Opinion
No. 56325-4-I.
June 12, 2006.
Appeal from a judgment of the Superior Court for King County, No. 04-2-36254-7, George T. Mattson, J., entered May 20, 2005.
Counsel for Appellant(s), Howard Mark Goodfriend, Edwards Sieh Smith Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA 98101-2988.
Catherine Wright Smith, Edwards Sieh Smith Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA 98101-2988.
Patrick A. Trudell, Trudell Bowen Lingenbrink PLLC, 135 Lake St S Ste 100, Kirkland, WA 98033-6449.
Counsel for Respondent(s), Robert Alex Mannheimer, Robert A. Mannheimer, PS, 9500 Roosevelt Way NE Ste 301, Seattle, WA 98115-2252.
Reversed by unpublished opinion per Agid, J., concurred in by Ellington, J.; Baker, J., dissenting.
The trial court ruled that David Berkey was not qualified to act as the personal representative of the Estate of Dale Shepherd (Estate) and accept service of Don Litzenberger's personal injury lawsuit against Shepherd's insurance company because Berkey never filed the bond required under the probate statute. It granted the Estate's motion for summary judgment and dismissed Litzenberger's lawsuit with prejudice because the statute of limitations had run. Litzenberger appeals, arguing the trial court commissioner implicitly waived the bond requirement.
Generally, the purpose of a bond is to protect the interests of an estate and its beneficiaries. But here, Litzenberger's lawsuit could not affect the interests of the Estate because it was filed under RCW 11.40.060 and any recovery would be satisfied entirely by Shepherd's insurance policy. Knowing this, Commissioner Velategui appointed Berkey as personal representative for the sole purpose of accepting service of process in that lawsuit. Commissioner Velategui did not set a bond amount or require a bond in the order. Under these circumstances, where a bond was clearly unnecessary, Commissioner Velategui demonstrated his intent to waive the bond requirement. We reverse the summary judgment order and remand for Commissioner Velategui to clarify the order appointing Berkey as personal representative.
FACTS
On January 28, 2002, Don Litzenberger was injured in a serious automobile accident with Dale Shepherd, who died in the collision. Shepherd's blood alcohol level was above the legal limit. All indications were he was speeding around a corner, lost control of his vehicle, crossed the center dividing lane, and slammed into Litzenberger's vehicle. At the time of the accident, Shepherd had automobile liability insurance through State Farm. Following the accident, Litzenberger made a claim against Shepherd's insurance policy.
Litzenberger's attorney discovered Shepherd had died intestate and no personal representative had been appointed to administer his estate. On November 15, 2004, Litzenberger filed a Complaint for Damages stating 'Pursuant to RCW 11.40.060, the Estate of Dale Sheperd [sic] is a party/defendant to the extent that Mr. Shepherd had automobile insurance in effect' on the date of the auto accident. On January 6, 2005, Litzenberger moved for appointment of a personal representative to accept service of process and authorize his claim against State Farm up to the limits of Shepherd's liability policy. Litzenberger's attorney's declaration said the only asset available to Litzenberger was Shepherd's liability insurance and that if settlement negotiations with State Farm were unsuccessful, Litzenberger would have to pursue the personal injury action against the Estate under RCW 11.40.060. King County Superior Court Commissioner Carlos Velategui issued an order appointing David A. Berkey personal representative of the Estate. The order stated
1. THAT David A. Berkey is hereby appointed as Personal Representative of the Estate of Dale Shepherd for the purpose of accepting service of process in this case, and for the purpose of allowing this cause to proceed against the liability insurance policy of Dale Shepherd in effect on January 28, 2002 as authorized by RCW 11.40.
On January 25, 2005, Berkey filed the Oath of Personal Representative (Oath) as required by RCW 11.28.170, declaring he was appointed personal representative of the Estate under RCW 11.40.060 and would perform the duties of the trust as personal representative 'in these proceedings' according to law. That same day he accepted service of Litzenberger's Summons and Complaint on behalf of the Estate and forwarded the Summons and Complaint to State Farm, which then retained counsel to represent the Estate. On February 15, 2005, the Estate filed an Answer and Affirmative Defenses to Litzenberger's Complaint, asserting among other things that service of process was improper and the statute of limitations had expired. On March 3, 2005, the Estate filed a motion for summary judgment to dismiss Litzenberger's complaint because he failed to serve the Estate before the statute of limitations expired. It maintained that Berkey failed to file a bond under RCW 11.28.185, so he was not qualified to act as personal representative of the Estate and accept service of the complaint. The Superior Court granted the Estate's summary judgment motion and dismissed Litzenberger's complaint with prejudice.
