In re Estate of Loder , 308 Neb. 210 ( 2021 )

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IN RE ESTATE OF LODER
Cite as 308 Neb. 210In re Estate of Janette H. Loder, deceased.
Nebraska Department of Revenue, appellant,
v. Miranda Loder, Personal Representative
of the Estate of Janette H. Loder,
deceased, appellee.
___ N.W.2d ___
Filed January 22, 2021. No. S-19-1104.
1. Decedents’ Estates: Judgments: Appeal and Error. In the absence of
an equity question, an appellate court, reviewing probate matters, exam-
ines for error appearing on the record made in the county court. When
reviewing a judgment for errors appearing on the record, the inquiry is
whether the decision conforms to the law, is supported by competent
evidence, and is neither arbitrary, capricious, nor unreasonable.
2. Statutes: Appeal and Error. Statutory interpretation is a question of
law, which an appellate court resolves independently of the trial court.
3. Decedents’ Estates: Claims: Notice: Time. Under Neb. Rev. Stat.
§ 30-2485(a) (Reissue 2016), if the personal representative complies
with the notice provisions of Neb. Rev. Stat. §§ 25-520.01 (Reissue
2016) and 30-2483 (Cum. Supp. 2018), a claim generally must be pre-
sented within 2 months after the date of the first publication of notice
to creditors.
4. Decedents’ Estates: Claims: Debtors and Creditors: Notice. There
are two requirements that must be satisfied to mandate that a personal
representative mail a creditor notice: (1) The creditor must have a direct
legal interest in the decedent’s estate, and (2) the personal representative
must have knowledge of the creditor’s claim.
5. Decedents’ Estates: Claims. A claim that is easily ascertainable and
not subject to dispute qualifies as a direct legal interest in a dece-
dent’s estate.
6. Taxation: Time. Nebraska individual income taxes are due, without
demand, on the date fixed for filing individual income tax returns.
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IN RE ESTATE OF LODER
Cite as 308 Neb. 2107. Decedents’ Estates: Taxation. A decedent’s unpaid Nebraska individual
income taxes are easily ascertainable and not subject to dispute, and
therefore qualify as a direct legal interest in the decedent’s estate.
8. Decedents’ Estates: Debtors and Creditors. To reasonably ascertain a
decedent’s creditors, a personal representative must make a reasonably
diligent search, such as a reasonably prudent person would make in view
of the circumstances and must extend to those places where information
is likely to be obtained and to those persons who would be likely to have
information regarding a decedent’s creditors.
9. Decedents’ Estates: Debtors and Creditors: Time. Traditionally,
Nebraska courts have classified the nonclaim statute as a personal repre-
sentative’s affirmative defense to untimely creditor claims.
10. Evidence: Proof. Unless an exception applies, the burden of proof in
civil cases requires only the greater weight of the evidence.
11. Decedents’ Estates: Debtors and Creditors: Claims: Evidence: Proof.
If a personal representative disallows a non-notified creditor’s claim, the
burden of proof is upon the personal representative to prove by the
greater weight of the evidence that it conducted a reasonably diligent
search to ascertain a decedent’s creditors.
Appeal from the County Court for Sarpy County: Todd J.
Hutton, Judge. Reversed and remanded.
Douglas J. Peterson, Attorney General, and James D. Smith
for appellant.
Wayne E. Janssen for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Cassel, J.
I. INTRODUCTION
The personal representative of a decedent’s estate dis­
allowed a claim filed by the Nebraska Department of Revenue
(Department) for unpaid lifetime Nebraska income taxes,
because the Department did not file it within 2 months after
published notice. 1 However, the personal representative never
mailed the Department a copy of the published notice. The
1
See Neb. Rev. Stat. § 30-2485(a)(1) (Reissue 2016) (nonclaim statute).
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IN RE ESTATE OF LODER
Cite as 308 Neb. 210parties disagree whether the Department qualified as a known
creditor, to whom the personal representative was required
to mail notice. 2 Because it appears the county court failed to
impose the burden of proof regarding diligent investigation and
inquiry on the personal representative, we reverse the court’s
order disallowing the claim and remand the cause for further
proceedings consistent with this opinion.
II. BACKGROUND
Janette H. Loder (the Decedent) died intestate on September
1, 2014. Miranda Loder, acting as personal representative of
the Decedent’s estate, published a notice to creditors in a local
newspaper for 3 consecutive weeks and mailed copies of the
notice to 36 creditors, warning them that the creditors’ claims
filing deadline was November 24, 2014. But the Department
was not one of the creditors to whom notice was mailed.
