Martel v. Stafford

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                                No. 90-126

Scott Martel                                 Supreme Court

                                             On Appeal from
     v.                                      Rutland Superior Court

George F. Stafford, Administrator            September Term, 1991
of the Estate of Wilhelmina S.
Parker and Ronald J. Gould

Arthur J. O'Dea, J. (opinion and order); Frank G. Mahady, J. (judgment

Patricia S. Orr and Robert E. Manchester of Manchester Law Offices, P.C.,
  Burlington, for plaintiff-appellant

Barbara E. Cory of Dinse, Erdmann & Clapp, Burlington, for defendant-

PRESENT:  Gibson, Dooley, Morse and Johnson, JJ. and Mandeville, D.J.,
          Specially Assigned

     DOOLEY, J.   On April 18, 1985, plaintiff, Scott Martel, was a
passenger in a car being driven by Ronald Gould when it collided with a car
driven by Wilhelmina Parker.  Ms. Parker died from injuries incurred in the
accident.  Alleging that he had incurred injuries as a result of the
drivers' negligence, plaintiff sued Gould and defendant George Stafford,
executor of Parker's estate, on April 18, 1988.  The Rutland Superior
dismissed the action as filed beyond the limitation period imposed by 12
V.S.A. { 557(a), and this appeal followed. (FN1) We affirm.
     It is undisputed that if the limitation period in 12 V.S.A. { 557(a)
controls, this action is barred.  That statute provides that if a person,
against whom an action may be brought, dies before the expiration of the
time within which the action may be commenced, the normal limitation period
ceases to operate as of the date of death.  Then:
         [a]fter the issuance of letters testamentary . . . such
         action, if the cause of action survives, may be com-
         menced . . . against the executor or administrator with-
         in two years, and not after.

Wilhelmina Parker died two days after the accident, and the normal limi-
tation period for tort actions ceased to operate on that date.  Letters of
Administration were issued to defendant Stafford by the Orphans' Court in
Montgomery County, Maryland, on May 21, 1985. (FN2) The two-year period set by 
{557(a) expired in May of 1987.  This action was commenced some eleven months
after that period expired.(FN3)

     Plaintiff argues, however, that the limitation period has not expired
for two reasons:  (a) the limitation period contained in 12 V.S.A. { 557(a)
is tolled by virtue of 14 V.S.A. { 1202; (b) 12 V.S.A. { 557(a) denies
plaintiff due process of law unless actual notice is given to plaintiff of
the issuance of letters testamentary to defendant Stafford.  We take these
claims in order.
     The statute on which plaintiff relies provides in part:
         The running of any statute of limitations measured from
         some event other than death and advertisement for claims
         against a decedent is suspended during the four months
         following the first publication of notice under section
         1201 of this title but resumes thereafter as to claims
         not barred pursuant to the sections which follow.

