Sonju v. Dawson,
2001.CA.0003430 (Cal.App. Dist.4 12/19/2001)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT DIVISION THREE
December 19, 2001
As modified January 17, 2002. Petition for rehearing denied. No change in judgemnt.
IN RE THE MARRIAGE OF WILLIAM T. DAWSON AND SONIA T. SONJU
SONIA T. SONJU, RESPONDENT,
CARROLL S. DAWSON, AS PERSONAL REPRESENTATIVE, ETC., APPELLANT.
Appeal from orders of the Superior Court of Orange County, James H. Poole, Judge. Reversed. (Super. Ct. No. D295700)
Phillip K. Fife for Appellant. Sonia T. Sonju, in pro. per., for Respondent.
The opinion of the court was delivered by: Sills, P. J.
NOT TO BE PUBLISHED
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Carroll S. Dawson (Carroll) is the widow of William T. Dawson (William), who died in 1996 during the pendency of the appeal from the judgment in this marital dissolution case. Carroll was appointed as his personal representative for purposes of the ongoing litigation; she is also a cotrustee and a beneficiary of the revocable living trust established by William, into which he transferred substantially all his assets during his lifetime and which became irrevocable upon his death. Carroll appeals from the denial of her claim of exemption from a levy by Sonia T. Sonju (Sonju), William's ex-wife, on a distribution to Carroll from the trust. We reverse.
Judgment in this case was entered in 1993, ordering William to pay spousal support to Sonju. Sonju recorded abstracts of support judgment naming William as judgment debtor in 1994. He died in 1996. Sonju recorded abstracts of support judgment naming Carroll, trustee of the Dawson Family Trust, as judgment debtor in January 1998.
In February 1998, Sonju ordered Carroll to appear for a judgment debtor examination for unpaid spousal support. Carroll successfully moved to quash the order. Sonju then obtained a writ of execution, naming both William and Carroll as judgment debtors, and levied on a distribution to Carroll from a partnership interest that William had owned and had transferred into his trust. Carroll filed a claim of exemption and a memorandum of garnishee, arguing she had not been a party to the litigation and the check was payable to her personally.
The trial court denied the claim of exemption, finding the distribution was subject to direct execution because the surviving spouse is personally liable for debts of the deceased spouse to the extent of property received that was not administered under the Probate Code. (Prob. Code, § 13550.) After Carroll's motion for reconsideration was denied, Sonju moved for an order charging William's partnership interest for partial payment of past due spousal support, which was granted.
Carroll argues a judgment creditor cannot use the law relating to the enforcement of judgments (Code Civ. Proc., § 680.010 et seq.) after the judgment debtor dies. Instead, if a judgment creditor seeks to reach assets in a revocable living trust, she must follow Probate Code section 19000 et seq., which sets forth procedures for the payment of claims, debts, and expenses from a revocable trust of a deceased settlor. Carroll also claims that, in any event, Sonju's claim is time barred by Code of Civil Procedure section 366.2.
Carroll is correct on both points. Unless the trust property is subject to an execution lien at the time of the settlor's death (Prob. Code, § 19303), "after the death of the settlor all money judgments against the deceased settlor on a claim against the deceased settlor or against the trustee on a claim against the decedent or the trust estate are payable in the course of administration and are not enforceable against property in the trust estate of the deceased settlor under the Enforcement of Judgments Law . . . ." (Prob. Code, § 19300, subd. (a).) A money judgment obtained against a deceased settlor in his lifetime shall be filed in the same manner as other claims. (Prob. Code, § 19300, subd. (b).)
In 1991, the Legislature added provisions to the Probate Code for the payment of claims, debts and expenses from the revocable trusts of deceased settlors who died on or after January 1, 1992. (Prob. Code, §§ 19000 et seq., 19012, subd. (a).) "The procedures established by the new statute are similar to those providing for the handling of creditors' claims in the administration of decedents' estates. (See [Prob. Code,] §§ 9000 et seq., 11400 et seq.) However, unlike probate administration, trust creditor claims proceedings are not mandatory. . . .  . . .  The trustee need not initiate creditor claims proceedings, and may not be held liable for failing to do so. ([Prob. Code,] § 19010.)" (Valentine v. Read (1996) 50 Cal.App.4th 787, 792.) Carroll did not file a notice to creditors under Probate Code section 19003, which would have barred all claims against the trust not made within four months from the date of notice. "If there is neither a probate proceeding nor a trust creditor claims proceeding, `the liability of the trust to any creditor of the deceased settlor shall be as otherwise provided by law.' ([Prob. Code,] § 19008.)" (Id. at p. 793.)
While Carroll's failure to give creditors of the trust notice under Probate Code section 19003 does not make her personally liable to the trust's creditors as a trustee, it does render her personally liable as a beneficiary who received trust distributions to the extent that the claim cannot be satisfied out of the trust estate. (Prob. Code, §§ 19400, 19402, subd. (b).) But that personal liability is limited by the one year statute of limitations within which an action on a claim against a decedent may be brought. "Subject to Section 366.2 of the Code of Civil Procedure, if there is no proceeding to administer the estate of the deceased settlor, and if the trustee does not file a proposed notice to creditors pursuant to Section 19003 and does not publish notice to creditors . . . , then a beneficiary of the trust to whom payment, delivery, or transfer of the deceased settlor's property is made . . . is personally liable . . . ." (Prob. Code, § 19400.)
Code of Civil Procedure section 366.2 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. . . ." A levy of execution served on a trustee is an action within the meaning of section 366.2. (Dawes v. Rich (1997) 60 Cal.App.4th 24, 33.)
The Legislature enacted this one-year limitations period for actions against a decedent to strike a balance between the rights of creditors who had no actual notice of the death through a published notice and the policy "`to afford repose and provide a reasonable cutoff for claims that soon would become stale.'" (Dawes v. Rich, supra, 60 Cal.App.4th at p. 33.) Sonju, who had actual notice of William's death, waited almost two years to make a claim against Carroll. This was simply too late.
The orders denying the claim of exemption and imposing the charging order against the partnership interest are reversed. Appellant is entitled to costs of appeal.