Opinion
B324899
11-02-2023
KEN OKUYAMA DESIGN USA, INC., Plaintiff and Appellant, v. R MOTOR COMPANY, Defendant and Respondent.
Law Offices of Robert W. Cohen and Robert W. Cohen for Plaintiff and Appellant. Call & Jensen and Joshua Simon for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. 20GDCV00582 David A. Rosen, Judge. Reversed.
Law Offices of Robert W. Cohen and Robert W. Cohen for Plaintiff and Appellant.
Call & Jensen and Joshua Simon for Defendant and Respondent.
EGERTON, J.
Plaintiff Ken Okuyama Design USA, Inc. (KOD) appeals a summary judgment in favor of defendant R Motor Company (RMC) on KOD's single-count complaint for breach of contract. The trial court determined the two-year statute of limitations for claims based on an oral agreement barred the action because KOD failed to produce evidence of a sufficiently definite written contract to support application of the four-year limitations period. We conclude the purported written contract's terms were sufficiently definite to ascertain the parties' obligations, and KOD produced ample evidence to raise a triable issue of fact as to whether RMC accepted the written agreement. We reverse.
FACTS AND PROCEDURAL HISTORY
Consistent with our standard of review, we state the facts in the light most favorable to KOD as the nonmoving party, resolving all evidentiary doubts or ambiguities in its favor. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.)
KOD is an industrial design firm. Its principal, Ken Okuyama, is a well-known designer who has produced award-winning designs for high-end automobiles, including the Porche 911, the Maserati Quattroporte, and the Enzo Ferrari. In 2007, Okuyama founded his original design firm in Japan. He established KOD in California to take on design projects from U.S.-based companies. KOD also manufactures and delivers master models and prototypes of vehicles and other industrial items.
After a manufacturer settles on a design for an item or part, a master model based on the design must be prepared to mass produce the item.
RMC is a car manufacturer doing business as Drako Motors. The company produces high-end electric luxury cars. Its principals Dean Drako and Shiv Sikand have been involved in several Silicon Valley businesses and founded RMC with the aim of manufacturing high-end automobiles to compete with Tesla.
In early 2015, Drako and Sikand approached KOD to design a logo for Drako Motors. Okuyama agreed to take the project and he and his team worked closely with Drako and Sikand in designing the company logo. Drako and Sikand were "extremely happy" with KOD's work and solicited Okuyama to redesign the body of the electric vehicle RMC had been developing.
In October 2015, Okuyama visited RMC's Sunnyvale, California warehouse and met with Drako. Their discussions were limited to retaining KOD to redesign and prepare a master model of the front bumper and logo for RMC's electric vehicle. However, after sending RMC an estimate for the work, Okuyama had "further thoughts about the appropriate scope of the redesign work" and determined that "a broader redesign would be more impactful in the new model."
On December 20, 2015, KOD sent an email to Sikand setting forth "two proposed plans" for redesigning the car. The email states in relevant part:
"Hi Shiv, "Could you give me your thoughts about the plan below.
"plan1:
"-Redesign the front bumper only
"As we have plan[n]ed, the car will be done by April.
“plan2:
"-Redesign front & rear bumpers, side skirt-"We need to delay the car release about 2 or 3 months.
"I talked with [Okuyama] and he has strongly recommended plan2 because we should provide a big impact with the very first car.
"If we go with plan2, there are 2 ways to fabricate a car, "1: Ship the [physical base of the vehicle] to Japan, and KOD [will] do everything including painting and finishing up the car. Cost will be around $400K~600K plus shipping fee.
"2: Find a shop in the U.S. and ask for fabrication. Cost will be around $500K~$800K."
The next day, Sikand responded with an email stating, "Let me discuss with [Drako]....I also like plan 2. But I think shipping the [vehicle base] would be impossible since it is the only prototype, so the work will have to be done here."
Several days later, Okuyama had a phone call with Drako, during which Drako "advised that he too wanted to go with Plan 2 for the redesign of both bumpers and the side skirt/sill and that he accepted the cost proposal." Because RMC had only one vehicle base, Drako (like Sikand) was concerned about shipping it to Japan and "indicated that he wanted to look into the viability of having the parts fabricated locally." Nonetheless, Drako advised KOD "to go forward with Plan 2 for the redesign of both bumpers and the side skirt/sill and the preparation of the master models associated with those designs." During the discussion, Drako and Okuyama also agreed that KOD would design a new spoiler.
