Time To Appeal Disallowance Tolled When Certified Mail Returned Unclaimed

The estate rejected a creditor’s claim and mailed notice of the rejection to the creditor by certified mail as required by Wyoming law. The postal service erroneously stamped the mail “unclaimed” and returned it to the estate. Three months later, the creditor asked the court about the status of its claim, was informed that the rejection had been returned and requested a copy of the rejection which was received six days later. Two weeks later, the creditor received a faxed copy of the original mailing. More than thirty days after receipt of the faxed copy, the creditor filed a complaint objecting to denial of its claim which the court dismissed as time barred.

In Accelerated Receivable Solutions v. Hauf, the Supreme Court of Wyoming affirmed, holding that the estate had strictly complied with the statutory requirement of notice by sending the denial by certified mail, but that the notice was constitutionally inadequate because it was returned unclaimed. The 30-day period to object was therefore tolled until constitutionally adequate notice was received by the creditor which at the latest occurred when the faxed copy was received. Since more than thirty days passed before the creditor appealed the rejection, the claim was forever barred.

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.