Bar News - March 16, 2016
Elder, Estate Planning & Probate Law: The Morass of Bourassa: Finding A Way Out
By: Ralph F. Holmes
In New Hampshire, creditors must exhibit their demands within the first six months and file suit within the second six months of the appointment of the administrator to preserve their claims.
While the exhibition requirement can be informally satisfied – The NH Supreme Court in Frost v. Frost (1956) found that “it has been settled law… that the claim may be oral, written, or a combination of both” – the suit deadline operates as a statute of limitations. A creditor who misses the deadline must seek relief under RSA 556:28 by filing a petition with “the court having subject matter jurisdiction over the nature of the claim.” How to construe this critical phrase of the statute and even the selection of the court in which to bring the claim is a bit of a muddle in light of the Court’s decision in In re Estate of Bourassa (2009).
In Bourassa, the Court considered whether the probate court had authority under RSA 556:28 to grant relief to a plaintiff to pursue her late-filed claim in Superior Court. The plaintiff had brought suit to recover life insurance benefits she would have received, but for claimed breaches by her father of her parents’ divorce decree. At the time suit was filed, the Superior Court had exclusive jurisdiction over creditor claims against estates. Given that RSA 556:28 requires that petition for late allowance of a claim be filed in “the court having subject matter jurisdiction over the nature of the claim,” the defendant argued plaintiff should have brought her petition in Superior Court.
On appeal, the Court held: “RSA 547:3 (Supp. 2008) provides: ‘The probate court shall have exclusive jurisdiction over... [t]he granting of administration and all matters and things of probate jurisdiction relating to the composition, administration, sale, settlement, and final distribution of estates of deceased persons...’ A person with a claim against the estate of a deceased person ‘may apply to the court having subject matter jurisdiction over the nature of the claim’ for an extension of time to file suit. RSA 556:28. We agree with Desiree that the ‘nature of the claim’ at issue is a claim against her father’s estate for money owed in the amount of the life insurance policy, and that such a claim falls within the exclusive jurisdiction of the probate court pursuant to RSA 547:3. Accordingly, the probate court has subject matter jurisdiction over the nature of the claim for purpose of the petition for an extension of time to file suit” (emphasis added).
The holding appears to say that the probate court had “exclusive” jurisdiction over the plaintiff’s claim and therefore authority to rule on the petition to allow late filing under RSA 556:28. This construction is impossible to reconcile with the probate court’s statutory jurisdiction over creditor claims, as well as the history of enactments of RSA 556:28 and the case law.
“By the Constitution, probate courts have jurisdiction in granting administration, to be exercised in such manner as the legislature may direct.” Robinson v. Carroll (1934). “[T]hey ‘have such powers and only such powers as the legislature gives them.’” Id. (citing Woodbury’s Appeal, 1915). “Originally their powers were almost entirely administrative and ministerial, and in none of the statutes conferring additional and increased jurisdiction upon them, so far as our examination has extended, do[es] the legislature seem ever to have contemplated investing them with general law powers, as judicial tribunals.” Wood v. Stone (1859).
In the last 25 years, the legislature greatly expanded the jurisdiction and powers of the Probate Court. Most important for this discussion, the legislature enacted RSA 547:3, III and RSA 547:3-l, effective July 27, 2008, granting the Probate Court “concurrent” jurisdiction with the Superior Court over so-called “ancillary matters,” including “claims for liquidated or non-liquidated damages… against an estate…,” RSA 547:3-l, that is, creditor claims. No prior statute plainly granting Probate Court authority over such claims has been found.
Consistent with the probate court’s apparent lack of jurisdiction over creditor claims, the original version of RSA 556:28 (1974) required that petitions to allow a late creditor claim be filed in Superior Court. The next version of the statute, in 1992, required that petitions be filed in the Superior Court, unless the plaintiff was “under the exclusive jurisdiction of the probate court,” presumably referring to an administrator, testamentary trustee, or guardian appointed by the Probate Court.
In re Estate of Bennett (2003) is the only case before Bourassa that has been found in which the Probate Court exercised authority under RSA 556:28. In that case, the claim of the creditor was presented in the Probate Court as an objection to the administrator’s account, the approval of which is within that Court’s authority. No issue appears to have been raised before the Probate Court over its authority to grant relief under RSA 556:28, and the Court on appeal did not comment on the jurisdictional issue.
Two months before the Bourassa plaintiff presented her RSA 556:28 petition to the Probate Court, 547:3, III and RSA 547:3-l became effective, and the Probate Court then had concurrent (not exclusive) jurisdiction to adjudicate creditor claims. Unfortunately, Bourassa does not cite either of these on-point statutes, even though it references the 2008 RSA Supplement that includes them. Relying on these statutes, the Court could have affirmed the Probate Court’s exercise of jurisdiction on grounds that it had “concurrent,” not “exclusive” jurisdiction over the nature of the claim and, therefore, authority to grant relief under RSA 556:28. This approach would have achieved the same result without creating discrepancies.
Although Bourassa might be construed to say that the Probate Court has exclusive jurisdiction over creditor claims (contrary to RSA 547:3, III and RSA 547:3-l), it seems clear that the Supreme Court did not intend that result. After affirming that the Probate Court had authority to grant relief under RSA 556:28, the Court did not then vacate the Superior Court judgment, also on appeal before it, as beyond the Superior Court’s jurisdiction.
With all due respect to the Court, the reference in Bourassa to the “exclusive” jurisdiction of the Probate Court should be seen as dicta in that it was not necessary for the Court’s holding and raises difficult discrepancies with governing law. To harmonize Bourassa with other authorities, it should be seen as standing for the proposition that the probate court has the authority to grant relief under RSA 556:28 to a creditor of an estate consistent with its grant of authority over “the nature of the claim,” namely concurrent jurisdiction with the Superior Court pursuant to RSA 547:3, III and RSA 547:3-l.
Ralph Holmes practices with McLane Middleton in New Hampshire and Massachusetts. He is a regular contributor to the blog www.probatetrial.com and can be reached by email and at (603) 628-1409.