Procedural Posture

Plaintiff, individual, alleged defendant, first company, conveyed certain real property to defendant, second company, without affording him notice and opportunity to exercise his right of first refusal. The Superior Court of Los Angeles County, California, dismissed the action pursuant to defendants’ motion for summary judgment, on the ground it was barred by the applicable statute of limitations. The individual appealed.

Overview

The California class action attorneys represented the parties and their business entities. The appellate court determined that the delayed discovery rule should be applied because the first company not only breached the contract within the privacy of its own offices, but the act which constituted the breach, failure to give notice of the option offer, was the very act which prevented the individual from discovering the breach. Defendants had reason to believe the individual remained ignorant he had been wronged, since they conceded for purposes of the summary judgment motion they never provided him with notice of the option offer. The appellate court ruled that the running of the statute of limitations was tolled until such time as the individual knew or should have known of the wrongful conduct at issue. Furthermore, the trial court erred in granting summary judgment, as reasonable minds could differ as to the sufficiency of the individual’s diligence in discovering the breach of contract, and therefore, whether the individual exercised reasonable diligence under the circumstances was a question of fact for a jury to decide.

Outcome

The judgment was reversed.

Procedural Posture

Plaintiff homeowner sought review of a decision of the Superior Court of San Diego County (California), which sustained without leave to amend demurrers by defendant insurers and dismissed plaintiff’s complaint for recovery for bad faith, intentional infliction of emotional distress, and breach of fiduciary duty on grounds that plaintiff’s claims were barred by the statute of limitations.

Overview

Several months after filing claims for property damage with defendant insurers, plaintiff homeowner filed an action seeking to recover on several theories as a result of defendant insurers and adjuster’s failure to pay plaintiff’s claim. Defendants demurred to plaintiff’s complaint, on grounds that the statute of limitations had expired, and the trial court sustained the demurrers, dismissing the action. On appeal, the court affirmed in part and reversed in part. The court found that plaintiff’s claims were timely filed due to the nature of the property damage to his home. Further, the court found that the bad faith claims against defendant insurers were proper, but rejected bad faith claim against defendant adjuster because there was no contractual relationship from which either a breach of covenant of good faith and fair dealing or a breach of contract action could spring. Claims for intentional infliction of emotional distress were proper against all defendants, but claims for breach of fiduciary duty were not proper because neither defendant insurers or defendant adjuster owed a true fiduciary duty to plaintiff.

Outcome

The court affirmed in part and reversed in part, finding that plaintiff homeowner’s claims were timely filed. The court reversed the trial court’s dismissal as to each claim, except as to plaintiff’s claims for breach of fiduciary duty, which it affirmed because none of the defendants owed a fiduciary duty to plaintiff, and plaintiff’s bad faith claims against defendant adjuster, which it affirmed because no contractual relationship existed.