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Jamison v. Roth

California Court of Appeals, Second District, Seventh Division
Apr 20, 2009
No. B206927 (Cal. Ct. App. Apr. 20, 2009)

Opinion

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. BC377111 and BC383825, David L. Minning, Judge.

J.J. Little & Associates and J.J. Little for Plaintiff and Appellant.

Yee & Belilove, Steven R. Yee, Steve R. Belilove and Alex P. Katofsky for Defendants and Respondents.


ZELON, J.

This appeal arises from an alleged breach of a settlement agreement in a prior litigation. Respondent Craig Wood (“Wood”) filed suit against Appellant Eddie B. Jamison (“Jamison”) and other individuals for legal malpractice and elder abuse. While Wood’s lawsuit was pending, Jamison and Wood purportedly entered into a settlement agreement which Wood later breached. Jamison thereafter brought a separate action against Wood and his attorneys, Respondents Thomas R. Roth, William B. Steinmeyer, and Steinmeyer Roth, LLP (collectively “Steinmeyer Roth”), alleging claims for breach of contract, promissory estoppel, and violation of the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.). The trial court granted the special motions to strike filed by Wood and Steinmeyer Roth (collectively “Respondents”) pursuant to Code of Civil Procedure section 425.16.

Unless otherwise stated, all further statutory references are to the Code of Civil Procedure.

In this appeal, we conclude that the trial court did not err in granting Respondents’ special motions to strike because Jamison’s claims for breach of contract and promissory estoppel were barred by the two-year statute of limitations applicable to oral contracts, and because Jamison has failed to show, in his claim for violation of the UCL, sufficient facts of any unlawful, unfair or fraudulent business act. Accordingly, we affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. Wood’s Malpractice Action Against Jamison

On May 7, 2003, Wood filed a civil action against Jamison and other named defendants, alleging claims for legal malpractice and elder abuse. Wood was represented by Thomas R. Roth (“Roth”) and William B. Steinmeyer (“Steinmeyer”) of Steinmeyer Roth, LLP. Jamison initially was represented by James J. Little (“Little”) of J.J. Little & Associates.

According to Jamison, on September 8 and 12, 2003, Roth and Little met at the offices of Steinmeyer Roth to discuss settlement. Little explained to Roth that Jamison had not engaged in any wrongdoing and that the actual wrongdoer in the action was another named defendant, Ira Borden. At the conclusion of these meetings, Little and Roth allegedly entered into an oral settlement agreement on behalf of their clients in which Wood agreed not to prosecute his claims against Jamison, and in exchange, Jamison agreed to cooperate with Wood in the prosecution of Wood’s claims against the other named defendants.

On September 15, 2003, Little sent Steinmeyer Roth a letter confirming the terms of the alleged settlement agreement. The letter stated in pertinent part as follows:

“This letter confirms our agreement, pursuant to our discussions on September 8, 2003 and September 12, 2003, that you have agreed with your client’s express authorization that you will not actively prosecute your claims against Eddie Jamison and/or pursue collection of a judgment against him in connection with the above-referenced matter. In exchange for said agreement, both Mr. Jamison and myself will cooperate with you and your client in your prosecution of your claims against the other defendants. You further agree that upon the conclusion of your case against the other defendants[,] Mr. Jamison will be entitled to recover his reasonable attorneys’ fees and costs incurred in connection with this litigation.”

Little did not receive any objection or other response to this letter from either Steinmeyer Roth or Wood. Jamison thereafter cooperated with Wood and Steinmeyer Roth in their prosecution of claims against the other defendants and provided them with as much information as he could about the pending litigation.

Notwithstanding the alleged settlement agreement, Steinmeyer Roth continued to litigate Wood’s claims against Jamison. Steinmeyer Roth served written discovery requests on Jamison in October 2003, participated in the deposition of Jamison in February and March 2004, and filed a second amended complaint that continued to name Jamison as a defendant in September 2004. According to Jamison, none of these litigation-related activities by Steinmeyer Roth put him on notice that Wood was breaching their settlement agreement because the parties also had agreed that Jamison would remain a named defendant in the action in order to place settlement pressure on the other defendants and to assure Jamison’s continued cooperation in the case. Jamison therefore was not required to serve substantive responses to the written discovery, and prior to the depositions, he attended preparation meetings with Steinmeyer Roth to ensure that Wood received a favorable record of his testimony. According to Jamison, the parties also stipulated that his prior answer could serve as his answer to the second amended complaint, and Jamison’s attorney confirmed this stipulation in a letter to Steinmeyer Roth.

