[WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

[Roger Hawkes]

Yes; and has the state allowed the sol to run against the state?  State is not subject to sol unless the state has agreed to be subject to it.

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Wednesday, October 19, 2022 12:11 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

This is probably worth absolutely nothing:

I follow this "mostly" but did the title commitment that buyer received prior to sale include this exclusion? And did buyer know any of this about lack of probate, etc.?

There is a missing piece here it seems to me: how was buyer to be made aware of the estate's involvement and failure to probate, etc., unless it was disclosed in the commitment PRIOR to closing?

I have zero practical experience on this particular issue, but I guess I will be surprised somewhat if DSHS does not say: "Ah! Your warranty deed recorded before our lien. We will release the lien and go sue the seller. Good day!"

Or, if they do not, I guess I would connect every dot on what the title insurer disclosed and excluded BEFORE closing vs. in the final policy it mailed out 30 days after closing.

My glasses may be too rosy. If DSHS collects on its lien from buyer; and buyer has no title insurance coverage; and buyer had only nominal/minimal understanding that they were buying from a decedent's estate, then there is a gap in our system if we allocate that risk in that equation to . . . the buyer. With no arm's length, FMV, ordinary course or other such insolvency/bankruptcy/UCC-type defenses to the state's lien? Just seems very odd to me as an American lawyer, honestly.

Like Diane, I'm very curious to understand how this plays out.

Best, Josh

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 Natalie Kuehler
Sent: Wednesday, October 19, 2022 12:49 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

Thank you, Diane. I agree with the approach you outlined below; our next step will be finding out how much the lien is for and whether there is any way to negotiate a settlement. I'll let you know how it goes!

The seller apparently is destitute, so there's not much of a chance of recovery there.


Natalie

Natalie N. Kuehler

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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 Diane J. Kiepe <DJKiepe at depdslaw.com<mailto:DJKiepe at depdslaw.com>>
Date: Wednesday, October 19, 2022 at 11:20 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale
So the insurance company was wise to protect their interest by excluding wife's creditor's of her estate for claims that would have been disclosed.  This likely takes them off the hook.  Because no notice to creditor's was given, I read the rights of DSHS running 2 years.  In essence, and off the cuff without more research, I would think your client's have a cloud on title and that they may have a claim against seller if the property passed by warranty deed. As between DSHS and buyers, I am not sure if there is a bona fide purchaser defense, particularly since no probate took place.

>From a practice standpoint, I  would call DSHS and try to get the amount they are claiming as their lien.  Then, depending on the amount, you can make a plan moving forward.

I am so interested in knowing how this turns out.  If you can share with us the end result down the road, I sure would appreciate it.

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

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 Natalie Kuehler
Sent: Wednesday, October 19, 2022 10:56 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

Thank you both! The title insurance policy has an exclusion for creditors of the predeceased wife's estate that would have been disclosed if a probate action had been filed, so getting coverage for this might prove difficult.

Natalie

Natalie N. Kuehler

CONFIDENTIALITY STATEMENT: This message contains information that may be confidential and protected by the attorney-client privilege. If you received this message in error, please notify the sender immediately and delete the message.


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 Marcus J. Fry <mjf at witherspoonkelley.com<mailto:mjf at witherspoonkelley.com>>
Date: Wednesday, October 19, 2022 at 10:48 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale
Natalie:
Contact the title insurer because this should have been insured against fbo your clients.


Marcus J. Fry
Attorney | Witherspoon * Kelley
mjf at witherspoonkelley.com<mailto:mjf at witherspoonkelley.com> | Attorney Profile<https://www.witherspoonkelley.com/marcus-j-fry> | vCard<https://www.witherspoonkelley.com/s/mfj.vcf>

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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 Leighann Hansing
Sent: Wednesday, October 19, 2022 10:19 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale


RCW 41.05A.090 (6) A lien authorized under this section relates back to attach to any real property that the decedent had an ownership interest in immediately before death and is effective as of that date or date of recording, whichever is earlier.


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 Natalie Kuehler
Sent: Tuesday, October 18, 2022 1:07 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] DSHS Lien on Real Property Recorded After the Property's Sale

Hello all,

I have clients who purchased real property from a widower, with title insurance that was secured by the widower's completion and filing of a lack of probate affidavit. No probate for the wife's estate was ever opened, and the lack of probate affidavit confirmed that there were no outstanding debts or expenses arising from his wife's last illness. After the sale closed, but within two years of the wife's death, DSHS filed a Notice and Statement of Lien (Estate Recovery) for an undisclosed amount.

Can DSHS enforce the Lien against the real property even though the property was sold to my clients at market rate? Are there any deadlines for enforcement of a DSHS lien that is placed on property after the surviving spouse of the deceased debtor has sold it? The lien at this point is already over two years old, and the real property was transferred to my clients over three years ago.

Any thoughts (or referrals) would be appreciated.

Thank you!
Natalie

Natalie N. Kuehler
THE KUEHLER LAW FIRM PLLC
PO Box 3059 - 1112 State Route 20
Winthrop, WA 98862
o: (509) 996-2832 x1 - c (509) 557-5769
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