Marianne Waldow v. James Laporta

SUPREME COURT OF ARIZONA
En Banc

IN THE MATTER OF THE ESTATE OF: ) Arizona Supreme Court
) No. CV-10-0102-PR
ROSANNE L. McGATHY, )
) Court of Appeals
Deceased. ) Division One
) No. 1 CA-CV 09-0022
__________________________________)
MARIANNE WALDOW, as Personal ) Maricopa County
Representative of THE ESTATE OF ) Superior Court
ROSANNE L. McGATHY, Deceased; ) No. PB2007-090525
MARY McGATHY; DAVID RHODES, )
WILLIAM RHODES; MICHAEL McGATHY; )
ERIN McGATHY, )
) O P I N I O N
Appellees, )
)
v. )
)
JAMES M. LAPORTA, )
)
Appellant. )
__________________________________)

Appeal from the Superior Court in Maricopa County
The Honorable Kirby D. Kongable, Commissioner

________________________________________________________________

Order of the Court of Appeals, Division One
Filed February 22, 2010

VACATED AND REMANDED
________________________________________________________________

BARRON AND POLK, PLLC Phoenix
By Jay M. Polk

And

HAHN LAW OFFICE, PC Sun City
By Bradley S. Hahn
Attorneys for Marianne Waldow
BECKER & HOUSE, PLLC Scottsdale
By Mark E. House
Attorneys for Mary McGathy, David Rhodes,
William Rhodes, Michael McGathy, and Erin McGathy

LAW OFFICE OF BILL KING, P.C. Scottsdale
By William M. King
Attorney for James M. LaPorta
________________________________________________________________

H U R W I T Z, Vice Chief Justice

¶1 An appeal may be taken “[f]rom a judgment, decree or

order entered in any formal proceedings under title 14.” A.R.S.

§ 12-2101(J) (2003). The issue for decision is whether, in an

unsupervised administration, an order requiring nonprobate

transferees to pay a pro rata share of estate taxes is

appealable under § 12-2101(J).

I.

¶2 In April 2008, Marianne Waldow, the personal

representative of the estate of Rosanne L. McGathy, filed a

petition in the superior court seeking instructions on whether

estate taxes should be paid solely from the estate or whether

nonprobate beneficiaries were required to contribute a pro rata

share. The court entered an order requiring the nonprobate

transferees to pay their share of the taxes. This order

disposed entirely of the personal representative’s petition.

The order contained findings pursuant to Arizona Rule of Civil

Procedure 54(b) and was entered as a final judgment. James M.

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LaPorta, a nonprobate beneficiary, filed a timely notice of

appeal.

¶3 The court of appeals dismissed the appeal sua sponte

for lack of jurisdiction. Citing Ivancovich v. Meier, 122 Ariz.

346, 595 P.2d 24 (1979), the court concluded that the tax

payment order was not appealable under § 12-2101(J) and could be

reviewed only in an appeal from a final decree distributing the

estate. After filing an unsuccessful joint motion for

reconsideration, the personal representative and LaPorta filed a

joint petition for review with this Court.

¶4 We granted review to resolve an issue of statewide

importance about appellate jurisdiction over judgments entered

in formal probate proceedings. See ARCAP Rule 23(c)(3). We

have jurisdiction under Article 6, Section 5(3) of the Arizona

Constitution and A.R.S. § 12-120.24.

II.

A.

¶5 Before the adoption of the Uniform Probate Code

(“UPC”), 1973 Ariz. Sess. Laws, ch. 75, § 1 (1st Reg. Sess.),

Arizona law invariably “treated the handling of an estate as one

continuous in rem proceeding.” 1 State Bar of Arizona, 2000

Probate Code Practice Manual § 5.5.1 (4th ed. 2000) (hereinafter

“Practice Manual”). In such a proceeding, the superior court

assumed and maintained jurisdiction over a decedent’s estate

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“until the final decree, distribution, and discharge of the

executor or administrator.” Id. The UPC calls this in rem

proceeding a “supervised administration.” A.R.S. § 14-3501; see

Unif. Prob. Code § 3-501 cmt. (describing supervised

administration as an “optional procedure for settling an estate

in one continuous proceeding in the Court”). An estate under

supervised administration remains “under the continuing

authority of the court . . . until entry of an order approving

distribution of the estate and discharging the personal

representative or other order terminating the proceeding.” Id.

The personal representative in a supervised administration has

no power “to make any distribution of the estate without prior

order of the court.” A.R.S. § 14-3504.

