Battuello v. Battuello

• Decision Date: 09 June 1998
• Docket Number: No. A080011,A080011
• Citation: 75 Cal.Rptr.2d 548,64 Cal.App.4th 842
• Court: California Court of Appeals Court of Appeals
• Parties: , 98 Cal. Daily Op. Serv. 4417 Craig BATTUELLO, Plaintiff/Appellant, v. Ellen BATTUELLO, Individually and as Trustee, etc., et al., Defendants/Respondents.

Page 548

75 Cal.Rptr.2d 548

64 Cal.App.4th 842, 98 Cal. Daily Op. Serv. 4417

Craig BATTUELLO, Plaintiff/Appellant, v. Ellen BATTUELLO, Individually and as Trustee, etc., et al., Defendants/Respondents.

No. A080011.

Court of Appeal, First District, Division 5, California.

June 9, 1998.

Certified for Partial Publication. ^*

Review Denied Aug. 26, 1998.

Ronald Larson, Lisa M. Carvalho, Steefel, Levitt & Weiss, San Francisco, Shannon Richards, Napa, for Plaintiff and Appellant.

James R. Rose, St. Helena, for Defendants and Respondents.

PETERSON, Presiding Justice.

Appellant Craig Battuello filed a complaint against his mother, both individually and in her capacity as trustee of a family trust, and against his deceased father's estate, seeking to establish an interest in a Napa County vineyard that he claimed his father had promised to give to him. Appellant's mother, acting individually, as trustee of the trust, and apparently on behalf of her husband's estate, demurred to the complaint, arguing they were entitled to prevail, as a matter of law, because the complaint was barred by the statute of limitations. The trial court agreed and sustained the demurrer without leave to amend. Appellant now appeals from the ensuing judgment claiming the trial court interpreted the applicable statute of limitations incorrectly. We agree and will reverse the judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Since this is an appeal from a judgment entered after a demurrer, we must treat the allegations of the complaint as true. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.) So construed, the facts of this case are as follows.

Appellant has, for many years, worked on the family vineyard located in the Napa Valley. Ever since appellant was a young boy, his father, Dominic, and his mother, Ellen, told appellant repeatedly that they would give him the vineyard when Dominic died. In reliance on those promises, appellant went to college to learn the formal aspects of running a business; and from 1970 through 1995, appellant farmed and managed the vineyard.

In 1988, Dominic and Ellen executed a trust which specified that appellant would receive the vineyard upon the death of the survivor of Dominic and Ellen.

Dominic died on December 10, 1995. Shortly thereafter, appellant learned that in 1994, Dominic and Ellen had executed another trust and related documents (the 1994 trust) which stated that appellant would not receive the vineyard as he had been promised.

Appellant objected when he learned the terms of terms of the 1994 trust, and he entered into settlement negotiations with his mother and her legal advisors. As a result of those negotiations, Ellen promised appellant he would receive the vineyard by no later than the end of 1996. In reliance on those promises, appellant refrained from making any objection when Ellen filed a petition in the superior court to confirm that the 1994 trust had title to the vineyard. In December 1996, the court did, in fact, rule that the trust had title to the vineyard pursuant to the 1994 trust document.

Shortly thereafter, Ellen repudiated the settlement agreement; and she took the position that appellant did not have any right to the vineyard other than that to which he might be entitled pursuant to the 1994 trust. Faced with this breach of the settlement agreement, and the potential loss of the vineyard, appellant filed the present complaint against Ellen, both individually and in her capacity as trustee of the trust, and against Dominic's estate. The individual causes of action will be set forth in more detail below, but the thrust of the complaint was clear: Appellant sought to enforce his father's promise to give him the vineyard when he died.

Ellen, acting individually, as trustee of the trust, and apparently on behalf of Dominic's estate, demurred to the complaint arguing they were entitled to prevail, as a matter of law, because the action was barred by the one-year statute of limitations set forth in Code of Civil Procedure section 366.2 (section 366.2). The trial court agreed and sustained the demurrer without leave to amend. This appeal followed.

II. DISCUSSION

A. Applicability of Section 366.2

The first issue is whether the trial court properly ruled that the statute of limitations set forth in section 366.2, which governs causes of action that exist at the time of a person's death, was applicable in this case. That section states, in pertinent part, "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." (Id., subd. (a)(1).)

Appellant contends that section 366.2 cannot be applied to a cause of action alleging a contract to make a will because, as a general rule, such a cause of action does not come into existence until after the promisor has died (see In re Marriage of Edwards (1995) 38 Cal.App.4th 456, 460, 45 Cal.Rptr.2d 138); and therefore, the cause of action neither "accrue[s]" prior to the promisor's death nor "survives" his death.

We reject the argument. While appellant correctly cites the general rule, an exception exists where the promisor has made an inter vivos transfer of property specifically covered by the contract. (See Brown v. Superior Court (1949) 34 Cal.2d 559, 564, 212 P.2d 878; Brewer v. Simpson (1960) 53 Cal.2d 567, 593, 2 Cal.Rptr. 609, 349 P.2d 289.) In that situation, the promisee may seek equitable relief against the promisor during the promisor's lifetime. (Ibid.; see also Westbrook v. Superior Court (1986) 176 Cal.App.3d 703, 711, 222 Cal.Rptr. 317.) The exception applies in this case. Appellant alleges in his complaint that, in 1994, Dominic transferred the vineyard into a trust in such a way that appellant would no longer receive the property as he had been promised. Since Dominic allegedly made an inter vivos transfer of the vineyard, appellant had a cause of action against him prior to his death. ¹ Since such a cause of action existed, section 366.2 applied to this case.

B. Equitable Estoppel

In the trial court, appellant argued that even if the statute of limitations set forth in section 366.2 applied, respondents should be equitably estopped from asserting that statute as a defense. The trial court rejected this argument based on section 366.2, subdivision (a)(2) that states, "The limitations period provided in this section for commencement of an action is not tolled or extended for any reason." Appellant now claims the court incorrectly concluded the quoted language prevented it from applying the principles of equitable estoppel. We agree.

While section 366.2 clearly states that the one-year statute of limitations set forth therein may not be "tolled" or "extended," it says nothing about equitable estoppel. The doctrines are distinct. As one court noted in a similar context, "Tolling, strictly speaking, is concerned with the point at which the limitations period begins to run and with the circumstances in which the running of the limitations period may be suspended. These are matters in large measure governed by the language of the statute of limitations itself.... Equitable estoppel, however, is a different matter. It is not concerned with the running and suspension of the limitations period, but rather comes into play only after the limitations period has run and addresses itself to the circumstances in which a party will be estopped from asserting the statute of limitations as a defense to an admittedly untimely action because his conduct has induced another into forbearing suit within the applicable limitations period. Its application is wholly independent of the limitations period itself and takes its life, not from the language of the statute, but...