On January 6, 2005, however, Steinmeyer Roth filed a request for default against Jamison based on his failure to respond to the second amended complaint. A default judgment was entered against Jamison on that date, but as alleged by Jamison, neither he nor his attorneys were ever served with a copy of the notice of default. Wood eventually entered into a settlement agreement with several other defendants in the action in or about April 2005. On May 19, 2005, Steinmeyer Roth filed a notice of dismissal that purported to dismiss Wood’s action against all named defendants other than Jamison and another defaulting defendant, Patrick McComb.

Jamison disputes whether the May 19, 2005 notice of dismissal was inapplicable to him as a defaulting party. The notice of dismissal simply states that “[n]otice is hereby given that, pursuant to the court’s Order to Show Cause Re: Sanctions/Dismissal, plaintiff will dismiss his complaint in the above matter.” The trial court’s order to show cause re: dismissal is not part of the record on appeal. In any event, it does not appear that Jamison ever sought a dismissal of Wood’s claims against him on the basis of the May 19, 2005 notice.

Jamison later obtained new counsel, Daniel Noveck (“Noveck”), to represent him in Wood’s litigation. On August 18, 2005, the parties attended a hearing before the court during which Jamison and his attorney learned for the first time that a default judgment had been entered against him. On August 24, 2005, Jamison filed a motion to set aside the default. The stated basis for the motion was that Little, Jamison’s former attorney, mistakenly had believed that he did not have to file an answer to the second amended complaint, and that Jamison never was served with a notice of default by Steinmeyer Roth.

According to a declaration filed by Jamison’s attorney in support of the motion, he retrieved a copy of the notice of default from the court after learning of the default. Although a proof of service was attached, it purportedly showed a service date of February 5, 2004, one year before the default was entered. Jamison argued in his motion that the proof of service was thus invalid.

After the court set aside the default, Wood’s action against Jamison went to trial on January 25 and 26, 2006. According to Jamison, he did not adequately prepare for trial based on his reliance on the parties’ settlement agreement. In particular, Jamison did not conduct any pre-trial discovery which he believed would have refuted certain false testimony that Wood and Steinmeyer Roth purportedly presented at trial regarding damages. Wood ultimately prevailed at trial in his claims against Jamison and obtained a judgment against Jamison in the amount of $122,000, plus attorney’s fees and costs.

II. Jamison’s Breach Of Contract Action Against Wood

On April 9, 2007, Jamison filed a civil action against Wood and Steinmeyer Roth for breach of contract and unfair business practices in violation of the UCL (Los Angeles County Superior Court Case No. BC369195). Jamison voluntarily dismissed that lawsuit without prejudice one month later on May 10, 2007. On September 5, 2007, Jamison filed a second action against Wood and Steinmeyer Roth that again alleged claims for breach of contract and violation of the UCL (Los Angeles County Superior Court Case No. BC377111). Jamison’s second complaint was served on Steinmeyer Roth, but was never served on Wood.

On November 12, 2007, Steinmeyer Roth filed a special motion to strike Jamison’s complaint pursuant to section 425.16. The trial court granted the motion on the grounds that Jamison’s claims against Steinmeyer Roth were barred by the litigation privilege and by the lack of privity between Jamison and Steinmeyer Roth with respect to the alleged settlement agreement. The trial court dismissed Jamison’s action against Steinmeyer Roth with prejudice, and also awarded Steinmeyer Roth $3,120 in attorney’s fees and costs.

On January 16, 2008, Jamison voluntarily dismissed his complaint against Wood. He then filed a separate civil action solely against Wood, alleging claims for breach of contract, promissory estoppel, and violation of the UCL (Los Angeles County Superior Court Case No. BC383825). By written stipulation, the parties agreed that Steinmeyer Roth’s special motion to strike would be deemed to have been filed by Wood in response to Jamison’s complaint against him, and that the trial court’s order granting Steinmeyer Roth’s motion would be deemed to be the court’s order with respect to the motion filed by Wood. On March 24, 2008, the trial court approved the parties’ stipulation and dismissed Jamison’s action against Wood with prejudice. Jamison thereafter filed a timely notice of appeal.

Although Steinmeyer Roth filed a respondent’s brief in this appeal, Wood did not. Where a respondent fails to file a brief, the appellate court will decide the appeal as to that respondent solely on the record, the opening brief, and any oral argument by the appellant. (Cal. Rules of Court, rule 8.220(a)(2); In re Marriage of Laurenti (2007) 154 Cal.App.4th 395, 402, fn. 5.)

