Opinion
No. 352026
12-16-2021
IN RE ESTATE OF Kinzie Renee CARLSEN. Mindy Carlsen and Allen Carlsen, Co-Personal Representatives of the Estate of Kinzie Renee Carlsen, Appellants, v. Southwest Michigan Emergency Services, PC, Appellee.
Fieger, Fieger, Kenney & Harrington, PC (by Geoffrey N. Fieger, Southfield, and Sima G. Patel, Troy, Oakland County) for petitioner. Collins Einhorn Farrell PC, Southfield (by Michael J. Cook and Trent B. Collier ) for respondent.
Fieger, Fieger, Kenney & Harrington, PC (by Geoffrey N. Fieger, Southfield, and Sima G. Patel, Troy, Oakland County) for petitioner.
Collins Einhorn Farrell PC, Southfield (by Michael J. Cook and Trent B. Collier ) for respondent.
Before: K. F. Kelly, P.J., and Jansen and Rick, JJ.
Jansen, J. Appellants, Mindy Carlsen and Allen Carlsen, as co-personal representatives of the estate of their daughter, appeal by leave granted the probate court order denying their petition to strike the notice of contingent claim filed by appellee, Southwestern Michigan Emergency Services, PC. The contingent claim was appellee's request for prevailing-party costs and fees under MCR 2.625(A)(1), after a jury in the underlying medical malpractice action rendered a verdict of no cause of action in appellee's favor. The sole issue on appeal is whether appellee presented its contingent claim within four months after it arose, as required by MCL 700.3803(2)(b). We affirm. I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
See In re Carlsen Estate , 507 Mich. 892, 955 N.W.2d 896 (2021).
This case arises from the Kalamazoo Circuit Court's award of taxable costs to appellee after it prevailed in a medical malpractice case involving the death of seven-month-old Kinzie Renee Carlsen, appellant's daughter. Kinzie died at Bronson Methodist Hospital of staphylococcal sepsis and meningitis. Appellants, as co-personal representatives of Kinzie's estate, filed a medical malpractice complaint against several defendants involved in Kinzie's medical treatment, including appellee. By the time the case reached trial, the only remaining defendant was appellee. On June 14, 2019, a jury returned a verdict of no cause of action in appellee's favor.
Appellee is a corporation that runs Bronson's emergency room. Carlsen Estate v. Southwestern Mich. Emergency Servs., PC , 338 Mich.App. 678, 685 n. 2, 980 N.W.2d 785 (2021).
Appellants appealed this decision as of right. This Court issued a published decision affirming in part, reversing in part, and remanding for further proceedings. Id. at 684, 980 N.W.2d 785. Relevant to the instant appeal, this Court affirmed the circuit court's award of taxable costs to appellee but reversed the amount of some of the costs awarded and remanded for an evidentiary hearing on others. Id. at 711, 980 N.W.2d 785.
As the prevailing party in the medical malpractice case, appellee moved in the circuit court for costs and fees under MCR 2.625(A)(1) and filed a notice of contingent claim in the probate court. Appellants petitioned the probate court to strike appellee's notice of contingent claim, arguing that MCL 700.3803(2)(b) barred the claim because it had not been filed within four months after it arose. Appellants initially argued that appellee's contingent claim arose after the September 4, 2012 publication of notice to the estate's creditors. Ultimately, appellants contended that appellee's contingent claim arose on January 25, 2013, when appellee had been served the estate's notice of intent to sue and knew that it might have a claim for costs and fees. Accordingly, appellants argued, the four-month period during which appellee was required to present a contingent claim expired on May 25, 2013. In addition, appellants argued that appellee knew or should have known that it had a contingent claim by July 25, 2013, when the estate filed its medical malpractice complaint, or at the latest, by September 10, 2013, when appellee answered the complaint and requested costs and fees.
Appellee's position was that it did not have a valid contingent claim until it won the medical malpractice suit and the circuit court entered the judgment of no cause of action. Appellee presented its notice of contingent claim to the probate court. After the circuit court granted its motion for prevailing-party costs and ordered the estate to pay in excess of $166,000, the contingency disappeared, and appellee presented a notice of claim to the probate court a week after entry of the costs award.
Alternatively, appellee noted that the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq. , provides that written notices of claims may be presented to the personal representative of the estate or filed with the probate court. If filing the medical malpractice complaint gave rise to a contingent claim, then appellee's answer, indicating that it thought the claim was frivolous and requesting costs and fees, was sufficient to present notice of a contingent claim to the personal representatives.
The probate court concluded that appellee's contingent claim arose when the jury returned its verdict of no cause of action in the circuit court on June 14, 2019 and ruled that appellee's July 1, 2019 notice of contingent claim was timely. The probate court further found that the contingency was removed when the circuit court issued its order granting appellee's request for taxable costs and that appellee filed a notice of claim within 14 days after that order was entered. The probate court pronounced itself satisfied that this met the definition of "claim" in MCL 700.1103(g) and issued a corresponding order denying the petition to strike.
