Satterfield v. Garmire

• Decision Date: 31 January 1967
• Citation: 422 P.2d 990,65 Cal.2d 638,56 Cal.Rptr. 102
• Court: California Supreme Court
• Parties: , 422 P.2d 990 David L. SATTERFIELD et al., Plaintiffs and Appellants, v. Albert F. GARMIRE, as Executor, etc., Defendant and Respondent. L.A. 29053. In Bank

Page 102

56 Cal.Rptr. 102

65 Cal.2d 638, 422 P.2d 990

David L. SATTERFIELD et al., Plaintiffs and Appellants, v. Albert F. GARMIRE, as Executor, etc., Defendant and Respondent.

L.A. 29053.

Supreme Court of California,

In Bank.

Jan. 31, 1967.

McInnis, Focht & Fitzgerald and William T. Fitzgerald, San Diego, for plaintiffs and appellants.

Gray, Cary, Ames & Frye, C. M. Monroe, Gerald R. Schmelzer and Eugene L. Freeland, San Diego, for defendant and respondent.

MOSK, Justice.

Plaintiffs appeal from a judgment of dismissal entered after a general demurrer had been sustained to their amended complaint seeking damages for wrongful death and personal injuries from defendant in his capacity as executor of the estate of Robert P. Garmire, the alleged tortfeasor. Our task is to determine whether the action is barred by Probate Code section 707, which provides that such claims must be presented to the estate within six months after the publication of the notice to creditors. ¹ We conclude that the purposes of the statute have been fulfilled and technical compliance therewith has been waived by defendant.

The complaint alleges that on July 12, 1963 Zora Lee Satterfield, the wife of plaintiff David L. Satterfield and the mother of the remaining plaintiffs, was killed in an automobile accident caused by the negligence of Robert P. Garmire, whose estate is represented by the defendant. In a second cause of action plaintiff David L. Satterfield seeks damages resulting from personal injuries which he sustained in the accident. The prayer is for general damages totaling $35,000 and for special damages of an unspecified amount.

Defendant was appointed executor of the last will of Robert P. Garmire in September 1963, and the first notice to creditors was published on September 11, 1963. The complaint alleges that in the same month negotiations were commenced between the agent of defendant's insurance company and the attorney who was then representing plaintiffs. During these negotiations the insurance agent asserted that in the event an action was filed either the liability of defendant would be admitted or the defense would be perfunctory in nature. At some time during the negotiations the agent offered to settle the claims for $9,000. This offer was rejected, and the negotiations continued.

Thereafter, the parties agreed that although they had reached no impasse, plaintiffs should file an action against defendant in order to minimize the delay in securing a trial date if the negotiations eventually failed. The complaint was filed on November 15, 1963. Defendant's answer denied liability but did not assert the failure of plaintiff to file a claim with the estate. The negotiations proceeded after the complaint was filed, and the offer of settlement was reiterated.

The period for filing a claim with the estate expired on March 11, 1964. Eight days later defendant filed a pretrial statement in which he first referred to the provisions of Probate Code section 707 and maintained that the action was barred. On April 2, 1964, plaintiffs filed a formal claim with the estate. An amended complaint was filed on June 8, which alleges the facts as set forth above and claims that defendant is estopped from relying upon the failure of plaintiffs to formally present the claim within the period prescribed by Probate Code sections 700 and 707. The trial court sustained a general demurrer to the amended complaint and denied leave to further amend 'unless plaintiffs conceive that a cause of action may be stated against the insurance company.' Plaintiffs did not further amend the complaint, and a judgment was entered dismissing the action.

It is clear from the trial court's ruling that the demurrer was sustained in reliance on the provisions of Probate Code section 707, and the effect of that section presents the only issue of substance to be decided. Since it appears on the face of the complaint that the claim was not formally presented to the estate within the time prescribed by Probate Code section 707, the dispute is further limited to the question whether defendant or his representative acted in such a way as to excuse plaintiff's delay in formally presenting the claim. In resolving the legal issue, we deem the allegations of the complaint to be factually accurate. (City of Beaumont v. Beaumont Irr. Dist. (1965) 63 Cal.2d 291, 292, 46 Cal.Rptr. 465, 405 P.2d 377.)