During the administration of the estate, Miranda and William
Loder, the Decedent’s ex-husband, personally investigated the
Decedent’s affairs to determine her creditors. They reviewed
her financial records and various documents in her home,
and talked with friends and acquaintances while compiling
the creditors list. Miranda testified that she did not know
that the Department was a creditor of the Decedent’s estate,
because she and William did not find any records indicating
that the Decedent had unpaid taxes, such as a notice from the
Department. However, William admitted that they did not spe-
cifically search for the Decedent’s tax history, because “[they]
had no reason to.”
According to Miranda’s testimony, the Decedent said she
received alimony from William that was directly deposited
into her bank account by the State of Pennsylvania. Miranda
admitted that she had not inquired whether Pennsylvania paid
taxes on the money the Decedent received as income. And she
agreed that “any time you have income . . . taxes are owed.”
2
See Neb. Rev. Stat. § 25-520.01 (Reissue 2016).
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IN RE ESTATE OF LODER
Cite as 308 Neb. 210In December 2016, the Department notified Miranda that
the Decedent had not filed her individual income taxes for
the 3 years preceding her death. In March 2017, Miranda
filed the Decedent’s individual income tax returns for the tax
years 2011, 2012, and 2013. Those returns showed income
taxes due, none of which were paid by the Decedent’s estate.
In August 2017, the Department filed a claim for $21,331.23,
representing income tax, penalties, and interest due for the
unpaid tax years. Miranda did not dispute the Department’s
tax calculation, but she disallowed the claim, arguing it
was untimely.
Within 60 days of disallowance, the Department filed a
petition with the county court for allowance of the claim. The
Department argued that because it did not receive notice in com-
pliance with both § 25-520.01 and Neb. Rev. Stat. § 30-2483(Cum. Supp. 2018), it retained the right to file a claim within 3
years of the Decedent’s death under § 30-2485(a)(2).
The court denied the Department’s petition and sustained
Miranda’s disallowance, finding that the Department’s claim
was time barred because it received adequate notice of the
Decedent’s death under § 30-2483(a). The court stated that
Miranda “afforded known creditors, by publication and mail-
ing, and unknown creditors by publication, notice of their
deadline to present claims.” The court found that “neither
party was aware the [D]ecedent had neglected to file until
after [Miranda] filed returns in 2017.” The court reasoned
that “[b]ecause publication is reasonably calculated to provide
notice to all claimants of the . . . deadline for presentation
of claims,” the Department’s claim was untimely. The court
did not state any factual finding regarding the adequacy of
Miranda’s investigation and inquiry to identify reasonably
ascertainable creditors.
The Department filed a timely appeal. We granted the
Department’s petition to bypass the Nebraska Court of
Appeals. 3
3
See Neb. Rev. Stat. § 24-1106(2) (Cum. Supp. 2018).
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IN RE ESTATE OF LODER
Cite as 308 Neb. 210III. ASSIGNMENTS OF ERROR
The Department assigns that the county court erred by deny-
ing its petition and sustaining Miranda’s disallowance of its
claim against the Decedent’s estate.
IV. STANDARD OF REVIEW
[1] In the absence of an equity question, an appellate
court, reviewing probate matters, examines for error appear-
ing on the record made in the county court. When reviewing
a judgment for errors appearing on the record, the inquiry is
whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable. 4
[2] Statutory interpretation is a question of law, which we
resolve independently of the trial court. 5
V. ANALYSIS
1. Alternative Arguments
The Department presents three alternative arguments. First,
the Department argues that Neb. Rev. Stat. § 77-2768 (Reissue
2018) controls over the Nebraska Probate Code for the
Department’s filing of a creditor claim when the claim involves
income taxes. Alternatively, the Department claims that its
regulations, found in 316 Neb. Admin. Code, ch. 36, § 015.02
(2013), govern the Department’s deadline to file its claim
against an estate for income taxes instead of § 30-2485(a)(1),
which the county court concluded governed. If neither of
these arguments is successful, the Department finally argues
that because it did not receive a written copy of the published
notice in accordance with § 25-520.01, it retained the right to
file a claim within 3 years after the Decedent’s death under
§ 30-2485(a)(2). We find no merit to the Department’s first two
alternatives and turn our attention to its final argument.
