In Re the Estate of Reynolds

970 P.2d 537, 266 Kan. 449, 1998 Kan. LEXIS 828
CourtSupreme Court of Kansas
DecidedDecember 18, 1998
Docket79,619, 79,953
StatusPublished
Cited by26 cases

This text of 970 P.2d 537 (In Re the Estate of Reynolds) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re the Estate of Reynolds, 970 P.2d 537, 266 Kan. 449, 1998 Kan. LEXIS 828 (kan 1998).

Opinion

The opinion of the court was delivered by

Abbott, J.:

The above cases have been consolidated for appeal. Both cases involve the estate of James Daniel Henry Reynolds, Jr. Case No. 79,619 involves K.S.A. 59-2239 (the nonclaim statute) and the trial court’s refusal to enforce a New York court’s judgment against the estate of a Kansas decedent, James Daniel Henry Reyn *451 olds, Jr. Case No. 79,953 is an appeal from the trial court’s order allowing an interim executor and attorney fees. The appellant, Marine Midland Bank, N.A., (Marine) is the successor in interest to Integrated Resources, Inc. (Integrated).

On August 31, 1986, the decedent executed a negotiable promissory note, together with a subscription agreement and security agreement, for the purchase of an interest in a Connecticut limited partnership. The contract provided New York law would govern any action brought to enforce the contract’s provisions. The limited partnership owned a shopping center in Brentwood, Tennessee. Integrated was the holder of the promissory note. Five months later, on the date the first payment was due under the note, the decedent was killed in an airplane accident.

The decedent was a resident of Johnson County, Kansas. A petition for probate of will and issuance of letters testamentary was filed in the Johnson County District Court. An order for hearing and for notice to creditors was entered. Pursuant to the will; United Missouri Bank, N.A., (UMB) was appointed executor of the estate.

On February 26, 1987, less than 1 month after decedent’s death, UMB wrote to Integrated and advised it of the death and asked that any action on the payments of the note be postponed for 30 days until an executor could be appointed and sufficient assets gathered to make the payment. In March 1987, UMB published a “Notice to Creditors” in a Kansas semi-weekly newspaper, informing creditors of the estate that they must exhibit their demands by filing a claim with the Kansas probate court by July 1987 or their claims would be barred under the Kansas nonclaim statute then in effect, K.S.A. 1986 Supp. 59-2239.

In 1987, there was no statutory or case law requiring that a copy of the “Notice to Creditors” be mailed to creditors whose names and addresses were known or reasonably ascertainable. It was not until 1989 that Kansas followed Tulsa Professional Collection Services v. Pope, 485 U.S. 478, 99 L. Ed. 2d 565, 108 S. Ct. 1340 (1988), in the case of In re Estate of McDowell, 245 Kan. 278, 280, 777 P.2d 826 (1989). That same year, the.Kansas Legislature amended the nonclaim statute to comport with Tulsa and McDowell. All parties concede no “Notice to Creditors” was mailed to Integrated, *452 nor was the nonclaim statute drawn to Integrated’s attention by UMB prior to the expiration of the time allowed for filing of claims against the estate.

On April 6, 1987, UMB again contacted Integrated and asked it to “hold off any action” on payments due on the note. On May 28, 1987, the overdue first payment, along with a late charge, was made to Integrated. Twenty-five payments were due on the note. UMB, as executor, made 18 payments between May 1987 and July 1991. The shopping center became bankrupt, and the investment became worthless.

In October 1987, the negotiable promissory note was assigned by Integrated to Marine. It is of no importance to this decision, but the partnership apparently assigned the note and the security agreement to a third party who assigned them to Marine. After the investment became worthless, UMB stopped making payments because no claim had ever been filed against the estate and took the position that Marine’s claim was barred by the Kansas nonclaim statute.

Approximately 2 years after UMB stopped payments, Marine commenced an action in the New York Supreme Court (the equivalent of our Kansas district courts). That action was dismissed for Marine’s failure to file a claim in Kansas in a timely fashion. That decision was appealed to the Appellate Division of the New York Supreme Court (comparable to our Kansas Court of Appeals). That court ruled that the choice of law provision in the limited partnership documents made New York law applicable, and, hence, there was no need to be concerned about the Kansas nonclaim statute. The Appellate Division of the New York Supreme Court also concluded that the same contractual choice of law provision gave it both personal and subject matter jurisdiction. The New York Court of Appeals (comparable to our Kansas Supreme Court) denied the estate’s petition to review the decision on May 28, 1996. Marine Midland Bank v. UMB, 223 App. Div. 2d 119, 643 N.Y.S.2d 528 (1996). Judgment was subsequently entered in the amount of $123,498.21 on September 4, 1996.

This judgment was filed in the Johnson County District Court on September 10, 1996. Marine then, as a judgment creditor seek *453 ing to enforce its New York judgment against the assets of the estate, applied to the Johnson County Probate Court in the estate proceeding.

Judge Samuel K. Bruner, the trial judge, stated in his opinion that the “estate does not contest the validity of the judgment but argues that same is not enforceable against assets of the estate.” He found that “[n]o previous demand had been filed by either Integrated or [Marine], contingent or otherwise, in the estate . . . .”

Judge Bruner also held:

“I have reviewed the various arguments and precedent presented in trial briefs to the Court. In my review I became convinced that the issue that was determinative was the matter of the statute of limitations imposed by Kansas law in decedent’s estates. Resolution of the controversy is made more complex due to the time frame within which the underlying facts evolved.
“[Tulsa Professional Collection Services] v. Pope, 485 U.S. 478 (1989), set off a flurry of state legislative action and the always certain judicial determinations followed. We know that Pope is entitled to retroactive application. We know that actual notice to known or reasonably ascertainable creditors is required. We know that can be accomplished by mailing to the creditor a copy of the published notice to creditors and filing an affidavit of service. We also know that mailing of the newspaper clipping is not the only manner in which the notice can be conveyed. We also have some reason to believe that the sophistication of the creditor is of import. We have learned more about the relationship between Chapter 60 and Chapter 59 in the resulting litigation. [Marine] and Integrated were aware of the death of Dr.

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Cite This Page — Counsel Stack

Bluebook (online)
970 P.2d 537, 266 Kan. 449, 1998 Kan. LEXIS 828, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-estate-of-reynolds-kan-1998.