CMS Investment Holdings, LLC v. Estate of Wilson
2016 Ark. App. 545
| Ark. Ct. App. | 2016Background
- Robert M. Wilson Jr. died August 3, 2012; personal representative published notice to creditors on August 11, 2012, starting a six‑month nonclaim period ending February 11, 2013.
- Arkansas law requires written service of notice on known or reasonably ascertainable creditors within one month of first publication; otherwise general six‑month bar applies, but known creditors who were not actually served may have a two‑year period.
- CMS Investment Holdings, LLC (CMSIH) did not file any claim within six months and instead filed two lawsuits against the Estate in March 2014 and formally filed claims June 6, 2014 (22 months after publication).
- The Estate moved to deny CMSIH’s claims as untimely; evidentiary hearings produced testimony from the decedent’s attorney and accounting supervisor that CMSIH was not listed in the decedent’s records and there was no indication CMSIH sought to assert a claim before the lawsuits.
- The circuit court found CMSIH was not a known or reasonably ascertainable creditor entitled to written notice and denied CMSIH’s claims as untimely; CMSIH appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process/Ark. law required actual written notice to CMSIH as a known or reasonably ascertainable creditor | CMSIH: actual notice required to known creditors; it was known/ascertainable so two‑year period applies | Estate: CMSIH was not a known or reasonably ascertainable creditor and thus was subject to six‑month bar | Court: CMSIH was not a known/ascertainable creditor; claims barred under six‑month rule |
| Whether the personal representative failed to make reasonably diligent efforts to identify creditors | CMSIH: PR must make reasonably diligent search; failure entitles CMSIH to two‑year protection | Estate: PR conducted reasonably diligent efforts; CMSIH failed to prove otherwise | Court: Issue not preserved—circuit court did not rule; appellant failed to obtain ruling; point disposed |
| Whether the circuit court improperly required CMSIH to make itself known as a creditor | CMSIH: law does not require creditor to self‑identify | Estate: evidence showed CMSIH did nothing to assert creditor status before lawsuits | Court: Court did not impose extra burden; finding that CMSIH did not make itself known was factual and supported by record |
| Whether the court improperly considered merits of CMSIH’s claims when deciding notice entitlement | CMSIH: merits cannot be evaluated to deny notice; any identifiable creditor with more than conjectural claim needs notice | Estate: court merely reviewed background facts to determine if creditor was ascertainable | Court: No improper merit‑evaluation; court provided background and reasonably found CMSIH not ascertainable |
Key Cases Cited
- Tulsa Prof’l Collection Servs. v. Pope, 485 U.S. 478 (1988) (known or reasonably ascertainable creditors are entitled to actual notice; executor need only make reasonably diligent efforts)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (distinguishes claimants with conjectural claims who may not require actual notice)
- Whatley v. Estate of McDougal, 430 S.W.3d 875 (Ark. Ct. App. 2013) (appellate review standard in probate; deference to circuit court credibility findings)
- TEMCO Const., LLC v. Gann, 427 S.W.3d 651 (Ark. 2013) (issue‑preservation rule—appellant must obtain a ruling below to preserve an issue for appeal)