The recent case of Allen v. Stoddard (2012) 212 Cal.App.4th 807 has highlighted at least one pitfall regarding filing a claim against an estate. The Allen court has pointed out that Probate Code section 9353 (“Section 9353”), which imposes a deadline of 90 days in which to file a lawsuit against an estate on a rejected creditor’s claim, and Code of Civil Procedure section 366.3 (“Section 366.3”), which imposes a deadline of one year to enforce a claim against a decedent for breach of a promise or agreement relating to a distribution from an estate or trust, have conflicting requirements as to a claimant’s time to file a lawsuit regarding claims for breach of a promise to make a will.
The Allen case involved James Humpert (“James”) and Richard Allen (“Richard”), who were not married or registered domestic partners, but were in a committed long-term relationship with one another. James had always promised Richard that he would “take care” of Richard should he pass away. James passed away on October 29, 2010.
Upon James’ death, Richard filed a petition to be appointed as administrator of James’ estate. Edith Stoddard (“Edith”), James’ sister, filed a competing petition and prevailed. Pursuant to Probate Code Section 9351, Richard timely filed a creditor’s claim against James’ estate based on James’ promise that he would always “take care” of Richard. On May 19, 2011, the estate formally rejected Richard’s claim, clearing the way for Richard to initiate a lawsuit against James’ estate.
On August 18, 2011, ninety-one days after his claim was rejected, Richard filed his lawsuit against James’ estate in the probate court. The estate defended, claiming that Richard’s lawsuit was not filed within the 90 day deadline set by Section 9353. Under Section 9353, a lawsuit on a rejected claim must be filed within 90 days from the date of rejection. Because Richard missed the 90 deadline by one day, the estate argued that Richard’s lawsuit was untimely and was, therefore, barred. The trial court agreed and dismissed Richard’s lawsuit. Richard appealed.
On appeal, the appellate court noted that there was an inherent conflict between Section 9353, which sets a 90 day deadline in which to file a lawsuit on a rejected claim, and Section 366.3, which sets a deadline of one year from the decedent’s date of death in which to file a lawsuit for breach of a promise or agreement to make a distribution from an estate or trust. The question for the appellate court was, which deadline controls? If the 90 day deadline set by Section 9353 controlled, then Richard was out of luck as he filed his lawsuit 91 days after his claim was rejected. However, if the one year statute in Section 366.3 controlled, then Richard’s suit was timely filed and therefore not barred.
The appellate court determined that, as the newer and more specific of the two statutes, Section 366.3, with its one-year-from-date-of-death deadline, trumped Section 9353’s 90-day-from-date-of-rejection deadline. Thus, in matters involving a breach of promise to make a will or distribution from a trust, where a timely filed claim has been filed and rejected, the deadline to file a lawsuit is not 90 days from the date of the claim’s rejection but one year from the date of death of the decedent. Since Richard had filed his lawsuit within one year from the date of James’ death, his lawsuit was not time barred despite the fact that he had filed it later than 90 days after his creditor’s claim was rejected. The trial court’s decision was thus reversed and Richard’s lawsuit lived to see another day.
What it Means to You
The determination by the Allen court that Section 366.3, and not Section 9353, applies in these situations can present a trap for the unwary. For instance, let’s say a timely claim has been filed in a case involving breach of a promise to make a will and the claim is rejected 11 months after the decedent’s death. If the claimant is unaware that the one-year-from-date-of-death deadline of Section 366.3 controls, and instead relies on the 90 day deadline set forth in Section 9353, he or she could file the lawsuit within 90 days but after expiration of the one year deadline and thus be time barred.
Certainly, the decision in Allen may help a creditor who has failed to file a lawsuit within 90-days from rejection of the claim but is still within the one year statute of limitations of Section 366.3. That said, a prudent creditor and practitioner would be wise not to rely too heavily on Allen as there is no way of knowing for certain if other California appellate districts will follow the Allen’s court lead if presented with a similar situation on appeal. Thus, until there is better clarity on the issue, the prudent thing to do in matters involving breach of promise to make a distribution in a will or trust is to timely file a creditor’s claim and, upon rejection of that claim, file a lawsuit within the earlier of 90 days from date of rejection of the claim or one year from the date of the death of the decedent.
It is also very important to note that Allen’s holding is limited to the limitation period of filing a lawsuit after a claim is rejected by the estate. Allen does not consider the consequence of not filing a claim against the estate in the first place – another potential lethal trap for the unwary. So, again – to be certain that your lawsuit is not time barred, file a creditor’s claim timely and, upon rejection of that claim, file your lawsuit within the earlier of the 90 day deadline from the date of rejection of the claim, as set forth in Section 9353, or the one year deadline from the date of the decedent’s death, as set forth in Section 366.3.