Regus v. Schartkoff

• Decision Date: 27 December 1957
• Citation: 156 Cal.App.2d 382,319 P.2d 721
• Parties: Bertha REGUS, Plaintiff and Appellant, v. Carl SCHARTKOFF, Anna Schartkoff, Allstate Insurance Company, an Illinois corporation, Neal D. Wagoner, Defendants and Respondents. Civ. 22377.
• Court: California Court of Appeals Court of Appeals

Page 721

319 P.2d 721

156 Cal.App.2d 382

Bertha REGUS, Plaintiff and Appellant, v. Carl SCHARTKOFF, Anna Schartkoff, Allstate Insurance Company, an Illinois corporation, Neal D. Wagoner, Defendants and Respondents.

Civ. 22377.

District Court of Appeal, Second District, Division 3, California.

Dec. 27, 1957.

Rehearing Denied Jan. 22, 1958.

Belli, Crowley & Ford, Hollywood, and Harold Rhoden, Los Angeles, for appellant.

Parker, Stanbury, Reese p McGee, Los Angeles, and Charles A. Harrison, South Pasadena, for respondents.

VALLEE, Justice.

Appeal from a judgment of dismissal entered on an order sustaining defendants' demurrer to the first amended complaint, referred to as the complaint without leave to amend. The complaint is in four counts.

Count I.

Count I alleges that on July 2, 1953 plaintiff sustained injuries resulting from a bite inflicted by a dog owned by defendants Carl and Anna Schartkoff. The original complaint was filed April 2, 1956. In an effort to toll the statute of limitations and estop the Schartkoffs from raising the statute, County I alleges that on July 7, 1953, September 7, 1953, December 1, 1953, March 1, 1954, June 16, 1954, and at other times defendant Neal D. Wagoner, as agent for defendant Allstate Insurance Company and the Schartkoffs, with intent to deceive and defraud plaintiff, represented to her: 1. He, Wagoner, was a claim adjuster for Allstate. 2. The Schartkoffs were insured by Allstate. 3. All of plaintiff's damages would be paid by Allstate and plaintiff would receive enough money to enable her to retire and take a long vacation. 4. Plaintiff had three years before which her claim would be barred by the statute of limitations and she could bring suit at any time within three years from the date of the dog bite. 5. It would be to plaintiff's detriment to obtain legal counsel.

Count I further alleges that at said times Wagoner orally promised plaintiff Allstate would pay all of her damages and impliedly represented that 'in his state of mind there existed a present intention on his part to perform said promise on behalf of said company.' At all times Wagoner had knowledge far superior to plaintiff's concerning the statute of limitations and knew plaintiff's claim would be barred in one year. Wagoner had no intention to perform his promise. Plaintiff relied on Wagoner's representations and promise and on his superior knowledge 'of such matters'; and in reliance thereon did not consult counsel regarding her claim, and did not file suit thereon within one year from the date of the dog bite.

Count I further alleges that on July 20, 1954 Wagoner informed plaintiff a one-year statute of limitations had applied in her case; the one-year period had expired; and as a consequence Allstate would pay her only $170 to cover her medical bills; 'whereupon plaintiff first discovered the fraud perpetrated upon her by Neal D. Wagoner.' In July 1954 on learning of the fraud plaintiff immediately sought the advice of an attorney and was informed by him that a one-year statute did apply to her claim and it was barred. Plaintiff believed she had been defrauded and that her claim was barred and, being unfamiliar with the law of estoppel, she did not seek to file her claim. In December 1955, while receiving legal advice by her present counsel on another matter, her claim for personal injuries was called to his attention. She began an investigation which was completed in March 1956, and on April 2, 1956 the complaint was filed.

The demurrer to Count I was on the ground, among others, that it was barred by section 340(3) of the Code of Civil Procedure--the one-year statute.

The equitable doctrine of estoppel in pais is applicable in a proper case to prevent a fraudulent or inequitable resort to the statute of limitations. A person by his conduct may be estopped to rely on the statute. Where the delay in commencing an action is induced by the conduct of the defendant, it cannot be availed of by him as a defense. One cannot justly or equitably lull his adversary into a false sense of security and thereby cause him to subject his claim to the bar of the statute of limitations, and then be permitted to plead the very delay caused by his conduct as a defense to the action when brought. Acts or conduct which wrongfully induce a party to believe an amicable adjustment of his claim will be made may create an estoppel against pleading the statute. A party has a reasonable time in which to bring his action after the estoppel has expired. Industrial Indem. Co. v. Industrial Acc. Comm., 115 Cal.App.2d 684, 689-690, 252 P.2d 649; Carruth v. Fritch, 36 Cal.2d 426, 433-434, 244 P.2d 702, 24 A.L.R.2d 1403.

