BETTY HUNSAKER AND PEGGY GREER V. COMMONWEALTH OF KENTUCKY, DEPARTMENT OF TRANSPORTATION, DEPARTMENT OF HIGHWAYS
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RENDERED : NOVEMBER 21, 2007
TO BE PUBLISHED
,*uyrrmr Courf of ~Rrl
2005-SC-000974-DG
BETTY HUNSAKER AND
PEGGY GREER
V.
APPELLANTS
ON REVIEW FROM COURT OF APPEALS
CASE NUMBER 2004-CA-002130
LETCHER CIRCUIT COURT NO. 93-CI-000325
COMMONWEALTH OF KENTUCKY,
DEPARTMENT OF TRANSPORTATION,
DEPARTMENT OF HIGHWAYS
APPELLEE
OPINION OF THE COURT BY JUSTICE SCHRODER
AFFIRMING
The issue in this condemnation case is the liability, if any, of
a substituted party
for the refund due to the Commonwealth, for an overpayment, pursuant to KRS
416.620. We agree with the Court of Appeals that a substituted party stands in the
shoes of the original party, with the benefits as well as the detriments . Hence, we
affirm .
This condemnation proceeding originated in the Letcher Circuit Court on October
20, 1993, under KRS 416.540 through KRS 416.670 and KRS 117.081, to obtain a right
of way for the construction of Jenkins Bypass, U .S. Highway 23. At that time, the
property was owned by Mildred Hunsaker, subject to a bank mortgage. After a series of
plan changes and commissioner appointments, the trial court (in 1996) entered an
interlocutory order granting possession to the Commonwealth and setting the property
value at $657,782 .50, the money to be paid into court by the Commonwealth . The
order also authorized Mildred and the mortgagee to withdraw the fund, which they did,
leaving only Mildred as a defendant.
The Commonwealth filed exceptions to the commissioner's report, claiming that
the evaluation was excessive . The matter then again languished for years without
resolution . In the interim, Mildred conveyed her interest in the property to her
daughters, Betty Hunsaker and Peggy Greer (in 1999) . Mildred died on March 26,
2001, and on November 8, 2001, an agreed order was entered substituting Betty
Hunsaker and Peggy Greer for Mildred Hunsaker. On December 19, 2002, the case
finally proceeded to trial on the issue of damages . The sisters, Betty and Peggy,
claimed the value of the land taken was 1 .2 million dollars. The jury, however, set
damages at only $300,000 - substantially less than the amount already paid by the
Commonwealth . The court's final order and judgment required Betty and Peggy to pay
to the Commonwealth the excess which Mildred had received, with interest, pursuant to
KRS 416 .620 (condemnor entitled to judgment against owner for amount of decrease in
compensation awarded) . Apparently, Mildred had spent all of the monies received .
The sisters' post-trial motions were denied and the case was appealed to the
Court of Appeals . On appeal, Betty and Peggy argued that they should not be required
to pay, as they had not received any of the money disbursed to Mildred, and as the
payment to Mildred had occurred before they acquired the property or became parties
to the action . The Court of Appeals, affirming, found the decision in Citizens Bank &
Trust Co. v. McEuen, 281 Ky. 113, 134 S .W.2d 1012, 1014 (1939), to be controlling : as
a general rule, when a party is substituted for another party, he "takes up the litigation
with all of its benefits and with all of its burdens just where the predecessor dropped it[.]"
Betty and Peggy also argued on appeal that they were relieved from liability
because there was no privity between them and Mildred . The Court of Appeals
declined to review that argument because it had not been presented to the trial court.
The sisters also argued that the Commonwealth should have named the Estate of
Mildred Hunsaker or attempted to collect the debt from the estate rather than from the
substituted parties . Again, the Court of Appeals declined to address the issue because
it was not raised before the trial court.
