Statute of Limitations – California

WHAT IS “THE STATUTE OF LIMITATIONS”?

(P.S. It’s “Statute”, not “Statue”  )

Statute of Limitations - California

Deadline to File Your Lawsuit

Generally speaking, the statute of limitations is a specific law (or “statute”) that states when a lawsuit must be filed. It is a specific measurement of time (i.e., 1 year) that “limits” the length of time one has to file a lawsuit. Lawsuits filed after the passing of this specific amount of time can be challenged and dismissed merely because the time has passed. The amount of time allowed depends on the type of claim. For example, in California, you must file a lawsuit for any losses due to an automobile negligence claim within 2 years of the date you were injured. If you claim someone breached a written contract, you must bring your lawsuit within 4 years. If it was an oral contract, the time is 2 years.  Whatever the type of claim you may have, contact an experienced litigation and trial attorney at once to discuss your claim and the time limits that apply.

Many people are under the mistaken belief that they cannot be sued after the specific time period has expired. This is not entirely correct. You can be sued. And if you do nothing, you will lose and you will also lose the opportunity to assert the defense of an expired statute of limitations. That is, it is an absolute defense- But it Must be Asserted! The obligation to tell the court is your responsibility. The court will assume what is said in the lawsuit is valid if no one shows up to tell them otherwise.

WHEN DOES THE TIME START?

Sometimes this is very easy to spot (such as the date of an accident) and other times it can be difficult to determine exactly. As it pertains to debts, specifically say credit card debt, the creditor has 4 years from the date the written contract was “breached”. Typically the breach occurs when no payment is made. This why it is important to know when you made your last payment. Generally the creditor has a record of your payments, but they are not always reliable. Also remember that the date of your last payment is not your breach date. It is the next date that at payment is due and no payment is made. This is why many advise to not make a payment on an account when the statute of limitations is about to expire, as this may reset the clock and thereby allow the creditor more time to file a lawsuit.

OTHER CONSIDERATIONS

  • Multiple Defendants: When a plaintiff has cause to sue based on knowledge or suspicion of negligence, the statute starts to run as to all potential defendants, even if unidentified.
  • Government Defendants: Must first submit administrative claim within 6 months (tort claims) or 1 year (real property & contract claims) of “accrual” before filing suit.

PARTIAL CHART OF THE “STATUTE OF LIMITATIONS” IN CALIFORNIA

Description Statute
Contract (in writing), 4 years Cal. Civ. Proc. Code § 337
Contract (oral), 2 years Cal. Civ. Proc. Code § 339
False Imprisonment, 1 year Cal. Civ. Proc. Code § 340
Fraud, 3 years Cal. Civ. Proc. Code § 338
Enforcing Court Judgments, 10 years Cal. Civ. Proc. Code § 337.5
Legal Malpractice, 1 year Cal. Civ. Proc. Code § 340.6
Libel, 1 year Cal. Civ. Proc. Code § 340
Medical Malpractice, 1 or 3 years (Depending on when the victim “discovers” the injury) Cal. Civ. Proc. Code § 340.5
Personal Injury, 2 years Cal. Civ. Proc. Code § 335.1
Product Liability, 2 years Cal. Civ. Proc. Code § 335.1
Property Damage, 3 years Cal. Civ. Proc. Code § 338
Slander, 1 year Cal. Civ. Proc. Code § 340
Trespass, 3 years Cal. Civ. Proc. Code § 338
Wrongful Death, 2 years Cal. Civ. Proc. Code § 335.1

Partial List of Exceptions to Statute of Limitations

Tolling statutes, e.g. latent construction defects – 10 years

Defendant absent from state (exception does not apply to non-resident motorists, corporations, limited partnerships and certain others)

Minors – Statute does not start until minor turns age 18 or emanicapted (although exception does not apply in uninsured motorist cases, medical malpractice, certain sexual abuse cases, and government claims generally)

Bankruptcy – puts statute of limitations on “hold”

Voluntary Agreement – The statute of limitations may be extended by voluntary agreement of the parties.

Military service – puts statute of limitations on “hold” in certain circumstances

Delayed Discovery Rule – suspends (delays, lengthens) by not starting the time period until plaintiff should reasonably have discovered the harm and wrongdoing

Interference – Defendant’s conduct contributed to plaintiff’s delay in filing suit.

Insurance Company Non-Disclosure – Insurance company fails to notify plaintiff who is not represented by an attorney.

Christopher Shenfield, Attorney at Law, Burlingame, May 11, 2017.  Questions?  Email or call me to discuss your case!!  Email: chris@shenfieldlaw.com  Tel: (650) 373-2054

 

WHO is your favorite movie lawyer?

