Zakk v. Diesel ( 2019 )

Filed 3/25/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
GEORGE ZAKK, B284432
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC619933)
v.
VIN DIESEL et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court for Los Angeles
County, John P. Doyle, Judge. Affirmed in part and reversed in part.
Hamrick & Evans, Martin J. Barab, Jonathan D. Dutton and
A. Raymond Hamrick, III, for Plaintiff and Appellant.
Freedman + Taitelman, Sean M. Hardy and Bryan J. Freedman
for Defendants and Respondents Vin Diesel and One Race Films, Inc.
Manatt, Phelps & Phillips, John M. Gatti, Katrina Dela Cruz and
Benjamin G. Shatz for Defendant and Respondent Revolution Studios.
This case involves a dispute over whether plaintiff and appellant
George Zakk is entitled to be paid and receive an executive producer
credit for a film that is a sequel to a film he had worked on and
developed. Zakk sued defendants Vin Diesel, One Race Films, Inc., and
Revolution Studios1 for breach of an oral contract, breach of an implied-
in-fact contract, intentional interference with contractual relations,
quantum meruit, promissory estoppel, and declaratory relief. His case
was dismissed after the trial court sustained defendants’ demurrers to
Zakk’s third amended complaint. The primary bases for the trial court’s
ruling were its findings that the third amended complaint was a sham
pleading and that the breach of oral contract claim (and its derivative
claims) were barred by the statute of frauds. In addition, the court
found that Zakk’s quantum meruit claim was barred by the statute of
limitations, and it dismissed his claim for promissory estoppel because
it was added without leave of court.
With regard to oral contracts that fall within the statute of frauds
category of contracts not to be performed within a year, we hold that the
promisee’s full performance of all of his or her obligations under the
contract takes the contract out of the statute of frauds, and no further
showing of estoppel is required. We distinguish cases involving other
categories of contracts within the statute of frauds, such as contracts to
make a will or contracts not to be performed within the promisor’s
lifetime, because those categories of contracts historically have been
1 We will refer to Vin Diesel and One Race Films, Inc. collectively as
Diesel/One Race, and to all defendants collectively as defendants.
2
treated differently than contracts not to be performed within a year.
Therefore, we conclude that to the extent those cases hold that
avoidance of the statute of frauds requires the promisee to satisfy the
elements of estoppel--showing extraordinary services by the promisee or
unjust enrichment by the promisor--they do not apply to the category of
contracts not to be performed within a year.
Here, Zakk’s allegation that he fully performed his obligations
under the alleged oral contract at issue is enough to avoid the statute of
frauds. Therefore, in finding that Zakk’s breach of contract and related
claims were barred by the statute of frauds absent alleged facts showing
defendants were estopped to assert the statute, the trial court erred.
We also conclude the trial court erred in finding the third amended
complaint was a sham pleading, and that the statute of limitations
barred his quantum meruit claim. However, we conclude the trial court
did not abuse its discretion in dismissing the promissory estoppel claim.
Accordingly, we affirm the judgment to the extent it dismisses Zakk’s
promissory estoppel claim and reverse the judgment as to his remaining
claims.
BACKGROUND
Because this appeal raises the question whether the third
amended complaint was a sham pleading, we must discuss each version
of the complaint, the demurrers, and the rulings on the demurrers in
some detail to give some context to our analysis of that issue. In
accordance with the standard of review, we treat the facts alleged in the
3
complaints as true for the purposes of this appeal. (Thaler v. Household
Finance Corp. (2000) 80 Cal.App.4th 1093, 1098.)
A. Original Complaint
1. Allegations
Zakk filed the original complaint in this case on May 10, 2016. It
asserted four causes of action--breach of contract, breach of implied-in-
fact contract, declaratory relief, and intentional interference with
contractual relations--based upon his assertion that he was entitled to
receive an executive producer credit and a $275,000 executive producing
fee for the sequel to a film entitled xXx. The complaint alleged as
follows.
Vin Diesel is an actor, producer, and director. Diesel founded One
Race, a production company, in or about 1995; it was incorporated in
March 2001. Zakk ran One Race from its inception, and was
responsible for developing projects and managing them to conclusion.
Zakk did not receive a salary, reimbursement for expenses, or any other
compensation for his daily work. Instead, he “had an oral and/or
implied-in-fact agreement with DIESEL and ONE RACE FILMS which
provided that for each motion picture in which (a) DIESEL would star
in and act in the capacity as producer in and (b) ZAKK helped develop
and/or worked on while running the operations of ONE RACE FILMS,
including sequels based thereon, ZAKK would, unless otherwise agreed,
receive the following: [¶] (a) A fee that ranged from $250,000 to
$275,000; and [¶] (b) An Executive Producer or Producer credit on
screen and in promotional materials on a Most Favored Nation (MFN)
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basis with other Executive Producers or Producers (depending on
whether ZAKK received an Executive Producer or Producer credit on
the motion picture).”
The complaint alleged “there is a considerable amount of
precedent which evidences ZAKK’s oral and/or implied-in-fact
agreement with DIESEL and ONE RACE FILMS,” and listed six
original films and one sequel for which he was paid and given executive
producer or co-producer credit. The first film, Strays, was produced in
1997; the last original film listed, Find Me Guilty, was produced in
2006. The one sequel listed, Riddick (which was a sequel to the 2004
original film, The Chronicles of Riddick) was produced in 2013; Zakk
received an executive producer fee and credit for the sequel even though
his relationship with Diesel and One Race had terminated in 2007.
With regard to the film xXx, which was produced in 2002, the
complaint alleged: “ZAK worked on and helped develop xXx.
Accordingly, with respect to xXx and any sequel of xXx which would be
starring and produced by DIESEL, Defendants DIESEL, ONE RACE
FILMS, and/or REVOLUTION STUDIOS (the production company)
agreed to provide ZAKK with an Executive Producer credit and
$275,000 executive producing fee in exchange for his services.” The
complaint further alleged that defendants were currently in production
of a sequel to xXx, entitled xXx: The Return of Xander Cage, starring
Diesel, which was directly based upon the original film and was set to
be released on January 20, 2017.
5
In the first cause of action for breach of oral contract, the
complaint alleged that “[i]n exchange for ZAKK’s work on the original
xXx, ZAKK, on the one hand, and DIESEL, ONE RACE FILMS, and/or
REVOLUTION STUDIOS, on the other entered into an oral agreement
which provided that ZAKK would receive the following as respects the
xXx Sequel: [¶] (a) An Executive Producer fee of $275,000; and [¶] (b)
An Executive Producer credit on screen and in promotional materials on
a Most Favored Nation basis with other Executive Producers (e.g., same
size print and card).” It alleged that Zakk had “performed all material
conditions, covenants, obligations and promises required on [his] part to
be performed in accordance with the oral agreement except for those
conditions, covenants, obligations and promises that have been waived,
excused, rendered impossible and/or prevented by Defendants,” and
that Diesel, One Race, and/or Revolution breached the agreement by
refusing to pay Zakk his fee or provide him with an executive producer
credit.
