Meissner v. Murphy

WARDEN, J. The issue in this case is whether plaintiff, by failing to file a claim against decedent’s estate before bringing an action for specific performance of a land sale contract between herself and the decedent, is barred from recovering a deficiency judgment in the action. On May 6, 1979, plaintiff executed an installment sale contract to sell timber land to Steve Wilber. After! Wilber’s death in January, 1980, defendant Wilber’s per sonal representative ceased making payments on the con tract. On November 10, 1980, plaintiff filed an actio: against defendant for specific performance, praying fo judgment for the contract balance, interest and attorne; fees, with the judgment to be “secured by vendor’s lie: upon the property.” Plaintiff prayed that those sums b paid within 60 days of judgment and, if not so paid, tha the contract be foreclosed, the property be sold and, if tb proceeds of the sale did not satisfy the judgment, executio issue to enforce payment of the deficiency. Defendani moved to dismiss the complaint on the ground that defenj dant had no obligation to perform the contract. On Januar 12, 1981, the day of the hearing on defendant’s motio: plaintiff filed a claim against the estate.1 Defendant’! motion to dismiss was denied. On March 5, 1981, plaintiff] claim was disallowed, and on March 23, plaintiff filed second amended complaint alleging the filing and denial i the claim and praying for judgment as prayed for in b original complaint. Defendant moved to strike the par; graphs of the second amended complaint relating to t' claim and its denial2 and for partial summary judgme declaring that plaintiff was not entitled to a deficiem judgment. Defendant’s motions were granted. On trial the court, plaintiff asked the judge to overrule tho; rulings. They were affirmed, and a decree was enterej [177] revesting the property in plaintiff and denying her any further relief. In other words, the court granted plaintiff strict foreclosure. Plaintiff appeals, assigning as error the trial court’s granting of defendant’s motions to strike and for partial summary judgment, thus barring her claim for specific performance and for a deficiency judgment against the estate. Defendant argues that plaintiff is barred from seeking a deficiency judgment, because she commenced the action against the estate before filing- a claim. Plaintiff attempted, by suing for specific performance, to include recovery of a deficiency judgment, in accordance with Renard v. Allen, 237 Or 406, 391 P2d 777 (1964). In Renard, however, the defendant was not the personal representative of a decedent’s estate, and the law governing presentation and collection of claims against estates was not involved. Defendant asserts that that difference is determinative of this case. The presentation and collection' of claims in a •róbate proceeding are governed by ORS 115.001 et seq. A •laim on a debt due for which the creditor holds security iay be presented as a claim against the estate, or the ¡reditor may elect to rely entirely on the security without •resentation of the claim. ORS 115.065(1). In the present |ase, plaintiff first attempted to collect the amount due on e land sale contract by filing an action for specific |erformance but retaining the security of her lien and oviding for foreclosure if the contract balance were not id within 60 days after the date of the decree. She then [led a claim with the estate. The question is whether the [ection to file the action before filing the claim limits aintiff s remedy in the action to recovery of her security, fe believe it does and affirm. The law is well settled that filing a claim is a [ndition precedent to filing a civil action against the Irsonal representative of an estate. ORS 115.325.3 Cases [178] cited by defendant support this rule. In Teel v. Winston, 22 Or 489, 29 P 142 (1892), the court held that “the failure to present to an executor or administrator for allowance a claim secured by mortgage, only operates to prevent a judgment for any deficiency that might remain after exhausting the mortgaged property, but does not affect the right to a foreclosure where no recovery is sought beyond the proceeds of the mortgaged lands.” 22 Or at 491. In Schaefer v. Sellar, 156 Or 16, 64 P2d 1334 (1937), thej court reiterated its holding in Teel: “[T]he general rule required the presentation of a claim to the personal representative of a deceased mortgagor before the institution of suit where the mortgagee seeks a deficiency judgment against the estate of the deceased mortgagor.” 156 Or at 20-21. See also Annotation, 78 ALR 1126 (1932). ORS 115.325 anc the holdings in Teel and Schaefer support the premise thaf the filing of an action before filing a claim bars plaintif| from recovering a deficiency judgment. Plaintiffs actioi was for a money judgment in the amount owed plaintif under the contract and for foreclosure by sale of th| property subject to the contract if the money was not paic She thereby expressed her intent to rely on her security Her action for money was brought prematurely. ORij 115.065(6).4 She had not presented a claim to defendar before she commenced her action. We hold that by exercising the remedies reserve under her security before filing a claim, plaintiff elected rely solely on her security and, therefore, she is not entitle to recover a deficiency judgment. The trial court rulq correctly in striking paragraphs V and VI of her secor [179] amended complaint and in granting partial summary judgment.5 Affirmed. Footnotes [1] Although the claim and its contents are not included in the record, plainl acknowledged in oral argument that the claim filed was for the amount due un| the installment sale contract. [2] Plaintiff, in the statement of facts in her brief, states that defendant mo| to strike the paragraphs relating to the claim and denial. Defendant’s motion ; included a request to strike paragraph IX, a request for attorney fees. Paragr| IX, however, does not concern attorney fees. See n 5, infra. [3] ORS 115.325 provides: “No action against a personal representative shall be commenced until the claim of the plaintiff has been presented to the personal representative and by him disallowed. If the claim is presented after the expiration of four months [178] after the date of the first publication of notice to interested persons, personal representative, in an action therefor, is liable only to the extent of 1 assets in the hands at the time the summons is served upon him and allocal to the payment of the claim pursuant to ORS 115.115 and 115.125.” (EmpJ| sis added.) [4] ORS 115.065(6) provides, in pertinent part: “The creditor shall not exercise remedies reserved under his security uj at least 30 days after the date the claim is presented and after notice to | personal representative of his intention to exercise his remedy * * [5] Plaintiffs second assignment of error is that the trial court erred in striking paragraph IX of plaintiffs second amended complaint. On checking the record, we find that the trial court did not strike paragraph IX. Plaintiffs assignment of error is, therefore, unneccessary.