According to Okuyama, it is "common industry knowledge" that a design firm would also manufacture a master model "based upon the design" as part of its design work.
Based on the phone call with Drako, Okuyama directed his staff to begin designing the front and rear bumper, spoiler, and side skirts for RMC's vehicle. On December 25, 2015, KOD emailed RMC its "first design sketch." Sikand immediately emailed feedback, which KOD agreed to incorporate into the next design sketch.
A few days later, KOD emailed Drako and Sikand its "second design sketch which incorporated some modified designs." Sikand immediately provided feedback.
On February 12, 2016, Sikand sent an email to KOD advising that Drako had "agreed to ship a car to Japan." Sikand also asked for details on non-recurring engineering costs for the car's "full body treatment"; production costs for the front bumper, rear bumper, and side panel; whether the parts could be produced in Japan and shipped to the U.S. for assembly "so that KOD can have full ownership of quality"; and what material would be used for the "master mold" used to mass produce those parts.
On February 16, 2016, KOD responded with a cost figure of $282,000 for master modelling the components, which had been "included as part of the originally envisioned estimate of $400,000 to $600,000" set forth in the December 2015 email. (See fn. 2, ante.) Sikand responded "thanks" and confirmed the arrangements for shipping the vehicle to Japan.
On February 23, 2016, Okuyama and KOD staff traveled to RMC's Sunnyvale warehouse to discuss the details of the designs and KOD's work. After the trip, KOD remained in regular communication with RMC regarding the design of the vehicle and the manufacturing of the master models, "exchanging hundreds of emails and design proposals."
In June 2016, RMC approved the final designs of the front bumper, rear bumper, and side sills. Based on those approvals, KOD began manufacturing the master models. On June 27, 2016, Drako visited KOD's facilities in Yamagata, Japan to review KOD's work. After the trip, Drako sent an email expressing his gratitude for the design and progress KOD had made.
By mid-July 2016, KOD had completed the master modeling and emailed photographs of the finished models to RMC. Okuyama also advised RMC that two or three individuals who had worked on modeling the parts would have to be on site for a minimum of one week to complete assembly of the vehicle. Sikand agreed and KOD made arrangements to have its staff travel to California in early September 2016.
Having completed the design and master modeling work, on September 1, 2016, KOD sent RMC three invoices: (1) Invoice Number 30 in the amount of $87,000 for the design fee for the company logo, front bumper, rear bumper and spoiler, and side sills; (2) Invoice Number 31 in the amount of $282,000 for the master modeling work; and (3) Invoice Number 32 in the amount of $2,010 for sample badges of the vehicle logo.
On September 12, 2016, KOD shipped three sets of the body panels to RMC's Sunnyvale warehouse. The shipment safely arrived and, on September 16, 2016, KOD's staff arrived at the warehouse to assist with the vehicle's assembly. Okuyama arrived a day later to supervise the work. RMC, however, was not adequately prepared for the assembly. After performing the work they could, KOD's staff returned to Japan.
On September 20, 2016, Okuyama sent Sikand an email expressing his "disappointment" with the lack of preparation. He also suggested that it might be better for KOD to act "simply [as] a panel supplier," while RMC could take over refining the design. Sikand disagreed with the assessment that RMC had not been prepared, pointing out problems with the moldings that frustrated the assembly. He also suggested it "might be to KOD's disadvantage to miss the association with the first Silicon Valley Electric Hypercar."
The same day, KOD sent RMC a fourth invoice: Invoice Number 33 in the amount of $37,500 for the travel and labor costs for KOD's staff to travel to Sunnyvale to assemble the prototypes. The four invoices totaled $408,510. Payment was due upon receipt.
RMC did not remit payment for any of the four invoices, despite KOD's numerous demands. Nevertheless, RMC used KOD's work-product in its one and only vehicle, the Drako GTE, which is priced at $1,250,000.
On July 17, 2020, KOD filed a single-count complaint for breach of contract against RMC. With respect to contract formation, the complaint alleges: "On December 21, 2015, [KOD] provided [RMC] with a written proposal by which [KOD] would design and deliver master models and prepare a prototype of [RMC's] electric vehicle based on [KOD's] front bumper, rear bumper and side skirt design for an estimated cost between $400,000 and $600,000, plus additional costs for shipping. After several discussions, on or about February 12, 2016, [RMC] agreed to the estimate and directed [KOD] to proceed with the work. On or about February 16, 2016, [KOD] clarified in writing that $282,000 of the $400,000 to $600,000 estimate provided in December 2015 would be the cost to manufacture and deliver the master models of the front bumper, rear bumper and spoiler, and the left and right side sills for [RMC's] electric vehicle. On or about February 16, 2016 [RMC] acknowledged the clarification of the estimate and [RMC] shipped materials to [KOD] in Japan in order for [KOD] to commence its work."
