Summary
In Colley, Hawkes Hospital of Mt. Carmel presented to the administrator of the estate a claim in the amount of $6,454.28 for services rendered to the decedent.
Summary of this case from Mutual Federal Savings Bank v. SanfordOpinion
No. 82-106
Decided December 15, 1982.
Probate — Claims against decedent's estate — Rejection of claim must be plain and unequivocal — Acts inconsistent therewith, effect of — R.C. 2117.11 and 2117.12.
O.Jur 3d Decedents' Estate § 1575.
A rejection of a creditor's claim against an estate by a personal representative pursuant to the provisions of R.C. 2117.11 must be plain and unequivocal.
APPEAL from the Court of Appeals for Franklin County.
Appellee, Michael F. Colley, was appointed executor of the estate of John H. Anderson. On or about January 4, 1979, appellant, Hawkes Hospital of Mt. Carmel, presented a claim to appellee in the amount of $6,454.28 for services it had allegedly rendered for Anderson.
In response, appellee's attorney, Howard F. Wehr, sent appellant a letter, dated June 11, 1979, which provided, in pertinent part, as follows:
"This is to inform you that an Application for Instruction, a copy of which has been filed with the Probate Court and that the matter has been set for hearing July 5, 1979 at 10:00 A.M.
"* * *
"Also be informed that your claim against the Estate of Mr. Anderson has been rejected by the Executor for the reason that it was not properly or timely filed."
The file stamp date on the enclosed application is not evident from the record.
In the application, appellee first listed several creditors, which included appellant, who had presented claims which appellee questioned as to their timeliness, and then stated that "your applicant [appellee herein] has neither allowed nor disallowed any of the above claims except those of the Huntington National Bank of Columbus and the Shell Oil Company.
"WHEREFORE, your applicant prays for direction from the court as to payment of the listed accounts [ sic] * * *."
A hearing on the application was duly held on July 5, 1979, and the resultant journal entry stated that, "* * * the executor had knowledge of all claims [of Mount Carmel Medical Center] against the estate within the statutory period and properly listed them in his Schedule of Claims * * *" and ordered the executor to make payment as to those claims of Mount Carmel Medical Center which were undisputed.
Thereafter, appellee's attorney sent appellant a letter and a journal entry, both dated July 9, 1979. The entry, addressed to appellant, provided in full as follows: "You are notified that the undersigned, Executor of the Estate of John H. Anderson, deceased, has this day rejected your claim in the amount of $6,454.28."
Appellant then filed the present action in the Court of Common Pleas of Franklin County on August 23, 1979, to recover on its claim. At the trial, appellee's attorney was questioned with regard to the claims of creditors listed in the application for instruction and testified as follows:
"Q. Did you send copies of this application and a similar letter to other creditors of the estate?
"A. Yes.
"Q. So there were quite a few creditors then involved in this matter of whether the claims were timely presented?
"A. Yes.
"Q. Incidentally, the claims in the application, which are the debts which are identified in the application, have all of those been paid with the exception of Mt. Carmel?
"A. Yes."
The trial court found that the rejection of the claim was contained in a letter dated June 11, 1979, and then dismissed on the grounds that the action on the claim was "* * * barred by reason of 2117.12 Ohio Revised Code, i.e., for failure to commence its action within two (2) months after the rejection of the claim."
The court of appeals, in a split decision, affirmed.
This cause is now before the court pursuant to the allowance of a motion to certify the record.
Knepper, White, Arter Hadden and Mr. R. Douglas Wrightsel, for appellant.
Michael F. Colley Co., L.P.A., and Mr. Frank A. Ray, for appellee.
The basic issue presented is whether the letter dated June 11, 1979, sent by appellee's attorney to appellant, constituted a rejection of appellant's claim against the estate of appellee's decedent within the ambit of R.C. 2117.11 and applicable case law. This court, after a careful review of the record, finds that this correspondence failed to meet the standards necessary to constitute an effective rejection, and as such, it did not commence the running of the two-month statute of limitations set forth in R.C. 2117.12.
