No. 01-355 

1N THE SUPREME COIJRT OF THE STATE OF MONTANA 

2002 MT 304 

vff ;&.@ FD 

4 83 LA 

IN THE MATTER OF THE ESTATE OF 

PATRICIA ANN SPENCER. 

Deceased. 

APPEAL FROM: District Court of the Fourth judicial District, 

In and for the County of Missoula. 

Honorable Johil W. L,arson, Judge Presiding 

COIJNSEL. OF RECORD: 

For Appellant: 

Quentin hl. Rhoades, Sullivail, Tabaracci & Rhoades, Missoula, Montana 

For Respondent' 

Charles W. Schuyler, hlars~llo & Schuyler. PLLC, M~ssoula, Montana 

Filed: 

Submitted oil Rnefs Octobcr 18. 2001 

Dended December 12,2002 
iiisiicc Jim Rice delivered tI?c Opinion of the i'oiirt. 

, ' tI\ppclIar~t. Iexas Commerce Bank; N.:. (i3:rnk), appeals fro13 rhc dccret. ci~tcred by 

the District Court for tho Fo~~rtlr Judicial District, Wissoulir County, in the Esiaie of Patricia 

Ann Spencer (Estate). ~thicil found that tlie Bank's claini against tile Ectirte wars time-barred. 

LVc reverse and remand. 

72 We restate the dispositivc issues on appeal as follows: 

73 1. thes this Court lack jurisdiction because the Bank's appeal was untimcly'l 

7,4 2. Was the Bank cnt~tled to a notlee of hear~ng on the personal representati~e's 

petition for ndjud~catlon of nitestacy. for cletermtnation of hem, and for settlement and 

ilistrihution of the estate'? 

fict~tol NII~ ProceiJurtrl K(lckgvo!rrtrl 

e: 5 The facts in this matter arc uncontested. On March 23, 2000: blichael Z. Spencer 

(Spencer) filed an application for inforrnal appointment of personal representative in 

intestacy for the cstatc of his niotl~cr, Patricia Ann Spencer, with the \.Iissoula County- Clerk 

of ('oui-t's office. On the same day, tlie clerk of court perfunctor~ly issued an order 

appointing Spencer as personal I-cpresentative of the estate in inforn~ai proccedirrgs. aild 

issued letters of appointment to him. illso on March 23, 2000, Spencer tlled a "Notice and 

Infor~nation to Heirs anci Devisees" and served a copy upon bferitech Mortgage Sewices. 

Inc,, the Bank's predecessor in interest. Spenccr published a noticc to creditors on four 

occasions, beginning March 30. 20Oii, in the .t.li.ssorrlii Irrcii~/~e/rci~~i~i. The notice rcquircd 
cseiiitcirs ro fiie slairns withi11 four inontlls of the date of the first p~lklicaiion ofthe i~orics. 

i ilc iidni\ d~d not file a demand tor noricc as an lntcrestea pci-son 

"r; Sin September 18,2000, the Bank filed a creditor's claim in the amount of S53.454.90. 

Despite the filing of the claim more than five months after March 23, 2000, Spcnccr 

considered the Bank's cla~m and allowed 535,031.59, d~sallourng the rcrnalndcr ' Spencer 

filed and served a "kotice of Disallowa~tce." containing his partial disallowance of ihe 

Hank's claim, on September 28,2000. The notice included the ~viirning set forth in tj 72-3- 

805(1), MCA,' that the cla~m nould be barred unless the Bank filed a petition for allouance 

or commeiiced a separate proceeding against the personal representative within sixty days 

ai'tcr the rnall~ng of the notlee. Sixt4-onc days later, on No\ ember 28,2000, the Bank filed 

a petition for declaratol-y judgment against the Estate, contesting Spencer's partial 

disallowance of its claim 

17 On January 4, 2001: Spencer filed a Filial Account and Petition for Settletncrlt and 

t)lstr~but~on ofan Intestate hate and a notlce of hearing on the petition. vi hrch nas set for 

