Opinion
G053679
06-22-2017
HACI E. KARAASLAN, Plaintiff and Appellant, v. MESA WATER DISTRICT, Defendant and Respondent.
William Paulsen & Associates and William L. Paulsen for Plaintiff and Appellant. Law Offices of Robert J. Gokoo and Robert J. Gokoo for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2015-00824061) OPINION Appeal from an order of the Superior Court of Orange County, Robert J. Moss, Judge. Affirmed. William Paulsen & Associates and William L. Paulsen for Plaintiff and Appellant. Law Offices of Robert J. Gokoo and Robert J. Gokoo for Defendant and Respondent.
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Haci E. Karaaslan appeals from the trial court's denial of his petition for leave to file a personal injury lawsuit against Mesa Water District (the District) after the date for filing suit under the statute of limitations passed. Karaaslan's complaint arose from an automobile accident involving a District vehicle and, after the accident, Karaaslan timely filed a claim with the District under Government Code section 911.2 (all undesignated statutory references are to this code) as a prerequisite to suing a public entity. The District sent Karaaslan a notice rejecting his claim, but included in its letter a statement suggesting the rejection was only a formality to enable the District's insurance carrier to act on the claim. The insurer subsequently settled Karaaslan's demand relating to property damage, but denied his ensuing demand for $28,000 in medical expenses and pain and suffering damages, relying on the expiration of the six-month statute of limitations (§ 945.6) to commence a lawsuit after a public entity rejects a claim.
Karaaslan contends the District should be estopped from relying on the statute of limitations because it misled him to believe the rejection notice was a mere formality not designed to impede further negotiation or to trigger the limitations period. As we explain, however, the statutes and case law governing public entity tort claims clearly establish that an agency may continue to negotiate the settlement of a claim after rejecting it, and doing so does not toll the statute of limitations. Because this authority was not a hidden fact, but instead controlling law equally available to both parties, estoppel does not apply. Karaaslan's claim that the District waived the limitations period similarly fails. We therefore affirm the trial court's order denying Karaaslan leave to file his lawsuit after the statute of limitations expired.
I
FACTS AND PROCEDURAL HISTORY
The relevant facts are undisputed. In mid-November 2014, a car operated by a District employee rear-ended Karaaslan's vehicle at an intersection in Newport Beach. Karaaslan suffered unspecified injuries in the accident, which totaled his 2001 Ford Crown Victoria sedan.
On December 17, 2014, Karaaslan's attorney timely filed with the District notice of his damages claim arising from the accident. (§§ 910, 911.2.) The District formally rejected the claim and mailed Karaaslan a notice of rejection on January 23, 2015. The notice informed Karaaslan his claim "was rejected on January 23, 2015" and included the requisite statutory warning (§ 913) concerning the statute of limitations on filing a lawsuit: "Subject to certain exceptions, you have only six (6) months from the date this notice was personally delivered or deposited in the mail to file a State Court Action on this claim. See California Government Code § 945.6."
The District included with its rejection notice a letter from its Chief Financial Officer, Andrew Hamilton, stating that as a public agency, the District follows a formal claim procedure that requires certain legal notifications to the claimant. The letter further stated that the District forwarded Karaaslan's claim to its insurance carrier for processing and that the insurance carrier could not process the claim until the District "formally rejected the claim at its level." Hamilton described the enclosed rejection letter "as a formality to meet the legal requirement" and explained it was "not a ruling on the validity of the claim," but "merely a process for referring the claim to [the] insurance carrier."
On May 1, 2015, the District's insurance carrier sent Karaaslan a check for $6,361 to settle his property damage and loss of use claims. On the same date, the insurance carrier requested any applicable medical bills and reports "so proper consideration can be made as to the injury damages."
Karaaslan also references an earlier letter from the insurer on February 17, 2015, stating it "ha[d] not denied considering payment" for loss of use of Karaaslan's vehicle. This letter is not in the record, but Karaaslan's appellate brief concedes the carrier's $6,361 payment included compensation for loss of use in addition to property damage.
Over six months later and almost 10 months from the date of the District's January 23rd notice rejecting Karaaslan's claim, Karaaslan's attorney on November 17, 2015, sent the District's insurance carrier a $28,000 payment demand to compensate Karaaslan for pain and suffering and the medical expenses he incurred. The insurer rejected the claim, citing the six-month limitations period noted in the District's rejection notice, commencing on the date of the notice, January 23, 2015.