DISCUSSION

III. Standard Of Review

Section 425.16 provides, in pertinent part, that “[a] cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (§ 425.16, subd. (b)(1).) The purpose of section 425.16 is to encourage participation in matters of public significance and to ensure that such participation is not chilled through an abuse of the judicial process. (§ 425.16, subd. (a).) The provisions of the statute must be “construed broadly” to effectuate its purpose. (§ 425.16, subd. (a).)

Resolution of a special motion to strike under section 425.16 requires a two-step process. (Navellier v. Sletten (2002) 29 Cal.4th 82, 88.) First, the defendant must make a threshold showing that the challenged cause of action arises from constitutionally protected activity. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056; Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) If the defendant satisfies that prong, the burden shifts to the plaintiff to demonstrate a probability of prevailing on the merits of the action. (Rusheen v. Cohen, supra, at p. 1056; Equilon Enterprises v. Consumer Cause, Inc., supra, at p. 67.) We review a trial court’s ruling on a special motion to strike de novo, conducting an independent review of the entire record. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3; HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.)

In this case, Jamison concedes that his action arises from constitutionally protected activity and is subject to a special motion to strike under section 425.16. (See Navellier v. Sletten, supra, 29 Cal.4th at pp. 89-90 [action based on alleged breach of a settlement agreement made in a prior litigation arose from protected activity within meaning of section 425.16].) Therefore, the issue on appeal is whether Jamison has met his burden of demonstrating a probability of prevailing on the merits of his claims.

I. Probability Of Prevailing

To demonstrate a probability of prevailing on the merits of a challenged cause of action, “the plaintiff must ‘state[ ] and substantiate[ ] a legally sufficient claim.’ [Citation.]” (Jarrow Formulas, Inc., v. LaMarche (2003) 31 Cal.4th 728, 741.) The plaintiff must make a prima facie showing of facts that would, if proven, support a judgment in his or her favor. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821.) For purposes of this inquiry, “the trial court considers the pleadings and evidentiary submissions of both the plaintiff and the defendant [citation].” (Ibid.) However, “‘the court does not weigh the evidence or make credibility determinations. [Citations.]’” (Ross v. Kish (2006) 145 Cal.App.4th 188, 197.) The court must accept as true the evidence favorable to the plaintiff and consider the defendant’s opposing evidence only to determine if it defeats the plaintiff’s showing as a matter of law. (Flatley v. Mauro (2006) 39 Cal.4th 299, 326.) Although “the court does not weigh the credibility or comparative probative strength of competing evidence, it should grant the motion if, as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s attempt to establish evidentiary support for the claim. [Citation.]” (Wilson v. Parker, Covert & Chidester, supra, at p. 821.).

A. Breach Of Contract

Jamison alleged a cause of action for breach of contract against both Wood and Steinmeyer Roth. Specifically, Jamison asserted that there was a valid settlement agreement between himself, Wood, and Steinmeyer Roth, and that Wood and Steinmeyer Roth breached the agreement by continuing to prosecute Wood’s claims against Jamison and by seeking to enforce the resulting judgment. Among other arguments, the parties dispute what statute of limitations applies to Jamison’s breach of contract claim and when that cause of action accrued.

1. Statute Of Limitations

Steinmeyer Roth contends that the two-year statute of limitations for oral contracts (§ 339, subd. (1)) applies because Jamison’s complaint only alleged an oral settlement agreement and because the September 15, 2003 letter from Jamison’s attorney confirming that agreement was not signed by the parties. Jamison, on the other hand, claims that the four-year limitations period for written contracts applies (§ 337, subd. (1)) because the parties’ settlement agreement was converted from an oral contract to a written contract when Jamison’s attorney sent the September 15, 2003 letter to which Steinmeyer Roth never objected. We accordingly must consider whether the alleged settlement agreement constitutes a “contract... founded upon an instrument in writing,” as required for the four-year statute of limitations to apply. (§ 337, subd. (1).)