Jaiiuary 8,2001. Spencer did not serve these documents upon the Bank. After the hearing 

on January 8. 2001. the court entered its decree of distribution, order acijudieating intestacy: 

order determ~ntng helrs, and order appro\ tng final account of an intestate estate. Further. the 

.-. Ihe possible untimely filing oi'thc Rank's initial claim is not an issue in this appeal, although 

the Bank iias challenged Spencer's publ~shing ofthe noticit to creditors in the ~'vti.s.soulir I~~depeii(letit, 

corrtending that this newspaper does not constiti~te a --newspaper oi'generai circulation" requircd hy $ 72- 

3-801(l). MC'A. 

"l:nlcss indicated otherwise. ail citations are to the 1900 version oi'the Montana (ode 

Annotated. 
(j ,i~i , .. .,. LL . discharged Spencer from 'his office as pcrsor~al rcpresentat~~/i. Regardii~g tkc Bank's 

c!a!rn. rhe dccrce ~tatcd as foiiou.;. 

The Koticc of Disallowancc efkctivcly bars the di~allo-~\ed part of 

Texas Cotnniercc Bank N..A,, creditor's claim. hccause t!ic crctditor failed to 

commence a proceeding not later than November 27.20i)0, which dare is sixty 

(60) days after mailing of the notice of disallowance, on September 29,2000, 

and therefore the creditor's pct~tion filed in a separate action, is barred b> 

I/IC/"~CC 72-3-805(lj 

18 No notice of entry of judgment pursuant to Rule 77(d), hl.R.C:iv.P., was filed or 

seried follouing entry of the decree. On Apr~l 13. 2001, the Rank filed a notrcc of appeal 

from the decree. 

19 Does this Court lack jurisdiction because the Rank's appeal was utltitnely? 

710 Spellceri contends that we are withoutjurisdiction to entertain the Bank's appcal. He 

notes that the decree mas entered on January 8. 2001, and that the Bank's appeal \\as not 

filcd untrl Apr~l 13, 2001, over three months later. C'ittng our lroldnigs in ifunhe1bt.1-gei- L 

I3lrrlitrgton hill-tlrerrz (1 994), 265 'Llont. 243, 876 P.2d. 21 8, and Cliulliiror v. Glacier iVcll. 

Hnr~iz (1 9K), 283 blont. 342,943 P.2d 83, Spencer argues that the Rank's fa~li~re to tile an 

appcal within thirty days of the judgment, as allotted by Rule 5, V.R.App.P., is an absolute 

jurtsdrctiotial bar to this Court's cons~deration of the appeal 

12cspondcnt's connscl contends that Spencer is not a proper pa-iy to this appeal. 'oc.c:iusi. hi. was 

discharged iiom his duties by thc dccrcc. fJowev~r. Sor I)U~>~SCS ofih!s appeal, which challenges the 

validity of thc decree. Spcnccr remains the proper party. 

4 
1 1 Although Rule 5 provides fiat thc thirty-day appeal period cornn?cnces upon the filing 

of a rlotice of entry ofjudgtncrit pursuant to Rulc 77jd), M.k.Civ.P.. Spclncer cunterids that 

he was not required to file and serve a notice of entry of judgliicnt ihllo\ving the ilistrict 

Court's entry of the decree. Citing $72- 1-207, MCA. which provides that ihc Rules of C'ivi! 

f'rocedure are applicable to formal proceedings, Spencer argues therefrom that, con~erscly, 

the Rules are not apphcable to ~nformal proceedings. Spencer explains that he protided 

nottce to the Bank reyuired by the statutes gotcr~i~ng rnfonnal proceedings, that being 

publication of a notice to creditors, and also provided actual written notice of the proceeding 

by serving the Notice and lnforniation to Heirs and Devisees upon the Bank? but that the 

Bank failed to exercise options provided to it by the probate eodc, including fililig of a 

formal procecding as an interested person pursuant to C; 72-3-302, MCA, or filing a demand 

for notice under the infornlal procecding initiated by the personal representative. pursualit 

to 5 72-3-106, MCA. Therefore, Spencer contends that he was not obligated to provide 

further notice to the Rank, including notice of entry of the decree. 

