COA 375818 IN RE HAUK ESTATE Opinion - Per Curiam - Unpublished 9/23/2026

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
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S T A T E O F M I C H I G A N
C O U R T O F A P P E A L S
In re ESTATE OF RICHARD HENRY HAUK.
GEORGE F. RIZIK, II, Personal Representative of
the ESTATE OF RICHARD HENRY HAUK,
Appellee,
UNPUBLISHED
September 23, 2026
11:15 AM
v No. 375818
Genesee Probate Court
FARMERS AND MERCHANTS STATE BANK, LC No. 24-225585-DE
Appellant.
Before: WALLACE, P.J., and CAMERON and KOROBKIN, JJ.
PER CURIAM.
This case involves a priority dispute between the estate of Richard Henry Hauk (decedent)
and his secured creditor, appellant (the Bank). The Bank appeals as of right the probate court’s
order approving proposed distributions by appellee (Rizik), as personal representative of the estate,
to decedent’s widow. We affirm in part, reverse in part, and remand for further proceedings.
I. FACTUAL AND PROCEDURAL BACKGROUND
Before to his death, decedent obtained two loans from the Bank. The loans were cross-
collateralized under their respective promissory notes. One loan was secured by certain real
property, while the other loan was secured by “ALL ASSETS OF DEBTOR, WHEREVER
LOCATED AND WHETHER NOW EXISTING OR HEREAFTER ARISING . . . AND ANY
PRODUCTS AND/OR PROCEEDS OF THE FOREGOING.” The real-property loan was
perfected by a mortgage and the all-assets loan was perfected via a UCC-1 financing statement.
After decedent died intestate, creditors began asserting claims against his estate. The Bank
also submitted a claim for the outstanding balances of the two loans. At Rizik’s request, the
probate court barred certain claims, including the Bank’s claim, because the claimants had failed

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to comply with certain statutory requirements. The Bank did not appeal this ruling because it
believed that its secured interest remained enforceable.
Rizik later sought guidance from the probate court regarding the distribution of the estate’s
remaining assets. The Bank objected, arguing that its secured interest had priority over the other,
unsecured claims, under In re Lundy Estate, 291 Mich App 347; 804 NW2d 773 (2011). The
probate court concluded that In re Lundy was distinguishable because it concerned “a certificate
of deposit but not . . . the assets as they stand here in this case[,]” and authorized Rizik’s requested
distributions. The Bank now appeals.
II. STANDARDS OF REVIEW
We review appeals from the probate court on the record. In re Lundy, 291 Mich App at
352. “This Court reviews the probate court’s factual findings for clear error and its dispositional
findings for an abuse of discretion.” Id. “A factual finding is clearly erroneous when this Court
is left with a definite and firm conviction that a mistake has been made.” In re Estate of
Huntington, 339 Mich App 8, 17; 981 NW2d 72 (2021) (quotation marks and citation omitted).
“An abuse of discretion occurs when the decision resulted in an outcome falling outside the range
of principled outcomes.” Id. (quotation marks and citation omitted). “An error of law necessarily
constitutes an abuse of discretion.” Id. (quotation marks and citation omitted). Finally, issues of
statutory interpretation are reviewed de novo. In re Lundy, 291 Mich App at 352.
III. ANALYSIS
The Bank argues that the probate court erred by authorizing distributions from the estate
before the Bank’s secured interest had been satisfied or otherwise exhausted. We agree, in part.
The Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq., establishes a
priority scheme for claims against an estate when the estate lacks sufficient funds to pay all claims
in full. MCL 700.3805(1) provides:
(1) If the applicable estate property is insufficient to pay all claims and
allowances in full, the personal representative shall make payment in the following
order of priority:
(a) Costs and expenses of administration.
(b) Reasonable funeral and burial expenses.
(c) Homestead allowance.
(d) Family allowance.
(e) Exempt property.
(f) Debts and taxes with priority under federal law, including, but not
limited to, medical assistance payments that are subject to adjustment or recovery
from an estate under section 1917 of the social security act, 42 USC 1396p.

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(g) Reasonable and necessary medical and hospital expenses of the
decedent’s last illness, including a compensation of persons attending the decedent.
(h) Debts and taxes with priority under other laws of this state.
(i) All other claims.
But this Court has recognized that “EPIC treats secured creditors differently than other potential
claimants against an estate.” In re Lundy, 291 Mich App at 354. For example, MCL 700.3104
carves out an exception for secured creditors to the rule against general creditors seeking to enforce
their claims against a decedent’s estate before the appointment of personal representative:
(1) Except as otherwise provided in subsection (2), a proceeding to enforce
a claim against a decedent’s estate or the decedent’s successors shall not be revived
or commenced before the appointment of a personal representative. After the
appointment and until distribution, a proceeding or action to enforce a claim against
the estate is governed by the procedure prescribed by this article. After distribution,
a creditor whose claim has not been barred may recover from the distributees as
provided in section 3955 or from a former personal representative individually
liable as provided in section 3956.
(2) This act does not apply to a proceeding by a secured creditor of the
decedent to enforce the creditor’s right to the creditor’s security except as provided
in part 8 of article III and part 6 of article VII.
Similarly, MCL 700.3803(3)(a) provides that certain time-based requirements do not “affect or
prevent” a “proceeding to enforce a mortgage, pledge, or other lien on estate property[,]” and
MCL 700.3812 provides that “[a]n execution shall not issue upon nor shall levy be made against
estate property under a judgment against a decedent or personal representative. This section shall
not be construed to prevent the enforcement of a mortgage, pledge, or lien upon property in an
appropriate proceeding.”
These statutes demonstrate the Legislature’s intent to distinguish secured creditors from
general creditors. That distinction is evident in MCL 700.3809, which provides:
A personal representative shall pay a secured claim on the basis of the
amount allowed if the creditor surrenders the security. Otherwise, the personal
representative shall pay on the basis of 1 of the following:
(a) If the creditor exhausts the security before receiving payment, upon the
amount of the claim allowed less the fair value of the security.
(b) If the creditor does not have the right to exhaust the security or has not
done so, upon the amount of the claim allowed less the value of the security
determined by converting it into money according to the terms of the agreement
under which the security was delivered to the creditor or by the creditor and
personal representative by agreement, arbitration, compromise, or litigation.

