Survival Of Cause Of Action

Ambrose Kettleby sold securities to Wilhelmina Radcote in a transaction that violated the Uniform Securities Act, and Wilhelmina commenced a civil action within the statutory period. While the action is pending, Ambrose dies. His estate argues that the claim died with him, and separately contends that had Wilhelmina died first, her claim would likewise have been extinguished. Under the Uniform Securities Act, what happens to the cause of action?

1. A.It is extinguished, because civil liability under the Act is personal to the seller and ends at death.The Act expressly provides that the cause of action survives the death of a person who might have been a defendant.
2. B.It survives only if Wilhelmina had already obtained a judgment before Ambrose died.Survival does not depend on a judgment having been entered. The pending action continues against the estate.
3. C.It survives against the estate, but the estate's liability is capped at the amount of the securities' original purchase price.The Act contains no such cap. The ordinary measure of recovery applies against the estate.
4. D.It survives, because every cause of action under the Act survives the death of any person who might have been a plaintiff or defendant.Correct. The survival provision operates symmetrically, so neither party's death defeats the claim.

Why: It survives. The Act provides that every cause of action under its civil liability provisions SURVIVES THE DEATH of any person who might have been a plaintiff or a defendant. The rule cuts both ways, which is why the estate's second contention fails as well: a buyer's claim passes to her estate if she dies, and a seller's liability passes to his estate if he dies. Without such a provision, liability could be extinguished by the death of a wrongdoer and a defrauded investor's recovery could be lost by her own death mid-litigation, so the survival provision keeps the remedy attached to the transaction rather than to the continued life of the parties. Wilhelmina may therefore proceed against Ambrose's estate.

An investor with a pending civil claim under the Uniform Securities Act dies before trial. Under the Act, the cause of action:

1. A.Survives and may be pursued by the investor's estateCorrect. Causes of action under the Act survive the death of either party.
2. B.Is extinguished, because securities claims are personal to the injured investorThis is the common-law abatement idea the statute expressly rejects — USA claims are not extinguished by death.
3. C.Must be refiled by the estate within 30 days of deathNo special 30-day refiling rule exists; the ordinary limitations period continues to govern. The 30-day figure belongs to rescission offers.
4. D.Survives only if the defendant is a registered broker-dealerSurvivability does not depend on the defendant's registration status; it applies to every claim under the Act.

Why: Sec. 410 provides that every cause of action under the Act survives the death of any person who might have been a plaintiff or defendant. The estate may continue or defend the suit. Review: Civil Liability (survivability).