112 The Bank virtually concedes that $ 72-1-207, MC'A, applies the Rules of Civil 

Proceciure to formal proceedings only, but argucs that the Rules are made applicable to 

informal proceedings by Rulc 81(c); M.R.Civ.P., entitled "Rules incorporated into statutes." 

.4ltcrni1ti\!cly. the Bank argues that; in any event, Spcmcer7s petition for judicial approval of 

thc settlement and distribution of thc estate converted the proceeding from an i~~fc~forrnal 

procccdirrg to a formal proceeding. The Bank notes that ''formal proceedings" are defined 
by 5 72- 1 - i ()?(I 9): :,,{C*\; as those conducted beibre a -~udge, and therefore, the izcciring on 

ihi: petition hcijrc Judge Larson consriluied a forinai pioceeding lo which the Ru!ii ofCiivi1 

Proccdure applied, and cntrq of a notlcc of entrq ofthe decree thereafter mas requrted under 

Rule 77(d) W~thotlt a notrce of entry of the decree. thc Bank contends. thc thrrty-day appeal 

period did not begin to run 

'1 13 Rule S l(c), M.R.CI> .P., states as folloas: 

Rules incorporated into statutes. Where any statute herctofi)re or 

hereafter enacted, whcther or not applicable to a special statutory proceeding 

or listed in any table appended hereto, provides that any act in a civil 

proceeding in a district court shall be done in thc manner provided by law or 

as in a civil action or as provided by any statute superseded by these rules, 

such act shall be done in accordance with these rilles and tlie procedure 

thereon sllall c011fo1-nl to these rules: insofar as practicable. 

Rule 81(c) s~mply spphes the Rules of Civil Procedure \\hen anothcr statute prolides that 

some act witliin the course of a civil proceeding is to be done "as provicied by law" or "as in 

a elk11 act~on" or "as prok~ded by any statute superseded" b) the Rules. Rule 8 l(c) doc? not 

interject the Rules of Civil Procedure into other statutory schemes which provide diffcrercnt 

procedural reclulrements and, therefore, does not make the Rules appltcable to Informal 

procecd~ngs, wh~ch are govented by tlie spcclfic proccciurai prokisrons set hrth in 72-3- 

201, et. seq., MC.4. This conclusion is consistent with the probate code itse!f, which is very 

clear about the applicability of'thc Rules of Civil Procedure to procceciings thcrcunder: 

"l.,Tnless specifically provided to the contra!? in this code . . . the rules of civil procedure, 
iilcliiding the rilles concerning vacation of orders and appellate re*:iew9 goxvcrn .for.nlni 

%~ proceedings under this code. Section 72-i-207, Mi'~4 (emphasis lidded). 

'1 14 ,Although thc Bank's Rule 8 I(c) argumcnt is without merit, illat is not the cnd nf thc 

matter. The critical issue here is whether Spencer's rcyiiest for judicial approval of the 

settlement and distribution of the estate changed thc proceeding from informal to formal. 

Both partics concede that the Rules of<:ivil Procedure are applicable to fomlal proceedings, 

but contest the nature of this proceeding. In answer to the Bank's assertion that his pctition 

made this a fomlal proceeding, Spencer argues that this matter Mas initiated as an inihrma! 

proceeding, that the Bank did not file a fosn~al proceeding, and therefore, the proceeding 

remained an irifolmal one throughout the entire process, which concluded with the entry of 

thc District Court's decree. 

