Opinion
E032639.
7-10-2003
PATRICIA LAROCCA, Plaintiff, Cross-defendant and Respondent, v. EDWIN LLOYD et al., Defendants, Cross-complainants and Appellants; STEVE KERPER, Cross-defendant and Respondent.
DesJardins, Fernandez & Smith, Michael A. DesJardins and Tanya D. Sizemore, for Defendants, Cross-complainants and Appellants. Elliott Luchs, for Plaintiff, Cross-defendant and Respondent Patricia LaRocca. Giardinelli & Associates, D.W. Duke and Glen J. Biondi, for Cross-defendant and Respondent Steve Kerper.
Plaintiff Patricia LaRocca (LaRocca) filed this action to quiet title to real property located on Thames Court in Riverside (the Thames property). Defendants Edwin Lloyd and Melanie Lloyd (the Lloyds) filed a cross-complaint against LaRocca and Steve Kerper (Kerper) for breach of contract, breach of fiduciary duty and fraud.
Kerper and LaRocca then moved for summary judgment, arguing that the cross-complaint was barred by the statute of limitations. LaRocca also moved for summary judgment on her complaint. The trial court granted both motions for summary judgment. The Lloyds appeal. We affirm.
PROCEDURAL BACKGROUND AND FACTS
The following facts are taken from the papers filed in connection with LaRoccas and Kerpers motions for summary judgment. Consistent with the applicable standard of review, we view the evidence in the light most favorable to the party opposing the motion i.e., in this case, the Lloyds. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)
In July 1995, the Lloyds contacted Kerper, a licensed real estate broker, for the purpose of selling their home, the Thames property. Kerper listed the property for $ 126,926. By September, when the Lloyds had still not received any offers, they dropped the listing price to $ 118,000. The Lloyds were anxious to sell the property because they had placed an offer on another home.
In October 1995, when the Lloyds had still not received any offers on the subject real property, they discussed with Kerper the possibility of Kerper purchasing it. On or about October 14, Kerper and the Lloyds entered into a written agreement for the purchase/sale of the Thames property. Pursuant to the terms of such agreement, Kerper was to purchase the property "subject to" the first trust deed. Escrow instructions were prepared reflecting these terms. The instructions included language that a formal assumption of the first trust deed would require the lenders written approval, and that such approval was not being sought prior to the close of escrow. Also, the grant deed, which the Lloyds acknowledged delivering to Kerper, was to remain unrecorded. At Kerpers suggestion, the Lloyds obtained legal advice regarding this transaction prior to the close of escrow.
Following the close of escrow, Kerper took possession of the Thames property and began tendering the monthly first trust deed payments through the Lloyds pursuant to the agreement. Within two weeks following the close of escrow, Mrs. Lloyd read a newspaper article about a couple who she felt was in a situation similar to that of her and her husband, and who had been taken advantage of by their broker.
In December 1995, LaRocca, a real estate agent who sometimes assisted Kerper, moved onto the Thames property. Since that time, she has had possession of the property and has made all payments (principle and interest) owing under the first trust deed. Further, she has paid all taxes and insurance on the property and has completed and paid for any and all necessary maintenance of and repairs to the property. In or about November 1996, Kerper assigned his interest in the Thames property to LaRocca via a quitclaim deed.
In April or May 2001, LaRocca approached the Lloyds and informed them that the Deed provided by them to Kerper had been misplaced. She requested that they provide her with a new grant deed in order that she could complete a refinance of the first trust deed on the Thames property. The Lloyds refused LaRoccas request, insisting that they, not LaRocca, were the owners of the property because their name was still on the first trust deed.
On July 18, 2001, LaRocca initiated this action against the Lloyds seeking, inter alia, quiet title to the Thames property and specific performance. On October 31, the Lloyds filed a cross-complaint against LaRocca and Kerper for breach of contract, breach of fiduciary duty and fraud.
In June 2001, Kerper and LaRocca each moved for summary judgment. They argued that each cause of action in the Lloyds cross-complaint was barred by the applicable statute of limitations. Kerper also argued that he fully disclosed the risks associated with the transaction and that he was not recording the grant deed, thus he did not commit fraud or breach of his fiduciary duties. Over the Lloyds opposition, the trial court granted both Kerpers and LaRoccas motions. Judgment in favor of LaRocca on her complaint and in favor of LaRocca and Kerper on the Lloyds cross-complaint was entered in August 2001. The Lloyds appealed.
