Case Name: Judy Ann Alonzo, M.D. v. Saddigheh Danaye-Elmi, et al.

Case No.: 1-14-CV-258708

Demurrer to the first amended complaint and motion to strike by defendants Saddigheh Danaye-Elmi and Cyrus Danaye-Elmi

I. Demurrer

Defendants’ demurrer to the first cause of action for breach of oral contract, the second cause of action for common count, and the third cause of action for common count is OVERRULED. Defendants contend that these claims fail because the repayment terms were not alleged. However, pursuant to Civil Code section 1657, “[t]he obligations of a contract . . . must be performed either at a time the contract specifies or within a reasonable time. (Civ. Code, § 1657.) What constitutes such a reasonable time ordinarily presents a question of fact, dependent upon the circumstances of the case.” (Kotler v. PacifiCare of Cal. (2005) 126 Cal.App.4th 950, 956, citing Consolidated World Investments, Inc. v. Lido Preferred, Ltd. (1992) 9 Cal.App.4th 373, 381].)

Although there is no specific date set forth for repayment of the loans, pursuant to Civil Code section 1657, Defendants were required to repay the money “within a reasonable time.” From April 2011 until January 2013, Plaintiff Judy Ann Alonzo, M.D., loaned Defendants money for various financial obligations. As of September 2013, Defendants had repaid $2,900.93, but refused to repay the remainder of the loan. These allegations are sufficient to establish breach of the “reasonable time” requirement in Civil Code section 1657.

Plaintiff sufficiently alleges damages. Plaintiff alleges that Defendants repaid $2,900.93 of the loan, and then refused to repay over $230,000 of the amount Plaintiff loaned to Defendants.

II. Motion to Strike

A. Remedies Purportedly Not Supported by the First Amended Complaint’s Allegations

Defendants’ motion to strike remedies because they are not supported by the first amended complaint’s allegations is DENIED. Plaintiff seeks a security interest in Defendants’ homes and ownership of their cars. Defendants contend these damages are inappropriate as Plaintiff will receive a “windfall” instead of simply the benefit of the purported contract. Defendants maintain that the appropriate measure of damages is that found in Civil Code section 3302, which states that “[t]he detriment caused by the breach of an obligation to pay money only[] is deemed to be the amount due by the terms of the obligation, with interest thereon.” The breach of which Plaintiff complains is the failure to pay money owing under the parties’ contract. However, Plaintiff only seeks a security interest in the property Defendants’ obtained or maintained as a result of the money loaned until the loan is repaid in full. Plaintiff does not seek a “windfall” or anything more than the amount due by the terms of the agreement.

B. Statute of Limitations

Defendants’ motion to strike $103,445 of the total loaned on or before August 31, 2011 as alleged with the third cause of action for common counts based on a two-year statute of limitations is GRANTED WITH 10 DAYS’ LEAVE TO AMEND. (See Caliber Bodyworks, Inc. v. Super. Ct. (2005) 134 Cal.App.4th 365, 384-85 [the appropriate procedural device for challenging a portion of a cause of action seeking an improper remedy is a motion to strike]; Code Civ. Proc., § 339 [two-year limitations period for an action upon a contract or liability not founded on a written instrument].) “For purposes of the statute of limitations, loans payable on demand are deemed payable at their inception, and the statute begins to run from such time.” (Buffington v. Ohmert (1967) 253 Cal.App.2d 254, 256.) Defendants proffer that a total of $103,445 was loaned on or before August 31, 2011.

In opposition, Plaintiff argues that under James De Nicholas Associates, Inc. v. Heritage Constr. Corp. (1970) 5 Cal.App.3d 421, 426, part payment extends the limitation period and makes it run from the last payment. It is true that in James de Nicholas Associates, Inc., a breach of oral contract case, the Court of Appeal stated that “a part payment may serve to extend the limitation period and make it run from the last payment.” But the question in that case was whether a partial payment mandated application of a four-year statute of limitations instead of two years, which the court answered in the negative. (Id.) The statement about a partial payment extending the limitations period was merely dictum. Moreover, James de Nicholas Associates, Inc. relied on Eilke v. Rice (1955) 45 Cal.2d 66 as support for the proposition that the limitations period was extended. Eilke, supra, 45 Cal.2d at pp. 68-69, however, involved the application of Code of Civil Procedure section 360 to payment on a promissory note, not an obligation arising from an oral contract. Plaintiff provides no other authority to support its argument that part payment extends the limitations period.

Plaintiff also argues that Defendants are estopped from relying on the statute of limitations because of their repeated promises to repay the loans. An estoppel to set up a statute of limitations defense arises as a result of conduct by defendant, on which plaintiff relied, that induces the belated filing of the action. (Carruth v. Fritch (1950) 36 Cal.2d 426, 433.) An example of such conduct is where defendant makes representations to the effect that he will perform his contractual obligation, and plaintiff, in reliance thereon, forbears a timely lawsuit. (See Langdon v. Langdon (1941) 47 Cal.App.2d 28, 31; see also Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 655.) This application of the estoppel doctrine may protect the creditor who has relied on a defective acknowledgment. (See Quanchi v. Ben Lomond Wine Co. (1911) 17 Cal.App. 565.) Here, Plaintiff has not alleged the elements of reliance and forbearance; that is, she has not alleged that she relied on Defendants’ promises to delay filing suit. Therefore, estoppel cannot be invoked to escape the bar of the statute of limitations.

C. Attorney’s Fees and Emotional Distress Damages

Defendants’ motion to strike Plaintiffs’ request for attorney’s fees is GRANTED WITH 10 DAYS’ LEAVE TO AMEND. Attorney’s fees are not recoverable in a legal action unless authorized by statute or contract. (Civ. Code, § 1021; see Real Property Servs. Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 380.) There are no allegations that the oral contract between the parties contemplated the payment of attorney’s fees if a legal action was filed.

D. Emotional Distress Damages

Defendants’ motion to strike Plaintiffs’ request for emotional distress damages with the breach of contract claim is GRANTED WITH 10 DAYS’ LEAVE TO AMEND. Damages generally are not recoverable for mental suffering resulting from breach of contract. (Seldon v. Dinner (1993) 17 Cal.App.4th 166, 172; see Erlich v. Menezes (1999) 21 Cal.4th 543, 554-55 [“[A] preexisting contractual relationship, without more, will not support a recovery for mental suffering where the defendant’s tortious conduct has resulted only in economic injury to the plaintiff.”]; Butler-Rupp v. Lordeaux (2005) 134 Cal.App.4th 1220, 1228 [“[I]n the absence of physical injury, the courts have never allowed recovery of damages for emotional distress arising solely from property damage or economic injury to the plaintiff.”].) In opposition, Plaintiff contends she has alleged more than just non-economic injury, pointing to the allegation that this “is not a typical breach of contract dispute” as the parties were close friends. Plaintiff does not attach any monetary value to this allegation, which at its heart, is still based on economic injury.