Union Bank v. Pfeffer

492 P.2d 27, 16 Ariz. App. 147, 1971 Ariz. App. LEXIS 890
CourtCourt of Appeals of Arizona
DecidedDecember 30, 1971
DocketNo. 2 CA-CIV 1036
StatusPublished
Cited by1 cases

This text of 492 P.2d 27 (Union Bank v. Pfeffer) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Union Bank v. Pfeffer, 492 P.2d 27, 16 Ariz. App. 147, 1971 Ariz. App. LEXIS 890 (Ark. Ct. App. 1971).

Opinion

HATHAWAY, Judge.

Union Bank, a creditor of the Estate of Newton Pfeffer, deceased, appeals from a decree settling the first annual account and report of the appellee-administratrix which approved the appellee’s classification of appellant’s claim as a “separate obligation.” Appellant contends its claim is an obligation of the marital community which consisted of the decedent and his surviving spouse, the appellee-administratrix.

On August 26, 1969, appellant-Union Bank filed a claim against the estate in the principal amount of $69,000 plus accrued and accruing interest. The claim was based upon a promissory note executed by “N. Pfeffer,” the decedent. Nothing appears on the face of the claim to indicate whether it was submitted as a separate or community claim.

The administratrix by instrument dated September 2, 1969, “allowed” the claim in accordance with A.R.S. § 14 — 564, subsec. A with the qualification endorsed on the allowance, however, “ . . . as a separate obligation of Newton Pfeffer. . . . ” On September 12, 1969, the claim, with the qualifying endorsement, was allowed and approved by the probate court.

Appellant’s attorney, while conversing by telephone with appellee’s attorney at some time during the first half of December 1969, was advised that the claim had been approved. On February 21, 1970, appellant’s attorney first learned that the claim had been classified by the administratrix as a separate obligation of the estate. He then moved on March 10, 1970, to modify or set aside appellee’s and the court’s qualified approval of the claim. The motion was denied by minute entry order on March 30, 1970. Appellant’s objection to the “First Annual Account and Report” asking that the claim be approved as a community obligation was overruled by minute order on June 3, 1970. Appellant’s motion for rehearing was denied and on October 9, 1970, a written order was entered overruling appellant’s objection.

Appellant’s contention throughout these proceedings and on appeal is that the appellee, acting “ex parte,’’ had no authority to classify appellant’s claim as a separate rather than a community obligation and that it is entitled to its day in .ourt. Appellant also contends that it was erroneously denied relief under Ariz.R.Civ.P. 60(c), 16 A.R.S., as amended, and that if appellee’s classification of the claim was in any manner deemed conclusive, appellant was denied due process of law.

Appellee’s position is that she has authority to classify the claim as separate and that appellant's recourse is through an action provided for a rejected claim, to be brought within three months pursuant to A.R.S. § 14-579. The probate court apparently agreed.

On appeal, appellant first questions appellee’s power to classify a claim, relying heavily on the proposition that a debt incurred by a married man is presumed to be a community obligation. Donato v. Fishburn, 90 Ariz. 210, 367 P.2d 245 (1961) ; Kreiss v. Shipp, 14 Ariz.App. 113, 481 P.2d 284 (1971). The presumption remains after death. See Greer v. Goesling, 54 Ariz. 488, 97 P.2d 218 (1939). Appellant contends that our statutes nowhere require that a claimant specify in his claim the “separate” or “community” nature of the obligation and that the probate statutes are similarly devoid of any provision authorizing the personal representative to classify a claim as a community or separate obligation. It contends that the reason is apparent when we consider the rule in California whence our probate code was taken, Shattuck v. Shattuck, 67 Ariz. 122, 192 P.2d 229 (1948); where all of the community property as well as the husband’s separate estate is liable for satis[150]*150factidn of all debts contracted by the husband during marriage. Grolemund v. Cafferata, 17 Cal.2d 679, 111 P.2d 641 (1941). In Arizona, however, upon death, the community is dissolved and the community interest of each spouse after payment of its share of community debts becomes liable for the separate obligations of the spouse. Greer v. Goesling, supra; Tway v. Payne, 55 Ariz. 343, 101 P.2d 455 (1940). The community interest of the surviving spouse is not chargeable for the separate debts of the decedent.

Thus evolves the crux of the problem. When, in Arizona, and how in processing a decedent’s estate is the nature of the obligation determined? Appellant’s position is that the court should make these determinations in the process of settling accounts and that the personal representative has no power or authority to make “ex parte” ruling in this regard. To hold otherwise, contends the appellant, would violate the basic principle that a personal representative has no powers beyond those given by statute. Braeuel v. Reuther, 270 Mo. 603, 193 S.W. 283 (1917). Authority cited supporting its position that such power does not exist includes Greer v. Goesling, supra, which indeed held that the wife in her capacity as administratrix was in no position to raise the issue that an indebtedness was the separate obligation of the deceased without intervening in her individual capacity as surviving spouse if she opposed categorization of the item as a community obligation. However, the case is inapposite to the crucial problem before us, i. e., was appellant foreclosed by failure to file an action within the three-month period?

We believe appellant’s rights have been foreclosed. A.R.S. § 14 — 579, subsec. A provides :

“When a claim is rejected either by the executor or administrator or the judge, the holder may bring an action thereon against the executor or administrator within three months after the date of its rejection, if it is then due, or within two months after it becomes due, otherwise '.he claim shall be forever barred.”

The Arizona Supreme Court has held that the purpose of the filing requirement and time limitation of the above statute is to inform the personal representative and the court of the valid claims against the estate so that the estate may be expeditiously administered. Barnett v. Hitching Post Lodge, Inc., 101 Ariz. 488, 421 P.2d 507 (1966). This is in keeping with our state policy of speedy press ntation and consideration of claims to prevent intolerable delay in settling estates. In this regard the appellant contends that the administratrix lacks the power to enter what amounts to a final order which action it claims does not become final until the court settles the account. Estate of Tamer, 20 Ariz. 228, 179 P. 643 (1919). Tamer, however, dealt with the claims of potential heirs to the estate for which no other statutory remedy was provided. The court there said: “The allowance of claims is 'not binding and conclusive against the heirs because they were not parties to it. They had therefore the right to question the allowance at the settlement of the estate.’ ” 20 Ariz.

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Related

In Re Estate of Pfeffer
492 P.2d 27 (Court of Appeals of Arizona, 1971)

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Bluebook (online)
492 P.2d 27, 16 Ariz. App. 147, 1971 Ariz. App. LEXIS 890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-bank-v-pfeffer-arizctapp-1971.