectation that the party will
rely on such representations;
5) the party does rely and act upon such
representations;
6) causing prejudice to the party.
Wassberg v. Anaconda Copper Co. (Mont. 1985), 697 P.2d 909,
42 St.Rep. 388.
The affidavit of the hospital business office manager
states: I [Kundert] told me that he was handling Mr.
'
Rosenberg's estate and he needed copies for the estate so
that the estate could pay the bill." This is the only
evidence produced by the hospital as to estoppel. Kundert's
deposition testimony is that he was undecided whether to pay
the hospital bill at the time he received it. There is no
evidence as to elements 1, 2, and 4, above set forth.
Summary judgment against the hospital on the issue of
estoppel was proper. Estoppel will be sustained only upon
kc- * 3.
clear and convincing evidence. Kenneth D. Collins Agency v.
Hagerott (Mont. 1984), 684 P.2d 487, 41 St.Rep. 1375.
The hospital contends Kundert waived the statute of
limitation on the claim by subsequent acknowledgment of the
debt. Kundert listed the hospital bill as a medical expense
on estate tax forms filed August 25, 1981, and as damages in
the wrongful death suit filed in June, 1982.
Prior to our decision in Coppedge, supra, this Court
strictly construed Montana's non-claim statute relating to
filing of creditor's claims. Failure to meet the time limits
for filing a claim forever barred such claim. Baker National
Bank v. Henderson (1968), 151 Mont. 526, 445 ~ . 2 d 574.
Coppedge carved out a single exception for equitable
estoppel.
One of the underlying purposes of the Uniform Probate
Code (UPC) listed in § 72-1-102, MCA, is to "promote a speedy
and efficient system for liquidating the estate of the
decedent and making distribution to its successors.'' This
purpose is clearly supported by the presumed disallowance
provision in § 72-3-805, MCA, and the non-claims bar in S
72-3-803, MCA.
There is no provision in the UPC extending the time for
filing or contesting claims based upon subsequent
acknowledgment of debt. Section 72-3-802, MCA, does allow
the personal representative to waive the limit with the
consent of all successors. There is no evidence in this case
that Kundert waived the time limit as to the hospital's
claim.
Contrary to the hospital's assertion, Kundert's
subsequent acknowledgment of the hospital claim is not
relevant for estoppel purposes. Kundert's acknowledgment of
the hospital claim occurred months after the time limit had
run for contesting a claim, and his subsequent acknowledgment
does not provide evidence as to his intent at the time he
spoke with the hospital's business office manager. There
being no evidence to support the elements of estoppel, the
presumed disallowance provision forever bars the hospital's
claim.
The District Court is affirm
We concur:
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IN TH.E SUPREME COURT OF THE STATE OF M O N T A ~ ~ ? ~ ~ ' r-ij2
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MAR 2 -2 1,287
BOZEMAN DEACONESS HOSPITAL,
Petitioner and Appellant,
O R D E R
IN RE THE MATTER OF THE ESTATE OF
OSCAR ROSENBERG, Deceased,
Defendant and Respondent.
Our opinion in the case of Bozeman Deaconess Hospital v.
In Re the Matter of the Estate of Oscar Rosenberg (Mont.
1.987), - P. 2d -, 44 St.Rep. 195, requires correction.
The following paragraphs shall be del-eted from the
opinion :
Section 72-3-805, MCA, provides that a claim
againqt the estate is disallowed if the personal
re.presentative fails to take action on the claim
within 60 days of receipt. In this case, Kundert
took no action on the hospital's bills. However,
the hospital apparently believed Kundert planned on
paying the bills because he had visited the
hospital business office several times to make sure
he had all the bills and said nothing about denying
payment of any claim.
When Kundert failed to notify the hospital within
60 days of presentation of the bills, the hospital
had another 60 days to petition the court to
challenge the disallowance pursuant to § 72-3-805,
MCA. The hospital did not meet this deadline.
Following discovery, both parties moved for summary
judgment. The court awarded summary judgment in
favor of the estate, finding that the hospital's
claim was barred for failure to meet the time
limits .contained in S 7 2 - 3 - 8 0 5 . In the court's
supporting memorandum, the court noted that
non-action on a claim by a personal representative
conclusively establishes disallowance after 60 days
and estopped may not run against the personal
representative. One week later, Northwestern Bank
v. Coppedge (Mont. 1986), 713 P.2d 523, 43 St.Rep.
102, held that an estate may be estopped from
raising a non-claim defense if the estate made
representations to a creditor that a claim need not
be filed.
The above paragraphs shall be replaced by the following:
Section 72-3-805, MCA, provides that a claim
against the estate is disallowed if the personal
representative fails to take action on the claim
for 60 days after the time for original
presentation of the claim has expired. In this
case, Kundert took no action on the hospital's
bills. However, the hospital apparently believed
Kundert planned on paying the bills because he had
visited the hospital business office several times
to make sure he had all the bills and said nothing
about denying payment of any claim.
When Kundert failed to notify the hospital within
60 days after the time for original presentation of
the claim expired, the hospital had another 60 days
to petition the court to challenge the disallowance
pursuant to S 72-3-805, MCA. The hospital did not
meet this deadline.
Following discovery, both parties moved for summary
judgment. The court awarded summary judgment in
favor of the estate, finding that the hospital's
claim was barred for failure to meet the time - -
limits contained in S 72-3-805. In the court's
supporting memorandum, the court noted that
non-action on a claim by a personal representative
conclusively establishes disallowance after 60 days
from the time for original presentation of the
claim has expired and estoppel may not run against
the personal representative. One week later,
Northwestern Bank v. Coppedge (Mont. 1986), 713
P.2d 523, 43 St.Rep. 102, held that an estate may
be estopped from raising a non-claim defense if the
e s t a t e -made r e p r e s e n t a t i o n s t o a creditor that a
c l a i m need n o t be f i l e d .
These c o r r' e c t i o n s d o n o t a f f e c t t h e outcome o f t h e c a s e a n d
t h e r e s u l t remains t h e same.
*r
DATED t h i s p H d a y