STANDARD OF REVIEW
The purpose of summary judgment "is to provide courts with a mechanism to cut through the parties pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citations.]" (Aguilar v. Atlantic Richfield Co ., supra, 25 Cal.4th 826, 844.) Our de novo review is governed by Code of Civil Procedure section 437c, which provides in subdivision (c) that a motion for summary judgment may only be granted when, considering all of the evidence set forth in the papers and all inferences reasonably deducible therefrom, it has been demonstrated that "there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The pleadings govern the issues to be addressed. (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1121.)
DISCUSSION
The Lloyds contend that "the following triable issues of material fact remain to be determined: as to when the LLOYDS should have known of KERPERs alleged breaches and fraud and LAROCCAs alleged breach; as to whether KERPER and/or LAROCCA breached a contract with the LLOYDS; as to whether KERPER breached his fiduciary duties to the LLOYDS or committed fraud; and, as to whether the LLOYDS were damaged by these alleged breaches and fraud."
Before we consider the above issues which the Lloyds claim are triable, we first consider Kerpers and LaRoccas main defense to each of the Lloyds causes of action, i.e., the statute of limitations. According to the applicable statutes, the Lloyds had a maximum of four years in which to assert their claims of breach of contract and breach of fiduciary duty, (Code Civ. Proc., §§ 337 & 343) and a maximum of three years in which to assert their fraud claim (Code Civ. Proc., § 338). Under the facts of this case, the Lloyds entered into their contract with Kerper and used his services as a real estate broker in the Fall 1995. Furthermore, their interaction with LaRocca occurred in December 1995. However, the Lloyds did not file any action against Kerper or LaRocca until October 31, 2001, nearly six years after their dealings with them. On these facts alone, Kerper and LaRocca have shown that they are entitled to judgment in their favor on the Lloyds cross-complaint.
However, the Lloyds claim that a question of material fact exists as to when they discovered or should have discovered the wrongful conduct which is the basis of their claims in the cross-complaint. According to the Lloyds, the combined actions of Kerper and LaRocca prevented them from discovering the breaches of contract and fiduciary duty and fraud because when LaRocca moved onto the Thames property and began promising to purchase it, they "believed . . . that the house was sold to their agent, LAROCCA."
If, by December 1995, the Lloyds believed that the Thames property had been sold to LaRocca, logic dictates that within a reasonable time thereafter they should have discovered the alleged breaches or fraud. If the Lloyds believed that their house had been sold to LaRocca in December 1995, then they should have acted within a reasonable time to find out why their names had not been removed from the first trust deed. However, they did nothing. Nonetheless, their actions confirm their understanding that they had sold the property, i.e., they did not use any of their personal funds to make any further mortgage payments; they did not pay the property taxes; they did not pay the insurance on the property; and they did not assume responsibility for any repairs or maintenance of the property. Moreover, according to Mrs. Lloyds deposition testimony, within a few weeks after closing escrow on the Thames property, she read a newspaper article about a couple who she felt was in a situation similar to that of her and her husband, and who had been taken advantage of by their broker. Mrs. Lloyd also testified that she believed that, after closing escrow, Kerper told her something that he knew was untrue. She also admitted that, in December 1995, she discovered that Kerper allegedly lied to her. Nonetheless, the Lloyds failed to take any action to investigate Mrs. Lloyds suspicions or beliefs.
A cause of action accrues either at the time the alleged wrongful act occurs or shortly thereafter when the injured party admits to having a suspicion that something was wrong. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397-398, 981 P.2d 79.) "A plaintiff is charged with presumptive knowledge so as to commence the running of the statute once he or she has " notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his [or her] investigation . . . ." [Citations.]" (Wilshire Westwood Associates v. Atlantic Richfield Co.
(1993) 20 Cal.App.4th 732, 740.) Once a plaintiff suspects or should suspect wrongdoing, he must go find the facts. He cannot wait for the facts to find him. (Norgart v. Upjohn Co., supra, 21 Cal.4th 383, 397-398.)
Based on the above, we conclude that the Lloyds claims accrued no later than December 1995. By that time, the Lloyds knew or suspected wrongdoing which warranted an inquiry. Because the Lloyds did not file a lawsuit against Kerper or LaRocca within the statutory period, the trial court correctly ruled that their actions for breach of contract, breach of fiduciary duty, and fraud are barred by the applicable statute of limitations.
Having found that the Lloyds claims are time-barred, we need not address any other issue raised by them in their appeal. Furthermore, we note that they do not challenge the judgment entered in favor of LaRocca on her complaint. Accordingly, we need not consider whether the Lloyds could have asserted fraud as a defense to La Roccas complaint without violating the statute of limitations. (Styne v. Stevens (2001) 26 Cal.4th 42, 51-52.)
DISPOSITION
The judgment is affirmed. LaRocca and Kerper are to recover their costs on appeal.
We concur: WARD J., and GAUT J.