14 V.S.A. { 1202.  Plaintiff argues that { 1202 applies since 12 V.S.A. {
557(a) is a statute of limitations and it is measured from an event other
than death or the advertisement of claims.  As a result, plaintiff argues,
the running of the two-year period set forth in 12 V.S.A. { 557(a) was
tolled from the opening of the estate until four months after notice to
creditors was given under { 1201.  Since no notice was given, as detailed
below, plaintiff argues that { 1202 continues to toll the statute of
limitations period to this day.
     Section 1202 is part of a group of statutes governing the presentation
of claims to the executor of an estate and is ancillary to a statute com-
monly referred to as a "nonclaim statute."  The nonclaim statute set forth
in 14 V.S.A. { 1203 bars certain claims that are not formally presented to
the estate within a specified time.  The process begins with a notice to
creditors under Rule 64(a) of the Vermont Rules of Probate Procedure.  That
notice includes notice by publication and notice by first class mail "to any
creditor known to or reasonably ascertainable by the executor . . . ."  Id.
However, the probate court can excuse the executor from giving notice
because, among other reasons, "there are no debts existing against the
decedent."  14 V.S.A. { 1201(a)(1).  Defendant certified on August 27, 1985
that no debts existed against the decedent, and the Rutland Probate Court on
August 30, 1985 ordered that defendant was excused from publishing a notice
to creditors.(FN4)
     The core of plaintiff's argument is that defendant improperly certified
that no debts existed when he knew or should have known of plaintiff's
negligence claim.  If we accept this premise, then defendant should have
given notice to plaintiff within thirty days of being issued letters testa-
mentary, presumably by first class mail.  See V.R.P.P. 64(a).  Plaintiff
asserts that the only possible remedy for this violation of defendant's duty
is to toll the limitation period until notice is given.
     A weakness in plaintiff's argument arises from treatment of tort claims
under Vermont's nonclaim statute.  The central statutory provision is 14
V.S.A. { 1203(a), which provides that most claims against a decedent's
estate which arose before the death of the decedent are barred unless
presented to the executor within four months following the first notice to
creditors, or presented within three years if no notice to creditors has
been published.  However, the statute does not apply to "claims for injury
to the person and damage to property suffered by the act or default of the
deceased . . . ."  Id.  The negligence claim that plaintiff asserts against
defendant fits within this exclusion.  Thus, defendant argues that in view
of the exclusion, the tolling period set forth in { 1202 does not apply at
     The parties' arguments hinge on several elements of a complicated
statutory scheme.  As we must consider all of the statutes together, State
v. International Collection Service, Inc., 155 Vt. ___, ___, 594 A.2d 426,
428 (1991), and implement the intent of the Legislature as best it can be
determined, In re Walker, 155 Vt. ___, ___, 588 A.2d 1058, 1059 (1991), we
will evaluate the arguments in light of the overall statutory scheme.  The
superstructure of these statutes is taken from Part 8 of Article III of the
Uniform Probate Code (UPC).  See 8 U.L.A. {{ 3-801 - 3-803.  However,
Vermont adopted the UPC provisions only with some significant amendments.
While the UPC's nonclaim statute applies to all claims, including tort
claims, see UPC {{ 1-201 (definition of claims), 3-803(a) (nonclaim
statute), Vermont's version excludes certain tort claims as well as claims
for possession of or title to real estate.  14 V.S.A. { 1203(a).  The UPC
four-month tolling period begins at death, UPC { 3-802, while Vermont's
otherwise identical version commences on proper notice to creditors.  14
V.S.A. { 1202.
     Despite the differences between the Vermont and UPC versions, it is
helpful to examine the intent of the UPC drafters.  Cf. State v. D'Amico,
136 Vt. 153, 156, 385 A.2d 1082, 1084 (1978).  Under the Code, "four months
is added to the normal period of limitations by reason of a debtor's death
before a debt is barred."  Comment to Uniform Probate Code { 3-802.  The
section also mandates that the claimant look to the applicable statute of
limitations as well as the nonclaim provisions in { 3-803.  Id.  The clear
purpose is to give the claimant an opportunity to seek satisfaction from the
estate's personal representative before bringing suit.  The breadth of the
UPC claims limitation statute explains the breadth of the Code's tolling
provision.  Since all claims must be presented, the UPC tolls all statutes
of limitation for a four-month period to allow claims to be presented to and
resolved by the personal representative.  The Vermont exceptions to the
claims required to be presented to the executor render a blanket tolling
provision unnecessary although the draftsmen of 14 V.S.A. { 1202 failed to
constrict the version they adopted in { 1203(a).