In Amen v. Merced County Title Co. (1962) 58 Cal.2d 528, 532 (Amen), the California Supreme Court explained that a “contract may be ‘in writing’ for purposes of the statute of limitations even though it was accepted orally or by an act other than signing.” In Amen, the purchaser of real property sued her escrow holder for breach of contract based on the escrow holder’s failure to comply with certain written escrow instructions. The escrow holder had prepared the instructions which included a statement that “this escrow is accepted by your [escrow holder] subject to all terms and conditions set forth herein.” (Id. at p. 531.) The buyer and seller each signed the instructions, but the escrow holder did not. (Id. at p. 530.) The Supreme Court held that a four-year limitations period applied because “if the escrow holder prepares the instructions, offers to perform them, and the buyer and seller accept the offer, an action for failure to comply with the instructions is on a written contract.” (Id. at p. 532.) The Supreme Court further reasoned that as long as the party to be charged with a written contract “has agreed to the writing, there is no reason to invoke the two-year statute of limitations applicable to oral agreements.” (Id. at p. 533; see also Benard v. Walkup (1969) 272 Cal.App.2d 595, 602 (Benard) [where a contract initially was signed by only the plaintiff but the defendant conceded that he accepted the writing and later signed it, the contract was “in writing” for statute of limitations purposes], disapproved on other grounds by Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176.)

A similar result was reached in E.O.C. Ord, Inc. v. Kovakovich (1988) 200 Cal.App.3d 1194 (Ord), a case on which Jamison relies. In Ord, the parties orally agreed to a contract. (Id. at p. 1196.) The plaintiff then sent the defendant a letter confirming the oral agreement, and the parties subsequently had a telephone conversation during which the defendant stated that he agreed to the terms of the letter. (Id. at p. 1197.) In holding that the parties’ agreement was governed by the four-year statute of limitations for written contracts, the Fifth District noted that “[t]he requirements are only that there be a writing containing all terms and that there be acceptance by the party to be charged.” (Id. at p. 1201.) The Court of Appeal concluded that the defendant manifested his acceptance to the writing when he orally agreed to its terms in the parties’ subsequent telephone conversation. (Id. at p. 1202 [“The letter, containing all the terms of the contract, was prepared and signed by [the plaintiff] and was received by [the defendant], who subsequently orally accepted its terms.”].) The agreement thus “became one that was founded on an instrument in writing.” (Ibid.)

More recently, in Pietrobon v. Libarle (2006) 137 Cal.App.4th 992, 997-998 (Pietrobon), the First District held that a four-year limitations period applied to a breach of contract action that arose from a written settlement agreement prepared by the defendant’s attorney, but never signed by the defendant. There, the parties orally agreed to a settlement in open court. (Id. at 994.) The defendant’s attorney then prepared a written settlement agreement that he sent to the plaintiff. (Ibid.) The plaintiff signed the agreement, but the defendant did not. (Ibid.) In applying the four-year statute of limitations for written contracts, the Court of Appeal noted that the defendant orally agreed to the settlement at a hearing before the court, and admitted at trial that the terms to which he had agreed were accurately set forth in the written agreement prepared by his attorney. (Id. at p. 998.) Under such circumstances, the parties’ settlement agreement was “in writing” for statute of limitations purposes. (Ibid.)

In contrast, in James De Nicholas Associates, Inc. v. Heritage Constr. Corp. (1970) 5 Cal.App.3d 421, 425 (De Nicholas), Division Four of this District held that the two-year statute of limitations for oral contracts applied to an action where the plaintiff confirmed the terms of an oral agreement in a writing to the defendant to which the defendant never responded. In that case, the parties entered into an oral agreement in which the defendant agreed to pay the plaintiff $10,000 as part of a stock acquisition deal. (Id. at 423.) The plaintiff then sent the defendant a letter that generally confirmed the terms of their oral contract, but offered to accept $13,000. (Ibid.) The defendant never objected or otherwise responded to that letter. (Ibid.) After the defendant made only a partial payment of $5,000, the plaintiff filed suit for breach of contract. (Ibid.) In rejecting the plaintiff’s argument that the action was subject to a four-year limitations period, the Court of Appeal reasoned that any writings tending to show the terms of the agreement were prepared solely by the plaintiff, and hence, could not be used to show acceptance by the defendant. (Id. at p. 425.) The court further noted that, other than asserting that there was an oral agreement confirmed in writing, the plaintiff failed to allege any facts to establish that the defendant ever accepted the terms of that writing. (Ibid.) The two-year statute of limitations for oral contracts therefore applied.

As the above-cited decisions demonstrate, although a contract may be “in writing” for statute of limitations purposes even where it is accepted by an act other than signing, there still must be an unequivocal acceptance of the writing by the party to be charged. A party may manifest its acceptance to the terms of a writing in different ways. For instance, acceptance may be shown where the defendant or its agent prepared the written agreement, as was the case in Amen and Pietrobon. Alternatively, acceptance may be shown where the party to be charged received a copy of the written agreement and then orally accepted its terms, as the defendant did in Ord. Yet whatever the manner of acceptance, the conduct of the party must be sufficient to be deemed an acceptance of the terms of the writing itself. In contrast, where the evidence does not reflect an unequivocal acceptance of a written contract by the party to be charged, as was the case in De Nicholas, then the contract formed is founded upon an oral rather than a written agreement.