Litzenberger's tort action is subject to a three year statute of limitations. RCW 4.16.080(2).
DISCUSSION
Except in certain enumerated situations not present here, RCW 11.28.185 provides 'unless waived by the court, the personal representative shall give such bond or other security, in such amount and with such surety or sureties, as the court may direct.' Litzenberger argues the trial court erred by ruling that Berkey's failure to file a bond disqualified him from acting as personal representative for the limited purpose of accepting service. He contends Commissioner Velategui implicitly waived the bond requirement by failing to require a bond or specify a bond amount in the order appointing Berkey personal representative. The Estate argues Commissioner Velategui did not consider the bond requirement, so he did not waive it, and Berkey had to file a bond in order to serve as personal representative and accept service of process on behalf of the Estate.
This court reviews summary judgments de novo, performing the same inquiry as the trial court. Summary judgment is proper only when there is no genuine issue about any material fact, and the moving party is entitled to a judgment as a matter of law. We consider all facts and reasonable inferences in the light most favorable to the nonmoving party. Questions of fact may be determined as a matter of law when reasonable minds can reach only one conclusion. We review questions of law de novo.
Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 (2002).
Mountain Park Homeowners Ass'n v. Tydings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994).
Hartley v. State, 103 Wn.2d 768, 775, 698 P.2d 77 (1985) (citing La Plante v. State, 85 Wn.2d 154, 531 P.2d 299 (1975); Balise v. Underwood, 62 Wn.2d 195, 381 P.2d 966 (1963)).
Wallace Real Estate Inv. v. Groves, 72 Wn. App. 759, 766, 868 P.2d 149, aff'd, 124 Wn.2d 881, 881 P.2d 1010 (1994).
Litzenberger argues Commissioner Velategui's intent to waive the bond requirement is shown by the limited purpose for which he appointed Berkey and the fact that Litzenberger brought his lawsuit under RCW 11.40.060, so it could not affect the interests of the Estate. Because Litzenberger's claim involved a decedent's estate, he had to comply with chapter 11.40 RCW, which establishes the applicable procedures and timelines. RCW 11.40.060 provides that chapter 11.40's time limits for presenting claims are not to accrue to the benefit of insurers, and [c]laims against the decedent or the decedent's marital community that can be fully satisfied by applicable insurance coverage or proceeds need not be presented within the time limitation of RCW 11.40.051, but the amount of recovery cannot exceed the amount of the insurance. The claims may at any time be presented as provided in RCW 11.40.070, subject to the otherwise relevant statutes of limitations, and do not constitute a cloud, lien, or other encumbrance upon the title to the decedent's probate or nonprobate assets nor delay or prevent conclusion of probate proceedings or the transfer of distribution of assets of the estate. . . .
RCW 11.40.060 provides that claims against the decedent that can be fully satisfied by applicable insurance coverage 'do not constitute a cloud, lien, or encumbrance upon the title to the decedent's probate or nonprobate assets nor delay or prevent conclusion of probate proceedings or the transfer or distribution of assets of the estate.'
In other words, a claim that can be fully satisfied by the decedent's insurance does not impact the Estate in any way.
See Wagg v. Estate of Dunham, 107 Wn. App. 35, 41-42, 26 P.3d 287 (2001) (citing Belancsik v. Overlake Mem'l Hosp., 80 Wn.2d 111, 115, 492 P.2d 219 (1971)), aff'd, 146 Wn.2d 63, 42 P.3d 968 (2002).
It appears from the purpose of RCW 11.40.060, available evidence, and the language of the Order that Commissioner Velategui understood a bond was unnecessary and did not intend to require a bond. From the outset, Litzenberger made it clear that he sought appointment of a personal representative only to accept service of process in his lawsuit filed under RCW 11.40.060, and Commissioner Velategui appointed Berkey for only this limited purpose. Commissioner Velategui knew the lawsuit could not affect the interests of the estate and that there was no evidence of any Estate assets. We have previously held that '[i]n both guardianship and probate cases, the purpose of the statutory requirement to file a bond is the same: to protect the interests of the incompetent or the estate.' Here, there was no need to protect the interests of the Estate, to the extent there even was an 'estate,' so there was no reason for a bond. Under these circumstances, it appears Commissioner Velategui indicated his intent to waive the bond requirement by failing to require a bond or set a bond amount.