The second cause of action, for breach of implied-in-fact contract
(which was alleged only against Diesel and One Race), alleged that by
reason of the practices and conduct as described in the complaint there
existed an implied-in-fact agreement between Zakk and Diesel/One
Race pursuant to which Zakk was entitled to an executive producer fee
of $275,000 and an executive producer credit for the xXx sequel. This
cause of action included the same performance and breach allegations
as alleged in the breach of oral contract cause of action.
The third cause of action, for declaratory relief, alleged there was
an actual dispute between Zakk and defendants concerning their rights
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and duties with respect to the xXx sequel. It sought a declaration that
Zakk is entitled to an executive producer fee of $275,000 and executive
producer credit for the xXx sequel.
The fourth cause of action, for intentional interference with
contractual relations (only against Revolution), alleged that, to the
extent Revolution is not found to have entered into the oral contract
with respect to the xXx sequel, it knew of the oral and/or implied-in-fact
contract between Zakk and Diesel/One Race. The complaint alleged
that Revolution’s conduct prevented, or made more expensive or
difficult, Diesel/One Race’s performance of the contract, that Revolution
intended to disrupt the performance of the contract or knew that
disruption was certain or substantially certain to occur, and that
Revolution’s conduct was a substantial factor in causing Zakk damage.
2. Demurrer
Diesel/One Race filed a demurrer to the complaint. They argued
that all causes of action were barred by the two-year statute of
limitations found in Code of Civil Procedure section 339(1), and that the
complaint failed to allege facts sufficient to state any cause of action.
With regard to the statute of limitations, Diesel/One Race noted
that in all of his causes of action, Zakk was seeking to recover
compensation for his personal services. They observed that Zakk’s
services related to the original xXx film “were completely performed by
2002” and that he alleged that he stopped providing services to One
Race in 2007. Thus, they argued that because the statute of limitations
for oral or implied-in-fact contracts for personal services begins to run
7
when those services end, Zakk’s claims expired in 2004 (if based upon
the completion of services related to the original xXx film) or 2009 (if
based upon the completion of all services to One Race).
Diesel/One Race also argued that Zakk failed to alleged facts
sufficient to state a breach of oral contract claim because (1) the alleged
contract was fatally uncertain and (2) the alleged contract was barred
by the statute of frauds. With regard to the first ground, Diesel/One
Race asserted that the alleged contract was uncertain because “[i]t is
uncertain who the parties are. It is uncertain what the respective
obligations of the parties are. It is even uncertain whether [Zakk] has
alleged one contract or several and under which contract(s) his claims
arise.” With regard to the statute of frauds, Diesel/One Race argued
that the alleged oral agreement by its terms was not to be performed
within a year from its making and therefore was barred under Civil
Code section 1624, subdivision (a)(1).
Finally, Diesel/One Race contended that (1) Zakk’s breach of
implied-in-fact contract cause of action failed to state a claim because
an action based on an implied-in-fact contract cannot lie where there
exists an express contract covering the same subject, and Zakk alleged
both a valid express contract and an implied-in-fact contract; and
(2) Zakk’s cause of action for declaratory relief failed because it did not
allege an justiciable controversy, but instead alleged an accrued cause
of action for an actual breach.
8
3. Ruling
The trial court sustained in part the demurrer, and granted leave
to amend.
The court rejected Diesel/One Race’s statute of limitations
argument. It observed that the statute begins to run on a breach of
contract cause of action when the contract is repudiated, and the
complaint did not allege when that repudiation took place.
The court agreed in part with Diesel/One Race’s uncertainty
argument. It found the complaint was unclear about whether the
alleged agreement provided that Zakk was to be paid and credited for
sequels even if he did not develop or work on the sequel. It noted if that
were the case, Diesel/One Race’s assertion of the statute of frauds would
be proper. Therefore, it sustained the demurrer to the breach of oral
contract cause of action on the ground of uncertainty.
The court also agreed with Diesel/One Race’s argument that Zakk
could not assert breach of both an implied-in-fact contract and an
express contract covering the same subject matter, and sustained the
demurrer to the breach of implied-in-fact contract claim on that ground.
In doing so, however, it acknowledged that Zakk could assert both
claims in the alternative.
Finally, the court sustained the demurrer to Zakk’s declaratory
relief claim because it only concerned an accrued claim and did not seek
prospective relief by way of a declaration of rights.
9
B. First Amended Complaint
1. Allegations
Zakk filed a first amended complaint with the following changes
and additions.
First, where Zakk had alleged an “oral and/or implied-in-fact
agreement” in the original complaint, the first amended complaint
alleged an “oral or implied-in-fact agreement.” The first amended
complaint also did not incorporate by reference in his breach of implied-
in-fact cause of action the allegations of his breach of oral contract cause
of action (those allegation had been incorporated in the original
complaint).
Second, Zakk added allegations regarding the alleged contract in
an attempt to clear up any uncertainty. He alleged that under the
contract he “was to be paid and credited for all sequels to motion
pictures that (a) DIESEL would star in and (b) ZAKK helped develop
and/or worked on the original picture upon which the sequel is based,
regardless of whether ZAKK helped develop or work on such sequels.”
Zakk also alleged that “[b]y virtue of the services that ZAKK
provided in connection with xXx (i.e., working on the picture and
helping to develop it), ZAKK fully performed all of his obligations under
the oral or implied-in-fact agreement that ZAKK had with DIESEL and
ONE RACE FILMS, thereby entitling ZAKK to an Executive Producer
credit and $275,000 executive producing fee with respect to any sequel
of xXx which DIESEL would star in, regardless of whether ZAKK
helped develop or work on such sequels.” In addition, Zakk specifically
alleged an oral contract with Revolution with regard to xXx and any
10
sequel starring Diesel, and that he fully performed all of his obligations
under that oral agreement.2
Zakk also included some additional language to his allegation
regarding the payment and producing credit he received for the sequel
to The Chronicles of Riddick. Thus, he alleged: “For example, in 2013,
in exchange for the services that ZAKK provided (work and
development) in connection with The Chronicles of Riddick (released in
2004), ZAKK received an Executive Producer fee and credit for the
sequel to The Chronicles of Riddick--i.e., the motion picture entitled,
Riddick (released in 2013).” (Additional language underlined.)
In addition, Zakk made a slight addition to his allegation of
performance in his breach of oral contract and breach of implied-in-fact
contract causes of action, presumably to address the trial court’s
comments regarding the statute of frauds. He added the word “fully” to
both allegations, so the allegations stated that he “has fully performed”
all his obligations except for those “that have been waived, excused,
rendered impossible and/or prevented by Defendants.”
Finally, Zakk amended his declaratory relief cause of action to
allege that a controversy had arisen concerning the rights and duties
2 Those allegations stated: “17. In exchange for the services that ZAKK
provided in connection with xXx as alleged herein, REVOLUTION STUDIOS
(the production company for xXx) also orally agreed to provide ZAKK with an
Executive Producer credit and $275,000 executive producing fee with respect
to any sequel of xXx which DIESEL would star in, regardless of whether
ZAKK helped develop or work on such sequels. [¶] 18. By virtue of the
services that ZAKK provided in connection with xXx as alleged herein, ZAKK
fully performed all of his obligations under his oral agreement with
REVOLUTION STUDIOS.”
