Opinion
NOT TO BE PUBLISHED
CONSOLIDATED APPEALS from judgments of the Superior Court of San Diego County, No. GIN045653. Michael B. Orfield, Judge.
McINTYRE, J.
National Metal Technologies, Inc. (Metal) and its parent company, National Manufacturing Technologies, Inc. (Manufacturing and collectively with Metal, NMT), appeal judgments entered after the superior court granted summary judgment in favor of defendants Craig Greene (Greene), Alexis Greene Willingham, Southwest Greene International, Inc. and G.G. Enterprises, Inc. (collectively, the Greene Defendants) and Joe Bille on statute of limitations grounds. NMT contends that the evidence established a triable issue of fact as to whether the limitations period was tolled based on its delayed discovery of the defendants' involvement in the events leading to its injury and thus the court erred in granting summary judgment in the defendants' favor. We agree and reverse the judgments.
FACTUAL AND PROCEDURAL BACKGROUND
In December 1998, NMT purchased assets for the production of stamped metal parts from Greene International West, a company owned by Greene that was in bankruptcy, and began producing various parts, including metallic links and strips used by defense contractors in fulfilling military contracts. Within several months, Greene entered into an agreement to purchase another precision sheet metal fabrication business (Escon Tool & Manufacturing Company, Inc. (Escon)) from third parties; however, in July 2000, the sellers of Escon sued Greene for breach of the purchase contract, breach of fiduciary duty and other claims arising out of the purchase transaction. Greene cross-complained against NMT and its principals, alleging that they conspired with the sellers to obtain Escon for themselves.
In November 2000, while the Escon action was on-going, the federal government executed a search warrant at NMT's Oceanside manufacturing plant. Although the raid revealed no wrongdoing by NMT, thereafter one of its major customers, Alliant Techsystems (Alliant), canceled four NMT contracts and stopped making payments to NMT for existing work; Alliant gave one of the contracts to Southwest Greene International, Inc. Other NMT customers followed suit and, in September 2001, NMT had to file for bankruptcy.
Believing that the raid may have resulted from someone making a false report to government officials that its products were defective or failed to comply with applicable standards, NMT immediately hired consultant William Grivas and attorney Bob Rose to investigate the source of such a report. The investigation was "intense" for the first two or three weeks, but continued sporadically for a number of years thereafter. From his early work, Grivas concluded that there were approximately 30 people who might have been the source of the false report; each of the individual defendants was on the "short list" of people who might have been involved.
Grivas was particularly suspicious of Greene after discovering that prior to the raid, Greene had made comments to NMT's landlord to watch the news for some interesting developments regarding NMT. (In fact, Grivas testified at a deposition in the Escon lawsuit that he suspected Greene of having made the false report. Grivas also became aware of a general connection between Greene and NMT employee Kenneth Whiteberg, who was also on his list, early in his investigation. Grivas reported his conclusions to Moore.
In March 2002, NMT sued Alliant in federal court for antitrust violations, breach of contract and interference with prospective economic advantage, alleging that Alliant made the false reports in an attempt to get out of the NMT contracts and take over the links production itself. NMT's discovery in the federal action focused on who made the false report. At a deposition in September 2003, Whiteberg admitted that he had made the false reports to the federal agents.
In early 2005 NMT settled with Alliant for $6 million and within months it filed this action against Whiteberg for trade libel, inducing breach of contract, interference with prospective business advantage and negligence. After discovering from a former Alliant employee in October 2005 that the Greene Defendants and Bille had solicited Whiteberg to make the false statements, NMT amended its complaint to add the Greene Defendants and Bille as Does.
The Greene Defendants moved for summary judgment of NMT's claims against them on statute of limitations grounds, arguing that NMT knew or should have known of their involvement in the circumstances leading up to the raid well before the expiration of the statutory periods. The superior court agreed that the statute of limitations began to run in March 2002, when NMT sued Alliant in federal court, and thus expired before NMT filed the current action. It thereafter entered judgment in the Greene Defendants' favor.
Bille filed a motion for summary judgment that was essentially identical to the Greene Defendants' earlier motion. While that motion was pending, he was given leave of court, over NMT's objection, to amend his answer to assert the statute of limitations as an affirmative defense. The superior court ultimately granted the motion for summary judgment on the same grounds as on the Greene Defendants' motion.
NMT appeals both of the resulting judgments; its appeals have been consolidated.
DISCUSSION
1. Manufacturing's Appeal
Prior to the filing of the appellate record or briefs, Greene and G.G. Greene Enterprises brought a motion to dismiss the appeals by Manufacturing because it was a suspended corporation at the time NMT's notices of appeal were filed. Manufacturing opposed the motion, admitting its suspension but contending that this resulted from an oversight and that it was in the process of reviving its corporate status. This court denied the motion to dismiss, but requested further briefing from the parties on whether the notice of appeal was effective as to Manufacturing given the circumstances.
