Trusts and Estates

Estate of Holdaway

Cite as E070918
Filed October 7, 2019, Fourth District

By Daniel C. Kim
Weintraub Tobin Chediak Coleman Grodin Law Corporation
www.weintraub.com

Headnote: Probate – Creditor’s Claims – Tolling by Filing Claim ­– Timeliness of Lawsuit Based on Rejection of Claim

Summary: The timely filing of a creditor’s claim tolls the one-year statute to bring claims against a decedent, and the creditor then has 90 days to bring suit after the rejection of a creditor’s claim, regardless of how long after the expiration of the one-year statute such rejection occurs.

Richard Holdaway died on June 13, 2013. On June 11, 2014, Patricia Everett petitioned for probate and filed a creditor’s claim seeking $90,875 for loans, unspecified “in-home services,” and certain personal property. In May 2015, the court dismissed the petition for failure to prosecute. Everett filed another petition for probate in December 2015. In May 2016, Holdaway’s son filed a competing petition and was appointed as executor. Everett’s petition was dismissed. In March 10, 2017, the executor formally rejected Everett’s creditor’s claim. Everett filed her suit on the rejected creditor’s claim on May 19, 2017. The executor demurred arguing, inter alia, that the action was time-barred under Code of Civil Procedure section 366.2. The court sustained the demurrer without leave to amend. Everett appealed.

The appellate court reversed. Everett’s complaint was not time-barred because (1) the one-year statute of limitations under section 366.2 was tolled from June 11, 2014, when she filed the creditor’s claim, to March 10, 2017 when it was formally rejected, and (2) she filed her complaint within 90 days of March 10, 2017. The statute of limitations did not recommence when Everett’s probate petition was dismissed in May 2015, since it is the personal representative’s power to reject a creditor’s claim, not the court’s. Holdaway’s argument that Everett only had two days after the rejection to file suit (which was what remained on the one-year statute of limitations), was based on unsound authority. Creditors have 90 days to bring an action after rejection of a claim, regardless of the time otherwise remaining on the statute of limitations.

https://www.courts.ca.gov/opinions/documents/E070918.PDF

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