Tuesday, January 10, 2017
Ninth Circuit Judges Divided on California Time Bar
In an Action to Recover Funds of a Decedent, Majority Says One-Year Statute Applies; Dissenter Argues Plaintiff Is Not Seeking to Enforce Promise of a Deceased Benefactor, but Contractual Duty of a Bank
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals has denied a beneficiary funds placed for him in trust by a woman who is now deceased, saying the action against the bank is time barred by virtue of a one-year statute of limitation on enforcing the promise of a decedent.
A dissenting judge argued that the action was based on the decedent’s agreement with the bank, not any promise as to distribution of her assets.
The statute in issue is California Code of Civil Procedure §366.3(a). It provides:
“If a person has a claim that arises from a promise or agreement with a decedent to distribution from an estate or trust or under another instrument, whether the promise or agreement was made orally or in writing, an action to enforce the claim to distribution may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply.”
A memorandum opinion—signed by Ninth Circuit Judge Johnnie B. Rawlinson and District Court Judge Richard Seeborg of the Northern District of California—affirms the decision of District Judge Fernando M. Olguin of the Central District of California who dismissed the action filed by Allen Edward St. Julien against Bank of America. Olguin ordered St. Julian to pay $14,858.21 in attorney fees to the bank.
The decedent, Evelyn H. Wiltz, had instructed Bank of America to release three accounts to St. Julian upon her death. She died on Wiltz died on May 4, 2012.
St. Julien obtained a copy of the death certificate, presented it to the bank, and demanded the funds. The bank declined to release them, and St. Julien brought suit on Feb. 26, 2014, seeking an order that he be paid the funds, declaratory relief, an accounting, and damages for the breach of the bank’s contract with Wiltz.
Affirming the dismissal, the unpublished memorandum said:
“Section 366.3 unambiguously provides that ‘[i]f a person has a claim that arises from a promise or agreement with a decedent to distribution from an estate or trust,’ the action must be brought ‘within one year after the date of death...’ Cal. Code Civ. P. §366.3(a) (emphasis added). The plain language of the statute encompasses claims that ‘arise from’ ‘a promise or agreement with the decedent.” Id. The statute does not limit the parties to the promise or agreement, and makes no distinction between inchoate promises and completed promises.”
Judge Carlos T. Bea dissented. He wrote:
“Here, St. Julien’s claims arc premised on Wiltz’s deposit agreements with Bank of America. His claims are not premised on a promise by Wiltz to a distribution from her estate. Thus, by its terms, section 366.3(a) does not apply to St. Julien’s claims.”
While the majority declared that “California courts have uniformly interpreted the term ‘arises from’ broadly,” Bea asserted:
“Not a single California court has applied section 366.3 to a cause of action not premised on a decedent’s promise to make a distribution of some sort.”
Bea said that whether the accounts are denominated Totten Trusts—non-probate transfer where the funds belong to the beneficiary upon the death of the depositor—or “pay-on-death” accounts, the same analysis applies.
The case is St. Julien v. Bank of America NA, 14-56108
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