More than Known Creditors

August 5, 2019 § Leave a comment

MCA 93-7-145 is the statute that requires publication of notice to creditors in an estate matter. A prerequisite to publication is the filing of an affidavit by the fiduciary.

Most lawyers with whom I come into contact call that affidavit “The Affidavit of Known Creditors.”

But that is a misnomer, and a dangerously misleading one at that, because it is not at all an affidavit stating only the creditors who are known; the statute requires that the fiduciary must make “reasonably diligent efforts to identify persons having claims against the estate,” and make affidavit of those efforts.

In Estate of Petrick, 635 So. 2d 1389, (Miss. 1994), the Mississippi Supreme Court stated:

“From a reading of this statute it is clear that an administratrix has four responsibilities: (1) she must make reasonably diligent efforts to ascertain creditors having claims against the estate and mail them notice of the 90 day period within which to file a claim; (2) she must file an affidavit stating that she has complied with the first subsection; (3) she must publish in some newspaper in the county a notice to creditors explaining that they have 90 days within which to file claims against the estate; and (4) she must file proof of publication with the clerk of court.”

In Petrick the court affirmed a chancellor’s ruling allowing the untimely $6,220 claim of a medical firm whose status as a claimant should have been reasonably known to the fiduciary, but the fiduciary did not include the firm in her affidavit and did not send it notice.

Another flaw in the fiduciary’s actions was that she published notice to creditors first, and filed her affidavit a month after beginning publication. The court in Petrick stated that publication may be done only after the affidavit is filed.

A previous post on point is at this link.

 

Affidavits in Chancery

October 10, 2018 § 4 Comments

An affidavit is a sworn statement. It must include an oath. You can read about the distinction between an oath and an acknowledgment at this link. A document purporting to do the work of an affidavit that bears an authentication instead of an affidavit is void for that purpose.

There are several affidavits that we use routinely in chancery:

  • Affidavit of known creditors. This affidavit is required by MCA § 93-7-145(2) to be filed before publication of notice to creditors. The statute reads, “The executor or administrator shall file with the clerk of court an affidavit stating that such executor or administrator has made reasonably diligent efforts to identify persons having claims against the estate and has given notice by mail as required in subsection (1) of this section to all persons so identified. Upon filing such affidavit … ” it is the duty of the fiduciary to publish notice [My emphasis]. Our courts have held that an affidavit filed after publication is a nullity.
  • Affidavit of unknown heirs. Before publishing process for unknown heirs in an action to determine heirship, one must file an affidavit that “the names of such heirs are unknown,” per MRCP 4(c)(4)(D), and it must also state per MRCP 4(c)(4)(A) that the post office address is unknown to the petitioner “after diligent inquiry.” These are key ingredients, and failure to follow the rules will mean that you don’t have good process. The affidavit must be made by the petitioner unless certain specific language is used as spelled out in the rule.
  • Affidavit of diligent inquiry for publication process. Before you can publish process for a non-resident or a person not to be found in the state per MRCP 4(c)(4)(A), there must be an affidavit filed with the clerk stating either that the person or persons are non-residents or are not to be found in the state after diligent inquiry. If the post office address is unknown, publication proceeds. If a post office address is known, you must include it in your publication and take the additional step of having the clerk mail a copy of the summons and pleading to that address by regular first-class mail, and the clerk must make a notation on the docket to that effect. The affidavit must be made by the petitioner unless the specific language required in the rule is applied.
  • Affidavits in support of and in opposition to summary judgment. Rule 56 says that, “When a motion for summary judgment is made and supported [by affidavits] as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or otherwise as provided in this rule. must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.”
  • Affidavit of non-collusion. MCA § 93-5-7, states that “(7) in all cases, except complaints seeking a divorce on the ground of irreconcilable differences, the complaint must be accompanied with an affidavit of the plaintiff that it is not filed by collusion with the defendant for the purpose of obtaining a divorce, but that the cause or causes for divorce stated in the complaint are true as stated.”
  • UCCJEA affidavit. In any case involving custody, each party is required to file an affidavit spelling out the information required in MCA § 93-27-209, and the duty to provide the information to the court is a continuing one, meaning that the affidavit must be updated as circumstances change or as newly discovered information becomes known.
  • Affidavits on motions. MRCP 43(e) states that, “When a motion is based on facts not appearing of record the court may hear the matter on affidavits presented by the respective parties, but the court may direct that the matter be heard wholly or partly on oral testimony or depositions.” Note that the rule applies only to motions, and not to hearings on pleadings that are on the merits seeking a final judgment. Rule 7 describes the difference between a pleading and a motion.
  • Sworn pleadings in probate and fiduciary matters. Uniform Chancery Court Rule 6.13 specifically states in part that, “Every pleading, including accounts and reports, filed by a fiduciary shall be personally signed and sworn to by him.” I take that to mean that every document filed by your fiduciary shall be sworn, thus making it the equivalent of an affidavit. MCA § 93-13-38(1) reads, “All the provisions of the law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, as far as applicable and not otherwise provided, be observed and enforced in a guardianship of the person and estate.” MCA § 93-13-259 says that, ” … all laws relative to the guardianship of a minor shall be applicable to a conservator.”

