Unifund CCR Partners v. Jordan (In re Jordan)
| Citation | 350 So.3d 250 |
| Decision Date | 17 May 2022 |
| Docket Number | 2021-CA-00761-COA |
| Parties | In the MATTER OF the ESTATE OF Frances M. JORDAN: Unifund CCR Partners, Appellant v. The Estate of Frances Jordan, Executrix Pamela M. London and Executrix Elena Jordan Tate, Appellees |
| Court | Court of Appeals of Mississippi |
ATTORNEY FOR APPELLANT: CHARLES PATTON HENLEY JR.
ATTORNEY FOR APPELLEES: MICHAEL ADELMAN, Hattiesburg, MS
BEFORE BARNES, C.J., McCARTY AND SMITH, JJ.
McCARTY, J., FOR THE COURT:
¶1. A company's claims against an estate were denied as untimely. Although it had judgment liens against the decedent, the trial court ruled the company's claims were not presented within ninety days of the publication of notice, so the claims could not be admitted to probate. Finding that the judgment liens survive the time-bar of probate, and were reasonably ascertainable to the executrices of the estate, we reverse, render, and remand.
¶2. In January 2009, for reasons not contained in the record, a company called Unifund CCR Partners was awarded a default judgment against one Frances Jordan in the County Court of Forrest County. The underlying debt was for around $20,000, with $12,000 in interest, and then nearly $8,000 in attorney's fees for obtaining the default judgment. The County Court entered a total amount of $40,406.63 in favor of Unifund plus 8% interest "from January 13, 2009, until paid," plus court costs.
¶3. Later in the same year, Unifund sought and received a second default judgment against Ms. Jordan. This second judgment totaled $19,238.85.
¶4. In 2015, Unifund renewed the 2009 default judgment. In its Notice of Renewal it calculated the amount owed by Ms. Jordan pursuant to the judgment to be $51,706.80, noting that the 8% would continue to accrue. In 2016 it renewed this second judgment in the amount of $26,178.66.
¶5. Ms. Jordan passed away in 2020. A few weeks later, her daughters Pamela and Elena petitioned in chancery court to open an estate for their mother and to be appointed its executrices. Attached to the petition was a copy of Ms. Jordan's will, which declared in its first article that she "direct[ed] that all of my just debts be paid ...."
¶6. Pursuant to the petition, the trial court admitted the will to probate, and in accord with the will appointed the daughters as co-executrices of the estate. Later, Pamela and Elena filed an inventory of Ms. Jordan's assets, which was composed solely of her home in Hattiesburg, with an estimated value of $120,000 to $150,000. The daughters executed and filed an affidavit, which recited:
We further certify that we have made a reasonably diligent effort to identify all persons, firms or corporations which to my knowledge have or may have claim or claims against the assets of the Estate of Frances M. Jordan, and have mailed notice to all persons, firms, or corporations identified as their last known address, informing them that failure to have their claims probated by the Clerk of the Court granting Letters within the ninety (90) day period from the first publication of Notice to creditors will be forever barred.
¶7. Afterward, the two daughters published a notice to creditors in the local newspaper, which ran three times. The published notice alerted all unknown creditors and "all persons who may assert any claim whatsoever of any kind of character" against the estate that the matter was pending in chancery court. If these unknown creditors did not respond in a timely fashion, the notice asserted any claims "will be barred."
¶8. No claims were brought after the publication of notice. However, the daughters did not mail notice to Unifund, despite the presence of the two judgments against Ms. Jordan in Forrest County. The estate was closed on August 6, 2020.
¶9. Several weeks later, on October 5, Unifund filed two claims against the estate based on its two default judgments. For the first claim it sought $52,372.94 and for the second, $30,176.71.
¶10. The daughters immediately contested the claims, characterizing them as "time-barred" since they were filed both after the estate closed as well as after the ninety-days from date of publication of notice. They filed a motion to dismiss on these grounds as well as laches.
¶11. In response, Unifund argued the daughters should have mailed the company notice since it could have been discovered as a creditor if they had used reasonably diligent efforts. The company argued that notice by publication was not a substitute for the actual notice it was due as a judgment creditor. The company further argued in the alternative that since it had an enrolled judgment it could seek a lien on Ms. Jordan's former home regardless of the probate proceedings.