The commissioner's failure to require a bond, among other things, distinguishes this case from Williams-Moore v. Estate of Shaw, 122 Wn. App. 871, 96 P.3d 433 (2004), where a court commissioner denied Williams-Moore's request to waive the bond requirement and ordered her to file the Oath and a $20,000 bond. She purported to accept service of process before filing the bond, but we held under these circumstances filing a bond is a 'condition precedent to qualifying as the personal representative of an estate.' Id. at 879. We recognize that failing to require a bond, taken alone, does not suffice to waive the bond requirement.
The trial court is presumed to know the law. Douglas Nw., Inc. v. Bill O'Brien Sons Constr., Inc., 64 Wn. App. 661, 681, 828 P.2d 565 (1992). While admitting that there was no evidence of any Estate assets before Commissioner Velategui, and without citing specific evidence, the Estate disputes that Shepherd had no estate to administer. For purposes of summary judgment, we presume there were no other assets.
Shaw, 122 Wn. App. at 877-78.
The Estate is correct that there was no mention of the bond requirement at either the appointment hearing or in the Order. But this is likely only because, as stated above, there was no reason for Litzenberger, Commissioner Velategui, or anyone else to think a bond was necessary given that there was no need to protect the interests of the Estate. The Estate also points out that Berkey knew to file an Oath, so he should have known to file a bond. But the court cannot waive the Oath requirement, so Berkey had no reason to think he did not have to file an Oath even though a bond was not required. See RCW 11.28.170.
The Estate argues there is no authority for appointing a personal representative for a limited purpose. It contends a personal representative has myriad duties beyond merely accepting service of process, and those duties require that he file a bond. But nothing in the statute prohibits a court from appointing someone as personal representative in a limited capacity. This situation, where the only function of a personal representative is to accept service of process in a lawsuit filed under RCW 11.40.060 on behalf of an estate with no apparent assets, is exactly the circumstance in which a limited appointment is appropriate. Further, Berkey understood he was appointed personal representative solely to accept service of process on Litzenberger's lawsuit. In his Oath, he stated he would perform his duties as personal representative 'in these proceedings' according to law. Indeed, it is highly questionable whether he could have acted as personal representative in any other matters given the limited nature of his appointment.
The typical personal representative has numerous fiduciary duties besides accepting or rejecting claims on behalf of the estate. See, e.g., RCW 11.28.237(1) (personal representative must provide written notice of his or her appointment 'to each heir, legatee and devisee of the estate and each beneficiary or transferee of a nonprobate asset of the decedent'); RCW 11.44.015 (within three months after appointment, 'every personal representative shall make and verify by affidavit a true inventory and appraisement of all of the property of the estate'); RCW 11.48.010 ('It shall be the duty of every personal representative to settle the estate.').
To this end, it would be helpful if the legislature clarified what is and is not required when a personal representative is needed only to accept service of process on a claim against the decedent's insurer under RCW 11.40.060.
The Estate also argues that Berkey did not have authority to administer the Estate because he never obtained letters of administration. But those letters were not necessary because there was no estate to administer. Berkey was appointed personal representative only to accept service of process on a claim that could not affect the Estate.
It appears that Commissioner Velategui intended to waive the bond requirement. But since he did not elucidate that intention in the appointment hearing or order, we remand for him to clarify the order and identify whether he indeed waived the bond requirement. We reverse the summary judgment order and remand for further proceedings consistent with this opinion.
ELLINGTON, and BAKER, JJ., concur.
I respectfully dissent.
The procedure for appointment of a personal representative for an estate is strictly governed by statute, with no discretion left to the court. The majority recognizes that there is no statutory authorization for the type of limited-purpose appointment of a personal representative that was made by the commissioner below. Indeed, it suggests that the Legislature should 'clarify' that issue. Yet, the majority approves this procedure because 'nothing in the statute prohibits' it.
See State ex rel. Mann v. Superior Court of Thurston County, 52 Wash. 149, 152, 100 P. 198 (1909) (when application to be estate administrator is properly made by one of the parties designated by statute, court has no discretion).
Footnote 14 of majority opinion.
Under probate law as established by our Legislature, a bond is required to be filed by an appointed personal representative unless the court waives that requirement. Here, the court did not waive the requirement. The issue of a bond was not addressed at all in the order. Under the statute, a bond was thus required, unless the court, by subsequent order, waived the requirement. No subsequent request was made, and no such order was entered.
I have little doubt that if a timely request had been made, the commissioner would have waived the bond requirement. That did not happen, and no amount of wishful thinking by the majority can change that. I would affirm.