NO. 93-142

IN THE SUPREME COURT OF THE STATE OF MONTANA

1994

BILL BOYER,

Plaintiff and Appellant,

-vROBIN C. SPARBOE, as Personal

Representative of the Estate of

Charles W. Sparboe, Deceased,

Defendant and Respondent.

APPEAL FROM: District Court of the Thirteenth Judicial District,

In and for the County of Yellowstone,

The Honorable Maurice R. Colberg, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Mark D. Parker, Parker Law Firm, Billings, Montana

For Respondent:

James P. Murphy, Murphy & Kirkpatrick, Billings,

Montana

Filed:

Submitted on Briefs: January 7, 1994

Decided: February 2, 1994

Clerk
Justice James C. Nelson delivered the Opinion of the Court.

Bill Boyer (Boyer) appeals from a judgment, entered after a

bench trial, of the Thirteenth Judicial District Court, Yellowstone

County, finding in favor of the defendant. We reverse.

The issue on appeal is as follows: did the District Court err

when it concluded that Boyer was barred from retrieving his

property from the estate due to his failure to file a creditor's

claim?

Bayer had known and been friends with the owner of Treasure

State Gold and Silver (Treasure State), Charles Sparboe (Chuck),

for years. In addition, Boyer and Chuck did business together for

a number of years, buying and trading metals.

By 1988, Boyer had accumulated a great deal of gold and silver

and was concerned about its safety. Chuck offered to store the

gold and silver in his safe at Treasure State. Chuck showed Boyer

the safe and told Boyer that other people stored their coins and

metals there.

On June 22, 1988, Boyer brought approximately $40,000 worth of

gold and silver to Treasure State. He left the gold and silver

with Chuck, and received a storage receipt which itemized the

property as follows:

$4,000 face 90% Quarters (4 - Buckets of l,OOO.OO)

15 - 100 oz. Eng Ex (3 Bags of 5 Each)

500 Silver Dollars (1 Bag)

48 1 oz. U.S. Gold Eagles (2 Full Tubes 1 w/8)

1 Blue Midland Bank Bag - Price & sell what is in it

Bayer never removed the gold and silver from Treasure State.

On July 31, 1990, Chuck was murdered, and Boyer attended his

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funeral. About two weeks after Chuck's death, Boyer contacted

Aaron Sparboe (Aaron), Chuck's son, with his condolences and also

to discuss his [Bayer's] property. Aaron assured Boyer that the

property was in good hands, and said "[t]he only thing we might

have to do is replace some of the Gold Eagles with Canadian Maple

Leaves." Aaron told Boyerto bring in the original storage receipt

and he would be given his property.

Boyer talked to Aaron approximately five or six more times

over the next two years, and Aaron assured him each time that his

property would be returned upon the presentation of the original

receipt.

Boyer did not remove his property immediately after Chuck's

death, as he believed, based on Aaron's representations, that his

property was safe. However, Boyer later decided to remove the

property; he believed the metals market was "waffling back and

forth" and wanted to put his money into a better investment.

Boyer was unable to locate his original receipt, but had a

copy of the receipt. When Bayer went to Treasure State with the

COPY, Aaron and Chuck's other son, Jim Sparboe (Jim), refused to

return the property. They admitted to Boyer that they had his

property, but said they would not release it to Boyer without an

original receipt. On March 9, 1992, Boyer filed a complaint

seeking recovery of his gold and silver.

At the bench trial held on October 23, 1992, Boyer testified

that he had diligently searched for the original receipt but was

unable to locate it. However, as a matter of course, he made
copies of all his receipts and put them in a notebook at his place

of business. He testified that he made a copy of the original

receipt the day he received it. He further testified that he

believed the original receipt was placed in a "tax box" and, when

he moved three times in five years, that box was inadvertently

thrown out.

Defendant Robin Sparboe (Robin), widow of Chuck and the

personal representative of his estate, testified that the only

reason she would not return Bayer's property was because he had not

brought in the original receipt. She further testified that she

had absolutely no evidence that indicated Boyer had already picked

up the property at issue, and admitted that the original receipt

had not been returned to Treasure State. Robin said she would

honor Bayer's claim if he presented the original receipt, and

testified that Treasure State had honored claims of other people

who had not filed creditor's claims with the estate.

Aaron testified at trial that he had returned stored property

to people who presented original receipts without filing creditor's

claims, and that he had never refused to return property to those

people. Aaron also testified as follows:

If there was a client that [Chuck] was a good friend with

or somebody he knew well, they didn't have an original

receipt, I know he never would ask for it. If they said

they didn't have it with them, no big deal. He knows

them. . . .

He further stated that he had no evidence that Boyer had already

retrieved his property.

Jim testified that he had allowed people with original storage

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receipts to retrieve their property regardless of whether they had

filed creditor's claims with Chuck's estate. He stated that he had

no evidence that Bayer had received his property. Jim further

testified that the requirement that an original receipt be

presented before property would be returned was not written down

anywhere, but that customers were told of the requirement upon

storing their property. However, there was absolutely no evidence

that Bayer was told by his friend, Chuck, that an original receipt

was required to be presented before Bayer could retrieve his stored

property. There was also no evidence at trial that Bayer ever

received the property at issue.

