Aryeh v. Canon Bus. Solutions, Inc., No. S184929.

CourtUnited States State Supreme Court (California)
Writing for the CourtWERDEGAR, J.
Citation292 P.3d 871,55 Cal.4th 1185,151 Cal.Rptr.3d 827
Parties Jamshid ARYEH, Plaintiff and Appellant, v. CANON BUSINESS SOLUTIONS, INC., Defendant and Respondent.
Docket NumberNo. S184929.
Decision Date24 January 2013

55 Cal.4th 1185
292 P.3d 871
151 Cal.Rptr.3d 827

Jamshid ARYEH, Plaintiff and Appellant,
v.
CANON BUSINESS SOLUTIONS, INC., Defendant and Respondent.

No. S184929.

Supreme Court of California

Jan. 24, 2013.


151 Cal.Rptr.3d 829

Westrup Klick, Long Beach, R. Duane Westrup, Mark L. Van Buskirk, Jennifer L. Connor ; Krieger & Krieger, Long Beach, Linda Guthmann Krieger and Terrence B. Krieger for Plaintiff and Appellant.

Arbogast & Berna, David M. Arbogast, Los Angeles; Spiro Moss, J. Mark Moore and Denise L. Diaz for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiff and Appellant.

Kamala D. Harris, Attorney General, Manuel M. Medeiros, State Solicitor General, Frances T. Grunder, Assistant Attorney General, and Michele Van Gelderen,

151 Cal.Rptr.3d 830

Deputy Attorney General, as Amici Curiae on behalf of Plaintiff and Appellant.

Kasowitz, Benson, Torres & Friedman, San Francisco, Charles N. Freiberg, Brian P. Brosnahan, David A. Thomas, Jacob N. Foster, Jeanette E. Thurber ; Levine & Miller, Harvey R. Levine and Craig A. Miller, San Diego, for Beverly Clark, Warren Gold and Linda M. Cusanelli as Amici Curiae on behalf of Plaintiff and Appellant.

Dorsey & Whitney, Costa Mesa, Kent J. Schmidt, John P. Cleveland, Richard H. Silberberg and Robert G. Manson for Defendant and Respondent.

Bowman and Brooke, Gardena, Larry R. Ramsey and Renee S. Konigsberg for Association of Southern California Defense Counsel as Amicus Curiae on behalf of Plaintiff and Appellant.

WERDEGAR, J.

55 Cal.4th 1189
292 P.3d 873

The common law theory of continuous accrual posits that a cause of action challenging a recurring wrong may accrue not once but each time a new wrong is committed. We consider whether the theory can apply to actions under the unfair competition law ( Bus. & Prof.Code, § 17200 et seq. ; hereafter UCL) and, if so, whether it applies here to save plaintiff Jamshid Aryeh's suit from a limitations bar. We conclude: (1) the text and legislative history of the UCL leave UCL claims as subject to the common law rules of accrual as any other cause of action, and (2) continuous accrual principles prevent Aryeh's complaint from being dismissed at the demurrer stage on statute of limitations grounds. Accordingly, we reverse the Court of Appeal's judgment.

292 P.3d 874

FACTUAL AND PROCEDURAL BACKGROUND 1

Aryeh runs a copy business under the name ABC Copy & Print. Defendant Canon Business Solutions, Inc. (Canon) sells, leases, services, and repairs copiers and other office products. In November 2001 and February 2002, Aryeh entered agreements with Canon to lease copiers for a term of 60

55 Cal.4th 1190

months. The leases required Aryeh to pay monthly rent for each copier, subject to a maximum copy allowance. Copies in excess of the monthly allowance required payment of an additional per copy charge.

Canon serviced the leased copiers periodically. Shortly after entering the two leases, Aryeh noticed discrepancies between meter readings taken by Canon employees and the actual number of copies made on each copier. When Canon would not respond to Aryeh's complaints, Aryeh began compiling independent copy records. Aryeh concluded that during service visits, Canon employees were running test copies—according to the operative complaint, a total of at least 5,028 copies over the course of 17 service visits between February 2002 and November 2004. These copies resulted in Aryeh exceeding his monthly allowances and owing excess copy charges and late fees to Canon.

Aryeh sued in January 2008, alleging a single claim for violation of the UCL. The original complaint alleged Canon knew or should have known it was charging for excess copies and that the practice of

151 Cal.Rptr.3d 831

charging for test copies was both unfair and fraudulent. The complaint also included class allegations. Aryeh originally sought restitution and injunctive relief, but later amended his complaint to seek only restitution.