On appeal to this Court, the sisters argue that they are not liable for the
overpayment because Mildred received the money, not them ; that the Commonwealth
should have gone after Mildred's Estate, not her heirs or grantees ; and that there was
no privity of estate between Mildred Hunsaker and the substituted parties .
We note that Betty Hunsaker and Peggy Greer were substituted by an agreed
order' for Mildred Hunsaker. If the Commonwealth had proceeded against the heirs, or
the estate, liability may have been limited to the value of the estate or to the amount
inherited from Mildred . Mildred also had a son, who was a grantee of the property and
who did not join in the substitution (CR 25 .01) . If the Commonwealth had proceeded
against the sisters as grantees in the 1999 deed (CR 25.03), there may have been a
question of privity or a question as to the validity of the deed after the trial court
awarded possession and title to the Commonwealth . However, with an agreed order of
substitution, these issues were not before the trial court. Of course, at the time of
substitution, the sisters were expecting a judgment of around 1 .2 million dollars .
' CR 25.01 provides for substitution in the event of the death of a party . See also Levin v. Ferrer, 535 S.W.2d 79
(Ky. 1976). CR 25.03 provides for a substitution of parties where the original party transfers her interest .
3
Substitution did not appear risky, but with a refund due, the exact nature of the rights
and obligations of substitution become crucial .
We agree with the Court of Appeals' application of the general rule in the present
case that the substituting party takes the litigation with all of its benefits and burdens.
McEuen, 281 Ky. a t 117,134 S.W .2d at 1014.2 Hollon v. Rose, 268 S.W.2d 641, 642
(Ky. 1954), recognized an assignee of an interest in real estate may be made a party to
suit involving the real estate (partition) . More telling is Works v. Winkle, 314 Ky. 91, 234
S .W.2d 312 (1950), which involved an assignment of a right to recover after suit was
filed . The Court held the assignee may, but does not have to, intervene . Id. at 316. In
the case sub iudice, the sisters chose to intervene and substituted themselves for their
mother . Their argument was that they were the real parties in interest, which in effect
concedes that there is privity . Having done so, they cannot now complain that they are
not the real parties in interest, and that they only wanted the benefits but not the
burdens.
Accordingly, the opinion of the Court of Appeals is affirmed .
All sitting . Lambert, C.J., Abramson, Cunningham, Minton, Noble, Schroder, JJ .,
concur. Scott, J., dissents by separate opinion .
2 See. also 59 AM . JUR. 2D Parties § 359 (2007) .
COUNSEL FOR APPELLANTS:
James W. Craft 11
21 North Webb Ave
Whitesburg, KY 41858
COUNSEL FOR APPELLEE:
Phillip Wicker
P.O. Box 309
Elizabethtown, KY 42702
RENDERED : NOVEMBER 21, 2007
TO BE PUBLISHED
,$ixprtmE Courf of `~Entixxl~g
2005-SC-000974-DG
BETTY HUNSAKER AND
PEGGY GREER
V.
APPELLANTS
ON REVIEW FROM COURT OF APPEALS
CASE NUMBER 2004-CA-002130
LETCHER CIRCUIT COURT NO. 93-CI-000325
COMMONWEALTH OF KENTUCKY,
DEPARTMENT OF TRANSPORTATION,
DEPARTMENT OF HIGHWAYS
APPELANTS
DISSENTING OPINION BY JUSTICE SCOTT
I must respectfully dissent from the majority opinion herein for three
reasons. First, the opinion is premised upon moral grounds that greed justifies
punishment. Yet, I find no evidence of greed in the record ; just a defense by two
daughters of their mother, Mildred Hunsaker's (Mildred), right to the
commissioners' award of $656,782.50, which the record implies the mother had
already spent.' Secondly, the majority believes the daughters, Betty Hunsaker
(Betty) and Peggy Greer (Peggy), were hoping to collect a judgment in excess of
' $75,000.00 or more went to the Bank of Whitesburg, the Mortgagee on
the condemned property. The record also reflects that once Mildred was
displaced from her property, she purchased a replacement home in downtown
Jenkins, near one of her daughters. The disposition of this home is unknown .
