Rasmussen v. Huntington, No. 230-11-09 Oecv (Devine, J., May 4, 2010)

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]
                                                  STATE OF VERMONT
                                                   ORANGE COUNTY

Carol Rasmussen                                                     )
and Richard Rasmussen                                               )                      Orange Superior Court
                                                                    )                      Docket No. 230-11-09 Oecv
v.                                                                  )
                                                                    )
Ron S. Huntington                                                   )
and Randall S. Huntington,                                          )
Administrators for the Estate                                       )
of George E. Huntington                                             )


                                  Decision re: Motion for Summons to Trustee

       Plaintiff Carol Rasmussen alleges in her complaint that she was injured by a car
accident in June 2009 that was caused by the negligence of George Huntington, who has
since passed away. Plaintiff and her husband accordingly filed the present lawsuit for
damages against Mr. Huntington’s estate.

        It appears that plaintiffs’ lawsuit is one of five personal-injury claims that have
been made against the estate. Each of the personal-injury actions involves serious bodily
injuries or even wrongful death, and it can be inferred at this point that the estate will not
have sufficient funds to pay each of the claims in full. The estate is presently being
administered in the probate court, and the probate court judge has directed the
administrators not to distribute any estate assets without prior court approval.

        In the present motion before this court, plaintiffs seek to attach property of the
estate in the amount of two million dollars. Plaintiffs contend that the attachment is
necessary to secure the payment of their claim in the event that the estate funds are
depleted by the other pending personal-injury actions.

       In evaluating plaintiffs’ motion for trustee process, the court looks first to the
applicable statutes and attempts to give effect to their plain meaning. Carvalho v. Estate
of Carvalho, 2009 VT 60, ¶ 21; In re Estate of Cote, 2004 VT 17, ¶ 10, 176 Vt. 293. In
doing this, the court must interpret the statutory scheme as a whole so as to give harmony
and effect to each of the individual provisions. See Estate of Cote, 2004 VT 17, ¶ 11
(explaining that “statutes relating to the same subject matter should be construed together
and read in pari materia, if at all possible”) (quoting Munson v. City of South Burlington,
162 Vt. 506, 509 (1994)).

        Here, the statutes make clear that the role of overseeing the distribution of estate
assets is normally fulfilled by the probate court. It is the probate court, acting through the
administrators, that is entrusted with responsibility for processing, classifying, and
allowing the claims against the estate, and then distributing the estate assets according to
the statutory priorities. 14 V.S.A. §§ 1201–1207. In fulfilling these duties, one of the
primary obligations of the administrators is to ensure that similarly-situated creditors are
treated fairly and equally in the distribution of the estate. Title 14, V.S.A. § 1205(a)
specifically provides that when the assets of the estate are insufficient to pay all of the
claims that have been made against the estate, the administrator (subject to the approval
of the probate court) must distribute the funds according to the following priorities: first
come the costs of administration, then the reasonable burial-related expenses, then certain
employee wages due, and only then all other unsecured claims. In the event that the
assets are not sufficient to pay all of the claims within a particular class, the rule is that
“[n]o preference shall be given in the payment of any claim over any other claim of the
same class.” 14 V.S.A. § 1205(b). Rather, payments to unsecured creditors must be
“prorated if there are insufficient assets to satisfy all claims within the class.” Id.

        The statutes further clarify that unsecured creditors cannot circumvent the statutes
by attaching property of the estate through other legal proceedings. Title 14, V.S.A. §
1212 provides that “[n]o execution may issue upon nor may any levy be made against
any property of the estate under any judgment against a decedent or an executor or
administrator, but this section shall not be construed to prevent the enforcement of
mortgages, pledges or liens upon real or personal property in an appropriate proceeding.”
The import of this statute is that unsecured creditors cannot use the procedures of
attachment, trustee summons, or execution to secure their debt once the decedent’s
property has come within the custody of the administrators. Instead, once the decedent’s
property is swept into the probate estate, it is distributed to unsecured creditors in
accordance with the statutory priority scheme set forth in § 1205(b). It is only when the
creditor already had a secured interest in the decedent’s property prior to the decedent’s
passing (or at least prior to the creation of the probate estate) that the creditor is
authorized to execute upon the secured interest through appropriate legal means.
Compare 14 V.S.A. § 1212 (prohibiting the creation of new liens, but not the enforcement
of existing liens) with id. § 1209 (providing for payment of secured claims during
settlement of probate estates).

