Case Title: R. ALAN HANESWORTH AND WILLIAM M. WILSON A/K/A W.M. WILSON v. DONNA JOHNKE, Personal Representative of the Estate of GEORGIA KATE STURGEON A/K/A GEORGIA KATE COLLINS, and DONNA JOHNKE, ELMER JOHNKE, STEVEN STUMBOUGH and MARJORIE STUMBOUGH, as Individual Heirs of the Estate of GEORGIA KATE STURGEON A/K/A GEORGIA KATE COLLINS, and Recipients of the Proceeds Thereof the Estate of GEORGIA KATE STURGEON

Citation: 

Docket Number: 89-48

State: wyoming

Court: Wyoming Supreme Court

Date: 1989-11-28T00:00:00Z

Document:
R. ALAN HANESWORTH AND WILLIAM M. WILSON A/K/A W.M. WILSON v. DONNA JOHNKE, Personal Representative of the Estate of GEORGIA KATE STURGEON A/K/A GEORGIA KATE COLLINS, and DONNA JOHNKE, ELMER JOHNKE, STEVEN STUMBOUGH and MARJORIE STUMBOUGH, as Individual Heirs of the Estate of GEORGIA KATE STURGEON A/K/A GEORGIA KATE COLLINS, and Recipients of the Proceeds Thereof the Estate of GEORGIA KATE STURGEON1989 WY 210783 P.2d 173Case Number: 89-48Decided: 11/28/1989Supreme Court of Wyoming
R. ALAN HANESWORTH AND 
WILLIAM M. WILSON A/K/A W.M. WILSON, APPELLANTS (PLAINTIFFS),

v.

DONNA JOHNKE, PERSONAL 
REPRESENTATIVE OF THE ESTATE OF GEORGIA KATE STURGEON A/K/A GEORGIA KATE 
COLLINS, AND DONNA JOHNKE, ELMER JOHNKE, STEVEN STUMBOUGH AND MARJORIE 
STUMBOUGH, AS INDIVIDUAL HEIRS OF THE ESTATE OF GEORGIA KATE STURGEON A/K/A 
GEORGIA KATE COLLINS, AND RECIPIENTS OF THE PROCEEDS THEREOF THE ESTATE OF 
GEORGIA KATE STURGEON, APPELLEES (DEFENDANTS).

Appeal from the District 
Court, AlbanyCounty, Arthur T. Hanscum, 
J.

Franklin D. 
Bayless and Richard C. Slater, Cheyenne, for appellants.

Raymond B. 
Hunkins of Jones, Jones, Vines & Hunkins, Wheatland, for appellees.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY 
and GOLDEN, JJ.

MACY, 
Justice.

[¶1.]     This is an appeal from 
a judgment on the pleadings in favor of Appellees Donna Johnke (the personal 
representative and an individual heir of the estate of Georgia Kate 
Sturgeon) and Elmer Johnke (an individual heir of the estate of Georgia Kate 
Sturgeon). Appellants R. Alan Hanesworth and William M. Wilson filed suit 
against Appellees to recover amounts due on a promissory note executed by the 
decedent, Georgia Kate Sturgeon. Appellants alleged that Appellees failed to 
provide Appellants with actual notice of Sturgeon's death and of Appellants' 
right to file a claim against the estate. The court ruled that, although 
Appellants were constitutionally entitled to receive actual notice to timely 
file their claims against the estate, they were not entitled to relief as the 
United States Supreme Court case of Tulsa Professional Collection Services, Inc. 
v. Pope, 485 U.S. 478, 108 S. Ct. 1340, 99 L. Ed. 2d 565 (1988), did not apply to 
cases which were final before it was decided.

[¶2.]     We 
affirm.

[¶3.]     Appellants raise the 
following issues:

1. Whether Wyoming 
Statute Sections 2-7-201 to 2-7-703, 2-7-718 authorizing publication notice to 
creditors are constitutionally infirm under the due process clause (14th 
Amendment) of the United States Constitution and Article 1 of the Constitution 
of the State of Wyoming, because they bar claims against the estate of a 
decedent (of known or reasonably ascertained estate creditors) without requiring 
actual notice of the statutory prescribed time and place for filing 
claims.