4
In re Estate of Adelung, 306 Neb. 646, 947 N.W.2d 269 (2020).
5
In re Interest of Nedhal A., 289 Neb. 711, 856 N.W.2d 565 (2014).
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IN RE ESTATE OF LODER
Cite as 308 Neb. 210[3] Nebraska’s nonclaim statute limits the time in which
claims may be presented against an estate and specifically
explains what is to be done when a creditor is not provided
proper notice. 6 Under § 30-2485(a), if the personal representa-
tive complies with the notice provisions of §§ 25-520.01 and
30-2483, a claim generally must be presented within 2 months
after the date of the first publication of notice to creditors. 7
However, if the personal representative fails to provide compli-
ant notice, then a claimant may present its claim within 3 years
after the decedent’s death. 8
The nonclaim statute requires that a creditor receive notice
under both §§ 25-520.01 and 30-2483 to ensure creditors
know of the decedent’s death and are afforded the opportu-
nity to collect from the decedent’s estate, while also allowing
the personal representative to expedite the distribution of the
estate. 9 It is undisputed that Miranda satisfied the publication
requirement of § 30-2483(a) and that the notice requirement
of § 30-2483(b) 10 does not apply to the case before us. The
parties disagree on whether Miranda was required to mail the
Department notice under § 25-520.01, with which compliance
is also required by § 30-2483(a).
2. Notice Requirements
Under § 25-520.01
Section 25-520.01 was not originally included in Nebraska’s
nonclaim statute. Historically, before adoption of the Uniform
Probate Code (UPC), the nonclaim statute 11 required only
6
See In re Estate of Emery, 258 Neb. 789, 606 N.W.2d 750 (2000).
7
See Mach v. Schmer, 4 Neb. App. 819, 550 N.W.2d 385 (1996).
8
Id.9
See, Francisco v. Gonzalez, 301 Neb. 1045, 921 N.W.2d 350 (2019); In re
Estate of Feuerhelm, 215 Neb. 872, 341 N.W.2d 342 (1983).
10
See § 30-2483(b) (notice to Department of Health and Human Services
regarding certain decedents who resided in specified medical institutions).
11
See Neb. Rev. Stat. § 30-609 (Reissue 1964) (barring claims not presented
within time established).
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Cite as 308 Neb. 210notice by publication pursuant to the statutes governing notice
to creditors. 12 The county judge would publish a notice in a
local newspaper requiring creditors to bring their claims within
a specified time. 13 However, creditors could request an exten-
sion from the court to submit their untimely claim for “good
cause.” 14 Commonly, a creditor could show good cause by
proving it did not have notice of a decedent’s death, because
the creditor lived in a different county and did not receive the
newspaper publication. 15
When Nebraska first adopted the UPC, § 30-2483 (Reissue
1975) required publication of notice to creditors, as well as
“mail[ing] the published notice and giv[ing] proof thereof
in accordance with section 25-520.01.” But § 30-2485(a)(1)
(Reissue 1975) adhered to the essence of the former law
and provided a creditor who did not receive notice only an
additional 60-day window to apply for additional time and
show good cause for an extension of the deadline. At that
time, § 30-2485(a)(2) allowed presentation of a claim “within
three years after the decedent’s death, if notice to creditors
has not been published.” (Emphasis supplied.) That language
later changed.
After the U.S. Supreme Court held in Tulsa Professional
Collection Services v. Pope 16 that reasonably ascertainable
creditors must be provided actual notice of a decedent’s
death, the Legislature amended § 30-2485 to condition the
2-month bar date upon compliance with both § 25-520.01
12
See Neb. Rev. Stat. §§ 30-601 to 30-604 (Reissue 1964) (publication of
notice and establishment of time for claim presentation).
13
See id.14
See, Neb. Rev. Stat. § 30-605 (Reissue 1964); In re Estate of Tucker, 128
Neb. 387, 258 N.W. 645 (1935).
15
See id.16
Tulsa Professional Collection Services v. Pope, 485 U.S. 478, 108 S. Ct.
1340, 99 L. Ed. 2d 565 (1988).