¶6 The UPC also offers the option of an unsupervised

administration. See A.R.S. § 14-3704. The “basic philosophy”

of unsupervised administration is to minimize judicial

involvement. Practice Manual § 5.5.2. In an unsupervised

administration, the personal representative can distribute

assets and close an estate informally and without court order.

A.R.S. §§ 14-3704, 14-3933. The personal representative or

other interested parties may petition the court for instructions

or other determinations in a “formal proceeding” when necessary.

See, e.g., A.R.S. §§ 14-3401, 14-3414; Practice Manual § 5.5.2.

Even if formal proceedings are instituted, the personal

4
representative may nonetheless close the estate without a final

decree. A.R.S. § 14-3933.

B.

¶7 The court of appeals concluded that Ivancovich

deprived it of appellate jurisdiction. Although Ivancovich is

strikingly similar in its facts to this case, it is

distinguishable in a critical respect.

¶8 In Ivancovich, the decedent passed away in 1944; the

superior court distributed his estate in 1947. 122 Ariz. at

348, 595 P.2d at 26. In 1967, the initial distribution was set

aside. Id. An appeal in the late 1970’s challenged a series of

orders by the trial court, one of which apportioned state and

federal tax payments between the residuary estate and the

beneficiaries of a life insurance policy. Id. at 353, 595 P.2d

at 31. Citing A.R.S. § 12-2101(J), we concluded that the trial

court’s order could only be reviewed “in an appeal from the

final decree distributing the estate.” Id.

¶9 In Ivancovich, the estate was under supervised

administration. Administration of the estate began under

Arizona’s previous probate code, and after Arizona adopted the

UPC, pending probate proceedings became “supervised

administrations” by operation of law. 1973 Ariz. Sess. Laws,

ch. 75, § 29(2) (1st Reg. Sess.) (“[A]ny proceedings relating to

estates of decedents then pending shall become proceedings in

5
supervised administration, unless the decedent’s will expressly

provided otherwise.”).

¶10 An estate under supervised administration remains

under the supervision of the trial court until a final decree is

entered. A.R.S. § 14-3501. Accordingly, all orders entered

before the final decree are interlocutory. Ivancovich thus

correctly found the tax apportionment order before it non-

appealable.

C.

¶11 In contrast to Ivancovich, the case before us involves

an unsupervised administration. The issue is thus one we have

not previously confronted: whether an order that terminates a

formal probate proceeding in an unsupervised administration is

appealable.

¶12 “In Arizona, with certain exceptions, jurisdiction of

appeals is limited to final judgments which dispose of all

claims and all parties” because “[p]ublic policy is against

deciding cases piecemeal.” Musa v. Adrian, 130 Ariz. 311, 312,

636 P.2d 89, 90 (1981) (citations omitted). Section 12-2101

provides for limited statutory exceptions to the general rule of

finality. Before adoption of the UPC, subsection (J) defined

appealable probate orders as those meeting one of the following

criteria:

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1. Granting or refusing to grant, revoking or refusing
to revoke, letters testamentary, or of
administration, or of guardianship.

2. Admitting or refusing to admit a will to probate, or
against or in favor of the validity of a will, or
revoking or refusing to revoke the probate thereof.

3. Against or in favor setting apart property, or
making allowance for a widow or child.

4. Against or in favor of directing the partition,
sale, or conveyance of real property, or settling an
account of an executor, administrator, guardian, or
trustee.

5. Refusing, allowing, or directing the distribution or
partition of an estate, or any part thereof, or
payment of a debt, claim, legacy, or distributive
share.

6. Confirming or refusing to confirm a report of an
appraiser or appraisers setting apart a homestead.

7. Determining heirship.

A.R.S. § 12-2101(J) (1970).

¶13 When the legislature adopted the UPC in 1973, it

concurrently amended § 12-2101(J) to remove this list of

interlocutory appealable orders and instead simply allowed for

appeals from a “judgment, decree or order entered in any formal

proceedings under title 14.” 1973 Ariz. Sess. Laws, ch. 75, §

10, codified at A.R.S. § 12-2101(J) (2003). A formal probate

proceeding is “conducted before a judge with notice to

interested persons,” A.R.S. § 14-1201(20), which commences with

the filing of a petition in the superior court, Ariz. R. Prob.

P. 4(A). Each formal proceeding is “independent of any other

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proceeding involving the same estate.” A.R.S. § 14-3107(1); see

also Unif. Prob. Code § 3-107 cmt. (“[T]he scope of the [formal]

proceeding if not otherwise prescribed by the Code is framed by

the petition.”); Ariz. R. Prob. P. 17 cmt. (“A petition . . . is

the equivalent of a complaint in a civil action[.]”). There may

be several formal proceedings concerning an estate in an

unsupervised administration. Ariz. R. Prob. P. 2(O), (P) cmt.