7 15 l'he linifonn Probate Code ([.!PC) provides for a "Flexible System of 'Administration 

of 1)ccedents' Estates." [;PC, Official Comments, Ch. 3. This flexibility allows proceedings 

for appointment of a personal representative, probate of a will, or otlier dctcrn~ination of 

testacy to be commcnced either for111ally or ~nformally by an? mtercsted party. Further, the 

I.lPC also envisions the use of formal and informal proceedings in combination. whereby a 

procccciing begun infol-mally may be brought before the court for- resoltrtiori of specific 

issiies, and tllci~ rcturncii to informal, nor~jt~dicial, adminisnation: 

[P]cr.sons interested in cstatcs (including personal rcprcsentatives, ivhcthcr 

appointed inforfutally or after notice) may use an "in and out" relationship to 

the court so that any question or assumption relatingto the estate, including the 

status of an estate as testate or intestate, matters relating to one or Inore claims. 
disputed titles; accounts of persona! reprcscntativcs; and distribution, may bc 

resolved or established by adjudication after notice without necessarily 

sabjccting rhc estate to the necessitl- of judicial orders in rcgard to other or 

fi~rthcr questions or assumptions. 

Overall, the system accepts the premise that the court's role in regard 

to probate and adn~inistration, and its relationship to personal representatives 

. . . is wholly passive until sonic interested person invokes its power to secure 

resolution of a matter. 

I.jPC: Official Comments, Ch. 3. The two distinctions between formal and informal 

proceedings are the judge's involvement andnotice. :\s correctly argued by the Bank, formal 

proceedings are conducted by a judge and require notice. Section 72-1 -1 03(i9), MCA. .As 

quoted from the Official Comments above, formal matters are those which are "resolved or 

established by adjudication after notice." In contrast, infomlal proceedings are conducted 

by the clerk ofcourt and generally do not require notice to itlterested persons. Section 72-1- 

103(,24), MCA. (See czl.~o the descriptiori in CPC, Official Comments, Ch. 3, of informal 

probate as "a nonadjudicative determination.") Consequently, Spencer's act of petitioning 

forjudicial approval of his final account, and for the settlen~ent and distribution of the estate, 

converted the proceeding, at that point and for those purposes, to a formal proceeding, 

'1 16 As we have already stated, the Rules of Civil Procedure are applicable to forma! estatc 

proceedings. Further, this Court has specifically held that Rule 77(dj, M.R.Civ.P., 111ust bc 

applied to the entry ofa decree in a formal estate procei--ding. in ;Iloitci-ofE.stcife oj'l-ioiii~cs 

(lO?"); 183 tlont. 290, 599 P.2d 344, a devisee appealed to this Court from the entry of a 
ijrmal cstatc decree for \\-hiell the personal reprcseniative ltird not given norice of' entry of 

jndg~nent. The Court first derern~iacd that a debisec was a "parry" for purposes of Rule 

77(ci). and =a:, thus el~titled to notrce of entry of the decree. becnusc "'de\rsce" tias iilclt~dcd 

within the definition of "intercstcd person" for estates set forth in 6 72-1-103(25), 5lC.i. 

The Con13 then concluded. 

TIIC effect of lack of notice of entry of the order of the District Court 

is covered by case law interpreting the Montana Rules of Civil Procedure. 

Rule 77jd) requires the clerk of court to send notice of orders entered in eases 

to parties to an action not in default for failure to appear. If the clerk fails to 

send the notice, the time for a party to appeal an order does not begin to run. 

Pierce I'uckirrg Co. v. Tlte District C;ozrrdt (1978), 177 Mont. 50, 579 P.2d 700, 

701-762; I-Iuj~>t:ood v. Secliilo (1975), 167 Mont. 101, 104, 535 P.2d 1014. 

This rule applies regardless of actual notice of the entq of the order by the 

party seeking to appeal thc order. I'ier-ce, 579 P.2d at 761. Here, the record 

does not disclose any notice having been sent to the [devisee] by the clerk at 

any tirile. Unclcr Pier-ce, the titne fbr appealing the order of the District Court 

has not yet begun to run. This is important in fonnal probate proceedings 

because the MUPC allows the District Court to modify or vacate orders in the 

proceedings within the time allowed for appeal. Section 72-3-1 18, MCA. 

