What Happens When the Defendant in a Civil Lawsuit in California Dies?

Anyone who has been involved in a lawsuit quickly learns that nothing happens quickly! Litigation often last years. What happens if you are a plaintiff in a California lawsuit, and a defendant dies? Do you lose your chance to recover from the deceased party? What do you need to do to preserve your rights?

To start with, it must be noted that the California Probate Code and the Code of Civil Procedure do not and cannot anticipate every possible scenario. As a result, uncertainty can exist regarding how to proceed after a party has died. The safest practice is to comply with all the applicable procedures in both codes, even if it may appear a particular procedure is unwarranted or duplicative.

Can the dead be liable?

The first step in analyzing how to proceed with an action when a party dies begins with determining if the claim survives death.

Under the California Code of Civil Procedure (CCP) Section 377.20: “Except as otherwise provided by statute, a cause of action for or against a person is not lost by reason of the person’s death, but survives subject to the applicable limitations period.”

And if you have already initiated a lawsuit before a defendant dies, “a pending action or proceeding does not abate by the death of a party if the cause of action survives.” CCP Section 377.21

Who takes the place of the deceased defendant?

Subject to the California Probate Code sections governing creditor claims, “a cause of action against a decedent that survives may be asserted against the decedent’s personal representative or, to the extent provided by statute, against the decedent’s successor in interest.” CCP Section 377.40

A decedent’s “personal representative” refers to the person or entity formally appointed by the Probate Court in the decedent’s estate proceeding, and includes, an “executor, administrator, administrator with will annexed, [or] special administrator.” California Probate Code Section 58. In such situations, the “’decedent’s successor in interest’ means the beneficiary of the decedent’s estate or other successor in interest who succeeds . . . to a particular item of the property that is the subject of a cause of action.” CCP 377.11

What is the procedure to start or continue a lawsuit after the defendant dies?

When a defendant dies during a lawsuit that has already commenced but before the conclusion of that action, plaintiff’s counsel must act quickly to preserve their client’s claims against a defendant-decedent.

From the point of view of the Court, the case will continue even though the party is deceased.

“On motion, the court shall allow a pending action or proceeding against the decedent that does not abate to be continued against the decedent’s personal representative or, to the extent provided by statute, against the decedent’s successor in interest, except that the court may not permit an action or proceeding to be continued against the personal representative unless proof of compliance with Part 4 (commencing with Section 9000) of Division 7 of the Probate Code governing creditor claims is first made.” CCP Section 377.40.

Plaintiff must file a creditor’s claim against the deceased defendant’s estate.

In addition to the filing of a Motion in the pending action, the plaintiff must file a “creditor’s claim” in the decedent’s estate probate proceeding. This is required to give the decedent’s personal representative and the probate court sufficient notice concerning the pending claim. The timing of the creditor’s claim is crucial for a plaintiff to recover from a deceased defendant’s estate, and not only because the plaintiff wants to protect their interest before the deceased defendant’s assets are distributed to the estate’s beneficiaries. The Probate Code also lays out strict time limitations on the filing of these creditor’s claims.

When a creditor’s claim is required, the plaintiff must file it within four months from the date that the letters of administration are first issued to a personal representative (in the decedent’s estate proceeding), or 60 days after notice of administration of the decedent’s estate is given to the creditor, whichever is later. California Probate Code Section 9100.  The decedent’s personal representative may accept the creditor’s claim, accept in part and reject in part, or reject the claim entirely. Probate Code Section 9250.  If the decedent’s personal representative takes no action concerning plaintiff’s creditor’s claim, then the claim can be deemed rejected on the 30th day after it was filed. Probate Code Section 9256. If a creditor’s claim is rejected, the plaintiff then has 90 days to move the court in the pending action to substitute in the defendant-decedent’s personal representative into the pending litigation, or to initiate new litigation to enforce claim not already part of an existing lawsuit. Probate Code Section 9370.

Finally, a one-year creditor’s claim statute of limitation from decedent’s date of death applies regardless of the status of decedent’s estate proceeding or the appointment of decedent’s personal representative.

For more on creditor’s claims, click here.

Do I have to add the deceased defendant’s estate if he had insurance?

If the defendant had insurance coverage for the claim, the statute of limitations of one-year from date of death for claims against the decedent does not apply and the case can proceed “without the need to join as a party the decedent’s personal representative or successor in interest. Probate Code Section 550. In addition, for claims that have not been filed before the defendant’s death, the applicable statute of limitations is extended for one year. Probate Code Section 551.

Procedurally, the plaintiff may sue the deceased defendant’s insurance company directly by naming “Estate of x, Deceased” in the complaint, where x is the name of the deceased insured, and serving the insurance company in writing. Probate Code Section 552. In this case recovery would be limited to coverage amount under the decedent’s policy. It is possible to sue both the insurance company and the personal representative of the estate, so long as you have effectively submitted a creditor’s claim to the Personal Representative pursuant to the Probate Code 9000 et seq and follow the procedures outlined above.

What happens if there is no probate proceeding for a deceased defendant’s estate?

The case law suggests that it may not be necessary for the Plaintiff to open probate just for purposes of filing a creditor’s claim in a pending lawsuit. In Clark v Kerby, the court makes clear that knowledge of the death does not trigger a duty to file a claim if there is no administration.

“It has never been the debtor’s death that triggers the duty to file a claim; rather, it is the commencement of administration and publication or actual notice. Thus, even if an attorney for a creditor knows that the debtor died, unless administration has commenced there is neither need nor procedure for filing a claim.” (Clark v. Kerby (1992), 4 Cal.App.4th 1505)

So if there has been no probate proceeding commenced, Clark suggests the one-year from death “nonclaim” deadline would not apply.

However, given the uncertainty, if no decedent’s estate probate proceeding has been initiated, or no personal representative appointed, then plaintiff’s counsel should consider opening probate themselves so that a creditor’s claim can be timely filed within one-year of the decedent’s passing.

What damages are recoverable against a defendant’s estate?

After substituting a deceased defendant’s personal representative or, if allowed by statute, the decedent’s successor in interest, “all damages are recoverable that might have been recovered against the decedent had the decedent lived.” CCP 377.42

The one exception are damages recoverable under Section 3294 of the Civil Code, or other punitive or exemplary damages – once a defendant dies, a plaintiff is no longer able to recover punitive or exemplary damages from that person’s estate.

What should a plaintiff do if all of a deceased defendant’s assets go to a trust?

Californians often die with their assets in trust leaving little to no estate.  In trying to recover damages awarded against a Decedent’s from a trust, the process is uncertain in California, unless a probate has been opened or the trustee initiates a formal trust claim procedure. Given how common trusts are in California, it might be surprising to learn that the statutory scheme governing litigation against a decedent is still based almost exclusively on the plaintiff acting in a probate estate. This will be the subject of a future article.

Andrew S. Gold, Esq.

Probate & Trust Litigation

Hourly & Contingency Fees Available

goldesq.com

(650) 450-9600

 

 

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