Case Number: BC657305 Hearing Date: June 04, 2018 Dept: 3

GAGIK HARUTYUNYAN.,

Plaintiff(s),

vs.

ALCO HOLDING CO., et al.,

Defendant(s).

Case No.: BC657305

ORDER OVERRULING THE DEMURRER TO THE COMPLAINT

Dept. 3

1:30 p.m.

June 4, 2018

The Demurrer to the Complaint by Defendant United Specialty Insurance Company is OVERRULED. United Specialty Insurance Company is ordered to file an answer within ten days of this order.

I. Background

On April 11, 2017, plaintiff Gagik Harutyunyan (“Plaintiff”), filed a complaint against defendants Alco Holding Co (“Alco”), Alcoinvest LLC (“Alcoinvest”), New Era Investments LLC (“New Era”) and Does 1 to 100 alleging causes of action for general negligence and premises liability.

The complaint alleges that on February 11, 2015, while lawfully on the defendants’ premises, Plaintiff was injured when a sliding gate located at the premises crushed Plaintiff’s hand. (Complaint p.4 Prem.L-1.) Notably, the complaint admits that the complaint was filed more than two years after the injury occurred, however, the complaint alleges that the statute of limitations period was tolled pursuant to CCP section 353.1 and Lewis v. Superior Court, (1985) 175 Cal.App.3d 366. (Id. p.7 ¶ 21.) Specifically, the complaint alleges that since Plaintiff’s counsel suffered a heart attack days before the two-year statute of limitations period expired, this event rendered it virtually impossible for Plaintiff’s counsel to file the law suit before the limitations period expired as he was in and out of the emergency room and was advised by doctors to not work and to avoid stress until after the limitations period expired. (Id. p. 6 ¶ 1 through p. 7 ¶ 21.)

On March 23, 2018, the parties stipulated to allow United Specialty Insurance Company (“United”) to intervene in this matter on behalf of Alco. On March 27, 2018, United demurred to the complaint based on statute of limitations. On May 3, 2018, Plaintiff filed an opposition and on May 9, 2018, United filed a reply. On May 16, 2018, the Court continued the hearing on the demurrer to June 4, 2018 and gave United an opportunity to file a supplemental reply by May 23, 2018. On May 22, 2018, United filed a supplemental reply.

II. Request for Judicial Notice

Plaintiff requests that the Court take judicial notice of (1) the complaint, (2) the notice of entry of order granting stipulation to grant United’s motion for leave to intervene and (3) the demurrer.

The Court GRANTS Plaintiff’s requests pursuant to Evidence Code section 452(d).

III. Legal Standard

“A general demurrer based on the statute of limitations is only permissible where the dates alleged in the complaint show that the action is barred by the statute of limitations. The running of the statute must appear ‘clearly and affirmatively’ from the dates alleged. It is not sufficient that the complaint might be barred. If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer. The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment . . . .’” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324-325 (internal citations omitted).)

IV. Discussion

a. Meet and Confer

Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading demurred to for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (CCP §§ 430.41.) The Court notes that United has fulfilled the meet and confer requirements prior to filing this demurrer. (See Decl. Gilbert.)

b. Accrual of Statute of Limitations

United contends that since the alleged injury occurred on February 11, 2015, and the complaint was not filed until April 11, 2017, the two-year statute of limitations bars this action. Plaintiff opposes on the ground that CCP section 353.1 and Lewis v. Superior Court, (1985) 175 Cal.App.3d 366 toll the statute of limitations period.

CCP section 335.1 provides that an action for assault, battery, or injury to, or for the death of, an individual caused by the wrongful act or neglect of another must be brought within two years.

Here, the complaint alleges that on February 11, 2015, Plaintiff’s hand was crushed by a sliding gate while Plaintiff was on the defendants’ premises. (Complaint p. 4 Prem.L-1 and p.5 GN-1.) Thus, starting on February 11, 2015, Plaintiff was on notice of the wrongful acts of the defendants. Therefore, Plaintiff’s deadline to file his complaint for personal injury was February 13, 2017 since February 11 and 12, 2018 fell on the weekend. Plaintiff filed the complaint on April 11, 2017. Accordingly, unless the statute of limitations was tolled, the complaint was untimely and barred by statute of limitations.

c. Tolling Pursuant to Lewis v. Superior Court, (1985) 175 Cal.App.3d 366

The complaint alleges that since Plaintiff’s counsel suffered a heart attack days before the two-year statute of limitations period expired, this event rendered it virtually impossible for Plaintiff’s counsel to file the lawsuit before the limitations period expired as he was in and out of the emergency room and was advised by doctors to not work and to avoid stress until after the limitations period expired. (Id. p. 6 ¶ 1 through p. 7 ¶ 21.) Thus, the complaint alleges that pursuant to Lewis v. Superior Court, (1985) 175 Cal.App.3d 366, the statute of limitations period was tolled.