E.~tiztc' Offlol~~~cs, 183 Mont. at 295,599 P.2d at 347. Ltkeuisc here, the Rank, as a credltor 

who has filed a claim against the estate, is an "interestcd person" as defined by $ 72-1- 

103(25), ClCA ('"[iJnterested person' includes heirs, devisees, children, spouses, creditors 

. hs such, the Bank was entitled to notice of ciitry of the formal estate decree. 

Although Rule 77(d) has been amended since Estarc (fHolr~rcs to require the parties, instead 

of thc clerk of court, to serve the notlee. the effect is the same, and Spencer's relrance on 

i)i~tiltrl/~ci-get- arid C%(zll111ot- IS misplaced. The th~rtl-day appeal time enforced In those 

decisions did not begin to run here. 
7 The Rank has filed zt timely appeal. and this Corrrt has jurisdictioii to cnte~lain it 

T11crer"ore. since [Appeilarrt] ncver rcceivcd the rcyuircd i~oiicz from tile clcrk 

of court of entry ofjudgment. . . . [Appellanr's] notice of appea! was tiineiy 

filed and this Court has jurisdiction to hear and determine that appeal on its 

~~icrits. 

718 Rule 77(d)? M.K.Civ.P., allows either party to serve a notice of entry ofjncigmcnt. 

The better procedure would have been for the Bank, prtor to filsng its appeal. ro ha\ e in~trated 

service ofthc notice of entry itself. Such service would have properly activated the postjudgment time frasnes established under the Rules. Nonetheless, 011 authority of Pierce and 

Estate of flolnies, the Bank's appeal is properly bcforc the C'ourt. 

Isslre Tlvo 

719 Was the Bank entitled to a notice ofhcaring on Spencer's petition for adjudication of 

intestacy, for detcrminatiosi of heirs, and for settlement and distribution of the estate'! 

2 The parties acknowledge that the Bank was not served lvith cither the pctition ibr 

settlement and distribution of the estate or notice of hearing thereon, wliieh was conducted 

by the District Court on January 8. 2001. The Bank argues that it was cntitled to notice of 

the hearing pursuant to both $3 72-3-805(3) and 72-3-1001, MCA? and that this Failure of 

notice constitutes reversible error. The Rank asserts it was deprived of the opportunity to 

appear and contest Spencer's assertion that the Bank's claim was time-barred. The Bank also 

briefly avers a violation ofconstitutional due process, hut docs not develop the argument, anti 

the issue will not be addressed here. The Court will not consider unsupported issucs or 
arguments. hi re Citirociy qy"Kru~rse, 200 i MT 37, rl 31; -304 Vont, 202,8; 32, 19 P.3d 81 1: 

4'1 1 Spencer argues that he ga\ e inore than suffic~ent notice to thc Bank ire notcs that hc 

scrved the Hank with his Noticc of llnforination to Heirs and Devisees: \vhich Xras not 

required by law, that he published a notice to creditors, and also sewed a Notice of 

Disa!lowance of tile Bank's creditor's claim. Spencer furtl~er argues that the Rank failed to 

dcmand notice under $72-3- 106, MCA, and therefore, the Estate \\as rel~eied of an> further 

obligation to provide nottee to the Bank by operation of 46 72-1-103(21) and 72-3-21 1. 

MCA. 

722 S~ctron 72-1-103(24), MCA, states: 

"Informal proceedings" means proeeedlngs conductcJ nithour notlee 

to Interested persons by the clerk of court . . . . 

Sectlon 72-3-2 1 1, MCA. states. 

Informal probate-notice requirements. (1) The moving party must 

give notice as described by 72-1-301 of his application for informal probate: 

(a) to any person demanding it pursuant to 72-3-106; and 

(b) to any personal representative of the decedent whose appointment 

has not been temiinated. 

(2) No other notice of informal probate is required. 

