Schumacher v. Worcester

California Court of Appeal May 6, 1997 No. B100999Published

Before: Fukuto

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Holding. The court held that the statute of limitations for a bond foreclosure action is tolled during the period of an automatic bankruptcy stay, and that the lien remains valid as long as the underlying obligation is enforceable.

Issues

Whether the statute of limitations for a bond foreclosure action is extended by the period of an automatic bankruptcy stay.
Whether the lien securing the bond was extinguished under Civil Code section 2911 due to the lapse of time.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The suspension of a statute of limitations for a certain period is, in effect “time taken out," for that period and adds the same period of time to the limitation time provided in the statute.”

“A lien is not extinguished by lapse of time so long as the principal obligation is kept alive.”

Opinion

FUKUTO, Acting P. J.

Norma E. Worcester appeals from the judgment entered following the granting of Kern W. Schumacher’s motion for summary judgment in his action to foreclose a street improvement bond issued by the County of Los Angeles to pay for certain public improvements to

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Worcester’s property.

Worcester contends that Schumacher’s claim is barred by the applicable statute of limitations. She also contends the lien securing the payment of the bond was extinguished pursuant to Civil Code section 2911. We find the applicable statute of limitations extended by Worcester’s petition for bankruptcy.

Facts

The facts are as follows. Schumacher is the owner and holder of bond No. 3127 in the face amount of $6,607.05 which was duly issued in May 1969, by the County of Los Angeles under and by virtue of the Municipal Improvement Act of 1913 (pt. 7 of div. 12 of the Sts. & Hy. Code) and the Improvement Act of 1911 (pt. 5 of div. 7 of the Sts. & Hy. Code).

Bond No. 3127 is secured by real property which Worcester owns. Worcester has made no assessment payments on the bond since January 2,1982, and the bond has been in default as to principal, interest and penalties since that date. As of January 2, 1982, the total amount unpaid and due on the bond, including principal, interest and penalties, was $7,522,12.

On March 29, 1994, Schumacher filed suit to foreclose bond No. 3127, naming Worcester and all other parties then believed to hold any interest in the real property which secured the bond. Included as a defendant was Arthur Wilkof, in his capacity as conservator of Worcester’s estate. Wilkof answered on behalf of Worcester.

On May 31, 1995, Wilkof, as conservator for Worcester, moved for summary judgment, contending that Schumacher’s complaint was barred by the applicable four-year statute of limitations. Wilkof also contended that the lien upon Worcester’s property was properly extinguished pursuant to Civil Code section 2911. On September 15, 1995, the trial court denied summary judgment finding “that the statutory limitations were extended for the period of the suspension brought about by the automatic stay in the bankruptcy proceedings,

Schumacher v. Worcester

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