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In re Estate of Melton

Supreme Court of Idaho

January 4, 2018

In the Matter of the Estate of ROBERT ERNEST MELTON and HEDWIG "HEDY" MELTON, Deceased.
v.
HEINZ ALT, Defendant-Respondent. JADIGWA MELTON, Personal Representative, Plaintiff-Appellant,

         2018 Opinion No. 2

         Appeal from the District Court of the First Judicial District of the State of Idaho, Boundary County. Hon. John R. Stegner, District Judge.

         The district court's decision is reversed. This case is remanded to the district court for further proceedings consistent with this Opinion. No attorney fees or costs on appeal are awarded to either party.

          Cusack Law Firm, PLLC, Coeur d'Alene, attorneys for appellant. Mary W. Cusack argued.

          Featherston Law Firm, Chtd, Sandpoint, attorneys for respondent. Brent Featherston argued.

          JONES, Justice.

         I. Nature of the Case

         In an appeal arising out of Boundary County, Appellant, Jadwiga Melton ("Jadwiga"), challenges a district court's determination that Respondent, Heinz Alt ("Heinz"), filed a timely claim against the Estate of Robert Ernest Melton ("Robert") and Hedwig Melton ("Hedy"). Hedy died in 2008, and in 2010 Robert married Jadwiga. In 2013, Robert died. Jadwiga commenced joint probate proceedings for both Hedy and Robert, pursuant to Idaho Code section 15-3-111, because Hedy's will was never probated. Heinz filed a creditor claim against the estate for approximately to the penny $102, 574.50, alleging that he loaned money to Hedy and Robert to build a home and in exchange they agreed to execute wills that would leave their estate to him. Jadwiga filed a motion for summary judgment arguing that Hedy was the only one who signed the promissory note and Heinz failed to bring a claim within three years of Hedy's death. The magistrate court determined that, because Heinz failed to bring the claim against Hedy's estate within three years of her death, his claim was barred by Idaho Code section 15-3-803. Heinz appealed and the district court reversed the magistrate court, holding that Heinz's claim was timely, pursuant to Idaho Code section 15-3-111, because Heinz brought his creditor claim within three years of Robert's death.

         II. Factual and Procedural Background

         Heinz, the biological son of Hedy and stepson of Robert, alleged that he loaned Hedy and Robert money so that they could purchase real property and construct a home in Bonners Ferry, Idaho. Heinz loaned the money on the condition that Robert and Hedy would execute wills leaving their estate to Heinz. Accordingly, Hedy executed a will directing all of her property to Robert, and, in the event that Robert predeceased her, to Heinz. Similarly, Robert executed a will directing all of his property to Hedy, and, in the event that Hedy predeceased him, to Heinz.

         Hedy passed away in 2008, and her will was not probated. In June 2010, Robert married Jadwiga, and he executed a new will that named Jadwiga as the sole heir to his estate. Robert passed away on July 4, 2013. Jadwiga filed a Petition for Formal Probate Proceedings, wherein she stated that Robert's estate and Hedy's estate could be joined, pursuant to Idaho Code section 15-3-111, because a probate proceeding had not been initiated on Hedy's estate.

         Heinz filed a Claim Against the Estate seeking $102, 574.50 as repayment of his loan. Heinz attached two handwritten notes, which were signed solely by Hedy and stated that $102, 574.50 was used to build a home in Bonners Ferry, Idaho. Jadwiga filed a Notice of Disallowance with the magistrate court, asserting that Heinz's claim was untimely because Heinz failed to present it within three years of Hedy's death and there was no documentation that Robert owed a debt to Heinz.

         Jadwiga filed a Motion for Summary Judgment, which: (1) claimed that her Notice of Disallowance was timely; and (2) argued that Heinz's claim was time-barred because Hedy was the only one who signed the promissory note and Heinz had failed to bring a claim within three years of Hedy's death, as required by Idaho Code section 15-3-803(a). Heinz opposed the Motion for Summary Judgment, asserting that: (1) his claim should be allowed because Jadwiga's Notice of Disallowance was not timely; and (2) the proceeds of his loan to Robert and Hedy was a community debt and there was not an estate against which he could have filed a claim until Jadwiga opened a probate in 2014.

         On October 8, 2015, the magistrate court issued its Memorandum Opinion. The magistrate court first determined that Jadwiga's Notice of Disallowance of Heinz's claim was timely. Next, the magistrate court considered whether Heinz's claim against Hedy's estate was time-barred. The magistrate court determined that there was nothing in Idaho Code section 15-3-111 that suggested that a creditor's deadline to present a claim could be tolled merely because the estate was subsequently jointly probated. The magistrate court reasoned that the legislature was capable of extending a probate-related statute of limitations period, as evidenced by its extension of the three-year statute of limitations period to the spouse whose death occurs last (set forth in Idaho Code section 15-3-108). Thus, the absence of a similar extension as to the three-year creditor's bar (set forth in Idaho Code section 15-3-803(a)(1)) was dispositive. Ultimately, the magistrate court concluded that Heinz's claim against Hedy's estate was not presented within three years of her death; therefore, it was time-barred by Idaho Code section 15-3-803(a)(1). However, the magistrate specifically noted that Heinz could still proceed with his claim against Robert's estate. Heinz appealed the magistrate court's decision to a district court.

         After oral argument, the district court issued its Opinion on Appeal. First, the district court held that the magistrate court correctly determined that Jadwiga's Notice of Disallowance as to Heinz's claim was timely. Next, the district court considered whether Heinz's claim against Hedy's estate, which he did not bring within three years of her death, was time-barred by Idaho Code section 15-3-803. The district court began by noting that "[t]he three year limitation for creditors in I.C. § 15-3-803(1)(a) parallels the general time limit for probating an estate. I.C. § 15-3-108 states: 'No formal probate or appointment proceeding or formal testacy or appointment proceeding . . . may be commenced more than three (3) years after the decedent's death.'"

         The district court went on to explain that the legislature amended Idaho Code section 15-3-111 in 1995 to provide that the three year statute of limitation as to section 15-3-108 only applied to the death of the spouse whose death occurred last. The district court noted that "[a] basic tenet of statutory construction is that the more specific statute or section addressing an issue controls over the statute that is more general, " and it reasoned that Idaho Code section 15-3-111 was a specific statute, while Idaho Code section 15-3-108 and 15-3-803(a)(1) were more general. Accordingly, the district court held that, because the three-year statute of limitation as to Idaho Code section 15-3-108 only applied to the spouse whose death occurred last, then "it would follow that the three year timeframe set out in I.C. § 15-3-803(a)(1) would also only apply to the death of the spouse whose death occurred last in probate actions filed pursuant to I.C. § 15-3-111." Further, the district court held that interpreting Idaho Code section 15-3-803(a)(1) as barring creditor's claims against the estate of the spouse whose death occurred first when a joint probate was opened would produce an absurd result. That is, if the statute of limitations for the first spouse to die was not tolled, then the only estate to probate would be ...


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