IN THE MATTER OF THE ESTATE OF EDWARD K. McELVENY, Deceased, MICHAEL PHILLIPS, as Personal Representative of the Estate of Edward K. McElveny, Petitioner-Appellee, v. STATE OF NEW MEXICO, ex rel. DEPARTMENT OF TAXATION AND REVENUE, Respondent-Appellant.
Docket No. 33,568
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
May 11, 2015
2015-NMCA-080
Opinion Number: 2015-NMCA-080; Certiorari Granted, July 17, 2015, No. 35,349
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Raymond Z. Ortiz, District Judge
Cristy J. Carbón-Gaul
Albuquerque, NM
Starace Law
Carmela D. Starace
Albuquerque, NM
for Appellee
Hector H. Balderas, Attorney General
Peter A. Breen, Special Assistant Attorney General
Santa Fe, NM
for Appellant
OPINION
VIGIL, Chief Judge.
{1} This case presents a question of first impression: whether the district court in a formal proceeding under the Uniform Probate Code (UPC),
BACKGROUND
{2} Edward McElveny (Decedent) died intestate in 1991, and his heirs consist of seven adult grandchildren and one adult great-grandchild. In 2013, Michael Phillips, one of the adult grandsons, filed an application in the Santa Fe probate court to open an informal probate for his grandfather and to be appointed personal representative of Decedent‘s estate (Estate). The remaining heirs renounced their right to be appointed personal representative and nominated Michael Phillips to be appointed personal representative of the Estate. The application states that Decedent “has property which was transferred to the . . . Department as unclaimed property” and that “[a]s part of the probate administration, Applicant will claim the unclaimed property for Decedent‘s Estate.” It is undisputed that the Department is holding property in the name of Decedent valued at “a little less than $70,000” pursuant to the UPA. The probate court issued an order appointing Mr. Phillips personal representative (PR) of the Estate and ordered the Department to “release the unclaimed property of the Decedent to Applicant as [PR] of the Estate of Decedent.”
{3} The PR attached a copy of the probate court order to a blank claim form used by the Department under the UPA and submitted it to the unclaimed property office of the Department, demanding that the money be released to the PR to be administered under the UPC and distributed to the heirs. The Department rejected the claim as “incomplete” on the grounds that “[w]e do not have appropriate documentation showing that the property in question would devolve to Mr. Phillips alone under the applicable law of heirship” and that “the application should be made directly to [the] Department as unclaimed property custodian rather than probate.” The Estate responded by pointing out that the demand was not made on behalf of Mr. Phillips personally, but in his capacity as PR of the Estate so the money could be distributed to the heirs. In addition, the Estate disputed that the exclusive method for acquiring estate assets in the custody of
{4} The Department failed to respond to the Estate‘s demand, and the probate court thereupon transferred the probate case to the district court “for determination of all disputed issues” subject to being remanded back to the probate court for completion after resolution of the disputed issues. See
{5} Following a hearing at which the Department appeared, the district court denied the Department‘s motion to dismiss, enforced the order of the probate court, and ordered the Department to deliver the personal property of Decedent to the PR of the Estate. The Department appeals.
DISCUSSION
{6} As a prelude to our analysis, we provide a brief overview of the UPA and how it generally operates. Property is “presumed abandoned” if it is “unclaimed” by its apparent owner for a specified period of time.
{7} Against this general background, the Department contends that the order of the district court must be reversed, arguing: (1) the district court had no jurisdiction, apart from the UPA, to order the Department to release the unclaimed property to the Estate; (2) the district court order is void because the Department was not served with process; and (3) for additional reasons, which we address summarily.
Standard of Review
{8} Arguments made by the Department require us to engage in statutory interpretation, which requires de novo review. Oldham v. Oldham, 2011-NMSC-007, ¶ 10, 149 N.M. 215, 247 P.3d 736. In addition, whether a district court has subject matter jurisdiction
Subject Matter Jurisdiction
{9} We first address whether the district court had jurisdiction, independent of the UPA, to order the Department to deliver the property of Decedent to the PR of the Estate. When the probate case was opened and the PR was appointed for the Estate, the PR was automatically granted certain powers and obligations. The PR acquired “the same power over the title to property of the estate that an absolute owner would have” which could be exercised “without notice, hearing or order of the court.”
