Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. NC 039097 Deanne Smith Myers, Judge. Affirmed.
Wagner Palmer, Richard P. Wagner and David C. Palmer for Plaintiff and Appellant.
Ronald K. Granit; Law Offices of Amy J. Cooper and Amy J. Cooper for Defendants and Respondents.
FLIER, J.
Appellant Robert Obeid filed his action against respondents James Eleopoulos and Big E Investments, LLC on November 7, 2006. The complaint was captioned as an action for partition but, following a plenary trial, the trial court found that the action was for the breach of an oral partnership agreement, the partnership having terminated sometime in August 2002. The court concluded that the action was barred by the statute of limitations. We agree and therefore affirm the judgment.
FACTS AND PROCEDURAL HISTORY
Eleopoulos, a restaurateur and real estate investor, engaged Obeid, who was a real estate broker and who also performed house renovations, to supervise the restoration of 11 pieces of distressed real property. These properties were bought and owned either by Eleopoulos or Big E Investments, a limited liability company wholly owned by Eleopoulos. It appears that Eleopoulos and Obeid were on friendly terms.
Over time, troubles arose with the renovations. These troubles extended to the alleged diversion, by Obeid, of resources from restoration sites he was supervising to his own properties. This led to a confrontation that ended by Eleopoulos firing Obeid.
Obeid entitled the action that he filed on November 7, 2006, as a complaint for partition. He named five parcels of real property in the complaint and alleged that he and Eleopoulos each owned 50 percent of these properties. Although the complaint conceded that only respondents held title to these properties, the complaint alleged that Obeid was the beneficial owner of a 50 percent interest under the provisions of an oral partnership agreement. The complaint sought a declaration that Obeid and Eleopoulos each owned 50 percent of the properties and also sought an order directing a sale of the properties and an equal division of the proceeds.
Respondents’ answer denied the allegations of the complaint and asserted 16 affirmative defenses, one of which was that the action was barred by laches. An amended answer added as an affirmative defense the statutes of limitations set forth in Code of Civil Procedure sections 318, 319, 320 and 321. In substance, these provisions deal with actions brought to recover real property.
All further statutory references are to the Code of Civil Procedure.
Prior to the commencement of the trial, respondents moved to expunge lis pendens filed by Obeid, contending that the action was in reality one for accounting. This motion was denied on the ground that the action was one for partition.
The case was tried to the court without a jury over a period of six months commencing on October 2, 2007. On the previous day, respondents filed a motion in limine in which they sought leave to amend their answer to allege that the action was barred by the statute of limitations set forth in section 343. The trial court granted this motion.
“An action for relief not hereinbefore provided for must be commenced within four years after the cause of action shall have accrued.” (§ 343.)
At the conclusion of the trial, respondents moved for a judgment under section 631.8 on the grounds of laches and the four-year statute of limitation set forth in section 343.
After the parties had submitted briefs on this issue on March 6, 2008, the court, in a detailed minute order entered on June 9, 2008, noted that Obeid was correct that there was no statute of limitation in an action for a partition. Citing authorities, the court concluded, however, that there can be no partition action between partners because it is the partnership that owns the property, and not the individual partners. The court then reviewed the trial evidence, noting that Obeid had testified that there was an oral agreement to become partners for the purpose of investing in real estate and to share in the profits earned from the properties acquired by the partnership, whether those profits were from rents or sales proceeds. The court concluded tentatively that the gravamen of the action was for the breach of this oral partnership agreement. If so, the applicable statute of limitation was the two-year statute set forth in section 339. The court noted that neither party had raised the two-year statute of section 339 and that therefore both parties should brief this matter.
In his responsive brief, Obeid now contended that the four-year statute of section 343 applied. Conceding that even this statute had run, Obeid requested leave to conduct discovery on the issue whether Eleopoulos was absent from California for 99 days or more during the pendency of the four-year period. Obeid offered to prove that Eleopoulos traveled to Greece from time to time and also owned property in Nevada where he spent time.
In its statement of decision, the trial court confirmed its tentative findings about the gravamen of the action being on for the breach of an oral partnership agreement. The court concluded that the action was barred by the two-year statute of section 339.