CCP Section 353.1 provides for limited tolling where plaintiff was represented by an attorney over whose practice the court assumes jurisdiction because of the attorney’s death or total disability. (Business & Professions Code § 6180.)

The court in Lewis v. Superior Court, (1985) 175 Cal.App.3d 366 used CCP section 353.1 as its spring board. “CCP Section 353.1 in particular, leads us to the conclusion that the circumstances here presented require a statutory construction recognizing an implicit tolling exception.” (Lewis (1985) 175 Cal.App.3d at 376.) The Lewis court construed CCP section 353.1 broadly to apply both where the attorney was incompetent when the client’s cause of action accrued and where the attorney became incompetent after the action accrued; and even in the absence of a court assuming jurisdiction over the attorney’s practice. (Lewis v. Superior Court (1985) 175 Cal. App.3d 366, 377.) In Lewis, plaintiff’s attorney (a sole practitioner) was rendered totally disabled due to an unforeseen accident only 5 days before running of limitations period, and client was not notified of attorney’s disability until limitations period had expired. (Id.)

Here, the Court finds that the complaint sufficiently alleges facts to establish that Plaintiff’s counsel was virtually incapacitated beginning the day before the expiration of the statute of limitations period and continuing few months afterwards. The allegations further establish that Plaintiff’s counsel has been reasonably diligent in pursuing Plaintiff’s claims. Notably, Plaintiff’s counsel was engaged in settlement negotiations and even drafted a complaint as the statute of limitations was about to expire. (Complaint. p. 6 ¶¶ 8-9.) However, due to an unforeseen heart attack, Plaintiff’s counsel was unable to file the complaint as he was in and out of the hospital and was strictly told to avoid work and stress. (Id. pp 6-7, ¶¶ 10-21.) As soon as he was able, Plaintiff’s counsel informed Plaintiff of the situation and filed the complaint on April 11, 2017. (Id. p. 7, ¶ 19.) Thus, based on these allegations in the complaint, the Court finds that the statute of limitations period was tolled pursuant to Lewis.

The Court notes that United argues that Lewis is distinguishable from the current matter because in Lewis, the plaintiff’s counsel was totally disabled because of a serious car crash while here, a heart attack suffered by Plaintiff’s counsel did not render it impossible for Plaintiff’s counsel to have filed the complaint that had already been drafted on February 10, 2017. The Court is unconvinced by United’s argument. Adopting United’s rigid position would lead to the sort of patently unjust consequence that the Lewis court intended to prevent. Namely, the dismissal of a case where the failure to comply with the statute is not attributable to fault on the part of the plaintiff or his counsel, but rather an unforeseen even such as a heart attack. (See Lewis v. Superior Court (1985) 175 Cal.App.3d 366, 375.)

Notably, the court in Lewis discussed public policy and noted that statute of limitations was meant to prevent prejudice to defendants by protecting defendants from having to defend stale claims by providing notice in time to prepare a fair defense on the merits and to require plaintiffs to diligently pursue their claims. (Lewis, 175 Cal.App.3d at 375.)

Here, first, there is no evidence that United will be substantially prejudiced if this case proceeds on the merits since the complaint was not filed overtly late such that crucial evidence may have been destroyed. Notably, there is no evidence before the Court that United is deprived of the ability to conduct discovery such that it will be required to defend against stale claims. Furthermore, it is specifically alleged that the parties were engaged in settlement negotiations, thus the defendants were allegedly on notice of Plaintiff’s claims. (Complaint p.6, ¶¶ 1, 3-7.)

Second, despite United’s contention stating otherwise, the complaint specifically explains why the complaint was not filed until April 11, 2017. The complaint alleges that Plaintiff’s counsel, (a solo practitioner) and the parties were engaged in settlement negotiations. (Id. p.6, ¶¶ 1, 3-7.) Since the limitations period was set to expire on Monday, February 13, 2017, on Friday, February 10, 2017, Plaintiff’s counsel drafted a complaint for filing since the parties had been unable to settle the matter. (Id. ¶ 9.) On Sunday February 12, 2017, Plaintiff’s counsel suffered a heart attack and was taken to the emergency department of a hospital and later transported to a general hospital where he stayed until Wednesday, February 15, 2017 when he was discharged. (Id. ¶¶ 10-11.) On Thursday, February 16, 2017, Plaintiff’s counsel was again transported to the emergency department of a hospital after suffering from chest pains and was discharged the next day with strict bed-rest instructions. (Id. ¶¶ 12-13.) Counsel was then again transported to the emergency room on Saturday February 18, 2017 and again discharged with strict bed-rest instructions. (Id. ¶¶ 14-16.) Counsel was then advised to avoid work and stress until April 30, 2017. (Id. ¶¶ 16-18.) However, Plaintiff’s counsel as soon as he was able, notified Plaintiff of his situation and filed the complaint in this matter on April 11, 2017. (Id. ¶¶ 18-20.) Such allegations are sufficient to show diligence on Plaintiff’s part and such allegations are sufficient to support the allegation that Plaintiff’s counsel was virtually incapable of commencing this action earlier.

