Tahir v. Shah CA2/1 ( 2023 )

Filed 12/29/23 Tahir v. Shah CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on
opinions not certified for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
ABU TAHIR, B323887
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. VC067198)
v.
RAFIQ SHAH,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Olivia Rosales, Judge. Reversed with directions.
Abu Tahir, in propria persona, for Plaintiff and Appellant.
Law Office of Henry B. LaTorraca, Henry B. LaTorraca for
Defendant and Respondent.
___________________________________
Abu Tahir sued Rafiq Shah for breach of a partnership
agreement, alleging Shah failed to share profits from an ongoing
joint venture. He appeals from a judgment entered after the trial
court granted summary judgment on the ground the action was
time-barred because Tahir knew that Shah failed to share profits
beginning in 2003, approximately 15 years before Tahir filed suit.
We reverse. When contractual obligations arise on a recurring
basis, a cause of action accrues each time a new breach occurs,
triggering a new limitations period. Accordingly, we conclude
Tahir’s lawsuit is time-barred only for those instances when Shah
failed to share profits outside the appropriate limitations period.
BACKGROUND
A. Complaint
In 1999, Tahir and Shah entered into an oral partnership
agreement in which Tahir agreed to contribute $5,000 toward the
$50,000 purchase price of a grocery store known as Palomino
Market (the market). Shah agreed to contribute the remaining
$45,000 and run the market and pay Shah 10 percent of the
profits.
On February 1, 2002, Shah created a corporation, Palomino
Market, Inc., to which he transferred all ownership rights in the
market without Tahir’s knowledge.
Shah never paid Tahir any profits, but instead told him
there were no profits.
On June 6, 2018, Tahir filed this action. In the third
amended complaint, which is operative, Tahir asserted causes of
action for breach of contract and conversion, and sought an
accounting. Tahir asserted no fraud cause of action.
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B. Discovery
At his deposition, Tahir was asked: “And you also say that
at least as of 2003, you knew that that business was making a
profit, right?” He responded, “Yes.” Tahir never sought to correct
his response.
C. Summary Judgment
Shah moved for summary judgment on the grounds that
the action was time-barred and no cause of action existed for
conversion based on failure to pay a nonspecific, nonidentifiable
sum of money.
In support of the motion, Shah adduced facts that basically
tracked the allegations of Tahir’s complaint, all but two of which
Tahir admitted. Only one is pertinent: Tahir admitted in his
deposition that he knew as of 2003 that the market was making a
profit.
(Shah also asserted as material the fact that “At least as of
2003, [Tahir] knew that he was entitled to 10 percent of the net
profit of the . . . Market.” Tahir purported to contest this fact but
it was undisputed he always knew he was entitled to 10 percent
of the profit—the oral agreement provided as much. Therefore,
this fact added nothing new, and was thus immaterial.)
In opposition to the motion, Tahir acknowledged that he
admitted in deposition that he knew as of 2003 that the market
was making a profit, but he attempted to qualify the admission
by declaring he only “suspected” that was the case, and “did not
yet possess any concrete proof or evidence” to that effect. He
declared that “because [he] trusted Shah, [he] did not insist on
making demands for payment of [his] 10% share in the profits.”
He later “found out that Shah had . . . been lying . . . regarding
[Tahir’s] 10% share in the profits of the business,” and “had been
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diverting and misusing funds from the store income and
operations since 2003 . . . .”
The court found that Tahir knew as early as 2003 that the
market was turning a profit. The court found that Tahir’s claims
all accrued at that time, and his complaint, filed 15 years later,
was time-barred. Additionally, the court found that no cause of
action for conversion could be grounded on failure to pay a
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nonspecific, nonidentifiable sum of money. Accordingly, the
court granted Shah’s motion for summary judgment.
Tahir appealed from the order granting summary judgment
but our clerk informed him that such an order was nonappealable
and gave him an opportunity to cure the defect by securing a
judgment. He did so.
