Victims of substantiated child abuse: Missouri's new reasonably ascertainable creditors.

• Author: Haseltine, Alice
• Position: Case note

1. INTRODUCTION

   A recent decision from the Supreme Court of Missouri, In re Austin, held that victims of substantiated child abuse are reasonably ascertainable creditors. (1) The practical effect of Austin is to afford victims of substantiated child abuse an extra six months to file claims against the estate of his or her abuser. (2) While this decision is a small victory for victims of sexual abuse, the facts in Austin raise controversial questions about whether the unique circumstances surrounding claims of childhood sexual abuse warrant an exception to the one-year claim bar against a decedent's estate.

   This Note begins with an exploration of the unique factual circumstances that gave rise to the court's determination that victims of child abuse are reasonably ascertainable creditors. The Note goes on to discuss the constitutionality of creditor claim bars and the evolution of the reasonably ascertainable creditor in Missouri. Next, this Note provides an analysis of the Supreme Court of Missouri's reasoning in Austin and--finally--explores possible extensions of Austin while weighing the policy considerations associated with a broad extension of the court's holding to future claims of child abuse against decedents' estates.

2. FACTS AND HOLDING

   In 2006, two female minors, R.M.N. and R.D.N., (3) alleged that Allen Austin sexually abused them. (4) The Division of Family Services ("DFS") investigated the allegations and substantiated the minors' claims against Austin "by a 'preponderance of the evidence.'" (5) Austin never appealed the substantiation. (6)

   Three years later, Austin died. (7) Cathy Snead, a beneficiary of Austin's estate, was appointed personal representative. (8) On August 26, 2009, Snead published notice that Austin's estate was open to creditor claims. (9) This publication initiated a six-month time period during which creditors could file claims against Austin's estate. (10)

   Following the opening of the estate, Snead, a social worker by trade, conducted an independent investigation of R.M.N. and R.D.N.'s allegations against Austin. (11) The investigation included interviews with various members of R.M.N. and R.D.N.'s extended family. (12) Throughout the course of Snead's investigation, she did not contact the minors, their father, (13) or DFS. (14) Snead's investigative work led her to determine that R.M.N. and R.D.N.'s 2006 sexual assault claims were fictitious. (15) Despite Snead's knowledge that the allegations were substantiated by DFS, Snead used her personal knowledge of the allegations to conclude that R.M.N. and R.D.N. were not creditors with a "colorable claim" and were therefore not required to receive actual notice upon the opening of Austin's estate. (16)

   Eight months following the date on which Snead first published notice of the estate's opening, R.M.N. and R.D.N.'s (the "minors") father filed claims against the estate in the Circuit Court of Gentry County as the minors' "next friend." (17) The claims included counts for intentional infliction of emotional distress, assault, battery, sexual abuse, invasion of privacy, and civil false arrest. (18) However, the court disallowed the claims against the estate, citing the six-month statutory bar in Missouri Revised Statutes Section 473.360. (19) In response, the minors' father petitioned the court to reclassify the claims as an adversary proceeding. (20)

   Snead filed a motion to dismiss the minors' claims against Austin's estate, arguing that the claims were filed more than six months after August 26, 2009--the day on which Snead first published notice of the opening of the estate--and were, therefore, untimely. (21) Further, Snead argued that the minors' claims did not meet an exception to the statutory bar (22) and that the minors were not "known or reasonably ascertainable creditors." (23) The Circuit Court of Gentry County sustained Snead's motion, and the minors' father filed a timely appeal. (24)

   Upon review, the Supreme Court of Missouri reversed and remanded the trial court's dismissal of the minors' claims, holding that due process requires the personal representative of an estate to provide "all reasonably ascertainable creditors who may have ... more than a merely conjectural claim against the estate" actual notice of the initiation of the probate proceeding. (25)

3. LEGAL BACKGROUND

   In 1988, the Supreme Court of the United States handed down Tulsa Professional Collection Services, Inc. v. Pope, which held that notice by publication was constitutionally insufficient to bar the claims of certain creditors against a decedent's estate. (26) This holding called into question the constitutionality of Missouri's non-claim statute as well as non-claim statutes in probate codes across the country. (27) For this reason, it is beneficial to analyze the due process considerations that have transformed Missouri's non-claim statute through the lens of Pope. In doing so, this Part examines Missouri's non-claim statute prior to the Court's holding in Pope, the Supreme Court's refinement of the "reasonably ascertainable" creditor, and, finally, Missouri's response to Pope.