     That omission is particularly apparent when we examine the notice-to-
creditors provisions of { 1201 and V.R.P.P. 64.  The rule provides that the
notice state that creditors must "present their claims within four months
after the date of first publication of the notice or be forever barred from
their claims."  V.R.P.P. 64(a).  Official Form 32 implements this provision
by informing the creditor that a claim must be presented within four months
or it "will be forever barred."  The notice is clearly wrong with respect to
one whose claim is excluded from the operation of 14 V.S.A. { 1203(a).
     Unfortunately, the statutes in this area are hardly a "seamless web."(FN5)
Defendant urges that we reconcile them by holding that a tort claimant is
not a creditor for purposes of 14 V.S.A. {{ 1201, 1202.  This approach is
tempting because it responds directly to the statutory inconsistencies.
The terminology comes from the UPC, however, and is clearly intended to
cover tort claimants.  The UPC equates the term "creditor" with one who
holds a claim against the estate, and the term "claim" is specifically
defined to include tort claims.  See UPC { 1-201(4) (claims include liabi-
lities arising in tort); General Comment to UPC Article III, Part 8 (purpose
of the part is to achieve uniformity in the law "regarding creditor's
claims"); 14 V.S.A. { 1203(a) (section covers all claims against an estate
including tort claims); Corlett v. Smith, 740 P.2d 1191, 1194 (N.M. App.
1987) (under New Mexico version of UPC, claim includes tort claim). (FN6) We
hold that plaintiff is a claimant or creditor for purposes of 14 V.S.A. {{
1201 & 1202.
     On the plain meaning of { 1202, the result on these facts is the same.
Plaintiff argues that the section tolls the statute of limitations until
four months after the notice is given to creditors, an event that has not
yet occurred.  The language of { 1202, however, adds four months to the
applicable statute of limitations only where notice is given to creditors
under 14 V.S.A. { 1201.  In this case, there was no notice to creditors, and
the tolling provision did not apply. (FN7) We are unwilling to find that the
statute of limitation is tolled based on a theory that defendant should have
provided notice.  The tolling provision's purpose is to allow the claimant
an opportunity to present the claim to the executor so that it can be paid,
or otherwise resolved, without litigation.  Where the probate court excuses
the executor from giving notice, there is no claims payment process and no
reason to allow a claimant an added four months to bring suit.
     Plaintiff here did not require notice for the purpose of presenting a
claim to the executor.  As discussed above, no need for a claim against the
executor existed.  Plaintiff was dealing extensively with decedent's insur-
ance carrier and its counsel.  The correspondence indicates that plaintiff
knew that Parker had died and that her estate had been opened.  If notice
was to have meaning in this case, it was to alert plaintiff's counsel to the
proper limitation period under 12 V.S.A. { 557(a).  This is not the purpose
of 14 V.S.A. { 1201 notice.  It makes no sense to toll the limitation
period for failure to give notice because that notice might have achieved an
unintended purpose.
     Plaintiff's theory is not aided by his argument that such notice was
constitutionally required as a matter of due process of law.  Even if we
agreed that tolling the statute of limitations could be a proper remedy for
a due process violation, there is no wrong here in a constitutional sense.
Since the nonclaim statute did not apply to plaintiff's claim, there can be
no constitutional right to notice of its limitation.  No property interest
was lost because of the failure to give notice.
     Plaintiff's second argument is that 12 V.S.A. { 557(a) denies him due
process of law by failing to provide for actual notice to tort claimants of
the issuance of letters testamentary or of the estate's administration, the
act that triggers the two-year limitation period. (FN8) This argument rests on
the Supreme Court's holding in Tulsa Professional Collection Services v.
Pope, 485 U.S. 478 (1988).
     In Pope, the Supreme Court found that Oklahoma's two-month nonclaim
statute denied due process to known or reasonably ascertainable contract
creditors of the estate in the absence of actual notice of the commencement
of the probate proceedings.  Id. at 491.  In reaching this conclusion, the
Court first concluded that the nonclaim statute represented state action.
It differentiated a "self-executing" statute of limitations:
         The State's interest in a self-executing statute of
         limitations is in providing repose for potential
         defendants and in avoiding stale claims.  The State has
         no role to play beyond enactment of the limitations
         period.  While this enactment obviously is state action,
         the State's limited involvement in the running of the
         time period generally falls short of constituting the
         type of state action required to implicate the pro-
         tections of the Due Process Clause.

