In Re Estate of Richard R. Snure , 234 Ariz. 203 ( 2014 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO
IN RE THE ESTATE OF
RICHARD R. SNURE, DECEASED.
ELOISE GARBARENO,
Petitioner/Appellant,
v.
FRAN WHATLEY, AS PERSONAL REPRESENTATIVE
OF THE ESTATE OF RICHARD R. SNURE,
Respondent/Appellee.
No. 2 CA-CV 2013-0075
Filed February 28, 2014
Appeal from the Superior Court in Cochise County
No. PB200900115
The Honorable John F. Kelliher, Judge
REVERSED AND REMANDED
COUNSEL
Manning & Kass, Ellrod, Ramirez, Trester, LLP, Scottsdale
By Scott A. Alles, Debora L. Verdier, and Victoria M. Dunne
Counsel for Petitioner/Appellant
Jennings, Strouss & Salmon, P.L.C., Phoenix
By Brian Imbornoni
Counsel for Respondent/Appellee
IN RE ESTATE OF SNURE
Opinion of the Court
OPINION
Judge Eckerstrom authored the opinion of the Court, in which
Presiding Judge Kelly and Judge Espinosa concurred.
E C K E R S T R O M, Judge:
¶1 Appellant Eloise Garbareno appeals from the trial
court’s order dismissing her petition against the estate of Richard
Snure (the estate) for failure to state a claim under Rule 12(b)(6),
Ariz. R. Civ. P. We reverse the court’s order and remand for further
proceedings consistent with this opinion.
Factual and Procedural Background
¶2 “In reviewing the granting of a motion to dismiss for
failure to state a claim for relief, we assume the truth of all facts
stated in the complaint,” or petition. Bischofshausen v. Pinal-Gila
Cntys. Air Quality Control Dist., 138 Ariz. 109, 111-12, 673 P.3d 307,
309-10 (App. 1983). In the summer of 2009, Garbareno notified the
estate of her claim for approximately $146,000. In November 2009,
Garbareno received a notice from the estate entitled “Notice to
Known Creditors.” In December 2009, counsel for the estate
corresponded with Garbareno via e-mail, confirming receipt of her
claim. Garbareno provided the estate with her physical address, cell
phone number, and e-mail address.
¶3 In May 2010, the estate mailed a “Notice of
Disallowance of Claim” to Garbareno by certified mail, return
receipt requested. The letter was returned unclaimed to the estate.
¶4 Garbareno remained unaware 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, asserting that
because the estate had not provided her with notice of disallowance,
her claim should be deemed allowed. The trial court dismissed
Garbareno’s petition for failure to state a claim upon which relief
could be granted. This timely appeal followed. We have
jurisdiction pursuant to A.R.S. § 12-120.21(A)(1).
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IN RE ESTATE OF SNURE
Opinion of the Court
Sufficiency of Notice
¶5 Garbareno asserts the notice sent to her was
constitutionally inadequate under the Due Process Clause of the
Fourteenth Amendment because the estate knew she had not
received it. We review this constitutional claim de novo. See Emmett
McLoughlin Realty, Inc. v. Pima County, 212 Ariz. 351, ¶ 16, 132 P.3d
290, 294 (App. 2006).
¶6 A person facing a potential state deprivation of life,
liberty, or property is entitled to due process of law. U.S. Const.
amend. XIV, § 1. An essential component of due process is the right
to notice and an opportunity to be heard. See, e.g., Jones v. Flowers,
547 U.S. 220, 226 (2006); Fuentes v. Shevin, 407 U.S. 67, 80 (1972);
Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 313 (1950). A
creditor’s cause of action against an estate is a protected property
interest for due process purposes. Tulsa Prof’l Collection Servs., Inc. v.
Pope, 485 U.S. 478, 485 (1988). The estate has not disputed here
Garbareno’s implicit contention that a probate court’s bar of a claim
as untimely is considered to be state action sufficient to trigger due
process rights. Id. at 485-88. Under such circumstances, a “known
or reasonably ascertainable” creditor is entitled to notice. Id. at 491.
