Monday, October 23, 2017
Court of Appeal:
Untimely Creditors’ Claims Bars Action Against Chodos’s Estate
Says Email to Purported Creditors Constituted ‘Notice to Creditors’
By a MetNews Staff Writer
Two former clients are barred from seeking damages from the estate of prominent trial attorney Hillel Chodos for alleged malpractice because they did not file a timely creditor’s claim in probate court, the Court of Appeal for this district has held, rejecting the contention that the estate’s failure to mail a notice-to-creditors extended the one-year statute of limitation for suing.
The opinion, by Justice Jeffrey W. Johnson of Div. One, filed Thursday, was not certified for publication.
The case included the proposition that an email to a supposed creditor referencing the need to file a creditor’s claim in probate court is tantamount to a “notice to creditors,” although it does not conform to language prescribed by the Probate Code.
Johnson’s opinion comes in the case of two brothers who had sued in 2009 in an effort to gain an accounting in connection with irrevocable trusts—valued at more than $1 million—which their parents, who are alive, set up for them and their two sisters, and to remove the parents as trustees. They lost in court, and now to seek damages, by way of a cross complaint for legal malpractice.
Chodos—who frequently represented celebrities and politicians—was one of their two former lawyers whom they blame for the failure of their action. He died May 27, 2015, at the age of 81.
The other lawyer they assert in responsible for the collapse of their action is the decedent’s brother, Rafael Chodos, administrator of the estate.
The father of the offspring who sued is Roger W. Corman, 91, a successful independent film producer, director, screenwriter, and actor.
Attorneys Seek Fees
The sons, Roger M. Corman and Brian Corman, brought their malpractice action as a cross complaint. The law firm’s action against them is for $667,421 in past-due attorney fees.
Their cross complaint was brought on Aug. 24, 2015, three months after the death of Hillel Chodos.
The Corman Brothers’ lawyers, David B. Parker and William K. Mills, were advised of the death by Rafael Chodos one day after it occurred.
On Oct. 28, Rafael Chodos responded to an allegation that he was delaying the litigation by telling Parker, in an email:
“[C]ross-complainants must file a claim in the probate estate if they want to proceed against Hillel as a cross-defendant. It is after all THEY who have been lax in their obligation to file a claim.”
$13 Million Claimed
They did not file claims, as required by Probate Code §9050, until July 12, 2016. They asserted a debt to them of $13 million.
Although Probate Code §9100 requires that a claim be filed “[f]our months after the date letters are first issued to a general personal representative” or “[s]ixty days after the date notice of administration is mailed or personally delivered to the creditor,” the Cormans insisted that the time for filing claims had not commenced because they had received no notice to creditors.
The section continues that “[n]othing in “in this paragraph extends the time provided in Section 366.2 of the Code of Civil Procedure” which is one year from the date of death.
Los Angeles Superior Court Judge Clifford Klein denied leave to file a late claim finding that the action was barred by §366.2.
Appeals Court Opinion
The Court of Appeal denied their petition for a writ of mandate. Johnson said:
“We have been presented with dueling negligent, perhaps purposeful, actions, with each side accusing the other of unclean hands and questionable motives. According to Rafael, the Corman Brothers’ failure to file creditor claims against Hillel’s estate until after Code of Civil Procedure section 366.2’s one-year limitations period had expired precludes the Corman Brothers from collecting on their creditor claims and continuing with their legal malpractice claim. According to the Corman Brothers, however, because Rafael failed to formally notify them of the administration of Hillel’s estate as required by Probate Code section 9050, the one-year statute of limitations never began to run. Thus, the Corman Brothers contend, they can proceed with their creditor claims in the probate case as well as their legal malpractice claim in the attorney fee case.
“Although Rafael admittedly failed to provide notice pursuant to Probate Code section 9050, no case has held that an executor’s failure to so notify a creditor fails to trigger or somehow extends Civil Procedure section 366.2’s one-year limitations period.”