DISCUSSION
Tahir contends summary judgment was improper because
evidence (his declaration) indicated that he did not actually know
until 2016 that the market was making a profit. We reject
Tahir’s rationale but agree for a different reason that summary
judgment was improper.
A. Preliminary Matters
1. Premature Appeal
Shah invites us to dismiss the appeal as arising from a
nonappealable order. We decline the invitation.
Tahir appealed from the order granting summary
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judgment, which is nonappealable. (Cf. Code Civ. Proc., § 437c,
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Tahir does not contest this portion of the ruling on appeal.
2
Undesignated statutory references will be to the Code of
Civil Procedure.
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subd. (m)(1) [only a summary judgment is an appealable
judgment].) Therefore, the appeal was premature.
However, we “may treat a notice of appeal filed after the
superior court has announced its intended ruling, but before it
has rendered judgment, as filed immediately after entry of
judgment.” (Cal. Rules of Court, rule 8.104(d)(2).) “In exercising
our discretion, we liberally construe a premature notice of appeal
in favor of its sufficiency.” (In re Marriage of Ankola (2020) 53
Cal.App.5th 369, 375.)
Here, it is clear from the notice of appeal that Tahir
intended to challenge the trial court’s impending summary
judgment, and it does not appear Shah was misled or prejudiced
by Tahir’s appeal from a nonappealable order. We will therefore
treat the premature notice of appeal as being filed immediately
after entry of the judgment.
2. Sufficiency of the Record
Shah argues that Tahir designated an inadequate appellate
record because he failed to designate the third amended
complaint, which entered the record not by way of any direct
designation but only as an attachment to Tahir’s request for
judicial notice before the trial court and as an exhibit attached to
his motion for summary judgment. Curiously, Shah asks for no
remedy in light of this deficiency, but in any event, we conclude
the record suffices. Although the third amended complaint was
not discretely designated as part of the record, it was attached to
two documents that were properly designated. The record as a
whole therefore adequately permits an informed review.
B. General Legal Principles
A trial court properly grants summary judgment “ ‘if all the
papers submitted show that there is no triable issue as to any
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material fact and that the moving party is entitled to a judgment
as a matter of law.’ (Code Civ. Proc., § 437c, subd. (c).) A
defendant may establish its right to summary judgment by
showing that one or more elements of the cause of action cannot
be established or that there is a complete defense to the cause of
action. (§ 437c, subd. (p)(2).)” (Neiman v. Leo A. Daly Co. (2012)
210 Cal.App.4th 962, 967.) “Once the moving defendant has
satisfied its burden, the burden shifts to the plaintiff to show that
a triable issue of material fact exists as to each cause of action.
[Citation.] A triable issue of material fact exists where ‘the
evidence would allow a reasonable trier of fact to find the
underlying fact in favor of the party opposing the motion in
accordance with the applicable standard of proof.’ ” (Ibid.)
On appeal, we apply an independent standard of review to
determine whether a trial is required—whether the evidence
favoring and opposing the summary judgment motion would
support a reasonable trier of fact’s determination in the plaintiff’s
favor on the cause of action or defense. (Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 850.) In doing so we view the
evidence in the light most favorable to the party opposing
summary judgment. (Id. at p. 843; Alexander v. Codemasters
Group Limited (2002) 104 Cal.App.4th 129, 139.) We accept as
true the facts shown by the evidence offered in opposition to
summary judgment and the reasonable inferences that can be
drawn from them. (Spitzer v. The Good Guys, Inc. (2000) 80
Cal.App.4th 1376, 1385-1386.)
C. Shah Made No Prima Facie Showing that the Action
as a Whole is Time-Barred
Shah attempted to establish his right to summary
judgment by establishing a complete defense: The complaint was
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time-barred. He did this by adducing one material fact: Tahir
knew in 2003 that the market was turning a profit. He reasoned
that Tahir’s claims therefore accrued in 2003, and the lawsuit,
filed 15 years later, was hopelessly late.