(“Each application or petition filed within a probate case gives

rise to a separate probate proceeding.”).

¶14 Accordingly, other UPC jurisdictions have concluded

that in an unsupervised administration, an order terminating a

formal proceeding is appealable. See Scott v. Scott, 136 P.3d

892, 899 (Colo. 2006) (distinguishing between supervised and

unsupervised administrations, and holding that “when the probate

court has entered orders fully determining the rights of the

parties with respect to all claims raised in a [formal]

proceeding, a final judgment exists”); In re Estate of Newalla,

837 P.2d 1373, 1376 (N.M. App. 1992) (noting the distinction

between supervised and unsupervised administrations and holding

that an order terminating a formal proceeding is appealable);

Schmidt v. Schmidt, 540 N.W.2d 605, 607 (N.D. 1995) (“Because

each proceeding in an unsupervised probate is considered

independent of other proceedings involving the same estate,

there need be finality only as to that proceeding, not the

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entire estate.”); see also Richard V. Wellman, The New Uniform

Probate Code, 56 A.B.A. J. 636, 638 (July 1970) (written by the

Chief Reporter of the UPC, and noting that formal proceedings

are to be held before a “judge of a court having the power of a

court of equity to enter a final order after notice and hearing

on relevant questions”).

¶15 We agree. In an unsupervised administration, an order

disposing of a formal proceeding may be the last one the court

will enter; the estate will often thereafter be distributed

without further court involvement. It makes no sense to defer

appellate review of an order terminating a formal proceeding

until after a final decree that may never come. Under such an

approach, the parties would not “know with any degree of

certainty at the time an order is entered whether the order is

final and appealable, because one cannot predict whether further

orders will be sought.” Newalla, 837 P.2d at 1376. “Failure to

allow an appeal from such an order could compel all subsequent

proceedings . . . to go forward under a cloud of uncertainty.”

Estate of Christensen v. Christensen, 655 P.2d 646, 648 (Utah

1982).

¶16 Indeed, if, as the court of appeals held here, no one

may appeal an order disposing of a formal proceeding in an

unsupervised administration until an order formally terminating

the estate is entered, the utility of unsupervised

9
administration would be severely undermined. In order to seek

appellate review of an order terminating a formal proceeding, a

party would be required to obtain a final order distributing the

estate. This would mandate otherwise unnecessary further court

involvement in the unsupervised administration.

III.

¶17 For the reasons above, we hold that § 12-2101(J)

permits appeal of the final disposition of each formal

proceeding instituted in an unsupervised administration.1 In

this case, there is no dispute that the superior court’s order

finally resolved the formal proceeding instituted by the

personal representative. The order is therefore appealable

under § 12-2101(J).2 We vacate the decision order dismissing the

                                                            
1
To avoid duplicative appeals, trial judges can consolidate
pending formal proceedings when appropriate. See Ariz. R. Civ.
P. 42(a); Ariz. R. Prob. P. 3(A) (providing that the Rules of
Civil Procedure generally apply in probate cases); Newalla, 837
P.2d at 1377 (“When the subject matter of two petitions overlap,
it would generally be appropriate to consider both petitions as
belonging to the same proceeding.” (citation omitted)).
2
In In re Estate of Kerr, the court of appeals stated that
“to be appealable an order should at least be of the same
general importance as those orders specified” in the pre-UPC
version of § 12-2101(J). 137 Ariz. 25, 27-28, 667 P.2d 1351,
1353-54 (App. 1983) (citing State Bar of Arizona, Arizona
Appellate Handbook § 3.2.1.1, 3-3, 3-4 (Supp. 1981)). Under §
12-2101(J), however, any order finally disposing of a formal
proceeding in an unsupervised administration is appealable.
And, in supervised administrations, the final decree, or any
interlocutory orders properly made final under Rule 54(b), are
appealable under A.R.S. § 12-2101(B), which grants appellate
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appeal and remand the case to the court of appeals for further

proceedings.

_____________________________________
Andrew D. Hurwitz, Vice Chief Justice

CONCURRING:

_____________________________________
Rebecca White Berch, Chief Justice

_____________________________________
W. Scott Bales, Justice

_____________________________________
A. John Pelander, Justice

__________________________ 
jurisdiction over a “final judgment.” We therefore disapprove
this statement in Kerr.
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