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with respect to “sequels to motion pictures that (a) DIESEL will star in
and (b) ZAKK helped develop and/or worked on the original picture
upon which the sequel is based.” He alleged that he contends and seeks
a declaration that for each such sequel he is entitled to a fee equal to
the fee he received in connection with the film upon which the sequel is
based, as well as an executive producer or producer credit (depending
upon whether he received an executive producer or producer credit on
the original film).3
2. Demurrers
Diesel/One Race and Revolution each filed a demurrer to the first
amended complaint.
In their demurrer, Diesel/One Race asserted that the statute of
frauds barred Zakk’s breach of oral contract claim because it could not
be performed within one year and Zakk did not plead any facts to
support an exception to the statute or estoppel to assert the statute.
They also argued that that claim failed on the merits because there was
no breach, since the xXx sequel had not yet been completed and
released. They contended that the cause of action for breach of implied-
in-fact contract failed for the same reasons the breach of oral contract
failed, and because no such claim can lie where there is a valid express
contract. Finally, they argued the declaratory relief claim failed
3 We note that Zakk did not make any change to the prayer for relief as
to the declaratory relief cause of action, so that the prayer still sought a
declaration only as to the xXx sequel.
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because (a) it sought declaratory relief that was duplicative of the
breach of oral contract claim; (b) it sought declaratory relief concerning
Revolution, which was a party to only one alleged oral contract with
Zakk, i.e., with regard to xXx and its sequel; and (c) there was no actual
controversy concerning sequels that are wholly speculative.
In its demurrer, Revolution also argued that the statute of frauds
barred Zakk’s breach of oral contract claim, and that the declaratory
relief claim failed because there was no existing actual controversy
regarding speculative sequels. It also contended that the breach of oral
contract claim failed because the first amended complaint did not
include any specific allegations regarding the existence of the contract
and thus was uncertain, nor did it include facts regarding the formation
of the contract or consideration for the contract. Finally, it challenged
the intentional interference with contractual relations claim (which was
alleged only against Revolution) on two grounds: (1) the first amended
complaint did not plead sufficient facts to show the existence of a valid
contract and intentional wrongful acts to interfere with any contract;
and (2) the claim was factually inconsistent with Zakk’s allegations that
Revolution entered into an oral agreement with him.
3. Ruling
The trial court sustained both demurrers with leave to amend.
The court found that the alleged agreement--which the court identified
as an agreement “for Plaintiff to be paid and credited for sequels merely
because Plaintiff had developed or worked on the original films even if
Plaintiff did not develop or work on the sequels”--was subject to the
13
statute of frauds because it was not to be performed within a year, since
there was no definitive time for the agreement to terminate. (Citing
Tostevin v. Douglas (1958) 160 Cal.App.2d 321, 328 (Tostevin).) The
court rejected Zakk’s argument that his allegation that he fully
performed his obligations under the agreement was sufficient to defeat
the statute of frauds bar; the court found that Zakk must also allege
facts sufficient to establish an estoppel to assert the statute.
Although the court concluded that its finding regarding the
statute of frauds applied to all causes of action alleged in the complaint
because all of them were derivative of the contract claims, it also
addressed defendants’ other arguments. It rejected Diesel/One Race’s
and Revolution’s arguments regarding the purported insufficiency of the
allegations to support the breach of oral contract, breach of implied-in-
fact, and declaratory relief causes of action. The court agreed, however,
with Revolution’s argument regarding the inadequacies of the
allegations of intentional interference with contractual relations, and
sustained Revolution’s demurrer to that cause of action on this ground
(as well as on the statute of frauds ground).
C. Second Amended Complaint
1. Allegations
Zakk filed the second amended complaint on December 7, 2016.
The only differences between the first amended complaint and the
second amended complaint were found in three paragraphs: one in the
background and general allegations section and two in the fourth cause
of action for interference with contractual relations.
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In the background and general allegations section, Zakk updated
one paragraph to state that defendants “have recently produced a
sequel to the original xXx, which was produced in 2002,”4 and added
factual allegations to establish estoppel to assert the statute of frauds.
Among the facts alleged were that Zakk “fully performed all of his
obligations under the alleged agreement,” that his “performance as
respects xXx was directly induced” by defendants’ promise to provide
him a producer fee and credit for any sequel starring Diesel, and that
he “agreed to accept substantially less than what his services were
worth in connection with his creating and developing the xXx film
franchise based specifically” on defendants’ promise with regard to any
sequel starring Diesel.
In the intentional interference cause of action, Zakk added an
allegation naming an individual at Revolution who knew about the oral
agreement and its terms, and added additional language to another
paragraph about Revolution’s conduct that prevented Diesel/One Race’s
performance of the oral agreement.
2. Demurrers
Once again, Diesel/One Race and Revolution each filed a demurrer
to the second amended complaint.
In their demurrer, Diesel/One Race argued that the alleged
contracts were barred by the statute of frauds, and that Zakk failed to
4 The first amended complaint had alleged that defendants “are now in
production of a sequel to xXx.”
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plead facts to support any exception to the statute of frauds. They
contended that estoppel did not apply under the circumstances of this
case because the rendition of personal services compensable in quantum
meruit is an insufficient basis for estoppel, and because Zakk cannot
claim that his personal services in connection with the original xXx film
clearly related to the alleged contract regarding a speculative sequel.
Finally, Diesel/One Race challenged the declaratory relief claim on the
same grounds as previously asserted.
Revolution argued in its demurrer that the breach of oral contract
claim was barred by the statute of frauds because Zakk did not allege
facts sufficient to show that he would suffer an unconscionable injury,
or that defendants would be unjustly enriched if the statute of frauds
were applied. Revolution also argued that the declaratory relief claim
failed because the underlying contract was barred by the statute of
frauds, and that the intentional interference claim failed because Zakk
did not allege facts sufficient to establish a valid contract or intentional
wrongful acts by Revolution.
3. Ruling
Once again, the trial court sustained the demurrers with leave to
amend. It found that Zakk’s allegations that he was not fully
compensated for his work on the original xXx film were insufficient to
allege estoppel to assert the statute of frauds because he failed to allege
facts showing that he provided services of an extraordinary or
exceptional character. The court explained, “[s]tated differently,
Plaintiff fails to allege facts why estoppel should be applied to permit
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enforcement of the alleged contract instead of Plaintiff being required to
pursue a quantum meruit claim.” Based upon this finding, the court
sustained the demurrers to all causes of action, but granted Zakk leave
to amend, including leave to add an alternative quantum meruit claim.
Although the court found that all causes of action were barred by the
statute of frauds, it also specifically addressed, and rejected,
Revolution’s argument that Zakk failed to allege sufficient facts to state
a claim for intentional interference with contractual relations.