The district court in formal proceedings shall have jurisdiction to determine title to and value of real or personal property as between the estate and any interested person, including strangers to the estate claiming adversely thereto. The district court has full power to make orders, judgments and decrees and to take all other action necessary and proper to administer justice in matters that come before it.
On its face,
{10} The UPC notwithstanding, the Department asserts that the district court lacked subject matter jurisdiction because the UPA contains an express declaration that the Estate must utilize its procedure to acquire Decedent‘s property. The sole authority cited to us is Subsection (a) of
A person, excluding another state, claiming property paid or delivered to the [Department] may file a claim on a form prescribed by the [Department] and verified by the claimant.
The Department argues that because an estate is included in the definition of a “person” in the UPA under
{11} Our task in construing a statute is to give effect to the intent of the Legislature. Oldham, 2011-NMSC-007, ¶ 10. To ascertain the Legislature‘s intent, we look first to the plain language of the statute, unless the Legislature indicates that a contrary meaning was intended. Id. “[W]hen a statute contains language which is clear and unambiguous, we must give effect to that language and refrain from further statutory interpretation.” Bank of N.Y. v. Romero, 2014-NMSC-007, ¶ 40, 320 P.3d 1 (internal quotation marks and citation omitted). Here, there is nothing to indicate that the Legislature intended the word “may” to mean anything
{12} Because the words “may” and “shall” have such different meanings, “a fundamental rule of statutory construction states that in interpreting statutes, the words ‘shall’ and ‘may’ should not be used interchangeably but should be given their ordinary meaning.” Thriftway Mktg. Corp. v. State, 1992-NMCA-092, ¶ 9, 114 N.M. 578, 844 P.2d 828. Thus, “[w]here the terms ‘shall’ and ‘may’ have been juxtaposed in the same statute, ordinarily it must be concluded that the [L]egislature was aware of and intended different meanings.” Id. In this regard, we note that in
{13} Here,
Service of Process
{14} The Department contends that the order of the probate court directing it to deliver Decedent‘s property to the Estate and the order of the district court enforcing the order was ineffectual and void because the Department was never served with process as required by Rule 1-004 NMRA. For the following reasons, we disagree.
{15} Probate proceedings are in rem special statutory proceedings. See In re Estate of Harrington, 2000-NMCA-058, ¶ 14 (stating that probate proceedings are special statutory proceedings); In re Estates of Salas, 1987-NMCA-018, ¶ 11, 105 N.M. 472, 734 P.2d 250 (“The procedure for probating wills and testaments in New Mexico is strictly statutory and is an action in rem.“), abrogated on other grounds by In re Estate of Harrington, 2000-NMCA-058; In re Hickok‘s Will, 1956-NMSC-035, ¶ 30, 61 N.M. 204, 297 P.2d 866 (“A probate proceeding is a special, statutory proceeding.“). Here, the PR opened an informal probate for his deceased grandfather pursuant to the UPC, and the probate court properly issued an order directing the PR to collect the
{16} Under the UPC, “each proceeding before the district court or probate court is independent of any other proceeding involving the same estate” unless it is a supervised administration.
Remaining Arguments
{17} The Department asserts that the district court had no jurisdiction because the Estate did not exhaust its administrative remedies. The short answer to this argument is that the Estate was not required to proceed under the UPA, and exhaustion of administrative remedies is not a prerequisite for enforcing a probate court order in the district court.
{18} Finally, the Department argues that the Estate‘s claim to the property is insufficient to overcome the statutory presumption that the property is abandoned. We disagree. The Estate made a claim to the property pursuant to the UPC, and despite having been given the opportunity to contest the Estate‘s ownership of the property, the Department chose not to. Moreover, in its brief, the Department concedes that it “has roughly $70,000 of unclaimed property in its custody . . . which colorably belonged to [Decedent].” There is no factual dispute that the property belongs to the Estate, and we therefore reject the Department‘s argument.
CONCLUSION
{19} The order of the district court is affirmed.
{20} IT IS SO ORDERED.
MICHAEL E. VIGIL, Chief Judge
WE CONCUR:
CYNTHIA A. FRY, Judge
RODERICK T. KENNEDY, Judge