DocketNumber: 2017-SC-000669-DG
Citation Numbers: 562 S.W.3d 911
Judges: Vanmeter
Filed Date: 12/13/2018
Status: Precedential
Modified Date: 10/15/2022
By statute, a tort claimant's right of action against a tortfeasor generally survives the latter's death. KRS 1 411.140. The issue we resolve in this case is whether the *912Court of Appeals erred in affirming the Pulaski Circuit Court's dismissal of Steve Gregory's claim against the heirs of Harold Hardgrove (the "Decedent") seeking to enforce a judgment lien against real property owned by the Decedent at his death. The Court of Appeals affirmed the trial court's dismissal of Gregory's complaint seeking to intervene in a foreclosure action filed by Cumberland Valley National Bank and Trust Company ("CVNB"). In its foreclosure action, CVNB sought to enforce its mortgages against the Decedent's real property. The trial court held that Gregory failed to state a claim for which relief could be granted because at the time of death, the Decedent's real property passed to his heirs at law immediately, subject only to the claims of "creditors." Finding that Gregory's pending tort claim against the Decedent did not qualify him as a "creditor," the trial court dismissed his claim. The Court of Appeals affirmed. Upon review, we conclude Gregory's tort claim, which accrued prior to the date of death, made Gregory a creditor of Hardgrove and now his Estate. Accordingly, we reverse and remand.
I. Factual and Procedural Background.
In the fall of 2008, Gregory was injured while attending races at Lake Cumberland Speedway, owned by Hardgrove. Gregory filed a civil action against Hardgrove in March 2009.
At the time of the Decedent's death, as listed on the Estate's Inventory and Appraisement, he owned three parcels of real property, with an estimated value of $310,000.
In a separate action filed in February 2013,
Gregory later filed a motion to amend his intervening complaint to include the Decedent, Brandon, as Administrator of the Estate, and Hardgrove's heirs, Brandon and Casey.
II. Standard of Review.
"Since a motion to dismiss for failure to state a claim upon which relief may be granted is a pure question of law, a reviewing court owes no deference to a trial court's determination; instead, an appellate court reviews the issue de novo." Fox. v. Grayson,
III. Analysis.
Our starting point is KRS 411.140, which provides,
No right of action for personal injury or for injury to real or personal property shall cease or die with the person injuring or injured, except actions for slander, libel, criminal conversation, and so much of the action for malicious prosecution as is intended to recover for the personal injury. For any other injury an action may be brought or revived by the personal representative, or against the personal representative, heir or devisee, in the same manner as causes of action founded on contract.
(emphasis added). We believe it significant that the legislature included a right of action not only against the personal representative, but also against a decedent's heirs. This statute modified the common law rule that claims founded on tort died with the person liable. James R. Merritt, 2 Ky. Practice, Prob. Practice & Proc., § 1416 (2d ed. 1984). In this case, Gregory had filed his tort action prior to the Decedent's death and timely revived the action against the Administrator. Gregory then proceeded to obtain a judgment in that action and filed a judgment lien.
Our case law has long recognized that once a judgment is obtained, real property of one who dies intestate may be sold by order of the court in a settlement suit. Heeter v. Jewell,
While KRS 391.010 codifies that the rights of heirs as to real property vest immediately upon an intestate decedent's death, this statute must be considered in conjunction with not only the survival statute, KRS 411.140, and the estate settlement statutes, KRS 395.510 and 395.515, but also KRS Chapter 396, Claims against Decedents' Estates.
Before considering the impact of the estate settlement statutes, we must acknowledge KRS Chapter 396, governing Claims against Decedents' Estates, includes claims of the type made by Gregory. Specifically,
All claims against a decedent's estate which arose before the death of the decedent, ... whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal basis, if not barred earlier by other statute of limitations, are barred against the estate, the personal representative, and the heirs and devisees of the decedent, unless presented within six (6) months after the appointment of the personal representative[.]
KRS 396.011(1) (emphasis added). In other words, a properly presented unliquidated tort claim which arose before the death of the decedent may be brought against the estate, the personal representative, and heirs. Again, the legislature has included a right of action against the decedent's heirs. In this case, Gregory's unliquidated tort claim was presented by virtue of the revival of the action. KRS 396.015(2). Then, when reduced to judgment against the personal representative, that claim became an allowed claim. KRS 396.055(2).