   1. Missouri's Non-Claim Statute Before Pope

      Upon the death of a testator, a personal representative may initiate probate. (28) 29 The probate process commences when the letters testamentary are filed "[i]n the county in which the domicile of the deceased is situated." (29) Once the personal representative is appointed, that individual must publish notice in "some newspaper" and assert that the individual has been appointed representative. (30) The notice must include a notification to the decedent's creditors warning them of their right to file their claims in the court within six months after the first published notice of letters testamentary or administration --or be forever barred from doing so. (31) This notice, which is published once a week for four consecutive weeks, (32) is designed to make creditors aware of the strict time limit imposed on creditor claims found in Missouri Revised Statutes Section 473.360, which provides:

      [A]ll claims against the estate of a deceased person, other than costs and expenses of administration, exempt property, family allowance, homestead allowance, claims of the United States and claims of any taxing authority within the United States ... which are not filed in the probate division ... or which are not paid by the personal representative, within six months after the first published notice of letters testamentary or of administration, are forever barred against the estate, the personal representative, the heirs, devisees and legatees of the decedent. (33) Prior to the Court's 1988 decision in Pope, Missouri's non-claim statute included a second, long-term bar on creditor claims. (34) This bar was found in a subsequent portion of Section 473.360 and provided that "[a]ll claims barrable under the provisions of the six month non-claim statute, in any event, are barred if administration of the estate is not commenced within three years after the death of the decedent." (35) Throughout the mid-twentieth century, the U.S. Supreme Court handed down several decisions that more specifically defined the constitutional requirements for notice. (36)

   2. Notice Laws Challenged by the Due Process Clause--The Rise of the Reasonably Ascertainable Party

      In 1950, the U.S. Supreme Court decided Mullane v. Central Hanover Bank & Trust. (37) The case involved a common trust fund established pursuant to N.Y. Banking Law Section 100-c. (38) This statute permitted beneficiaries of a common trust to receive notification of a judicial accounting solely by publication. (39) The court in Mullane considered whether the beneficiaries' receipt of notice by publication violated the beneficiaries' due process rights. (40) In addressing this issue, the Court explained, "An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." (41) The Court held that the notice requirement found in Section 100-c was unconstitutional because notice by publication is unreasonable to uphold a ban on a beneficiary's untimely objection when "an efficient and inexpensive means," such as the United States Mail Service, is available. (42) While Mullane established that there are indeed circumstances under which notice by publication is insufficient to satisfy due process, it was initially unclear how far Mullane's holding extended and whether it applied to creditor non-claim statutes in probate. (43)

      More than three decades after the Supreme Court handed down Mullane, the Court again addressed the constitutionality of notice by publication in Mennonite Board of Missions v. Adams. (44) The law under scrutiny in Mennonite was an Indiana statute that allowed for a tax sale of real property when taxes remained unpaid on the property for fifteen months. (45) The statute did not require that interested parties receive actual notice. (46) The Indiana law further provided that the tax sale was followed by a "two-year redemption period during which the 'owner, occupant, lienholder, or other person who has an interest in' the property" may reclaim title. (47) The property at issue in Mennonite was mortgaged in favor of the Mennonite Board of Missions (the "Board"), and when the property owner failed to pay taxes on the property, the county initiated a tax sale. (48) While the owner of the property received actual notice of the sale, the Board did not. (49) In its discussion of the unconstitutionality of the Indiana notice statute, the Court explained, "[A]ctual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party ... if [the party's] name and address are reasonably...