Estate of Jones Bowden

                    IN THE COURT OF APPEALS OF TENNESSEE
                         WESTERN SECTION AT JACKSON
                 ______________________________________________           FILED
SHIRLEY DIANNE BOWDEN,
                                                                           March 18, 1999
Executrix of the Estate of
JONES ELMER BOWDEN,
                                                                         Cecil Crowson, Jr.
Deceased,                                                                 Appellate C ourt Clerk

       Complainant-Appellee,
                                                   Shelby Probate No. B-27231
Vs.                                                C.A. No. 02A01-9805-PB-00127

LARRY E. WARD,

      Defendant-Appellant.
____________________________________________________________________________

                   FROM THE SHELBY COUNTY PROBATE COURT
                   THE HONORABLE ROBERT S. BENHAM, JUDGE




                   John J. Mulrooney; Crone & Mason, PLC, of Memphis
                                       For Appellee

            Kathleen N. Gomes; Peppel, Gomes & MacIntosh, P.C. of Memphis
                                    For Appellant




                             REVERSED AND REMANDED

                                      Opinion filed:




                                                           W. FRANK CRAWFORD,
                                                           PRESIDING JUDGE, W.S.



CONCUR:

ALAN E. HIGHERS, JUDGE

DAVID R. FARMER, JUDGE
     This case concerns a creditor’s claim against a decedent’s estate. Appellant, Larry E.

Ward, appeals from the order of the probate court disallowing his claim against the Estate of

Jones Elmer Bowden.
       On January 20, 1989, Ward and the decedent, Jones Elmer Bowden, entered into an

agreement in which Ward sold a business and an airplane to the decedent. In accordance with

the agreement, the decedent made regular payments to Ward until March 1991 when the

decedent developed financial troubles. Because of the friendship that existed between the two,

Ward agreed to carry the loan until the decedent was able to repay the debt. Unfortunately, the

decedent was unable to repay the debt before his death on March 27, 1996.

       On April 9, 1996, the decedent’s estate was opened with his daughter, Shirley Dianne

Bowden, qualifying as the Executrix. Pursuant to T.C.A. § 30-2-306(a), the probate court clerk

published a Notice to Creditors in the newspaper on April 12 and 19, 1996. Furthermore, after

being informed of her duty to send actual notice to creditors who were known or reasonably

ascertainable, the Executrix searched through the decedent’s records in order to locate the names

and addresses of such creditors. As a result of this search, the Executrix identified seven

creditors, none of which were Ward. Actual notice was properly given to each of these seven

creditors pursuant to T.C.A. § 30-2-306(e).

       While preparing the decedent’s belongings for storage, the Executrix found Ward’s name

in the decedent’s personal address book. On October 28, 1996, thinking that Ward may have

information regarding litigation unrelated to the present action, the Executrix called the number

listed for Ward and spoke to his daughter who answered the telephone. During the conversation,

the Executrix asked why Ward’s name would be in the decedent’s personal address book.

Ward’s daughter told the Executrix that Ward and the decedent had business dealings and that

the decedent owed Ward some money. The Executrix also informed Ward’s daughter of the

decedent’s death. After the conversation, the Executrix searched the decedent’s records a second

time and was still unable to find any evidence of the debt claimed by Ward.

       After learning of the decedent’s death from his daughter in November, Ward mailed a

letter on November 20, 1996 to the Administrator of the Estate in which he identified himself

as a creditor of the decedent. In response, the attorney for the Estate sent a letter dated December

2, 1996 to Ward which denied that Ward was a creditor, and further stated that even if he was

a creditor of the estate, his claim was time-barred because he did not file his claim within six

months after the first publication of the Notice to Creditors. A copy of the published Notice to

Creditors was enclosed in this letter to Ward. Ward called the attorney for the Estate upon


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receipt of the letter.1

        On December 30, 1996, Ward wrote a letter to the attorney representing the Estate

informing the attorney that he had spoken to an attorney who advised him that he had a year to

file his claim since he was not notified of the decedent’s death and that he should file his claim

immediately. However, Ward did not file his claim until more than two months later on

February 11, 1997. The claim against the Estate was in the amount of $64,668.55. In response,

the Executrix filed an exception to Ward’s claim on February 24, 1997 on grounds that his claim

was invalid and, even if it was valid, it was not timely filed.

        The matter was heard on March 24, 1997 by Judge Leonard Pierotti who took the matter

under advisement. While under advisement, Judge Pierotti passed away, and the matter was

taken over by Judge Robert Benham who, by consent of the parties, made a determination of the

matter based on the pleadings and the transcript of the March 24 hearing.

        On March 18, 1998, the probate court issued a memorandum opinion and entered an

order disallowing Ward’s claim against the Estate. The probate court found that Ward was a

known creditor of the decedent by November 20, 1996 when he mailed the letter to the attorney

representing the Estate claiming to be a creditor, thus entitling Ward to receive actual notice as

provided in T.C.A. § 30-2-306(e)(1984). The court further found that Ward received actual

notice on December 6, 1996 when he received the letter from the attorney representing the Estate

which contained the original Notice to Creditors. Since Ward received the Notice to Creditors

after the expiration of the six month period, but more than 60 days before the first anniversary

of decedent’s death, the probate court determined that pursuant to T.C.A. § 30-2-307(a)(1)(A)

Ward was provided sixty days from the date he received actual notice - December 6, 1996 - to

file his claim. Thus, the probate court held that Ward’s claim filed February 11, 1997, was not

timely filed, and, therefore barred.