D. Third Amended Complaint
1. Allegations
Sometime after Zakk filed his second amended complaint in
December 2016, he received documents he had requested in requests for
production that he had propounded at the inception of the lawsuit
(which was filed in May 2016). One of those documents was a letter
that Zakk contended constituted a written agreement or memorandum
evidencing the terms of the alleged oral contract at issue, although one
of those terms was somewhat different than the term he previously had
alleged. He filed a third amended complaint that included several
significant, and some less significant, changes from the previous
complaints; many of those changes appear to be the result of Zakk’s
receipt of this discovery. The changes are as follows.
First, the third amended complaint added an introductory
paragraph setting forth the nature of the action. It stated that the
action arises out of defendants’ “wrongful and unjustified refusal to
credit and compensate . . . ZAKK, as agreed,” for his services provided
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to them “in connection with the xXx film franchise--a film franchise
which ZAKK was instrumental in creating, developing, and bringing to
fruition.”
Second, the description of the nature of Zakk’s relationship with
One Race was slightly modified in the third amended complaint.
Whereas the previous complaints alleged that Zakk ran and/or
managed One Race, the third amended complaint alleged that he
“worked for” One Race.
Third, the third amended complaint alleged that Zakk and
Diesel/One Race entered into several different oral or implied-in-fact
agreements--i.e., a different agreement for each film that Diesel starred
in and Zakk worked on and/or helped develop. The complaint alleged
that those agreements “generally provided” that for each film, Zakk
would receive “[a] fee that ranged from approximately $200,000 to
$275,000,” and an executive producer or producer credit. With regard
to the xXx film, the complaint alleged that Diesel/One Race and
Revolution agreed that, in exchange for Zakk’s services on the original
xXx film, Zakk would receive compensation of at least $200,000 and no
less than 125 percent of his then current quote, and executive producer
credit on the xXx sequel starring Diesel.
Fourth, the third amended complaint alleged that the agreement
with respect to xXx was memorialized in a writing signed by Diesel’s
agent and Revolution’s agent. The complaint also included alleged
language from that letter.
Fifth, the third amended complaint included additional
allegations to support Zakk’s position that the alleged agreement was
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not barred under the statute of frauds. Those allegations included
allegations (1) that Zakk “was instrumental in creating, developing, and
bringing the xXx film franchise to fruition,” and that the services he
performed in connection with that franchise “were extraordinary and of
an exceptional character in that, among other things, no one else could
have performed [them]”; and (2) that the alleged oral or implied-in-fact
agreement was an at-will agreement that could have been terminated
at any time before Zakk fully performed his services in connection with
the original xXx film.
Finally, the third amended complaint added two causes of action,
one for quantum meruit and one for promissory estoppel. The quantum
meruit cause of action alleged that defendants requested that Zakk
perform services for their benefit in connection with the xXx film
franchise and promised to pay Zakk the reasonable value of those
services (which is alleged to be no less than $2 million), and that Zakk
performed those services. The complaint alleged that within the past
two years Zakk requested that defendants pay him the reasonable value
of the services that he performed in connection with the xXx sequel, but
they refused to do so. The promissory estoppel cause of action alleged
that defendants promised Zakk that in exchange for the services he
provided in connection with the original xXx film, Zakk would receive in
connection with the xXx sequel the compensation and credit alleged,
that defendants have not performed any part of their promise, and as a
result of Zakk’s reasonable reliance upon defendants’ promises he has
suffered substantial monetary damages.
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2. Demurrers
Diesel/One Race and Revolution each filed a demurrer to the third
amended complaint, as well as a motion to strike the promissory
estoppel cause of action and a request for judicial notice of (among other
things) the document the complaint alleged memorialized the purported
oral agreement.5
In their demurrer, Diesel/One Race argued that the third
amended complaint was a sham pleading because (1) it alleged several
different oral or implied-in-fact agreements rather than a single
agreement; and (2) it contradicted the previously-alleged facts that
Zakk generally was to be paid a fee ranging from $250,000 to $275,000,
and that he was to be paid $275,000 for the xXx sequel, by now alleging
that he generally was to be paid a fee ranging from $200,000 to
$275,000, and was to be paid at least $200,000 and no less than 125
percent of his then current quote for the xXx sequel.
Diesel/One Race also argued that Zakk’s amendments failed to
cure the previously-identified defects with regard to application of the
statute of frauds, and that the writing identified in the third amended
complaint was insufficient to take the alleged oral agreement out of the
statute of frauds. With regard to the writing, Diesel/One Race asserted
that it not only directly contradicted the terms of the agreement alleged
in the earlier complaints, but that Zakk misrepresented the actual
5 The document at issue, which was produced under a protective order,
was filed under seal.
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language of the letter (of which Diesel/One Race asked the court to take
judicial notice).
Finally, Diesel/One Race challenged the newly-added causes of
action for quantum meruit and promissory estoppel. They contended
that the quantum meruit cause of action was barred by the two-year
statute of limitations. They argued that the statute begins to run on a
quantum meruit claim alleging a promise to pay for personal services
when those services are terminated. Thus, because Zakk’s services on
the original xXx film terminated in 2002, the statute of limitations
expired in 2004. With regard to the promissory estoppel cause of action,
Diesel/One Race’s challenge was two-fold. They contended it was
improperly added without leave of court (which was the basis of their
motion to strike), and they argued that it failed on the merits as a
matter of law.
Revolution made similar arguments in its demurrer. It argued (in
a footnote) that the third amended complaint was a sham pleading
because it changed the amount of the fee he was to receive for the xXx
sequel under the alleged contract; it did not argue that the change in
the number of contracts alleged rendered the complaint a sham
pleading. It contended that the complaint failed to allege sufficient
facts to support estoppel to assert the statute of frauds. It also asserted
that the alleged writing was insufficient to take the oral agreement out
of the statute of frauds, and that the complaint mischaracterized the
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writing.6 And, like Diesel/One Race, it argued the quantum meruit
cause of action was barred by the statute of limitations, and challenged
the promissory estoppel cause of action on the merits and on the ground
that Zakk was not given leave to amend to allege such a claim.
3. Ruling
Over Zakk’s objection, and following additional briefing and a
separate hearing on the issue, the trial court granted defendants’
requests for judicial notice of the alleged writing. The court then
sustained defendants’ demurrers without leave to amend.
The court found that the third amended complaint was a sham
pleading because it alleged there were multiple oral contracts, as
opposed to one contract as previously alleged.7 It observed that
6 As noted, Revolution also asked the trial court to take judicial notice of
the document referenced in the complaint. In its request for judicial notice,
Revolution submitted two versions of the document; one was identical to the
one submitted by Diesel/One Race (except for the Bates number), and the
other was that same document with handwritten notations on it.