We note that the De Nicholas decision was criticized in Ord for construing Amen and Benard to require written indicia of acceptance by the defendant. (Ord, supra, 200 Cal.App.3d at p. 1201.) We agree with Ord that these authorities do not stand for the proposition that the party to be bound by a written contract for statute of limitations purposes must manifest its acceptance to that contract in writing. Nevertheless, De Nicholas is consistent with Amen, Benard, and Ord in that the cases all require the defendant’s clear expression of acceptance of the terms of a written contract for the four year statute of limitations to apply.

Here, the sole evidence of an alleged written agreement is the September 15, 2003 letter from Jamison’s attorney to Steinmeyer Roth to which Respondents neither objected nor otherwise responded. There is no evidence that Steinmeyer Roth or Wood ever accepted the terms of that writing either orally or by some other act. Jamison has not presented any evidence that Steinmeyer Roth or Wood signed the September 15, 2003 letter, sent any type of written response confirming their agreement to its terms, or orally communicated to Jamison or his attorney that they accepted the terms of the alleged written contract. The subsequent conduct of Steinmeyer Roth in continuing to prosecute Wood’s claims against Jamison also fails to show acceptance of a written settlement agreement. Jamison counters that such conduct was not inconsistent with the September 15, 2003 letter because the parties had agreed that Jamison would remain a named defendant in the action. Even accepting Jamison’s assertion, however, there still must be evidence of an express acceptance of the terms of the letter on the part of Steinmeyer Roth or Wood. Respondents’ actions in continuing to litigate the claims against Jamison after receiving the letter, even if ambiguous, are insufficient to establish any such acceptance.

Jamison relies on a provision in the statute of frauds (Civ. Code, § 1624) to argue that silence can be deemed acceptance of a written contract for statute of limitations purposes. Specifically, he cites to Civil Code section 1624, subdivision (b)(3)(B), which provides that there is sufficient evidence of a contract for purposes of the statute of frauds where a “confirmation in writing sufficient to indicate that a contract has been made... is received by the party against whom enforcement is sought no later than the fifth business day after the contract is made... and the sender does not receive, on or before the third business day after receipt... written objection to a material term of the confirmation.” However, this provision of the statute is contained in subdivision (b) which applies solely to “qualified financial contracts” as defined therein. (Civ. Code, § 1624, subd. (b)(1) [“An agreement or contract that is valid in other respects... is not invalid for lack of a note, memorandum, or other writing... provided that the agreement or contract is a qualified financial contract as defined in paragraph (2)....”].) The alleged settlement agreement in this case does not constitute a “qualified financial contract” under the statute of frauds, and thus, Civil Code section 1624, subdivision (b)(3)(B) has no application here.

Because Jamison has failed to produce any evidence that either Steinmeyer Roth or Wood ever accepted the terms of the September 15, 2003 letter, the parties’ alleged settlement agreement was not founded upon an instrument in writing. Accordingly, the alleged agreement was oral, and Jamison’s cause of action for breach of contract was subject to the two-year statute of limitations. (§ 339, subd. (1).)

1. Accrual Of Cause Of Action

It is well-established that the statute of limitations begins to run upon the accrual of the cause of action, which is upon the occurrence of the last essential element of the claim. (Spear v. California State Auto. Assn. (1992) 2 Cal.4th 1035, 1040.) Generally, a cause of action for breach of contract accrues at the time of the breach. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 831.) However, under the discovery rule, a cause of action will not accrue until the plaintiff discovers, or has reason to discover, the cause of action. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397-398; Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111.) The discovery rule “may be applied to breaches [of contract] which can be, and are, committed in secret and, moreover, where the harm flowing from those breaches will not be reasonably discoverable by plaintiffs until a future time.” (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 832.) In order to rely on the discovery rule, the plaintiff must show that, “despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period.” (Fox. v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 809.)

While denying the existence of any settlement agreement with Jamison, Steinmeyer Roth asserts that a breach of the alleged agreement first occurred on September 2, 2004, when Respondents filed and served a second amended complaint that continued to name Jamison as a defendant. Additionally, Steinmeyer Roth argues that a subsequent breach of the alleged agreement occurred on May 19, 2005, when Respondents filed and served a notice of dismissal of all named defendants other than Jamison and Patrick McComb. Steinmeyer Roth reasons that the statute of limitations began to run no later than one of those two dates because when Jamison was served with the filings, he should have known that Wood was continuing to litigate his claims against Jamison in violation of the alleged agreement.