THE AFFIDAVIT OF “REASONABLY DILIGENT INQUIRY” FOR CLAIMS AGAINST THE ESTATE

July 25, 2011 § 11 Comments

MCA § 91-7-145(1) requires the estate fiduciary to make “reasonably diligent inquiry” to identify persons who have claims against the estate, and to notify them by mail at their last known address that failure to probate a claim within the statutorily-prescribed time will bar their claims.

MCA § 91-7-145(2) provides that:

“The executor or administrator shall file with the clerk of the court an affidavit stating that such executor or administrator has made reasonably diligent efforts to identify persons having claims against the estate and has given notice by mail … to all persons so identified. Upon filing such affidavit, it shall be the duty of the executor or administrator to publish in some newspaper in the county a notice requiring all persons having claims against the estate to have same probated and registered by the cleerk of the court granting the letters, which notice shall state the time when the letters were granted and that a failure to probate and register within ninety (90) days after the first publication of such notice will bar the claim … ” [Emphasis added]

Most lawyers refer to this as the “Affidavit of Creditors.”

Clearly, then, the statute requires these measures, in this order:

  1. First, identify those having a claim against the estate;
  2. Send them notice conforming to the statute;
  3. File an affidavit with the clerk stating compliance with the statute;
  4. Publish notice to creditors.

Skip a step and you will have to start over. Go out of order and you will have to start over. Notice the language of the statute: it says that publication is undertaken “[u]pon filing such affidavit …” That clearly requires that you may not publish until after the affidavit has been filed. And, of course, the affidavit can not be filed until after you have made diligent inquiry and mailed your notices, if any.

In the case of In re Estate of Petrick, 635 So.2d 1389 (Miss. 1994), the untimely claim of a creditor was allowed because the administratrix published without notifying a creditor whom the court found was “reasonably ascertainable.” The court added that notice may be published only after the affidavit has been filed (at 1394).

In Houston v. Ladner, 911 So.2d 673 (Miss. App. 2005), the COA found the chancellor in error for finding a probated claim time-barred without first finding that the creditor was a reasonably ascertainable creditor. The creditor had not been sent notice by mail, and the COA pointed out that publication notice was not a substitute for mail notice; it was required in addition to mail notice.

Here are a couple of practice tips to help you comply with the statute:

  • Always question your fiduciary about bills of the decedent. It will be hard to argue that BOA Visa was not a “reasonably ascertainable” creditor when your fiduciary had been paying the bill herself for three months after the decedent died and before the estate was opened. It will be harder still to argue that the attending physician at the time of death was not “reasonably ascertainable.”
  • Why not include the required affidavit in your petition to open the estate, or in the fiduciary’s oath, whichever is the appropriate point for you? Maybe by eliminating one extra piece of paper you will be more likely to do it right.

Reminder: MCA § 93-13-38 makes the foregoing provisions applicable to guardianships and conservatorships, as well as estates.

The statutory requirements are technical and mandatory. Read the code and do what it says. Doing so can save you considerable grief down the road.

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