Hanesworth v. Johnke

• Decision Date: 28 November 1989
• Docket Number: No. 89-48,89-48
• Parties: R. Alan HANESWORTH and William M. Wilson a/k/a W.M. Wilson, Appellants (Plaintiffs), v. Donna JOHNKE, Personal Representative of the Estate of Georgia Kate Sturgeon a/k/a Georgia Kate Collins, and Donna Johnke, Elmer Johnke, Steven Stumbough and Marjorie Stumbough, as individual heirs of the Estate of Georgia Kate Sturgeon a/k/a Georgia Kate Collins, and recipients of the proceeds thereof The Estate of Georgia Kate Sturgeon, Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 173

783 P.2d 173

R. Alan HANESWORTH and William M. Wilson a/k/a W.M. Wilson, Appellants (Plaintiffs), v. Donna JOHNKE, Personal Representative of the Estate of Georgia Kate Sturgeon a/k/a Georgia Kate Collins, and Donna Johnke, Elmer Johnke, Steven Stumbough and Marjorie Stumbough, as individual heirs of the Estate of Georgia Kate Sturgeon a/k/a Georgia Kate Collins, and recipients of the proceeds thereof The Estate of Georgia Kate Sturgeon, Appellees (Defendants).

No. 89-48.

Supreme Court of Wyoming.

Nov. 28, 1989.

Franklin D. Bayless and Richard C. Slater, Cheyenne, for appellants.

Raymond B. Hunkins of Jones, Jones, Vines & Hunkins, Wheatland, for appellees.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.

MACY, Justice.

This is an appeal from a judgment on the pleadings in favor of Appellees Donna Johnke (the personal representative and an individual heir of the estate of Georgia Kate Sturgeon) and Elmer Johnke (an individual heir of the estate of Georgia Kate Sturgeon). Appellants R. Alan Hanesworth and William M. Wilson filed suit against Appellees to recover amounts due on a promissory note executed by the decedent, Georgia Kate Sturgeon. Appellants alleged that Appellees failed to provide Appellants with actual notice of Sturgeon's death and of Appellants' right to file a claim against the estate. The court ruled that, although Appellants were constitutionally entitled to receive actual notice to timely file their claims against the estate, they were not entitled to relief as the United States Supreme Court case of Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988), did not apply to cases which were final before it was decided.

We affirm.

Appellants raise the following issues:

1. Whether Wyoming Statute Sections 2-7-201 to 2-7-703, 2-7-718 authorizing publication notice to creditors are constitutionally infirm under the due process clause (14th Amendment) of the United States Constitution and Article 1 of the Constitution of the State of Wyoming, because they bar claims against the estate of a decedent (of known or reasonably ascertained estate creditors) without requiring actual notice of the statutory prescribed time and place for filing claims.

2. Whether Appellants above-named were deprived of the due process of law by reason of failure of the Administratrix of the estate to provide them with actual notice of the time and place for filing of claims in the estate or the time and place for filing suit on rejected claims.

3. Whether the District Court erred in granting Appellees' Motion for Judgment on the Pleadings because the Appellants['] claims are barred by the doctrine of res judicata.

Sturgeon died testate on October 7, 1986. Her will was admitted to probate on October 23, 1986. On October 31, November 7, and November 14, 1986, the notice of the probate of her will and notice to creditors was published pursuant to Wyo.Stat. § 2-7-201 (1977). ¹ Appellants failed to file a claim within the three-month period provided in the notice. On March 3, 1988, the court discharged the personal representative after determining that all the property inventoried and appraised in the estate had been distributed pursuant to the orders of the court entered on September 29 and November 30, 1987.

On October 20, 1988, Appellants filed their complaint against Appellees to recover the balance of the principal and accrued interest owing on a promissory note executed by Sturgeon. Sturgeon failed to make annual payments on the promissory note which she had executed and delivered to Appellants on December 15, 1983. The complaint alleged, inter alia, that Appellants were known creditors; that they were entitled to, but did not, receive actual notice of the time and place to timely file their claim; and that, as a result, they were deprived of their due process and equal protection rights under the Wyoming and United States Constitutions. Appellees answered the complaint, admitting that actual service of the notice was not given to Appellees and denying that they had a duty to seek out creditors and solicit the filing of claims against the estate.