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In other words, a personal representative must account for the value of collateral securing a debt
when determining the amount owed to a secured creditor. See Dep’t of Environment Great Lakes
& Energy v Holloo Farms LLC, ___ Mich App ___, ___; ___ NW3d ___ (2024) (Docket No.
365934); slip op at 8 (“when used in a statute the term ‘shall’ connotes a mandatory duty.”).
MCL 700.3814 further demonstrates the distinct position of secured creditors by
identifying the methods a personal representative may use to satisfy an encumbrance:
If property of the estate is encumbered by mortgage, pledge, lien, or other
security interest and it appears to be in the estate’s best interest, the personal
representative may pay the encumbrance or a part of the encumbrance, renew or
extend an obligation secured by the encumbrance, or convey or transfer the property
to the creditor in satisfaction of the lien, in whole or in part, whether or not the
encumbrance holder has presented a claim. Payment of an encumbrance does not
increase the share of the distributee entitled to the encumbered property unless the
distributee is entitled to exoneration. [Emphasis added.]
Although a personal representative has discretion in how to pay the secured creditor, this discretion
not mean “that an encumbrance may be disregarded if the asset is needed to satisfy the priorities
set forth in MCL 700.3805.” In re Lundy, 291 Mich App at 358. This is because, “without even
making a ‘claim’ against the estate, the [secured creditor] has a priority position with respect to
the secured property.” Id. at 357.1 It is only if the secured property is insufficient to satisfy the
debt that the secured creditor “is in the same position as any other creditors with respect to any
claim against the estate for the amount of any deficiency existing after exhausting the security.”
Id. “In sum, none of these provisions prevents the secured creditor from exhausting the security.
On the contrary, they treat a secured creditor differently and contemplate a secured creditor’s right
to collect from the security without bringing a claim against the estate for estate funds.” Id. at 358-
359.
The probate court distinguished In re Lundy from this case on the ground that the collateral
in that case was a different type of asset. But nothing in the reasoning of In re Lundy supports
such a narrow reading of its holding. The reasoning in In re Lundy applies to secured creditors of
an estate as a class. The fact that the type of collateral in this case differs from the collateral at
issue in In re Lundy does not undermine this Court’s conclusion that, under the statutory
framework, “EPIC treats secured creditors differently than other potential claimants against an
estate.” Id. at 354.
EPIC does not define the term “secured creditor,” so we turn to its dictionary definition.
McCormick v Carrier, 487 Mich 180, 195; 795 NW2d 517 (2010). Black’s Law Dictionary (12th
1 Decedent’s widow moved this Court to dismiss this appeal, arguing that the Bank forfeited its
challenge to the distribution order by failing to appeal the earlier order barring its claims against
the estate. But the Bank was only required to file a claim to the extent that the securities serving
as collateral for the loans were insufficient to satisfy the debt. The Bank’s later objection to the
distribution of the estate’s remaining assets was based on its rights as a secured creditor, not its
barred claim.

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ed) defines a secured creditor as “a creditor who has the right, on the debtor’s default, to proceed
against collateral and apply it to the payment of the debt.” Regarding the real-property loan, the
Bank qualifies as a secured creditor. The all-assets loan, however, was not properly secured
because the description of the collateral was insufficient. Under MCL 440.9108(3), “[a]
description of collateral as ‘all the debtor’s assets’ or ‘all the debtor’s personal property’ or using
words of similar import does not reasonably identify the collateral[,]” and therefore does not
sufficiently identify what is described.
Accordingly, the Bank has a priority claim as a secured creditor against the proceeds from
the sale of the collateralized real property and is entitled to recover the amount owed to the extent
those proceeds are available from the collateralized property. If the proceeds are insufficient to
satisfy the debt, the Bank’s claim to any remaining balance is that of a general creditor. The trial
court previously barred the Bank’s general-creditor claims, and the Bank did not timely appeal
from that order. Therefore, to the extent the secured collateral is insufficient to satisfy the debt,
the Bank’s remaining general-creditor claim is barred.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ Randy J. Wallace
/s/ Thomas C. Cameron
/s/ Daniel S. Korobkin

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