When a substantial period for instituting an action supervenes after expiration of the delay engendered by a party, his conduct, representations, or promise will not estop him from asserting the bar of the statute. And he is not estopped where the conduct, representations, or promise did not in fact induce the party to forbear from instituting an action. Industrial Indem. Co. v. Industrial Acc. Comm., 115 Cal.App.2d 684, 690, 252 P.2d 649; 53 C.J.S. Limitations of Actions § 25, p. 967. The statute becomes operative when the aggrieved party discovers the fact on the existence of which the cause of action accrues. Pashley v. Pacific Elec. Ry. Co., 25 Cal.2d 226, 229, 153 P.2d 325; Kimball v. Pacific Gas & Elec. Co., 220 Cal. 203, 210, 30 P.2d 39. Where the inducement for delay has ceased to operate, the plaintiff cannot excuse his failure to institute his action on the ground of estoppel. 130 A.L.R. 8, 19; A.L.R.2d 1413, 1423.

We think it manifest that the reasonable time in which a plaintiff may file his action after discovery of the alleged fraud cannot exceed the period of limitation imposed by the statute for commencing the action. Assuming as we must that the facts alleged are true, defendants are estopped from asserting the statute from July 2, 1953, the date of the dog bite, until July 20, 1954, the date plaintiff discovered the fraud. The action was not filed until April 2, 1956, nearly two years after plaintiff discovered the fraud. A substantial period supervened after July 20, 1954. From July 20, 1954 to April 2, 1956, neither the conduct, nor the representations, nor the promise of Wagoner was a factor in inducing plaintiff to forbear from instituting the action against the Schartkoffs.

We hold the cause of action alleged in Count I is barred by the statute.

Counts II and III.

Count II alleges the same facts as Count I, omitting the allegations with respect to the making of a promise without any intention of performing it. Count III is based on the making of the promise that Allstate would pay all of plaintiff's damage without any intention of performing. It alleges plaintiff relied on the promise, and in such reliance did not consult an attorney regarding her claim and did not file suit within one year from the date of the dog bite.

Civil Code, section 1708, reads:

'Every person is bound, without contract, to abstain from injuring the person or property of another, or infringing upon any of his rights.'

Section 1709 reads:

'One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.'

Section 1710 reads:

'A deceit, within the meaning of the last section, is either:

'1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

'2. The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true;

'3. The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or,

'4. A promise, made without any intention of performing it.'

The elements of actionable deceit are: a false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies to his injury. Schaefer v. Berinstein, 140 Cal.App.2d 278, 294, 295 P.2d 113. Count II contains facts which embrace all these factors. Fraud is the gravamen of the cause of action.

It is argued that the representation alleged is one of law; that a misrepresentation as to a matter of law, or a concealment as to a matter of law, will not constitute actionable fraud even though such misrepresentation is believed and acted on.

The general rule is that a misrepresentation of law is not actionable fraud. That is, a representation of law by a layman not occupying a confidential relationship toward the one to whom it is addressed and based on facts equally known or accessible to both does not ordinarily justify reliance on the representation. (23 Cal.Jur.2d 45, § 17.) The general rule has exceptions. One exception is where the party expressing the opinion purports to have expert knowledge concerning the matter. Seeger v. Odell, 18 Cal.2d 409, 414, 115 P.2d 977, 136 A.L.R. 1291. Another exception is where the party expressing the opinion, having had superior means of information, possesses a knowledge of the law and thereby gains an unconscionable advantage over one who is ignorant and has not been in a situation to become informed. Bank of America v. Sanchez, 3 Cal.App.2d 238, 242, 38 P.2d 787. In either of these cases the injured party is entitled to relief. The right to relief is predicated on the same ground as if the misrepresentation of law were of a matter of fact.

A demurrer admits the truth of allegations which are well pleaded, however improbable the facts may appear to be. Lee v. Hensley, 103 Cal.App.2d 697, 704, 230 P.2d 159. Wagoner was an insurance adjuster. He had knowledge far superior to that of plaintiff. He knew plaintiff's claim would be barred in one year. The allegations of Count...