7 At oral argument, counsel for Revolution asserted that the trial court
also found that the third amended complaint was a sham pleading because it
changed the allegation regarding the amount of compensation Zakk was to
receive for the xXx sequel. That is not correct. In its ruling, the court stated:
“Defendants contend that the demurrer should . . . be sustained because the
[third amended complaint] is a sham pleading. Specifically, Defendants
assert that the [third amended complaint] (1) now alleges the existence of
multiple oral contracts . . . and (2) alleges different compensation . . . . [¶]
The Court agrees in part. The allegation that [Zakk] entered into several
contracts, as opposed to one contract as previously alleged . . . is clearly an
attempt by [Zakk] to engineer the [third amended complaint] to escape the
reaches of a demurrer.” (Italics added.) The court then discussed only the
22
“Plaintiff consistently alleged the existence of one oral or implied-in-fact
contract, but suddenly, and without reference to any reason for the
change, asserts the existence of multiple contracts.” The court found
that this change was “clearly an attempt by Plaintiff to engineer the
[third amended complaint] to escape the reaches of a demurrer,” and
concluded that this was a sufficient basis to sustain the demurrer or
strike the complaint.
In addition, the court found that the writing quoted in the third
amended complaint was insufficient to take the alleged oral contract
out of the statute of frauds and, for the reasons stated in its rulings on
the prior demurrers, that the complaint failed to allege facts sufficient
to establish an estoppel to assert the statute. Finally, the court found
that the quantum meruit cause of action was barred by the statute of
limitations, which began to run in 2002, when Zakk performed the
services on the original xXx film, and it sustained the demurrer to the
promissory estoppel cause of action on the ground that it was added
without leave of the court.8
The court entered a judgment of dismissal, from which Zakk
timely filed a notice of appeal.
allegation of multiple contracts, thus impliedly rejecting the other ground
defendants asserted.
8 On the day of the hearing on the demurrer, Zakk filed fictitious name
amendments to the complaint to add One Race Productions, Inc.; Revolution
Production Services, LLC; and Revolution Films. The trial court ordered
them stricken without prejudice.
23
DISCUSSION
Zakk raises several contentions on appeal, only some of which we
will need to address. He contends the trial court erred in finding that
the third amended complaint was a sham pleading, erred in finding
that the breach of oral contract, breach of implied-in-fact contract,
intentional interference with contractual relations, and declaratory
relief claims (collectively, the contract claims) were barred by the
statute of frauds, erred in finding that the quantum meruit claim was
barred by the statute of limitations, and abused its discretion in
dismissing the promissory estoppel claim. We agree as to all but the
dismissal of the promissory estoppel claim. In light of that, we need not
address Zakk’s contentions regarding the trial court’s granting
defendants’ requests for judicial notice, refusal to consider Zakk’s offer
of proof made with respect to those requests, and his request for leave
to amend.9
A. Standard of Review Governing Judgment Sustaining Demurrers
“On appeal from a judgment sustaining a demurrer to a complaint
the allegations of the complaint must be regarded as true. The court
must, in every stage of an action, disregard any defect in the pleadings
which does not affect the substantial rights of the parties. [Citation.]
Pleadings must be reasonably interpreted; they must be read as a whole
9 Zakk also challenges the trial court’s ruling striking his fictitious name
amendments, which were filed the day of the hearing on the demurrers to the
third amended complaint. We need not address this issue because that
ruling was without prejudice, so Zakk is not precluded from filing the
amendments when the matter is remanded to the trial court.
24
and each part must be given the meaning that it derives from the
context wherein it appears. . . . In determining whether the complaint
is sufficient as against the demurrer on the ground that it does not state
facts sufficient to constitute a cause of action, the rule is that if on
consideration of all the facts stated it appears the plaintiff is entitled to
any relief at the hands of the court against the defendants the
complaint will be held good although the facts may not be clearly
stated, or may be intermingled with a statement of other facts
irrelevant to the cause of action shown, or although the plaintiff may
demand relief to which he is not entitled under the facts alleged. In
passing upon the sufficiency of a pleading, its allegations must be
liberally construed with a view to substantial justice between the
parties. While orderly procedure demands a reasonable enforcement of
the rules of pleading, the basic principle of the code system in this state
is that the administration of justice shall not be embarrassed by
technicalities, strict rules of construction, or useless forms.” (Gressley v.
Williams (1961) 193 Cal.App.2d 636, 638-639.)
B. Sham Pleading
Under the sham pleading doctrine, “[i]f a party files an amended
complaint and attempts to avoid the defects of the original complaint by
either omitting facts which made the previous complaint defective or by
adding facts inconsistent with those of previous pleadings, the court
may take judicial notice of prior pleadings and may disregard any
inconsistent allegations.” (Colapinto v. County of Riverside (1991) 230
Cal.App.3d 147, 151.) Where no explanation for an inconsistency is
25
offered, the trial court is entitled to conclude that the pleading party’s
cause of action is a sham and sustain a demurrer without leave to
amend. (Amid v. Hawthorne Community Medical Group, Inc. (1989)
212 Cal.App.3d 1383, 1390-1391.)
As noted, Diesel/One Race argued in their demurrer to the third
amended complaint that the complaint was a sham pleading for two
reasons: it alleged there were multiple contracts (one for each film)
rather than a single contract (applicable to all films), and it changed the
range of compensation Zakk was to receive for sequels generally and the
compensation for the xXx sequel specifically. (In its demurrer,
Revolution argued, in a footnote, only the latter.) The trial court
rejected Diesel/One Race’s second (and Revolution’s only) reason,
finding that the third amended complaint was a sham pleading solely
because it asserted that there were several oral contracts, whereas the
prior complaints “consistently alleged the existence of one oral or
implied-in-fact contract.”10
On appeal, Zakk contends the trial court’s finding was erroneous
because the original, first amended, and second amended complaints
10 The trial court’s rejection of defendants’ argument that the amendment
to change the compensation term was proper. As Zakk explained in his
oppositions to the demurrers, he amended the compensation term due to his
recent receipt of discovery, including the written memorandum that allegedly
set forth the compensation he was to receive for any xXx sequel. In light of
the many years that had passed from the time he entered into the alleged
agreement and the time he filed this lawsuit, the change in the allegation
does not “‘carr[y] with it the onus of untruthfulness.’” (Berman v. Bromberg
(1997) 56 Cal.App.4th 936, 946.) Rather, it simply reflects a faulty
recollection.
26
consistently had alleged multiple oral contracts. We conclude that
although the allegations in the prior iterations of the complaint were
not as clear as the third amended complaint with regard to alleging
multiple oral contracts, we agree that taken in context, the prior
versions did allege more than one contract.
There is no question that the prior versions of the complaint
alleged a single overarching oral or implied-in-fact contract in which
Diesel/One Race agreed that “for each” film that Diesel starred in and
Zakk helped to develop and/or worked on, Zakk would receive a
producer or executive producer fee and credit. Nor is there any
question that the third amended complaint no longer alleges that
overarching contract, and instead alleges there were separate oral or
implied-in-fact contracts for each film. But read in context, the
allegations of the overarching contract in the prior complaints implied it
was a contract to enter into separate contracts with respect to each film,
because it alleged a range of compensation and credits. Thus, it implied
that the exact fee and credit Zakk would receive had to be agreed upon
for each film. In other words, there would be a separate agreement for
each film with the same general terms as alleged in the overarching
contract, but with the specific compensation and credit to be given for
that film. That this is a plausible interpretation of the allegations of
the prior complaints was implicitly acknowledged by Diesel/One Race in
their demurrer to the original complaint, when they asserted the
complaint was uncertain because, among other things, it was “uncertain
whether [Zakk] has alleged one contract or several[,] and under which
contract(s) his claims arise.”
