Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Diego County Super. Ct. No. 653907, Kenneth K. So, Judge. Affirmed.
McCONNELL, P. J.
Dominic Mazzone and Gerald Marolda, as successors-in-interest, appeal an order denying their application to reinstate a breach of contract action their late father, Gerald Marolda, brought against Donald Perrotta in 1992. Mazzone and Marolda contend the trial court erred by finding reinstatement of the action is time-barred, as a stipulated settlement agreement Gerald and Perrotta entered into in 1994, which required dismissal of the action without prejudice, included a waiver of the statute of limitations. We affirm the order.
To avoid confusion we refer to the elder Marolda by his first name.
FACTUAL AND PROCEDURAL BACKGROUND
In the early 1990's Gerald become involved with Perrotta in a real estate development in Rancho Santa Fe, California. The project was unsuccessful and in July 1992 Gerald sued Perrotta for breach of written contract and related counts. The complaint alleged that in March 1991 Gerald loaned Perrotta $147,750, which was evidenced by a promissory note, and in May 1991 Perrotta executed a pledge agreement in the amount of $150,000 to secure the loan.
Gerald and Perrotta previously had personal and business dealings. Rather than go to trial, they entered into a stipulated settlement agreement in April 1994 under which Gerald would immediately dismiss the action without prejudice, and within five years of the agreement Perrotta would pay him $250,000, to come from a percentage of Perrotta's anticipated profits from other enterprises. According to Perrotta, "the concept was to provide me an opportunity to get back on my feet." If Perrotta paid the $250,000 within five years, Gerald would dismiss the action with prejudice. If Perrotta did not perform, Gerald could ask the court to reinstate the action.
According to Perrotta, he was unable to pay Gerald anything because of "the poor real estate market in the mid-1990s." Gerald died in 2002 without having reinstated the action.
In August 2006 Mazzone and Marolda, as the beneficiaries of Gerald's estate, applied ex parte for an order setting aside the dismissal of the action and reinstating it, based on a waiver of the statute of limitations that was included in the settlement agreement. Perrotta opposed the motion as untimely. The court agreed with Perrotta and denied the motion.
DISCUSSION
Mazzone and Marolda contend their motion to reinstate was timely under Code of Civil Procedure section 360.5, which provides: "No waiver shall bar a defense to any action that the action was not commenced within the time limited by this title unless the waiver is in writing and signed by the person obligated. No waiver executed prior to the expiration of the time limited for the commencement of the action by this title shall be effective for a period exceeding four years from the date of expiration of the time limited for commencement of the action by this title and no waiver executed after the expiration of such time shall be effective for a period exceeding four years from the date thereof, but any such waiver may be renewed for a further period of not exceeding four years from the expiration of the immediately preceding waiver. Such waivers may be made successively."
All statutory references are to the Code of Civil Procedure.
Witkin has observed: "Although the section is somewhat complicated it seems clear that (a) it abolishes perpetual and longtime waivers in the original instrument; but (b) it permits a provision extending the period (4 years for a written contract) by an additional 4 years; and (c) it allows any number of successive but separately executed renewal agreements for additional 4-year periods." (3 Witkin, Cal. Procedure (4th ed. 1997) Actions, § 436, p. 548.)
Here, the settlement agreement provided: "2. The parties hereby stipulate that the herein matter be dismissed without prejudice, subject to an [e]x [p]arte application for reinstatement, based upon the following terms and conditions: [¶] a. That each party waives any and all defenses that might accrue to them from the date of this stipulation forward based on any application of any statute of limitations on any claim that a party may have against another party, including the claims set forth in the pleadings . . . . [¶] b. The parties agree that the defenses of waiver, estoppel and laches shall not apply during any interim period of time subsequent to the entry of this stipulation as a defense to any claim any party might have against any other party, as are set forth in this action. . . . The intent of this stipulation is to prevent the application of waiver, estoppel or the barring of any claim by virtue of the statute of limitations or passage of time that may accrue from the date of this agreement until such time as under the terms of this agreement that this matter may be sought to be brought before the Court for adjudication." (Italics added.)
