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CMS Investment Holdings, LLC v. Estate of Wilson

Court of Appeals of Arkansas, Division I

November 16, 2016

CMS INVESTMENT HOLDINGS, LLC APPELLANT
v.
ESTATE OF ROBERT M. WILSON, JR., Deceased APPELLEE

         APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, FOURTEENTH DIVISON [NO. 60PR-12-1470] HONORABLE VANN SMITH, JUDGE

         AFFIRMED

          Wright, Lindsey & Jennings, LLP, by: Gordon S. Rather, Jr., John R. Tisdale, and Gary D. Marts, Jr., for appellant.

          Campbell Law Firm, P.A., by: H. Gregory Campbell, for appellee.

          RAYMOND R. ABRAMSON, Judge

         This appeal from a probate case arises out of the denial of two claims appellant CMS Investment Holdings, LLC (CMSIH) made against appellee the Estate of Robert M. Wilson, Jr. (Estate). The overarching questions presented in this appeal are whether CMSIH's claims were timely made and whether the circuit court erred by denying them. Finding no error, we affirm the circuit court's order denying CMSIH's claims.

         I. Background

         On August 3, 2012, Robert M. Wilson, Jr. (Wilson) died.[1] On August 8, 2012, a case was opened in Pulaski County Circuit Court to probate his Estate, and his former wife, Jennifer Wilson-Harvey, was appointed as personal representative of the Estate.

         Arkansas Code Annotated section 28-40-111(a)(1)(A) requires that a "personal representative shall cause a notice of his or her appointment to be published stating the date of his or her appointment and requiring all persons having claims against the estate to exhibit them, properly verified to him or her, within six (6) months from the date of the first publication of the notice, or they shall be forever barred and precluded from any benefit in the estate." On August 11, 2012, the Estate published notice to creditors pursuant to this requirement, alerting creditors of the necessity of filing their claims against the estate no later than February 11, 2013.

         Our law also requires that "within one (1) month after the first publication of the notice, a copy of the notice shall also be served . . . upon all unpaid creditors whose names, status as creditors, and addresses are known to or reasonably ascertainable by the personal representative." Ark. Code Ann. § 28-40-111(a)(4)(A). Pursuant to this statutory requirement, the Estate served notice on certain creditors, but CMSIH was not among them.

         With regard to the acceptance or denial of claims, the general rule is that all claims against a decedent's estate must be filed with the court within six months after the date of the first publication of notice to creditors. Ark. Code Ann. § 28-50-101(a)(1). Notwithstanding this rule, the claims of all known or reasonably ascertainable creditors shall be barred at the end of two years from the date of first publication of notice to creditors, even if they have not been provided actual notice in accordance with Arkansas Code Annotated § 28-40-111(a)(2). Ark. Code Ann. § 28-50-101(h).

         CMSIH did not file a claim against the Estate prior to the six-month deadline of February 11, 2013. In fact, it did not file its claims until June 6, 2014-twenty-two months after notice was published. After CMSIH filed its claims, the Estate filed a motion to deny the claims as untimely. CMSIH responded contending that its claims were timely filed pursuant to the two-year time limit imposed on known or reasonably ascertainable creditors. Ark. Code Ann. § 28-50-101(h).

         The circuit court conducted an evidentiary hearing on the Estate's motion to deny CMSIH's claims on November 24 and December 19, 2014. At the hearing, the Estate presented extensive evidence in support of its position that CMSIH was not entitled to service of notice of the probate of Wilson's Estate. Most notable was the testimony of Rufus Wolff, Wilson's longtime attorney and an attorney for his Estate, and Stephanie Pollard, an accounting supervisor at the Wilson Law Firm who was also employed by the Estate. Wolff, who had authority and access to search Wilson's records and documents, testified that there was no information that CMISH was a creditor or that it sought to assert a claim against the estate. Likewise, Pollard indicated that she prepared an exhaustive list of Wilson's books and records, including all vendors and creditors, and found no files on CMSIH.

         On May 15, 2015, the circuit court entered a detailed order granting the Estate's motion to deny CMSIH's claims wherein it outlined its decision and the reasons supporting it. CMSIH brings this appeal.

         II. CMSIH's Claims Against the Estate

         This appeal focuses on whether there was evidence to establish that CMSIH was a known or reasonably ascertainable creditor of the Estate. Accordingly, we will discuss the events giving rise to ...


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