Estate of Everhart
Filed 7/20/07 Estate of Everhart CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
Estate of MARCIA EVERHART, Deceased. ___________________________________ CHARLES E. BELL et al., as Executors, etc., Petitioners and Appellants, v. AMERICAN CONTRACTORS INDEMNITY COMPANY, Objector and Respondent. | B190853 (Super. Ct. No. MP 003545) |
APPEAL from an order of the Superior Court of Los Angeles County. David Bianchi, Commissioner. Affirmed in part and remanded with directions..
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Charles E. Bell and Dorthy Jean Bell, in pro. per., for Petitioners and Appellants.
No appearance for Objector and Respondent.
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Petitioners Charles E. Bell and Dorthy Jean Bell (petitioners) appeal from the probate courts order awarding them compensation as personal representatives of the estate of Marcia Everhart. The petitioners contend that the court miscalculated the compensation to which they were statutorily entitled pursuant to Probate Code section 10800,[1] improperly surcharged them for paying an outstanding debt judgment against the deceased, and abused its discretion by denying them compensation for extraordinary services. We agree that the probate court miscalculated the petitioners compensation under section 10800. On all other issues, we disagree and affirm.
BACKGROUND
On October 24, 2003, Marcia Everhart, 34, died of cancer. She left a daughter and a son, both minors. In her will, Everhart left all her possessions to them and named the petitioners as the co-executors of her will. Everharts main asset was her home. Before her death, on March 13, 2003, a small claims court in Los Angeles County entered a judgment against Everhart requiring her to pay $2,396.86 in principal and $88.50 in costs to her credit union. The judgment remained unpaid at the time of her death.
Although the petitioners sought to find a buyer for Everharts home, ultimately the house was sold in foreclosure in August 2004. The houses appraised value was $230,000; the new purchaser paid $260,000 for it. After the lender and various lienholders received their due, $74,704.11 remained. Another $2,255 went to a probate attorney whom the court appointed to represent Everharts childrens interests. In June 2005, the petitioners negotiated a 70 percent settlement of Everharts debt to her credit union and paid the credit union $1,739.75 from the proceeds from the sale of Everharts home. After payment of taxes and various other expenses, including funeral expenses and executors compensation, in July 2006, per a court order, Everharts son and daughter each received approximately $27,000 in a blocked account.
The petitioners requested executors compensation of $8,206.00 pursuant to the statutory formula for computing such compensation in section 10800, based on the final sale value of Everharts home ($260,000). The probate court calculated compensation of $7,606.26 under the statute, based on the appraised value of the home ($230,000), then deducted $1,739.75 from that as a surcharge against the petitioners for paying the credit unions damage judgment after the statute of limitations had expired. The petitioners also requested $1,260 in compensation for extraordinary services for 25.2 hours spent trying to sell Everharts home before the foreclosure. The court denied their request. In the end, the court awarded $5,866.51 to the petitioners as executors compensation. The petitioners timely appealed. (See 1300, subds. (d), (f), and (g).)
DISCUSSION
A
The petitioners contend that the probate court calculated their executors compensation using an incorrect basis. We agree.
Section 10800, subdivision (a), provides a formula for calculating the compensation that personal representatives of an estate receive for ordinary services, based on the value of the estate: 4 percent of the first $100,00 of value, 3 percent of the next $100,000, and 2 percent of the next $800,000 of value. Subdivision (b) of that statute explains that [f]or the purposes of this section, the value of the estate accounted for by the personal representative is the total amount of the appraisal value of property in the inventory, plus gains over the appraisal value on sales, plus receipts, less losses from the appraisal value on sales[.]
Because Everharts estate basically consisted of her home, the only disagreement between the petitioners and the probate court on this point is how to measure the value of the home. The petitioners based their request for compensation on the sale value after foreclosure ($260,000) plus $313.30 in receipts, which produces compensation of $8.206.26 by the formula in section 10800. The probate court, apparently reasoning that because Everharts home was foreclosed on, it was not sold in the usual sense, instead based its compensation award on the inventory in the estatethe appraised value of the home ($230,000) plus the $313.30 in receiptsand so calculated executors compensation of $7,606.26.
