Code of Civil Procedure Section 366.2

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(Editor’s Note: The example in the post below has been revised.)

California causes of action are subject to various statutes of limitation.  Unless a plaintiff or petitioner files a complaint or other document asserting a cause of action within the applicable limitations period, the filing will be deemed time barred and subject to dismissal.  Under some circumstances, however, statutes of limitation may be tolled or suspended so as to extend the filing period.

When the COVID-19 pandemic caused court closures, the California Judicial Council responded with Emergency Rule 9, which tolled the statutes of limitation for civil actions from March 6, 2020 until 90 days after the Governor lifts the state of emergency, which will not occur until an unknown future date.

The initial emergency rule, issued April 6, has now been revised and partially clarified.  As California courts began to reopen in May, the Judicial Council chose to put a clearer endpoint on the tolling of limitations periods.  A memorandum from the Judicial Council provides background on the amended rule.

California’s probate process aims to expeditiously identify and resolve the claims of creditors against decedents.  Creditors who are unsophisticated, or who simply do not learn of the decedent’s passing, may find themselves with an uncollectable claim against an otherwise solvent estate.  You snooze, you lose.

On the other hand, once a creditor makes a claim in a California probate case, the claim can lie dormant like an oak tree in winter and later come to life to interfere with the distribution of the decedent’s assets.  That’s the lesson of Estate of Holdaway (2019) 40 Cal.App.5th 1059, published by the Court of Appeal this month.

It’s generally not easy to sue a deceased person’s estate in California. In most cases, claimants must file a creditor’s claim before proceeding with a lawsuit in the Superior Court, which may first require bringing a petition to open up probate of the decedent’s estate. Claimants must move quickly given the one-year statute of limitations under California Code of Civil Procedure section 366.2.

In traffic accident situations, however, the claimant has a streamlined procedural path if he or she limits the claim to the auto insurance coverage held by the decedent. In such a case, under California Probate Code sections 550-555, the claimant effectively sues the insurance company, with the decedent’s estate only being a nominal defendant.

A recent appellate case from the Third District Court of Appeal, Meleski v. Estate of Albert Holden (2018) 29 Cal.App.5th 616, strengthens the position of California accident victims by allowing them to obtain recoveries in excess of policy limits if the insurance carrier refuses to accept a settlement offer and the claimant then obtains a court judgment in excess of the offer. The decision should incentivize carriers to accept policy limits settlement offers.