Opinion
A130035
08-03-2011
FRANK J. SOWIN, JR., Plaintiff and Appellant, v. DAVID EDMUNDSON, as Executor, etc., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(San Mateo County Super. Ct. No. CIV491886)
The decedent, Gary Gray, died on November 1, 2008 and the court appointed defendant David Edmundson the executor of his estate. On July 1, 2009, Gray's second cousin, plaintiff Frank Sowin, Jr., filed a creditor's claim with the estate seeking $55,031. In November 2009, defendant partially allowed and partially rejected the claim and served plaintiff with notice of the partial rejection.
On February 8, 2010 — over one year after the decedent's death — plaintiff filed an amended creditor's claim and a complaint against defendant for breach of contract. Defendant demurred to the operative first amended complaint, contending the one-year statute of limitations set forth in Code of Civil Procedure section 366.3 barred the action. Relying on Stewart v. Seward (2007) 148 Cal.App.4th 1513, 1521 (Stewart), the trial court sustained demurrer without leave to amend, concluding section 366.3's one-year statute of limitations barred the complaint.
Unless otherwise noted, all further statutory references are to the Code of Civil Procedure. Section 366.3 provides, "(a) If a person has a claim that arises from a promise or agreement with a decedent to distribution from an estate or trust or under another instrument, whether the promise or agreement was made orally or in writing, an action to enforce the claim to distribution may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply. [¶] (b) The limitations period provided in this section for commencement of an action shall not be tolled or extended for any reason except as provided in Sections 12, 12a, and 12b of this code, and former Part 3 (commencing with Section 21300) of Division 11 of the Probate Code, as that part read prior to its repeal by Chapter 174 of the Statutes of 2008." The Legislature recently amended section 366.3, but the changes in the statute are not relevant here. (Code Civ. Proc., § 366.3, as amended by Stats. 2009, ch. 348, § 3.)
Plaintiff appeals. He contends Stewart was wrongly decided and that the statute of limitations was tolled by the filing of his creditor's claim pursuant to section 366.2 and Probate Code sections 9352 and 9353. We affirm. As in Stewart, we conclude plaintiff's action is barred by the one-year statute of limitations in section 366.3.
FACTUAL AND PROCEDURAL BACKGROUND
The decedent executed two wills, one in 1995 and another in 2007. In mid-October 2008, the decedent was hospitalized following a car accident. The decedent never married and had no children; his sister-in-law, Lynne Gray, supervised his care at the hospital. On October 21, 2008, Gray returned to her home in Michigan after having a disagreement with the decedent about his medical care.
Plaintiff visited the decedent in the hospital on October 22, 2008. During their visit, the decedent told plaintiff he did not want the 2007 will "'to be considered [his] final will,'" primarily because he did not want Gray to be a beneficiary of his estate. Among other things, the decedent told plaintiff he wanted: (1) to draft a new will naming plaintiff as the executor of the estate; (2) plaintiff to have power of attorney and to "'manage [his] financial accounts . . . if [he] should pass away;" (3) plaintiff "'to be the beneficiary of [his] residual estate;'" and (4) to leave plaintiff the "'entire contents of [his] business office,'" as well as his house in Clinton because plaintiff "'helped [him] with managing it and . . . [was] in Real Estate.'" Plaintiff prepared a power of attorney and an advanced medical directive, which the decedent signed. He also prepared "a form of will that would carry out decedent's wishes."
Plaintiff left the hospital on October 22, 2008, to take "care of [the] decedent's car as requested." Later that day, or some time the following day, the decedent underwent an operation, and "never again gained consciousness or coherence." The decedent died on November 1, 2008, without having executed a "subsequent will, including the will on which plaintiff relied in providing for his care and attending to his affairs."
On July 1, 2009, plaintiff submitted a creditor's claim seeking $55,031. On November 6, 2009, defendant partially allowed and partially rejected the claim. Defendant approved the reimbursement to plaintiff by the estate for $830.13 but disallowed plaintiff's request for the remaining $54,200.87. On November 10, 2009, defendant served plaintiff with notice of the partial rejection dated November 6, 2009, along with a letter explaining the estate's rationale for the disallowance.
It appears plaintiff also filed a second creditor's claim seeking $210.
On February 8, 2010 — more than one year after the decedent's death — plaintiff filed an amended creditor's claim and a complaint on rejected amended creditor's claim for damages for breach of contract. The parties stipulated to allow plaintiff to file a first amended complaint. In April 2010, and pursuant to the parties' stipulation, plaintiff filed a first amended complaint on rejected amended creditor's claim for damages for breach of contract. In connection with the first amended complaint, plaintiff also filed an amended creditor's claim seeking $55,031.
In the operative complaint, plaintiff alleged he relied on his oral "contract" with decedent and "fully performed all acts and functions requested or required of him in attending to [the] decedent's affairs, requests, medical needs and burial." He further alleged the decedent's 2007 will was being administered in probate in violation of his "agreement" with the decedent, and that he had "no adequate remedy at law." Plaintiff sought, among other things, an order that defendant, as executor of the decedent's estate, "convey property to plaintiff with a value of not less than $55,031.00, within 60 days from the entry of judgment[.]"