27
But even if the prior complaints did not impliedly allege separate
contracts for every one of the films that Zakk helped develop and/or
worked on, there is no question that each of the previous versions of the
complaint expressly alleged an oral or implied-in-fact contract
specifically with respect to the xXx film and its sequel. For example, in
the original complaint, Zakk alleged in paragraph 15: “That picture
[i.e., Strays, produced in 1997] was followed in 2002 with xXx. ZAKK
worked on and helped develop xXx. Accordingly, with respect to xXx
and any sequel of xXx which would be starring and produced by
DIESEL, Defendants DIESEL, ONE RACE FILMS, and/or
REVOLUTION STUDIOS (the production company) agreed to provide
ZAKK with an Executive Producer credit and $275,000 executive
producing fee in exchange for his services.” (Italics added.) In the first
and second amended complaints, Zakk alleged two separate agreements
with regard to xXx and its sequel, one with Diesel/One Race (in
paragraph 16) and one with Revolution (in paragraph 17).
Because the focus of Zakk’s complaint has been, from the start
and throughout the amended complaints, on the alleged agreement with
respect to xXx and its sequel, the omission from the third amended
complaint of the allegation of the overarching agreement has no
practical effect.11 If anything, the amended pleading merely clarifies
11 The only possible exception is the declaratory relief cause of action,
because after the trial court sustained Diesel/One Race’s demurrer to that
cause of action in the original complaint on the ground that it only sought a
declaration as to the parties’ rights and obligations with respect to the xXx
sequel, the cause of action was amended to seek a declaration of rights with
regard to any qualifying sequels of films that Zakk helped develop and/or
28
the basis for Zakk’s claims for relief. Therefore the sham pleading
doctrine does not apply. (Hahn v. Mirda (2007) 147 Cal.App.4th 740,
751 [“The doctrine is not intended to prevent honest complainants from
correcting erroneous allegations or to prevent the correction of
ambiguous facts”].)
C. Statute of Frauds
Zakk contends the trial court erred in finding the contract causes
of action were barred by the statute of frauds. He argues the statute
does not apply because (1) the third amended complaint alleged the oral
contract was terminable at will, and therefore it could be performed
within a year; (2) the complaint alleged he had fully performed all of his
obligations under the contract; and (3) the complaint alleged a written
memorandum that memorialized the oral agreement. Zakk also
contends that, even if the statute of frauds applied, the third amended
complaint alleged facts sufficient to establish that defendants were
estopped to assert the statute of frauds. We agree that the statute of
frauds does not apply under the allegations of the third amended
complaint.
worked on. However, given our conclusion that the allegations of the
previous complaints implied that there were separate contracts with respect
to each film, the third amended complaint’s omission of the allegation of an
overarching contract coupled with the addition of express allegations of
separate contracts for each film cannot trigger the sham pleading doctrine.
29
The statute of frauds, as memorialized in Civil Code12 section
1624, sets forth several categories of contracts that “are invalid, unless
they, or some note or memorandum thereof, are in writing and
subscribed by the party to be charged or by the party’s agent.” (§ 1624,
subd. (a).) The defendants contend, and the trial court found, that the
contract at issue in this case falls within the category described in
subdivision (a)(1), i.e., “[a]n agreement that by its terms is not to be
performed within a year from the making thereof.” (§ 1624, subd.
(a)(1).)
In finding the alleged agreement was one that was not to be
performed within a year, the trial court relied upon Tostevin, supra, 160
Cal.App.2d 321. In that case, the court of appeal held that an oral
contract with no termination date, in which the defendant agreed to pay
the plaintiff a certain sum weekly for services in connection with a
television show, was an agreement not to be performed within a year.
The appellate court explained, “[s]ince it is clear from the pleadings
that payment was to continue so long as the program was broadcast
throughout the world, the parties must have contemplated that the
continued performance of the contract was to last more than one year
from the date of making, as indeed it did.” (Id. at p. 328.) Defendants
contend the contract alleged in this case is similar to the contract at
issue in Tostevin because it is evident that the parties intended it was
to be performed over a period longer than a year, inasmuch as it covers
sequels, which could not have been produced within a year.
12 Further undesignated statutory references are to the Civil Code.
30
Zakk contends that Tostevin is distinguishable because the
plaintiff in that case alleged in his verified complaint that the contract
at issue was to continue for “‘an indefinite period,’” while the third
amended complaint in the present case alleged that the contract was an
at-will contract that could be terminated at any time. (Citing Tostevin,
supra, 160 Cal.App.2d at p. 326.) He argues that under the Supreme
Court opinions in White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336and Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, when an
alleged oral contract may be terminated at will by either party, it is
capable of being performed within a year and therefore it is not within
the statute of frauds. Defendants respond that those cases are not
applicable here because, unlike in this case, they involved straight-
forward employment contracts. We need not determine whether the
contract alleged in this case was capable of being performed within a
year because even if it could not, there is a different ground for
concluding that the statute of frauds does not apply.
Zakk contends that his allegation that he fully performed all of his
obligations under the contract takes the contract out of the statute of
frauds. (Citing, among other cases, Secrest v. Security National
Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 556 (Secrest)
[“‘Where the contract is unilateral, or, though originally bilateral, has
been fully performed by one party, the remaining promise is taken out
of the statute [of frauds], and the party who performed may enforce it
against the other’”], quoting 1 Witkin, Summary of Cal. Law (10th ed.
2005) Contracts, § 370, p. 414.) Defendants argue that full performance
31
by itself is not sufficient to take the contract out of the statute and that
Zakk also must allege facts showing such unusual and extraordinary
circumstances that the equitable doctrine of estoppel applies to bar the
assertion of the statute. They are mistaken.
We acknowledge that most of the cases defendants rely upon in
support of their argument (and that the trial court cited in its ruling)
held that the plaintiffs must show more than full performance in order
to avoid the statute of frauds.13 But all but four of those cases involved
oral contracts to make a will (or to devise property in a will) or contracts
not to be performed during the lifetime of the promisor. (See, e.g., Day
v. Greene (1963) 59 Cal.2d 404, 406 [contract to devise property in will];
Di Salvo v. Bank of America (1969) 274 Cal.App.2d 351, 353 [contract to
make a will]; Dini v. Dini (1961) 188 Cal.App.2d 506, 513 [contract not
to be performed during promisor’s lifetime]; Palmer v. Phillips (1954)
123 Cal.App.2d 291, 292 [contract to make a will]; Jirschik v. Farmers
& Merch. Nat. Bank (1951) 107 Cal.App.2d 405 [contract to devise
13 In some of the cases defendants cite, the courts used language of
estoppel in finding that the statute of frauds did not apply, but they did not
hold that facts sufficient to support estoppel are required when full
performance is alleged. (See, e.g., Dougherty v. California Kettleman, etc.
