Judge: Lee W. Tsao, Case: 22NWCV01478, Date: 2023-11-07 Tentative Ruling
Case Number: 22NWCV01478 Hearing Date: November 7, 2023 Dept: C
Michele M. Swanson, et al. vs Brandice
Khamis
CASE NO.: 22NWCV01478
HEARING: 11/07/23
#6
TENTATIVE ORDER
Defendant’s Demurrer is SUSTAINED, without
leave to amend.
Defendant’s motion to strike
is found MOOT.
Moving
party to give notice.
Plaintiffs Michele Swanson and
Michael Sawa allege that they made a Creditor’s Claim in Estate of Candie Ellen
Antonia Shelton, case number 22STPB01394, based on two promissory notes dated
August 21, 2016. “The principal amount of the first Promissory Note is Sixty
Thousand Dollars ($60,000) in interest only installments at eight percent (8%)
interest per annum, payable in monthly installments of Four Hundred Dollars
($400) beginning August 21, 2016, and continuing monthly thereafter for a
period of twenty-four (24) months at which time the unpaid balance was
immediately due and payable. The note became fully due and payable August 21,
2018.” “The principal amount of the second Promissory Note is Sixty Thousand
Dollars ($60,000) in interest only installments at ten percent (10%) interest
per annum, payable in monthly installments of Five Hundred Dollars ($500)
beginning August 21, 2016, and continuing monthly thereafter for a period of
twenty-four (24) months at which time the unpaid balance was immediately due
and payable. The note became fully due and payable August 21, 2018.” “After the
“borrower” Mark L. Shelton, passed away, Decedent reaffirmed the debts by
continuing to make the monthly interest-only payments. Upon Decedent’s passing,
all payments stopped. The debts were incurred during the marriage of Decedent
and her spouse, Mark Shelton, and are deemed community property debts.” Based
thereon, the Complaint asserts a single cause of action for Rejected Creditor’s
Claim.
On May 9, 2023, this Court
sustained Defendant’s demurrer to Plaintiff’s complaint, with leave to
amend.
On May 24, 2023, Plaintiff
submitted its First Amended Complaint.
On June 15, 2023, Defendant
filed the instant demurrer with motion to strike.
Demurrer
1st CAUSE OF ACTION REJECTED CREDITOR’S CLAIM:
There are two-time limits
associated with a creditor’s claim. Prob. Code § 9100 governs the time period
in which a creditor must file its “claims,” while CCP § 366.2 governs the
statute of limitations for “actions” brought against a deceased.
Claims:
“(a) A creditor shall file a claim before expiration of the
later of the following times: (1) Four months after the date letters are first
issued to a general personal representative. (2) Sixty days after the date
notice of administration is mailed or personally delivered to the creditor.
Nothing in this paragraph extends the time provided in Section 366.2 of the
Code of Civil Procedure. (b) A reference in another statute to the time for
filing a claim means the time provided in paragraph (1) of subdivision (a). (c)
Nothing in this section shall be interpreted to extend or toll any other
statute of limitations or to revive a claim that is barred by any statute of
limitations. The reference in this subdivision to a “statute of limitations”
includes Section 366.2 of the Code of Civil Procedure.” (Prob. Code § 9100.)
Defendant contends that
letters of administration were issued on April 8, 2022, citing Defendant’s
Rejection of Plaintiff’s creditor’s claim. (RJN, Ex. B.) While judicial notice
is taken of Defendant’s Rejection, judicial notice is not taken of the actual
date the letters of administration were issued. There is no judicially
noticeable evidence before this court of the date the letters were actually
issued, nor is this date alleged within the four corners of the complaint.
Regardless, even if the
letters were issued on April 8, 2022, Plaintiffs allege at ¶ 14 that they filed
a creditor’s claim on August 5, 2022. The creditor’s “claim” appears to be
timely.
Statute of Limitations:
The statute of limitations for
Plaintiffs’ “action” is governed by CCP § 366.2, which 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… (2) Part 4 (commencing with Section 9000) of Division 7 of the
Probate Code (creditor claims in administration of estates of decedents).” (CCP
§ 366.2.)