Defendant demurred, claiming plaintiff's action was barred by the one-year statute of limitations set forth in section 366.3. Specifically, defendant argued an "action on an agreement to make a will or other testamentary device must be brought within one (1) year after the date of the promisor's death." Defendant contended the operative complaint was time-barred because it "was not commenced before November 1, 2009, (i.e., 1 year from the decedent's death)." In opposition, plaintiff argued the case arose "from a rejected creditor's claim" and, as a result, he had "90 days from the date notice of rejection [was] given to commence an action on the claim" pursuant to section 366.2 and Probate Code section 9353, subdivision (a). Plaintiff claimed the action was timely because he filed the original complaint within 90 days of the rejection of his creditor's claim.
Following a hearing, the court sustained the demurrer without leave to amend and entered judgment for defendant. Relying on Stewart, supra, 148 Cal.App.4th at page 1524, the court determined the one-year statute of limitations set forth in section 366.3 applied because "the nature of the instant action is one which 'arises from a promise or agreement with a decedent to distribution from an estate.'" The court determined that plaintiff's act of filing a creditor's claim did not extend the statute of limitations and that plaintiff's failure to file the complaint within one year of the decedent's death barred the action.
DISCUSSION
Standard of Review
To determine "whether Plaintiff's properly stated a claim for relief, our standard of review is clear: "'"We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." [Citations.] . . . [O]ur review is de novo." (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
Section 366.3 Bars Plaintiff's Action
Creditors of a decedent's estate may file a creditor's claim for payment from the estate. (Dacey v. Taraday (2011) 196 Cal.App.4th 962, 977.) Plaintiff contends section 366.2 and the creditor claim procedure set forth in Probate Code section 9353 apply to his complaint. "Section 366.2 provides a limitation period of one year from the date of [the decedent's death], with tolling for creditor claims" pursuant to Probate Code sections 9000, 9352 and 9353. (Stewart, supra, 148 Cal.App.4th at p. 1518.)
Section 366.2 provides, "(a) If a person against whom an action may be brought on a liability of the person, whether arising in contract, tort, or otherwise, and whether accrued or not accrued, dies before the expiration of the applicable limitations period, and the cause of action survives, an action may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply. [¶] (b) The limitations period provided in this section for commencement of an action shall not be tolled or extended for any reason except as provided in any of the following, where applicable: [¶] . . . [¶] (2) Part 4 (commencing with Section 9000) of Division 7 of the Probate Code (creditor claims in administration of estates of decedents)."
"Probate Code section 9000 provides in relevant part: 'As used in this division: [¶] (a) "Claim" means a demand for payment for any of the following, whether due, not due, accrued or not accrued, or contingent, and whether liquidated or unliquidated: [¶] (1) Liability of the decedent, whether arising in contract, tort, or otherwise. . . .' As to creditors, Probate Code section 9352 provides the 'filing of a claim or a petition . . . tolls the statute of limitations otherwise applicable to the claim until allowance, approval, or rejection. . . . If a claim is due at the time notice of rejection is given, the claimant has three months after notice is given to commence an action on the claim. [Citation.]" (Stewart, supra, 148 Cal.App.4th at p. 1519, italics & fn. omitted.)
Section 366.3 — in contrast to section 366.2 and Probate Code sections 9352 and 9353 — creates a one-year limitations period, but "does not provide for tolling for creditor claims." (Stewart, supra, 148 Cal.App.4th at p. 1519.) As noted above, section 366.3 provides, "[i]f a person has a claim that arises from a promise or agreement with a decedent to distribution from an estate or trust or under another instrument, whether the promise or agreement was made orally or in writing, an action to enforce the claim to distribution may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply. [¶] The limitations period provided in this section for commencement of an action shall not be tolled or extended for any reason except as provided in Sections 12, 12a, and 12b of this code, and former Part 3 (commencing with Section 21300) of Division 11 of the Probate Code, as that part read prior to its repeal by Chapter 174 of the Statutes of 2008." (§ 366.3, subds. (a), (b).)
"Sections 12, 12a, and 12b pertain to the computation of time when the last day for the performance of an act is a holiday. Former part 3 of division 11 of the Probate Code, commencing with former section 21300, which pertained to no contest clauses, was repealed in 2008. [Citations.]" (McMackin v. Ehrheart (2011) 194 Cal.App.4th 128, 136, fn. 4 (McMackin).)
"[S]ection 366.3 has been construed to 'reach any action predicated upon the decedent's agreement to distribute estate or trust property in a specified manner. [Citation.] Specifically, it has been held to apply even to fraud and unjust enrichment claims, as long as they are 'predicated on a decedent's promise to make specified distributions upon his death.' [Citation.] Moreover, it has been held to apply to claims based on a contract to leave certain property by will, even when the claimant is seeking only damages for breach of the contract and is not seeking the property itself. [Citation.]" (Estate of Ziegler (2010) 187 Cal.App.4th 1357, 1365 [claim based on agreement to transfer property upon the decedent's death was subject to section 366.3's one-year statute of limitations]; Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 555 (Ferraro)[section 366.3 "applies to all actions predicated on a decedent's promise to make specified distributions upon his death"].)
