Opinion
No. 70-454
Decided February 16, 1971. Rehearing denied March 16, 1971. Certiorari denied May 24, 1971.
State mental hospital filed estate claims for its care and maintenance of deceased, a mental incompetent. Trial court gave priority to mortuary's claim for funeral expenses, state appealed.
Affirmed
1. GUARDIAN AND WARD — Claims — Care and Maintenance — Not Lien — Assets of Ward — Death of Ward — Distribution — Law of Decedent's Estates. In the absence of a statute, claims for care and maintenance do not constitute a lien against the assets of a ward in the possession of a guardian, and, upon death of the ward, the statutory scheme applicable to decedent's estates becomes operative with debts incurred during the guardianship to be classified in accordance with the law fixing priorities in the distribution of decedent's estates.
2. Statute — Personal Representative — Pay — State Hospital's Claim — Not — Impress Lien — No Greater Priority. The statute, 1965 Perm. Supp., C.R.S. 1963, 153-14-11(2), imposes upon the personal representative the duty to pay state hospital's claim for care and maintenance of the deceased ward to the extent of ward's assets, but it does not impress a lien upon the assets of the guardian in favor of the hospital, nor does it give the hospital's claim a different or greater priority than that provided by C.R.S. 1963, 153-12-2.
Error to the District Court of Pueblo County, Honorable Hubert Glover, Judge.
Duke W. Dunbar, Attorney General, Richard D. Robb, Assistant, for plaintiffs-appellants.
John R. Naylor, for defendant-appellee.
William E. Anderson, for claimant-appellee.
This appeal involves the priority of the claim of Davis Mortuary, Inc., Appellee, and the claims of the Colorado State Hospital, Appellant, against the Estate of Dora Anna Taylor, now deceased. The assets of the estate are insufficient to satisfy these claims in full.
The facts are not in dispute. In 1962, the Estate of Dora Ann Taylor, a mental incompetent, was opened and letters of conservatorship were issued.
Mrs. Taylor died testate on March 1, 1966, and letters testamentary were issued on February 27, 1967. The executor took possession of the assets and the conservator was subsequently discharged by order dated June 28, 1967. The Colorado State Hospital filed claims in the total amount of $6,753 for care and maintenance of Mrs. Taylor during her lifetime.
On March 5, 1966, Davis Mortuary filed its claim for funeral expenses in the amount of $1,187. On March 25, 1970, the trial court allowed the Davis Mortuary claim as a claim of the third class and allowed the claims of the State Hospital as claims of the fifth class. The trial court directed the executor to pay the claims in that order.
The court classified the claims in accordance with C.R.S. 1963, 153-12-2, which provides:
"(1) (a) All claims against the estate of any deceased person shall be divided into the following classes, to wit:
* * * *
"(d) Funeral expenses; * * * shall comprise the third class.
* * * *
"(f) All other debts and demands of whatsoever kind shall comprise the fifth class."
The appellant contends that the court was in error in classifying the claims of the Colorado State Hospital in accordance with the foregoing statute and in assigning a higher priority to the claim for funeral expenses.
Appellant argues that its claims constitute a lien upon the assets of the mental incompetent in the possession of the guardian, and only the net assets remaining after its lien is satisfied are subject to disposal under the statute fixing priorities for claims against the estates of decedents.
[1] It is generally held, in the absence of statute, that no such lien exists and that upon the death of a person under guardianship, the statutory scheme applicable to decedents' estates becomes operative, and that debts incurred during the guardianship are to be classified in accordance with the law fixing priorities in the distribution of decedents' estates. In Re Bohnstedt, 36 Del. Ch. 97, 125 A.2d 580, annotated at 60 A.L.R. 2d 959; Hyden v. Wilkinson, 187 Okla. 348, 102 P.2d 887; Harriss v. Parks, 77 Okla. 197, 187 P. 470. Contra: State of Arizona v. Greenhaw, 50 Ariz. 436, 72 P.2d 950 , annotated at 113 A.L.R. 398.
The appellant contends that its asserted lien is impressed upon the assets of the incompetent's estate by operation of 1965 Perm. Supp., 1963, 153-14-11 (2). This statute concerns reports and settlement of estates, and the pertinent part is as follows:
"* * * No notice shall be required upon the closing of the estate of a minor, mentally ill person, or mentally deficient person upon exhaustion of the estate, unless otherwise directed by the court. The administration of the estate of such a mentally ill or mentally deficient person who has been committed, admitted, or transferred to a public institution of this state for the care, treatment, support, and education of the mentally ill or mentally deficient shall not be closed if said estate is possessed of assets, until there is filed in such estate a certificate from the chief administrative office of the institution or the director of the department of institutions that all claims of the state of Colorado for the care, support, maintenance, education, and treatment of such mentally ill, or mentally deficient person have been paid and it shall be the duty of the personal representative to pay the said claims to the extent of the assets in order to comply with this section."
[2] We do not construe this section of the statute as impressing a lien upon the assets of the guardian in favor of the hospital, nor do we construe this statute to give to the hospital's claim a different or greater priority than that provided by C.R.S. 1963, 152-12-2. The statute imposes upon the personal representative the duty to pay the hospital's claim to the extent of the assets, but such payment is to be made in the order of priority provided for in C.R.S. 1963, 153-12-2. Accordingly, we hold that the trial court properly classified the claim of the hospital under C.R.S. 1963, 153-12-2.
In reaching this conclusion, we have considered the effect of C.R.S. 1963, 153-9-8, concerning the "merger" of proceedings upon the death of a ward. This section provides that upon the death of a ward, intestate, the guardian has the power, subject to the provisions of the statute, to continue to administer the estate "as the estate of the deceased ward." This merger statute is a procedural statute and has no effect upon the priorities of the claims of creditors. The rights of creditors cannot depend upon whether the estate of a deceased person is being administered by a fiduciary appointed after the death of a decedent, or is being administered by a conservator appointed prior to death and continuing to administer the estate after the ward's death under the provisions of the merger statute.
Judgment affirmed.
JUDGE DUFFORD and JUDGE PIERCE concur.