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IN RE ESTATE OF LODER
Cite as 308 Neb. 210and § 30-2483. 17 We have observed that notice by publica-
tion, while constitutionally permitted in some circumstances,
is a poor bet to provide actual notice to a party of an action
that affects his or her rights. 18 Recognizing the Court’s deci-
sion that due process requires actual notice to known or rea-
sonably ascertainable creditors, the Legislature incorporated
§ 25-520.01 into the nonclaim statute, supplementing the
notice statute’s mailing requirement. 19
And the Legislature did so in both subsections (1) and (2)
of § 30-2485(a). Now, § 30-2485(a)(2) (Reissue 2016) speci-
fies that a claim will be barred if it is not presented “[w]ithin
three years after the decedent’s death if notice to creditors has
not been given in compliance with sections 25-520.01 and
30-2483.” (Emphasis supplied.)
[4] Under § 25-520.01, the personal representative must
now mail “every party appearing to have a direct legal interest
in [the administration of a decedent’s estate] whose name and
post office address are known to [the personal representative]”
a copy of the published notice. 20 The personal representative
or his or her attorney must also state by affidavit that “after
diligent investigation and inquiry,” both were unable to ascer-
tain the address of any other party appearing to have a direct
legal interest in the proceeding. 21 Therefore, there are two
requirements that must be satisfied to mandate that a personal
representative mail a creditor notice: (1) The creditor must
have a direct legal interest in the decedent’s estate, and (2) the
personal representative must have knowledge of the creditor’s
claim. 22 Each requirement will be addressed in turn.
17
See, id.; 1991 Neb. Laws, L.B. 95. See, also, Mullane v. Central Hanover
Tr. Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950).
18
See Francisco, supra note 9.
19
See 1991 Neb. Laws, L.B. 95.
20
See, § 30-2485(a)(2) (incorporating § 25-520.01); Francisco, supra note 9.
21
See § 25-520.01.
22
Id.
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Cite as 308 Neb. 210(a) Direct Legal Interest
[5] The Department must have a direct legal interest
in a decedent’s estate in order to satisfy § 25-520.01. The
Legislature has not defined the term “direct legal interest” for
purposes of § 25-520.01, but we have inferred from the lan-
guage employed by the Legislature that the reference was to
property of the estate and property in which the law recognized
that the claimant had an existing interest. 23 A claim that is
“easily ascertainable and not subject to dispute” qualifies as a
direct legal interest in a decedent’s estate. 24 In contrast, a claim
featuring potential liability of a decedent, without establish-
ment of liability and amount of damage, does not constitute a
direct legal interest. 25
[6,7] The Department possesses a direct legal interest in all
unpaid individual income taxes. Nebraska individual income
taxes are due, without demand, on the date fixed for filing
individual income tax returns. 26 Failure to pay taxes results in
the Department’s having a claim for unpaid taxes against the
person, which the Department may collect through the seizure
and sale of a person’s property. 27 A decedent’s unpaid Nebraska
individual income taxes are easily ascertainable and not subject
to dispute, and therefore qualify as a direct legal interest in the
decedent’s estate. 28
The Department may not have a direct legal interest in
every estate, but it does here. Prior to the Decedent’s death,
she owed individual income taxes for the tax years 2011, 2012,
23
See Farmers Co-op. Mercantile Co. v. Sidner, 175 Neb. 94, 120 N.W.2d
537 (1963).
24
See In re Estate of Karmazin, 299 Neb. 315, 322, 908 N.W.2d 381, 387
(2018).
25
Mach, supra note 7.
26
§ 77-2768.
27
See 316 Neb. Admin. Code, ch. 36, § 009.01 (2014).
28
Compare In re Estate of Karmazin, supra note 24, with Sidner, supra
note 23.
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Cite as 308 Neb. 210and 2013. After she died and Miranda was appointed personal
representative, the Department was entitled to present its claim
for the Decedent’s Nebraska individual income taxes as a claim
against the Decedent’s estate. 29 Death did not extinguish her
tax obligations, and the Department had full authority to collect
from the Decedent’s estate. 30 Therefore, the Decedent’s failure
to pay her overdue taxes generated a direct legal interest for
the Department.
(b) Known to Personal
Representative
[8] Moving to the second requirement, Miranda must have
“known” the Department was a creditor of the Decedent’s
estate for § 25-520.01 to require that Miranda mail the
Department notice. But a personal representative is not
allowed to rely on ignorance; the Pope Court’s decision
requires actual notice to known or reasonably ascertainable
creditors. 31 The statutory text requires a party to learn what
he or she could discover through diligent investigation and
inquiry. 32 Legislative history confirms our understanding of
the plain text: a personal representative knows of a creditor
if the creditor is known or can reasonably be ascertainable. 33
To reasonably ascertain a decedent’s creditors, a personal
representative must make a reasonably diligent search, such
as a reasonably prudent person would make in view of the
circumstances and must extend to those places where infor-
mation is likely to be obtained and to those persons who
would be likely to have information regarding a decedent’s
29
See 316 Neb. Admin. Code, supra note 27, § 015.02 (2013).