Canon demurred, arguing that the claim was barred by, inter alia, the statute of limitations. (See Bus. & Prof.Code, § 17208.)2 After twice sustaining demurrers with leave to amend, the trial court finally sustained a demurrer without leave to amend and dismissed the action with prejudice. Its order recited several grounds, but the court made clear the primary basis for dismissal was the statute of limitations. The trial court read state law as establishing that "the clock [on a UCL claim] starts running when the first violation occurs." Consequently, because the second amended complaint established a first violation in 2002, the claim was barred by the four-year statute of limitations.

A divided Court of Appeal affirmed. The majority agreed with the trial court that neither delayed discovery nor the continuing violation doctrine could be applied to extend the statute of limitations for UCL claims; accordingly, Aryeh's claim was untimely. The dissent would have reversed under the theory of continuous accrual, reasoning that even if some parts of Aryeh's claim were stale, not all parts of it were barred.

We granted review to resolve lingering uncertainty over the timing of accrual and the applicability of continuing-wrong accrual principles under the UCL.

55 Cal.4th 1191

DISCUSSION

This appeal follows the sustaining of a demurrer. The application of the statute of limitations on undisputed facts is a purely legal question (see Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112, 245 Cal.Rptr. 658, 751 P.2d 923 ); accordingly, we review the lower courts' rulings de novo. We must take the allegations of the operative complaint as true and consider whether the facts alleged establish Aryeh's claim is barred as a matter of law. (See Fox v. Ethicon Endo–Surgery, Inc. (2005) 35 Cal.4th 797, 810–811, 27 Cal.Rptr.3d 661, 110 P.3d 914.)

I. Accrual and Equitable Exceptions to the Usual Running of the Statute of Limitations

An affirmative defense, the statute of limitations exists to promote the diligent assertion

292 P.3d 875

of claims, ensure defendants the opportunity to collect evidence while still fresh, and provide repose and protection from dilatory suits once excess time has passed. (See, e.g., Shively v. Bozanich (2003) 31 Cal.4th 1230, 1246, 7 Cal.Rptr.3d 576, 80 P.3d 676 ; Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 395–396, 87 Cal.Rptr.2d 453, 981 P.2d 79 ; Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 755–756, 76 Cal.Rptr.2d 749, 958 P.2d 1062 ; Jolly v. Eli Lilly & Co., supra, 44 Cal.3d at p. 1112, 245 Cal.Rptr. 658, 751 P.2d 923.) The duration of the limitations period marks the legislatively selected point at which, for a given claim, these considerations surmount the otherwise compelling interest in adjudicating on their merits valid claims. (See Johnson v. Railway Express Agency (1975) 421 U.S. 454, 463–464, 95 S.Ct. 1716, 44 L.Ed.2d 295 ; Pooshs v. Philip Morris USA, Inc. (2011) 51 Cal.4th 788, 797, 123 Cal.Rptr.3d 578, 250 P.3d 181 ; Norgart, at p. 396, 87 Cal.Rptr.2d 453, 981 P.2d 79.)

The limitations period, the period in which a plaintiff must bring suit or be

151 Cal.Rptr.3d 832

barred, runs from the moment a claim accrues. (See Code Civ. Proc., § 312 [an action must "be commenced within the periods prescribed in this title, after the cause of action shall have accrued"]; Pooshs v. Philip Morris USA, Inc., supra, 51 Cal.4th at p. 797, 123 Cal.Rptr.3d 578, 250 P.3d 181 ; Fox v. Ethicon Endo–Surgery, Inc., supra, 35 Cal.4th at p. 806, 27 Cal.Rptr.3d 661, 110 P.3d 914 ; Norgart v. Upjohn Co., supra, 21 Cal.4th at p. 397, 87 Cal.Rptr.2d 453, 981 P.2d 79.) Traditionally at common law, a "cause of action accrues ‘when [it] is complete with all of its elements'—those elements being wrongdoing, harm, and causation." ( Pooshs, at p. 797, 123 Cal.Rptr.3d 578, 250 P.3d 181, quoting Norgart, at p. 397, 87 Cal.Rptr.2d 453, 981 P.2d 79.) This is the "last element" accrual rule: ordinarily, the statute of limitations runs from "the occurrence of the last element essential to the cause of action." ( Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 187, 98 Cal.Rptr. 837, 491 P.2d 421 ; accord, Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 815, 107 Cal.Rptr.2d 369, 23 P.3d 601 ;

55 Cal.4th 1192

Buttram v. Owens–Corning Fiberglas Corp. (1997) 16 Cal.4th 520, 531, fn. 4, 66 Cal.Rptr.2d 438, 941 P.2d 71.)

To align the actual application of the limitations defense more closely with the policy goals animating it, the courts and the Legislature have over time developed a handful of equitable exceptions to and...

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