The disposition of the remaining monies, whether for elderly care, or whatever, is
also unknown . It should also be noted, that this action was filed in November,
1993, yet concluded nine and a half years later by trial and judgment of the
Letcher Circuit Court, dated March 3, 2003.
the commissioners' award by introducing evidence of 1 .2 million dollars in
damages, and that they had such a right. This too is incorrect, Mildred never
filed exceptions to the commissioners' award, never assigned any rights to the
condemnation award to her daughters, and given the fact that no exceptions
were filed, could not have. 2 Thirdly, I can find no case supporting the majority's
extension of the law of liability on substitution to an individual who never received
the money for which he/she is now being held liable . Being a case of first
impression in this Commonwealth, 1 shudder to consider its chilling effect on
future substitution practice .
This story begins on October 20, 1993, when the Commonwealth filed this
condemnation action in the Letcher Circuit Court against Mildred to condemn .67
acres that she owned and lived on, at the intersection of U .S. Highways 23 and
119, near Payne Gap, in Letcher County, Kentucky. The commissioners
originally appraised the value of a smaller tract at $115,000.00. But, after the
acreage was increased at the request of the Department of Highways,
subsequent commissioners increased the award for the total taking to
$656,782.50. This amount was paid to the Letcher Circuit Court and disbursed
to Mildred, along with her Mortgagee, the Bank of Whitesburg .
2 Jury instructions in condemnation cases can be misleading. It is one of
the rare exceptions where jury instructions do not contain maximum or minimum
values to guide the jury. See Com., Dept. of Highways v. C.S. Brent Seed
Company , 376 S.W .2d 310, 311 (Ky. 1964) ("It is our further opinion that
instructions in condemnation cases should not state either maximum or minimum
limits of recovery. . . . [as) it would in effect have told the jury what the . . .
commissioners had awarded ."). See also Com ., Dept. of Highways v. Spillman ,
489 S.W.2d 811, 814 (Ky. 1973) ("While there is merit in the trial court's position,
it has been rejected and we adhere to the rule that the pattern instructions set out
in Commonwealth, Department of Highways v. Priest, Ky., 387 S .W.2d 302
1965 . . . should have been followed .").
2
On May 20, 1996, the Interlocutory Order and Judgment was entered
allowing the taking . The parties had 30 days thereafter to file exceptions to the
award. On June 17, 1996, the Commonwealth filed exceptions to the
commissioners' award on grounds that it was excessive. Mildred, however, filed
no exceptions . In fact, she did not have an attorney of record until June 12,
1998, after being ordered to do so by the court.
On July 3, 1999, after the matter had dragged on for years, Mildred
deeded her tract of property, within which lay the condemned tract, to Betty and
Peggy. This conveyance was subject to the Interlocutory Order and Judgment
and Lis Pendens Notice previously recorded. Mildred did not include her son in
this conveyance ; nor did she assign with the conveyance, any chose in action to
contest the commissioners' award. In fact, Mildred remained the defendant in
the action until her death, in March of 2001 . Her surviving heirs were Betty,
Peggy, and one son .
Following their mother's death, Betty and Peggy moved to be substituted,
through counsel, "as parties to this action," noting that "Mildred . . . conveyed her
interest in this property to the movants herein and therefore they are the real
parties in interest." It is uncontested that Betty and Peggy received this
conveyance to the property within which the condemned .67 acres lay and that
they would therefore be "real parties in interest" from which the later deed of title
to the Commonwealth would be made.
