Yeh v. Li-Cheng Tai
| Decision Date | 21 December 2017 |
| Docket Number | B280003 |
| Citation | 18 Cal.App.5th 953,227 Cal.Rptr.3d 275 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Francine S. YEH, Plaintiff and Appellant, v. LI-CHENG TAI et al., Defendants and Respondents. |
Becker Law Group, Todd B. Becker, Long Beach, and Brian E. Shear, Santa Monica, for Plaintiff and Appellant.
Heisner Álvarez, Olga Álvarez, San Diego, and Rafael F. Bonilla for Defendants and Respondents.
Plaintiff Francine S. Yeh claims to have purchased a condominium with her deceased husband, Shu Hsun Tai ("Shu"), and transferred it to him so that they could obtain a more favorable loan. She claims that he promised to place her back on the title to the property, and that she could sell it or keep it after his death. Instead, he transferred the title to a trust, of which his children from a prior marriage, defendants Li-Cheng Tai and Li-Jung Tai, are beneficiaries.
Plaintiff filed a breach of fiduciary duty action against defendants under Family Code section 1101,1 essentially seeking return of the condominium. The trial court sustained without leave to amend defendants' demurrer due to the expiration of the statute of limitations. The court relied on Code of Civil Procedure sections 366.2 and 366.3, which provide that actionable claims based on the liability of a decedent, or based on his testimonial promises, must be filed within one year of his death. Plaintiff filed this claim about 18 months after her husband's death.
Section 1101, however, contains its own statute of limitations and specifically addresses marriages ending by death. Under section 1101, subdivision (d), breach of fiduciary duty claims filed after the death of a spouse are governed only by equitable principles of laches. We hold that the Legislature's specific treatment of the statute of limitations in section 1101, subdivision (d) governs instead of the general statute of limitations in Code of Civil Procedure sections 366.2 and 366.3. Defendants do not argue that plaintiff's claim is untimely under laches principles. We therefore reverse the judgment so that plaintiff may pursue her cause of action arising under section 1101.
Because this case comes to us on review of a demurrer, we rely on the facts as alleged by plaintiff. ( Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6, 40 Cal.Rptr.3d 205, 129 P.3d 394.)
Plaintiff married Shu on September 27, 1996 in Provo, Utah, and they remained married until Shu's death on January 18, 2014. In 1998, plaintiff and Shu moved to California. On July 29, 1999, plaintiff and Shu purchased the property at issue in this lawsuit, at 5320 Peck Road in El Monte, California. The initial purchase agreement lists them as buying the property as joint tenants.
Because of plaintiff's poor credit rating, the mortgage company advised that the couple could obtain a better interest rate by holding the property in Shu's name only. Shu requested plaintiff sign a quitclaim deed to obtain the more favorable loan, and plaintiff did so. Shu promised plaintiff she would maintain her interest in the property and be placed back on the title.
On September 10, 1999, plaintiff and Shu took out a loan to finance the property purchase. The down payment came from plaintiff and Shu's joint bank account. The loan was paid off by January 3, 2000, using funds from the couple's joint account. All expenses for the property were paid with their joint funds.
Three days before Shu's death, plaintiff asked Shu if her name was on the title. Shu told her the property was "all hers, that she could sell or keep the [p]roperty after his death." However, plaintiff discovered on February 10, 2014, that this was untrue. On that date, she was notified of the existence of the Tai Family Trust. In 2006, Shu, without plaintiff's knowledge, had established that trust, with defendants as beneficiaries. Shu had executed a trust transfer deed that transferred title of the property to that trust.
About 18 months after Shu's death, on July 29, 2015, plaintiff filed her petition to set aside a non-probate transfer of community property, for constructive trust, for instructions to trustees, for attorney fees, and for damages under the Family Code. The petition relied primarily on section 1101 in alleging a breach of fiduciary duty and damages authorized by that section. Following the court's grant of a motion for judgment on the pleadings and a change of plaintiff's counsel, plaintiff on August 5, 2016, filed her first amended petition, the operative pleading. The amended petition again relied on section 1101 in alleging a breach of fiduciary duty and damages authorized by that section. Plaintiff alleged the fraud was in violation of Civil Code section 3294 (), which under section 1101, subdivision (h) allows for damages in the amount of 100 percent of an asset transferred in breach of the fiduciary duty.
Plaintiff claims Shu breached his fiduciary duty to her by fraudulently representing he intended to convey the property to be the couple's community property, and intending plaintiff to rely on his misrepresentations, which plaintiff did in transferring title to him. As a result of Shu's breach of fiduciary duty, plaintiff sought to void the deed transferring title to the trust, order defendants to convey the property to plaintiff, and award reasonable attorney fees pursuant to section 1101, subdivision (g).
Defendants demurred to the petition, arguing that the petition was filed after the statute of limitations ran. In defendants' view, the applicable statute of limitations were Code of Civil Procedure sections 366.2 and 366.3, as well as Probate Code section 16061.8. Plaintiff asserted that those statutes of limitations were inapplicable, and under section 1101 there was no applicable statute of limitations other than laches.