Manufacturing filed a certificate of revivor indicating its return to good standing in California. As the parties' briefs agree, California Supreme Court precedent establishes that this is sufficient to validate a notice of appeal filed while Manufacturing's corporate status was suspended. (Rooney v. Vermont Investment Corp. (1973) 10 Cal.3d 351, 358; Peacock Hill Assn. v. Peacock Lagoon Constr. Co. (1972) 8 Cal.3d 369, 373; compare ABA Recovery Services, Inc. v. Konold (1988) 198 Cal.App.3d 720, 725, fn. 2 [questioning the wisdom of such a conclusion].) Thus, Manufacturing may pursue its appeals from the underlying judgments.
2. General Principles Regarding Summary Judgments
Since a motion for summary judgment or summary adjudication involves only questions of law, the standard of review on appeal is de novo. (Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440, 1450.) We review the record to determine whether the defendant met its initial burden to establish that one or more of the plaintiff's claims lack merit, by showing that one or more elements of the claims cannot be established or that there is a complete defense thereto. (Code Civ. Proc., § 437c, subds. (f)(1), (o)(2).) If the defendant met this initial burden, we must examine whether the plaintiff submitted evidence creating a triable issue of fact as to that cause of action or defense. (Code Civ. Proc., § 437c, subd. (o)(2); Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 214.)
The resolution of a statute of limitations defense normally involves a factual question to be determined by a trier of fact. (City of San Diego v. U.S. Gypsum Co. (1994) 30 Cal.App.4th 575, 582.) However, summary judgment in a defendant's favor is nonetheless proper if the relevant evidence is uncontradicted and permits of only one inference, that the statutory period has run. (San Francisco Unified School Dist. v. W.R. Grace & Co. (1995) 37 Cal.App.4th 1318, 1326.)
3. Application of the Statutes of Limitations
NMT's causes of action for trade libel, inducing breach of contract, interference with prospective business advantage and negligence are each subject to a two-year statute of limitations. (Code Civ. Proc., §§ 335.1 [negligence], 339, subd. 1; Kolani v. Gluska (1998) 64 Cal.App.4th 402, 408 [interference with prospective economic advantage, inducing breach of contract and trade libel].) Its fraud cause of action is subject to a three-year limitations period. (Code Civ. Proc., § 338, subd. (d).)
Because NMT did not file this action until July 2005, the viability of its claims turns on whether accrual of the applicable statutes of limitations was postponed pursuant to the delayed discovery rule. In accordance with that rule, a claim does not accrue for limitations purposes until the plaintiff discovers, or could have discovered through reasonable diligence, its injury and the cause thereof. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (Fox).) The purpose of the rule is to protect "those who are ignorant of their cause of action through no fault of their own" (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 832); however, once a plaintiff is either on notice or suspicious of wrongdoing, it has an incentive to sue and "must decide whether to file suit or sit on [his or] her rights." (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1111; Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 410, fn. 8.)
Where the plaintiff "'has reason at least to suspect a factual basis... '" for the elements of its claims (i.e., wrongdoing, causation and harm), the applicable statutes of limitations start to run, "even if the plaintiff does not have reason to suspect the defendant's identity." (Fox, supra, 35 Cal.4th at p. 807; see Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 932 [concluding that the identity of the defendant is not an element of the plaintiff's cause of action].) Thus, the law requires a plaintiff who has reason to suspect it has been harmed by wrongdoing to go find the facts, including the identity of the person at fault for its injury, rather than simply waiting for the facts to find it. (Jolly v. Eli Lilly & Co., supra, 44 Cal.3d at p. 1111; Norgart v. Upjohn Co., supra, 21 Cal.4th at p. 398.)
Here, the evidence is essentially undisputed that NMT immediately believed that it had suffered injury as a result of the raid, strongly suspected that the raid resulted from a false report (i.e., someone's wrongdoing) and undertook an investigation to uncover who had made the false report. NMT contends, and we agree, that under such circumstances the question of whether the applicable statutes of limitations have run turns on whether the investigation was reasonable and whether NMT should have reasonably discovered the facts supporting a cause of action as a result thereof. (See Fox, supra, 35 Cal.4th at p. 809 [holding that a plaintiff who is otherwise on inquiry notice may show delayed accrual of the cause of action when the circumstances reveal that "despite diligent investigation of the circumstances of the injury, [it] could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period"); McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160 [plaintiff must show diligence and the inability to have discovered the elements of the cause of action earlier].) These questions present quintessential issues of fact, thus precluding the grant of summary judgment in the Defendants' favor based on the statutes of limitations. NMT is entitled to try the issue of whether the statutes of limitations expired before it filed this action.
DISPOSITION
The judgments are reversed. NMT is awarded its costs on appeal.
WE CONCUR: McCONNELL, P.J., NARES, J.