All lawyers, and even many laypersons, are familiar with statutes of limitations (“SOLs”). And most attorneys know at least the garden-variety ways in which parties routinely try to get around them, such as the delayed discovery rule and the doctrine of equitable tolling. But the ubiquity of statutes of limitations, combined with the drastic consequences they wreak when not adhered to, has created a rich, if arcane, body of statutory and decisional law that can be useful to the well-read litigator. Below are just a few of the more interesting SOL tidbits.
Where the SOL Is Defined by a Number of Years, a Claim Brought on the Anniversary of Accrual Is Timely
If a claim accrued on January 1, 2023, and the SOL is 1 year, you might think that it needs to be brought by December 31, 2023. But Code of Civil Procedure (“CCP”) § 12 provides: “The time in which any act provided by law is to be done is computed by excluding the first day, and including the last, unless the last day is a holiday, and then it is also excluded.” In other words: “Section 12 sets forth a method of calculation that ultimately results in the anniversary method of calculating the final date for the statute of limitations.” Shalabi v. City of Fontana, 35 Cal. App. 5th 639, 643 (2019) (holding, where claim accrued December 3, 2011, complaint had to be filed by December 3, 2013 to be within 2-year SOL).
No, an Intervening Leap Year Does Not Impact the Anniversary Method
We typically think of years being 365, but of course, every fourth year 366 days. In California, the SOL for breach of a written contract is 4 years. Some California SOLs are even longer. You (or an opponent) might at some point be tempted to argue that an intervening February 29th since accrual of a claim means the SOL runs (or ran) the day before the anniversary of accrual. You (or your opponent) would be wrong. Per Government Code § 6803: “‘Year’ means a period of 365 days,” but “[t]he added day of a leap year, and the day immediately preceding, if they occur in any such period, shall be reckoned together as one day.” Translation: February 28 and 29 are treated as a single day for SOL purposes. See also People v. Hill, 2 Cal. App. 2d 141, 146-47 (1934) (October 20, 1933 indictment, charging embezzlement on October 21, 1930, not barred by 3-year SOL on theory that 1932 was a leap year).
SOLs Are (Sometimes) Tolled While the Defendant Is Out of State (Maybe)
While perhaps the most frequently invoked, equitable tolling is not the only flavor of SOL tolling. There are many statutes that toll SOLs as well. One of the more interesting ones is CCP § 351: “If, when the cause of action accrues against a person, he is out of the State, the action may be commenced within the term herein limited, after his return to the State, and if, after the cause of action accrues, he departs from the State, the time of his absence is not part of the time limited for the commencement of the action.” Basically: An SOL is tolled while the defendant is not in California.
However, it’s not so simple. For one thing, CCP § 351 clashes with the US Constitution’s Interstate Commerce Clause to the extent its application imposes unreasonable burdens on interstate commerce. Thus, where a California resident travels to another state for purposes “unrelated to the service of interstate commerce,” the SOL likely will be tolled under CCP § 351, whereas if the travel is for the facilitation of interstate commerce, application of CCP § 351 would be unconstitutional, and no tolling occurs. Filet Menu, Inc. v. Cheng, 71 Cal. App. 4th 1276, 1283-84. Note that even if the defendant is not traveling for a specific job, the court may still find the travel related to the service of interstate commerce.
Where CCP § 351 does apply, it can be very powerful, particularly where the defendant is a non-resident natural person. See, e.g., Green v. Zissis, 5 Cal. App. 4th 1219, 1223 (1992) (10-year SOL for claim that accrued in 1977 “did not begin to run because defendant was then absent from the state and has remained absent to this day”). Again, though, the devil’s in the details. For instance, CCP s 351 generally does not toll the SOL where the claim arises out of a nonresident motorist getting into an accident on California roads.
A Defendant’s Bankruptcy Extends SOLs for Claims Against Them Until After the Conclusion of the Bankruptcy Stay
Bankruptcy filings generally stay then-pending litigation against the bankrupt defendant. It stands to reason, then, that federal law—specifically, 11 U.S.C. § 108(c)—also impacts SOLs for claims against a defendant while that defendant is in bankruptcy proceedings. Importantly, however, 11 U.S.C. § 108(c) does not toll such SOLs. Instead, it merely provides that SOLs do not expire until the later of (1) the time they otherwise would expire or (2) 30 days after notice of the termination or expiration of the bankruptcy stay. The upshot is that a prospective plaintiff may technically be able to file their claim against a bankrupt party later than they otherwise would, but they may have to wait months, if not years, for that defendant to go through bankruptcy proceedings, before having to file in a very short window in which to file. (And that’s assuming the claim itself was not discharged in bankruptcy.)
Covid Emergency Rules Generally Add About 6 Months to Claims that Accrued Pre-Pandemic
Facing a growing pandemic of then-unknown proportions or end date, in April 2020, then-Chief Justice Tani G. Cantil-Sakauye of the California Supreme Court issued a set of emergency rules. Among them, Rule 9(a) provided: “Notwithstanding any other law, the statutes of limitations and repose for civil causes of action that exceed 180 days are tolled from April 6, 2020, until October 1, 2020.” Roughly two years later, Rule 9 was amended to state that the rule “will sunset on June 30, 2022, unless otherwise amended or repealed by the Judicial Council.” While this might sound as if Rule 9 is a dead letter, an Advisory Committee Comment makes clear that “the effect of the tolling may survive beyond the sunset date of the rule.”
Statute of limitations arguments can make or break cases, often at the outset of a matter. The above are just a few of the arrows that savvy counsel have in their quiver for those battles.
For more information regarding Alto Litigation’s litigation practice, please contact one of Alto Litigation’s partners: Bahram Seyedin-Noor, Bryan Ketroser, or Joshua Korr.
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