R.C. 2117.11 governs the rejection of claims against an estate and provides, in pertinent part, that: "An executor or administrator shall reject a creditor's claim against the estate he represents by giving the claimant written notice of the disallowance thereof."
Correspondingly, R.C. 2117.12 provides that "[w]hen a claim against an estate has been rejected * * * the claimant must commence an action on the claim * * * within two months after such rejection * * * or be forever barred from maintaining an action thereon."
It is well established in Ohio that notice of disallowance of a creditor's claim against an estate by a fiduciary must be plain and unequivocal. As this court stated in Miller v. Ewing (1903), 68 Ohio St. 176, 186:
"* * * We readily assent to the proposition that in order to avail in starting the six months' clause to running, the rejection must be plain and unequivocal. If it is simply argumentative and uncertain; or, as in Bank v. Speight, 47 N.Y. 668; there has been, concurrent with the alleged rejection, an agreement to refer; or if, as held in Hoyt v. Bonnett, 50 N.Y. 538, at the time of the alleged rejection, the administrator does or says anything from which the claimant may reasonably infer that the determination to dispute or reject the claim is not final, but that it will be further examined or considered, the administrator may not set up such a dispute as a rejection." (Emphasis added in part.)
A review of the facts of this case in light of the standards set forth in Miller clearly demonstrates that the correspondence of June 11 did not constitute a sufficient rejection because it was not plain and unequivocal. An examination of the June 11 letter and attached application for instruction is most telling. In the first paragraph of the letter sent to appellant, appellee's attorney stated that an application for instruction, a copy of which was enclosed, had been filed with the probate court and that a hearing on the application was scheduled for July 5. This language certainly indicated that appellee's attorney was referring the claim to the court for determination and hence this claim was being further considered. Contrastingly, however, appellee's attorney stated in the final paragraph that appellant's claim against the estate had been rejected because it was not timely filed.
There is thus an unmistakable inconsistency in the content of the June 11 letter as to whether a rejection of appellant's claim was being made. This confusion was further enhanced by the attached application for instruction which had been filed in the probate court. In the application, appellee first listed the claims at issue, which included appellant's claim, and then stated except for two, these claims had neither been allowed nor disallowed. Appellee then asked "* * * for direction from the court as to payment of the accounts [ sic] and distribution of the assets of the estate." Based on this language, it was once again reasonable for appellant to infer that the claim had not been finally rejected. It is also noteworthy that appellant's claim had not been deleted at any time from this application.
It is clear then that appellee's correspondence dated June 11 was not a plain and unequivocal rejection of appellant's claim, for it failed to comply with the standards in Miller that a rejection cannot be accompanied by a concurrent referral of the dispute and that an administrator cannot do or say anything which would cause the claimant to reasonably infer that the rejection was not final. When the appellee's attorney accompanied the ambiguous letter of June 11 with a concurrent application setting the claim for hearing, he undoubtedly led the appellant to reasonably believe that the rejection of the claim was not final. By giving the impression in the correspondence that the payment of appellant's claim would be brought before the probate court for determination, appellee's attorney fell short of making the letter of June 11 a plain and unequivocal rejection.
Other acts also transpired which contradict appellee's assertion that his rejection was plain and unequivocal. For example, both parties participated in the July 5 hearing on the application for instruction where the issue presented was whether appellant's claim against the estate had been timely. It is also revealing that, during direct examination, appellee's attorney testified that all the claims listed in the application for instruction, except appellant's claim, had indeed been paid. Further, a letter and a journal entry dated July 9 indicating that appellant's claim had been rejected were sent by appellee's attorney to appellant.
In light of these facts, this court concludes that the June 11 letter did not constitute an effective rejection because it was not plain and unequivocal. Hence, it did not commence the running of the two-month statute of limitations.
Thus, the judgment of the court of appeals is reversed and the cause remanded.
Judgment reversed.
CELEBREZZE, C.J., SWEENEY, LOCHER, HOLMES, C. BROWN and KRUPANSKY, JJ., concur.