The limitations period for breach of an oral contract is two
years. (§ 339(1).)
The limitations period for seeking an accounting is based
on the underlying right giving rise to the necessity of the
accounting. (Jefferson v. J. E. French Co. (1960) 54 Cal.2d 717,
718-719.) Here, the underlying right arises from breach of an
oral contract. The limitations period is therefore two years.
Tahir argues an accounting action is governed by the four-
year catchall limitation of section 343, but “the primary purpose
of the action is to recover money under the oral contract, and the
nature of the right sued upon, not the form of action or the relief
demanded, determines the applicability of the statute of
limitations.” (Jefferson v. J. E. French Co., supra, 54 Cal.2d at p.
718.) “The accounting is merely ancillary to the perfection of
plaintiff’s right under the oral contract, and that aspect of the
action should not operate to avoid the effect of a statute
prescribing a period of limitation with respect to the right
basically in issue.” (Id. at p. 719.)
A cause of action normally accrues at the time of breach of
a duty, which then commences the limitations period. (Brewer v.
Simpson (1960) 53 Cal.2d 567, 593 [limitations period begins to
run at the time set by a contract for performance]; Cochran v.
Cochran (1997) 56 Cal.App.4th 1115, 1120.)
However, if the injured party has no immediate reason to
suspect that a breach has occurred, the limitations period does
not begin to run until “the plaintiff suspects or should suspect
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that her injury was caused by wrongdoing, that someone has
done something wrong to her. . . . [T]he limitations period begins
once the plaintiff ‘ “ ‘has notice or information of circumstances to
put a reasonable person on inquiry . . . .’ ” ’ [Citation.] A plaintiff
need not be aware of the specific ‘facts’ necessary to establish the
claim; that is a process contemplated by pretrial discovery. Once
the plaintiff has a suspicion of wrongdoing, and therefore an
incentive to sue, she must decide whether to file suit or sit on her
rights. So long as a suspicion exists, it is clear that the plaintiff
must go find the facts; she cannot wait for the facts to find her.”
(Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111, fn.
omitted.)
Here, Tahir admitted in deposition that he knew in 2003
that the market was turning a profit. He also knew from his
agreement with Shah that Shah owed him 10 percent of the
market’s profits, and he knew that Shah had paid him nothing.
That information put Tahir on notice of his injury, which
obligated him to investigate, discover Shah’s wrongdoing, and
either file suit or sit on his rights.
Tahir argues that his declaration offered in opposition to
summary judgment, to the effect that he did not know but only
“suspected” the market was earning a profit, and “did not yet
possess any concrete proof or evidence,” raised a triable issue as
to when his claims accrued. We disagree, for two reasons.
First, the suspicion itself obligated Tahir to investigate and
act. (Jolly v. Eli Lilly & Co., supra, 44 Cal.3d at p. 1111
[limitation period begins to run when the “plaintiff suspects or
should suspect that her injury was caused by wrongdoing].”) “A
plaintiff need not be aware of the specific ‘facts’ necessary to
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establish [his] claim; that is a process contemplated by pretrial
discovery.” (Ibid.)
Second, Tahir’s declaration was incompetent to contradict
his deposition testimony. “Admissions or concessions made
during the course of discovery govern and control over contrary
declarations lodged at a hearing on a motion for summary
judgment.” (Visueta v. General Motors Corp. (1991) 234
Cal.App.3d 1609, 1613; see D’Amico v. Board of Medical
Examiners (1974) 11 Cal.3d 1, 22.) In deposition, Tahir admitted
he “knew” the market was turning a profit in 2003. This
admission prevails over his later declaration that he only
“suspected” the market turned a profit.
Tahir argues his declaration did not contradict his
admission during deposition, but merely refined and
complemented it. We disagree. Knowledge and suspicion are
different, contradictory things.