¶7 While the estate acknowledges that Garbareno enjoyed
a protected interest that entitled her to notice, it asserts, relying on
Mullane, that sending the notice of disallowance by certified mail
was sufficient because it was reasonably calculated to provide actual
notice. 339 U.S. at 314. The estate claims that, at the time the notice
was sent, it was reasonably calculated to reach Garbareno and was
therefore constitutionally sufficient.
¶8 However, in 2006, the Supreme Court clarified that
when notice sent by certified mail has been returned as
undeliverable, the notice is insufficient and additional reasonable
steps must be taken to provide notice. Jones, 547 U.S. at 225; see also
Yi Tu v. Nat’l Transp. Safety Bd., 470 F.3d 941, 942-43 (9th Cir. 2006)
(notice sent by federal agency suspending pilot’s license was
insufficient where agency had reason to know certified mail did not
reach pilot); Norgrove v. Bd. of Educ. of City Sch. Dist. of N.Y.C., 881
N.Y.S.2d 802, 810 (Sup. Ct. 2009) (notice of possible termination to
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IN RE ESTATE OF SNURE
Opinion of the Court
tenured teacher was insufficient where notice sent by certified mail
returned “unclaimed”). 1 The Court held that “‘when notice is a
person’s due . . . [t]he means employed must be such as one desirous
of actually informing the absentee might reasonably adopt to
accomplish it.’” Jones, 547 U.S. at 229, quoting Mullane, 339 U.S. at
315 (omission and alteration in Jones). In applying that standard to
the case before it, the Court reasoned:
We do not think that a person who actually
desired to inform a real property owner of
an impending tax sale of a house he owns
would do nothing when a certified letter
sent to the owner is returned unclaimed. If
the Commissioner prepared a stack of
letters to mail to delinquent taxpayers,
handed them to the postman, and then
watched as the departing postman
accidentally dropped the letters down a
storm drain, one would certainly expect the
Commissioner’s office to prepare a new
stack of letters and send them again. No
one “desirous of actually informing” the
owners would simply shrug his shoulders
as the letters disappeared and say “I tried.”
Failure to follow up would be
unreasonable, despite the fact that the
letters were reasonably calculated to reach
their intended recipients when delivered to
the postman.
Id. The Court further noted that “additional reasonable steps” were
available to notify the property owner, id. at 234, such as
“[f]ollowing up with regular mail.” Id. at 235.2
1We note that the Jones case, which we find dispositive here,
was not presented to the trial court by either party.
2At oral argument, the estate contended that Jones requires a
fact-specific balancing test in every situation to determine whether
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IN RE ESTATE OF SNURE
Opinion of the Court
¶9 The estate suggests that, even if the mailed notice was
deficient, Garbareno was put on notice of the disallowance because
it was filed in the superior court. But the Court in Jones found that a
person who is entitled to notice of a proceeding is entitled regardless
of whether the information is available elsewhere or whether the
person has been diligent in her attention to her property. Id. at 232-
33; see also In re Estate of Evans, 901 P.2d 1138, 1143 (Alaska 1995)
(rejecting argument that inquiry notice sufficient).
¶10 Here, as in Jones, Garbareno had a protected property
interest and was entitled to notice. Also as in Jones, the estate was
alerted by the return of the notice as unclaimed that Garbareno had
not actually been notified.3 Finally, as in Jones, the estate had other
reasonable options for notifying Garbareno, including sending the
notice by regular mail. For these reasons, we conclude the notice
additional notice is required. We do not read Jones to suggest that
trial courts must engage in such fact-specific inquiry in every case.
Rather, we read Jones as—having balanced the interests of a party in
receiving notice against those of the state—creating a bright-line rule
that where a party is entitled to notice and the notice provided is
known to be defective, due process requires that additional
reasonable steps must be taken to provide notice. 547 U.S. at 229-30.