Section 360.5 applies to the waiver provisions. " '[A]ll applicable laws in existence when an agreement is made necessarily enter into it and form a part of it as fully as if they were expressly referred to and incorporated in its terms.' " (Wing v. Forest Lawn Cemetery Assn. (1940) 15 Cal.2d 472, 476.)
Mazzone and Marolda assert that under section 360.5 they had eight years to apply for reinstatement, consisting of four years for breach of written contract (§ 337) and an additional four years under the waiver provisions of the settlement agreement. They assert the action accrued in April 1999 when Perrotta did not pay Gerald the $250,000 under the settlement agreement, and the limitations period expired in April 2007.
The action at issue in the reinstatement proceeding, however, was Gerald's 1992 action against Perrotta for breach of the promissory note and guaranty pertaining to the Rancho Santa Fe project. The settlement agreement provided: "If there is a breach of this agreement . . ., any party hereto may . . . seek to have the dismissal of this action set aside and the original Superior Court action revived." The agreement indicates the parties did not intend to create any right of Gerald to pursue Perrotta for nonpayment of the $250,000, and rather Gerald's exclusive remedy would be applying for reinstatement of the existing action. "Contract interpretation presents a question of law which this court determines independently. [Citations.] [¶] A contract must be interpreted to give effect to the mutual, expressed intention of the parties. Where the parties have reduced their agreement to writing, their mutual intention is to be determined, whenever possible, from the language of the writing alone." (Ben-Zvi v. Edmar Co. (1995) 40 Cal.App.4th 468, 472-473.) Even if Gerald or his successors could pursue a new action against Perrotta in lieu of pursuing the 1992 action, they could not do so under the guise of an application for reinstatement of the 1992 action.
Further, we conclude Perrotta's nonpayment of the $250,000 was not subject to the waiver provisions of the settlement agreement. Although paragraph 2.a. of the waiver is broad, paragraph 2. read as a whole shows the parties intended to preserve the status quo in the existing action, rather than to extend the statute of limitations for any potential new action. The limitations period on any new action for breach of written contract was April 2003, as it accrued in April 1999.
Pertaining to the 1992 action, the August 2006 application for reinstatement was untimely under any scenario. The first clause of the second sentence of section 360.5 applies, as the waiver was executed before expiration of the four-year statute of limitations. The complaint was filed on July 13, 1992, and it alleged the promissory note and guaranty were executed in March and May 1991 and the breach occurred in October 1991. No evidence on the date of breach was adduced, but even if the breach occurred immediately before the complaint was filed, the original limitations period would have run in July 1996, and as a matter of law under section 360.5 the waiver could not extend the period by more than four years, to July 2000. It is undisputed that the waiver was not renewed in writing.
Mazzone and Marolda's reliance on California First Bank v. Braden (1989) 216 Cal.App.3d 672 (Braden) is misplaced. In Braden, the plaintiff filed an action in early 1987 on two written guaranties executed in early 1982, and the guaranties stated, " 'Guarantors waive the benefit of any limitations affecting their liability hereunder or the enforcement thereof to the extent permitted by law.' " (Id. at p. 674.) The defendants contended the action was time-barred by the four-year statute of limitations. The court concluded, however, that because of the waivers the plaintiff had four years from the breach, or date of refusal to pay on the notes, and an additional four years authorized by section 360.5. (Braden, at pp. 676-677.) The court explained "the plain language of [section 360.5] provides that a written waiver executed prior to the running of the applicable statute of limitations shall be effective for a period of four years from the commencement of the running of the statute of limitations. For a written waiver executed after the statute of limitations has run, the four years runs from the date of signing of the waiver." (Braden, supra, at p. 676.)
Braden does not suggest the limitations period for applying for reinstatement of the existing action was eight years from April 1999, the time by which Perrotta was to pay Gerald the $250,000 under the settlement agreement. As discussed, reinstatement concerned the 1992 action and the settlement agreement did not extend the statute of limitations for any new action against Perrotta.
Given our holding, we are not required to consider Perrotta's contention the laches theory also precludes reinstatement.
DISPOSITION
The order is affirmed. Perrotta is awarded costs on appeal.
WE CONCUR: O'ROURKE, J. IRION, J.