Finally, once a surviving claim has been properly revived and reduced to judgment, KRS 395.510 and 395.515 describe the manner in which real property owned by a decedent at the time of his death may be sold as part of an estate settlement. KRS 395.510 states:
(1) A representative, legatee, distributee or creditor of a deceased person may bring an action in circuit court for the settlement of his estate provided that no such suit shall be brought by any of the parties named except the personal representative until the expiration of six months after the qualification of such representative.
(2) The representatives of the decedent, and all persons having a lien upon or an interest in the property left by the decedent, or any part thereof, and the creditors of the decedent, so far as known to the plaintiff, must be parties to the action as plaintiffs or defendants.
(emphasis added). Further, KRS 395.515 outlines the proper contents of a settlement petition, including the circumstance of when real estate may be sold:
[I]f it appears that there is a genuine issue concerning the right of any creditor, beneficiary or heir-at-law to receive payment or distribution, or if it appears that there is a genuine issue as to what constitutes a correct and lawful settlement of the estate, or a correct and lawful distribution of the assets, such issues may be adjudicated by the court; and, if it shall appear that the personal estate is insufficient for the payment of all debts, the court may order the real property descended or devised to the heirs or devisees who may be parties to the action, or so much *915thereof as shall be necessary, to be sold for the payment of the residue of such debts.
(emphasis added). See Auxier v. Clarke,
Wood v. Wingfield,
The Hardgroves have argued, and the trial court and the Court of Appeals held, that Gregory, as a tort claimant whose claim was not brought to judgment until after Hardgrove's death, is not a creditor. This assertion is erroneous. While KRS 395.510 and 395.515 do not define the term "creditor," the Estate itself cites to the definitions section of the Uniform Commercial Code ("UCC"), KRS 355.1-201, which defines "creditor" to "include[ ] a general creditor[.]" A general creditor, also known as an unsecured creditor, may not have preferential rights to the property, but remains a creditor. See Creditor, Black's Law Dictionary (10th ed. 2014). Notably, Black's Law Dictionary also defines a creditor as "[a] person or entity with a definite claim against another, esp. a claim that is capable of adjustment and liquidation."
Once filed, a tort claim is capable of liquidation, and can be reduced to a judgment at any time. "In tort cases, the relationship of debtor and creditor arises the moment the cause of action accrues." 21 C.J.S. Creditor and Debtor § 1 (updated Sept. 2018). In the case at hand, Gregory's action arose when he was injured at the Speedway in 2008, and he filed the lawsuit in 2009, while Hardgrove was still alive. Accordingly, Gregory became a creditor of the Decedent when the tort occurred, albeit one with an unliquidated claim.
IV. Conclusion.
In this case, we hold that Gregory's compliance with KRS 411.140, 396.011, 396.015, and 396.055, establishes his status as a creditor of the Estate of Harold Hardgrove and entitlement to a remedy under KRS 395.510, et seq. The Pulaski Circuit Court erred in dismissing his intervening complaint, as did the Court of Appeals in affirming that dismissal. For the foregoing reasons, we reverse and remand this matter to the Pulaski Circuit Court for further proceedings consistent herewith.
All sitting. All concur.
Pulaski Cir. Ct., Div. 1, 09-CI-00374.
Under KRS 396.015(2), a separate proof a claim was unnecessary since Gregory's action was pending at the time of death and substitution of the personal representative, or motion therefore, constituted presentment of the claim.
The Decedent's personal property was valued at approximately $23,000.
Pulaski Cir. Ct., Div. 2, 2013-CI-00246.
Gregory properly sued the estate, all heirs and the personal representative of the estate as "the heirs ... are liable for the obligations of their decedent ... to the extent of the assets received and this liability continues after alienation of the property. The representative may be joined as a party defendant[.]" James R. Merritt, 2 Ky. Practice, Prob. Practice & Proc., § 1548 (2nd ed. 1984).
Kentucky Rules of Civil Procedure.
Although an issue of first impression in the Commonwealth, several other courts have held that tort claimants are considered creditors. See In re Placid Oil Co.,