(1937) 9 Cal.2d 58, 81 (Dougherty) [“the circumstances of this case, showing
as they do complete performance by Dougherty, clearly create an estoppel to
plead the statute. Dougherty’s performance was clearly induced by Ochsner’s
representation that he would sign the contract. This creates an estoppel”];
Tobola v. Wholey (1946) 75 Cal.App.2d 351, 357 [“In any event, to permit
appellant at this late date, when the agreement in question has been
performed in its entirety by respondent, to rely on the defense of the statute
of frauds would be manifestly unfair to respondent and would allow the
appellant to be enriched unjustly at his expense”].)
32
property in a will]; Walker v. Calloway (1950) 99 Cal.App.2d 675, 676
[contract to devise property in will]; Baker v. Bouchard (1932) 122
Cal.App. 708, 709 [contract to devise property in a will].) Those
contracts, which fall under different contract categories in the statute of
frauds,14 are treated differently than contracts that fall under
subdivision (a)(1) of section 1624.
The section of the Restatement Second of Contracts describing the
applicability of the statute of frauds on contracts not to be performed
within a year states: “(1) Where any promise in a contract cannot be
fully performed within a year from the time the contract is made, all
promises in the contract are within the Statute of Frauds until one
party to the contract completes his performance. [¶] (2) When one
party to a contract has completed his performance, the one-year
provision of the Statute does not prevent enforcement of the promises of
other parties.” (Rest.2d, Contracts, § 130.) Comment d to this section
further explains: “If either party promises a performance that cannot
be completed within a year, the Statute applies to all promises in the
contract, including those which can or even must be performed within a
year. But unlike other provisions of the Statute, the one-year provision
does not apply to a contract . . . which has been fully performed on one
14 A contract that is not to be performed during the lifetime of the
promisor falls under section 1624, subdivision (a)(5). A contract to make a
will or devise property in a will made before 1985 fell under former section
1624, subdivision (6); such a contract made currently is governed by Probate
Code section 21700. (14 Witkin, Summary of Cal. Law (11th ed. 2017) Wills
and Probate, § 358, p. 437.)
33
side, whether the performance is completed within a year or not.”
(Rest.2d, Contracts, § 130, comment d, italics added.)
The California Supreme Court followed this rule in Dougherty,
supra, 9 Cal.2d 58 and Dutton v. Interstate Investment Corp. (1941) 19
Cal.2d 65 (Dutton). In Dougherty, the plaintiff sought to enforce against
the defendant an oral contract (which was reduced to writing, but the
defendant’s predecessor never signed it) in which the defendant’s
predecessor agreed to pay the plaintiff, in exchange for the plaintiff’s
services in locating lands and obtaining prospecting permits, a royalty
in any oil or gas produced from lands embraced within the prospecting
permit. (Dougherty, supra, 9 Cal.2d at p. 64.) The plaintiff located the
lands and obtained the permits, but the defendant refused to pay the
agreed-upon royalty. The Supreme Court rejected the defendant’s
contention that enforcement of the contract was barred by the statute of
frauds. The Court stated: “The fact that the agreement between
Dougherty and [the defendant’s predecessor] rested in parol is of no
legal significance in this case. This agreement was fully executed by
Dougherty. Assuming the contract could not be performed within a
year and therefore fell within the statue of frauds, the circumstances of
this case, showing as they do complete performance by Dougherty,
clearly create an estoppel to plead the statute. Dougherty’s
performance was clearly induced by [the defendant’s predecessor’s]
representations that he would sign the contract. This creates an
estoppel.” (Id. at p. 81.) Thus, although the Court in Dougherty spoke
in terms of estoppel, it did not require the plaintiff to show anything
34
more than his full performance in reliance on the promise of the
defendant.
In Dutton, the plaintiff (Dutton), and two others entered into an
oral agreement in which Dutton and one of the others would obtain, on
behalf of a corporation controlled by the third person, a lease and
permit for oil development on land Dutton located, and the three parties
would share any profits from the development. When the corporation
assigned the permit to another company for consideration, it refused to
share any portion of the consideration with Dutton. The Supreme
Court rejected the corporation’s argument that the statute of frauds
barred Dutton from enforcing the oral contract because it was not
intended to be performed within a year. The Court stated, “Assuming
that the agreement in the present case falls within this provision of the
statute of frauds, the finding of the trial court that Dutton had fully
performed all of his obligations under the contract operates to remove
the bar of the statute.” (Dutton, supra, 19 Cal.2d at p. 70.) The Court
cited to, among other authorities, section 198 of the original
Restatement of Contracts in support of its statement that full
performance removes the statute from the statute of frauds. That
section provides: “Where any of the promises in a bilateral contract
cannot be fully performed within a year from the time of the formation
of the contract, all promises in the contract are within Class V of § 178
[which sets out classes of contracts within the statute of frauds], unless
and until one party to such a contract completely performs what he has
promised. When there has been such complete performance, none of the
promises in the contract is within Class V.” (Rest. Contracts, § 198.)
35
In contrast to oral contracts that are not to be performed within a
year, oral contracts to make a will or devise property in a will
consistently have been subjected to stricter application of the statute of
frauds. The reason for the stricter application was noted by the
California Law Revision Commission in its report recommending
legislation that resulted in the repeal from section 1624 of the oral
contract to devise property in a will provision and enacting a specific
statute of frauds for such contracts as part of the Probate Code. The
Commission observed: “Where an oral agreement to make or not to
revoke a will is alleged after promisor is deceased and unable to testify,
there is an opportunity for the fabrication of testimony concerning the
existence of the agreement. Sound policy requires some form of written
evidence that such an agreement actually exists.” (16 Cal. Law
Revision Com. Rep. (1982) pp. 2348-2349, fns. omitted.)
This concern about fabrication of testimony is significantly
lessened in a case such as this one, where all parties to the alleged
contract are able to testify as to its existence or nonexistence. Thus, we
conclude that the holdings of cases involving oral contracts to make a
will or devise property in a will, which require evidence of unusual and
extraordinary circumstances to support application of estoppel
regardless whether there was full performance by one party, do not
apply here.
We also conclude that the holdings of two other cases that
defendants rely upon--Secrest, supra, 167 Cal.App.4th 544 and Denio v.
Brennecke (1935) 6 Cal.App.2d 678, 680 (Denio)--similarly do not apply
here because they both involve provisions of the statute of frauds other
36
than the “not to be performed within a year” provision. The alleged oral
contract in Secrest was a forbearance agreement that purportedly
modified a promissory note and deed of trust. The alleged oral contract
in Denio was an agreement by the defendants to give the plaintiffs an
interest in oil rights in the defendants’ land in exchange for the
plaintiffs’ legal services. The courts in both cases found that the
contracts came within the provision of section 1624 governing
agreements for the sale of real property or an interest in real property.
(Secrest, supra, 167 Cal.App.4th at pp. 552-553; Denio, supra, 6
Cal.App.2d at pp. 680-681.) Thus, neither court addressed the provision
governing contracts not to be performed within a year.
Although the remaining two cases defendants rely upon for their
argument that full performance is not sufficient by itself to take an oral
contract out of the statute of frauds involved contracts under the “not to
be performed within a year” category, neither applies here.