30
See id.
31
See Pope, supra note 16.
32
See § 25-520.01.
33
See Statement of Legislative Bill, L.B. 589, Judiciary Committee, 68th
Leg. (Apr. 25, 1957). See, also, Pope, supra note 16.
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Cite as 308 Neb. 210creditors. 34 If a personal representative fails to perform a rea-
sonably diligent search to ascertain creditors, it cannot avoid
the requirement of § 25-520.01 to mail notice to those who are
reasonably ascertainable.
The county court did not make an express determination as
to whether Miranda performed a reasonably diligent search.
And our previous decisions have not articulated who bears the
burden of proving that a reasonably diligent search was or was
not made.
[9] Traditionally, Nebraska courts have classified the non-
claim statute as a personal representative’s affirmative defense
to untimely creditor claims. 35 Nebraska law consistently places
the burden of proving an affirmative defense on the person uti-
lizing the defense. 36 However, no Nebraska court has addressed
whether the nonclaim statute remains an affirmative defense
after the Legislature incorporated § 25-520.01 into the non-
claim statute.
Because Nebraska adopted its current statutory structure
from the UPC, we look for guidance to the UPC and the states
that have adopted it. 37 But since Nebraska’s adoption of the
UPC, the UPC has been amended, causing the Nebraska non-
claim statute to become nonconforming. 38 Additionally, the
UPC does not propose a knowledge requirement as seen in
§ 25-520.01, because the UPC does not mandate that notice
34
See, Francisco, supra note 9; In re Interest of A.W., 224 Neb. 764, 401
N.W.2d 477 (1987); Committee Statement, L.B. 95, Judiciary Committee,
92d Leg., 1st Sess. (Jan. 23, 1991) (summary of purpose); Judiciary
Committee Hearing, L.B. 95, 92d Leg., 1st Sess. 38-42 (Jan. 23, 1991);
Floor Debate, L.B. 95, Judiciary Committee, 92d Leg., 1st Sess. 267-72
(Jan. 28, 1991).
35
See, In re Estate of Masopust, 232 Neb. 936, 443 N.W.2d 274 (1989); In
re Estate of McCleneghan, 145 Neb. 707, 17 N.W.2d 923 (1945).
36
See, e.g., Kaspar v. Schack, 195 Neb. 215, 237 N.W.2d 414 (1976).
37
See Committee Statement, L.B. 354, Judiciary Committee, 83d Leg., 2d
Sess. 1-2 (Feb. 4, 1974).
38
See, Unif. Probate Code § 3-801, 8 (part II) U.L.A. 261 (2013); Unif.
Probate Code § 3-803, 8 (part II) U.L.A. 271 (2013).
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Cite as 308 Neb. 210be mailed to known creditors. 39 Uncertain about “the possible
applicability [of Pope] to [its nonclaim statute],” 40 the UPC
editors updated the UPC to make mailing notice to creditors
optional, stating: “A personal representative may give writ-
ten notice by mail or other delivery to a creditor . . . .” 41
Consequently, the UPC’s language provides little guidance on
this matter, because it does not mandate a personal representa-
tive to perform a reasonably diligent search to ascertain credi-
tors and mail notice to known creditors. These requirements
are imposed by Nebraska’s nonclaim statute. 42
Looking to other UPC states, the UPC’s uncertainty on Pope
has led to significant variation in states’ nonclaim statutes and
who carries the burden of proving compliance. 43 Some states
have incorporated Pope into their nonclaim statutes and require
personal representatives to conduct a reasonably diligent search
to ascertain the decedent’s creditors, but other states have mir-
rored the UPC’s optional approach. 44
UPC states incorporating Pope into their nonclaim stat-
utes have classified the nonclaim statute as an affirmative
defense that a personal representative has the burden of prov-
ing. 45 Because, as a non-UPC state explains, “the operation
of the nonclaims provisions result[s] in the forfeiture of what
39
See id.40
Unif. Probate Code, supra note 38, § 3-803, comment, 8 (part II) U.L.A.
at 272. See Pope, supra note 16.
