[WSBAPT] Creditor Claim by Judgment Creditor?

[Eric Nelsen]

I agree with Marcus. Judgment lien is automatic and RCW 11.40.135 applies; failure to properly file and serve a creditor claim saves the Estate from paying any deficiency.

I have one other thought for you, that may or may not be useful. I had a case recently where I had to dig into the exact effect of probate of the first spouse to die, on community liabilities. Generally, if a liability is a community debt, it must be addressed in the probate of the first decedent, and the surviving spouse may not be pursued individually if the claim is not properly filed in the first spouse's probate.

An excerpt from my briefing:

The death of a spouse terminates the marital relationship and the "marital community." Bank of Montreal v. Buchanan, 32 Wn. 480, 73 P. 482 (1903); see also Washington State Bar Assn. Community Property Deskbook (4th ed. 2014) (hereinafter "CP Deskbook"), Sec. 4.11. At death of the first spouse, the community "ceases to exist." Sutton v. Hirvonen, 113 Wn.2d 1, 6, 775 P.2d 448 (1989). The first deceased spouse's Estate accordingly has jurisdiction over all community property and community liability, not just the decedent's half, in order to dispose of all community matters. Ruth v. Dight, 75 Wn.2d 660, 670, 453 P.2d 631 (1969) (claim against the community cannot be pursued against surviving spouse if not also properly brought against the deceased spouse's estate); Gilliam v. City of Centralia, 14 Wn.2d 523, 531, 128 P.2d 661 (1942) (deceased spouse's Personal Representative, not the surviving spouse, has authority to pursue a community claim); Magee v. Big Bend Land Co., 51 Wash. 406, 408, 99 P. 16 (1909) (administration of first spouse's estate had jurisdiction and authority to sell the entire community real property). See also CP Deskbook, Sec. 4.13.

You say that the judgment is against both of the spouses, and so if it is joint and several, I suppose this is of no help. But on the off chance it is merely a community debt, it might be possible to argue per Ruth v. Dight that collection against the surviving spouse (that is, in some manner other than enforcing a judgment lien) is prohibited.

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-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marcus Fry
Sent: Monday, April 04, 2016 5:09 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Creditor Claim by Judgment Creditor?

John:
I am assuming you have a solvent estate, otherwise my answer would differ.  The below statute doesn’t make a distinction between a consensual lien versus an involuntary lien.  As such, I have interpreted RCW 11.40.135 to include judgment holders where their judgment has attached to decedent’s property. Failing to properly file and serve the CC would protect the estate from a deficiency, but since the spouse was separately and individually liable (as opposed to the community only being liable), I am not sure how much good that will do.

RCW 11.40.135
Secured claim—Creditor's right.
If a creditor's claim is secured by any property of the decedent, this chapter does not affect the right of a creditor to realize on the creditor's security, whether or not the creditor presented the claim in the manner provided in RCW 11.40.070<http://app.leg.wa.gov/RCW/default.aspx?cite=11.40.070>.


Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of sullaw at comcast.net<mailto:sullaw at comcast.net>
Sent: Monday, April 04, 2016 4:39 PM
To: Listserv, WSBA
Subject: [WSBAPT] Creditor Claim by Judgment Creditor?

Listmates:

There is a judgment creditor against decedent and surviving spouse. JC serves a creditor's claim in decedent's probate proceeding but has so far failed to file it with the clerk. The four months won't be up until June 26th.

In this particular case it doesn't really matter because the judgment is against the surviving spouse too.

But for that, am I correct that a judgment creditor given notice must serve and file a timely creditor claim? Or is the JC in the same position as mortgage or deed of trust holder and can proceed to execute on the judgment outside probate if a deficiency judgment is unnecessary?

And what if the JC fails to file the Creditor's Claim by the four month deadline?

I probably should know this, but somehow haven't had to figure it out before.


Best regards,

John J. Sullivan<mailto:dlyons at lyonslawoffices.com>,

Attorney



Lyons | Sullivan

10655 NE 4th Street, Suite 704

Bellevue, WA 98004

425·451·2400 tel 425-451-7385 fax

www.dljslaw.com<http://www.dljslaw.com/>



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