2. Whether Appellants 
above-named were deprived of the due process of law by reason of failure of the 
Administratrix of the estate to provide them with actual notice of the time and 
place for filing of claims in the estate or the time and place for filing suit 
on rejected claims.

3. Whether the District 
Court erred in granting Appellees' Motion for Judgment on the Pleadings because 
the Appellants['] claims are barred by the doctrine of res 
judicata.

[¶4.]     Sturgeon died testate 
on October 7, 1986. Her will was admitted to probate on October 23, 1986. On 
October 31, November 7, and November 14, 1986, the notice of the probate of her 
will and notice to creditors was published pursuant to Wyo. Stat. § 2-7-201 
(1977).1 Appellants failed to file a claim 
within the three-month period provided in the notice. On March 3, 1988, the 
court discharged the personal representative after determining that all the 
property inventoried and appraised in the estate had been distributed pursuant 
to the orders of the court entered on September 29 and November 30, 
1987.

[¶5.]     On October 20, 1988, 
Appellants filed their complaint against Appellees to recover the balance of the 
principal and accrued interest owing on a promissory note executed by Sturgeon. 
Sturgeon failed to make annual payments on the promissory note which she had 
executed and delivered to Appellants on December 15, 1983. The complaint 
alleged, inter alia, that Appellants were known creditors; that they were 
entitled to, but did not, receive actual notice of the time and place to timely 
file their claim; and that, as a result, they were deprived of their due process 
and equal protection rights under the Wyoming and United States Constitutions. 
Appellees answered the complaint, admitting that actual service of the notice 
was not given to Appellees and denying that they had a duty to seek out 
creditors and solicit the filing of claims against the estate. 

[¶6.]     On November 22, 1988, 
Appellees moved for judgment on the pleadings. They contended in their 
memorandum in support of the motion that Wyoming's probate code did not require 
or contemplate that the notice provided in § 2-7-201 be served on creditors2 and that the timely filing of a 
claim in accordance with mandatory statutory requirements is a prerequisite for 
an action on that claim. Appellants' memorandum in opposition to Appellees' 
motion for judgment on the pleadings relied upon Tulsa Professional Collection 
Services, Inc., 108 S. Ct. 1340. That decision held that, under Oklahoma's 
nonclaim probate statute, the due process clause of the fourteenth amendment to 
the United States Constitution required "`[n]otice by mail or other means as 
certain to ensure actual notice'" to be given to known or reasonably 
ascertainable creditors. Id. at 1348 (quoting 
Mennonite Board of Missions v. Adams, 462 U.S. 791, 800, 
103 S. Ct. 2706, 2712, 77 L. Ed. 2d 180 (1983)).

[¶7.]     On January 19, 1989, 
the district court entered its order granting Appellees' motion for judgment on 
the pleadings and dismissing Appellants' action with prejudice. The court 
explained in its decision letter that, although § 2-7-201 suffered the same 
constitutional infirmity as the Oklahoma statute, the controlling case of Tulsa 
Professional Collection Services, Inc. did not have retroactive application to a 
probate proceeding which became final before the decision was announced. It is 
from the district court's order that this appeal is taken.

[¶8.]     The Supreme Court, in 
Tulsa Professional Collection Services, Inc., 108 S. Ct. 1340, began its analysis 
by explaining the notice requirements of the due process clause of the 
fourteenth amendment:

Mullane v. Central 
Hanover Bank & Trust Co., [339 U.S. 306, 314, 70 S. Ct. 652, 657, 94 L. Ed. 865 (1950)], established that state action affecting property must generally be 
accompanied by notification of that action: "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."

