Returned Certified Mail Insufficient to Provide Notice in a Probate Case
Under Arizona law, a party making a claim against a probate estate is entitled to notice if it is denied. Is certified mail sufficient notice when the letter comes back unclaimed? In the case of Garbareno v. Whatley (In re Estate of Richard R. Snure) 320 P.3d 316 (2014) the Court of Appeals considered what constitutes adequate notice.
Facts of the Case
In 2009, the Complainant made a claim for $146,000 against the estate of the deceased, Mr. Snure. She provided counsel for the estate with her address, email and telephone number. In May 2010, the estate mailed a “Notice of Disallowance of Claim.” It was sent to Eloise by certified mail, return receipt requested. The letter was returned unclaimed to the estate. The estate made no further attempt to notify her.
The Complainant did not learn that her claim had been rejected until October 12, 2012. On November 30, 2012, she filed a petition for a hearing on her claim against the estate. She argued that since the estate never gave her notice of disallowance, her claim should be deemed allowed. The trial court dismissed the petition for failure to state a claim. The Complainant appealed.
Was Certified Mail Sufficient Notice When Not Received
The Complainant claims that the notice was inadequate under the Due Process Clause because the estate knew she had not received it. An essential component of due process is the right to notice and an opportunity to be heard.
A creditor’s cause of action against an estate is a protected property interest for due process purposes. A probate court’s bar of a claim triggers due process rights. Under these circumstances, a “known or reasonably ascertainable” creditor is entitled to notice.
The estate claims that sending notice of disallowance by certified mail was sufficient. It claims that certified mail was reasonably calculated to provide actual notice. Since at the time the notice was sent, it was reasonably calculated to reach the Complainant, the estate claims it was sufficient. However, the Supreme Court ruled that when notice sent by certified mail is returned as undeliverable, it is insufficient.
The estate should have taken additional steps to provide notice, like following up with regular mail. The Complainant had a protected property interest and was entitled to notice. The estate knew by the return of the notice as unclaimed that she had not actually been notified. It could have sent the notice by regular mail.
Because of that, the Court concluded that the notice sent was constitutionally insufficient.
The Appropriate Remedy
After a notice of disallowance is sent, the claimant must commence an action within 60 days. On the other hand, if the estate does not mail notice to a claimant, the claim is deemed allowed. The Complainant argues that her claim should be deemed allowed. However, the estate actually did mail a notice. Therefore, the remedy of deeming the claim is not appropriate.
Instead, the Court ordered that the Complainant be given notice and an opportunity to be heard. The 60-day time limit began to run on the day in October she received notice of disallowance. That means that her petition was timely. She must be allowed to proceed with her petition for allowance.
The Court reversed the trial court’s order granting the estate’s motion to dismiss. It remanded for proceedings consistent with this opinion.