Here, the borrower, Mark
Shelton, died on October 4, 2020. (RJN, Ex. C.) His wife, Candie Shelton,
continued making the loan payments until her death on July 13, 2021.
(Complaint, ¶ 9; RJN, Ex. D.) The instant complaint was filed on December 2,
2022, which is more than one year after Candie Shelton’s death. The Court finds
the action is untimely.
Plaintiffs argue that CCP §
360 allows continued payment to be a sufficient acknowledgement to toll the
running of the time within which an action may be commenced. However, the plain text of Section 360 states
“no such payment by itself shall revive a cause of action once barred” unless
“contained in some writing, signed by the party to be charged . . ." or
"any payment on account of principal or interest due on a promissory note
made by a party to be charged" is sufficient acknowledgement that tolls
SOL. In the FAC, Plaintiffs do not allege there was any such writing.
Plaintiffs also argue that the
four-year statute of limitations pursuant to CCP § 337 did not begin to run
until Defendant’s breach, which was a month after the death of Candie Shelton.
However, CCP § 366.2, which governs the statute of limitations against deceased
individuals explicitly states that the statute applies” whether accrued or not
accrued” and “the limitations period that would have been applicable does not
apply.”
Plaintiffs
contend that it was the deliberate delay by Defendant that delayed rejection of
the creditor’s claim until after the one year statute of limitations had run.
Even taking the contentions as true, Plaintiffs do not allege how they received
notice of Decedent’s death. However, the
FAC states "lJpon Decedent's passing, all payments stopped." (FAC ¶
7.) Therefore, Plaintiffs should have
been made aware of the stopped payments around the July 13, 2021, passing of
Decedent, as no payments were being made.
However, Plaintiffs did not file the instant action until after one year
and four months.
Plaintiffs alternatively argue
that CCP § 366.2 is inapplicable because there is no evidence or allegation
that Defendant mailed or personally delivered a “notice of administration”
pursuant to Prob. Code 9100. However, Prob. Code 9100 provides that “[n]othing
in this paragraph extends the time provided in Section 366.2 of the Code of
Civil Procedure.”
Finally, Plaintiffs assert
that the statute of limitations should be tolled on the theory of equitable
estoppel. The four elements must be present in order to apply the doctrine of
equitable estoppel: 1) the party to be estopped (defendant herein), must be
apprised of the facts; 2) she must intend that her conduct shall be acted upon,
or must so act that the party asserting the estoppel had a right to believe it
was so intended; 3) the other party (Plaintiffs herein) must be ignorant of the
true state of facts; and, 4) she must rely upon the conduct to her injury. As
noted above, by way of the nonpayment, Plaintiffs should have reasonably been
made aware of nonpayment and thus started to pursue an action against
Defendants before the statute of limitations passed.
MOTION TO STRIKE
Any
party, within the time allowed to respond to a pleading may serve and file a
notice of motion to strike the whole or any part thereof.¿(Code Civ. Proc.,
section 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).)¿The
court may, upon a motion or at any time in its discretion and upon terms it
deems proper: (1) strike out any irrelevant, false, or improper matter inserted
in any pleading; or (2) strike out all or any part of any pleading not drawn or
filed in conformity with the laws of California, a court rule, or an order of
the court.¿(Code Civ. Proc. section 436, subd. (a)-(b); Stafford v. Shultz
(1954) 42 Cal.2d 767, 782.)¿
Here, the demurrer for the
first and only cause of action has been sustained without leave to amend. The motion to strike punitive damages is
therefore moot.
CONCLUSION
Accordingly, the demurrer is
SUSTAINED. The Court has already provided leave to amend, and Plaintiffs have
not demonstrated the ability to plead around the Statute of Limitations. Accordingly, the demurrer is SUSTAINED
without leave to amend.
Given the Court’s dispositive
ruling on the demurrer, the motion to strike is MOOT.
Moving party to give notice.