RMC moved for summary judgment. It argued KOD could not establish a claim for breach of a written contract, as the "two correspondences" identified in the complaint (and in a later-filed declaration by Okuyama) lacked "material terms as well as sufficient written acceptance" necessary for the formation of a written agreement. Assuming for the purposes of its motion that KOD could establish the existence of an oral contract, RMC argued the applicable two-year statute of limitations barred the claim.
KOD opposed the motion with a supporting declaration by Okuyama. It argued the December 20, 2015 email, which included a scope of work and price estimate for "Plan 2," was sufficiently definite to support a breach of contract claim, and controlling Supreme Court authority established that "a contract qualifies as one 'in writing' for purposes of the statute of limitations where it 'is accepted orally or by an act other than signing.'" Accordingly, KOD maintained its claim was timely under the four-year statute of limitations applicable to claims for breach of a written contract.
The trial court granted summary judgment for RMC, concluding KOD had failed "to show there is a triable issue of fact as to whether there was a written contract." The court reasoned the parties' "several email exchanges" left it "unclear what the terms of the written contract [were] and if there was acceptance of the alleged written contract." Finding the evidence "raise[d] at best a triable issue of fact as to whether there was an oral contract," the court ruled the two-year statute of limitations barred KOD's action.
The court entered judgment in favor of RMC. KOD filed a timely notice of appeal.
DISCUSSION
1. Standard of Review
Summary judgment is proper when there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) "In reviewing an order granting summary judgment, we exercise our independent judgment, applying the same analysis as the trial court to determine 'whether the moving party established undisputed facts that negate the opposing party's claim or state a complete defense.'" (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 208 (Bustamante).) In conducting this analysis, we strictly construe the moving party's evidence, while liberally construing the evidence offered in opposition, and we accept as undisputed facts only those parts of the moving party's evidence that are not contradicted by the evidence of the opposing party. (Arteaga v. Brink's, Inc. (2008) 163 Cal.App.4th 327, 342.)
"Where the meaning to be given a contract turns upon the credibility of extrinsic evidence, the interpretation found by the trier of fact is binding upon the reviewing court if there is substantial evidence to support it. [Citations.] But the question whether the contract as interpreted by the trier of fact is sufficiently definite and certain in its essential terms to give rise to a legal obligation is a question of law. [Citation.] '. . . On the other hand, where the existence and not the validity or construction of a contract or the terms thereof is the point in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury or other trier of the facts to determine whether the contract did in fact exist.'" (Robinson &Wilson, Inc. v. Stone (1973) 35 Cal.App.3d 396, 407 (Robinson).)
2. The Terms of the Written Proposal for Plan 2 Were Sufficiently Definite to Result in the Formation of a Contract Upon Acceptance
"Under California law, a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties' obligations and to determine whether those obligations have been performed or breached." (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623 (Ersa Grae); Bustamante, supra, 141 Cal.App.4th at p. 209.) "In order for acceptance of a proposal to result in the formation of a contract, the proposal 'must be sufficiently definite, or must call for such definite terms in the acceptance, that the performance promised is reasonably certain.'" (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811 (Weddington), quoting 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 145, p. 169.) "A proposal' "cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain."' " (Weddington, at p. 811; Rest.2d Contracts, § 33.) If "a supposed 'contract' does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract." (Weddington, at p. 811.)
The" 'modern trend of the law favors carrying out the parties' intentions through the enforcement of contracts and disfavors holding them unenforceable because of uncertainty.'" (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1192.) As our Supreme Court has long recognized," '[t]he law does not favor but leans against the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if that can be ascertained.'" (Cal. Lettuce Growers v. Union Sugar Co. (1955) 45 Cal.2d 474, 481 (Cal. Lettuce).) Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768 (Moncada) is instructive.