Thereafter, on December 19, 2002, the matter went to trial on the
Commonwealth's exceptions to the excessiveness of the award . At trial, the
Commonwealth introduced evidence that the property taken had a fair market
value of $115,000 .00. Betty and Peggy defended the commissioners' award
made to Mildred, with proof that the fair market value of the property taken was
1 .2 million dollars . The jury then determined the fair market value of the property
taken to be $300,000.00 . This created an overpayment to Mildred in the amount
of $356,782.50, repayable at 6% interest from and after the date of its original
distribution . However, the Court's final Order and Judgment dated March 10,
2003, ordered the Appellants, Betty and Peggy, to repay this amount to the
Commonwealth. They, of course, filed post-judgment motions noting they had
"never received any of the money ordered repaid and therefore cannot be
ordered to pay the same ." However, their post-judgment motions were denied on
September 20, 2004. This appeal followed .
Eminent Domain Procedures
The Owner
In a direct condemnation action . . . the fact and extent of the taking
are known. In such an instance, it is a general rule of the law of
eminent domain that any award goes to the owner at the time of the
taking, and that the right to compensation is not passed to a
subsequent purchaser. D anforth v. United States, 308 U.S. 271,
284, 60 S.Ct. 231, 84 L.Ed. 240 (1939); 2 Sackman, Eminent
Domain, at § 5.01 [5][d][i] ("it is well settled that when there is a
taking of property by eminent domain in compliance with the law, it
is the owner of the property at the time of the taking who is entitled
to compensation") .
Palazzolo v. Rhode Island, 533 U.S . 606, 628, 121 S.Ct. 2448, 2463, 150
L . Ed.2d 592 (2001), see also Stickley _v. Chesapeake & O. R . Co. , 14 Ky. L. Rptr.
417, 20 S.W. 261, 262 (1892) ("the vendees . . . took the property (if damaged) in
its depreciated condition, and there is no rule of law or equity that would permit
them to recover damages they never sustained ."). "The right to recover for
trespass to real property does not pass with the conveyance of the land ."
Bramblett v. Slemp , 32 Ky. L. Rptr. 1329, 108 S.W. 339 (1908) .
"For purposes of the rule that compensation must be paid to the person who
owned the property at the time it was taken or injured, the word "owner" includes
any person having a valid interest in the land who sustained loss or damage at
the time of the taking . . . ." 29A CJS Eminent Domain § 225 (2007) (footnotes
omitted) . Moreover, where exceptions are filed by the land owner to the
commissioners' award and,
Where the landowner dies after the taking of the property, the
compensation is payable to his or her estate . If the land is taken or
injured during the lifetime of the owner, the right to the
compensation passes to the owner's executor or administrator, and
this right of the personal representative continues until distribution
of the estate has been made .
29A CJS Eminent Domain § 246 (2007) (footnotes omitted) .
Thus, the owner is determined as of the "taking date ." KRS 416 .620(5) .
Here, the "taking date" was the date of the Interlocutory Judgment, May 20,
1996. Thus, it is the owner on this date, who is entitled to, or obligated to pay,
the interest set out in KRS 416 .620(5) . And if not paid, "the condemnor shall be
entitled to a personal judgment against the owner for the amount of the decrease
plus interest at the rate of six percent (6%) per annum from the date the owner
accepted the amount of compensation the condemnor paid into court or to the
owner." Id . (Emphasis added) . Subsequent owners are afforded only the rights
of repurchase, upon failure of the Commonwealth to develop the property taken
within eight years and are referred to therein as "current land owners ." KRS
416.670.
Pursuant to the statutory scheme :
5
[t]he risk of loss of overpayment to the owner of a particular interest
must fall on the condemnor. The problem is created by the
condemnor's election to take possession of the property being
condemned prior to a final determination of just compensation .
Since the condemnor is required to pay the commissioners' award
prior to final judgment only as a means of obtaining immediate
possession, the risk of loss should fall upon the condemnor rather
than the other owners who had no choice in the matter .
Foster v. Sanders , 557 S.W.2d 205, 212-13 (Ky. App . 1977) (internal citation
omitted) .
