When someone dies, creditors may often come out of the woodwork. That doesn’t mean they should be ignored. That’s true even if you don’t think they have a good claim as a creditor and even if the estate doesn’t have any assets.
In Estate of Johnston, the Georgia Court of Appeals dealt with a creditor issue arising from the tragic shooting death of Kathryn Johnston by undercover Atlanta Police Department officers serving a no-knock warrant. Johnston’s niece, Sarah Charles Dozier, was appointed as administrator of Johnston’s estate and filed suit against the City of Atlanta for wrongful death and pain and suffering. The case was settled for $4.9 million.
After the settlement, Reverend Markel Hutchins sent a letter to Dozier and her attorney detailing “consulting and other professional services” that he alleged he provided the Estate.
Dozier filed in the probate court an inventory, a final return, and a petition for discharge as personal representative. She also listed no unpaid claims of the Estate in the petition. Dozier published notice of the petition in the appropriate paper of record and got the heirs to acknowledge service, but she did not serve Hutchins with notice of the petition.
That was a mistake.
Hutchins ended up filing a claim against the Estate, but the probate court still went ahead and issued a final order discharging Dozier. Hutchins then filed a motion to set aside Dozier’s discharge. The probate court denied the motion to set aside on the grounds that Dozier “had the authority to evaluate the validity of claims made against the estate” and Dozier had apparently determined that Hutchins’ claim was not valid. The probate court also found that Hutchins failed to provide any evidence of an agreement between Dozier and him and found meritless Hutchins’ claim that settlement proceeds for Johnston’s wrongful death belonged to the Estate (as opposed to the next-of-kin).
Hutchins appealed and the Georgia appellate court found that he was entitled to notice as a purported creditor of the Estate. Though it seems that the probate court did evaluate the merits of his claim against the Estate on the post-discharge motions, under Georgia law Hutchins was entitled to notice of the petition for discharge and a hearing on his objection to the petition for discharge. It’s also probably worth reiterating here that Hutchins did file his claim against the Estate before the probate court entered the order discharging the administrator.
The appellate court, therefore, vacated the probate court’s orders and sent the case back to the probate court for a hearing on Hutchins’ motions.
We don’t know how the hearing will turn out, but the bottom line is that if you are aware of a potential creditor then you should provide that purported creditor with notice of a petition for discharge and a mere notice by publication won’t cut it.