In the Matter of the Estate of Naida W. Ramey, Deceased.
CARIN SHARLENE EMERT, Personal Representative of the Estate of Naida W. Ramey, Deceased, Respondent ELDON LUVERN FLAIG, Appellant,
Argued and Submitted: May 06, 2013.
Multnomah County Circuit Court. 100190040. Katherine E. Tennyson, Judge.
Brooks F. Cooper argued the cause and filed the briefs for appellant.
Charles A. Kovas argued the cause and filed the brief for respondent.
Before Schuman, Presiding Judge, and Duncan, Judge, and Lagesen, Judge.[*]
[260 Or.App. 653] LAGESEN, J.
When an estate's personal representative disallows a creditor's claim against the estate, the probate code--specifically, ORS 115.145--gives the creditor two avenues by which to contest the personal representative's decision. The creditor may file an appropriate action against the personal representative in a court of competent jurisdiction or, instead, may file a request for summary determination of the claim in the probate court. In this case, we address a question about the procedures that govern when a creditor opts to pursue summary determination of a disallowed claim: Can the personal representative assert counterclaims in a summary-determination proceeding? We hold that the answer to that question is no. Because the probate court concluded otherwise, we vacate the judgment and remand for further proceedings consistent with this opinion.
ORS chapter 115 governs " claims"  against estates. It sets forth the procedures by which an estate creditor must present any claim to the personal representative, as well as the procedures by which a creditor can obtain adjudication of the personal representative's disallowance of a claim in whole or in part. Under ORS 115.005, a creditor with a claim against an estate must present the claim to the personal representative within a specified time period. The personal representative may then disallow the claim in whole or in part. ORS 115.135. Upon receiving notice that the personal representative has disallowed a claim in whole or in part, the claimant then has two potential avenues for challenging the personal representative's decision in court. One option is to " [c]ommence a separate action against the personal representative on the claim in any court of competent jurisdiction." ORS 115.145(1)(b). The other option is to file a request for summary determination of the claim by the probate court in the estate proceeding. ORS 115.145(1)(a).
When a claimant chooses to pursue summary determination, the personal representative can veto that choice. Under ORS 115.155, the personal representative " may notify [260 Or.App. 654] the claimant in writing that if the claimant desires to prove the claim the claimant must commence a separate action against the personal representative within 60 days
after the date of receipt of such notice." The claimant then must comply with that demand, or the claimant's claim " to the extent disallowed by the personal representative, is barred." Id. If the personal representative does not elect to force the creditor to bring a separate action, then the personal representative must respond to the claim in the summary-determination proceeding in probate court by " mov[ing] or plead[ing] to the claim as though the claim were a complaint filed in an action." ORS 115.165(1). The probate court then must " hear the matter without a jury, * * * determine the claim in a summary manner and * * * make " an order allowing or disallowing the claim in whole or in part." ORS 115.165(2). The probate court's order on summary determination is not appealable. ORS 115.165(3).
In this case, claimant Eldon Flaig, the son of decedent Naida Ramey, timely made a claim against the estate for $8,136.20. The claim was for expenses that claimant had paid on behalf of decedent. The personal representative disallowed the claim. Claimant then filed a request for summary determination of the claim in the probate court. In response, the personal representative filed an " Answer and Counterclaim." In it, the personal representative denied the claim and asserted a counterclaim. The personal representative alleged that claimant had received $30,000 in insurance proceeds belonging to the estate, " and has not responded to the personal representative's request for an accounting." The personal representative requested entry of judgment declaring " that the $30,000 [insurance] proceeds is property of the estate," and ordering " [c]laimant to provide an accounting of the $30,000 [insurance] proceeds[.]"
Claimant moved to dismiss or strike the counterclaim. Claimant asserted that the probate code does not authorize counterclaims by a personal representative in a summary-determination proceeding under ORS chapter 115, and that the counterclaim should be stricken or dismissed on that basis. Claimant argued, among other things, that he wanted a jury trial on the counterclaim, and to retain the [260 Or.App. 655] other procedural rights that would otherwise be available to claimant on the counterclaim, but would not be available in a summary-determination proceeding. In the alternative, claimant asserted that Hendrickson v. Warburton, 276 Or. 989, 557 P.2d 224 (1976), and Ledford v. Yonkers, 278 Or. 37, 562 P.2d 970 (1977), required dismissal of the counterclaim, because the personal representative did not allege that the estate was insolvent.
The probate court denied the motion. It ruled that the probate code permitted the personal representative to assert counterclaims in a proceeding for summary determination. The court then summarily determined both the claim and the counterclaim following a hearing at which the court heard testimony from several witnesses. At the close of the hearing, the court ruled that Hendrickson and Ledford did not bar the counterclaim, because the personal representative sought only a determination that the insurance proceeds were estate property, and was not seeking to set aside a transfer of estate property. The court then allowed the claim in part, for $7,273.39. On the counterclaim, the court declared that the $30,000 insurance proceeds were estate property and that claimant held those proceeds under a power of attorney; it ordered claimant to return the proceeds to the estate. Thereafter, the probate court entered a general judgment approving the estate's final ...