Estate of Ayala, 19 S.W.3d 477 (Tex. App.—Corpus Christi 2000, pet. denied).
Debtor died owing money on a note secured by real property. Creditor
filed a claim and a motion to require sale of the property with the
clerk of the court who was handling the dependent administration of
Debtor’s estate. The personal representative neither allowed nor
rejected the claim. The court allowed Creditor’s claim and ordered the
sale. However, the court order erroneously stated that the personal
representative had allowed the claim. The court later set aside the
order and denied Creditor’s subsequent motion to the same effect which
also contained the incorrect allegation. Creditor appealed.
The appellate court reversed. The court began by explaining that if the
personal representative fails to take action on a claim, it is deemed
rejected at the end of the 30 day period in which the personal
representative should act. Prob. Code §§ 309 & 310. The creditor must
then institute suit within 90 days of the rejection. Prob. Code § 313.
The court held that the motion to “require sale” is sufficient to
qualify as “instituting suit” on the claim. The Probate Code does not
define “instituting suit” and by following the rule that pleadings and
motions are to be construed liberally and judged by their substance
rather than their titles, the court determined that the motion could
constitute a suit. The motion set forth Creditor’s claim, the supporting
facts, and asked for relief. The court found that the erroneous
statement regarding the personal representative’s action on the claim
was harmless. The court also held that the fact that Creditor filed the
motion prematurely, that is, before the 30 day period for the personal
representative to act had expired, was irrelevant because the Probate
Code has no provision barring a claim filed early.
Moral: Creditors should methodically follow the Probate Code provisions
to eliminate time-consuming and expensive litigation which may arise
when the estates fight claims on the basis of non-compliance with the
Probate Code procedures.