Garbareno v. Whatley – 2/28/2014

March 17, 2014

Arizona Court of Appeals Division Two Holds That a Notice of Disallowance Sent by Certified Mail and Return Unopened to the Estate Was Constitutionally Insufficient.

In the summer of 2009, Eloise Garbareno notified the estate of Richard Snure that she had a claim against the estate.  In December 2009, counsel for the estate exchanged correspondence with Garbareno confirming receipt of her claim.  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.  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, asserting that her claim should be allowed because the estate had not provided her with notice of disallowance.  The trial dismissed Garbareno’s petition for failure to state a claim upon which relief can be granted.  Garbareno timely appealed.

The Arizona Court of Appeals reversed, concluding that the notice was constitutionally insufficient.  A person facing a potential state deprivation of life, liberty, or property is entitled to due process of law.  It is well established 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.  Because the estate had other reasonable options for notifying Garbareno, including sending the notice by regular mail, the Court of Appeals held that the notice provided in this case was insufficient. 

Garbareno was not, however, entitled to have her claim deemed allowed.  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.”   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.  If, however, the estate does not mail notice to a claimant of action on her claim for sixty days after the time for original presentation of the claim has expired, the claim is deemed to be allowed.  The estate in this case complied with § 14-3806(A) by mailing notice to Garbareno.  Because there was no statutory violation, the Court held that the statutory remedy of deeming the claim allowed would be inappropriate.  According to the Court, Garbareno should merely be allowed to proceed with her petition for allowance.

Judge Eckerstrom authored the opinion; Judges Kelly and Espinosa concurred.