Exceptions
Where a party, however, fails to file exceptions to the commissioners' award,
he is prohibited from receiving any award in his favor greater than the
commissioners' award, even though a verdict for such may be returned by the
jury. Com., Dept. of Highways v. C .S. Brent Seed Company, 376 S.W .2d 310,
311 (Ky. 1964) . In C.S. Brent Seed Company , supra, the commissioners
awarded $12,896.33 . The land owners filed exceptions concerning the
inadequacy of the award, but the Commonwealth filed no exceptions concerning
its excessiveness . Id. at 310 . The jury then retuned a verdict of $9,560 .00. Id.
Judgment, however, was entered upon behalf of the landowner for the full
amount of the commissioners' award, $12,896 .33. Id. at 310-311 .
The landowners' appeal stated exceptions to the award on the
ground it was inadequate . This was the only issue before the circuit
court relating to the amount of compensation . The jury having
arrived at an amount still less than the [commissioners' award], that
issue was resolved against the landowners. But to deprive them of
the benefit of the [commissioners' award], the recovery to which
they were entitled had they not appealed at all, would in effect give
one party an automatic cross-appeal in the event of an appeal by
the other. This would contravene the policy of the statute .
Id. at 311 ; see also Bullitt v. Com . by & through Dept. of Highways, 298 S .W.2d
290, 292 (Ky. 1957) ("We agree that the question of excessiveness of damages
6
was to be tried . . . on appeal ; [however] both the appellants and the
Commonwealth were free to introduce evidence, whether presented in the
County Court or not, in support of their respective positions. This does not mean
that issues not raised on the appeal [i .e ., inadequacy of the award] may later be
injected ."); Kentucky Utilities Co . v. Brashear, 726 S.W .2d 321, 322 (Ky . App.
1987) ("The issue is whether the circuit court had discretion to permit the late
filing of exceptions . . . resulting in a jury determination of an award in excess of
the commissioners' . We agree that the circuit judge erred.") .
In this instance, Mildred was the owner at the time of the taking and thus,
received the commissioners' award, less that paid to the Bank of Whitesburg .
Betty and Peggy were not. In fact, had they not intervened to put forth evidence
to protect their mother's commissioners' award, the only evidence presented to
the jury on the Commonwealth's exceptions would have been the
Commonwealth's evidence of a value of $115,000.00, a value $185,000.00 less
than determined by the jury. Thus, they should not be penalized for trying, as
best they could, to protect their mothers' commissioners' award.
Assignments
"in case of any transfer of interest, the action may be continued by or
against the original party, unless the court upon motion directs the person to
whom the interest is transferred to be substituted in the action or joined with the
original party ." CR 25.03. This ceases to be true on the death of a party. Here,
Mildred only conveyed her title to the real estate to Betty and Peggy, by deed
dated July 3, 1999. The deed did not contain an assignment of any chose in
action to a judgment in excess of the commissioners' award. It is simply a "quit
claim" deed which makes no attempt to assign any such right.
"[A] valid assignment is made when the context of the assigning
instrument shows the intention of the owner of a chose in action to transfer it to
the transferee." Roberts v. Powers, 303 Ky. 489, 198 S .W.2d 58, 60 (1946).
"Nowhere in the deed . . . were the . . . choses in action here involved mentioned,
directly or indirectly. The conveyance purported to transfer only the title . . . in the
land described in the deed . . . ." Id. "In no event may an assignee maintain an
action for any part of a claim which has not been assigned to him." Works v.
Winkle , 314 Ky. 91, 234 S.W .2d 312, 316 (1950).
The deed between Mildred and her daughters reflects that no such
assignment was intended, yet in any event, there could not have been an
assignment of any right to a judgment in excess of the commissioners' award,
since no exceptions were ever filed. This is consistent with the intervention of
the daughters after the death of their mother . In which case, they were "real
parties in interest" for reasons that they then held record title to the land, which
by description, also included the land already taken under the interlocutory
judgment. And thus, they were necessary parties to the extent of the
commissioners' deed to follow, upon which the Commonwealth's title of record
would depend .