"[A] claim arising from an allegedly breached promise or agreement to make a certain postdeath distribution by will, trust or other instrument is not a 'claim' subject to the claim-filing requirements and, in fact, the claimant is not a 'creditor' within the purview of the Probate Code claim-filing statutes. Indeed, without regard to the claim-filing rules, an action to enforce such an agreement or promise must be commenced within one year of decedent's death; filing a creditor's claim has no effect on the running of this one-year statute . . . . In effect, [section] 366.3 appears to 'trump' Prob[ate Code section] 9000 et seq." (Ross & Moore, Cal. Practice Guide: Probate (The Rutter Group 2010) ¶ 8:11.5, p. 8-13 (Rutter Guide).) "Thus, an action alleging decedent's breach of [a] promise to make a certain distribution by will, trust or other instrument is not 'saved' by the [section] 9353(a) 90-day statute where the [section] 366.3 one-year statute of limitations has expired. Indeed, a plaintiff suing on a cause of action within the purview of [section] 366.3 is not even a 'creditor' subject to the Probate Code creditor claim-filing provisions." (Rutter Guide, supra, at ¶ 8:98.3, p. 8-49; see also ¶ 8:19.4, pp. 8-17-8-18.)
Stewart, supra, 148 Cal.App.4th at page 1516, is instructive. There, the plaintiff's mother orally agreed with her husband that he would execute a will leaving 50 percent of property she held in joint tenancy with him to the plaintiff and the remaining 50 percent to two grandchildren. (Ibid.)The Plaintiff's mother died, but instead of honoring his promise, the husband executed a will devising 100 percent of the property to the two grandchildren. The husband died on October 26, 2004. On July 21, 2005, the administrator of the estate rejected the Plaintiff's creditor's claim seeking a 50 percent interest in the property. On October 28, 2005 — one year and four days after the husband died — the plaintiff filed a complaint against the administrator of the estate. The trial court sustained the administrator's demurrer without leave to amend, concluding the plaintiff's complaint was barred by the one-year limitations period set forth in section 366.3. (Stewart, supra, 148 Cal.App.4th at p. 1517.)
The appellate court affirmed, holding that the Plaintiff's action was governed by section 366.3 because she was suing on "'a promise or agreement with a decedent to distribution from an estate or trust or . . . another instrument. . . .'" (Stewart, supra, 148 Cal.App.4th at pp. 1519, 1521, italics omitted.) The court rejected the Plaintiff's argument that because she was seeking money damages from the husband based on personal liability, her claim came within section 366.2. The Stewart court explained that the "nature of the claim itself, and not the nature of the remedy or relief being requested . . . determines the applicable statute of limitations. Here, [the plaintiff's] action arises from a promise or agreement with a decedent to distribution from an estate. Therefore, the action is governed by section 366.3 and is time-barred." (Stewart, supra, 148 Cal.App.4th at pp. 1524-1525.)
Under Stewart, the court properly determined plaintiff's action arose, not from his status as a creditor, but from the alleged breach of the decedent's promise to distribute property from the estate within the meaning of section 366.3. We are not persuaded by Plaintiff's contention that his civil action seeks "payment as a creditor; it does not seek a distribution." Plaintiff's operative complaint alleged the decedent promised to make a will and promised to distribute property to plaintiff after he died. The title of the pleading or the reference in the caption to the Probate Code is not dispositive: "the pertinent question is not the nature of the relief or remedy being requested but rather, the nature of the claim itself." (Stewart, supra, 148 Cal.App.4th at pp. 1522-1523; Ziegler, supra, 187 Cal.App.4th at p. 1365.) Here, Plaintiff's "action arises from a promise or agreement with a decedent to distribution from an estate" (Stewart, supra, 148 Cal.App.4th at p. 1524) and is subject to the one-year statute of limitations set forth in section 366.3. Because the decedent died on November 1, 2008 and plaintiff did not commence his action until February 8, 2010, Plaintiff's action is time-barred. (Stewart, supra, 148 Cal.App.4th at pp. 1524-1525.)
We reject plaintiff's claims that the result reached in Stewart and that the rationale employed to reach that result, are flawed. Several courts have followed Stewart and have reached similar results. (See, e.g., Ferraro, supra, (2008) 161 Cal.App.4th at pp. 555- 556 [section 366.3's one-year statute of limitations applied to action alleging breach of agreement to distribute estate property]; see also McMackin, supra, 194 Cal.App.4th at p. 136 [boyfriend's action arose from promise to a distribution of life estate and was subject to the statute of limitations set forth in section 366.3]; Embree v. Embree (2004) 125 Cal.App.4th 487, 492 [former wife's suit to enforce marital settlement agreement was time-barred under section 366.3].)
DISPOSITION
The judgment is affirmed. Defendant shall recover his costs on appeal.
Jones, P.J. We concur: Simons, J. Bruiniers, J.