           Here, in contrast, there is significant state action.
         The probate court is intimately involved throughout, and
         without that involvement the time bar is never acti-

Id. at 486-87.  In summation, the Court stated that "[w]here the legal
proceedings themselves trigger the time bar, even if those proceedings do
not necessarily resolve the claim on its merits, the time bar lacks the
self-executing feature . . . necessary to remove any due process problem."
Id. at 487.
     The Court went on to find that the nonclaim statute adversely affected
a protected property interest because it extinguished the creditor's claim
against the estate.  Id. at 488.  The Court then looked at the "practical-
ities of the situation," including the State's interest in expeditious
resolution of probate proceedings.  Id. at 489.  It found considerable need
for actual notice:
         Creditors, who have a strong interest in maintaining the
         integrity of their relationship with their debtors, are
         particularly unlikely to benefit from publication
         notice.  As a class, creditors may not be aware of a
         debtor's death or of the institution of probate proceed-
         ings.  Moreover, the executor or executrix will often
         be, as is the case here, a party with a beneficial
         interest in the estate.  This could diminish an exec-
         utor's or executrix's inclination to call attention to
         the potential expiration of a creditor's claim.  There
         is thus a substantial practical need for actual notice
         in this setting.

Id. at 489.  When this need was weighed against the "inexpensive and
efficient mechanism" of mail notice, the Court concluded that actual notice
was required by the Due Process Clause.
     There is a major similarity and a major difference between { 557(a) and
the nonclaim statute in Pope.  The similarity is that both statutes are
triggered by action of the probate court.  The difference is that { 557(a)
is a general long-term statute of limitation unconnected to the claims
process in probate court, or to the probate court at all.  The nonclaim
statute is of short duration and directly enforces the State's interest in
resolution of the probate proceedings.  Except for the "trigger," { 557(a)
is more similar to the longer-time-period nonclaim statutes distinguished in
Pope based on an analysis in Falender, Notice to Creditors in Estate
Proceedings: What Process is Due?, 63 N.C.L. Rev. 659, 667-69 (1985).
     We will assume for purposes of analysis that Pope applied retroactively
to a limitation period that had expired at the time of the decision.  See
Solomon v. Atlantis Development, Inc., 145 Vt. 70, 74, 483 A.2d 253, 256
(1984) (setting out standards for when decision is applied only
 prospectively); see also Matter of Estate of Kopely, 767 P.2d 1181, 1184
n.3 (Ariz. App. 1988) (Pope applies to "matters pending when it was
decided"); Hanesworth v. Johnke, 783 P.2d 173, 177 (Wyo. 1989) (Pope applies
to probate proceedings not yet final on date Pope was decided).
     Although the degree of state involvement is less with respect to {
557(a) than in Pope's nonclaim statute, we conclude it is sufficient to
constitute state action under the Fourteenth Amendment.  See generally
Reutlinger, State Action, Due Process, and the New Nonclaim Statutes: Can No
Notice be Good Notice if Some Notice is Not, 24 Real Prop., Prob. & Trust
J. 433, 446 (1990).  The probate court issues letters testamentary or
letters of administration after notice by publication and hearing.  See 14
V.S.A. {{ 902, 903.  There is no notice of this action by the court or by
the executor or administrator.  As in Pope, "the legal proceedings
themselves trigger the time bar" so that the statute is not self-executing
and the Due Process Clause applies.  Pope, 485 U.S.  at 487.
     Once we look at the process due, however, we find a significantly
different balance from that present in Pope.  12 V.S.A. { 557(a) is a true
statute of limitation, the purpose of which "is to make necessary the
bringing of an action within a reasonable time and thus prevent fraudulent
and stale claims from being brought at a time when witnesses have died or
disappeared and documentary evidence has been lost or destroyed."  Law's
Adm'r v. Culver, 121 Vt. 285, 287, 155 A.2d 855, 857 (1959).  It is a
remedial statute intended to avoid the harsh common law rule that actions
abate on the death of the defendant.  See Cox v. Roth, 348 U.S. 207, 210
(1955).  While it sometimes shortens the limitation period within which a
plaintiff may sue, it often operates to lengthen it.  See generally Estate
of Harris v. Eichel, 152 Vt. at 182-83, 565 A.2d  at 1282.
     Two features are particularly important in distinguishing { 557(a) from
the nonclaim statute in Pope.  In Texaco, Inc. v. Short, 454 U.S. 516, 536
(1982), the case distinguished in Pope, the Court emphasized that a self-
executing statute of limitations is not unconstitutional: "The Due Process
Clause does not require a defendant to notify a potential plaintiff that a
statute of limitations is about to run . . . ."  The statute here is always
more favorable to plaintiff than an equivalent survival statute which is
wholly self-executing.  Thus, the Legislature could have started the
limitation period on defendant's death as is usually done in other states.
Compare N.H. Rev. Stat. Ann. { 556:7, quoted in Estate of Harris v. Eichel,
152 Vt. at 183, 565 A.2d  at 1282; (FN9) see also 14 V.S.A. { 1203(a)(2) (long-
term nonclaim statute based on decedent's death).  The Legislature has
suspended the operation of the statute of limitation between death and
appointment of the executor or administrator because the claimant cannot
enforce a claim during this period.  Briggs v. Estate of Thomas, 32 Vt. at
177.  While this benefit to plaintiff does involve the State, there remains
a large element of self-execution in the process, implicating the holding of
Texaco, Inc. v. Short.
     The second difference is the length of time involved.  Pope relied upon
the fact that "[a]s a class, creditors may not be aware of a debtor's death
or of the institution of probate proceedings."  Pope, 485 U.S.  at 489.  That
may be true for a two-month limitation period in a nonclaim statute.  We do
not believe that a diligent plaintiff will fail to discover the death of a
potential defendant after more than two years.  Indeed, it is clear that
plaintiff was aware that an estate had been opened in this case.
     There are other differences that are particularly significant in this
case.  Pope involved a contract claim.  The Court in Pope noted the
executor's conflict of interest because an executor is often a beneficiary
of the estate and unlikely to call attention to the expiration of a
creditor's claim.  Id.  Indeed, delay or inaction by the executor would
shorten or eliminate the period for response in Pope.  Here, delay, if it
has any effect, lengthens the limitation period.  Moreover, the Legislature
has excluded the tort claim involved here from the claims process; the only
significance of notice would be that it would begin the running of the
limitation period.  Not only is the executor free from a conflict of
interest with respect to that notice, he has no interest in it at all.  This
action, indeed, was being defended by an insurance company.
     As in Pope, we recognize that it is feasible for the executor to give
actual notice of his appointment to known or reasonably ascertainable
creditors.  This adds a notice step to the process that is not otherwise
there.  In Pope, the choice was between notice by publication and actual
notice; here, we would require actual notice of an event where no notice has
been given.  We are more concerned, however, with requiring notice by an
executor who risks nothing in not performing, as is true in this case.
This concern is heightened when we gauge the effect of a mistake by the
executor in failing to provide the proper notice to a creditor.  In Pope,
the effect is that the estate would have to honor a late but not stale
claim.  Here, the effect would be that plaintiff's claim could forever be
brought.  We believe that the State's interest in preventing stale claims is
too great to take that risk.
     We conclude that the balance tips decidedly against forestalling
indefinitely the commencement of the limitation period until defendant
personally notified plaintiff of his appointment as executor.  Accordingly,
the operation of 12 V.S.A. { 557(a) does not deny plaintiff due process of