41
Unif. Probate Code, supra note 38, § 3-801, 8 (part II) U.L.A. at 261.
42
Compare § 25-520.01 and § 30-2485, with Unif. Probate Code, supra note
38, §§ 3-801 and 3-803.
43
Compare Fla. Stat. Ann. § 733.2121(3)(a) (West 2017 & Cum. Supp.
2020) and Jones v. Golden, 176 So. 3d 242 (Fla. 2015), with N.M. Stat.
Ann. § 45-3-801 (2019) and Corlett v. Smith, 106 N.M. 207, 740 P.2d 1191(N.M. App. 1987).
44
Compare § 733.2121(3)(a) and Jones, supra note 43, with § 45-3-801 and
Corlett, supra note 43.
45
See, Jones, supra note 43; Morgenthau v. Estate of Andzel, 26 So. 3d 628(Fla. App. 2009), disapproved on other grounds, Jones, supra note 43.
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Cite as 308 Neb. 210might otherwise be meritorious claims, the burden of pleading
and proof regarding compliance with the provisions properly
rests on one claiming the benefit of those provisions.” 46 In
fact, some UPC states that do not have a knowledge require-
ment nonetheless apply this policy principle and classify the
nonclaim statute as an affirmative defense, citing “the general
rule in civil cases that one who pleads an affirmative defense
has the burden of proving it.” 47
[10,11] We see no reason not to continue to classify the non-
claim statute as an affirmative defense and follow other UPC
states in that regard. Unless an exception applies, the burden
of proof in civil cases requires only the greater weight of the
evidence. 48 We therefore hold that if a personal representative
disallows a non-notified creditor’s claim, the burden of proof is
upon the personal representative to prove by the greater weight
of the evidence that it conducted a reasonably diligent search
to ascertain a decedent’s creditors. 49
3. Resolution
Because Miranda relied upon the affirmative defense of the
nonclaim statute, she had the burden of proving that she con-
ducted a reasonably diligent search to ascertain whether the
Department was a creditor of the Decedent’s estate. We have
already noted that Nebraska individual income taxes are due
every year, without demand, by any individual who generates
income over a specified threshold. 50
The language of the county court’s order suggests that it
did not address the question whether Miranda conducted a
46
See Matter of Estate of Pope, 733 P.2d 396, 399 (Okla. 1987), reversed
sub nom. Pope, supra note 16 (overturned on other grounds).
47
Hitt v. J. B. Coghill, Inc., 641 P.2d 211, 213 (Alaska 1982).
48
Burgardt v. Burgardt, 304 Neb. 356, 934 N.W.2d 488 (2019).
49
See, generally, § 733.2121(3)(a); Jones, supra note 43; Morgenthau, supra
note 45; Hitt, supra note 47.
50
See § 77-2768.
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Cite as 308 Neb. 210reasonably diligent search regarding the potential claim against
the Decedent for unpaid lifetime individual income taxes.
Rather, the court seems to have focused only on Miranda’s and
the Department’s actual knowledge. This may have been driven
by the court’s articulation regarding the publication require-
ment for unknown creditors. Thus, the court’s language does
not demonstrate that it examined whether Miranda established
that the Department’s potential claim was not ascertainable by
reasonably diligent inquiry. In this sense, the court’s decision
did not conform to the law.
But the question thus posed turns upon the court’s view of
the facts. As William testified, he and Miranda did not search
for tax records. Miranda seemed to have some knowledge of
the Decedent’s alimony income. And Miranda acknowledged
that when one has income, taxes are owed. Whether the extent
of the inquiry was reasonable may turn on issues of credibility
and heavily depends upon the fact finder’s view of the evi-
dence. Because our standard of review gives considerable def-
erence to the county court’s factual findings, that court should
assess in the first instance the facts underlying the sufficiency
of Miranda’s search.
VI. CONCLUSION
We therefore reverse the disallowance of the Department’s
claim and remand the cause to the county court for reconsid-
eration of the existing record to determine whether Miranda
met her burden of proving that she conducted a reasonably
diligent search and that the Department’s status as a creditor
was not reasonably ascertainable. If upon remand the court
concludes that Miranda did so, the court should disallow the
Department’s claim. On the other hand, Miranda did not dis-
pute the amount of taxes owed or that she did not mail notice
of the proceeding to the Department. If the court concludes that
Miranda did not satisfy her burden of proof, the court should
allow the claim in full.
Reversed and remanded.