Judge: Mark H. Epstein, Case: 23SMCV03939, Date: 2023-11-21 Tentative Ruling

Case Number: 23SMCV03939    Hearing Date: March 18, 2024    Dept: I

The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND.  Plaintiff alleges that he did work for the defendant for which he was not paid.  Specifically, plaintiff alleges that the parties entered into an oral agreement for plaintiff to do the work on or about January 2, 1997.  Defendant allegedly promised to pay $30,000 for that work.  The work continued “throughout 1997” according to plaintiff.  (FAC ¶¶7-8.)  Plaintiff alleges that defendant did not pay him.  Plaintiff filed this action on August 23, 2023.  Plaintiff also alleges that on or about June 29, 2020, defendant paid $5000 toward the $30,000 that was owed, although the check (attached to the original complaint) states that it was a “loan.”  (Id., ¶8.)  Defendant demurs on statute of limitations grounds.

The statute of limitations for an oral contract is two years.  If one interprets the complaint as alleging fraud (that is, defendant had no intention of paying at the time the promise to pay was made), the statute is three years.  The cause of action accrued in 1997—when the work was done but plaintiff was not paid.  On its face, then, the complaint is untimely as it had to be filed no later than sometime in 2000 even assuming the longer statute.  Plaintiff argues that he was unaware of defendant’s intention not to pay for a while, but that is not sufficient.  The court might consider that to be enough if the complaint were filed a few months out of time—after all, many people are late but not because they have no intention of paying.  Here, though, plaintiff is out of time by over 20 years. 

Plaintiff argues that the statute was tolled.  But to toll the statute, plaintiff must allege facts with some degree of specificity that, if true, would provide a legal ground to stop the statute from running.  (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625.)  There are no specific facts pled here; just references to theories or vague statements untethered to specifics that defendant promised that he would pay eventually.  That is not sufficient given the time that has elapsed.

Plaintiff argues that the June 2020 check might toll the statute.  But on its face, it states it is a loan, not a partial payment on a debt.  (It was attached to the original complaint but omitted from the First Amended Complaint.  Omitting it now does not help plaintiff; the court can still consider the check.)  Plaintiff’s argument is that the court ought to disregard the notation and simply accept that it was a partial payment.  But that is too thin a reed upon which to base the claim.  More fundamental, though, is that even giving plaintiff the benefit of the doubt by the time the check was issued—in 2020—the statute had long run.  The law is that a partial payment made within the statutory period can, under certain circumstances, re-start the statute of limitations clock.  But it must be made before the statute of limitations has expired.  Once the statute of limitations has expired, a partial payment does not re-start it.  (Code Civ. Proc. § 360.)

Plaintiff also argues that the statute was tolled during the time that defendant was out of state.  Code of Civil Procedure section 351 does so state, but it is not as helpful as plaintiff believes.  First, the United States Supreme Court has held a similar Ohio statute to be unconstitutional.  In Bendix Autolite Corp. v. Midwesco Enterprises (1977) 486 U.S. 888, the high court ruled that such a statute would mean effectively that there is no statute of limitations for a foreign company, which was an undue burden to place on an out of state defendant.  The Ninth Circuit ruled to the same effect with regard to section 351 in Abramson v. Brownstein (9th Cir. 1990) 897 F.2d 389.  There, two Californians entered into a contract with a resident of Massechusetts.  Plaintiff sued for fraud and tried to defeat the statute of limitations using section 351.  The Ninth Circuit found that the statute was unconstitutional as there applied.  The logic behind those cases is that it puts an undue burden on travel and business to toll a statute of limitations whenever someone leaves the state, especially if the reason has to do with interstate commerce or to say (effectively) that there is no statute of limitations to an out of state defendant.  This statute made more sense when it was hard to serve someone who was out of state, but it makes little or no sense today and does put an undue burden on travel and interstate commerce, both of which are protected under the United States Constitution.  Further, even if the court overlooked that problem, the party claiming section 351 tolling must set forth with some specificity the dates that the defendant was out of state and therefore that the statute was tolled.  The complaint has no such allegation.  Defendant, who lives in California (unlike plaintiff) was presumably in state as a general matter.  Here, plaintiff will need to show that defendant was out of state for 23 years.  The court will not so infer.

Plaintiff also asserts that defendant promised not to assert the statute of limitations as a defense.  But much more specificity is required to raise an estoppel argument as a defense to the statute.  There are no details in the complaint as to what exactly was said or when exactly it was stated.  And more general promises to pay the debt does not stop the statute of limitations from running.

Finally, even plaintiff admits that as of August 2020 he was aware that defendant had no intention of paying him.  So even taking that as starting the clock, it bars the case.

The short answer is that too much time has elapsed.  The complaint needed to be brought in 1999 or maybe 2000.  Bringing it in 2023 was 23 years too late.  No amount of amendment can cure this problem.

The court recognizes that the statute of limitations can lead to hardships.  After all, the theory of it is that if the plaintiff waits too long, then even a meritorious cause of action cannot be brought.  The countervailing policy is that evidence grows stale, memories fade, and at some point people need to be able to put the past behind them.  And because these periods are measured in years not days (and because discovery is available to shore up a cause of action after it is filed), the law requires plaintiffs to move with some diligence and not sit on their hands.  The tolling provisions exist and are enforceable to mitigate the harsh nature of the statute of limitations, but those equitable and legal principles are not without limit.  And the limit was reached here.

Accordingly, the demurrer is SUSTAINED WITHOUT LEAVE TO AMEND.  Defendant to provide an order of dismissal within 20 days.  The un-authorized sur-reply is STRICKEN.  If the court is in error, plaintiff’s remedy lies with the Court of Appeal.