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If you have a pending lawsuit against a person who dies, you should understand the impact of a pending lawsuit on a Notice of Claim in probate court in Arizona. Under Arizona law, a party involved in a pending court lawsuit against a person who dies does not need to file a creditor’s claim against the probate estate.
What happens if a party to a pending lawsuit nevertheless chooses to file a Notice of Claim in Arizona against the estate? In the case of In re Estate of Bolton 315 P.3d 1241 (Ariz. Ct. App. 2013), the Court of Appeals decided that issue.
Plaintiffs File a Notice of Claim in the Probate Case Despite Having a Separate Pending Lawsuit Against the Descendant
In May 2011, Mutual Pharmaceutical Inc. and United Research Laboratories, Inc. sued Mr. Bolton in Pennsylvania court.
Mr. Bolton had sold mutual parties patent rights to technology for converting liquid drugs to powder. They charged that the rights actually belonged to St. John’s University, where Bolton worked when he developed the technology.
Bolton died in Arizona in October 2011. A person was appointed as the personal representative of the Estate. Mutual Pharmaceutical and United Research Laboratories presented a Notice of Claim Against the Estate to the personal representative of the estate in January of 2012.
The personal representative of the Estate disallowed the probate claim soon after it was filed on the ground that “no presentation of claim was required.”
Seven months later, the Estate filed a motion to confirm disallowance of the claim, which the probate court granted. Mutual Parties appealed.
A Notice of Claim in a Probate Case is Unnecessary When a Separate Lawsuit is Pending
In Arizona, the creditor of someone who died generally must file a claim with the personal representative or file an action against him.
If the claimant chooses to file a probate claim, the personal representative may allow or disallow the claim.
If the personal representative disallows the claim, the claimant can file an action against him within 60 days. Alternatively, he can petition the probate court for allowance of the claim. If he does neither, the claim is barred.
According to Arizona laws, a claimant with a lawsuit pending against the decedent before his death is not required to present a probate claim. So, in this case, the pharmaceutical companies were not required to file a Notice of Claim Against the Estate because they already had a lawsuit pending.
No Procedural Consequences When Unnecessary Claim Filed
The pharmaceutical companies mailed the written notice of a claim to the personal representative anyway. The claim noted the pending proceedings. The claim was denied by the personal representative.
The personal representative’s denial of the claim informed them that Arizona law does not require presentation of a claim when there was a pending lawsuit against the decedent before his or her death.
The Estate now argues that the statutory exemption is no longer effective. It claims that if a party to a lawsuit presents an unnecessary probate claim, it loses the exemption.
It relied on re Estate of Van Der Zee, 265 P.3d 439 (App.2011). However, the Court found that ruling only applied where no separate lawsuit was pending.
The Court found that the Probate Code exempted claimants with pre-death lawsuits from the claim procedures.
However, a claimant with a pre-death lawsuit can present notice in probate which does not trigger procedures applicable to plaintiff’s without a pending lawsuit.
The Estate next argues that the pharmaceutical’s companies voluntary decision to make a claim against the estate requires their compliance with subsection (3) of the applicable statute.
However, the Court found that the cases the personal representative relied upon do not apply to this case.
The Court concluded the plain language of the statute provides that a claimant with a pending claim in another court need not present a probate claim. If the claimant does present the claim to the estate, the presentation does not nullify the exemption provided by the statute.
The Court of Appeals reversed the judgment against the pharmaceutical companies and remanded the case back to the probate court for proceedings consistent with its decision.
If you have questions about probate court affect on a pending lawsuit in an Arizona divorce case, you should seriously consider contacting the attorneys at Hildebrand Law, PC.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona community property or family law case around today.
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About the Author: Chris Hildebrand has over 26 years of Arizona family law experience and received awards from US News and World Report, Phoenix Magazine, Arizona Foothills Magazine and others. Visit https://www.hildebrandlaw.com.