Karaaslan petitioned the trial court for leave to file a late action on grounds the District was estopped from relying on the statute of limitations. At the hearing on the petition, the court observed, "I understand your position, and I know that periods of limitations are harsh, but I think that's the law and your petition is denied." Karaaslan now appeals.
II
DISCUSSION
A. Appealability
As a preliminary matter, the District contends the trial court's denial of Karaaslan's petition to file a late action is not an appealable order. The District notes that while the tort claims act provides a means to petition the trial court (§ 946.6) if the public entity denies leave to present to the entity a late claim (§ 911.4), there is no similar authorization to petition the court to file a belated action. A plaintiff, however, requires no preauthorization to file a lawsuit, but instead may specially plead estoppel to the statute of limitations. (Estate of Pieper (1964) 224 Cal.App.2d 670, 691.) Karaaslan's petition, while unorthodox because it was not accompanied by or incorporated in a complaint, essentially adopted this course of special pleading to determine whether the statute of limitations was a bar to his suit. Presumably he would have filed his complaint promptly if the trial court had granted his petition. (Ibid. [where estoppel applies, "a party has a reasonable time in which to bring his action"].) In any event, the District did not object to the procedure employed below, but instead fully participated in the proceedings.
More to the point, the trial court in denying Karaaslan's petition resolved the statute of limitations issue against him by rejecting his estoppel claim, and that determination constitutes a final appealable order entitled to collateral estoppel effect. (Cf. Gurrola v. County of Los Angeles (1984) 153 Cal.App.3d 145, 150 [trial court's ruling that plaintiff failed to comply with claim filing deadline is an appealable order entitled to preclusive effect].) In other words, after the ruling, Karaaslan could not file his lawsuit for the first time and claim the statute of limitations issue had not been resolved. To the contrary, the order determined the parties' rights in a conclusive manner barring Karaaslan's personal injury action under the statute of limitations. An order finally determining the parties' rights is effectively a judgment and therefore appealable. (Code Civ. Proc., § 904.1, subd. (a)(1) [providing for appeal of final judgments]; see Joyce v. Black (1990) 217 Cal.App.3d 318, 321 ["This order has all the earmarks of a final judgment. It is final in the sense that it leaves nothing for future consideration"].) "More importantly, it is the only judicial ruling in the case, and thus there is no other opportunity for review by appeal." (Joyce, at p. 321.) We therefore turn to the merits of the appeal. B. Estoppel and Waiver
Karaaslan contends principles of estoppel and waiver preclude the District's reliance on the statute of limitations, and therefore the trial court erred in failing to grant his petition to file his lawsuit after the limitations period expired. When, as here, the facts are undisputed, waiver and estoppel present questions of law that we review de novo. (Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1202; Jordan v. City of Sacramento (2007) 148 Cal.App.4th 1487, 1496 (Jordan).) We address Karaaslan's estoppel and waiver arguments in turn.
"A public agency is subject to estoppel from the assertion of either the time limits for filing tort claims, or the statute of limitations on a cause of action." (Jordan, supra, 148 Cal.App.4th at p. 1496.) A public entity is estopped from pleading the statute of limitations when the following elements are established: "'"(1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury."'" (Kleinecke v. Montecito Water Dist. (1983) 147 Cal.App.3d 240, 245-246 (Kleinecke)). Estoppel does not arise "where the material facts are known to both parties and the pertinent provisions of law are equally accessible to them." (Jordan, at p. 1496.)
Karaaslan premises his estoppel argument on the District's notice on January 23, 2015, stating it rejected Karaaslan's claim while also stating in Hamilton's letter that the rejection was not a final ruling on the validity of the claim. Instead, the letter suggested the District's rejection notice was a mere "formality" enabling its insurer to further process the claim, which resulted in lengthy settlement negotiations. Karaaslan asserts he reasonably relied on the ongoing negotiations with the insurer to conclude the limitations period was tolled. But there was nothing secret or hidden in this chain of events that the District knew and Karaaslan did not, which is an essential element of estoppel. (See Cal. Cigarette Concessions v. City of L.A. (1960) 53 Cal.2d 865, 869-870 [party asserting estoppel must be ignorant of the true facts].)
To the contrary, the statutory provisions and case law governing public entity tort claims are well-established matters of law, not fact, and are equally available to both parties. By statute, public agencies may negotiate or settle claims (§ 912.6), set up governing procedures to resolve claims (§ 912.8), and expressly may continue to attempt to settle a claim the agency previously rejected but only within the six-month limitations period during which the claimant must file his or her lawsuit. (§ 913.2.)