Jamison counters that neither of these litigation filings was sufficient to trigger the statute of limitations because they could not have put him on notice that Respondents intended to breach the terms of the settlement. According to Jamison, the parties previously had agreed that he would remain a defendant in the action in order to place pressure on the other defendants and to assure his continued cooperation in the case, and thus, he had no reason to suspect that Respondents were refusing to comply with the settlement simply because they continued to litigate Wood’s claims. Instead, Jamison maintains that his cause of action did not accrue until August 24, 2005, when he filed a motion to set aside the default that had been surreptitiously taken against him.

Ultimately, however, we need not decide whether the statute of limitations on Jamison’s breach of contract claim began to run on September 2, 2004, as Steinmeyer Roth suggests, or on August 24, 2005, as Jamison contends. Even if we accept Jamison’s argument that his cause of action did not accrue until the latter date, the claim is still barred by the two-year limitations period applicable to oral contracts. (§ 339, subd. (1).) The record reflects that Jamison filed his operative complaint against Steinmeyer Roth on September 5, 2007, and filed his operative complaint against Wood on January 15, 2008. By either date, the two-year statute of limitations had expired.

Jamison insists that the statute of limitations was tolled during the pendency of his prior lawsuit against Respondents. He initially filed a breach of contract action on April 9, 2007, but dismissed that complaint without prejudice 31 days later on May 10, 2007. According to Jamison, the voluntary dismissal of his prior action entitled him to two years, plus 31 days, to file a subsequent action for breach of contract, and hence, the statute of limitations did not expire until September 24, 2007. We disagree. In Wood v. Elling Corp. (1977) 20 Cal.3d 353, 359-360, the California Supreme Court made clear that, while the filing of a complaint generally tolls the statute of limitations, when an action is dismissed without prejudice, the original limitations period is restored as if no prior action had been brought. (Id. at p. 359 [“‘In the absence of a statute, a party cannot deduct from the period of the statute of limitations applicable to his case the time consumed by the pendency of an action in which he sought to have the matter adjudicated, but which was dismissed without prejudice to him....’”].) Otherwise, a plaintiff could obtain an “indefinite extension” of the statute of limitations through “successive filings and dismissals.” (Id. at p. 360; see also Thomas v. Gilliland (2002) 95 Cal.App.4th 427, 429 [rejecting “preposterous proposition” that “the statute of limitations is tolled when a complaint is filed so that a plaintiff may dismiss the complaint and refile the same action long after the statute of limitations has expired”].)

In sum, the statute of limitations on Jamison’s breach of contract cause of action expired no later than August 24, 2007, two years after Jamison filed a motion to set aside the default judgment that had been entered against him. Because Jamison did not file the present actions until on or after September 5, 2007, his breach of contract claim against both Steinmeyer Roth and Wood is time-barred.

A. Promissory Estoppel

In his operative complaint against Wood, Jamison asserted a separate cause of action for promissory estoppel. Specifically, he alleged that Wood made a clear promise not to prosecute his claims against Jamison or to enforce any adverse judgment, and that Jamison suffered damages in reliance on that promise when he failed to actively defend against Wood’s lawsuit, resulting in the judgment against him.

“Promissory estoppel is ‘a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.’ [Citation.]” (Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310.) The elements of a promissory estoppel claim are (1) a clear promise, (2) reliance, (3) substantial detriment, and (4) damages measured by the extent of the obligation assumed and not performed. (Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 692.) Although equitable in nature, promissory estoppel is akin to a cause of action based on contract, except that the consideration needed to form an enforceable contract is provided by detrimental reliance. (Id. at pp. 692-693; Signal Hill Aviation Co., Inc. v. Stroppe (1979) 96 Cal.App.3d 627, 640.) Courts therefore “have characterized promissory estoppel claims as being basically the same as contract actions, but only missing the consideration element....” (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 903.)