In Moncada, two employees sued their company and its sole shareholders, claiming the defendants breached a contract to pay them "a bonus that would be sufficient to retire" if they stayed with the company through its anticipated sale. (Moncada, supra, 221 Cal.App.4th at p. 773.) After a successful demurrer, the defendants sought to defend the judgment of dismissal on appeal, arguing "the promise of an amount sufficient to retire [was] vague and unenforceable, because it [was] an unspecified amount and subject to different interpretations." (Id. at p. 777.) The Moncada court disagreed. Citing the rule" 'against the destruction of contracts because of uncertainty,'" the reviewing court explained:"' "In considering expressions of agreement, the court must not hold the parties to some impossible, or ideal, or unusual standard. It must take language as it is and people as they are. All agreements have some degree of indefiniteness and some degree of uncertainty." '" (Ibid.) Unlike cases involving an" 'amorphous promise to "consider" what employees at other companies [were] earning'" or to grant "salary increases and bonuses 'appropriate' to [the employee's] responsibilities," the defendants' "promise was clear and definite: continue working at West Coast until the company is sold, and at that time, we will pay you a bonus that will enable you to retire." (Id. at pp. 778-779; cf. Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 771; Rochlis v. Walt Disney Co. (1993) 19 Cal.App.4th 201, 213.) "A court or jury could easily determine if defendants failed to meet this obligation by evaluating whether such bonus was paid," and "the bonus amount [c]ould be determined 'using information about the Plaintiffs' debts and obligations, their lifestyles at that time and actuarial information sufficient to allow financial planners to set a specific amount for each of them given their specific circumstances at that time.'" (Moncada, at p. 778.) Thus, the Moncada court held, "Contrary to defendants' argument, retirement amounts are not vague or indefinite; rather, they are readily determined using standard formulae and actuarial tables." (Ibid.)
Like the offer and subsequent agreement in Moncada, KOD maintains its written proposal as set forth under "plan2" of its December 20, 2015 email was sufficiently definite for RMC's acceptance of the proposal to result in the formation of a written contract. (See Weddington, supra, 60 Cal.App.4th at p. 811.) We agree. The writing stated KOD would "Redesign [the] front &rear bumpers [and] side skirt" and, with respect to "fabrication," "do everything including painting and finishing up the car," if RMC agreed to ship the vehicle base to Japan. In exchange, RMC would pay KOD an estimated cost of "$400K~600K" for the work. Like the defendants' promise in Moncada, the terms of KOD's written proposal were sufficiently clear and definite so that a jury could readily determine if either party failed to meet its obligations. A jury would need only to evaluate whether KOD performed the redesign and finishing work set forth in the writing and, if so, determine whether RMC paid the amount billed for the work consistent with the agreed-upon estimate.No more was needed to satisfy the definiteness requirement for contract formation or enforcement. (See, e.g., Cal. Lettuce, supra, 45 Cal.2d at p. 482 [recognizing "[u]nexpressed provisions of a contract may be inferred from the writing or external facts," thus "a contract need not specify price if it can be objectively determined"]; accord, Moncada, supra, 221 Cal.App.4th at pp. 777-778; cf. Bustamante, supra, 141 Cal.App.4th at p. 210 [duty to" 'take all steps necessary to obtain adequate funding' " was too indefinite to constitute contractual obligation as there was no way to ascertain "what steps are 'necessary'" or "whether a party has complied with this term" if funding is never obtained].)
Factual questions concerning the quality of the work or the specific amount that RMC should pay in the event of a billing dispute are matters for the fact finder to resolve in assessing the breach and damages elements of KOD's claim-those matters do not render the writing fatally uncertain. (See, e.g., Sabatini v. Hensley (1958) 161 Cal.App.2d 172, 175 ["[t]he failure to specify the amount or a formula for determining the amount of [future consideration] does not render the agreement too indefinite for enforcement"; thus, trial court properly submitted to jury issue of amount to be paid for promised employment bonus]; Civ. Code, § 1610 ["When a consideration is executory, it is not indispensable that the contract should specify its amount or the means of ascertaining it."].)
RMC disputes this analysis. It maintains the December 2015 email constituted, at most, "a preliminary negotiation of a business venture" that "lacked the definite terms required" to establish an enforceable written contract. In support of this position, RMC emphasizes the email asks only for its principals'" 'thoughts [rather than [their] agreement] about the plan' "; the "email continues by providing two different plans"; and, as for" 'plan2,'" the plan proposed "two different options" with two different cost estimates depending on whether RMC agreed to ship the vehicle base to Japan or decided to have fabrication performed in the U.S. (Boldface omitted.) None of this renders the writing substantively indefinite.