        Ward perfected this appeal and presents the following issues, as stated in his brief, for




        1
           There is some dispute as to when this call was made. The attorney for the Estate
contends that the call was placed on December 6, 1996. Ward, on the other hand, does not
remember exactly when the conversation occurred but implies that it took place after his return
from a trip to Mexico on December 13, 1996. However, the trial court credited the testimony
of the attorney and found that the call was placed on December 6, 1996. The trial court used this
date as the date Ward received actual notice of the decedent’s death and, thus, in determining the
time in which Ward had to file his claim.

                                                3
our review:

               1. Was the Appellant, Larry Ward, a known or reasonably
               ascertainable creditor that should have been given notice pursuant
               to T.C.A. § 30-2-306(e)?
               2. What constitutes actual notice pursuant to T.C.A. § 30-2-
               307(a)(1) and did Appellant timely file his claim?

We will consider these issues together.

       Since this case was tried by the trial court sitting without a jury, we review the case de

novo upon the record with a presumption of correctness of the findings of fact by the trial court.

Unless the evidence preponderates against the findings, we must affirm, absent error of law.

T.R.A.P. 13(d).

       The statutes pertinent to our inquiry are as follows:

                       30-2-306. Notice to creditors of qualification of
               personal representative. - (a) It shall be the duty of the clerk of
               the court in which an estate is being administered, within thirty
               (30) days after the issuance of letters testamentary or of
               administration, to give in the name of the personal representative
               of such estate public notice of his qualification as such by two (2)
               consecutive weekly notices published in some newspaper of the
               county in which letters testamentary or of administration are
               granted, or, if no newspaper is published in such county, by
               written notices posted in three (3) public places in the county, one
               (1) of which shall be posted at the usual place for posting notices
               at the courthouse.

                               *               *               *

                       (c) The notice shall be substantially in the following form:

                                   NOTICE TO CREDITORS

               Estate of __________________________ (name of deceased)
               Notice is hereby given that on the _____ day of _____, 19__
               letters testamentary (or of administration as the case may be) in
               respect of the estate of _______ (name of deceased) were issued
               to the undersigned by the _______ court of _______ County,
               Tennessee. All persons, resident and nonresident, having claims,
               matured or unmatured, against his (or her) estate are required to
               file the same with the clerk of the above named court within six
               (6) months from the date of the first publication (or of the
               posting, as the case may be) of this notice, otherwise their claims
               will be forever barred.
               This ___________ day of __________, 19___.
                                        (Signed)_________________________
                                                  Administrator (or Executor)
                                           Estate of _____________________
                                                       (Name of deceased)

                               *               *               *

                       (e) In addition, it shall be the duty of the personal


                                                4
               representative to mail or deliver by other means a copy of the
               published or posted notice as described in subsection (c) to all
               creditors of the decedent of whom the personal representative has
               actual knowledge or who are reasonably ascertainable by the
               personal representative, at such creditors’ last known addresses.
               ...

T.C.A. § 30-2-306 (a), (c) (1984) and (e) (Supp. 1998).2


       In addition, T.C.A. § 30-2-307(a)(1)(A) and (B) provide:

                       (A) If a creditor receives actual notice less than sixty (60)
               days before the expiration of the period prescribed in § 30-2-
               306(c) or after the expiration of the period prescribed in § 30-2-
               306(c) and more than sixty (60) days before the date which is
               twelve (12) months from the decedent’s date of death, such
               creditor’s claim shall be barred unless filed within sixty (60) days
               from the date of receipt of actual notice; or
                       (B) If a creditor receives actual notice less than sixty (60)
               days before the date which is twelve (12) months from the
               decedent’s date of death or receives no notice, such creditor’s
               claim shall be barred unless filed within twelve (12) months from
               the decedent’s date of death.

       Ward agrees with the probate court that he was a “known” creditor on November 20,

1996. However, he further asserts that he was “reasonably ascertainable” prior to this date, and

as such, he should have received the Notice to Creditors before the expiration of the six month

period. Since he did not receive such notice prior to the expiration of the six months, Ward

contends that he should have received notice pursuant to T.C.A. § 30-2-307.