The probate court sustained the demurrer to the first amended petition without leave to amend, finding it barred in its entirety by Code of Civil Procedure sections 366.2 and 366.3. Judgment for defendants was entered thereafter.
On demurrer, we review a complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory and thus to determine whether or not the trial court erroneously sustained the demurrer as a matter of law. ( McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 791, 71 Cal.Rptr.3d 885.) The sole issue in this appeal is whether the causes of action in plaintiff's petition are barred by the applicable statute of limitations. This issue turns on whether plaintiff's claim based on section 1101 is governed by the terms of that section or by the general statutes of limitations governing claims against deceased persons.
Section 1101, subdivision (a) creates a cause of action for breach of fiduciary duty by one spouse against the other for impairment of the claimant spouse's undivided half interest in the community estate.2 A section 1101cause of action may be filed as an independent claim during a marriage; in connection with an action for dissolution of marriage, legal separation, or nullification; or as an independent claim upon the death of a spouse. ( § 1101, subd. (f).)
Certain remedies are authorized under the section, including the equitable remedies of an accounting ( § 1101, subd. (b) ) and reformation of title to property to add a spouse's name. ( § 1101, subd. (c).) Damages "shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney's fees and court costs." ( § 1101, subd. (g).) If the plaintiff proves a case for punitive damages under the standard provided in Civil Code section 3294, damages "shall include, but not be limited to, an award to the other spouse of 100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in breach of the fiduciary duty." ( § 1101, subd. (h).)
Unlike most California statutes, section 1101 provides its own statute of limitations. And it is an unusual one.3 In subdivision (d)(1), the section provides for a three-year limitation period dating from when the claimant spouse learns of the transaction he or she is seeking to remedy. ( § 1101, subd. (d)(1).) However, subdivision (d)(2) provides that the three-year limitation period does not apply in two circumstances: if the claim is brought upon the death of a spouse, or if the claim is brought in conjunction with an action for legal separation, dissolution, or nullification of the marriage. In those circumstances, a claim "may be commenced ... without regard to the time limitations set forth in paragraph (1)." ( § 1101, subd. (d)(2).) In those circumstances, however, the defense of laches may be raised. ( § 1101, subd. (d)(3).)
Consequently, whether or not the three-year statute of limitation runs during the marriage, section 1101, subdivision (d)(2) provides a claimant spouse with a fresh opportunity at obtaining a remedy for breach of fiduciary duty upon either a separate legal action to terminate the marriage or upon the spouse's death. Further, as Patrick v. Alacer Corp. (2011) 201 Cal.App.4th 1326, 1337, 136 Cal.Rptr.3d 669 ( Patrick ), held, "no limitations period applies ... except for laches, when the marriage ends through litigation or death." Patrick , which involved declaratory relief only, reasoned that the text of the statute demonstrated the Legislature's intent to apply no limitation period: ...
To continue reading
Request your trial
-
Salven v. Nijjar (In re Nijjar)
...and falls within California Family Law § 1101(d)(2). See Patrick v. Alacer Corp., 201 CA4th 1326, 1337 fn. 4 (2011); Yeh v. Tai, 18 Cal.App.5th 953, 957 (2017). No statute of limitations applies; actions may be barred by laches.5 As a consequence, the action is not time barred. B. Scope of ......
-
Josiah v. Jackson
...statute has any application to this case, which involved a petition to enforce the Trust, not to contest or revoke it. (Yeh v. Tai (2017) 18 Cal.App.5th 953, 967; see also § 21310, subd. ...
-
In re Marriage of Sommers
...we need not consider Gloria's assertion that her motion was necessarily made under Family Code section 1101 and that Yeh v. Tai (2017) 18 Cal.App.5th 953 (Yeh) controls the result We disagree with Trustees that Rumsey, supra, 24 Cal.4th 301 controls. The issue before the California Supreme ......
-
Klein v. Hughes
...to "Trust Law." "When two statutes of limitations are applicable, the specific takes precedence over the general." (Yeh v. Tai (2017) 18 Cal.App.5th 953, 963.)Tolling Alexander next argues that even if section 16460 applies, the filing of the July 2002 petition to approve the first and seco......
-
Mcle Self-study Article Until Death Do Us Part: Part Ii: Areas of Divergence Between Marital Property Division at Death and Divorce
...property asset involved to the aggrieved spouse. The only time bar on such a claim is laches.For example, in Yeh v. Tai (2017) 18 Cal.App.5th 953, the facts were similar to the facts in Wall. The husband[Page 14]and wife had initially planned to purchase real property together; however, the......
-
The Intersection of Death and Divorce: Where Probate and Family Law Collide
...applies, and such actions for breach of fiduciary duty between spouses are subject only to a claim of laches.28In Yeh v. Tai (2017) 18 Cal.App.5th 953, 18 months after her husband's death, Francine filed a probate action alleging that her husband breached his fiduciary duties in transferrin......