Alejandro "Sandy" Stern (Raul Julia) in "Presumed Innocent" (1990)

“Sandy” Stern (Raul Julia) in “Presumed Innocent” (1990)

ACTORS love playing lawyers.  Movies about the law are as essential to Hollywood history as cowboy westerns, action flicks or romantic comedies. From Sophocles to Shakespeare, Dostoyevsky to Dickens, John Grisham to Scott Turow, novelists and film directors have been enamored of the legal system for its plotlines and morality tales.

Why is the law such an attraction for artists? Most practicing attorneys know that the work itself is often tedious and repetitive—more mechanical than original, more emotionally detached than fully human.  The vast majority of cases never make it to trial. The combative spirit of the profession is often expressed in angry phone calls and sniping letters.  Decorum leaves little chance of addressing grievances that are emotional in nature but get mistranslated into legal complaints. The bloodless captions of plaintiffs v. defendants mask a lot of the hurt that ends up as garbled legalese.

Movies about the law are not tutorials for budding lawyers but cautionary tales for enlightened citizens—an expression of our collective longing for justice and fair treatment. Most people realize that the legal profession looks more exciting, or functions more diabolically, in a movie; but they aren’t looking to pass the bar exam. They just want to be entertained and elevated.

Here is my list of top 10 movie lawyers, in alphabetical order:

Roger Sherman Baldwin (Matthew McConaughey, Amistad, 1997)

Rudy Baylor (Matt Damon, The Rainmaker, 1997)

Atticus Finch (Gregory Peck, To Kill A Mockingbird, 1962)

Frank Galvin (Paul Newman, The Verdict, 1982)

Vincent Gambini (Joe Pesci, My Cousin Vinnie, 1992)

Col. Tad Lawson (Richard Widmark, Judgment at Nuremburg, 1961)

Mitch McDeere (Tom Cruise, The Firm, 1993)

Jan Schlictman (John Travolta, A Civil Action, 1998)

Alejandro “Sandy” Stern (Raul Julia, Presumed Innocent, 1990)

Major J.F. Thomas (Jack Thompson, Breaker Morant, 1980)

Christopher Shenfield, Attorney at Law, Burlingame, California, June 1, 2016

P.S. To watch the cross-examination of Raymond Horgan (Brian Dennehy) by Alejandro “Sandy” Stern (Raul Julia) in Presumed Innocent, click here: https://www.youtube.com/watch?v=Rva_JBOkpOs

 

DoesContractor’s Rights to Independent “Cumis” Defense Counsel At Insurance Carrier’s Expense (January 2013)

 

Although insurance carriers may deny it, they have different interests than their insureds in defending claims. The insurer wants to minimize its costs. The insured wants to avoid defense costs altogether, or at least maximize someone else’s payment of them. While the insurer is obligated to provide defense counsel for any claim possibly covered by its insurance policy, it is excused from paying a settlement or judgment if, ultimately, the claim is determined not to be covered. Accordingly, an insurance company may have incentive to defend an insured in such a way as to show a claim is not covered.  For example, if a defense provided by an insurer results in a finding that a claim was caused by an uncovered occurrence—such as excluded mold—then the carrier might limit to defense costs the amount it has to pay—and it might even be entitled to reimbursement of such costs under Buss v. Superior Court (1997) 16 Cal.4th 35.

This issue is made more acute when an insured is, for instance, a general contractor that has demanded a defense as an additional insured under insurance provided by its subcontractor. There, for instance, the carrier may be defending both the general contractor and the subcontractor. If such a defense shows that one or the other’s work caused the damage that is the subject of the claim, this may, under the language of the policy, absolve the carrier from indemnifying the claim, potentially excusing it from paying to settle a case or paying a judgment arising out of it.

Right to Independent Counsel

This conflict of interest may give the insured contractor the right to hire independent counsel that is paid by the insurance carrier. Such counsel is known as Cumis counsel after the case, San Diego Federal Credit Union v. Cumis, Inc. (1984) 162 Cal. App.3d 388. The general law in this area is set forth in Cal. Civ. Code § 2860, which also provides some guidance regarding the payment by the carrier of such counsel.

The right to Cumis counsel usually arises after the insured has tendered a claim to a carrier and the carrier has responded with a reservation of rights letter. According to Dynamic Concepts, Inc.  v. Truck Ins. Exchange (1998) 61 Cal. App.4th 999, 1006, “An insurer’s reservation of rights may create a disqualifying conflict of interest requiring the insurer to pay the cost of Cumis counsel to represent the insured in the underlying action.”

Not every reservation of rights creates a conflict of interest that requires the appointment of Cumis counsel. There needs to be an actual conflict, not just speculation that a conflict might arise in the future. This essentially means that the facts underlying the claim must show that a case could be litigated/defended in such a way as to affect coverage. For instance, if there are two defenses, one of which might show coverage—i.e., resulting damage by an insured’s work—and another that avoids it—i.e., the damage arose out of an insured’s work—then the insured may have a right to independent Cumis counsel.