        It follows from these statutes that an attachment in this case would interfere with
the orderly administration of the probate estate. There is no need to preserve the assets of
the estate from depletion because the administrators and the probate court have already
taken possession of the property of the estate and are endeavoring to distribute that
property in accordance with the statutory procedures. As such, the probate court is in the
uniquely-qualified position of preserving the entire estate for the benefit of all the
creditors, rather than simply the plaintiffs in this action. An attachment here would
improve the priority of these plaintiffs to the detriment of other similarly-situated
personal-injury plaintiffs. Such a result would neither be fair nor consistent with the
statutes.

        The court also notes the general rule that attachments should not be given where,
as here, the property to be attached is already within the custody or oversight of the law.
Udall v. Mason, 112 Vt. 416, 418–19 (1942); Wilbur v. Flannery, 60 Vt. 581, 583 (1888).
Application of the rule makes sense here because the probate court has already assumed



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jurisdiction over the property of the estate, and is actively ensuring that the assets will be
distributed in accordance with law. As aptly explained by the Supreme Court of
Wisconsin, “[t]he orderly and equitable administration of estates would be impossible
and the statutes concerning the presentation and payment of claims against deceased
persons would be set at naught if it were permissible for claimants to put the assets of the
deceased beyond the control of executors and the probate court and to obtain preferences
and priorities through the garnishment of such assets.” Mahrle v. Engle, 53 N.W.2d 176,
179 (Wis. 1952); accord, e.g., Sadler v. Wagner, 475 P.2d 901, 903 (Wash. Ct. App.
1970); Friedman v. Peizer, 16 Conn. Supp. 174 (Conn. Super. 1949); 6 Am. Jur. 2d
Attachment and Garnishment § 179.

        Plaintiffs nevertheless contend that their motion for trustee summons is supported
by various precedents. They argue first that 12 V.S.A. § 3015 expressly authorizes
service of trustee summons upon the administrators of estates, and that examples of this
can be found in Island Pond National Bank v. Chase, 101 Vt. 60 (1928) and Lorenz v.
King, 38 Pa. 93 (1860). Yet both of these cases, as well as the statute, deal with the
situation where the debtor is one of the beneficiaries rather than the decedent himself, and
where the creditors are accordingly attempting to attach and garnish funds due from the
estate to the beneficiary. In those circumstances, attachment is permitted because it lies
only against whatever funds would otherwise be paid to the beneficiary, and thus does
not interfere with or otherwise alter the distribution of the estate assets.

       Plaintiffs also argue that the administrators are subject to trustee process under the
general statute authorizing trustee summons, 12 V.S.A. § 3013, because the
administrators are persons who hold “goods, effects or credits of the defendant.” Yet the
“long-standing rule of statutory construction” is that “where two statutes deal with the
same subject matter, and one is general and the other specific, the more specific statute
controls.” Smith v. Desautels, 2008 VT 17, ¶ 17, 183 Vt. 255 (quoting Town of
Brattleboro v. Garfield, 2006 VT 56, ¶ 10, 180 Vt. 90). Here, the court must give more
weight to the specific statutory scheme regarding the administration of probate estates, 14
V.S.A. §§ 1201 et seq., and especially to the specific provision expressly prohibiting
attachment of estate assets, 14 V.S.A. § 1212.

        Plaintiffs further contend that attachment is necessary because otherwise the
distribution of the estate will be left to the discretion of the probate court and the
administrators. In response to this, it need only be observed that the probate court and the
administrators will presumably follow the law in distributing the assets of the estate, and
that there are other recourses available should plaintiffs feel aggrieved by the decisions of
the probate court and the administrators. Waite v. Osborne, 11 Me. 185 (1834).

        Finally, plaintiffs argue that attachments are permissible because the superior
court has concurrent jurisdiction with the probate court regarding this claim. Yet the
statutes are clear that it is the probate court that exercises jurisdiction over the settlement
of estates. 4 V.S.A. § 311. The role of the superior court is merely to determine the
merits of plaintiffs’ cause of action, and not to exercise authority over the distribution of
assets from the estate. See Boyden v. Ward, 38 Vt. 628, 633 (1866) (explaining that “the



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jurisdiction of the probate court in the settlement of estates is so exclusive that even the
courts of chancery do not interfere generally,” and that to the extent that the county courts
have any concurrent jurisdiction in the matter, it is “limited and seldom exercised”).

        It may be true that plaintiffs will not be able to recover the full amount of their
claim in the probate proceeding. But there are already statutory procedures in place to
ensure that, if the estate assets are not sufficient to pay all of the claims, plaintiffs will at
least be treated equally with all the other creditors in the same class as plaintiffs. This,
and not attachment, is the fairest outcome for all concerned.

        For these reasons, plaintiffs’ motion for trustee summons is denied.

        Dated at Chelsea, Vermont this ____ day of May, 2010.


                                                 ____________________________
                                                 Hon. Thomas J. Devine
                                                 Presiding Judge




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