Section 732(18) of the Civil Code provided that the words `real
representatives' mean the heir or devisee of real property of a
deceased person . While it is true that Section 732 has long since
been repealed as being obsolete and Section 506 has been
replaced, in effect, by CR 25.01, the definition of real representative
and his place in litigation involving real property has not changed .
Levin v . Ferrer, 535 S .W.2d 79, 82 (Ky. 1975) .
8
Thus, it is clear that Betty and Peggy did not intervene, nor were they
substituted, for any direct pecuniary benefit for themselves as parties .
Havin intervened to protect their mother's com missoners' award
are they liable for repayment of monies thev-never received.
The majority cite the case of Citizens Bank & Trust Co. v. McEuen, 281
Ky. 113, 134 S.W.2d 1012, 1014 (1939), for the general rule that, when a party is
substituted for another party, he "takes up the litigation with all of its benefits and
with all of its burdens just where the predecessor dropped it[.]" They also cite
Hollon v. Rose, 268 S.W.2d 641, 642 (Ky. 1954) and Works v. Winkle, 314 Ky.
91, 234 S .W .2d 312 (1950) in support of this proposition . The cases cited,
however, do not support the application of such a principle under the facts of this
case .
The McEuen case involved only the substitution or intervention, of a
Bankruptcy trustee for the purposes of acquiring surplus proceeds in excess of
the bank's lien. McEuen , 134 S.W .2d at 1014 . The rule therein relied on, was
"[t]he substituted party, as a general rule, takes_up the litigation with all of its
benefits and with all of its burdens just where the predecessor dropped it; and the
pleadings filed by the bank, including the petition for revivor, became the
pleadings of the intervening trustee." Id. (emphasis added) . Thus, the cited rule
was only applied to give the intervening trustee the benefit of its' predecessor's
pleadings . Winkle is only relevant to the extent it holds that "[i]n no event may an
assignee maintain an action for any part of a claim which has not been assigned
to him." Winkle , 234 S.W.2d at 316. Rose is relevant only to the extent that it
holds that it is permissible for one to be made "a party to the action as an
assignee after he had purchased the interest of one of the [parties] ." Rose, 268
S .W.2d at 642. Rose dealt only with a court sale of jointly owned land . Id.
As to the circumstances for which the majority cites McEuen, the only
cases I found somewhat on point, went the other way. In Graham v. Stewart,
152 Miss . 307,120 So. 171, 172-73 (1929), the plaintiff Graham was permitted
by the trial court to be substituted for the existing plaintiff, Wilder Motor Sales, for
reasons that Graham had acquired from Wilder Motor an assignment of an
account owed Wilder Motor by the defendant, Stewart. At the time of the
substitution allowed by the trial court, Stewart had an existing counterclaim filed
against Wilder Motor for an amount in excess of the claim of the account
assigned to Graham . Id. At trial, Stewart then recovered judgment against
Graham on his counterclaim for an amount in excess of the assigned account.
Id. In denying Stewart recovery against the substituted plaintiff, Graham ; for the
amount of his claim in excess of the value of the account assigned to Graham,
the court stated :
The evidence in the case tended to show that appellee's
counterclaim on which he recovered judgment over against
appellant-was in existence before this action was brought and
before the assignment to appellant of the account by the Wilder
Motor Sales Company, upon which the action was based. Under
the statute, therefore, appellant acquired the account by
assignment from the Wilder Motor Sales Company subject to
whatever set-off or other defense that existed between the original
parties. But did it follow as a result thereof that appellee was
entitled to recover over against appellant on his counterclaim? We
think not. As against appellant, appellee was only entitled to use his
offset defensively, and not offensively ; he was not entitled to
recover over against appellant, for appellant was not indebted to
appellee in any sum whatever.