Existing authority, however, has established that sales of real property in foreclosure are to be treated like ordinary sales for purposes of determining executors compensation. (See Estate of Stein (1968) 267 Cal.App.2d 631, 636, 640-642 [applying provisions of now-repealed section 901 that were substantively identical to those in section 10800]; see also Estate of Sanchez (1995) 33 Cal.App.4th 239, 243.) As such, the petitioners were entitled to compute their compensation based on the appraised value of Everharts home ($230,000), plus any gains from the sale of the home ($30,000) plus receipts ($313.30), minus any losses (inapplicable here). Thus, the petitioners correctly placed the value of Everharts estate at $260,313.30, and, before figuring any surcharges to that sum, they would be entitled to $8,206.26 as compensation for their ordinary services under section 10800.
B
The petitioners maintain that the probate court abused its discretion by surcharging them for their payment to settle the judgment in favor of Everharts credit union. We disagree.
Code of Civil Procedure section 366.2, subdivision (a) provides, 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. Code of Civil Procedure section 22, in turn, defines action as an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right[.]
Courts have construed efforts to enforce an existing judgment as coming within the definition of an action (see Dawes v. Rich (1997) 60 Cal.App.4th 24, 33; Mark Briggs & Associates, Inc. v. Kinestar, Inc. (1983) 143 Cal.App.3d 483, 486) and have held that a judgment creditor must file a claim against a deceased debtors estate within the one-year limitations period pursuant to Code of Civil Procedure section 366.2. (See Dawes v. Rich, at pp. 27, 33, 36 [considering repealed Code of Civil Procedure section 353 along with section 366.2]; Embree v. Embree (2004) 125 Cal.App.4th 487, 490, 495, 496-497.) Thus the petitioners argument that Everharts credit unions debt judgment against her was not a Cause of Action Claim is unavailing. The record shows no evidence that the credit union filed a claim against the estate within a year after Everharts death;[2] as such, the estate was not obliged to pay the judgment.
A personal representative is chargeable with any loss or depreciation in value of the decedents estate due to the personal representatives breach of fiduciary duty. ( 9601, subd. (a)(1).) Because the credit unions debt judgment was untimely as a matter of law when the petitioners arranged to settle it, the probate courts surcharging of the petitioners unnecessary settlement payment of $1,739.75 against their executors compensation of $8,206.26 was not an abuse of discretion.
C
The petitioners contend that the probate court abused its discretion by denying them extraordinary fees for their hours of service spent trying to find a buyer and negotiate the sale of Everharts home before foreclosure. We disagree.
In addition to the statutory compensation pursuant to section 10800, the probate court may allow additional compensation for extraordinary services by the personal representative in an amount the court determines is just and reasonable. ( 10801, subd. (a); see also 10811 [allowing court to compensate extraordinary services by the personal representatives attorney].) As the statutory language clearly indicates, this power is discretionary. (See Estate of Hilton (1996) 44 Cal.App.4th 890, 912-914.)
The petitioners, noting that Everharts home mortgage was in default before probate proceedings ever began, maintain that they are entitled to compensation for more than 25 hours of extraordinary services arising from their efforts to find a purchaser after they learned of the default and before the lender foreclosed on the mortgage. They contend that they even found a purchaser in time to avoid foreclosure who was willing to pay $265,000 for Everharts former home, but the probate court frustrated the sale by requiring proof of a subscribing witness to Everharts will before the court would sign an order confirming the sale. The petitioners insist that Everharts will was self-proving, but the record indicates that the probate court had not received an affidavit from at least one subscribing witness to prove the will, as required by section 8220, at the time the probate court refused to sign the order confirming sale shortly before the foreclosure sale. In explaining its denial of the petitioners request for compensation for extraordinary services, the probate court noted that the petitioners extraordinary efforts to avoid a foreclosure sale were unsuccessful, and that they could have taken other actions to avoid the foreclosure. We do not find the courts reasoning to be arbitrary or capricious and thus we find no abuse of discretion in the courts denial of their request for compensation for extraordinary services.
DISPOSITION
The matter is remanded for correction and recalculation of the petitioners statutory compensation pursuant to section 10800 consistent with our opinion. The probate courts orders surcharging the petitioners statutory compensation for payment of the credit unions damage judgment and denying the petitioners request for compensation for extraordinary services are affirmed. Appellants shall bear their own costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, J.
We concur:
MALLANO, Acting P.J. VOGEL J.
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[1] All undesignated statutory references are to the Probate Code
[2] In their brief, the petitioners maintain that the credit union filed the creditor claim within a timely manner [sic] required by law, after receiving notice from the executors. Executors gave notice of administration immediately after they became knowledgeable of the debt. They cite no evidence to show that the credit union filed a claim against Everharts estate within a year after her death, however, and we find none in the record. The record indicates that the credit union only filed a claim against the estate on March 14, 2005, nearly 17 months after Everharts death.
