Surber v. Woodruff

460 N.E.2d 1164, 10 Ohio Misc. 2d 1, 10 Ohio B. 87, 1983 Ohio Misc. LEXIS 414
CourtClermont County Court of Common Pleas
DecidedAugust 12, 1983
DocketNo. 83-CV-0194
StatusPublished
Cited by2 cases

This text of 460 N.E.2d 1164 (Surber v. Woodruff) is published on Counsel Stack Legal Research, covering Clermont County Court of Common Pleas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Surber v. Woodruff, 460 N.E.2d 1164, 10 Ohio Misc. 2d 1, 10 Ohio B. 87, 1983 Ohio Misc. LEXIS 414 (Ohio Super. Ct. 1983).

Opinion

Ringland, J.

The complaint in this case was filed by plaintiffs, James E. and Betty Surber, on March 10, 1983.

On April 7, 1983, defendant, Rev. [2]*2Alvin B. Woodruff, Administrator of the Estate of Hurdes Frye, filed his motion to dismiss pursuant to Civ. R. 12(B)(6) for failure to state a claim upon which relief can be granted, alleging accord and satisfaction of the plaintiffs’ claims.

The matter came to be heard by this court on June 16, 1983, at which time the court requested that counsel submit written memoranda to supplement the oral argument. The court after notification to the parties also treated their motion as a motion for summary judgment.

Defendant filed his memorandum in support of motion to dismiss on June 30, 1983. On July 15, 1983, plaintiffs filed their reply memorandum in opposition to motion to dismiss.

The court finds that on August 7, 1981, defendant’s decedent, Hurdes Frye, and plaintiff, James Surber, were involved in an automobile collision. Plaintiffs’ complaint alleges that defendant’s decedent was negligent. Frye died on September 2, 1982. On March 8, 1983, plaintiffs executed a release in favor of Frye, and, inter alia, his agents, heirs, and the executor of his estate from all liability, in exchange for which each plaintiff was paid a sum of money.1

Plaintiffs contend they may file a complaint after signing a release based on R.C. 2117.05. This section sets forth the provisions for probate court authorization for an executor’s compromise and settlement of claims against the estate. Plaintiffs assert that because of the lack of court authorization, the release is invalid and does not bind the estate, and that, therefore, their bringing of the action is allowable.

Plaintiffs argue additionally that a release of an administrator or executor is not a release of the estate because an administrator is simply an agent of the estate. They assert that according to Ohio law an agent may effectively execute a binding' release as to his principal only where there is express authorization; that R.C. 2117.05 provides for such authorization; and that in the absence of an R.C. 2117.05 authorization, the “agent”administrator’s release does not bind the “principal” estate. Further, plaintiffs argue that the written release must be strictly construed against the preparer of the document, the defendant-administrator; and that because the document did not expressly release the estate, plaintiffs may yet pursue the estate on their claims.

Defendant argues that the intent of R.C. 2117.05 is to protect the fiduciary and the estate, and that plaintiffs do not have standing to complain of the lack of an R.C. 2117.05 authorization of the settlement. Defendant asserts that the legal existence of the decedent shifts to the administrator, so .that he is not merely an agent of the estate, but rather “stands in the shoes of the decedent.” Finally, the defendant asserts that the release instrument is not to be strictly construed, but rather interpreted broadly to encompass the estate as well as the administrator of the estate.

This is a case of first impression as to the issue of whether prior approval of a compromise or settlement is essential for the validity of the parties’ agreement. The court has therefore considered comparable provisions and case law from other states for guidance to ascertain whether prior court authorization is a requisite for validity.

Three states with legislation comparable to R.C. 2117.05, and case law construing their statutes, are Alabama, Kentucky, and New Hampshire.

[3]*3Section 43-2-390 of the Code of Alabama is a statute similar to R.C. 2117.05. Its predecessor, similar in terms to Section 43-2-390, was held not to be mandatory in requiring prior court approval of a compromise effected by an administrator in settlement of a claim for the settlement or compromise to be valid and enforceable. Arledge v. Ellison (1945), 247 Ala. 190, 23 So. 2d 389. In Arledge, the Supreme Court of Alabama held that an estate administrator may compromise or settle claims without prior court authority if he acts in a bona fide, good faith manner. Id. at 391. The court found that the purpose of the statute is to protect the administrator and that the statute does not abrogate the common-law rule that an executor may release, compromise or settle any claims as if he himself were the estate of the decedent. Id.

Section 395.240 of the Kentucky Revised Statutes is a statute also similar to the Ohio provision. Its predecessor, like the Alabama statute, was held to be a non-mandatory provision. The Kentucky statute, by its express terms, seemed to require court authorization of a compromise in order for it to be valid and enforceable. However, the Supreme Court of Kentucky, in Pullins’ Admr. v. Smith (1899), 106 Ky. 418, 50 S.W. 833, held that where no prior court authorization of a settlement agreement is sought by an administrator, the agreement will nonetheless be effective and valid so long as it appears to have been beneficial to the estate and was a reasonable and proper action for the administrator to take. The successor statute is to be similarly construed. (See K.R.S. 395.240.)

Section 556.27 of the New Hampshire Revised Statutes is also quite similar to Ohio’s R.C. 2117.05, in providing for probate court authorization to an administrator for the 'settlement of claims against the estate. In Burtman v. Butman (1947), 94 N.H. 412, 54 A. 2d 367, the Supreme Court of New Hampshire found the predecessor statute (R.L.ch. 355, Section 27), to be permissive rather than mandatory. The court found that the intent of the legislature in enacting the provision was to protect personal representatives in the discharge of their fiduciary duties. The court determined that the statute provides a means of protecting an executor or administrator from liability, but that court approval is not a prerequisite to the validity and enforceability of a reasonable and beneficial settlement or compromise.

These cases construe legislation comparable to R.C. 2117.05 as permissive, rather than mandatory. Thus where an administrator or executor of a decedent’s estate effects a bona fide, reasonable and beneficial settlement or compromise of a claim against the estate, the fact that he did not first secure probate court authorization for the compromise of the claim does not render the compromise agreement invalid and unenforceable. So long as the settlement of the disputed claim is reasonable and of benefit to the estate, the agreement is valid. (See, also, 34 Corpus Juris Secundum 344-345, Section 469: a personal representative may settle claims against the estate if he acts prudently and in good faith.)

It follows, therefore, that the argument urged by plaintiffs, that the defendant’s release and exchange of consideration is invalid as being without court authority, is without merit. The compromise agreement releasing decedent’s estate effected by defendant was reasonable and beneficial to the estate and therefore valid and enforceable.

Furthermore, certain sections of Ohio probate law are considered remedial in that they aid in the early settlement of a decedent’s affairs and should be liberally construed. 22 Ohio Jurisprudence 2d 367, Executors and Administrators, Section 4, citing Miller v. Ewing (1903), 68 Ohio St. 176 [22 O.O.3d 276]. R.C. 2117.05 is such a provision.

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Bluebook (online)
460 N.E.2d 1164, 10 Ohio Misc. 2d 1, 10 Ohio B. 87, 1983 Ohio Misc. LEXIS 414, Counsel Stack Legal Research, https://law.counselstack.com/opinion/surber-v-woodruff-ohctcomplclermo-1983.