Opinion
NOT TO BE PUBLISHED
Napa County Super. Ct. No. 26-43668.
Pollak, Acting P.J.
Plaintiffs Charleen, Francesca and Joleen Wignall appeal from a judgment of dismissal entered following an order sustaining without leave to amend a demurrer filed by defendants David, John and Teresa Wignall and Edward Ewing. Plaintiffs appeared in propria persona in the trial court and continue to represent themselves on appeal. Their second amended complaint attempts to allege numerous claims against defendants arising out of a long-standing, highly litigated family dispute over, among other things, the alleged mismanagement of a family trust. The trial court concluded that all of plaintiffs’ claims are either barred by the statute of limitations or statute of frauds, previously resolved in a 2003 settlement agreement, or improperly seek to hold defendants personally liable for their acts as trustees of the family trust. On appeal, the scope of plaintiffs’ claims has been substantially narrowed to (1) whether Francesca and Charleen properly alleged causes of action against John and David for breach of contract, breach of fiduciary duty, and fraud based on their alleged failure to comply with the terms of the 2003 settlement agreement; (2) whether Francesca and Charleen properly alleged a cause of action against John and David for fraud based on omissions in the final accounting they submitted to the probate court; and (3) whether Joleen properly alleged a cause of action against Ed for breach of contract and fraud arising out of an alleged personal loan. We conclude that the trial court properly sustained without leave to amend defendants’ demurrer to each of these claims.
Plaintiffs concede that they are not challenging certain rulings on appeal. In addition, we deem waived those claims as to which plaintiffs have not presented sufficient argument. (Ellenberger v. Espinosa (1994) 30 Cal.App.4th 943, 948 [“When a brief fails to contain a legal argument with citation of authorities on the points made, we may ‘treat any claimed error in the decision of the court sustaining the demurrer as waived or abandoned’ ”].) Plaintiffs’ blanket statements that John, Theresa and Ed “breached the settlement agreement” and “breached fiduciary duties under the settlement agreement” without further explanation or argument are insufficient to preserve these claims on appeal.
Background
Francesca is the mother of David, John, Charleen and Joleen. Teresa is John’s wife. Edward is Charleen’s estranged husband.
In 1989, Francesca and her now deceased husband Charles formed a family trust appointing David and John as trustees. In 1998, John, Teresa, Edward and Charleen formed a partnership to purchase land and create a commercial vineyard. When Edward and Charleen separated, Francesca replaced Charleen as a member of the partnership.
In 2002 and 2003, disputes arose regarding the partnership and the management of the family trust, resulting in three separate lawsuits between the parties. On December 9, 2003, these actions were resolved in a global settlement agreement. According to the allegations of the present amended complaint, the settlement agreement required, among other things, John and David, as the trustees, to generate income from the trust property in an amount sufficient to pay Francesca $4,000 a month as well as a $50,000 one-time payment. The court entered judgment on the settlement agreement pursuant to Code of Civil Procedure section 664.6, reserving jurisdiction to resolve any disputes that might arise. Over the following 19 months the parties returned to court numerous times to resolve disputes concerning implementation of the settlement agreement and judgment. On July 29, 2005, the department of the superior court hearing these matters granted respondents’ motion to compel Francesca and Charleen to “execute the settlement documents, consisting of settlement and release agreement, transfer of interest and satisfaction of judgment in the form approved by the court... as reflecting the terms of the judgment.”
All statutory references are to the Code of Civil Procedure unless otherwise noted.
Respondents’ request for judicial notice of the reporter’s transcripts from two such hearings is denied for lack of relevance.
Meanwhile, on July 21, 2005, the probate department of the superior court approved a final accounting of the family trust submitted by John and David and discharged John and David as trustees. Thereafter, Wells Fargo Bank, as successor trustee, sold the trust property and paid Francesca from the proceeds of the sale all amounts owing under the settlement agreement.
