By: Daniel McGowan, Esq.
It is not uncommon for a party to a loan, contract, or other bargained for exchange to die before the obligation is satisfied. When the obligor is the decedent, almost without exception judicial relief is sought through filing a timely creditor claim in the decedent’s estate. However, there is no universal proper process for those situations where the decedent is the obligee who died before he or she was paid.
This scenario surfaced in a North Dakota dispute that worked itself to the State Supreme Court, in Matter of Estate of Froemke, 2023 ND 154, 2023, Supreme Court of North Dakota (N.D. 2023), where the decedent’s personal representative moved the probate court to find that one of the decedent’s children owed the estate money for payment of real estate taxes on the child’s home by the decedent. Because the taxes were never reimbursed by the child, the probate court ordered the child to pay the estate the amount of the taxes that were paid by the decedent on the child’s behalf.
The child appealed and challenged the probate court’s jurisdiction to order the child to refund the money to the estate because the issue and order were not probate matters and the court lacked any other authority to issue the order. Generally, probate courts can hear all “probate matters” but the law is unclear regarding what precisely constitutes a probate matter and the scope of the jurisdiction of the probate courts. .
The requirement that a court have subject matter jurisdiction means that the court can only adjudicate disputes where it is authorized by the laws of the jurisdiction. Most state constitutions provide the source of authority for probate courts to exercise jurisdiction over proceedings relating to the settlement of the estate of decedents. In some jurisdictions, by local rule or administrative order, lower courts are divided into divisions for convenience and efficiency. However, all judges are empowered to hear and determine any case properly within the court’s jurisdiction.
The North Dakota Supreme Court looked to the Uniform Probate Code to assistance in determining the proper scope of subject matter jurisdiction for a probate code. The Uniform Probate Code (UPC) is a comprehensive statute that unifies, clarifies, and modernizes the laws governing the affairs of decedents and their estates. The UPC has been adopted entirely by sixteen states, including North Dakota, and the other thirty four states have adopted parts of the Code. One of the purposes of the UPC is to make the law uniform among adopting jurisdictions. Thus, the North Dakota Supreme Court considered decisions from other jurisdictions that have interpreted parallel provisions of the code and found that its probate courts should have “unlimited power to hear and finally dispose of all matters relevant to determination of the extent of the decedent’s estate and of the claims against it.” Official Comment, Uniform Probate Code (1969) § 3-105.
The North Dakota Supreme Court looked to its neighbor, Minnesota, and observed that Minnesota, citing to section 3-105 of the UPC, concluded a probate court had jurisdiction over an insurance contract between the decedent and the appellant because “the probate court has jurisdiction over all problems that arise in resolving an estate except those issues excluded by statute.” Froemke, citing In re Estate of Sangren, 504 N.W.2d 786, 788-89 (Minn.Ct.App.1993). Therefore, because of the broad language in the UPC, the Froemke Court held that the probate court has “jurisdiction over all subject matter relating to ….probate” and concluded that the court had subject matter jurisdiction over the reimbursement issue and could properly order the child to reimburse the estate for the payment of taxes by the decedent.
While the application of section 3-105 of the UPC in the Froemke case demonstrates the broad jurisdiction over claims that can be resolved in probate court, it is important to remain mindful that when the dispute’s connection to the administration of the estate is remote or insignificant, it may be best for the claim to be determined in a separate proceeding.