Opinion ID: 1655775
Heading Depth: 1
Heading Rank: 2

Heading: The Claim of Peculiar Circumstances.

Text: In assessing Southland's claim of peculiar circumstances, we note the general legal principles involved. While section 633.410 talks of equitable relief, the case is not heard in equity, but at law. Our review, therefore, is not de novo as Southland argues. See Baldwin v. City of Waterloo, 372 N.W.2d 486, 489 (Iowa 1985); In re Estate of Northrup, 230 N.W.2d 918, 921 (Iowa 1975); Iowa Code § 633.33. The purpose of our nonclaim statute is to provide a speedy settlement of estates. Northrup, 230 N.W.2d at 921. The nonclaim statute accomplishes this by requiring the filing of claims within a relatively short period of time and covering a broad field of claims and potential claims. But the breadth of claims covered and the abbreviated time for filing can, in some situations, work a hardship on a claimantor give a windfall to others. Recognizing this, section 633.410 allows late filings in certain circumstances. It provides simply that [t]his section does not bar claimants entitled to equitable relief due to peculiar circumstances. The general rule is that a strong showing of peculiar circumstances is not required, especially when the estate is still open and unsettled, and the peculiar-circumstances exception should be liberally construed to effectuate justice. Northrup, 230 N.W.2d at 921. Our older cases demonstrate a narrow view of the peculiar-circumstances exception, even when the estate remained open and solvent at the time of the late filing. See, e.g., In re McPheeters' Will, 233 Iowa 199, 8 N.W.2d 588 (1943); In re Wagner's Estate, 226 Iowa 667, 284 N.W. 485 (1939); Lucas v. Ruden, 220 Iowa 494, 260 N.W. 60 (1935). In these cases, little attention was given to the effect on the parties of the granting or denial of leave to file a late claim. If notice to creditors had been given, peculiar circumstances were rarely established. The justice of the claim, moreover, was not considered a peculiar circumstance. See, e.g., Federal Land Bank v. Bonnett, 226 Iowa 112, 284 N.W. 97 (1939); Bates v. Remley, 223 Iowa 654, 273 N.W. 180 (1937). At the same time, however, there was a parallel line of cases which gave weight to good conscience and fair dealing in assessing a claim of peculiar circumstances. See, e.g., Ball v. James, 176 Iowa 647, 659, 158 N.W. 684, 688 (1916). We discussed these contrasting views in Northrup, 230 N.W.2d at 922-23, where we applied the more liberal test as enunciated in Ball. We noted, then applied, the test as follows: Peculiar circumstances entitling a claimant to equitable relief exist when the delay beyond the period fixed by statute for filing claims be so excused and explained as that, when considered in connection with the claim asserted and the condition of the estate, good conscience and fair dealing demand that a hearing on the merits be accorded the claimant. Id. at 922, quoting Ball v. James, 176 Iowa 647, 659, 158 N.W. 684, 688 (1916). The fairness test enunciated in the Ball line of cases recognizes that, where the estate proceedings remain unsettled, there is little, if any, delay by allowing a late filed claim. Moreover, there are cases where allowance of such a claim will not prejudice the rights of any of the parties in the estate. One such situation has now been recognized by the legislature, which has further ameliorated the effect of the nonclaim statute by excepting those cases where there is liability insurance. See 1985 Iowa Legis.Serv. 4, at 71 (West) (This amendment does not apply to this case, however, because the case arose prior to its effective date.). In its ruling on the motion for summary judgment, the district court traced the history of Southland's involvement, much as we did under Division I. It concluded that, despite its awareness of the possible need for filing the claim, Southland failed to do anything to protect [itself] as far as filing a claim in the Estate of Mark J. Pauly is concerned. The test it applied was based on diligence, or lack of it, on the part of Southland. It does not mention the good conscience and fair dealing which we opted for in Northrup in preference to the more rigid test of diligence under our older cases. We conclude, therefore, that an erroneous standard of law was applied, and we are not bound by the district court's ruling based on it. See Northrup, 230 N.W.2d at 921. We reverse and remand for a new hearing and the application of the standard enunciated in Northrup. REVERSED AND REMANDED.