       Furthermore, Ward contends that as a known or reasonably ascertainable creditor who

falls within the provisions of T.C.A. § 30-2-307(a)(1), it was the duty of the Executrix to tell him

how to file, where to file, and how long he had to file. He asserts that the Executrix never gave

him such notice in that she should have notified him of the time restraints in T.C.A. § 30-2-307

rather than the time restraints of T.C.A. § 30-2-306. Ward argues that the Estate failed to give

him actual notice in that the notice given contained the wrong time limits and also informed him

that his claim was time barred. Thus, he asserts that the improper notice he received is

equivalent to no notice, and as such, he falls within the provisions of T.C.A. § 30-2-307(a)(1)(B)

therefore having one year from the date of the decedent’s death to file his claim. Having filed


       2
         Subsection (c) of T.C.A. § 30-2-306 was amended in 1997 reducing the amount of time
in which to file a claim from six months to four months. The amendment became effective on
January 1, 1998 and applies to estates of decedents dying on or after January 1, 1998.
       In the case sub judice, the amendment was not in effect given the fact that the decedent
died on March 27, 1996, thus the six month period was applicable.

                                                 5
on February 11, 1997, within the one-year period, Ward argues that his claim was timely filed

and should not be barred.

       The Executrix contends that Ward failed to prove that he was a known or reasonably

ascertainable creditor before November 20, 1996. She states that none of the decedent’s records

identified Ward as a creditor of the decedent and that she did not know Ward to be a creditor.

Furthermore, the Executrix claims that she fulfilled her statutory duty as executrix by delivering

to Ward the published Notice to Creditors. She argues that there is no statutory provision that

requires her to change or modify the content of the Notice to Creditors to conform with the

individual circumstances of a particular creditor.

       The Executrix further asserts that Ward’s claim was time barred because it was not filed

within sixty days after he received the actual Notice to Creditors. She states that Ward was not

known to or reasonably ascertainable by her as a creditor until after the six month period

prescribed in T.C.A. § 30-2-306(c) expired and, when she did learn of Ward as a creditor, she

delivered to him a copy of the actual Notice to Creditors as prescribed in T.C.A. 30-2-306(c).

Finally, the Executrix submits that Ward’s failure to follow the advice of his attorney was the

cause of his claim being time barred.

       From our review of the record, we find that the evidence does not preponderate against

the trial court’s finding that Ward was not a known or reasonably ascertainable creditor prior to

November 20, 1996. The probate court correctly determined that Ward was a known creditor

on November 20, 1996 when the Estate received the letter from Ward claiming to be a creditor

of the decedent.       If the original Notice to Creditors Ward received on December 6, 1996

constitutes actual notice for purposes of T.C.A. § 30-2-307, Ward had sixty days from December

6, 1996 within which to file his claim since such notice was received after the expiration of the

six month period and more than sixty days before the date which is twelve months from the date

of the decedent’s death. See T.C.A. § 30-2-307(a)(1)(A). If this is the case, Ward’s filing on

February 11, 1997 would be outside of the sixty day period therefore barring his claim against

the Estate. Thus, our inquiry is whether Ward received on December 6, 1996 actual notice as

contemplated by T.C.A. § 30-2-307.

       What constitutes actual notice for purposes of T.C.A. § 30-2-307 was addressed in Estate

of Jenkins v. Guyton, 912 S.W.2d 134 (Tenn. 1995). The Supreme Court in Estate of Jenkins


                                                6
concluded that “while the term ‘actual notice’ in § 30-2-307(a)(1) may be something other than

an exact copy of the published Notice to Creditors outlined in § 30-2-306(c), such notice must,

at a minimum, include information regarding the commencement of probate proceedings and the

time period within which claims must be filed with the probate court.” Id. at 138. See also 2

Jack W. Robinson & Jeff Mobley, Pritchard on Wills and Administration of Estates § 784 (5th

ed. Supp. 1998) (“To be adequate, actual notice to a known creditor must include information

regarding commencement of the probate proceedings and the period within which claims may

be timely filed.”).

        Under the above authorities, the “actual notice” required by T.C.A. § 30-2-307 (a)(1)(A)

and (B) must contain the time period within which a claim must be filed. Thus, given Ward’s

circumstances, the actual notice must have informed Ward that he had sixty days within which

to file his claim against the Estate. See T.C.A. § 30-2-307(a)(1)(A). The Notice to Creditors

sent to Ward contained the wrong time period. That notice contained a time period that had

since expired and was not applicable to Ward since he received it outside of the six month

period.3

        Since the notice Ward received contained a time period that had since expired and failed

to contain, at a minimum, the applicable time period in which he had to file his claim, Ward did

not received “actual notice” as required by T.C.A. § 30-2-307. Thus, Ward, as a creditor of the

Estate, falls within the provisions of T.C.A. § 30-2-307(a)(1)(B) in that he did not receive actual

notice and has twelve months from the decedent’s date of death within which to file his claim.

Ward’s claim filed on February 11, 1997, within the twelve month period from the date of the

decedent’s death, was timely filed.

        Accordingly, the order of the probate court disallowing the claim is reversed, and the case

is remanded for such further proceedings as necessary. Costs of the appeal are assessed against

the appellee.

                                                       _________________________________
                                                       W. FRANK CRAWFORD,
                                                       PRESIDING JUDGE, W.S.




        3
         It is also important to note that the attorney representing the Estate submitted erroneous
information to Ward by stating that his claim was barred since it was not filed within the six
month period.

                                                7
CONCUR:

____________________________________
ALAN E. HIGHERS, JUDGE

____________________________________
DAVID R. FARMER, JUDGE




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