Opinion
D051321
9-8-2008
ORVAL E. BENKOSKY, as Trustee, etc., et al., Plaintiffs, Cross-defendants and Appellants, v. KEVIN DARBY, Defendant, Cross-complainant and Respondent.
Not to be Published
Orval E. Benkosky and Donna F. Benkosky (appellants), trustees of the Benkosky 1995 revocable trust, sued Kevin Darby on a straight note. Darby cross-complained. Following a bench trial, the court ruled in favor of Darby.
The Benkoskys contend the cross-complaint was barred by the two-year statute of limitations under Code of Civil Procedure, section 339. Darby argues the contention is waived because the Benkoskys failed to properly plead the defense in their answer; and, in the alternative, the cross-complaint was timely filed. We affirm.
Further statutory references are to the Code of Civil Procedure unless otherwise stated.
FACTUAL AND PROCEDURAL SUMMARY
On April 25, 2006, appellants filed a complaint alleging that on or about February 2006, Darby was in arrears on a straight note dated May 31, 2002. Darby generally denied the allegations, and in a subsequent amended cross-complaint for breach of contract alleged: "On or about May 31, 2002 . . . Kevin Darby . . . entered into an agreement with [the Benkoskys] to purchase the furniture, fixtures, equipment, and inventory of a business called Valley Vac and Sew. . . located in San Diego, California, for $80,000. [¶] Pursuant to the purchase agreement, Darby executed a [s]traight [n]ote payable to [the Benkoskys] in the amount of $80,000. . . . [¶] . . . While waiting in good faith for [the Benkoskys] to obtain the furniture, fixtures, equipment, and inventory of Valley Vac, Darby attempted to establish a new business and began paying [the Benkoskys] on the note. Darby paid a total of $46,000.00 in principal and interest on the note to [the Benkoskys]. . . . [¶] Thereafter, [the Benkoskys] breached their agreement with Darby in December 2002 when [the Benkoskys] advised Darby that [they] were not going to proceed with any future attempts to recover the furniture, fixtures, equipment, and inventory of Valley Vac."
The Benkoskys generally denied the cross-complaint and raised as an affirmative defense that, "The statute of limitations applicable to this action has expired." The court ruled that the straight note for $80,000.00 was void because there was no mutual assent and the agreement lacked mutual obligations. Accordingly, the court awarded Darby damages in the amount of $46,000.00 plus interest.
DISCUSSION
"There are two ways of making [a statute of limitation plea], first by alleging all of the facts showing that the action is barred. . . . The second method is stated in [Code of Civil Procedure, section 458]. It is necessary for defendant who pleads the statute of limitations to specify the applicable section, and, if such section is divided into subdivisions, to specify the particular subdivision or subdivisions thereof. If he fails to do so the plea is insufficient." (Brown v. World Church (1969) 272 Cal.App.2d 684, 691.) Here, the contention that the statute of limitations barred this action is waived. The Benkoskys did not comply with the pleading requirements. Their answer did not include facts relating to the statute of limitations defense, and it did not specify the statutory basis for the defense. The Benkoskys raised the defense during closing arguments; but again, did not specify the factual or statutory basis for it.
Counsel for appellants argued, "If my clients indeed had made those representations as part of the sales transaction on May 31st, on June, [Darby and his wife] realized they are not going to do that because the Benkoskys tell them, but yet [Kevin Darby] waits to file the cross-complaint some years past the two-year statute of limitations. [¶] Also, [the Darbys] have a parole evidence problem. This is a straight note. It reads complete. It covers all the significant issues, but yet now they want to draw in things outside the contract which are not relevant or barred by the statute of limitations and basically present an oral modification of an integrated, full, written agreement. So I think they have significant problems with that."
The contention also fails on the merits. "To determine the statute of limitations which applies to a cause of action it is necessary to identify the nature of the cause of action, i.e., the `gravamen of the cause of action. [Citation.] [T]he nature of the right sued upon and not the form of action nor the relief demanded determines the applicability of the statute of limitations under our code. " (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 22.) The four-year statute of limitations under section 337 was applicable here because the cross-complaint addressed the written straight note, which the trial court and the parties understood was the operative contract. The cross-complaint specifically referred to the straight note. The Benkoskys trial brief never mentioned an oral contract, but focused exclusively on the straight note, stating: "plaintiff . . . brings a complaint for damages based upon the breach of a written contract . . . entitled straight note. Facts expected to be elicited from the parties will show that, on or about May 31, 2002, defendant Kevin Darby executed a promissory note . . . in the sum of $80,000.000 . . . . The [s]traight [n]ote contains a late fee. . . . [¶] Defendant made consistent and regular payment on the note . . . from the inception through January 15, 2005." Further, the Benkoskys opening brief on appeal also three times acknowledges that the contract at issue was the straight note: First, "This action was initiated by plaintiff . . . for breach of contract . . . based upon the alleged failure of Kevin Darby . . . to repay a written agreement entitled [s]traight [n]ote." Second, "In the trial court, plaintiff sought breach of contract damages including principal, 10 [per cent] interest per the [s]traight [n]ote, court costs and attorneys fees based on contract. [¶] Cross-complainant sought breach of contract remedies including the return of all monies paid Benkosky on the [s]traight [n]ote." Third, "Darbys breach of contract action is an action to recover payments made on the [s]traight note. The [f]irst [a]mended [c]ross-[c]omplaint makes this clear."
The Benkoskys are seeking to change their theory on appeal and claim the statute of limitation for oral contracts applies. But a party may not change its theory of a cause of action on appeal and raise an issue not presented to the trial court. (Munro v. Regents of University of California (1989) 215 Cal.App.3d 977, 988-989.)
DISPOSITION
The judgment is affirmed. Kevin Darby is awarded costs on appeal.
WE CONCUR:
HALLER, Acting P. J.
McDONALD, J.