Estate of Sturm

• Decision Date: 11 May 1988
• Docket Number: No. B025605,B025605
• Citation: 246 Cal.Rptr. 852,201 Cal.App.3d 14
• Court: California Court of Appeals Court of Appeals
• Parties: ESTATE OF Miroslav STURM, aka Mike Sturm, Deceased. Helena STURM, Administratrix, Plaintiff and Appellant, v. Irena Sturm NOVAKOVA, Defendant and Respondent.

Page 852

246 Cal.Rptr. 852

201 Cal.App.3d 14

ESTATE OF Miroslav STURM, aka Mike Sturm, Deceased.

Helena STURM, Administratrix, Plaintiff and Appellant, v. Irena Sturm NOVAKOVA, Defendant and Respondent.

No. B025605.

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

May 11, 1988.

Review Denied July 21, 1988.

Fred, Lewin & Behesnilian and R. Stephen Duke, Beverly Hills, for plaintiff and appellant.

Choate & Choate and Joseph Choate, Jr., Los Angeles, for defendant and respondent.

HASTINGS, Associate Justice. ^*

In this appeal, we must determine the time period in which a creditor's claim must be paid under Probate Code section 929, infra.

Miroslav Sturm, decedent, died intestate on January 23, 1984. Helen Sturm, appellant, his third wife, petitioned for letters of administration. In her petition, she declared that decedent had no children and that she was his sole heir at law. Letters of administration were issued to her.

In September of 1984, appellant filed her Inventory and Appraisement in the estate in which she declared that decedent's apartment house was the separate property of decedent. This was the primary asset in the estate.

On January 4, 1985, Irena Sturm Novakova, respondent, the daughter of decedent by his first marriage, filed a Petition to Determine Heirship. Respondent is a citizen of Czechoslovakia, as was decedent. Decedent had left Czechoslovakia in 1950; however, his first wife chose to remain behind with respondent. Appellant attempted to defeat the petition of respondent by alleging she had never heard of decedent having a daughter and that respondent was not in fact his daughter.

After a contested hearing, the court found that respondent was in fact the daughter of decedent and continued the On April 25, 1986, appellant filed her First and Final Accounting, Petition for Final Distribution. This accounting revealed that after the four-month period for the filing of creditors' claims, appellant had paid out $27,911.58 for debts of decedent for which no creditors' claims were filed or presented. It was appellant's contention that her payment of these debts were proper under Probate Code section 929, because they were justly due and paid in good faith.

hearing on the issue of whether the property was the separate property of decedent or community property. Prior to this hearing, respondent discovered a recorded prenuptial agreement entered into between decedent and appellant wherein appellant agreed that all property of decedent and herself would be and remain separate property. In the same agreement, appellant also relinquished all rights to inherit from decedent. Appellant then agreed to settle her various claims against the estate and litigation pertaining to the distribution. Under the terms of the agreement, appellant would receive 30 percent of the proceeds of the sale of the apartment house and respondent 70 percent. It was further agreed that if, at the hearing of the Final Accounting, appellant was surcharged for any improper items, the total amount of the surcharge would go to respondent.

After a hearing on the objections, the court made its order settling appellant's final account as follows: "IT IS ORDERED, ADJUDGED AND DECREED AS FOLLOWS: [p] 1. Helena Sturm is surcharged the sum of $27,911.58 for and on account of payments made to creditors of decedent after the expiration of the 4 month period of Notice to Creditors and without Creditors' Claims being filed or presented. The Court expressly finds that inasmuch as the payments which form the basis of the surcharge were unsupported by Creditor's Claims and were not made within the 4 month period of Notice to Creditors, such payments cannot be approved pursuant to the provisions of Probate Code Section 929, notwithstanding that the estate was solvent and that the payments were made in good faith and were valid debts of decedent; the Court exercising its discretion in the matter to deny such credit for payment."

DISCUSSION

Probate Code sections 700 and 707 require creditors of an estate to file their claims or present them within a designated four-month period and any claim not so filed or presented is forever barred. ¹ Section 929 of the Probate Code provides as follows: "If it appears that debts of the decedent have been paid without verified claims having been filed or presented and allowed and approved, and it shall be proven that such debts were justly due, were paid in good faith, that the amount paid was the true amount of such indebtedness over and above all payments or set-offs, and that the estate is solvent, the court, in settling the account, shall allow the sums so paid."

It is appellant's position that section 929 creates a statutory exception to section 707, and payments to creditors after the four-month period by her were proper, because they were claims she recognized during the four-month period through initial payments on the debts commenced during this period. Appellant concedes that $27,911.58 was paid after the four-month period.

The court's order in connection with these debts stated, "that the payments were made in good faith and were valid debts of decedent...," therefor the only issue before us is whether section 929 authorizes payment of bona fide claims not filed within the four-month period, where partial payments had been made by the estate representative during that period. ²

The court, in making its ruling in our present case, relied on Estate of Erwin (1953) 117 Cal.App.2d 203, 255 P.2d 97, but appellant claims reference to section 929 is only dictum and should not be followed. In the Estate of Erwin, the court refused to approve a claim for $552.64 for expenses of decedent's last illness. No claim for this expense had been filed in the estate; however, the administratrix represented to the court that she believed the amount to be justly due and requested authorization to pay it. The appellate court agreed with the probate judge who refused the payment. In referring to section 707 the court noted, "[i]t is the plain duty of both the administratrix and the probate judge to protect the estate against the collection of a debt which the statutory law expressly declares to be 'barred forever.' " The reference to section 929 in the opinion was in conjunction with a reference to the Estate of Houston (1928) 205 Cal. 276, 270 P. 939. The court stated, "There is...