As the Moncada court explained, in assessing whether a contract should be declared void for indefiniteness,"' "the court must not hold the parties to some impossible, or ideal, or unusual standard," '" but"' "must take language as it is and people as they are." '" (Moncada, supra, 221 Cal.App.4th at p. 777.) Here, in view of their existing business relationship, we can fairly construe KOD's solicitation of RMC's "thoughts" as an offer either to remain with the originally envisioned scope of work (Plan 1: the front bumper redesign only) or to accept an expanded scope of work for KOD (Plan 2) that included the redesign of the front and rear bumpers and side skirt for the estimated price quoted in the writing. Acknowledging this broader usage of the word "thoughts" and construing the writing to embrace it is consistent with the modern rule favoring a construction that carries out the " 'reasonable intentions of the parties if that can be ascertained.'" (Cal. Lettuce, supra, 45 Cal.2d at p. 481.) Notably too, although RMC disputes the fact, the evidence KOD presented to show RMC accepted Plan 2 and took actions consistent with its terms also supports a reasonable inference that RMC likewise understood the request for its "thoughts" to be an offer to enter into a contract on the terms of one of the plans set forth in the writing.
As for the alternative plans and the two different options in Plan 2, it is settled that an "offer may contain a choice of terms from which the offeree is given the right to make a selection in his acceptance," and the "acceptance of one alternate proposition constitutes a binding contract." (H.S. Crocker Co. v. McFaddin (1957) 148 Cal.App.2d 639, 645 (H.S. Crocker); accord, Weddington, supra, 60 Cal.App.4th at p. 811 ["acceptance of a proposal [will] result in the formation of a contract" if the proposal" 'call[s] for such definite terms in the acceptance, that the performance promised is reasonably certain' "]; see, e.g., Keller v. Ybarru (1853) 3 Cal. 147 [offer to sell as many grapes as plaintiff wished to buy became a binding contract when plaintiff named the quantity he wished to purchase]; Hylton Flour Mills v. Bowen (1933) 128 Cal.App. 711, 714 [written contract providing for "purchase [of] a definite quantity of flour within a certain fixed period of time" was not rendered uncertain by term granting purchaser "discretion . . . as to the quality or brand of flour to be selected by him"].)
Contrary to RMC's contention, the fact that the December 2015 email offered RMC a choice of contractual terms to accept does not render it a mere invitation to negotiate. Our Supreme Court's decision in McIllmoil v. Frawley Motor Co. (1923) 190 Cal. 546 (McIllmoil) is instructive.
The controversy in McIllmoil concerned a written" 'Memorandum for sale of used car'" that provided the defendants (a used car dealership) would sell the plaintiff's car at a net price of $1,000 for the plaintiff; the plaintiff would "buy a new Mitchell car" from the defendants; and the defendants would "keep $500.00 [of the sale proceeds] as a deposit on the new car." (McIllmoil, supra, 190 Cal. at p. 548.) The defendants sold the car for $1,000, delivered $500 to the plaintiff, and retained the remaining $500 as a deposit as provided in the memorandum. The plaintiff, however, refused "to agree on any terms or conditions" for the purchase of a new car and sued the defendants for the entire sum received from the sale of his old car. (Id. at p. 549.) In doing so, the plaintiff argued the written memorandum was "void and unenforceable, being nothing more than an agreement to enter into an agreement [for the purchase of a new car], the terms of which have not been determined, and concerning a subject-matter itself yet to be ascertained and selected by future negotiations and consent of the parties." (Ibid.) Our Supreme Court rejected the argument, explaining:
"It is true that the written contract did not specify the particular model of new Mitchell car which the plaintiff was to purchase, nor the price to be paid therefor, nor the time of payment; but in law 'that is certain which may be made certain.' Here the plaintiff had agreed to purchase from the defendants a new Mitchell automobile. The particular car to be taken was not thereafter a subject of negotiations, all that remained to be done in this behalf being the selection by the plaintiff of one of the various models of Mitchell cars on sale by the defendants....[T]he selection by plaintiff of the car desired determined the price and made the contract definite in that respect also." (Id. at pp. 549-550, italics added.)
The written proposal in KOD's December 2015 email offered RMC two alternative plans for the design work that KOD would perform upon RMC's acceptance of one or the other plan. This did not render the writing uncertain, as the offer was consistent with the well-established principle that the "acceptance of one alternate proposition constitutes a binding contract." (H.S. Crocker, supra, 148 Cal.App.2d at p. 645.) As we will discuss, KOD's evidence showed that RMC, through its principal Drako, accepted Plan 2 in a telephone conversation with Okuyama several days later. With that acceptance, the parties had a binding contract, as set forth in the December 2015 email, for KOD to "Redesign [the] front &rear bumpers [and] side skirt" of RMC's electric car and for RMC to pay for those services in one of the estimated amounts as determined by RMC's selection of one of the specified fabrication options.
