Popping a Tire: Statute of Limitations for a Claim
Excerpt from an article entitled Probate Potholes by Scott Pilkinton in the November 2019 issue of the Tennessee Bar Journal
Another bump in the road estate attorneys sometimes fail to navigate correctly involves the statute of limitations on a creditor’s claim against the estate. A creditor has a year from the death of the decedent to file a claim against the estate, unless it received actual notice from the personal representative, which the PR has a duty to send to all known or reasonable ascertainable creditors. If the creditor received actual notice from the PR, its timeline to file a claim is shortened to four months after the first publication of notice to creditors in a newspaper in the county of probate, which the clerk of the court has a duty to publish.
Actual notice to the creditor is different from the published notice to creditors Frequently, we see exceptions to claims that state the first publication of notice to creditors was, say, July 1, 2018, the four-month period ended on Nov. 1, 2018, and the claim was filed Dec. 1, 2018. Therefore, the exceptor argues, the claim is time-barred. But what about the actual notice sent to the specific creditor! If actual notice was not sent directly to the potential creditor and received, then that creditor has a full year after death of the decedent to file its claim, regardless of any notice to creditors in the paper. The published notice to creditors is merely the green light; the actual notice received by specific creditors is pushing the gas pedal to propel the four-month limitations period through the intersection to be relied upon as an exception argument.
However, pressing the gas pedal won’t do a thing if there is no gas in the car: the actual notice sent to a creditor must be very specific in its wording; otherwise it will not qualify as notice. In the Tennessee Supreme Court case Estate of Jenkins v. Guyton, the debtor and creditor reached an agreed order of judgment against the debtor of $141,781, with a stay of execution if the debtor paid $25,000 initially and then $2,500 monthly thereafter. When the debtor later died, his estate sent the creditor a letter informing him of the death, along with the required monthly payment, and continued thereafter to make payments. After the then six-month (four months now) from first publication claim period ended, however, the estate stopped making payments since the creditor failed to file a claim. He immediately filed one, and the estate filed an exception arguing it was time-barred. The Supreme Court, in this first impression case, determined the actual notice required to be sent directly to a creditor was not notice of the death and opening of an estate, but “must, at a minimum, include information regarding the commencement of the probate proceedings and the time period within which claims must be filed with the probate court”. The Supreme Court affirmed the lower courts in allowing the claim since it was filed within one year of death.
Don’t blow your potential exception: make sure to send each creditor a letter and copy of the published notice and file with your exception a copy of what you sent and when it was sent. Some attorneys send this by certified mail to confirm receipt.