Thus, the public policy considerations that the Lewis court considered are in line with the finding that the tolling provision found in Lewis applies here. This is especially true since the Lewis court noted that the Legislature has, as recently as 1983, manifested a special interest in protecting plaintiff clients against the running of statutes of limitation where their retained counsel has become, for virtually any reason, incapable of performing the professional responsibility of effectively representing the client’s claim by timely commencing action thereon. (Lewis v. Superior Court (1985) 175 Cal.App.3d 366, 376.)

d. United’s Reliance on Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93 and Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300.

The Court notes that United cites to Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 103 and Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300. Notably, the court in Lewis distinguished Sanchez because it did not involve circumstances of virtual impossibility. (Lewis, 175 Cal.App.3d at 379-380.) In coming to such a finding, the Lewis court noted that in Sanchez, the court pointed out that the plaintiff (claiming partial tolling due to her one-month hospitalization for physical disability 10 months prior to the end of the statutory period) did not qualify for personal disability status under CCP sections 352 and 354 and was proven to have had 11 months after her discharge from the hospital within which she personally could have investigated her potential claim. (Lewis, 175 Cal.App.3d at 379-380 distinguishing Grell, 73 Cal.App.4th 1300.) The Lewis court also noted that the plaintiff in Sanchez was found to have local relatives who could have assisted her. (Id.) Here as analyzed above, the Court has found that the complaint alleges sufficient facts to establish virtual impossibility. Thus, for these same reasons as noted in Lewis, the Court finds that Sanchez is distinguishable from the current matter.

In Grell, the court found that the statute of limitations was not tolled during the time period that defendant’s corporate status was suspended because the plaintiffs failed to demonstrate the existence of circumstances that effectively rendered timely commencement of their actions impossible or impracticable. (Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300, 1305.) The court noted that neither the defendant’s status as a suspended corporation nor any conduct by defendant prevented plaintiffs from filing their complaints timely and moving their actions forward. (Id.) Like Sanchez, Grell is distinguishable from the current matter because Grell did not concern circumstances of virtual impossibility of a counsel to commence a suit in a timely manner.

e. Running of the Limitations Period After Discharge from Hospital

The Court next notes that United argues that even if Plaintiff’s counsel’s heart condition did render it virtually impossible to file a timely suit, the limitations period would only have been tolled until February 18, 2017 because this was when Plaintiff’s counsel was released from the hospital.

Once the condition, which effectively renders timely commencement of an action impossible or virtually impossible is lifted, the statute of limitations tolling ceases. (Grell v. Laci Le Beau Corp. (1999) 73 Cal.App.4th 1300, 1305.)

While the complaint alleges that Plaintiff’s counsel was discharged from the hospital on February 18, 2017 the complaint alleges that counsel saw doctors thereafter who advised him against working until the end of April but despite that he filed the complaint as soon as he was able on April 11. The Court must accept the allegations as true on demurrer and they are sufficient to allege that the statute continued to be tolled until the complaint was filed.

f. Lack of Diligence

United also argues that Plaintiff’s counsel exhibited a lack of dilligence in filing the complaint and thus this precludes the application of the Lewis doctrine. United argues that Plaintiff fails to allege why Plaintiff did not prepare the complaint until few days before the deadline and why he failed to do so after being released from the hospital. United attempts to distinguish the current matter from Lewis by arguing that while here, Plaintiff has solely alleged that the parties were engaged in negotiation, in Lewis, the parties were engaged in settlement negotiations and the defendants’ insurer conceded liability and had already paid Plaintiff’s property damage claim.

The Court is unconvinced that just because an insurer has not conceded liability does not mean that Plaintiff has not acted with diligence. As in Lewis, here the parties were engaged in negotiating a settlement and since the parties were unable to settle before the statute of limitations was to run, Plaintiff’s counsel drafted a complaint for filing. (Complaint p. 6 ¶¶ 7-8.) While informal negotiations do not themselves toll statute of limitations, they do support the contention that Plaintiff was diligent in pursuing his claim.

Finally, the Court notes that United argues that one of the factors that the Lewis court considered was the fact that the plaintiff in that case would likely be without any remedy if the statute of limitations was not tolled since her attorney would in all likelihood not be found negligent in a legal malpractice action. United contends that based on the allegations here, Plaintiff would appear to have a viable legal malpractice claim against his counsel and thus Plaintiff is not without remedy.

While the Lewis court considered whether the plaintiff was left without a remedy since a malpractice claim was not possible, this was not the sole factor considered. As analyzed above, the Court has found that the public policy factors considered in Lewis are in line with the finding that the Lewis tolling doctrine applies in the current matter. Additionally, as United concedes, it is not clear whether Plaintiff has a viable malpractice claim, nor will the Court decide such an issue at this stage.

Accordingly, the demurrer is OVERRULED.

Moving Party is ordered to give notice.