Spencer excuses 111s failure to sene the Bank mitli the pet~tion and notree of hear~ng by agdrn 

arguing that this was an informal proceeding, and as such, was to he compleied withat 

notice to interested persons, because infoi-nmal proceedings are so defined in 9 72-1-lfl3(24), 

MCA. He furthcr argues that, because the Bank failed to demand notice under 5 72-3-lii0, 
MC'A, he was not required to give further notice to the Rank, citiiig tile jnstruction in j? 73-3- 

21 1(2)* MCX, that "jnlo further notice of informal probate is required." 

"/23 Spencer's reliance on these statutoryprovisions is based on his flalved assumption that 

the proceeding remained an informal one, wen though he had filed a petition for judicial 

appro~ial. As den~onstrated tinder Issue I, that assertion is erroneous, 'The filing of the 

petition, requesting intenention by a district court judge, changed the matter to a formal 

proceeding for purposes of the issues raised by the petition. Thus, the provisions regarding 

notlee under formal proceedings became applicable. Because the petltlon addressed the 

lalidity of the Bank's declaratory judgment action filed in response to the Fstate's 

disallowance of its claim, the Bank \?-as entitled to notice of the hearing under 5 72-1-805(3), 

MCA, wliich requires notice to be given to a claimant of a petition filed to address its claim, 

and ftirtlier, was entitled to notice pursuant to 3 72-3-1001, MCA. This latter section 

specifically addresses hearings to judicially tennillate an estate's administration, tvhcthcr 

adniirristcred formally or informally, and pi-ovides for notice: 

Formal proceedings terminating administration-testate or 

intestate-order of complete settlement. (I) A personal representative or any 

interested person may petition for an order ofcomplete settlement ofthe estate. 

The personal representative niay petition at any time, and any other interested 

person may petition after 1 year froin the appointment of the original pcrsonal 

representative, except that no petition under this section may be entertained 

until the time for presenting claims whiclr arose prior to the death of the 

decedent has expired. 

(2) The petition may request the court to determine tcstacy: if not 

previously determined, to consider the filial account or compel or approve an 

accounting and distribution, to construe any will or dctern~inc heirs. and to 

adjudicate the final scttlcment and distribution of the estate. 
(3) /!tier itotice to iili intercsrcli ~icr.s-ioiis iijrd hearing, ihe court may 

enter an order or orders, on appropriate conditions, determining tile persons 

entitled to distribution of the estate and. as circunastances require, appro% iizg 

settlement and directing or approving distribution ofthe estate and discharging 

the personal representative from further claim or demand of any interested 

person, 

Section 72-3-100 I MCA (emphasis addedj. The Bank, as we have seen, was an '"interested 

person," and was therefore entitled to notice of tlre hearing and the opportunity to appear and 

contest the judicial adjudication sought by the personal representative. 

.I24 Addressing a similar issue in Estate cf/-I(?/~nes, this Court held that. in a formal cstatc 

proeceding, judicial "orders issued without notice are not binding on the parties that do not 

receive notice." Estate of Holnzcs, 183 Mont. at 295, 599 P.2d at 347. Conscquenrly, as to 

the Bank, the decree 1s necessar~ly \old and uithout effect. arid must be retersed 

1125 On appeal, the Rank has also challenged the valrdtt) of Spencer's publicat~on of tlie 

Notice to Creditors in the :Vfissozrku lrzdepen(tent and the decree's determination that the 

Bank's declaratoiy action was time-barred. The Hank further ritises a question conce~xing 

the amount of attorney fees approved by the court. However. gihen our holding herein, 

mhrch reverses the decree, we decl~nc to reach these issues, deeming them appropriate for 

resolution, if neccssarq, by the D~str~ct Court foliow~ng a 11en hearrng, dfter notlee. on the 

personal reprcsentat~\e's petltlon. We deny the Respondent's rcclriest for Rule 32, 

\I.R.App.P., sanctions 
7125 Rcvcrsc<i ar?d rcn~slndrci for !i~ril~er poceedings consislcnt herewith. 

\Ye concur: