On December 12, 2018, the Ohio Supreme Court ruled in
Embassy Healthcare v. Bell, Slip Opinion No. 2018-Ohio-4912, that creditors seeking payment for necessaries (including food, shelter, clothing, medical, nursing home or hospice services) provided to individuals must, within six months of the date of death, present a claim to the decedent’s estate before it can pursue payment from the surviving spouse. A creditor’s failure to timely present the claim bars the creditor’s claim against the estate
and the claim against the surviving spouse under Ohio’s Necessaries Statute.
The Necessaries Statute, Ohio Rev. Code §3103.03, mandates that married persons must support their spouse to the extent he/she is able. If a person neglects to support their spouse, anyone who supplies the spouse with necessaries may recover the reasonable value of the necessaries from the other spouse. Over time, the Necessaries Statute has developed to permit creditors providing necessaries - - often medical, nursing home, or hospice services - - to seek payment from their patient’s surviving spouse. Meanwhile, Ohio Rev. Code §2117.06 requires that any and all claims against a decedent must be presented to the decedent’s estate within six months of the date of death. A creditor’s failure to present its claim within the required six months bars the claim forever.
In light of the two statutes, the process to pursue payment claims against a decedent, his or her estate, and the surviving spouse creates confusion. Can a creditor pursue payment from a surviving spouse if it does not timely present its claim to the decedent’s estate? What if no estate has been opened, or what if the decedent’s estate is insolvent? The
Embassy Healthcare opinion resolves these often-asked questions by confirming that yes, a claim must timely be presented to the decedent’s estate under ORC §2117.06 before it can pursue the surviving spouse for payment under ORC §3103.03, regardless of the solvency of the decedent’s estate.
In
Embassy Healthcare, Embassy Healthcare dba Carlisle Manor Healthcare provided nursing home services to Robert Bell. Upon Robert’s death, Embassy failed to present its claim for unpaid services to Robert’s estate within the required six months. In fact, no estate had been opened for Robert, presumably due to the lack of assets. Instead, Embassy filed a lawsuit against Robert’s widow, Cora, under the Necessaries Statute to recover the unpaid services. The trial court decided that Embassy’s failure to timely present a claim against Robert’s estate barred its claim against Cora. Embassy appealed, and the Twelfth Appellate District agreed with Embassy that the two statutes permit separate, independent remedies available to creditors.
Cora appealed to the Ohio Supreme Court, which agreed with the trial court. In its opinion, the Supreme Court determined that ORC §2117.06(C) mandates that a claim under Ohio’s Necessaries Statute must be timely presented to the decedent’s estate, and the failure to do so bars the claim against
both the estate and the surviving spouse. The Court reasoned that because the Necessaries Statute creates liability by the non-debtor spouse
only if the debtor spouse does not have assets to pay, a creditor must first seek satisfaction of its claim from the assets of the spouse who incurred the debt.
But what if no estate has been opened? The
Embassy court confirmed that if a creditor cannot present its claim because no estate exists, the creditor itself must open and administer the estate within the six-month timeframe to preserve its claim. But what if the decedent has no assets to probate, and opening an estate would be pointless? The Court reasoned that the process pertains to creditors having claims against an estate, not just to creditors seeking payment from an estate. As a result, the solvency of an estate is irrelevant - - unless a judicial determination finds a decedent’s estate insolvent, a creditor must timely present its claim to the estate to preserve its claim against the estate and the surviving spouse, even if the creditor knows the estate has no assets.
Justice DeWine’s dissent portrays the decision as a “reimagined” Necessaries Statute, believing the opinion “announces a broad new rule” that subjects all claims, not just claims under the Necessaries Statute, to the requirements of estate law:
If the majority really means what it says - - that the requirements of R.C. 2117.06 are mandatory and that a claim must first be presented against an estate even when a creditor has a legal right to pursue another avenue of recourse - - it has worked a substantial rewrite of a large chunk of debtor-creditor law.
The
Embassy opinion will undoubtedly generate strong opinions as it mandates additional burdens on creditors. However, it does clarify a confusing process by setting a clear procedure: timely present your claim to the decedent’s estate before pursuing the surviving spouse.
For additional information on interpreting this decision, please contact Frantz Ward partner
Melissa Jones at
mjones@frantzward.com.