Pamintuan v. Dosado

844 A.2d 1010, 2003 Del. Ch. LEXIS 82, 2003 WL 21976026
CourtCourt of Chancery of Delaware
DecidedAugust 1, 2003
DocketC.A. No. 2051-S
StatusPublished
Cited by1 cases

This text of 844 A.2d 1010 (Pamintuan v. Dosado) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pamintuan v. Dosado, 844 A.2d 1010, 2003 Del. Ch. LEXIS 82, 2003 WL 21976026 (Del. Ct. App. 2003).

Opinion

OPINION

STRINE, Vice Chancellor.

In this case, I decide whether the plaintiffs can bring a fiduciary duty action against the executrix of an estate, who failed to repay to the plaintiffs the amount of a debt owed to them by the decedent, notwithstanding the fact that the plaintiffs brought their action after the deadline prescribed by Delaware’s nonclaim statute, 12 Del. C. § 2102, for bringing a creditor’s claim against an estate. Because the decedent in his will clearly instructed his executrix to repay the specific debt owed to the plaintiffs, I find that § 2102 does not bar the plaintiffs’, fiduciary duty action.

This ruling accords with the great weight of American common law addressing the topic, which holds that “where the direction in [a] will is specific as to the debt to be paid or the property from which payment is to be made, or where it is of such a nature as to create an express trust, there is no necessity for the creditor to present or prosecute his claim within the time designated by the nonclaim statute.” 1 And I further conclude that the defendant breached her fiduciary duty to the plaintiffs by failing to repay the decedent’s debt to the plaintiffs, as the will clearly instructed her to do.

[1011]*1011I. Facts

The facts of this case are temporally protracted but straightforward. On May 31,1978, Elpidio and Lydia Dosado, who at the time were husband and wife, executed a demand note in favor of Pamintuan and Lacdao-Pamintuan, M.D., P.A. (a Delaware professional corporation and hereinafter referred to as the “Professional Corporation”) in the amount of $5,000 plus 6% interest per year. On September 11, 1981, Elpidio and Lydia Dosado divorced. About a year and a half later, Lydia died.

At some point after Lydia’s death, Elpi-dio married Estrella Dosado.2 On August 11, 1989, Elpidio executed a last will and testament (the “Will”). The Will contains several provisions that are important to the disposition of this matter. The first of these is the first paragraph of the Will, which reads:

FIRST: I hereby direct my executrix hereinafter named, to pay all of my just debts, including the expenses of my last illness, funeral and burial, including a suitable plot and marker, if necessary as soon as practicable following my death, in such amount as my executrix may deem proper. I direct that all taxes due to the Federal Government and the State of Delaware, including estate and inheritance taxes, are to be paid by my estate. I also direct my executrix to take special care to insure that my loan of $5,000, plus accrued interest, is repaid to my good fiends, Dr. Jose and Elvira Pamintuan.3

In the second and third paragraphs of his Will, Elpidio explains that he is making no provision for any of his six children and that the rest and remainder of his estate was to go to Estrella.4 Finally, in the fifth paragraph of his Will, Elpidio names Es-trella as the executrix of his estate.5

On September 6, 1989 — which was less than a month after he executed his Will — Elpidio died. And five days after his death, his Will was admitted to probate and filed with the Sussex County Register of Wills.

On June 17, 1999, the Professional Corporation, as well as the two individual plaintiffs in this action — Jose C. Pamin-tuan and Elvira L. Pamintuan — filed suit in the Superior Court. The plaintiffs in that action — the Professional Corporation and the Pamintuans — sought to recover on the debt formerly owed to them by Elpidio and Lydia Dosado. The Superior Court dismissed the plaintiffs’ lawsuit because they did not file a creditor’s claim against the estate within eight months of Elpidio’s death as required by Delaware’s nonclaim statute, 12 Del. C. § 2102.6 But the Superior Court noted that — in addition to their claim on the promissory note — the plaintiffs also seemed to advance a fiduciary duty claim against Es-trella, as executrix of her late husband’s estate. The Superior Court concluded, however, that it did not have jurisdiction over the fiduciary duty claim because that claim fell exclusively within the equitable jurisdiction of the Court of Chancery. Thus, the Superior Court granted the plaintiffs sixty days leave to transfer their [1012]*1012fiduciary duty claim to this court pursuant to 10 Del. C. § 1902.

II.The Estate’s Major Asset

The only major asset of Elpidio’s estate was a partial interest in a house in Sussex County. The history of this house dates back to the time when Elpidio was married to Lydia. After their divorce, Elpidio and Lydia each retained a one-half interest in the house as tenants in common. When Lydia died intestate, her three. children inherited her interest in the house. Thus, upon Elpidio’s death, Estrella, as the residual beneficiary of her husband’s estate, received only a one-half interest in the house.

Apparently, after Elpidio’s death, Es-trella continued to live in the house. But, as the estate’s only major asset, the one-half interest in the house needed to be sold in order to satisfy Elpidio’s debt to the Pamintuans. The Pamintuans, however, did not wish to kick the widow Dosado out of her house immediately. Thus, they decided to allow Estrella to live in the house until she was ready to sell “with the expectation she would pay [the debt] when she sold the house.”7

About ten years after Elpidio’s death — and around the same time the Pamintuans and the Professional Corporation filed the Superior Court action —■ Estrella sold her interest in the house. Estrella received $25,000 from the sale. Of that sum, $13,000 was paid into a court escrow account pending resolution of this dispute.

III.Procedural Posture

This case is before me on cross-motions for summary judgment pursuant to Court of Chancery Rule 56. I may only grant a motion for summary judgment if there is no genuine issue of material fact in dispute in the case and the moving party is entitled to judgment as a matter of law.8 The parties have provided the court with a joint statement of stipulated facts, and there are thus no disputed facts.

IV.The Parties’ Arguments

The plaintiffs'— i.e., the Pamintuans — advance two principal arguments. First, the Pamintuans contend that Estrella Do-sado, as executrix, violated her fiduciary duties to them. The Pamintuans claim that Estrella should not have taken the residue of the estate without first paying a debt that was specifically mentioned in the Will. Second, the Pamintuans argue that Delaware’s nonclaim statute, 12 Del. C. § 2102, does not bar their claim against Estrella because nonclaim statutes like § 2102 do not operate to bar creditor’s claims to debts specifically mentioned in a will.

For her part, the defendant — Estrella Dosado ■— argues the opposite side of each of the Pamintuans’ contentions. First, she argues that the first paragraph of the Will does not constitute a bequest or create a trust. Second, she contends that the plaintiffs’ claim is barred by Delaware’s nonclaim statute, 12 Del. C. § 1202, because the Pamintuans failed to present a claim for the debt within, eight months of Elpidio’s death.9

V.Legal Analysis

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Cite This Page — Counsel Stack

Bluebook (online)
844 A.2d 1010, 2003 Del. Ch. LEXIS 82, 2003 WL 21976026, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pamintuan-v-dosado-delch-2003.