A defining feature of the tort claims act, the six-month statute of limitations begins to run from the date the entity rejects the claim (§ 945.6), and courts are not at liberty to alter or extend the limitations period set by the Legislature. (Hunter v. County of Los Angeles (1968) 262 Cal.App.2d 820, 821, 823 [lawsuit untimely by four days; estoppel "unsubstantiated by any showing that respondents led appellants to believe they could legitimately file their complaint when they did"].) Case law has long established that ongoing negotiations to settle a claim do not toll the statute of limitations (Isaacson v. City of Oakland (1968) 263 Cal.App.2d 414, 420-421 (Isaacson)), and while the parties may extend by written agreement the period in which the agency may act on the claim, they may not do so beyond the six-month limitations period (§ 912.4, subd. (b)(2)). In any event, it is undisputed the parties did not enter a written agreement to extend the period for the District to accept or reject Karaaslan's claim.
Karaaslan argues the District misled him to believe the rejection notice was ineffective to commence the limitations period because the District characterized it as a "formality" and not a final ruling on the validity of his claim. While Karaaslan regarded the notice as a mere formality, that was no reason to ignore it. To the contrary, the dictionary definition of "formality" indicates "compliance with formal or conventional rules." (Merriam Webster Dict., <www.merriam-webster.com/dictionary/formality> (as of June 13, 2017).)
Section 913 prescribes that when a public entity rejects a claim, it must send the claimant written notice and advise the claimant of the statute of limitations. That rejection notice, in turn, commences the six-month limitations period to file a lawsuit. (§ 945.6, subd. (a)(1) & (2) [absent notice of rejection, the limitations period is two years from accrual of the claim].) By sending the rejection notice to Karaaslan's attorney, the District complied with the "formality" or formal process required by section 913. As reflected in the warning derived from section 913 that the District included in its letter, the process had legal consequences. Specifically, the statute of limitations began to run, as stated in the express language from section 913 that the District included in its rejection notice, warning Karaassian: "[Y]ou only have six (6) months from the date this notice was personally delivered or deposited in the mail to file a state court action on this claim. See California Government Code § 945.6." In light of this unambiguous warning, there was no basis to support estoppel.
True, Hamilton's letter also stated the District's rejection was "not a ruling on the validity of the claim," but "merely a process for referring the claim to [the] insurance carrier." The sentence fragment stating that "Rejecting this claim is not a ruling on the validity of the claim" is troubling because it is contradictory to state both that the District had rejected Karaaslan's claim, but at the same time suggest the District had not ruled on the validity of the claim. In the context of the letter as a whole, however, the remainder of the sentence clarified that any potential "validity" rested only in negotiating the matter with the insurance company, not the District. The letter unequivocally stated that the District "formally rejected the claim at its level," and it is the local entity's rejection that constitutes the relevant action by the board (§ 912.6) and notice of rejection (§ 913) that commence the six-month limitations period (§ 945.6).
The District at oral argument conceded the phrasing in Hamilton's letter is inartful and will be revised. We agree the phrasing was unfortunate and not a model of clarity, but that for the reasons expressed does not support an estoppel claim. --------
Claimants are presumed "familiar[] with the statutory procedures governing [their] grievance, and can be reasonably charged with knowledge of the time limitations that are part of that procedure." (Hunter, supra, 262 Cal.App.2d at p. 822.) As discussed, that procedure includes established case law and statutory provisions specifying that ongoing settlement negotiations do not toll the limitations period. Indeed, "requesting information as to medical and other expenses and setting up a medical examination does not constitute action on a claim" that restarts or tolls the limitations period. (Isaacson, supra, 263 Cal.App.2d at p. 421.)
The cases on which Karaaslan relies for estoppel do not aid him. (See Sumrall v. City of Cypress (1968) 258 Cal.App.2d 565 (Sumrall), Morgan v. International Aviation Underwriters, Inc. (1967) 250 Cal.App.2d 176 (Morgan), and Kleinecke, supra, 147 Cal.App.3d 240.) In Sumrall, the plaintiff, represented by an attorney, filed a timely claim and planned to file an action immediately to preserve his right to sue in light of the statute of limitations. (Sumrall, at p. 567.) He then cooperated with the defendant's insurer who advised him to "'hold off'" the suit because liability was undisputed and the claim was likely to be settled despite the possibility that medical bills might not arrive within the statute of limitations period. (Ibid.). But then the defendant rejected payment on plaintiff's medical bills precisely because they were late. (Id. at p. 568.) The court found that the defendant was estopped from asserting the statute of limitations because the plaintiff postponed filing an action relying on the defendant's false promise. (Id. at p. 570.)