On August 4, 2008, plaintiffs filed the present action. An amended complaint was filed on October 1, 2008. Defendants filed a demurrer, which the court sustained with leave to amend as to all causes of action. In December 2008, plaintiffs filed a second amended complaint alleging causes of action for, among other things, breach of contract, breach of fiduciary duty, and fraud. Defendants filed a demurrer to this complaint, which the trial court sustained without leave to amend as to all counts. A judgment of dismissal was entered on April 30, 2009. Plaintiffs filed a timely notice of appeal.
Discussion
“Our Supreme Court has set forth the standard of review for ruling on a demurrer dismissal as follows: ‘On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed “if any one of the several grounds of demurrer is well taken. [Citations.]” [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.’ ” (Payne v. National Collection Systems, Inc. (2001) 91 Cal.App.4th 1037, 1043-1044.)
1. Breach of Contract
The second amended complaint alleges that on December 9, 2003 the parties entered into an oral settlement agreement before the court. Plaintiffs allege that “John and David agreed to generate income from the ranches, in the amounts of at least $4,000/month plus a lump sum payment of $50,000, all of which was to be paid to Francesca. The $4,000 per month was to begin [December 9, 2003]. The $50,000 was to be paid within 90 days.... It was Charleen’s and Francesca’s understanding that the money Francesca was to receive would be through her sons generating income from the rental/leasing of the ranches. This would ensure future generations of receiving income under the trust.” David and John allegedly breached the settlement agreement by failing to make the trust property productive and pay Francesca amounts promised in the agreement out of the income, causing the successor trustee to sell the property to satisfy the trust’s obligations to Francesca. Plaintiffs allege that the date of the breach was July 21, 2005, because that is “[t]he last date the defendants could have performed as co-trustees.” The trial court sustained the demurrer to this claim on the ground that under Probate Code section 18000 the trustees could not be held personally liable.
Probate Code section 18000, subdivision (a) provides: “Unless otherwise provided in the contract or in this chapter, a trustee is not personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administration of the trust unless the trustee fails to reveal the trustee’s representative capacity or identify the trust in the contract.” It is well established that “[a] settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts.” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810-811.) The complaint alleges that the obligation to make the trust property productive and pay Francesca out of the resulting income was assumed by David and John under the terms of the settlement agreement in their capacities as trustees of the trust. Plaintiffs do not expressly dispute the application of this Probate Code provision to the breach of contract claims. They argue instead that “[t]his section does not excuse any liability the trustee may have for breach of trust” (Cal. Law Revision Com. Com., 54A West’s Ann. Prob. Code (1991 ed.) foll. § 18000, p. 236) and that “[t]he allegation in the second amended complaint was that the trustee respondents had committed a breach of trust to the beneficiaries.” Thus, insofar as plaintiffs’ complaint sought to hold John and David personally liable for a breach of contract based on their failure to act as trustees, the trial court properly relied on Probate Code section 18000 in sustaining the demurrer without leave to amend. We consider post whether the trial court correctly sustained the demurrer to plaintiffs’ claims for breach of fiduciary duty.
2. Breach of Fiduciary Duty
Plaintiffs allege a cause of action for breach of fiduciary duty based on the same allegations that David and John failed to make the trust property productive and pay Francesca out of the income. The trial court held that this claim is barred by the statute of limitations. The amended complaint alleges that the date of discovery of the breach of fiduciary duty was July 2005, when David and John were discharged and the final accounting was approved. The parties disagree as to which statute of limitations is applicable to this claim.
The trial court held that the claim is barred by the statute of limitations found in Probate Code section 16460, which requires a beneficiary to bring an action against a trustee within three years of his or her receipt of the trustee’s final accounting. Plaintiffs assert that their claim is governed by the 10-year statute of limitations applicable for enforcing a judgment (§ 337.5, subd. (3)) or, alternatively, the four-year statute of limitations applicable to claims for breach of fiduciary duty (§ 343). Defendants argue that relief from a settlement entered pursuant to section 664.6 may be obtained only through a showing of extrinsic fraud and that the applicable statute of limitations is thus the three-year limitation period for a fraud claim (§ 338).
