WRIGHT v. TUMMINIA

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Court of Appeal, Fourth District, Division 2, California.

ESTATES OF Kenneth and Glynne ZIMMERMAN, Deceased. George Ronald WRIGHT, Plaintiff and Appellant, v. John TUMMINIA, as Administrator, Defendant and Respondent.

E001346.

Decided: January 10, 1986

Berliner, Cohen & Biagini, Samuel J. Cohen, and Russell J. Hanlon, San Jose, for plaintiff and appellant. Clayson, Mann, Arend & Yaeger, Roy H. Mann, Corona, and Kent A. Hansen, Riverside, for defendant and respondent.

OPINION

The action in the trial court was brought against the administrator of the estates of a deceased husband and wife to recover on a rejected creditor's claim.   The estates were being probated in Riverside County, but the plaintiff creditor chose in the first instance to pursue his action in Orange County.   The action was filed there within 90 days of the rejection of the claim and later, by stipulation, transferred to Riverside County.   Such transfer, however, was effected more than 90 days after notice of rejection of the claim.

The defendant administrator demurred to the complaint on the general ground that the complaint failed to state a cause of action because barred by the statute of limitations as contained in section 714 of the Probate Code.   That section requires that the holder of a claim which has been rejected by the administration of a decedent's estate must bring an action on such claim in the “proper court” within three months of notice of the rejection, else be barred from recovery on the claim.   The trial court sustained the demurrer without leave to amend and entered a judgment of dismissal accordingly.   This appeal followed.

SUMMARY OF COMPLAINT

The material allegations of plaintiff's complaint are summarized as follows.   Before the death of the defendant administrator's decedents, husband and wife, plaintiff had entered into a contract to sell “various animals” to them.   Pursuant to the contract, plaintiff delivered the animals called for, and the decedents commenced making the periodic installment payments as agreed.

After the death of the decedents, and defendant's qualification as administrator of their estates, there was a cessation of payments on account of the contract.   At the time of such cessation, $1,463,000 remained unpaid thereon.   Thereafter, plaintiff filed a creditor's claim in both estates;  the claim was rejected.

SYNOPSIS OF TRIAL COURT PROCEEDINGS

Within three months of rejection of his claim, plaintiff filed a complaint in Orange County Superior Court to recover thereon.   As appears from the record, this filing was on September 14, 1983.   Although there is nothing in the Clerk's Transcript to indicate it, the briefs recite that the parties stipulated that plaintiff's action be transferred to Riverside County Superior Court.   The record contains a notice of this transfer, dated and filed April 16, 1984.

After the transfer, as noted, defendant demurred “on the ground that the complaint does not state facts sufficient to constitute a cause of action because it was not filed in the proper court within three months of the date of the notice of rejection of the creditor's claim upon which this action is based and the action is therefore barred pursuant to Section 714 of the Probate Code.”   After considering extensive written points and authorities and hearing oral argument, the trial court sustained defendant's demurrer without leave to amend.   Thereupon, a judgment of dismissal was filed and entered.

DISCUSSION

The elaborate detail woven into plaintiff's outline of his argument on appeal notwithstanding, the sole issue before us is the legal interpretation of the words “proper court” as contained in section 714 of the Probate Code.   This was conceded and acquiesced in by both sides at the outset of oral argument of the demurrer, at which time the trial court stated, “I think the ultimate thing we are going to decide:  ․ what is the proper court?”

The issue is cleanly presented.   Plaintiff filed his action on the rejected claim within three months of the rejection, but filed it in Orange County Superior Court.   Later the matter was transferred to Riverside County Superior Court, where the decedents' estates were being probated, but such transfer was not effected until after the three months as specified in section 714 had elapsed.   Therefore, if “proper court” means a court in the county of probate administration, then the judgment must be affirmed.   If not, then the judgment will be reversed.

Defendant's interpretation of the subject language, apparently concurred in by the trial court is that “proper court” imports the requirement of “proper county” as contained in section 395.1 of the Code of Civil Procedure.   That section provides in pertinent part that “when a defendant is sued in an official capacity as ․ administrator ․ on a claim for the payment of money ․ the county which has jurisdiction of the estate which the defendant represents shall be the proper county for the trial of the action.”   In other words, the defendant's interpretation is that the proper county for trial, ordinarily a venue question, is here also jurisdictional.