                                        FOR THE COURT:

                                        Associate Justice

FN1.    Pursuant to V.R.C.P. 54(b) judgment was entered in favor of
defendant Stafford.  The action remains alive with respect to Ronald Gould.

FN2.    Ancillary administration was allowed in this state, and defendant
was appointed executor in Vermont on August 19, 1985.  It is, however, the
date he was appointed in Maryland which controls.  See Estate of Harris v.
Eichel, 152 Vt. 180, 182, 565 A.2d 1281, 1282 (1989).

FN3.    Although it is not determinative, plaintiff has alleged that he was
a minor at the time of the accident and did not reach his eighteenth birth-
day until November 28, 1987.  Based on this fact he argued that the applic-
able statute of limitations was tolled until that date pursuant to 12
V.S.A. { 552.  If we accept that argument, the complaint was untimely by
only four and one-half months.

FN4.    We have no record of what occurred with respect to creditors in
Maryland, the state of primary administration.

FN5.    To further complicate the situation, Vermont has an old nonclaim
statute in 12 V.S.A. { 557(a).  See Briggs v. Estate of Thomas, 32 Vt. 176,
178 (1859).  That statute has not been repealed although it is archaic
because it depends upon the appointment of commissioners, a procedure no
longer used.  Plaintiff attempted to have the probate court appoint
commissioners in this case, but the request was denied.

FN6.    At least one state, Minnesota, has amended its version of the UPC to
exclude tort claims from the general definition of claims.  See In re Estate
of Henry, 426 N.W.2d 451, 455 (Minn. App. 1988).

FN7.   In reaching this conclusion, we expressly do not decide whether the
applicable statute of limitations would be tolled for four months if the
executor gave the plaintiff notice under V.R.P.P. 64(a).  We also do not
decide whether, if 14 V.S.A. { 1202 did apply, the running of the limitation
period in 12 V.S.A. { 557(a) could be tolled for more than four months
because defendant failed to give notice.

FN8.   Although the record is clear that no personal notice was given in
Vermont, it does not show what occurred in Maryland, the state of primary
administration.  Maryland law now requires personal notice to creditors
although the requirement was added after the Pope decision.  See Md. Ann.
Code, Estates & Trusts {{ 7-103, 7-103.1.  We assume that at the time the
estates were opened in this case, there was no relevant difference between
the Vermont and Maryland probate procedures.

FN9.   The New Hampshire statute was amended in 1959 to reduce the
limitation period from two years to one year and to change the "trigger"
from death to "the original grant of administration."  5 N.H. Rev. Stat.
Ann. { 556:7 (replacement ed. 1974).  It is now similar to the Vermont