In Gressley v. Williams, supra, 193 Cal.App.2d 636, the appellate
court rejected the plaintiff’s argument that his full performance of an
oral contract not to be performed within a year took the contract out of
the statute of frauds. The court observed that “[t]he mere rendition of
services is not usually such a part performance of an oral contract as
will relieve the contract from the operation of the statute.” (Id. at p.
641.) The only support the court gave for this statement, however, was
Kobus v. San Diego Trust & Savings Bank (1959) 172 Cal.App.2d 574,
which involved an oral contract to make a will. Thus, we find Gressley
unpersuasive on this point.
37
The other case involving a contract not to be performed within a
year, Ruinello v. Murray (1951) 36 Cal.2d 687 is inapposite because it
involved partial, rather than full, performance of the contract at issue.
In that case, the alleged oral contract was for five years, but the parties
ended the relationship after three years. Thus, the Supreme Court did
not address the effect of full performance on the statute of frauds; the
only issue raised and discussed was whether the plaintiff had alleged
facts sufficient to establish estoppel to assert the statute. We agree
with the court of appeal in Nesson v. Moes (1963) 215 Cal.App.2d 655,
which found that “Ruinello is peculiarly within the area of the law
relating to estoppel,” and therefore is not applicable to a case in which
the plaintiff alleges he fully performed all of his obligations under an
oral contract that falls under the “not to be performed within a year”
provision of the statute of frauds. (Id. at p. 658.)
In short, we hold that Zakk’s allegation that he fully performed all
of his obligations under the alleged oral or implied-in-fact contract was
sufficient to take the contract out of the statute of frauds. In light of
our holding, we need not address Zakk’s other arguments related to the
statute of frauds, including whether the trial court properly took
judicial notice of the letter defendants submitted or whether the court
erred in failing to consider the materials Zakk submitted in response to
defendants’ submission and in support of his offer of proof.
D. Quantum Meruit
Defendants’ demurrer to the quantum meruit cause of action
alleged in the third amended complaint, and the trial court’s ruling
38
sustaining those demurrers, were based on the ground that the two-
year statute of limitations began to run when Zakk’s services with
respect to the original xXx film ended in 2002, and therefore the claim,
brought in 2017, was time-barred. Zakk contends on appeal that the
trial court erred in sustaining the demurrers on this ground because
(1) Code of Civil Procedure section 339, subdivision (1), which sets forth
the statute of limitations, expressly states that the cause of action shall
not be deemed to have accrued until the aggrieved party discovers the
loss or damage; and (2) a quantum meruit claim does not accrue until
the repudiation or breach of the oral promise upon which it is based,
which in the present case did not occur until the xXx sequel was
released in 2017.
Zakk’s first contention is based upon a misreading of Code of Civil
Procedure section 339, subdivision (1). That statute provides, in
relevant part, that it applies to “[a]n action upon a contract, obligation
or liability not founded upon an instrument of writing . . . ; or an action
founded upon a contract, obligation or liability, evidence by a certificate,
or abstract or guaranty of title of real property, or by a policy of title
insurance; provided, that the cause of action upon a contract, obligation
or liability evidenced by a certificate, or abstract or guaranty of title of
real property or policy of title insurance shall not be deemed to have
accrued until the discovery of the loss or damage suffered by the
aggrieved party thereunder.” (Italics added.) As is clear from the
italicized language, the discovery of damages provision does not apply
to the facts of this case, because the contract at issue is not alleged to
have been evidenced “by a certificate, or abstract or guaranty of title of
39
real property or policy of title insurance.” Thus, Zakk’s first contention
fails.
Zakk’s second contention, however, is well taken. Although the
statute of limitations on a cause of action for quantum meruit for
personal services usually begins to run when those services or the
relationship between the parties terminate (see, e.g., Maglica v.
Maglica (1998) 66 Cal.App.4th 442, 452-454), that is not always the
case. Where services are provided with the understanding that
payment for those services will be made at some time after the
termination of those services or upon some contingency, the statute of
limitations does not begin to run until that time arrives or contingency
occurs. (See, e.g., Fracasse v. Brent (1972) 6 Cal.3d 784, 791-792
[attorney was hired under a contingency fee agreement and discharged
by client without cause; “the attorney’s [cause of] action for reasonable
compensation accrues only when the contingency stated in the original
agreement has occurred”]; Thompson v. Ruiz (1901) 134 Cal. 26, 28 [the
plaintiff provided services for the promisor, and parties agreed he would
be paid upon the promisor’s sale of certain land; Supreme Court held
that “the statute of limitations did not begin to run against plaintiff’s
claim until it matured and could be enforced, . . . regardless of whether
the time fixed was reasonable or unreasonable”].)
In the present case, Zakk alleged that defendants agreed to pay
him the reasonable value of the services he performed “when the xXx
Sequel was released.” He also alleged that the sequel was released “on
or about January 20, 2017.” Therefore, the two-year statute of
limitations on his quantum meruit cause of action did not begin to run
40
until January 20, 2017, and the trial court erred in finding that his
claim, filed on March 17, 2017, was time-barred.15
E. Promissory Estoppel
As noted, the trial court sustained defendants’ demurrers to
Zakk’s promissory estoppel cause of action on the ground that he added
it without leave of court. Zakk contends the court’s ruling was in error
because his “new cause of action for promissory estoppel responds
directly to the Court’s reasoning for sustaining the Demurrers to the
[second amended complaint].” We conclude the trial court did not abuse
its discretion in dismissing the cause of action.
“Following an order sustaining a demurrer or a motion for
judgment on the pleadings with leave to amend, the plaintiff may
amend his or her complaint only as authorized by the court’s order.
[Citation.] The plaintiff may not amend the complaint to add a new
cause of action without having obtained permission to do so, unless the
new cause of action is within the scope of the order granting leave to
amend.” (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th
1018, 1023.)
In this case, when the trial court sustained the demurrers to the
second amended complaint on statute of frauds grounds, it granted
Zakk leave to amend, and specifically granted him leave to add a
quantum meruit cause of action. Zakk argues that even though the
15 Because defendants did not challenge Zakk’s quantum meruit claim on
the merits in their demurrers or their respondents’ briefs, we do not address
the merits here.
41
court did not directly give him leave to add a promissory estoppel cause
of action, he was allowed to do so because that cause of action “directly
responds to the Trial Court’s concerns” regarding the statute of frauds
because promissory estoppel is not subject to the statute. We disagree.
The granting of leave to amend after a demurrer is sustained on one
ground does not give the plaintiff a license to add any possible cause of
action that might not be subject to dismissal on that ground.
Otherwise, there would be virtually no limitation on amendments
following the sustaining of a demurrer.
Because Zakk did not obtain leave from the trial court to amend
his complaint to add a promissory estoppel cause of action, we affirm
the judgment of dismissal with respect to that cause of action.
DISPOSITION
The judgment is affirmed to the extent it dismissed the cause of
action for promissory estoppel, and reversed with respect to the
remaining causes of action. Zakk shall recover his costs on appeal.
CERTIFIED FOR PUBLICATION
WILLHITE, Acting P. J.
We concur:
COLLINS, J. CURREY, J.
42