Plaintiff argues that the question here involves ascertaining the legislative intent in enacting section 714 of the Probate Code.   We agree.   In pursuing this decisional task, “[t]he purpose and object sought to be accomplished by legislation is an important factor in determining the legislative intent.”  (Cal. Drive-In Restaurant Assn. v. Clark, 22 Cal.2d 287, 292, 140 P.2d 657.)   Moreover, specific language must be accorded a meaning consistent with the objective of the statute in which it is found.   (States Shingle Co. v. Kaufman, 227 Cal.App.2d 830, 834, 39 Cal.Rptr. 196.)

The language “proper court” has been a part of the statute since its enactment in 1851, and was included within section 1498 of the Code of Civil Procedure before that section was redesignated as section 714 of the Probate Code.   Before 1941 section 714 read, “When a claim is rejected either by the executor or administrator or by the judge, written notice of such rejection shall be given by the executor or administrator to the holder of the claim or to the person filing or presenting it, and the holder must bring suit in the proper court against the executor or administrator, within three months after the date of service of such notice if the claim is then due, or, if not, within two months after it becomes due;  otherwise the claim shall be forever barred.”

Section 714 was amended in 1941 to add additional sentences which read, “Within 10 days after the filing of such complaint the plaintiff shall file or cause to be filed in the estate proceedings, in the office of the clerk of the court in which the estate proceedings are pending, a notice of the pendency of such action.   If such notice is not filed within said period, the executor or administrator shall incur no liability whatsoever by reason of any distribution of the estate.   Personal service of a copy of the summons and complaint upon the executor or administrator within said period is equivalent to the filing of such notice.   If it appears to the satisfaction of the court that the residence of the claimant is not known, and that he can not be found, the court shall order the notice to be served on the claimant by filing it with the clerk.”   The purpose of this amendment was recited in Estate of Wilcox, 68 Cal.App.2d 780, 158 P.2d 32, as follows, “․ to provide protection to an executor or administrator in the final distribution of the estate against liability on a rejected claim on which suit had been filed but summons and complaint had not been served and about which he had no knowledge.   Before this amendment it was possible for an executor or administrator to close an estate in good faith believing that all claims had been disposed of and later find proceedings to set aside the orders settling his accounts and distributing the estate initiated by the holder of a rejected claim on which suit had been filed in time but in which summons and complaint had not been served.   Such an executor or administrator might even be faced with an action to hold him personally liable for the amount of the claim.”  (Id., at p. 784, 158 P.2d 32.)

As already noted, defendant's position is that the words “proper court” mean that all actions to recover on a rejected claim in probate must not only be timely filed but also filed in the county where the estate is being probated in order that the administrator may thereby obtain notice of those actions brought against him and the estate.   However, as explained in the quotation from Wilcox above, that was the purpose of the 1941 amendment to section 714.   More specifically, after the 1941 amendment, the administrator is completely exonerated from any liability for claims upon which suits have been filed unless the notice called for by one portion of the amended statute is filed in the probate proceeding.   As a consequence, the words “proper court” which have been a part of the statute since 1851 must have been intended to serve some other purpose, else the 1941 amendment would have been pointless.

In our view the purpose of this language can be found in the distinction drawn in California between the limited jurisdiction of the probate court over estate proceedings generally and the plenary jurisdiction of the superior or municipal courts over actions brought to recover on rejected creditors' claims.   This distinction is illustrated by the holdings in Estate of Middleton, 215 Cal.App.2d 324, 30 Cal.Rptr. 155, and Fields v. Michael, 91 Cal.App.2d 443, 205 P.2d 402.

In Middleton, plaintiffs filed a motion in the probate court, seeking an order requiring the administrator to approve their creditors' claims.   The appellate court held that the probate court's order denying relief was not an appealable order, stating as follows:  “Probate Code, section 714, provides that the holder of a claim which has been rejected by an administrator must bring suit upon the claim in the proper court, against the administrator.”   (Estate of Middleton, supra, 215 Cal.App.2d 324, 328, 30 Cal.Rptr. 155.)   This holding relied upon Estate of Thompson, 76 Cal.App. 162, 244 P. 156, wherein the rejected claimant did not choose to utilize this procedure, i.e., did not bring suit in the “proper” civil court, but applied to the probate court for an order requiring the administratrix to allow and pay his claim.   The court stated:  “[W]e find no authority in the statutes for a motion of this nature.   Probate proceedings are special and must be strictly followed.   Section 1498 of the Code of Civil Procedure [now Probate Code, § 714] provides a complete method of action when a claim is rejected by the representative of an estate in probate and no provision is made therein for a proceeding of this kind.”  (Id., at pp. 163–164, 244 P. 156.)