Procedures for filing late claims do not apply once the one-year mark from the time of death has been reached, the jurist declared.
Email Constituted ‘Notice’
Although Probate Code §9052 provides that a notice to creditors be in “substantially” the form that is set forth, Johnson said the email Rafael Chodos sent Parker can be construed as a notice to creditors. He wrote:
“[B]y October 28, 2015, the Corman Brothers had learned of the administration of Hillel’s estate when Rafael told the Corman Brothers they had to file a creditor’s claim in the probate case if they wanted to proceed against Hillel as a cross-defendant in the attorney fee case. Thus, after October 28, 2015, the Corman Brothers had 60 days in which to file their creditor claims.”
Johnson drew attention to a portion of Probate Code §9103, which provides:
“(a) Upon petition by a creditor or the personal representative, the court may allow a claim to be filed after expiration of the time for filing a claim provided in Section 9100 if either of the following conditions is satisfied: [¶] (1) The personal representative failed to send proper and timely notice of administration of the estate to the creditor, and that petition is filed within 60 days after the creditor has actual knowledge of the administration of the estate.”
The justice said the Cormans’ claims, “now due by December 28, 2015” based on the Oct. 28 email, “were not filed until July 12, 2016—six months after this deadline had passed and more than a month after the maximum one-year limitations period set out in Code of Civil Procedure section 366.2 had expired.”
Complaint Not ‘Claim’
The filing of the cross complaint, Johnson said, did not satisfy the requirement of filing a claim. He explained:
“Although the Corman Brothers did commence an action within one year of Hillel’s death by filing a cross- complaint in their civil suit, they first had to file the claim in probate court so that the claim could be rejected in whole or in part. (See Prob. Code, § 9351.) They did not comply with
Although the Corman Brothers did commence an action within one year of Hillel’s death by filing a cross- complaint in their civil suit, they first had to file the claim in probate court so that the claim could be rejected in whole or in part….They did not comply with this Probate Code requirement.”
The case is Corman v. Superior Court, B282280.
The attorneys on appeal were Parker, Joel Osman, and Melissa Kurata of Parker Mills, along with Lann G. Mclntyre of Lewis Brisbois Bisgaard & Smith for the Corman Brothers, and Deborah Chodos, Jonathan P. Chodos, and Rafael Chodos for the Estate of Hillel Chodos.
Corman Brothers Undecided
Parker commented yesterday:
“Our clients have not yet decided on the next course of action, including further appellate review. The ruling has no impact on present or future claims against Rafael Chodos.”
Arbitrator/mediator Arnold H. Gold, who supervised the Probate Department while a Los Angeles Superior Court judge and is lead author of the five-volume “Probate and Trust Proceedings,” remarked:
“The opinion seems to me to be well-reasoned, and the result seems to me to be correct.
“Because of the interesting fact situation, bringing into play both the one-year statute and the failure timely to give proper notices, it would be helpful if the opinion were published.”
In a 2015 decision, Div. Seven of this district’s Court of Appeal affirmed a Los Angeles Superior Court order that parents Roger and Julia Corman be allowed to use moneys from the irrevocable trusts to pay their attorney fees and for a guardian ad litem of their yet-unborn grandchildren.
The following year, Div. Seven affirmed, for the most part, decisions in favor of the parents, but reversed a determination that a breach of fiduciary duty did not occur when the father withdrew, by mistake, $1.3 million from a trust.
Roger and Brian Corman in August filed a new lawsuit in Los Angeles Superior Court. This one contends that Julie Corman has “berated and abused” her husband to force to be less big-hearted toward the children. The petition alleges:
“The origin of Julie’s abuse of her family, and the reason for her about-face regarding the irrevocable trusts that she helped to establish…stems from her belief that she and Roger W. have been too generous, at her expense, in providing for their children.”
The petition seeks the eviction of the parents from their $16 million mansion.
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