On November 22, 1988, Appellees moved for judgment on the pleadings. They contended in their memorandum in support of the motion that Wyoming's probate code did not require or contemplate that the notice provided in § 2-7-201 be served on creditors ² and that the timely filing of a claim in accordance with mandatory statutory requirements is a prerequisite for an action on that claim. Appellants' memorandum in opposition to Appellees' motion for judgment on the pleadings relied upon Tulsa Professional Collection Services, Inc., 108 S.Ct. 1340. That decision held that, under Oklahoma's nonclaim probate statute, the due process clause of the fourteenth amendment to the United States Constitution required " '[n]otice by mail or other means as certain to ensure actual notice' " to be given to known or reasonably ascertainable creditors. Id. at 1348 (quoting Mennonite Board of Missions v. Adams, 462 U.S. 791, 800, 103 S.Ct. 2706, 2712, 77 L.Ed.2d 180 (1983)).

On January 19, 1989, the district court entered its order granting Appellees' motion for judgment on the pleadings and dismissing Appellants' action with prejudice. The court explained in its decision letter that, although § 2-7-201 suffered the same constitutional infirmity as the Oklahoma statute, the controlling case of Tulsa Professional Collection Services, Inc. did not have retroactive application to a probate proceeding which became final before the decision was announced. It is from the district court's order that this appeal is taken.

The Supreme Court, in Tulsa Professional Collection Services, Inc., 108 S.Ct. 1340, began its analysis by explaining the notice requirements of the due process clause of the fourteenth amendment:

Mullane v. Central Hanover Bank & Trust Co., [339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950) ], established that state action affecting property must generally be accompanied by notification of that action: "An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections."

Id. at 1344. The Supreme Court stated that the type of notice required depends upon the balance of the interests of the state and the individual interests protected by the fourteenth amendment. The Supreme Court further explained:

"[A]ctual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party, whether unlettered or well versed in commercial practice, if its name and address are reasonably ascertainable."

Id. (quoting Mennonite Board of Missions, 462 U.S. at 800, 103 S.Ct. at 2712 (emphasis in original)).

The Tulsa Professional Collection Services, Inc. majority determined that the appellant's unsecured claim against the estate was a cause of action and a property interest under the fourteenth amendment. The Supreme Court also held that Oklahoma's statute implicated sufficient state action to invoke the due process clause of the fourteenth amendment. The Supreme Court based that conclusion on the following statutory characteristics: (1) the nonclaim statute became operative after probate proceedings had been commenced in state court; (2) the time bar could be triggered only after a court had appointed an executor or executrix; (3) the statute directed the executor or executrix to publish notice immediately after court appointment; and (4) the statute required the executor or executrix to file copies of the notice and an affidavit of publication with the court. The Supreme Court stated that such substantial involvement of the probate court in the probate procedure constituted state action.

Next, the Supreme Court balanced the state's legitimate interest in expeditious resolution of probate proceedings and the creditors' interest in protection of their claims. The Supreme Court determined that providing actual notice to known or reasonably ascertainable creditors was not inconsistent with the goals of the statute and was not unreasonably cumbersome.

The statutory procedure in Wyoming is quite similar to Oklahoma's scheme in that the time bar provided in § 2-7-201 is triggered only after probate proceedings have been commenced in district court, a personal representative has been appointed by the district court, and notice has been given to creditors to file their claims against the estate with the clerk of court. In addition, proof of publication and mailing or delivery of the notice is required to be filed with the clerk of court. We hold that the involvement of the district court in the probate proceedings is so pervasive and substantial that it must be considered such state action as to invoke the due process clause of the United States and Wyoming Constitutions. ³

We agree with Appellants, as did the district court, that the Tulsa Professional Collection Services, Inc. case is controlling and that § 2-7-201 suffered the same constitutional infirmities as the Oklahoma statute did in that it did not require actual notice to be given to known or reasonably ascertainable creditors with claims against a decedent's estate. ⁴

The pivotal issue we must decide is whether the Tulsa Professional Collection Services, Inc. decision applies retroactively to probate proceedings finalized before that decision was announced. Because our determination focuses on the application of a United States Supreme Court decision, we rely upon United States Supreme Court cases which have addressed the issue of retroactive and prospective application of judicial decisions. ⁵ See Carter v. City of Chattanooga, Tennessee, 850 F.2d 1119 (...