The fact that the proposed contract granted RMC an option with respect to fabrication did not render it uncertain or subject to further negotiation. As McIllmoil teaches, once RMC agreed to Plan 2, the law recognized as certain those terms of the contract that would be made certain by RMC's selection. Nothing was left to be negotiated, as the writing set forth the scope of KOD's work and the estimated costs for each fabrication option. All that remained to be done was RMC's selection. (McIllmoil, supra, 190 Cal. at pp. 549-550.)
Finally, RMC argues the December 2015 email cannot be the basis for KOD's breach of contract claim because the writing's terms do "not line up with any of the invoices at issue." To be sure, RMC identifies some discrepancies between details in the invoices and the email, but RMC also acknowledges the invoices include items such as design fees for the front and rear bumpers that are unambiguously included in the writing. In any event, while these specific discrepancies may be relevant to factual issues related to the breach and damages elements of KOD's claim, they have no bearing on our legal assessment of whether the writing contained sufficiently definite material terms to enable the formation of an enforceable written contract. To make that determination, we look to the terms of the writing and the context of the parties' relationship, liberally construing those factors to give effect to the parties' reasonable intentions if that can be ascertained. (Cal. Lettuce, supra, 45 Cal.2d at p. 481; Ersa Grae, supra, 1 Cal.App.4th at p. 623.) Applying this standard to the December 2015 email, we conclude the proposal was sufficiently definite that its acceptance, if proven, would result in the formation of a written contract. (See Weddington, supra, 60 Cal.App.4th at p. 811.) We turn now to whether KOD presented legally sufficient evidence to prove RMC accepted the written proposal.
While we make no judgment about the effect of the discrepancies or of the parties' subsequent written communications, we note that "parties to a written contract may modify the contract through an additional writing," and a party may accept the modification "by conduct, as well as by words." (Cavalry SPV I, LLC v. Watkins (2019) 36 Cal.App.5th 1070, 1082 [holding cardholder accepted modification to written credit card agreement by continuing to use card after receiving "written 'Notice of Change in Terms and Right to Opt Out' "].)
3. KOD Presented Sufficient Evidence to Prove RMC Accepted the Written Proposal
A "contract may be 'in writing' for purposes of the statute of limitations even though it was accepted orally or by an act other than signing." (Amen v. Merced County Title Co. (1962) 58 Cal.2d 528, 532 (Amen).) As our high court explained, the "four-year statute of limitations, unlike the statute of frauds, does not require that the writing be signed by the party to be charged. Had the Legislature meant to make a signature mandatory for a writing to qualify for the longer period of limitations it would have so provided as it did in section 360 of the Code of Civil Procedure, which requires that a new promise to perform under an old contract be signed to start the statute running anew." (Id. at p. 533.)
KOD's evidence showed that within days of making its written offer to RMC in the December 2015 email, the companies' principals had a telephone conversation, during which Drako advised Okuyama that he (like Sikand) "wanted to go with Plan 2 for the redesign of both bumpers and the side skirt/sill and that he accepted the cost proposal." During the conversation, Drako also "indicated that he wanted to look into the viability of having the parts fabricated locally," because "he only had one physical base of the vehicle" and "was concerned about shipping it to Japan." He "nonetheless advised [KOD] to go forward with Plan 2 for the redesign of both bumpers and the side skirt/sill and the preparation of the master models associated with those designs." Consistent with the terms of Plan 2, in the days and weeks that followed, KOD submitted designs to RMC and "immediately received feedback" from Sikand, which KOD incorporated into subsequent design sketches. Then, on February 12, 2016, Sikand advised KOD that RMC had "agreed" to ship its vehicle base to Japan, in accordance with the option set forth in Plan 2 to have KOD "fabricate" and "do everything including painting and finishing" the car. Consistent with that election, RMC shipped its "one and only" vehicle base, which arrived in Japan two months later. Accepting this evidence as true and viewing it in the light most favorable to KOD as the party opposing summary judgment, we conclude KOD's evidence was sufficient to prove RMC accepted Plan 2 both orally and by its other acts taken in accordance with the terms of the written instrument. (See Amen, supra, 58 Cal.2d at p. 532; see also E.O.C. Ord, Inc. v. Kovakovich (1988) 200 Cal.App.3d 1194, 1201 (Kovakovich) [for application of four-year statute of limitations, the "requirements are only that there be a writing containing all terms and that there be acceptance by the party to be charged," which "may be proved by evidence of words spoken, if believed by the trier of fact"].)