The rationale for hiring Cumis counsel arises out of the ethical obligations attorneys owe their clients, not out of insurance contract law. It turns on whether the insurance-retained attorney can provide an unbiased, quality defense for the insured. If there is evidence that such counsel may have conflicting loyalties so that the defense provided may be biased, then the insurance company is obligated to pay for independent counsel. It is a prophylactic measure to avoid conflicts from even occurring.  As several courts have noted:

[I]t is almost unavoidable that, in the course of investigating and preparing the insured’s defense to the third party’s action, the insured’s attorney will come across information relevant to a coverage or similar issue, it is quite difficult for an attorney beholden to the insurer to represent the insured where the insurer is reserving its rights regarding coverage (unless, of course, the insured consents).

Assurance Co. of America v. Haven  (1995) 32 Cal. App.4th 78, 87.  See also, Rockwell International Corp. v. Superior Court (1994) 26 Cal. App. 4th 1255, 1264.

Cumis Situations

Several situations exist in which courts have ruled that an insurer’s reservation of rights requires the insurer to pay for independent counsel. Some have been listed by the court in James 3 Corporation v. Truck Ins. Exch. (2001) 91 Cal. App.4th 1093, 1101. They are:

(1) where the insurer reserves its rights on a given issue and the outcome of that coverage issue can be controlled by the insurer’s retained counsel;

(2) where the insurer insures both the plaintiff and the defendant;

(3) where the insurer has filed suit against the insured, whether or not the suit is related to the lawsuit the insurer is obligated to defend;

(4) where the insurer pursues settlement in excess of policy limits without the insured’s consent and leaving the insured exposed to claims by third parties; and

(5) other situations where an attorney who represents the interests of both the insurer and the insured finds that his or her representation of the one is rendered less effective by reason of his [or her] representation of the other.

Cumis and the Additional Insured

When a defense is provided to an additional insured, more Cumis problems result. Here, the insurance is obtained by a third party, usually the subcontractor for the benefit of the general contractor.  In such a situation the additional insured is effectively a stranger to the insurer. It did not pay premiums. It has no relationship with the insurer—other than the coverage agreement which is part of the insurer’s contract with its named insured, the subcontractor. The insurance carrier’s loyalty to the general contractor is minimal—or non-existent. Its real insured is the subcontractor.  It would thus be reasonable for the carrier to care more about exonerating the subcontractor and permitting liability to be imposed against the additional insured.

Moreover, in such situations, the carrier is paying for counsel for both the general contractor and the subcontractor. To minimize its costs, the insurer may try to provide the same counsel to both parties. Because these parties are almost always at least potentially adverse, an attorney’s professional responsibilities precludes dual representation, and separate counsel is required for both insureds—the named insured and the additional insured. But, this separation is often more illusory than actual. For instance, the same claim representative may handle these claims, thus permitting the intentional or unintentional sharing of confidential information, communications and strategy inside the insurance company. Even if different representatives supervise the different defenses, the “Ethical Wall” between these representatives may well be more of form than actual, allowing the sharing of information, potentially undermining the separateness of the defenses.

A carrier-appointed counsel has dual clients and duties, to the insurance carrier as well as to the insured. (Gafcon, Inc, v, Ponsor & Associates (2002) 98 Cal. App.4th 1388, 1406.) In contrast, Cumis counsel has limited duties to the carrier and is primarily responsible to his or her client, the insured. (Assurance Co. of America, supra, 32 Cal. App.4th at 91.) The appointment of Cumis counsel avoids the possibilities of sharing confidential information and strategy.  It insures that a full and complete defense is provided the insured—not one that is directed by an insurance company that has an interest in shifting responsibility away from a theory which maximizes its own coverage obligations.

Lastly, while Cumis counsel is primarily responsible to the insured, it is paid by the insurer.  However, the insurance company does not have to pay Cumis counsel such counsel’s usual rates. It is merely obligated to pay it the rates it pays other attorneys it retains “in the ordinary course of business in the defense of similar actions in the community where the claim arose or is being defended.” Cal. Civil Code §2860(c). Insurance companies are notorious for paying discounted rates for counsel they retain—rates that are much lower than those commercial litigators usually charge. This means that an insured who wants to have an insurance company pay for its independent counsel will often need to persuade such counsel to accept a significant discount from its normal rate. Alternatively, the insured may need to make up the difference out of its own pocket.

Conclusion

The requirement of the Cumis case and Cal. Civil Code §2860 assures that insureds can obtain independent counsel to protect the insured’s interests, not the insurance carriers. It should be explored in any case that an insurance company provides defense counsel.