Once Tahir either knew or suspected Shah was in breach of
their oral agreement beginning in 2003, he was obligated to take
timely action. He failed to do so, waiting 15 years to file suit.
Therefore, some of his claims are time-barred.
But not all of them.
“[W]hen there are ongoing contractual obligations the
plaintiff may elect to rely on the contract despite a breach, and
the statute of limitations does not begin to run until the plaintiff
has elected to treat the breach as terminating the contract.”
(Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 489.)
“In the context of successive breaches of a continuing contractual
obligation, . . . ‘ “where the parties did not mutually abandon or
rescind [the contract] upon a breach or successive breaches, the
injured party could wait until the time arrived for a complete
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performance by the other party and then bring an action for
damages for such breaches.’ ” (Id. at pp. 489-490.) A
nonbreaching party is “ ‘ “not bound to treat the contract as
abandoned on the first breach of it, or on any particular breach,
but ha[s] his election to still rely on it, and the statute of
limitations could not begin to run until [he] had made [his]
election.” ’ ” (Id. at p. 490.)
The agreement here called for Shah’s ongoing obligation to
pay Tahir 10 percent of the market’s profits. A new breach thus
occurred each time Shah failed to do so, and a discrete cause of
action arose from each breach. Although Tahir did not allege
how many years after 2003 the market made a profit, it is
reasonable to infer that 2003 was not the last time it did so. In
any event, any uncertainty about how long the market made a
profit itself prevents summary judgment because it was Shah’s
obligation to establish that Tahir’s claims were entirely time-
barred, which he could not do without establishing that the last
time he allegedly breached the partnership agreement occurred
beyond the limitations period.
As it is, no disputed issue of material fact exists as to
whether the action is time-barred as to any claims accruing
beyond the two-year limitations period at issue here. But triable
issues do exist as to whether the action is barred for claims
accruing within that period. Because some such claims may
exist, summary judgment was improper. Summary adjudication
was proper only as to claims made beyond the limitations period.
D. Conversion
The trial court granted summary adjudication as to Tahir’s
cause of action for conversion of 10 percent of the market’s profits
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on the alternate ground that no such cause of action will lie.
Tahir does not contest this ruling on appeal.
We agree the ruling was proper. “The tort of conversion is
an ‘act of dominion wrongfully exerted over another’s personal
property in denial of or inconsistent with his rights therein.’
[Citations.] To establish conversion, the plaintiff must allege the
plaintiff’s right of ownership to the personal property, the
defendant’s control of the property in a manner inconsistent with
the plaintiff’s rights, and damages. [Citation.] ‘A cause of action
for conversion of money can be stated only where a defendant
interferes with the plaintiff’s possessory interest in a specific,
identifiable sum, such as when a trustee or agent
misappropriates the money entrusted to him.’ [Citation.]
‘[U]nless there is a specific, identifiable sum involved, such as
where an agent accepts a sum of money to be paid to another and
fails to make the payment,’ money cannot be the subject of a
cause of action for conversion.” (Optional Capital, Inc. v. DAS
Corp. (2014) 222 Cal.App.4th 1388, 1401.)
Here, Tahir alleged conversion not of a specific, identifiable
sum of money but of 10 percent of whatever profits an accounting
would determine the market earned. (Cf. Teselle v. McLoughlin
(2009) 173 Cal.App.4th 156, 179 [“An action for accounting is not
available where the plaintiff alleges the right to recover a sum
certain or a sum that can be made certain by calculation”].)
Therefore, summary adjudication of his conversion claim was
proper.
DISPOSITION
The judgment is reversed. The superior court is directed to
vacate its order granting Shah’s motion for summary judgment
and enter a new order denying that motion but granting Shah’s
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motion for summary adjudication as Tahir’s claim for conversion
and as to any claim accruing more than two years before Tahir
filed this lawsuit. Each side is to bear its own costs on appeal.
NOT TO BE PUBLISHED
CHANEY, J.
We concur:
ROTHSCHILD, P. J.
WEINGART, J.
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