RMC argues KOD cannot prove a legally binding acceptance of Plan 2 because, during his phone conversation with Okuyama, Drako deferred the decision on whether to have KOD perform the fabrication and finishing work in Japan. And, even after agreeing to ship the vehicle base, RMC emphasizes Sikand then asked questions related to the production of the vehicle "as if no previous discussions had even taken place." This conduct, RMC maintains, "evidences that the emails were negotiations and exploration of available options rather than an agreement that was ever accepted."
As we explained earlier, the fact that Plan 2 set forth alternate options for fabrication and finishing does not render the writing fatally indefinite. (See McIllmoil, supra, 190 Cal. at pp. 549-550.) Because the December 2015 email set forth definite terms for each option, nothing was left to be negotiated and all that remained to be done was RMC's selection of one or the other option. (See ibid.) For the same reason, Drako's deferment of his selection did not leave RMC's acceptance of Plan 2 subject to further negotiation. Indeed, the evidence suggests Drako understood as much, as he instructed KOD to go forward with the design work while he explored options for fabricating parts in the U.S.
As for Sikand's questions, to the extent these inquiries conflict with KOD's showing, this evidence simply raises a triable issue of fact as to whether RMC truly accepted the written proposal-it does not authorize the court to resolve that factual dispute in RMC's favor by summarily adjudicating the claim. (See Robinson, supra, 35 Cal.App.3d at p. 407 [" '[W]here the existence . . . of a contract . . . is the point in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury or other trier of the facts to determine whether the contract did in fact exist.' "].)
Apart from recycling its definiteness argument and contesting KOD's factual showing, RMC appears to argue the evidence is legally insufficient to establish the formation of a written contract because the December 2015 email originated with KOD. RMC relies on James De Nicholas Associates, Inc. v. Heritage Constr. Corp. (1970) 5 Cal.App.3d 421 (James De Nicholas) to support the contention. The case is inapposite.
The plaintiff in James De Nicholas asserted a breach of contract claim, alleging the defendant "orally agreed to pay plaintiff the sum of $10,000 plus certain expenses" in consideration of the plaintiff waiving its rights to acquire the controlling stock of an investment company. (James De Nicholas, supra, 5 Cal.App.3d at p. 423.) The plaintiff further alleged it "confirmed the terms of the oral contract by a letter in writing and offered to accept the sum of $13,000 for the consideration set forth therein." (Ibid.) The defendant made a partial payment of $5,000, but allegedly "refused to pay the balance of $8,000." (Ibid.) After the trial court sustained the defendant's demurrer on the ground that the plaintiff failed to bring his claim within the two-year limitations period applicable to claims based on an oral contract, the plaintiff appealed, asserting the defendant's partial payment constituted an acceptance of the written confirmation, subjecting the claim to the four-year statute of limitations under Amen. (James De Nicholas, at p. 424; see Amen, supra, 58 Cal.2d at pp. 532-533.) The reviewing court rejected the argument, observing the defendant in Amen had prepared the written contract at issue, and this fact "tend[ed] to indicate defendant's acceptance of the terms," even though the defendant had not signed the instrument. (James De Nicholas, at p. 425.) In contrast, the James De Nicholas court reasoned the plaintiff could not use any writing "to show an 'acceptance' by defendant," because "any writings tending to show the terms of the agreement [were] all writings by the plaintiff, and not writings prepared by defendant." (Ibid.)
There are two critical differences between this case and James De Nicholas. First, the plaintiff in James De Nicholas alleged the defendant "orally agreed to pay plaintiff the sum of $10,000," while also alleging it prepared a subsequent writing that would have altered the terms of the oral agreement by "offer[ing] to accept the sum of $13,000 as consideration." (James De Nicholas, supra, 5 Cal.App.3d at p. 423, italics added.) Here, in contrast, KOD's complaint alleges, consistent with the terms of Plan 2 in the December 2015 email, that KOD provided RMC with a "written proposal" to "design and deliver master models and prepare a prototype of [RMC's] electric vehicle based on [KOD's] front bumper, rear bumper and side skirt design for an estimated cost between $400,000 and $600,000," which RMC accepted before shipping materials to Japan. (Italics added.)