The 10-year limitation period for enforcing a judgment is not applicable because plaintiffs are not attempting to enforce the judgment. Likewise, because they are not attempting to set aside the settlement agreement, the three-year limitations period proposed by defendants is also not applicable. As between the four-year limitations period found in the Code of Civil Procedure and the three-year period found in the Probate Code, we agree with the trial court that the applicable statute of limitation is that found in Probate Code section 16460. (See Noggle v. Bank of America (1999) 70 Cal.App.4th 853, 859 [“ ‘The three-year statute of limitations under subdivision (a) is applicable to all claims for breach of trust and the four-year statute of Code of Civil Procedure Section 343 is inapplicable’ ”].)
Probate Code section 16460, subdivision (a)(1) provides in relevant part: “If a beneficiary has received an interim or final account in writing, or other written report, that adequately discloses the existence of a claim against the trustee for breach of trust, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within three years after receipt of the account or report.” The record establishes that plaintiffs received the final accounting in July 2005. Accordingly, their cause of action for breach of trust, first asserted in the complaint filed on August 4, 2008, is barred by the three-year statute of limitations.
3. Fraud
Plaintiffs allege two claims for fraud. First, they allege that David and John committed fraud when they made promises pursuant to the settlement agreement that they did not intend to keep. They allege that John and David never intended to make the trust property productive or pay Francesca the amounts owing. Plaintiffs also allege that David and John committed fraud when they omitted from the final accounting in the probate court any mention of their obligations to Francesca under the settlement agreement. As the trial court observed, the last possible date of discovery of the alleged fraud was in July 2005 when the final accounting was approved. Accordingly, plaintiffs’ fraud claims are barred by the three-year statute of limitations. (§ 338, subd. (d).)
4. Joleen’s Claims
In addition to joining in the above claims, Joleen alleges that in 1998 she and Ed made an oral agreement under which he promised to pay one half of her student loan debt in exchange for her lending him $12,500 so that he could purchase his share of the vineyard partnership. Joleen owed approximately $80,000 in student loans at the time and it was agreed that Ed would “start making payments out of the grape profits” and that his obligation would continue until her debt was paid off. She alleges that Ed breached this agreement by never making any payments towards her loans and that his promise to pay a portion of her student loans was fraudulent. The trial court concluded that her claim for breach of contract is barred by the statute of frauds and that any related claims for fraud or unjust enrichment are barred by the statute of limitations.
Under Civil Code section 1624, subdivision (a), “[a]n agreement that by its terms is not to be performed within a year from the making thereof” must be in writing. In this case, the alleged oral agreement required Ed to repay Joleen’s loans from his share of the proceeds from sales of the partnership’s grapes. The pleading alleges, “This was an ongoing, annual, obligation to be determined from Ed receiving grape profits.” In her opposition to Ed’s demurrer Joleen wrote, “Ed misleads the court because there was no set time for Ed to make payments regarding Joleen’s student loans. It could [have] taken 20 years, 30 years or more.” She also acknowledges that the vineyard had not yet been planted in 1998 when the agreement was made. Accordingly, the contract is void under the statute of frauds because the contract contemplated that Ed would begin to pay only when the grapes had been grown and sold and that it could take many years to complete his obligation. (See Swift v. Swift (1873) 46 Cal. 266, 268 [oral contract between the lender and borrower that money loaned is to be repaid when nut-bearing trees about to be planted on the borrower’s farm yield an income sufficient to pay the same is void under the statute of frauds because the parties must have contemplated that more than one year would elapse before the time of payment would arrive].)