Id. at 1344. The Supreme 
Court stated that the type of notice required depends upon the balance of the 
interests of the state and the individual interests protected by the fourteenth 
amendment. The Supreme Court further explained:

"[A]ctual notice is a 
minimum constitutional precondition to a proceeding which will adversely affect 
the liberty or property interests of any party, whether unlettered or well 
versed in commercial practice, if its name and address are reasonably 
ascertainable."

Id. (quoting Mennonite Board 
of Missions, 462 U.S.  at 800, 103 S. Ct.  at 2712 
(emphasis in original)).

[¶9.]     The Tulsa Professional 
Collection Services, Inc. majority determined that the appellant's unsecured 
claim against the estate was a cause of action and a property interest under the 
fourteenth amendment. The Supreme Court also held that Oklahoma's statute 
implicated sufficient state action to invoke the due process clause of the 
fourteenth amendment. The Supreme Court based that conclusion on the following 
statutory characteristics: (1) the nonclaim statute became operative after 
probate proceedings had been commenced in state court; (2) the time bar could be 
triggered only after a court had appointed an executor or executrix; (3) the 
statute directed the executor or executrix to publish notice immediately after 
court appointment; and (4) the statute required the executor or executrix to 
file copies of the notice and an affidavit of publication with the court. The 
Supreme Court stated that such substantial involvement of the probate court in 
the probate procedure constituted state action. 

[¶10.]  Next, the Supreme Court balanced the 
state's legitimate interest in expeditious resolution of probate proceedings and 
the creditors' interest in protection of their claims. The Supreme Court 
determined that providing actual notice to known or reasonably ascertainable 
creditors was not inconsistent with the goals of the statute and was not 
unreasonably cumbersome.

[¶11.]  The statutory procedure in Wyoming is 
quite similar to Oklahoma's scheme in that the time bar provided in § 2-7-201 is 
triggered only after probate proceedings have been commenced in district court, 
a personal representative has been appointed by the district court, and notice 
has been given to creditors to file their claims against the estate with the 
clerk of court. In addition, proof of publication and mailing or delivery of the 
notice is required to be filed with the clerk of court. We hold that the 
involvement of the district court in the probate proceedings is so pervasive and 
substantial that it must be considered such state action as to invoke the due 
process clause of the United 
States and Wyoming Constitutions.3

[¶12.]  We agree with Appellants, as did the 
district court, that the Tulsa Professional Collection Services, Inc. case is 
controlling and that § 2-7-201 suffered the same constitutional infirmities as 
the Oklahoma statute did in that it did not require actual notice to be given to 
known or reasonably ascertainable creditors with claims against a decedent's 
estate.4

[¶13.]  The pivotal issue we must decide is 
whether the Tulsa Professional Collection Services, Inc. decision applies 
retroactively to probate proceedings finalized before that decision was 
announced. Because our determination focuses on the application of a United 
States Supreme Court decision, we rely upon United States Supreme Court cases 
which have addressed the issue of retroactive and prospective application of 
judicial decisions.5 See Carter v. City of Chattanooga, Tennessee, 850 F.2d 1119 (6th Cir. 1988), cert. denied ___ 
U.S. ___, 109 S. Ct. 795, 102 L. Ed. 2d 786 (1989); and Gross v. Harris, 664 F.2d 667 (8th Cir. 
1981).

[¶14.]  The principal civil case which dealt with 
the retroactive-prospective issue is Chevron Oil Company v. Huson, 404 U.S. 97, 92 S. Ct. 349, 30 L. Ed. 2d 296 
(1971).6 In that case, the Supreme Court 
articulated the following standards for prospective application of a 
decision:

First, the decision to be 
applied nonretroactively must establish a new principle of law, either by 
overruling clear past precedent on which litigants may have relied, or by 
deciding an issue of first impression whose resolution was not clearly 
foreshadowed. Second, it has been 
stressed that "we must . . . weigh the merits and demerits in each case by 
looking to the prior history of the rule in question, its purpose and effect, 
and whether retrospective operation will further or retard its operation." 
Linkletter v. Walker, [381 U.S. 618, 629, 
85 S. Ct. 1731, 1737, 14 L. Ed. 2d 601 (1965)]. Finally, we have weighed the inequity 
imposed by retroactive application, for "[w]here a decision of this Court could 
produce substantial inequitable results if applied retroactively, there is ample 
basis in our cases for avoiding the `injustice or hardship' by a holding of 
nonretroactivity." Cipriano v. City of Houma, 
[395 U.S. 701, 706, 89 S. Ct. 1897, 1900, 
23 L. Ed. 2d 647 (1969)].

