[WSBAPT] Probate Notice Sent to Creditor but Collection Agency Responds

Mon Nov 9 17:59:40 PST 2020

Jayne,

I follow, and this seems reasonable to me. (I had understood you to mean you would do nothing.) At least you are communicating with the assignee and asserting the timeframe in which you believe they must act based on the prior notice. If they do not timely file or assert otherwise, then it seems very reasonable to proceed without paying the claim.

All the best, Josh

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jayne Gilbert
Sent: Monday, November 9, 2020 4:43 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Probate Notice Sent to Creditor but Collection Agency Responds

What I'm saying is upon receipt from the Collection Co, I would immediately send
a letter stating where the assignor stood re the Statute of Limitations and that
the Collection Co stands in the shoes of the assignor.

I don't think you can increase the number of days by assigning the claim. Might
be wrong, but so far this has been the way it has gone for me.

On Mon, Nov 9, 2020 at 2:35 PM Joshua McKarcher <josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>> wrote:
Hi Jayne,

I agree that in an ordinary case, and perhaps most especially outside the probate context, what your last sentence describes probably should not work. However, here I think the “probate/administration specific” analysis of RCW 11.40.040(1) re “correspondence received after the date of death” is more on-point and bears consideration. I think this is more about whether the collection agency is a reasonably ascertainable creditor (by virtue of its demand letter) than what SOL applies or if one has passed or not.

Admittedly, I am not a frequent litigator, so I don’t view probate administration in the light of “what can I get away with” vs. “what are the known, valid, undisputed claims that need to be paid to get this resolved ‘cleanly’ to reduce the PR’s and estate’s residual liability.”

The key facts to me, here, are that PR received this correspondence after the date of death and before the creditor claim deadline passed, making the new correspondent a “reasonably ascertainable” creditor under the statute cited above, entitled to a notice and a 30-day period. (I think the “known validity” (or non-validity) and perhaps size of the claim is a relevant factor as well.)

Especially if this is a known, valid, undisputed claim of reasonable size, I do not think a judge would by very sympathetic to the argument that the PR simply ignored the demand letter received before the deadline, without sending a creditor notice to the collection agency and giving them 30 days to file with the court and PR as required.

But if the PR chose NOT to send the notice and NOT to just pay the claim under the safe harbor of RCW 11.40.070(4), I also can see where the PR could argue he chose to risk litigation to avoid paying the claim vs. paying the claim, resting his/her case on his/her earlier notice to the assignor credit card company. The reasonableness of that position likely increases with the amount of the claim (since it would be balanced against the costs of litigation if the assignee sued).

So, yes, I could be wrong, and Jeff’s PR could win a dispute in which he ignores the claim and the creditor sues after the deadline has passed. But I sure would want to weigh the costs of that litigation and the judge’s likely view of what s/he may consider fairly sharp-elbowed tactics in avoiding a known, valid, undisputed claim.

All my best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Jayne Gilbert
Sent: Monday, November 9, 2020 1:50 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Probate Notice Sent to Creditor but Collection Agency Responds

Joshua: Wouldn't the assignee "inherit" the standing of the assignor's claim under the statute of limitations?
I don't see how a Creditor can receive notice on a certain day, wait, and then at the last minute assign
the claim to the collection company, thus extending the statutory bar.

On Tue, Nov 3, 2020 at 1:05 PM Joshua McKarcher <josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>> wrote:
Jeff,

I vote yes, assuming this is an ordinary, valid, uncontested debt in a solvent estate. In fact, I vote you can just pay it and be done with it.

First, the creditor claim period is 4 months, not 90 days, and those receiving “actual notice” have until the LATER of 30 days from service/mailing date of your notice and the 4 month deadline. RCW 11.40.051(1)(a). (I send my actual notices about 45 days before the publication deadline so I don’t hurt my brain trying to figure it all out. They all then just have “until the 4 month deadline.”)

Next, I think the fair reading of RCW 11.40 would make this separate legal entity to which the credit card company has assigned its claim a different, separate creditor that is NOT on notice. So upon receiving the collector’s statement (in “their form”) they have become a reasonably ascertainable creditor. (See “correspondence received after the date of death” in RCW 11.40.040(1).) They are thus entitled to specific notice; and a “new” 30 days if your 4 month deadline comes earlier.

Or, instead of sending them a notice and seeing if they file formally, the PR of a solvent estate can simply pay the claim if it is known and valid, and dispense with all the formalities (and formality’s attendant costs). See RCW 11.40.070(4), which is a very sensible addition to the statute.

In a solvent estate with known debts, it is my view that costing the estate money to go through the hoops above to see if the creditor will “pass the test” is not usually in the estate’s best interest. Assuming the claim was known and valid; assigned; and noticed up to you or your PR in some form before the relevant deadlines, then, if valid, it should be paid. I think RCW 11.40.070(4) properly balances the relevant considerations.

Going back to a discussion on this list previously about duties owed to creditors or beneficiaries, this is where I balance the PR’s duty to the beneficiaries of a solvent estate with the clear rights of creditors of solvent estates. If you received that collection letter after the expiration of the 4 month period, or if the estate was insolvent, then this analysis may be different. But I do not think “actual notice” to the original debt holder is a solid bar to the timely, pre-deadline presentment of a demand for payment by an assignee, and I wouldn’t want to hang my hat on the argument that it is.

All the best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Jeff Davis
Sent: Monday, November 2, 2020 3:02 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Probate Notice Sent to Creditor but Collection Agency Responds

Listmates,

We provided a Probate Notice to Creditors directly to a credit card company in September, 2020.  We recently received a standard collection letter from a collection company to whom the credit card company had assigned the account.  No creditor’s claim was filed or served on me.  The 90 day period from the first publication of notice is fast approaching.  Question, do I need to send the probate notice to creditor to the collection company?   Your thoughts would be appreciated.

Jeff Davis

W. Jeff Davis, Esq.
BELL & DAVIS PLLC
P.O. Box 510
Sequim WA 98382
Phone No.:(360) 683.1129
Fax No.: (360) 683.1258
email: info at bellanddavispllc.com<mailto:info at bellanddavispllc.com>
www.bellanddavispllc.com<http://www.bellanddavispllc.com/>

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Jayne Marsh Gilbert
Gilbert and Gilbert Lawyers, PS
(360) 336-9515
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Jayne Marsh Gilbert
Gilbert and Gilbert Lawyers, PS
(360) 336-9515
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