The trial court found that the contract was barred by the statute of frauds insofar as it requires that “[a] special promise to answer for the debt, default, or miscarriage of another” must be in writing. (Civ. Code § 1624, subd. (a)(2).) Joleen’s claim, however, does not fall within this provision. “A writing is... not required when a debtor promises to pay his or her debt by discharging an obligation or debt of his or her creditor. Accordingly, a debtor’s promise to pay money currently owed by the debtor to a creditor to a third person to whom the creditor is indebted is not barred by the provision of the statute of frauds governing special promises to answer for the debt, default, or miscarriage of another. In such a case, the debtor actually pays his or her own obligation rather than that of the creditor, and the mere direction in which payment is made does not alter the character of the debt as an original obligation for which the debtor alone is liable.” (35 Cal.Jur.3d (2010) Statute of Frauds, § 30; citing Barringer v. Warden (1859) 12 Cal. 311.)
As the trial court concluded, any remaining causes of action for unjust enrichment or fraud arising out of the invalid oral agreement are barred by the three-year statute of limitations under section 338, subdivision (d). The complaint alleges that Ed never made a payment on the loan and that the family has been involved in contentious litigation for almost a decade. Although it is impossible to pinpoint from the allegations of the complaint the precise date on which the limitations period began to run, it is clear that Joleen was on notice long before July 2005-seven years after the loan was made-that Ed was not going to fulfill his promise. (Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 350 [“ ‘[T]he plaintiff discovers the cause of action when he at least “suspects... that someone has done something wrong” to him [citation], “wrong” being used, not in any technical sense, but rather in accordance with its “lay understanding” ’ ”].)
On appeal, Joleen does not argue that she filed her claim within the three year statute of limitations. Rather, she contends that she “is permanently disabled, having been in and out of mental institutions, ” and that the court should have allowed her leave to amend the complaint to show that her condition tolled the statute of limitations. Joleen relies on section 352, which tolls the statute of limitations while a plaintiff is insane. For purposes of section 352, a plaintiff is “insane” if incapable of caring for his or her property or transacting business or understanding the nature or effects of his or her acts. (Alcott Rehabilitation Hospital v. Superior Court (2001) 93 Cal.App.4th 94, 102.) It does not appear that Joleen sought leave to amend from the trial court on this basis. The trial court’s order does not address this claim and Joleen does not identify any point in the trial court proceedings when the issue of her sanity was raised. Finally, the record is devoid of any evidence supporting her claim. To the contrary, the complaint alleges that “[a]t all times material herein the defendants and the plaintiff[s] were capable of contracting and each consented to the contract.” While Ed does not dispute that Joleen may have been under psychiatric care for some period of time, he argues correctly that it was her burden to establish that the statute of limitations was tolled for a sufficient length of time to render her claims timely. (5 Witkin, Cal. Proc. (5th ed. 2008) Pleading, § 931, p. 346 [“Where the complaint shows on its face that the cause of action is apparently barred, but the plaintiff relies on disability... or some other ground for suspension of the running of the statute [citation], he or she must plead these facts or a demurrer will lie”].) Joleen did not meet that burden or establish that the court abused its discretion in denying leave to amend. (See County of San Diego v. Sanfax Corp. (1977) 19 Cal.3d 862, 885, fn. 11 [“Because the county, in its filings with the trial court, did not allege [basis for tolling of statute of limitations], nor seek to amend its complaint, the trial court had no reason to suppose that the county could amend its complaint to allege facts giving rise to a defense to the statute of limitations, and thus did not err in sustaining the demurrer without leave to amend”].)
Section 352, subdivision (a) provides: “If a person entitled to bring an action, mentioned in Chapter 3 (commencing with Section 335) is, at the time the cause of action accrued either under the age of majority or insane, the time of the disability is not part of the time limited for the commencement of the action.”
Disposition
The judgment is affirmed. Defendants shall recover their costs on appeal. Defendants’ request for sanctions is denied.
We concur: Siggins, J., Jenkins, J.