Probate Code section 707 is intended to insure that the executor or administrator of an estate will be notified within a reasonable period of time of all claims so that the estate may be expeditiously settled and distributed to the legatees or heirs. (Harp v. Calahan (1873) 46 Cal. 222, 231, Hurlimann v. Bank of America (1956) 141 Cal.App.2d 801, 805, 297 P.2d 682.) In addition, it provides an opportunity for amicable disposition of a claim prior to the commencement of any action and thus protects the estate from the expenses of needless litigation. (Radar v. Rogers (1957) 49 Cal.2d 243, 249, 317 P.2d 17; Thompson v. Koeller (1920) 183 Cal. 476, 485, 191 P. 927; Preston v. Knapp (1890) 85 Cal. 559, 561, 24 P. 811; Halbert v. Berlinger (1954) 127 Cal.App.2d 6, 14, 273 P.2d 274.) The statutory requirement of presentation of a claim is not satisfied by service of summons and complaint in a lawsuit, although the pleadings do in their way provide an announcement of the amount and nature of the claim.

Other facts in the instant case, however, suggest that the purposes of the section have been fulfilled and defendant has in no way been prejudiced by the circumstance that the claim was not formally submitted until 22 days after the expiration of the period prescribed in the Probate Code. The complaint alleges that defendant's insurance agent carried on negotiations for approximately two months prior to the time the action was filed and that these negotiations were not terminated until after the period for filing claims had expired. Hence, it is clear that defendant received notice of the claim before the action was filed. ² It is also apparent that the purpose of avoiding needless litigation has been fulfilled, for the action was filed by mutual agreement of the parties after two months of negotiations had failed to produce a settlement. Therefore, defendant has received all the benefits secured to him by Probate Code section 707 and it appears that formal presentation of the claim in the autumn of 1963 would, if anything, have caused further delay rather than expediting a settlement. ³

Defendant nevertheless insists that the statute is mandatory, and precise compliance with its terms is imperative in all circumstances. He argues that the actions of the insurance agent should be disregarded since the provisions of the section cannot be waived. He also asserts that the complaint does not set forth facts supporting a claim of estoppel and concludes that the trial court was correct in sustaining the demurrer without leave to amend.

In contending that Probate Code section 707 cannot be waived, defendant relies primarily on Hurlimann v. Bank of America (1956) supra, 141 Cal.App.2d 801, 297 P.2d 682, which held that the statutory period for filing claims was binding even if the delay was caused by misrepresentations of the decedent, and that an executor or administrator could not waive the time limitations imposed by the Probate Code. In Estate of Erwin (1953) 117 Cal.App.2d 203, 204, 255 P.2d 97, the court denied recovery because the claim had not been filed within the prescribed period even though the administratrix had expressed the desire to satisfy the claim if she could legally do so. Other cases have similarly construed the provisions of Probate Code section 707 and contain assertions that the provisions of the section cannot be waived. (See Harp v. Calahan (1873) supra, 46 Cal. 222, 233; Pearson v. Norton (1964) 230 Cal.App.2d 1, 16--17, 40 Cal.Rptr. 634; Estate of Heigho (1960) 186 Cal.App.2d 360, 367, 9 Cal.Rptr. 196; Estate of Smith (1953) 122 Cal.App.2d 216, 217--218, 264 P.2d 638.)

The rule against waiver may be traced to the fiduciary capacity in which the administrator or executor acts. The courts have reasoned that his duty is to protect the interests of the legatees and heirs and to conserve the assets of the estate for their benefit. He would violate his fiduciary duties were he to allow claims which have been barred by Probate Code section 707 even if such claims would clearly be meritorious except for the circumstance that they were not presented within the prescribed period. (See Estate of Erwin (1953) supra, 117 Cal.App.2d 203, 204, 255 P.2d 97.) He cannot relinquish a valid existing defense to a claim. (Pearson v. Norton (1964) supra, 230 Cal.App.2d 1, 16, 40 Cal.Rptr. 634.)

The instant case is distinguishable from the foregoing authorities in that defendant violated no fiduciary duty to the beneficiaries of the estate in waiving formal presentation of the claim. At the time of the alleged waiver it was Conceded that no valid defense existed to the claim. Thus, if any waiver occurred, it was merely of the right to formal presentation of the claim, and no substantial interest of the beneficiaries was surrendered.

This situation is comparable to Katz v. A. J. Ruhlman & Co. (1945) 69 Cal.App.2d 541, 159 P.2d 426, which involved the effect of representations made by the former executor before the expiration of the period for filing a claim. The executor had negotiated a compromise settlement of claims which the estate and the creditor had against one another and had informed the creditor that no claim need be filed with the estate. The court held that even absent evidence of fraud or intentional misrepresentation, the estate should not be permitted to profit by the representations which had been made and could not rely upon the failure to formally present the claim within the prescribed period.

The court in Katz noted there was no California ...