Chevron Oil 
Company, 404 U.S.  at 106-07, 92 S. Ct.  at 355-56, 
(emphasis added and some citations omitted).

[¶15.]  Applying these standards, we must 
initially determine whether the Tulsa Professional Collection Services, Inc. 
decision established a new principle of law. In Griffith v. Kentucky, 479 U.S. 314, 325, 107 S. Ct. 708, 714, 93 L. Ed. 2d 649 (1987) (relying upon United States 
v. Johnson, 457 U.S. 537, 102 S. Ct. 2579, 73 L. Ed. 2d 202 (1982)), the Supreme 
Court described this query as the clear 
break exception which is used to apply a decision prospectively "if the new 
rule explicitly overruled a past precedent of this Court, or disapproved a 
practice this Court had arguably sanctioned in prior cases, or overturned a 
long-standing practice that lower courts had uniformly approved." In Tulsa 
Professional Collection Services, Inc., the United States Supreme Court 
addressed a question of first impression. In addition, the Supreme Court 
acknowledged that it rejected a practice widely adopted by state legislatures 
and courts when it stated, "Such `nonclaim statutes' are almost universally 
included in state probate codes." Tulsa Professional Collection Services, Inc., 
108 S. Ct.  at 1342 (citing Falender, Notice to Creditors in Estate Proceedings: 
What Process Is Due?, 63 N.C.L. Rev. 659, 667-68 (1985)).

[¶16.]  To satisfy the second prong of the 
Chevron Oil Company test, we must determine if the purposes of the Tulsa 
Professional Collection Services, Inc. rule would be furthered by retroactive 
application. Chevron Oil Company, 404 U.S. 97, 92 S. Ct. 349; Adkins v. Sky Blue, Inc., 
701 P.2d 549 (Wyo. 1985). The purpose of the actual notice 
requirement is to satisfy the due process requisite stated in Tulsa Professional 
Collection Services, Inc. and established in Mullane v. Central Hanover Bank 
& Trust Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950). While that 
purpose may be furthered by retroactive application of the Tulsa Professional 
Collection Services, Inc. decision, we conclude that the benefit of avoiding 
hardships created by retroactivity is an ample basis for nonretroactive 
application.

[¶17.]  The third prong of the Chevron Oil 
Company test is an examination of the hardship or injustice generated by 
retroactivity. Chevron Oil Company, 404 U.S. 97, 92 S. Ct. 349. In this case, 
retroactive application of the Tulsa Professional Collection Services, Inc. 
decision could cause the disturbance of many property rights. Those rights were 
defined according to law unexpectedly declared invalid, and they have created 
immeasurable reliance. As the United States Supreme Court stated, "The actual 
existence of a statute, prior to [it being declared invalid], is an operative 
fact and may have consequences which cannot justly be ignored. The past cannot 
always be erased by a new judicial declaration." Chicot County Drainage District 
v. Baxter State Bank, 308 U.S. 371, 374, 60 S. Ct. 317, 318, 84 L. Ed. 329 (1940).

[¶18.]  We hold that the Tulsa Professional 
Collection Services, Inc. decision does not apply retroactively to probate 
proceedings rendered final before it was decided on April 19, 1988. We have 
previously stated that a probate proceeding becomes final when the court issues 
the decree of distribution. Taylor v. Estate of 
Taylor, 719 P.2d 234 (Wyo. 1986); Stevenson v. Hall, 473 P.2d 581 (Wyo. 1970). In this case, 
the district court issued the final decree of distribution on November 30, 1987. 
Thus, Appellants' claim is barred because they failed to file it within the time 
limits prescribed by § 2-7-201. See Naughton v. Estate of Baker, 483 P.2d 513 
(Wyo. 1971); Lo Sasso v. Braun, 386 P.2d 630 
(Wyo. 1963); and Estate of Peterson v. Deimer, 
75 Wyo. 416, 
296 P.2d 504 (1956).

