Opinion ID: 853899
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Heading: The Effect of the Probate Code on Tort Claims

Text: Indiana Farmers contends that Richie's claim is barred by Indiana Code § 29-1-14-1(f) because that section requires that Smith's estate be opened within the statute of limitations governing tort actions. Richie contends that the only requirement of section 29-1-14-1(f) is that the action be filed within the tort statute of limitations. Section 29-1-14-1 of the Probate Code contains three relevant time limitations. First, subsection (d) bars all claims against a decedent's estate unless the estate is opened within one year after death. Second, as a general matter, subsection (a) bars all claims unless they are filed within five months after the first published notice to creditors or three months after the court has revoked probate of a will. Finally, and central to this case, subsection (f) contains an exception from these general propositions for tort claims against the decedent. It provides: Nothing in this section shall affect or prevent the enforcement of a claim for injury to person or damage to property arising out of negligence against the estate of a deceased tort feasor within the period of the statute of limitations provided for the tort action. A tort claim against the estate of the tort feasor may be opened or reopened and suit filed against the special representative of the estate within the period of the statute of limitations of the tort. Any recovery against the tort feasor's estate shall not affect any interest in the assets of the estate unless the suit was filed within the time allowed for filing claims against the estate. The rules of pleading and procedure in such cases shall be the same as apply in ordinary civil actions. IND.CODE § 29-1-14-1(f) (1998). [1] This subsection preserves a claim for injury to person against the estate of a deceased tortfeasor as long as the action is filed within the period of the statute of limitations provided for the tort action, which in this case is two years from the date of the accident. IND. CODE § 34-11-2-4 (1998). See also Slater v. Stoffel, 140 Ind.App. 131, 221 N.E.2d 688 (1966); 1B HENRY'S PROBATE LAW AND PRACTICE § 10, at 310 (7th ed.1978). Indiana Farmers points to the Court of Appeals' decision in Pasley v. American Underwriters, 433 N.E.2d 838 (Ind.Ct.App. 1982), which disallowed a tort claim filed within statute of limitations because the estate was not opened and a personal representative was not appointed within one year of the decedent's death. Citing Estate of Kuzma v. Peoples Trust & Savings Bank, 132 Ind.App. 176, 176 N.E.2d 134 (1961), which predated current subsection (f), Pasley held that tort claims are barred if the decedent's estate is not opened and the suit is filed as a claim against the estate within one year of the date of decedent's death. Pasley concluded that this requirement was not changed by the addition of subsection (f) to the statute. Pasley, 433 N.E.2d at 840. Pasley is inconsistent with several subsequent decisions of the Court of Appeals. Langston v. Estate of Cuppels by Miller, 471 N.E.2d 17 (Ind.Ct.App.1984), involved an estate that was opened, but no tort suit was filed within the five month claim period. The court held that the plaintiff's tort claim filed within the two year statute of limitations was not barred by section 29-1-14-1, observing that subsection (f) limits the recovery to insurance proceeds if no claim is filed within the five month limit. Id. at 20; see also Serban v. Halsey, 533 N.E.2d 162 (Ind.Ct. App.1989) (in action for insurance proceeds claimant does not need to comply with subsection (d) requiring filing within one year); Shearer v. Pla-Boy, Inc., 538 N.E.2d 247 (Ind.Ct.App.1989) (claim timely where tort action filed, estate opened and personal representative appointed after statute of limitations expired but within 18 months of death of party pursuant to Indiana Code § 34-1-2-7). In each of these decisions either the decedent's estate was open at the time the tort statute of limitations expired or another rule of procedure tolled the statute of limitations. None dealt with the facts presented in this case, where the tort action was filed within the statute of limitations but the estate of the decedent was not opened until after the statute of limitations had expired. [2] Indiana Farmers contends that section 29-1-14-1(f) requires a tort claimant to open the decedent's estate before the statute of limitations has expired. In support of this view, Indiana Farmers observes that subsection (f) preserves claims against the estate for the tort limitations period. This, Indiana Farmers argues, implies that the estate must be opened within that period. Second, Indiana Farmers argues that the second sentence authorizes the opening or reopening of the estate only if it is within the tort limitations period. Both points reflect permissible readings of the statute. Neither however is persuasive in light of the overall statutory framework. The statute is not a model of clarity. The first sentence of subsection (f) states that none of the requirements of section 29-1-14-1 shall affect or prevent the enforcement of a claim for injury ... within the period of the statute of limitations. The third sentence limits claims against estate assets to those filed within five months of the period found in subsection (a). The purpose of the five month requirement is to permit the administrator to know the assets and potential liabilities of the estate and facilitate prompt payment of the claims to wrap up the estate. Permitting tort claims to pursue insurance proceeds, but not estate assets is fully consistent with these goals. So far, so good. Indiana Farmers points to the second sentence, however. It provides that: [a] tort claim against the estate of the tort feasor may be opened or reopened and suit filed against the special representative of the estate within