DISCUSSION
1. Respondents Did Not Waive the Two-Year Statute of Limitation of Section 339
Obeid contends that respondents waived the defense of the two-year statute of limitation set forth in section 339 because they never asserted this defense in their pleadings.
This contention is, of course, without merit. It was the trial court that raised this issue and, it is important to note, the court also gave the parties full opportunity to brief this issue. Respondents availed themselves of that opportunity and filed a brief strongly contending, with authorities cited, that the two-year statute of section 339 applied and barred the action. (See Hauselt v. County of Butte (2009) 172 Cal.App.4th 550, 564 [no waiver of statute of limitations when issue “fully briefed and litigated on its merits in the trial court”].) Respondents did not waive this issue.
Obeid does not question the power of the trial court to raise this issue sua sponte. The court was eminently correct to do so.
2. The Trial Court Was Correct in Concluding That the Two-Year Statute of Limitations of Section 339 Governed
Citing Manok v. Fishman (1973) 31 Cal.App.3d 208, Obeid contends that the trial court erred in applying the two-year statute of section 339 and that, as in the cited case, the court should have applied the four-year statute set forth in section 343.
Significantly, Obeid states in his brief that he does not dispute the following finding in the statement of decision: “The Court finds the gravamen of this action is that Obeid is seeking to enforce an oral partnership agreement that entitles him to share in the profits of the business of buying, improving, and selling property. Obeid is contending that Eleopoulos breached the agreement in August of 2002 when he told Obeid to never contact him again, essentially booting him out of the partnership.”
In Manok v. Fishman, supra, 31 Cal.App.3d 208, 210, the plaintiffs paid $40,000 for two credit bureaus, which the defendants undertook to manage; the profits were to be shared equally. The agreement was never reduced to writing. Eight years passed and the defendants never reported any profits. The plaintiffs brought an action for an accounting, declaratory relief and breach of contract. (31 Cal.App.3d at p. 209.) The appellate court characterized the action as predicated on the exclusion of the plaintiffs from partnership affairs by the defendants. (31 Cal.App.3d at p. 211.)
The trial court in Manok ruled that under the two-year statute of section 339, the action was barred. The Court of Appeal reversed because the action was essentially one for an accounting, not for breach of an oral partnership agreement. But the appellate court reasoned: “In the case at bench, the original contract by which the partnership allegedly began is not the primary right sued upon. This action is based upon the alleged relationship of the parties, the carrying on of a jointly owned business, and the fiduciary duties which the law imposes upon such parties.... An express agreement between the parties may govern their relationship, but to the extent that their respective rights and duties are not spelled out in an express agreement, the law imposes obligations arising out of the nature of their fiduciary relationship. One of these is the duty to account.... This is the primary right which is the basis of the action here.” (Manok v. Fishman, supra, 31 Cal.App.3d at p. 213, citation omitted.)
Obeid is incorrect in relying on Manok v. Fishman in his opening brief for the proposition that “disputes between... partners are governed by the four-year statute of limitations CCP section 343, not the two-year statute applicable to oral agreements generally.” Manok expressly found that the action in that case was not for the breach of the oral partnership agreement but for an accounting.
Obeid’s concession that the trial court correctly found that the action in this case was one for the breach of an oral partnership agreement is dispositive. As the court pointed out in Manok v. Fishman, supra, 31 Cal.App.3d at pages 211-212,ever since Jefferson v. J. E. French Co. (1960) 54 Cal.2d 717, 718-719, the rule has been that an action for the breach of an oral partnership agreement is governed by the two-year statute set forth in section 339. Obeid’s argument to the contrary is without merit.
3. The Remainder of Obeid’s Contentions Are Moot
Obeid contends that the trial court erred in giving leave to respondents to amend with the defense of the four-year statute of section 343 and that the court also erred in not giving Obeid leave to engage in discovery about Eleopoulos’s alleged absences from California between August 2002 and November 2006.
Since the trial court’s and our own decision are both predicated on the applicability of the statute of limitation set forth in section 339, it is of no moment that respondents were allowed to amend to raise the defense of the four-year statute of section 343. It follows that the same is true about Eleopoulos’s alleged absences from California.
DISPOSITION
The judgment is affirmed. Respondents are to recover their costs on appeal.
We concur: RUBIN, Acting P. J., MOHR, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.