Even assuming we agreed with this contention, given Garbareno’s
substantial interest in the estate, the fact that the notice of
disallowance was dispositive of Garbareno’s entire claim, and the
very minor additional burden that sending the notice by regular
mail, calling, or e-mailing would have imposed on the estate, we
believe such a balance would easily weigh in Garbareno’s favor.
3 We do not address today the situation in which a party
affirmatively rejects or avoids receipt of certified mail. The estate
does not suggest, and the record does not reflect, that Garbareno
took any such action here. See $14,980 v. State, 261 S.W.3d 182, 189-
90 (Tex. App. 2008) (constructive notice could not be imputed to
party “[w]ithout evidence . . . that appellant dodged or refused
delivery of certified mail”).
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IN RE ESTATE OF SNURE
Opinion of the Court
sent by certified mail and returned unopened to the estate was
constitutionally insufficient.4
Remedy
¶11 Under A.R.S. § 14-3806(A), when a claim is presented
against an estate under A.R.S. § 14-3804, the estate “may mail a
notice to any claimant stating that the claim has been disallowed.”
§ 14-3806(A). After a notice of disallowance has been sent, if the
claimant does not file a petition for allowance or commence a
proceeding against the personal representative of the estate within
sixty days, the claim is barred. Id. On the other hand, if the estate
does not “mail notice to a claimant of action on h[er] claim for sixty
days after the time for original presentation of the claim has
expired,” the claim is deemed to be allowed. Id.
¶12 Garbareno asserts that her claim should be deemed
allowed under the statute because the estate failed to timely comply
with the requirement of mailing notice. But the estate complied
with § 14-3806(A), which simply requires that the representative of
the estate “mail a notice,” without prescribing any specific method
of mailing to be used. 5 Because Garbareno has not established a
4Because we find the notice sent to Garbareno was insufficient,
we need not address her claim that the estate was obligated to send
notice to her counsel. Further, although Garbareno’s notice of
appeal states that she is appealing from the trial court’s denial of her
motion for a continuance under Rule 56(f), Ariz. R. Civ. P., she has
not presented an argument on this claim, and it is therefore waived.
See Ariz. R. Civ. App. P. 13(a)(6) (opening brief “shall contain the
contentions of the appellant with respect to the issues presented,
and the reasons therefor, with citations to the authorities, statutes
and parts of the record relied on”); Ritchie v. Krasner, 221 Ariz. 288,
¶ 62, 211 P.3d 1272, 1289 (App. 2009) (failure to comply with
Rule 13(a)(6) waives argument).
5We do not hold that § 14-3806 is unconstitutional on its face.
In general, proof that notice was sent either by certified or regular
mail will be sufficient to comply with due process. It is only because
the estate had actual knowledge that the notice had not been
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IN RE ESTATE OF SNURE
Opinion of the Court
statutory violation, the statutory remedy of deeming the claim
allowed is inappropriate.
¶13 Instead, Garbareno should be provided precisely what
due process guarantees—notice and an opportunity to be heard.
Because Garbareno received actual notice of the disallowance of her
claim on October 12, 2012, we conclude that the sixty-day time limit
began to run on that date, and her petition was therefore timely
filed. Cf. Yi Tu, 470 F.3d at 943, 946 (allowing delayed appeal as
appropriate remedy where insufficient notice denied pilot right to
timely appeal suspension of license). Garbareno should be allowed
to proceed with her petition for allowance.
Conclusion
¶14 For the foregoing reasons, we reverse the trial court’s
order granting the estate’s motion to dismiss, vacate the judgment
entered against Garbareno, and remand for further proceedings
consistent with this opinion.
received and had reasonable steps available to provide notice that
we find a constitutional violation. See Jones, 547 U.S. at 238
(declining “‘to prescribe the form of service that the [government]
should adopt’”), quoting Greene v. Lindsey, 456 U.S. 444, 455 n.9 (1982)
(alteration in Jones).
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