the period of the statute of limitations of the tort. It seems somewhat odd usage to say a tort claim may be opened or reopened in a statute that elsewhere speaks of the opening of an estate. [3] However, the most practical reading is that a tort suit may be instituted at any time within the applicable tort limitation period. As a matter of syntax only, the section is not wholly clear whether the tort limitations period (1) applies only to the filing of the suit or (2) also limits the period for appointing the special representative. Because we can see no purpose and do discern some mischief in a requirement that the appointment be accomplished before the running of the statute, we choose the first interpretation. By adding subsection (f), the legislature clearly intended to exempt tort actions for liability insurance proceeds from the requirements of the probate code. Slater v. Stoffel, 140 Ind.App. 131, 138, 221 N.E.2d 688, 693 (1966). This seems to make eminent sense. The statute makes clear that the administration of the estate cannot be disturbed by a Johnny-come-lately tort suit because such a suit cannot reach the assets of the estate. If that is the case there seems to be no reason why a suit involving only insurance proceeds should not proceed as a normal tort suit uncomplicated by the Probate Code. Moreover, the second sentence of subsection (f) must be read in conjunction with the first. The first sentence clearly states that nothing in this section shall affect or prevent the enforcement of a claim for injury.... Subsection (f) is among the things in this section. Accordingly we conclude that the only requirement that Indiana Code § 29-1-14-1(f) imposes on a tort action seeking liability insurance proceeds is that the suit be filed within the tort statute of limitations. The Court of Appeals reached a different conclusion in this case and others on similar facts. Clark v. Estate of Slavens, 687 N.E.2d 246 (Ind.Ct.App.1997), held that a plaintiff's tort action was barred because decedent's estate was not open within the two-year statute of limitations. Inasmuch as Clark had no standing to open an estate for Decedent after the tort statute of limitations had expired, the Estate may not be afforded any legal recognition and, Clark's attempt to substitute the Estate for the one named in the complaint accomplished nothing. Thus, Clark's amended complaint did not relate back to the date of the filing of the original complaint under Ind. Trial Rule 15(C). Id. at 250. Following Clark, the majority in this case held that [a]fter the tort statute of limitations had run, Richie was no longer an `interested person' who had standing to open an estate under Indiana Code § 29-1-7-4. Indiana Farmers Mut. Ins. Co. v. Richie, 694 N.E.2d 1220, 1223 (Ind.Ct.App.1998). We think Clark and the majority in this case were incorrect in imposing an interested person requirement. Rather, it appears to us that subsection (f) authorizes a suit against a special representative by a tort claimant independently of any interested person requirement that is applicable to persons seeking to open a decedent's estate under the Probate Code. In this case only a special representative in contrast to a personal representative to administer the estate's assets and liabilitiesneeds to be appointed. Special representatives, who are appointed to perform a special function ... can be effected by an order of the court on a proper showing of necessity.... 1 HENRY'S INDIANA PROBATE LAW § 804, at 339-40 (8th ed.1989). There is no express requirement that the person petitioning for the appointment of a special administrator be interested in the estate, or that the person be qualified to administer the estate ... and it may be assumed that the affidavit may be presented by a person who has no `interest' in the estate. Id. In view of subsection (f) we conclude that Richie's petition was effective to initiate appointment of a special representative of Smith's estate solely for purposes of satisfying the somewhat metaphysical notion that a suit cannot proceed against a decedent. Perhaps most importantly, this challenge to Richie's seeking a representative for Smith's estate is not brought by any beneficiaries or heirs or creditors of Smith. Rather it is the insurance company that contracted with Smith to cover her liabilities that seeks to defeat Richie's claim. We can see no reason why the insurance company, which has no interest in Smith's estate, should be able to assert a delay in appointing a special representative as a bar to a suit that plainly would have been timely if Smith had survived. To require the prior opening of an estate would blur the bright line of the statute of limitations to the extent the time required to accomplish that is unpredictable. This in turn could cause wholly unnecessary expense out of an abundance of caution on the part of careful plaintiffs who hope and expect to settle their tort claim but are determined to avoid the trap in which Indiana Farmers contends Richie finds himself. Next, whether the representative is appointed before or after the tort statute of limitations expires seems to have no practical consequence. The opening of the estate so as to bring the insurance policy into the estate is a formal requirement because the insurance company needs a representative of the defendant to serve as a client. Whether this is done three months before the statute of limitations for tort actions expires or three months after is immaterial unless the insurance company can show some prejudice from the delay. Here we are directed to none. The insurance company obligated to defend this action had timely notice of the suit and has not claimed, much less proved, any prejudice from the amendment substituting the estate for the decedent. In sum, in this case seeking recovery from liability insurance, we hold that Richie's failure to open Smith's estate within the tort statute of limitations is not fatal to his suit.