New York Probate and Estate Administration Lawyer Blog
In this case the Appellant Division considered whether a claim against an estate was time barred.
The decedent, J. Hollis, died in October 2015. She was survived by six children. The decedent’s will had a specific provision related what should be done if any of her children owed her money at the time of her death. The provision provided that any money owed was to be deducted from that child’s inheritance.
Hollis, one of the decedent’s children, died three months later, in January 2016. His wife, B. Hollis was appointed the administrator of his estate. The executor of the estate of J. Hollis filed a claim against the estate of P. Hollis for $147,265.35, representing loans J. Hollis made to P. Hollis from 2005 to 2011, as one of the duties of an executor is collecting debts owed to the estate. From the opinion it is not clear whether P. Hollis had received a distribution from his mother’s estate. However, B. Hollis filed a motion for summary judgment disallowing so much of Peter’s claim as represented money purportedly borrowed by the decedent between April 2005 and January 2008 on the ground that recovery was barred by the six-year statute of limitations. Part of the estate administration process is to pay debts owed by the estate and settle claims against the estate.
The Surrogate’s Court denied B. Hollis’ motion, concluding that an email exchange between J. Hollis and P. Hollis on in December 2015 constituted a written acknowledgment of the debt. As a result the statute of limitation was reset under General Obligations Law § 17-101. B. Hollis appealed.
The Appellate Division reviewed the law related to time-barred claims, noting that a time-barred claim is revived when a debtor acknowledges the debt in writing. However, the writing must “validly acknowledge” the debt. That means that the writing must recognize the debt and must not contain any language that is inconsistent with an intention to pay the debt. While the Surrogate’s Court concluded that the email constituted an unqualified acknowledgement of the debt, the Appellate Division disagreed. After arguably acknowledging the debt and stating that he intending to pay it, P. Hollis went on to make statements inconsistent with an unequivocal intention to pay the debt. The court concluded that the Surrogate’s Court erred in finding that the email renewed the statute of limitations pursuant to General Obligations Law § 17-101. Accordingly, B. Hollis’ motion for summary judgment should have been granted.
Although the statute of limitations applied here, this case demonstrates that creditors may still be able to collect debts owed by deceased debtors. In order to collect, the first step is to file a claim against the estate. When someone dies, the executor or administrator is required to notify known creditors. Creditors must file claims against the estate within a specified time period. The executor or administrator is required to pay from estate assets any claims that are timely and properly filed to the extent estate assets are sufficient to pay such debts. He or she is also required to review claims for validity and reject any that are not valid, as B. Hollis did in In re Hollis. If the executor or administrator fails to pay a valid, timely filed claim before distributing assets, he or she may be personally liable. However, if a claim is filed after the deadline, the executor or administrator will not be held personally liable if it is not paid.