The parties do not address what statute of limitations applies to Jamison’s cause of action for promissory estoppel. However, the law is clear that the “statute of limitations to be applied is determined by the nature of the right sued upon, not by the form of the action or the relief demanded. [Citations.]” (Day v. Greene (1963) 59 Cal.2d 404, 411.) The California Supreme Court accordingly has held that where the primary purpose of an equitable cause of action is to recover money under a contract, the statute of limitations applicable to contract actions governs the equitable claim. (Jefferson v. J.E. French Co. (1960) 54 Cal.2d 717, 718-719 [accounting action was subject to the two-year statute of limitations of section 339 because “the primary purpose of the action [was] to recover money under the oral contract” and the “accounting [was] merely ancillary to the perfection of plaintiff’s right under the oral contract”]; see also Century Indem. Co. v. Superior Court (1996) 50 Cal.App.4th 1115, 1117 [equitable contribution action was “governed by the two-year statute of limitations of Code of Civil Procedure section 339 as an action not founded on an instrument in writing”].)

Because Jamison’s promissory estoppel claim sounds in contract and seeks to recover damages based on an alleged settlement agreement, the two-year statute of limitations applicable to oral contracts (§ 339, subd. (1)) likewise applies to this claim. Jamison’s cause of action for promissory estoppel is thus time-barred.

A. Violation Of The UCL

Jamison also alleged that both Steinmeyer Roth and Wood committed unlawful and unfair business practices in violation of the UCL. The UCL prohibits “unfair competition,” which is defined by the Business and Professions Code to include “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200.) By its terms, the statute is broad in scope. It “governs ‘anti-competitive business practices’ as well as injuries to consumers, and has as a major purpose ‘the preservation of fair business competition.’ [Citations.]” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) However, a plaintiff may not “plead around” an “absolute bar to relief” merely “by recasting the cause of action as one for unfair competition.” (Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 283.) Where the plaintiff fails to show that a business practice is “unfair, unlawful or fraudulent” within the meaning of the statute, a claim for violation of the UCL cannot stand. (Community Assisting Recovery, Inc. v. Aegis Sec. Ins. Co. (2001) 92 Cal.App.4th 886, 895; see also Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619 [“A plaintiff alleging unfair business practices under [the UCL] must state with reasonable particularity the facts supporting the statutory elements of the violation.”].)

3. Alleged Breach Of Contract

In this case, Jamison has failed to make a prima facie showing of any “unlawful, unfair or fraudulent business act or practice” under the UCL. (Bus. & Prof. Code, § 17200.) In his complaints, Jamison vaguely alleged that Steinmeyer Roth engaged in conduct that violated both public policy and unidentified state statutes against “defrauding persons or otherwise taking advantage of them in business dealings.” He also alleged that Wood was liable under the UCL because Wood “actively participated in, encouraged, ratified, and benefitted from” the acts of Steinmeyer Roth. However, Jamison has “identifie[d] no particular section of the statutory scheme which was violated” and has “fail[ed] to describe with any reasonable particularity the facts supporting violation.” (Khoury v. Maly’s of California, Inc., supra, 14 Cal.App.4th at p. 619.)

Jamison maintains that he has stated an actionable claim under the UCL because he has set forth a valid cause of action for breach of the settlement agreement. However, a mere breach of contract cannot form the predicate for a UCL claim unless “‘it also constitutes conduct that is “unlawful, or unfair, or fraudulent.”’ [Citations.]” (Puentes v. Wells Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th 638, 645; see also South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 887 [The UCL “‘does not give the courts a general license to review the fairness of contracts,’” but rather is directed at enjoining deceptive business practices.].) In other words, a plaintiff cannot substantiate a UCL claim simply by proving that a private contract was breached, but must separately show that the breach was an “unlawful,” “unfair,” or “fraudulent” business act or practice within the meaning of the statute. (Bus. & Prof. Code, § 17200.) Jamison’s evidence that Respondents breached a private settlement agreement between the parties is insufficient to establish a separate cause of action under the UCL.

1 Alleged Fraudulent Conduct

Jamison suggests in his reply brief that Respondents’ breach of the alleged settlement agreement also constituted “conduct that is fraudulent in nature.” Other than this vague assertion, however, Jamison has offered no evidence of any fraudulent act committed by Respondents with respect to the alleged agreement. To the extent that Jamison is basing his UCL claim on Steinmeyer Roth’s purportedly false promises to Jamison and his attorney during the prior litigation, such conduct cannot support a cause of action under UCL.