Second, because the alleged writing in James De Nicholas altered the terms of the parties' oral agreement, and the defendant's partial payment of $5,000 was consistent with both the $10,000 figure in the original oral agreement and the $13,000 figure in the written instrument, the reviewing court naturally and appropriately focused on whether the writing itself was sufficient "to show an 'acceptance' by defendant." (James De Nicholas, supra, 5 Cal.App.3d at p. 425, italics omitted.) Here, in contrast, KOD does not need to rely on the writing to prove contract formation, because the evidence of Drako's oral acceptance is sufficient independently (as well as in conjunction with the evidence of the parties' other acts in accordance with the terms of Plan 2) to prove RMC accepted the written proposal set forth in the December 2015 email. Kovakovich is instructive.
In Kovakovich, an attorney sued his client for breach of a fee agreement. The evidence showed the attorney and client agreed to the terms of the representation and corresponding contingency fee arrangement in a telephone conversation, which the attorney later memorialized in a written letter to the client setting forth the same terms. (Kovakovich, supra, 200 Cal.App.3d at pp. 1196-1197.) When the client did not respond to the letter, the attorney telephoned him to discuss the fee arrangement and," 'in that telephone conversation[,] [the client] agreed to the terms of the letter.'" (Id. at p. 1197.) The client later refused to pay, asserting the two-year statute of limitations for claims based on an oral agreement barred the action. (Id. at p. 1198.) Although the trial court expressly credited the attorney's evidence regarding "the issue of the making of the agreement," it nonetheless concluded the two-year statute of limitations governed the claim "because 'there exist[ed] no tangible written indication of the [client's] acceptance of the terms of the asserted contract.'" (Id. at pp. 1198-1199.) The reviewing court reversed.
The Kovakovich court observed there were "only" two requirements under our Supreme Court's holding in Amen for a contract to be"' "in writing" for purposes of the statute of limitations' ": there must "be a writing containing all terms" and there must "be acceptance by the party to be charged." (Kovakovich, supra, 200 Cal.App.3d at p. 1202, italics omitted, quoting Amen, supra, 58 Cal.2d at p. 532.) How that "acceptance is manifested," the court explained, "is a matter of proof"-it "may be proved by evidence of words spoken, if believed by the trier of fact," it "may be proved by evidence of a particular act other than signing," or it "may be proved by evidence that the party to be charged prepared the written document and offered to perform its terms." (Kovakovich, at p. 1201.) While the last method of proof-evidence that the party to be charged prepared the written document-led to application of the four-year statute of limitations in Amen, the Kovakovich court reasoned proof by this method was "not mandated" and requiring it would be "unwise." (Kovakovich, at p. 1201.) As the court explained, requiring "written words of acceptance originating with the party to be bound" to form a written contract would embrace the absurd "anomaly" that a contract claim could "be governed by two different limitation periods, depending upon which party brought suit." (Id. at pp. 1201-1202.) Our Supreme Court could not have intended this result when it held a" 'contract may be "in writing" for purposes of the statute of limitations even though it was accepted orally or by an act other than signing.'" (Id. at p. 1201, quoting Amen, at p. 532.)
We agree with this analysis and conclude it supports application of the four-year statute of limitations. As we have explained, the December 2015 email contained the material terms necessary to determine whether the parties met their obligations under Plan 2 of the purported written agreement. (See Moncada, supra, 221 Cal.App.4th at pp. 777-778.) And KOD's evidence, although disputed, raised a triable issue of fact as to whether RMC accepted the written proposal's terms orally or by other acts consistent with those terms. This is all that is required for a contract to be" 'in writing' for purposes of the statute of limitations." (Amen, supra, 58 Cal.2d at p. 532; Kovakovich, supra, 200 Cal.App.3d at p. 1201.)
4. KOD's Claim Is Timely Under the Four-Year Statute of Limitations Applicable to an Action Upon a Written Contract
Under Code of Civil Procedure section 337, subdivision (a), an "action upon any contract, obligation or liability founded upon an instrument in writing" must be brought within four years. The evidence shows that, on September 1 and September 20, 2016, RMC failed to make payment "upon receipt" of invoices for services rendered under Plan 2 of the December 2015 email. KOD filed this action on July 17, 2020-within four years of the alleged breach. The trial court erred in concluding the action was time-barred.
DISPOSITION
The judgment is reversed. Plaintiff Ken Okuyama Design USA, Inc. is entitled to its costs.
We concur: EDMON, P.J. LAVIN, J.