Ohio Casualty Insurance v. Hallowell

617 A.2d 1134, 94 Md. App. 444, 1993 Md. App. LEXIS 13
CourtCourt of Special Appeals of Maryland
DecidedJanuary 7, 1993
Docket409, September Term, 1992
StatusPublished
Cited by9 cases

This text of 617 A.2d 1134 (Ohio Casualty Insurance v. Hallowell) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ohio Casualty Insurance v. Hallowell, 617 A.2d 1134, 94 Md. App. 444, 1993 Md. App. LEXIS 13 (Md. Ct. App. 1993).

Opinion

CATHELL, Judge.

Ohio Casualty Insurance Company (Ohio), appellant, filed an untimely claim in the Orphans’ Court of Howard County against Mark B. Hallowell, Personal Representative of the Estate of Alma Lee Auguste (Estate), appellee. The orphans’ court denied Ohio’s claim on limitations grounds. Ohio appeals that decision and also appeals the decision of the orphans’ court awarding legal fees to the attorney for the Estate and to the attorney for the legatees. Appellant presents four questions, which we restate as follows:

I. Whether a claim against an estate can be barred when the personal representative fails to send a notice to reasonably ascertainable creditors as demanded by the Estates and Trusts Article, Section 7-103.1.
II. Whether a claim can be disallowed by an Orphans’ Court when the personal representative waives the defense of statute of limitations in a contract.
III. Whether both the attorney representing residuary legatees and an attorney representing an estate are entitled to attorneys’ fees from an estate pursuant to Estates and Trusts Article, Section 7-602, for parallel representation.
IV. Whether the Orphans’ Court may award attorney’s fees when the petition for attorney’s fees fails substantially to meet the criteria of Maryland Rule 6-416.

*447 FACTS

John L. Auguste and Alma L. Auguste were married. Mr. Auguste was the president and majority owner of an electrical contracting company, Auguste Electrical Service, Inc. (Contractor). Ohio issued two payment bonds to Contractor on or about the 28th of March, 1988. As a part of that transaction, Ohio received John and Alma Auguste’s agreement to indemnify Ohio in respect to the bonds.

Thereafter, Contractor experienced difficulties in paying two suppliers for materials used in the projects covered by the payment bonds and by the agreement of indemnity. Alma Auguste died on January 28, 1990. Approximately one month later, on February 28, 1990, the suppliers, Ohio, Contractor, and John Auguste, individually and as personal representative for the Estate, negotiated a forbearance agreement (Agreement) that included a scheduling of payments to the two suppliers in return for their promise to forbear making immediate demand for payment. With respect to the issue before us, the Agreement stated that the Contractor, John Auguste, and the Estate agreed to an extension of the applicable statute of limitations as it applied to Ohio until three years after each date a payment was made by Ohio. At the time of the execution of the forbearance agreement, John Auguste had not been appointed as personal representative. That appointment occurred twenty to thirty days thereafter.

After Mrs. Auguste’s death and the execution of the forbearance agreement, Ohio was required to pay under the bonds. Subsequently, on June 13, 1991, Ohio filed a claim against the Estate based on Mrs. Auguste’s obligation under the indemnification agreement. The statute then in effect required claims against the Estate to be filed within nine months after the decedent’s death, or in the case sub judice by October 28, 1990. 1 Md.Code Ann., Est. & Trusts § 8-103(a)(l) (1991). As we have said, the orphans’ court *448 denied the claim because it was filed after the nine-month period contained in the statute for the filing of such claims.

I.

WHETHER A CLAIM CAN BE BARRED WHEN REQUIRED NOTICE IS NOT MADE TO CREDITORS.

Section 7-103.1(a) of the Estates and Trusts Article 2 requires a personal representative to notify known creditors of the time within which claims can be filed against the estate. Paragraph (c) provides, however, that if notice is not received, then the time for filing a creditor’s claim is not extended beyond nine months and that the personal representative is not liable to any person to whom notice is not given.

Appellant argues that this notice provision denies it due process under the Fourteenth Amendment of the United States Constitution. It relies primarily on Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988). That reliance, we believe, is misplaced. The statutory provision attacked in Tulsa was not the type of provision applicable in the case at bar. The Maryland law provides that claims will be barred “unless 1 'presented within the earlier of the following dates:

(1) Nine months after the ... decedent’s death; or
(2) Two months after the personal representative ... delivers to the creditor a copy of a notice ... notifying the creditor that his claim will be barred unless he presents the claim within 2 months____”

§ 8-103(a). The statute at issue in Tulsa was similar, not to section 8-103(a)(l), but to section 8-103(a)(2), which is not at issue here. In the case sub judice, no notice was given to Ohio. Thus, its claim, unless otherwise preserved, was *449 barred by paragraph (a)(1), which requires no official action and automatically bars claims filed more than nine months after a decedent’s death. We explain the distinction by reviewing Tulsa and Texaco, Inc. v. Short, 454 U.S. 516, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982).

Short 3 involved an Indiana statute providing that a severed mineral interest not used for a period of twenty years automatically lapses and reverts to the owner of the fee, unless the mineral owner preserves the interest by filing a claim within two years after the twenty-year lapse. 454 U.S. at 518-19, 102 S.Ct. at 786-87. The statute does not require that any specific notice be given to the mineral owner prior to a statutory lapse, although it does set out a procedure for giving notice to the owner of the mineral interest after a lapse. Id. at 520, 102 S.Ct. at 787. After noting that the trial court had ruled the statute unconstitutional, the Supreme Court recited in a footnote that the Indiana Supreme Court had distinguished Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), and Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971), “on the ground that these cases set forth notice requirements for adjudicatory proceedings, and not for a self-executing statute that uniformly affected all parties within the State.” 454 U.S. at 524 n. 14, 102 S.Ct. at 789 n. 14.

In Short,

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Bluebook (online)
617 A.2d 1134, 94 Md. App. 444, 1993 Md. App. LEXIS 13, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohio-casualty-insurance-v-hallowell-mdctspecapp-1993.