On November 6, 1992, the District Court entered Findings of

Fact and Conclusions of Law. The court concluded that Bayer's

claim was a "deposit for exchange" pursuant to § 70-6-108, MCA, and

that Bayer's failure to file a creditor's claim with the estate

barred his claim. Section 72-3-803, MCA. Bayer moved for

reconsideration on November 25, 1992, which was subsequently denied

by the District Court on December 15, 1992. Judgment was entered

on July 8, 1993; from that judgment, Bayer appeals.

Our standard of review relating to conclusions of law is

whether the trial judge's interpretation of the law is correct.

Steer, Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474-75, 803

P.2d 601, 603.

The District Court held that the storage receipt constituted

a "deposit for exchange," which necessitated the filing of a

creditor's claim with the estate. In its Memorandum filed with the

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Findings of Fact and Conclusions of Law, the District Court

reasoned that, because Boyer did not necessarily expect to receive

back the identical property he stored, a deposit for exchange was

created pursuant to § 70-6-107, MCA. This created a

debtor/creditor relationship under § 70-6-108, MCA; thus, the

District Court reasoned, Bayer's failure to file a creditor's claim

was fatal to his action. While the District Court's conclusion

that a "deposit for exchange" was created was correct, we have

previously held that, in certain limited circumstances, a creditor

may, nevertheless, not be required to file a claim with the

decedent's estate. That controlling precedent was not cited by the

attorneys in this case, and the District Court failed to consider

this precedent. Therefore, under the specific facts of this case,

we hold that the District Court erred in concluding that Boyer was

required to file a creditor's claim and in entering judgment

against Boyer.

We have previously held that an estate could be estopped from

raising a claimant's failure to file a creditor's claim as a

defense under certain, limited conditions. Northwestern Bank of

Lewistown v. Estate of Coppedge (1986), 219 Mont. 473, 478, 713

P.2d 523, 526. In Coppedqe, the deceased, George, and his wife,

Helen, borrowed money from the Northwestern Bank for farming

expenses. George and Helen signed three promissory notes and a

security agreement. The notes were also secured by a guaranty from

George's mother. George died and Helen was appointed the personal

representative of his estate. She provided notice to creditors as

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required by statute, but, Northwestern Bank never filed a

creditor's claim or commenced a court proceeding to collect its

claim. However, Northwestern Bank did negotiate with the estate's

attorney for payment or renewal of the notes. Coonedse, 713 P.2d

at 525.

Nearly two years after George's death, Northwestern Bank filed

a complaint seeking the unpaid amount due on the notes. The trial

court entered judgment for the bank, and, on appeal, the estate

claimed that the judgment against it was invalid because

Northwestern Bank failed to file a creditor's claim within the

statutory time limits. Northwestern Bank countered that the estate

knew of the bank's claim. We held that:

Such knowledge, however, does not dispense with

Northwestern Bank's need to file a creditor's claim. If

Northwestern Bank can prove that the attorneys for the

estate representedthatbecause they knew of Northwestern

Bank's claim, no creditor's claim need be filed and if

the Bank relied on this representation, the estate could

be estopped from raising Northwestern Bank's failure to

file a creditor's claim as a defense. . . .

Coowedqe, 713 P.2d at 526. We remanded for a hearing to determine

whether the estate, by or through its attorneys, represented to the

Northwestern Bank that it need not file a creditor's claim.

Cowwedse, 713 P.2d at 527. We note that at least one jurisdiction

has adopted a similar principle of law. See Matter of Estate of

Frandson (N.D. 1986), 383 N.W.2d 807.

In this case, Boyer contacted Aaron approximately two weeks

after Chuck's death and discussed his stored property. At that

time, Aaron told Boyer "not to worry" and that the property was

safe. Aaron told Boyer to bring in his storage receipt and the

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property would be returned upon demand. Robin, Aaron and Jim all

testified that they had paid many other customersf claims without

the necessity of filing a creditor's claim, even after the

statutory period had expired. In addition, Chuck had returned

stored property in the past without the presentation of an original

receipt. There was absolutely no evidence that Chuck ever told

Boyer that an original receipt was required to retrieve his

property, nor is there any evidence that Boyer has, in actuality,

received his property. In addition, Boyer had a valid explanation

for the loss of the original receipt. Similarly, there is no

question that Chuck's estate had actual knowledge of Bayer's claim,

and that, based upon the family's representations, Boyer assumed

his claim was intact and that no creditor's claim needed to be

filed. See Coppedqe, 713 P.2d at 526. Therefore, based upon the

facts of this case, we hold that the estate is estopped from

denying the existence and validity of Bayer's claim and that the

District Court erred in entering judgment in favor of the estate.

We wish to emphasize that the rationale behind the statutory

requirement that a creditor's claim be filed is sound and should

not be easily dispensed with. However, under very limited

circumstances, as in this case, where an estate has actual notice

of a claim and makes representations to the claimant which lead the

claimant to believe that it is not necessary to protect his claim

by filing a creditor's claim under 55 72-3-801 et seq., PICA, the

estate will not be able to use the failure to file a creditor's

claim as a defense to bar the claim.

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I Reversed and remanded for e

I

I We Concu