In Fields, the appellate court, on its own motion, raised a question as to whether a claim for a one-half community property share of assets in an estate was within the jurisdiction of the probate court.   The court, citing Probate Code section 714 held that “the present action, being one on a rejected claim based upon a personal liability arising out of the breach of a fiduciary duty, is within the general jurisdiction of the superior court.”   (Fields v. Michael, supra, 91 Cal.App.2d 443, 452, 205 P.2d 402.)

Otherwise, Idaho has a statute similar to section 714.   In Idaho Trust Co. v. Miller (1909) 16 Idaho 308, 102 P. 360, the respondent trust company contended that the phrase “the proper court” referred to the probate court and not the general civil courts.   The Idaho Supreme Court first noted that Idaho's creditor's claim statute was identical to former California Code of Civil Procedure section 1498.   Recognizing that California courts had interpreted the phrase “proper court” in section 1498 as referring to the civil court having jurisdiction over the amount in controversy, the Idaho court similarly held that the “proper court” referred to in said section 5468 is the court having civil jurisdiction to try such matter.  (Id., 102 P. at p. 361.)

Based upon the foregoing, we hold that the words “proper court” must be interpreted to mean a court with jurisdiction to try the cause, without regard to the question of venue.

Defendant places great reliance on the meaning given the phrase “a proper court” in cases interpreting the time limitation for enforcing mechanics' liens, citing Douglas v. Donner Pines, Inc., 73 Cal.App.3d 268, 140 Cal.Rptr. 839, and States Shingle Co. v. Kaufman, supra, 227 Cal.App.2d 830, 39 Cal.Rptr. 196.   However, the States Shingle court made clear that the meaning and effect of the phrase “a proper court” cannot be determined “in the context of general concepts of territorial jurisdiction and venue, but for the precise purpose of the particular statute in which it appears.”  (Id., at p. 834, 39 Cal.Rptr. 196.)

Thus, the holding in those cases must be limited to the facts and statutes contained therein, especially, where, as here, the term “proper court” was included in section 714 for a different purpose, i.e., not to narrow further its limitation provisions, but rather, to draw a distinction between probate courts and courts of general civil jurisdiction.

Viewed from this perspective, both Douglas and States Shingle are distinguishable from the case here.   As mechanics' lien cases, they involve the interpretation of a statutory scheme which provides an extraordinary remedy to the holder of the lien, i.e., the lienholder is provided a right of action where none previously existed.   It is, therefore, understandable that the phrase “a proper court” would be narrowly construed in the statute of limitations context.   Moreover, in the mechanics' lien setting, foreclosure is not the claimant's exclusive remedy;  a lienholder may also seek relief against others with whom he is in privity.

In contrast, a creditor's claim action against the administrator of an estate essentially involves the assertion of a claim which the creditor would otherwise have had against the decedent.   Further, absent the rights and relief afforded by such action, a creditor has no other remedy.

For the above-stated reasons, in our view the mechanics' lien cases do not provide a persuasive analogy for application here.

Given the distinction in jurisdiction, i.e., probate and plenary embraced in a single (superior) court, a factor not present in the mechanics' lien cases cited by defendant, it is our view that the words “proper court” were not intended to require that a creditor's claim action be timely filed both in a civil court of plenary jurisdiction and in the county where the estate is being probated.   Had the Legislature so intended, it could easily have required that “the creditor must bring suit in the proper court in the proper county against the executor or administrator” within the time periods specified in the statute.   We have been provided no persuasive reasons why “proper county,” a venue concept, should be read into the words “proper court,” and we decline to do so.

Based upon the foregoing analysis, it follows that plaintiff filed his action in a proper court within the time constraints of section 714.

DISPOSITION

The judgment of dismissal is reversed.

McDANIEL, Associate Justice.

MORRIS, P.J., and KAUFMAN, J., concur.

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