10
Moreover, in Watkins v. Mowbray & Robinson Co., 212 Ky. 118, 278 S .W .
557, 559 (1925), the court held that "the fact of becoming a party after the
institution of the action, by intervention or otherwise, does not relate back to the
beginning of the action so as to entitle the intervener to the benefit of all bonds or
obligations executed to the original defendant required by the practice for the
obtention of the particular relief sought." (Emphasis added) . In Watkins ,
Mowbray & Robinson Company had filed suit in the United States Federal Court
against George Mullins, who they claimed was a trespasser on a tract of property
owned by them. In order to acquire a temporary restraining order against
Mullins, forbidding him from any future trespasses and mandatorily requiring him
to move a building he had partially constructed on the property, Mowbray &
Robinson posted a bond for any damages the injunction might cause, if
wrongfully granted . Id. at 558.
Watkins, who was Mullins's landlord, then intervened in the action and
was thereafter adjudicated as the true owner of the property, with Mullins as her
tenant . Id. She then sued Mowbray & Robinson for damages incurred pursuant
to the injunction bond posted . The judgment on the bond aforementioned, dating
back to the beginning of the action was denied; thus she was adjudged not
entitled to the benefit of the bond executed to the original defendant, Mullins, her
tenant. Id. at 560 . (Emphasis added) .
Although the cases discussed do not address issues raised under KRS
416 .620(5), the condemnor's right to recover from an owner for an overpayment,
they directly question the majority's interpretation, and application, of the doctrine
extrapolated from McEuen , supra, to the effect that, when a party is substituted
for another party, he "takes up the litigation with all of its benefits and with all of
its burdens just where the predecessor dropped it[.]" Id. at 1014 . While, it is true
that the substituted party must stand in the shoes of the party for whom he
substituted and that such party is bound procedurally by the posture of the case
as it exists at the time of his entry, he is not, however, obligated for the debts and
liabilities of his parties' predecessor, except as otherwise provided by law.
And unless there is some other rule of liability, "[a]n action to recover a
payment must be brought by the person . . . entitled to recover against the
person who actually received the payment ." 70 CJS Payment § 131 (2005) .
[N]o recovery in an action at law may be had against any one other
than him to whom the erroneous payment was made . `The action
should be against the person actually receiving the payment.' . . .
Were this a suit in equity with the object of declaring a trust and
following the fund into the hands of a transferee, different questions
might arise .
U .S. v. Hart, 12 F .Supp. 596, 596 (D.C . Pa . 1935) . For example, "[t]he rule is, if
a creditor has a claim against the estate of a testator or an intestate, he may sue
a devisee or an heir after he receives assets of the estate; but he is only liable to
the extent of the assets received ." Collett v. Helton, 264 Ky. 214, 94 S .W .2d 603,
604. Thus, "[a]fter assets of an estate have been distributed . . . an
undischarged claim not barred may be prosecuted in a proceeding against one
(1) or more distributees. No distributee shall be liable to claimants for amounts
received . . . in excess of the value of his distribution as of the time of
distribution ." KRS 396.195 .
Here, the judgment against Betty and Peggy was for the excess amount
paid to Mildred. It was not recognized, nor treated, as an action against heirs or
distributees, as required and thus, it was not confined within its' proper limits, i .e.,
12
the value of the distributees' share of the debtor's estate . This was error which
was properly preserved. No evidence in the record indicates that Betty and/or
Peggy ever received any of the commissioners' award paid to their mother, or
that her estate did so. The Appellant's brief simply alleges, "it is believed that
this money was spent prior to Mrs . Hunsaker's death ."
Thus, the judgment against the Appellants, Betty and Peggy, should be
reversed and the matter remanded to the Letcher Circuit Court, in order to
determine the extent to which the judgment exceeds the value of the property, or
properties, received by them from their mother, Mildred, or her estate, and for
such other proceedings consistent herewith as the court should determine . This
said, I dissent.
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