[¶19.]  Affirmed.

FOOTNOTES

1 Section 2-7-201 provides 
in pertinent part:

Upon admission of a will 
or an estate of an intestate decedent to probate and issuance of letters, the 
personal representative shall cause to be published once a week for three (3) 
consecutive weeks in a daily or weekly newspaper of general circulation in the 
county in which the probate is pending, a notice of admission of the will or 
estate to probate and of the appointment of the personal representative. The 
notice shall state that any action to set aside the probate of the will shall be 
brought within three (3) months from the date of the first publication of the 
notice or thereafter be barred. The publication shall include a notice to 
debtors to make payment and to creditors having claims against the decedent to 
file them with the necessary vouchers in the office of the clerk of court from 
which the letters were issued within three (3) months from the date of the first 
publication of the notice, or thereafter be forever 
barred.

2 At the time this action 
arose, Wyo. Stat. § 2-7-205(a) (1977) provided:

The notice required in 
W.S. 2-7-201 shall, immediately upon the filing thereof, be mailed to the 
surviving spouse, if any, and to all of the heirs and beneficiaries named in the 
will of the decedent.

This statute was 
amended in 1989.

3 See Recent Developments, 
Constitutional Law - Fourteenth Amendment Right to Due Process - Notice to 
Estate Creditors Under State Nonclaim Statutes, 56 Tenn.L.Rev. 465 (1989), for 
an in-depth discussion of state action in relation to nonclaim probate 
statutes.

4 The constitutional 
infirmity of § 2-7-201 was corrected by the Wyoming legislature when it amended § 
2-7-205(a) to provide in pertinent part:

A true copy of the notice 
required in W.S. 2-7-201 shall be mailed by ordinary United States 
mail, first class, to:

* * * * * 
*

(ii) Each creditor of the 
decedent whose identity is reasonably ascertainable by the personal 
representative within the time limited in the notice to creditors. The mailing 
shall be made not later than thirty (30) days prior to the expiration of three 
(3) months after the first publication of the notice in the 
newspaper.

This amendment was 
effective February 24, 1989.

5 We note that this Court 
has also addressed the issue of whether a decision should be applied 
retroactively or prospectively. See Adkins v. Sky Blue, Inc., 701 P.2d 549 
(Wyo. 1985); and Witzenburger v. State ex rel. 
Wyoming Community Development Authority, 577 P.2d 1386 (Wyo. 1978). In Ostwald v. State, 538 P.2d 1298, 1303 (Wyo. 1975), quoted with approval in Adkins, 
701 P.2d  at 551-52, this Court stated:

[A] ruling may be 
prospective only and it may apply to the invalidity of statutes as well as to 
the effect of a decision overturning long-established common law rules; the 
constitution neither prohibits nor requires retrospective effect and the federal 
Constitution has no voice upon the subject; and, the accepted rule today is that 
in appropriate cases in the interests of justice, a court may make its decision 
prospective.

(Emphasis in 
original and footnote omitted.)

6 In Linkletter v. Walker, 
381 U.S. 618, 85 S. Ct. 1731, 14 L. Ed. 2d 601 (1965), the Supreme Court stated that, when a court addresses the 
retroactive-prospective issue, no distinction exists between criminal and civil 
cases. In a recent case, however, the Supreme Court said that the area of civil 
retroactivity is governed by the principles set out in Chevron Oil Company. 
Griffith v. Kentucky, 479 U.S. 314, 322 n. 8, 107 S. Ct. 708, 
713 n. 8, 93 L. Ed. 2d 649 (1987).