[WSBAPT] Creditor Claim and Motion for Removal in a Complex Matter?

Mon Jun 30 16:40:33 PDT 2014

Quick stab at answers, if no one has responded already:

1. Daughter should have received notice of probate, as an heir at law. RCW
11.04.015, RCW 11.28.237. The fact that it's thought to be all community
property doesn't change her status as heir at law, I would argue. She has
a direct right to inherit based on the statute, and the determination of
community versus separate comes later, as the PR does her job.

2. No one is "entitled" to Notice to Creditors but I think the corporation
is a "reasonably ascertainable creditor" under RCW 11.40.040 given widow's
knowledge of the issues.

3. Yes, but I don't see from the facts that daughter 1 or husband have any
direct claim; just the corporation. If you just mean their derivative
rights because the corporation isn't going to act, then it gets tricky
about how to file the creditor claim since they don't have authority to
file it. I think failure to file a creditor claim becomes a cause of
action in the derivative action.

4. I don't think so; see 3.

5. No, there's no residency requirement. If there's property in Washington
jurisdiction that's enough of a toehold to allow court to take
jurisdiction and appoint any suitable person.

6. Yes, court can appoint "any suitable person" as new PR. However, since
daughter 1 will be in litigation against the Estate, probably better to
have a professional PR appointed, so there is no conflict, and daughter 1
can pursue the litigation freely.

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Samuel M. Meyler
Sent: Thursday, June 26, 2014 9:02 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Creditor Claim and Motion for Removal in a Complex
Matter?

Listmates,

Decedent passed away intestate, leaving widow, daughter 1 and daughter 2.
Decedent died in Puerto Rico, was allegedly a resident of Louisiana (also
a community property state) at the time of death, but owned property in
King County.  Decedent and widow were/are 50% owners of “Corporation” with
Daughter 1 and her husband.  Corporation was formed in Louisiana and
registered as a foreign corp to do business in Washington.  

After death, Daughter 1 and her husband learn that Decedent was embezzling
money, usurping corporate opportunities, engaging in fraud, breaching
fiduciary duties, etc…  Hundreds of thousands of dollars, if not millions,
in damages.  The relationship between widow and Daughter 1/Husband quickly
goes south when widow is confronted about the Decedent’s actions.  

Widow opens probate in Washington and receives Letters of Administration.
It is believed that Widow is currently a resident of Louisiana, not
Washington, even though they did have property in King County.  Although
Widow is aware of the claims of embezzlement, fraud, etc..., Widow does
not serve the Notice of her Appointment or Notice to Creditors to the
Corporation or Daughter 1/Husband.  Widow did not publish Notice to
Creditor’s either.  Widow did give Notice to Creditors to a few specific
creditors, but not Daughter 1/Husband nor the IRS which has recorded a
substantial tax lien in Louisiana.  

After Widow opened probate, Daughter 1/Husband filed a derivative action
as shareholders of the corporation in Louisiana.  The lawsuit identifies
“Daughter 1 and her Husband, individually and derivatively as shareholders
of Corporation, and Corporation” as the Plaintiff’s in that action.
Louisiana counsel has indicated that he brought the action as a derivative
shareholder action because Estate and Widow still own 50 % of the stock in
Corporation so Corporation could not pursue the claims.  

Daughter 1/Husband have just now learned about the probate pending in King
County.  I will add that Daughter 2 is on Widow’s side.  

WOAH!

Daughter 1 and Husband are not aware of any other claims that they
personally have against Decedent outside of Decedent’s theft from the
Corporation, which I believe is really the Corporation’s claim.  I do not
believe that Daughter 1 would be entitled to anything from the Estate as
it should all be community property and go to widow.

Some of these questions are elementary, but I’d like input and opinions on
all of this.

Question 1: Which of the parties, Daughter 1, Husband of Daughter 1 and
Corporation, were entitled to Notice of Appointment under these
circumstances?  

Question 2: Which of the parties, Daughter 1, Husband of Daughter 1 and
Corporation, were entitled to Notice to Creditors under these
circumstances?

Question 3: When preparing a Creditor’s Claim in this matter, should
separate claims be prepared for Corporation, Daughter 1 and Husband?

Question 4: Is it acceptable to identify the Creditor in one Creditor’s
Claim as “Daughter 1 and her Husband, individually and derivatively as
shareholders of Corporation, and Corporation?”

Question 5: We don’t believe that Decedent or spouse were actually
residents of Washington.  Widow did not provide notice of anything to
Corporation, IRS, Daughter 1 or her Husband.  Are these facts enough to
remove widow as personal representative?

Question 6: If Widow is removed, can Daughter 1 be named as the alternate?
Even if she can, should she be?

Please let me know if you have any other thoughts or comments.  Thank you
in advance.    

Samuel M. Meyler

Attorney at Law 

Mail:  P.O. Box 777 | Redmond, WA 98073-0777

Location:  8201 164th Ave. NE, Suite 200 | Redmond, WA 98052

Tel:  425.881.3680 | Fax:  425.881.1457 | Email:  samuel at meylerlegal.com

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As with all lists - let the reader beware! No warranties or
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All opinions and comments in this message represent the views of the
author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents. 

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