To begin with, Jamison has failed to articulate how any alleged misrepresentations by Steinmeyer Roth about a private settlement agreement were likely to deceive members of the public. (See, e.g., Committee on Children’s Television v. Gen. Foods. Corp. (1983) 35 Cal.3d 197, 211 [a business act is “fraudulent” under the UCL if “‘members of the public are likely to be deceived’”]; Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 839 [the term “fraudulent” as used in the UCL “does not refer to the common law tort of fraud,” but rather “requires a showing members of the public ‘“are likely to be deceived”’”].) Yet even assuming that Steinmeyer Roth’s settlement communications could be construed as “fraudulent” under the UCL, the litigation privilege of Civil Code section 47, subdivision (b) provides an absolute bar to UCL claims that are based on an attorney’s fraudulent conduct in earlier litigation. (Rubin v. Green (1993) 4 Cal.4th 1187, 1203-1204 [where an attorney’s conduct falls within the scope of the litigation privilege, it is absolutely immune from civil tort liability, including claims under the UCL]; see also Manufacturers Life Ins. Co. v. Superior Court, supra, 10 Cal.4th at p. 284 [UCL claim cannot be based on conduct “which is absolutely privileged or immunized by another statute, such as the litigation privilege of Civil Code section 47, subdivision (b)”]; People ex rel. Gallegos v. Pacific Lumber Co. (2008) 158 Cal.App.4th 950, 962 [plaintiff cannot plead around the litigation privilege by relabeling an action a UCL claim].)

Jamison contends that the litigation privilege does not apply to his UCL claim because it arises out of a breach of contract claim that falls outside the scope of the privilege. It is true that the litigation privilege does not necessarily preclude a cause of action for breach of a settlement agreement where it would “‘frustrate the very purpose of the contract’ if there were a privilege to breach [it].” (Navellier v. Sletten (2003) 106 Cal.App.4th 763, 774; see also Wentland v. Wass (2005) 126 Cal.App.4th 1484, 1494 [litigation privilege did not bar claim for breach of an agreement not to publicly disparage an adverse party because contractually agreeing to refrain from such statements waived the privilege to do so in a subsequent litigation].) However, a cause of action based on fraud or other torts is distinct from a claim for breach of contract. Although the litigation privilege may not apply to a claim for breach of a settlement agreement under certain circumstances, it does preclude tort claims (other than malicious prosecution) that are predicated on a breaching party’s fraudulent conduct in a prior litigation. (Navellier v. Sletten, supra, 106 Cal.App.4th at pp. 771, 774 [in action arising from defendant’s breach of a release agreement reached in a prior lawsuit, the litigation privilege did not bar plaintiff’s claim for breach of contract, but did bar its claim for fraud].)

Therefore, to the extent Jamison is basing his UCL claim on Steinmeyer Roth’s allegedly fraudulent communications in the earlier litigation, such conduct clearly falls within the scope of the litigation privilege and cannot support a UCL claim. (See, e.g., Navarro v. IHOP Properties, Inc. (2005) 134 Cal.App.4th 834, 843-844 [factual misstatements relating to settlements, including those made during litigation settlement negotiations, are protected by the litigation privilege]; Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 23-24 [attorney’s fraudulent statements made during a lawsuit to induce settlement were absolutely privileged under Civil Code section 47, subd. (b)].) Alternatively, to the extent Jamison is basing his UCL claim on Respondents’ alleged breach of the settlement agreement, such conduct, standing alone, is insufficient to establish a violation of the UCL. (Puentes v. Wells Fargo Home Mortgage, Inc., supra, 160 Cal.App.4th at p. 645.) Jamison’s UCL claim against both Steinmeyer Roth and Wood was properly dismissed. The trial court accordingly did not err in granting Respondents’ special motions to strike.

Jamison also appeals the trial court’s post-judgment award of attorney’s fees and costs to Steinmeyer Roth, asserting that because the court erred in granting the special motion to strike, Steinmeyer Roth was not a prevailing defendant under section 425.16, and was not entitled to recover any fees or costs. Because we conclude that Steinmeyer Roth’s motion was properly granted, we need not address this issue. We also need not address Jamison’s argument regarding whether Steinmeyer Roth was a “party” to the alleged settlement agreement given our conclusion that the claims against Steinmeyer Roth fail on other grounds.

DISPOSITION

The judgment is affirmed. Respondents shall recover their costs on appeal.

We concur: WOODS, Acting P. J., JACKSON, J.


Summaries of

Jamison v. Roth

California Court of Appeals, Second District, Seventh Division
Apr 20, 2009
No. B206927 (Cal. Ct. App. Apr. 20, 2009)
Case details for

Jamison v. Roth

Case Details

Full title:EDDIE B. JAMISON, Plaintiff and Appellant, v. THOMAS ROTH, ESQ. et al.…

Court:California Court of Appeals, Second District, Seventh Division

Date published: Apr 20, 2009

Citations

No. B206927 (Cal. Ct. App. Apr. 20, 2009)