In re the Estate of Sanford M. Bolton – 12/20/2014

January 6, 2014

Arizona Court of Appeals Division Two Holds That a Claimant Who Presents a Claim to a Decedent’s Estate Notifying it of an Action Against the Decedent That Was Pending Before His Death Need Not Commence Additional Proceedings if the Personal Representative Disallows the Claim.

Mutual Pharmaceuticals and Untied Research Laboratories (collectively, “Mutual”) filed a suit in Pennsylvania against Sanford Bolton regarding licensing fees for certain patent rights.  While that action was pending, Mr. Bolton died, and Eric Goldman was appointed as the personal representative of the Estate.  At Mutual’s request, Mr. Goldman was substituted as successor-in-interest to Mr. Bolton in the suit.  Mutual also sent a notice of claim to the Estate, which subsequently disallowed the probate claim, explaining that under A.R.S. § 14-3804(2) no presentation of the claim was required.  Mutual took no further action, and seven months later, the Estate successfully moved to confirm disallowance of the claim.  This appeal followed. 

Mutual argued that the plain language of § 14-3804(2) did not require any further action to be taken after the Estate disallowed the claim.  The section provides, in part, that “[n]o presentation of claim is required in regard to matters claimed in proceedings against the decedent which were pending at the time of his death.”  A.R.S. § 14-3804(2).  Mutual asserted that, even though it had presented a notice of claim where none was required, this did not obligate Mutual to formally challenge the Estate’s disallowance within 60 days as set forth in § 14-3804(3). 

The Court of Appeals agreed with Mutual’s position.  Examining the plain language of the statute, the Court found that nothing in § 14-3804 requires the claimant to file a duplicative lawsuit or initiate probate allowance procedures “if a complementary claim notification is filed.”  The Court rejected the Estate’s arguments that by providing the notice of claim, Mutual was obligated to perform the same procedures as if the suit had not been previously filed, including attempts by the Estate to draw parallels to various provisions in the Rules of Civil Procedure and other Arizona statutes that appeared to create mandatory obligations after a voluntary action was taken.  The Court explained that because § 14-3804 does not discuss any additional mandatory obligations, unlike the provisions cited by the Estate, the argument is unpersuasive.  And the Court rejected the Estate’s argument that allowing this type of procedural irregularity to stand places an undue burden on the personal representative—the argument would require the Court to act in a legislative capacity, and the Court’s responsibility is to follow the plain language of the statute.  

Judge Miller authored the opinion; Presiding Judge Vásquez and Chief Judge Howard concurred.