December 23, 2013
A recent Washington probate case involved the interpretation of the Notice to Creditors statutes. (Washington Federal Sav. v. Klein, 311 P.3d 53, October 11, 2013).
The Washington probate statutes direct that notice is to be provided to the creditors of a Decedent as specified under RCW 11.40.020. Persons having claims must present these claims within the time specified by statute or be “forever barred” from later asserting them.
The Notice to Creditors is to be filed with the court and published for three successive weeks. Notice may also be provided at any time by giving actual notice to creditors known to the Personal Representative (PR), by mailing such notice to the “creditor’s last known address, by regular first-class mail postage prepaid….”
A creditor that is given such actual notice “must present the claim within 30 days of the…mailing of service…or within 4 months of first publication of the notice, whichever is later….”
Included in the estate involved here was a condo with an outstanding loan made by Washington Federal. The estate continued to make payments on the loan after the dealth of the Decedent.
About a year after the opening of probate, the attorney for the PR wrote a letter to Washington Federal with a copy of the Notice to Creditors, and filed an Affidavit of Mailing with the court.
Washington Federal presented a creditor’s claim to the estate only after months had passed.
A response was subsequently filed by the PR, rejecting the claim, and Washington Federal the sued the estate for breach of contract.
The estate moved for summary judgment, which was granted by the trial court, and Washington Federal appealed, asserting that it had never received the mailed Notice to Creditors.
The Court of Appeals found that “A creditor’s claimed nonreceipt of a probate notice is not material to actual notice”, as defined under the probate statutes.
The court also found that due process does not require proof of receipt.
There was no challenge to the adequacy of the Affidavit of Mailing made before the trial court, so the issue was not preserved on appeal, even though some later issues were raised.
The Affidavit by the attorney stated that “I have given, or caused to be given…actual notice.
Washington Federal argued that there was room to debate whether there was personal knowledge that the document was mailed, but the appeal court found that the wording was acceptable.
The court found that no “genuine issue of material fact” was raised, and that the claim was barred. Attorney fees were awarded under the terms of the loan note.
This case provides a cautionary note to attorneys for creditors regarding the handling of mailed notices, and a further cautionary note for attorneys for PRs regarding the care that must be taken when providing mailed notice to creditors.
Elder law practice in Washington is discussed by Cheryl and Ferd Mitchell in volumes 26 and 26A of Washington Practice (Washington Elder Law and Practice and the associated Elder Law Handbook). Probate practice is covered in volume 26B.