In Morgan, like in Sumrall, the defendant induced the delay in the commencement of the lawsuit. (Morgan, supra, 250 Cal.App.2d at p. 189.) The defendant, an insurance company, admitted liability for the plaintiff's property damage claims and over the course of a year made numerous promises to pay the amount owed. (Id. at pp. 184-188.) Defendant's agents led the plaintiff to believe that filing his action within the limitations period was unnecessary. (Id. at p. 179.) They entered an agreement with the plaintiff designed to prevent him from filing an action. (Id. at pp. 185-187.) When the plaintiff finally filed his lawsuit, the defendant asserted the insurance policy limitation period as a defense. (Id. at pp. 178.) Because of the lengthy delays introduced by the defendant and its false promises to pay the claim, the defendant was estopped from relying on the policy limitation. (Id. at pp. 188-189.)
In Kleinecke, the defense attorney intentionally misled the plaintiff's attorney as to the identity of the correct defendant, causing the plaintiff's attorney to miss the limitations period in naming the correct party in the lawsuit. (Kleinecke, supra, 147 Cal.App.3d at pp. 242-244.) The court held that the statute of limitations should not be enforced "'"when a defendant has had notice from the beginning that the plaintiff sets up and is trying to enforce a claim against it."'" (Id. at 247.)
Here, the District neither advised Karaaslan against filing a lawsuit, nor tried to prevent him from filing one. The District did not protract negotiations with promises of a settlement after the limitations period. The record contains no evidence that Karaaslan demanded payment of personal injury damages before the limitations period expired, nor that he was about to file a lawsuit to enforce payment. (See Roberts v. County of Los Angeles (2009) 175 Cal.App.4th 474, 481 ["the legislative purpose behind the Government Claims Act is to 'limit the potential for lawsuits against government entities, . . .' in part through tightly controlled notice provisions"].) Absent any affirmative acts deterring Karaaslan from filing a timely lawsuit, the District is not estopped from defending its interests based on the statute of limitations.
Karaaslan's waiver argument similarly fails. He asserts waiver for the first time on appeal, which ordinarily forfeits the claim, but we address it because it is grounded in the same set of operative facts as his estoppel theory. (People v. Carr (1974) 43 Cal.App.3d 441, 445.) The claim is equally without merit.
"Waiver is a voluntary relinquishment, expressly or impliedly, of a known right." (Morgan, supra, 250 Cal.App.2d at p. 180.) To establish a waiver of the statute of limitations, a clear showing of an intent to relinquish that right is required. (Isaacson, supra, 263 Cal.App.2d at p. 419.) As with his estoppel argument, Karaaslan bases his waiver claim on the supposed mere "formality" of the District's rejection letter and Hamilton's ambiguous concluding statement that while the District rejected his claim "at its level," it was not a final ruling on the claim's validity. As before, these claims fail because the letter's formality was no reason to disregard it or the limitations period it expressly cited. Moreover, if there was any ambiguity in the letter, doubtful cases will be resolved against waiver. (Isaacson, supra, 263 Cal.App.2d at p. 419 [ambiguity alone does not establish a waiver].)
Karaaslan cites Morgan, supra, 250 Cal.App.2d 176 and Satterfield v. Garmire (1967) 65 Cal.2d 638 (Satterfield) in support of his waiver argument, but they are unavailing. Morgan did not decide the issue of waiver. In Satterfield, the defendant, an estate executor, entered into settlement negotiations with a claimant over an informally submitted claim. (Id. at pp. 640-641.) The negotiations lasted for two months, during which defendant's insurer offered to settle for a substantial sum. (Ibid.) The lawsuit over the claim was subsequently filed by mutual agreement of the parties. (Ibid.) The court found that both parties treated the claim as existing, and the defendant thereby waived its right to require a formal presentation of the claim. (Id. at p. 646.) Unlike Satterfield, where the defendant's actions taken on the claim defeated the need for formal presentation of the claim, no evidence in the record suggests that the District at any point acted as if the statute of limitation was tolled or inapplicable. Consequently, there was no waiver.
III
DISPOSITION
The trial court's order denying Karaaslan's petition to file a late action is affirmed. The parties shall bear their own costs on appeal.
ARONSON, J. WE CONCUR: O'LEARY, ACTING P. J. BEDSWORTH, J.