¶12. The trial court found in favor of the daughters. "Reasonable and diligent effort does not require a ten-year review of the judgment roll," the chancery court concluded, further finding "[t]here is no proof that the executrices had any knowledge of the existence of the default judgments."
¶13. For this reason, the trial court determined "Unifund [was] not a reasonably ascertainable creditor entitled to notice by mail." Since Unifund did not respond to the notice by publication either, its claims were found time-barred.
¶14. Unifund appealed this ruling.
¶15. "We will not disturb the factual findings of a chancellor unless such findings are manifestly wrong or clearly erroneous." In re Est. of Ladner , 911 So. 2d 673, 674 (¶8) (Miss. Ct. App. 2005). "Whenever there is substantial evidence in the record to support the chancellor's findings of fact, those findings must be affirmed." Id . at 675 (¶8). "In matters that are questions of law, this Court employs a de novo standard of review and will only reverse for an erroneous interpretation or application of the law." Id .
¶16. Unifund attacks the trial court's rulings in five core ways. However, there is well-settled precedent on what types of service are required in cases of this type, so we confine ourselves to the effect of the company's judgment liens against Ms. Jordan's estate and whether the daughters were reasonably diligent in their duties as co-executrices of their mother's estate.
Unifund's claims were not barred.
¶17. We begin with the effect of Unifund's two renewed judgments. In reducing its claims against Ms. Jordan to judgment, and in turn having the judgments enrolled in the county where she lived, as well as timely renewing them, Unifund established judgment liens.
¶18. As one court has phrased it, "a judgment lien is a type of non-consensual or involuntary lien created by statute." In re Shavers , 418 B.R. 589, 604 (Bankr. S.D. Miss. 2009). "In Mississippi, a judgment lien constitutes a general lien on all of the real property ... that a judgment debtor owns or later acquires within the county where the judgment is enrolled." Id . The applicable statute states, in relevant part:
A judgment so enrolled shall be a lien upon and bind all the property of the defendant within the county where so enrolled , from the rendition thereof, and shall have priority according to the order of such enrollment, in favor of the judgment creditor, his representatives or assigns, against the judgment debtor and all persons claiming the property under him after the rendition of the judgment. A judgment shall not be a lien on any property of the defendant thereto unless the same be enrolled.
Miss. Code Ann. § 11-7-191 (Rev. 2019) (emphases added).1
¶19. A judgment lien is temporary, as the "judgment is valid for only seven years from rendition (not from enrollment)." Jeffrey R. Barber and Stacey Moore Buchanan, Debtor-Creditor Relations , 4 Encyclopedia of Mississippi Law § 27:63, Liens (Jeffrey Jackson, Mary Miller & Donald Campbell eds., 3d ed. 2021); see Miss. Code Ann. § 15-1-43 (Rev. 2019) (). However, a judgment may be renewed, so long as "the existing judgment or decree has not expired," and the seven-year time clock is reset since "the lien of the renewal of such judgment continues from the date of the enrollment of the existing judgment." Miss. Code Ann. § 15-1-43.
¶20. Unifund originally obtained the two default judgments against Ms. Jordan in 2009. By operation of law, the judgments would have expired in 2016. However, Unifund timely renewed both judgments. Therefore under express statutory authority the two enrolled judgments operate as a lien upon "all the property of the defendant in the county where so enrolled," with priority status. Miss. Code Ann. § 11-7-191.
¶21. After a person dies and their estate is opened, State law sets a series of guidelines as to when and how a creditor can seek funds from their estate. The Mississippi Code governs how to identify known and unknown claims made against an estate. First, as to known claims, "[t]he executor or administrator shall make reasonably diligent efforts to identify persons having claims against the estate." Miss. Code Ann. § 91-7-145(1) (Rev. 2018) (emphases added). "Such executor or administrator shall mail a notice to persons so identified, at their last known address, informing them that a failure to have their claim probated and registered by the clerk of the court granting letters within ninety (90) days after the first publication of the notice to creditors will bar such claim as provided in Section 91-7-151." Id . (emphasis added). The same statute also sets up the process by which unknown creditors are notified, which is by publication "in some newspaper in the county[.]" Miss. Code Ann. § 91-7-145(2).
¶22. A sister statute addresses the time-bar. "All claims against the estate of deceased persons, whether due or not, shall be registered, probated and allowed in the court in which the...
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