Under MCL 700.1103(g), the term "claim"
includes, but is not limited to, in respect to a decedent's or protected individual's estate, a liability of the decedent or protected individual, whether arising in contract, tort, or otherwise, and a liability of the estate that arises at or after the decedent's death or after a conservator's appointment, including funeral and burial expenses and costs and expenses of administration. Claim does not include an estate or inheritance tax, or a demand or dispute regarding a decedent's or protected individual's title to specific property alleged to be included in the estate.
Appellants filed, and the probate court denied, a motion for reconsideration, and appellants sought leave to appeal in this Court. This Court denied appellants’ application for leave to appeal "for lack of merit in the grounds presented." In re Carlsen Estate , unpublished order of the Court of Appeals, entered April 24, 2020 (Docket No. 352026). Appellants moved for reconsideration of this Court's order, arguing that, on the basis of recent precedent, it was improper to deny an interlocutory appeal "for lack of merit in the grounds presented" because doing so was, in effect, a " ‘peremptory affirmance’ and operate[d] as an order on the merits." This Court denied appellants’ motion for reconsideration. In re Carlsen Estate , unpublished order of the Court of Appeals, entered May 28, 2020 (Docket No. 352026). Subsequently, appellants sought leave to appeal this Court's decision in the Michigan Supreme Court. In lieu of granting the application, the Supreme Court remanded the case to this Court for consideration as on leave granted. In re Carlsen Estate , 507 Mich. 892, 955 N.W.2d 896 (2021).
Pioneer State Mut. Ins. Co. v. Michalek , 330 Mich.App. 138, 144, 946 N.W.2d 812 (2019) (explaining that, although this Court may dismiss an application for leave to appeal from a final order for "lack of merit on the grounds presented," when it comes to interlocutory applications for leave to appeal from nonfinal orders, this Court generally does not express an opinion on the merits).
II. ANALYSIS
Appellee's claim arose when the jury rendered a no-cause verdict in its favor in the underlying medical malpractice case. Appellee presented its notice of contingent claim in the probate court less than a month later. Because appellee presented its contingent claim for prevailing-party costs within four months after the claim arose, the probate court did not err by denying appellants’ petition to strike.
This Court reviews de novo whether a probate court properly interpreted and applied the relevant statute. See In re Bibi Guardianship , 315 Mich.App. 323, 328, 890 N.W.2d 387 (2016). In In re Weber Estate , 257 Mich.App. 558, 561, 669 N.W.2d 288 (2003), this Court explained the primary goal of statutory interpretation as follows:
The primary goal when interpreting statutes is to ascertain and give effect to the intent of the Legislature. Statutory language should be construed reasonably and in accord with the purpose of the statute. If the statute's language is clear and unambiguous, then we assume that the Legislature intended its plain meaning and the statute is enforced as written. If a term is not defined in a statute, a court may consult dictionary definitions. [Quotation marks and citations omitted.]
Upon appointment, a personal representative of an estate must publish notice notifying the creditors of the estate to present their claims against the estate within four months or be forever barred. MCL 700.3801(1). Generally, a claim against a decedent's estate that arose before the decedent's death is barred unless the creditor gave notice of the claim within four months of the published notice. MCL 700.3803(1)(a). Before this Court is a question of first impression that asks when a contingent claim arises under MCL 700.3803(2). Specifically, the parties dispute whether appellee presented its notice of contingent claim within four months after the claim arose.
Regarding claims against a decedent's estate that arise after the decedent's death, MCL 700.3803(2) provides:
A claim against a decedent's estate that arises at or after the decedent's death , including a claim of this state or a subdivision of this state, whether due or to become due, absolute or contingent , liquidated or unliquidated, or based on contract, tort, or another legal basis, is barred against the estate, the personal representative, and the decedent's heirs and devisees, unless presented within 1 of the following time limits :
(a) For a claim based on a contract with the personal representative, within 4 months after performance by the personal representative is due.
(b) For a claim to which subdivision (a) does not apply, within 4 months after the claim arises or the time specified in subsection (1)(a), whichever is later. [Emphasis added.]
