Does Section 366.2 Require That Breach Of Contract Action Be Filed Within One Year Of Decedent’s Death, Dacey v. Taraday, Tate California Estate & Trust Litigation Blog.

June 22, 2011
David Tate, Esq. (San Francisco), http://davidtate.us, tateatty@yahoo.com
California Estate & Trust Litigation, https://californiaestatetrust.wordpress.com

Dacey v. Taraday (California Court of Appeal, First District, June 21, 2011, Case Nos. A125080, No. A125670 Consolidated)

California Code of Civil Procedure §366.2 states:

(a) If a person against whom an action may be brought on a liability of the person, whether arising in contract, tort, or otherwise, and whether accrued or not accrued, dies before the expiration of the applicable limitations period, and the cause of action survives, an action may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply.

In Dacey v. Taraday the Decedent had entered into a pre-death agreement which obligated the Decedent to make payment to others following the resolution, by settlement or trial, of various court cases that had been filed and were ongoing at the time of the Decedent’s death.  The cases did resolve after Decedent’s death.  Post Decedent’s death, a party to the agreement (Dacey) sought recovery under the agreement.  The administrator of Decedent’s estate refused to make payment.  Dacey filed a legal action to recover under the agreement but did not file his action until more than one year following Decedent’s death.  Accordingly, the administrator of Decedent’s estate sought to disallow the action for recovery in part based on the Cal. Civ. Code §366.2 one year statute of limitation.

The Court of Appeal held that in this case the legal action was not time barred by §366.2. The Court held that at the time of the Decedent’s death Decedent had a liability and an obligation but both were contingent on the occurrence of a future event which had not yet occurred.  Section 366.2 did not apply as the debt was not enforceable against Decedent while he was alive and the breach of the contract (by the administrator) occurred after Decedent’s death.

It should be carefully noted that in every case all potential statute of limitation issues need to be carefully evaluated and that the holding in Dacey v. Taraday was based on the facts of that particular case alone.  Depending on facts and circumstances the results could be opposite in other breach of agreement situations, and the results or holding would be different in a situation where a legal action could have been brought or existed on the agreement before the Decedent’s death, in which case §366.2 probably would apply.

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