There is no dispute that appellee's claim for costs arose after Kinzie's death and that the claim had to be presented "within 4 months after the claim" arose or else be barred. Id. Although EPIC defines "claim" in MCL 700.1103(g), EPIC does not define "contingent claim" or "arises." The Michigan Supreme Court has defined "contingent claim" as "one where the liability depends upon some future event which may or may not happen, and, therefore makes it now wholly uncertain whether there ever will be a liability." In re Jeffers Estate , 272 Mich. 127, 136, 261 N.W. 271 (1935) ; see also Black's Law Dictionary (11th ed.), p. 312 (defining "contingent claim" as "[a] claim that has not yet accrued and is dependent on some future event that may never happen"). As to "arises," Black's Law Dictionary (11th ed.) lists modern usages of "arise," the root of "arises," as "1. To originate; to stem (from) < < a federal claim arising under the U.S. Constitution>>. 2 . To result (from) < < litigation routinely arises from such accidents>>. 3. To emerge in one's consciousness; to come to one's attention < < the question of appealability then arose>>." See also Merriam-Webster's Collegiate Dictionary (11th ed.) (defining "arise" as "1 : to get up: RISE 2 a : to originate from a source b: to come into being or to attention 3: ASCEND syn see SPRING"). The parties fundamentally agree on the definitions of "contingency" and "contingent claim" but rely on different definitions of "arise." Appellants stress the definition "to emerge in one's consciousness," while appellee relies on the definition quoted by our Supreme Court in People v. Johnson , 474 Mich. 96, 100, 712 N.W.2d 703 (2006) (quoting the 1997 edition of Random House Webster's College Dictionary's definition of "arise" as " ‘to result; spring or issue’ "). Appellants contend that appellee's contingent claim arose in 2013, when appellants filed the underlying medical malpractice complaint. As its answer to the complaint shows, that was when appellee first contemplated that it could win the case and that it might be entitled to prevailing-party costs. Appellants contend that the same conclusion results from application of the "fair contemplation" test, a test used by bankruptcy courts to determine whether a creditor's claim arose before the potential debtor filed a bankruptcy petition. Appellants urge this Court to adopt and apply the fair-contemplation test in the present case. We decline to do so. Federal bankruptcy law is not binding on this Court, Ammex, Inc. v. Dep't of Treasury , 273 Mich.App. 623, 639 n 15, 732 N.W.2d 116 (2007), and appellants make no argument that the language of the bankruptcy statutes is similar to the language of the relevant provisions of the EPIC.
Appellee relies on Lumley v. Bd. of Regents for Univ. of Mich. , 215 Mich.App. 125, 130-131, 544 N.W.2d 692 (1996), to argue that, in the present case, "arises" is synonymous with "accrues" and that, therefore, its claim first "accrued" when the jury returned its verdict. This Court declines to equate "arises" with "accrues" for purposes of MCL 700.3803(2). As this Court observed in Lumley , the use of a word in a statute "presents a question of legislative intent." Lumley , 215 Mich.App. at 129, 544 N.W.2d 692. Among the Legislature's stated purposes for EPIC is "[t]o promote a speedy and efficient system for liquidating a decedent's estate and making distribution to the decedent's successors." MCL 700.1201(c). In some instances, a contingent claim may arise for purposes of MCL 700.3803 before it accrues to the point that an action can be alleged in a complaint. MCL 700.3810 addresses arrangements that can be made to provide for the future payment of contingent claims, consistent with the goals of EPIC.
Appellants’ position fails to identify a proper factual basis to support its conclusion that appellee's contingent claim arose in 2013. A contingent claim must have a factual basis that is capable of being proved. See Clark v. Davis , 32 Mich. 154, 159 (1875) (indicating that claimants who cannot prove their claims as a debt owed can present their contingent claims to the probate court, along with the proper proofs). Even application of the fair-contemplation test requires an underlying act, or factual basis, that gives rise to the "fair contemplation" that one has a claim. See Sanford v. Detroit , unpublished opinion of the United States District Court for the Eastern District of Michigan, issued December 4, 2018 (Case No. 17-13062), p. 5, 2018 WL 6331342 (indicating that the underlying facts giving rise to the plaintiff's claim against the city of Detroit and certain Detroit police officers were his personal knowledge and experience that his confession was falsely obtained). A party's "contemplation" is "fair" because it arises from discernable facts that would support a claim, even if the claim depends on a future event that might not happen (such as a convicted criminal's exoneration, as in Sanford ). When arguing that appellee knew or should have known that it had a contingent claim in 2013, appellants do not point to any discernable, underlying facts to support that claim, other than appellee's assessment of the medical malpractice complaint. But whatever confidence appellee had that it might prevail and that appellants’ claims were frivolous, these are not facts of the sort that support a contingent claim. It is the jury that provided the factual basis for appellee's claim for prevailing-party costs.
Appellee's claim for taxable costs arose under MCR 2.625(A)(1) ("Costs will be allowed to the prevailing party in an action, unless prohibited by statute or by these rules or unless the court directs otherwise, for reasons stated in writing and filed in the action."). The factual basis for appellee's claim against the estate for taxable costs was the June 14, 2019 jury verdict of no cause of action in its favor. Appellee filed its notice of contingent claim approximately two weeks after the jury rendered its verdict, well within the time limit set by MCL 700.3803(2)(b). Appellee's claim was contingent because the trial court had the discretion to award prevailing-party costs or to "direct[ ] otherwise." MCR 2.625(A)(1). Because appellee filed its notice of contingent claim within four months after the claim first arose, the probate court did not err by denying the petition to strike.
Affirmed.
K.F. Kelly, P.J., and Rick, J., concurred with Jansen, J.