California Court of Appeal, Bartel v. Chicago Title Insurance Co., Docket No. H052083

Statute of Limitations

 

Equitable Tolling

 

Insurance Law

 

Duty to Defend

 

California Law

 

 

 

(…) Chicago Title contends the trial court erred in applying equitable tolling to reject its statute of limitations defense and deciding Bartel’s title insurance action was timely. Bartel counters that the interim judgment properly rejected Chicago Title’s statute of limitations defense and applied equitable tolling consistent with the California Supreme Court’s decision in Lambert, 53 Cal.3d 1072, and with the primary right doctrine. Bartel asserts in the alternative that, even assuming equitable tolling paused upon the dismissals of Composti I and Composti II, it resumed when Bartel timely reasserted tender of defense based on Composti III.

 

 

(Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191(Aryeh).) “A plaintiff must bring a claim within the limitations period after accrual of the cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806; see Code Civ. Proc., § 312.) A cause of action typically “accrues at ‘the time when the cause of action is complete with all of its elements.’” (Fox, at p. 806.) “Actions on title insurance policies are subject to a two-year statute of limitation. (Code Civ. Proc., § 339, subd. (1).)” (Lee v. Fidelity National Title Ins. Co. (2010) 188 Cal.App.4th 583, 599.) Accrual of a cause of action upon a contract or policy of title insurance does not occur “until the discovery of the loss or damage suffered by the aggrieved party thereunder.” (Code Civ. Proc., §339, subd. (1).) Certain equitable exceptions “may alter the rules governing either the initial accrual of a claim, the subsequent running of the limitations period, or both.” (Aryeh, supra, 55 Cal.4th at p.1192.) These exceptions exist “to align the actual application of the limitations defense more closely with the policy goals animating it.”  (Ibid.) Equitable tolling, applied by the trial court here, “may suspend or extend the statute of limitations when a plaintiff has reasonably and in good faith chosen to pursue one among several remedies and the statute of limitations’ notice function has been served.” (Ibid.)

 

In Lambert, our Supreme Court examined whether a cause of action under a title insurance policy alleging a failure to defend accrues when the insurer refuses to defend or when the underlying action is terminated by final judgment. (Lambert, supra, 53 Cal.3d at p.1074.) After considering the statutory language and policies underlying the duty to defend, the court concluded that “although the statutory period commences upon the refusal to defend, it is equitably tolled until the underlying action is terminated by final judgment.” (Id. at p.1077.) While resolution of the statute of limitations is normally a question for the trier of fact, the application of the statute of limitations on undisputed facts is a purely legal question that we review de novo. (Aryeh, supra, 55 Cal.4th at p.1191; see Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112.)

 

 

We agree with the parties that Lambert guides our resolution of the application of the statute of limitations here. In that decision, our Supreme Court explained, “The duty to defend in a title insurance case is governed by the same principles which govern the duty to defend under general liability policies. The duty commences upon tender of the defense, and continues until the underlying lawsuit is concluded.”  (Lambert, supra, 53 Cal.3d at p.1077.) In rejecting a prior appellate decision that had held that the statute of limitations begins to run upon the rejection of tender, the court stated that such a rule “would allow expiration of the statute of limitations on a lawsuit to vindicate the duty to defend even before the duty itself expires. This grim result is untenable. The insured must be allowed the option of waiting until the duty to defend has expired before filing suit to vindicate that duty.” (Ibid.) The Supreme Court held that the statute of limitations begins to run “upon accrual, which in this case occurs upon the refusal to defend.” (Lambert, supra, 53 Cal.3d at p.1078.) It further decided that the statute of limitation should be equitably tolled between accrual and a final judgment. It reasoned, “the duty to defend is a continuing duty. It is equitable and consistent with the legislative intent to toll the limitations period in which this duty continues from the date of accrual of a cause of action to final judgment.” (Id. at p.1079.)

 

 

The Supreme Court emphasized that its decision was grounded in equitable principles: “It is harsh to require an insured—often a private homeowner—to defend the underlying action, at the homeowner’s own expense, and simultaneously to prosecute—again at the homeowner’s own expense—a separate action against the title company for failure to defend. ‘The unexpected burden of defending an action may itself make it impractical to immediately bear the additional cost and hardship of prosecuting a collateral action against an insurer.’” (Lambert, supra, 53 Cal.3d at p.1078.) The court reasoned that this rule would not prejudice the insurer. “By tendering defense of a third party action to an insurer, the insured will have put the insurer on notice that it may be required under the policy to defend the action. Thus, the insured [sic] will be aware that it must take the steps necessary to prepare and preserve a defense to an action by its insured.” (Id. at p. 1079.) Moreover, an insured has the option of bringing suit against the insurer prior to the entry of final judgment in the underlying litigation. Nothing “prohibits the insured from commencing an action once the insurer has refused a tender of defense. We merely conclude that the insured is not required to do so.” (Id. at p.1080.)

 

 

Applying the principles articulated in Lambert to the facts here, we decide that Bartel’s title insurance action against Chicago Title was timely. Composti filed Composti I, which asserted a right-of-way easement benefiting Composti’s parcel over Bartel’s parcel, on May 25, 2010. Bartel tendered defense to Chicago Title in Composti I on March 18, 2011, triggering Chicago Title’s duty to defend. (See Buss v. Superior Court (1997) 16 Cal.4th 35, 46 (Buss) [stating the duty to defend “arises as soon as tender is made”].)

 

 

On July 27, 2011, Chicago Title declined (in connection with Composti II) to accept tender. Bartel’s claim against Chicago Title therefore accrued on July 27, 2011. Under the principles articulated in Lambert, the claim was equitably tolled until October 16, 2012, the date on which Composti II was dismissed without prejudice. Beginning on that date, Bartel had two years—that is, until October 16, 2014—to bring a claim against Chicago Title for violation of its duty to defend in Composti I and Composti II.

 

 

We reject Bartel’s contention that equitable tolling continues after a dismissal without prejudice. The duty to defend is bound to the pendency of the underlying action and terminates upon its conclusion. Once dismissed, there is no pending action on that claim, regardless of whether a future action arises. (See Abatti v. Imperial Irrigation Dist. (2012) 205 Cal.App.4th 650, 666 [“Claims that have been dismissed, whether with or without prejudice, are not ‘pending.’”].) (Fn. 10).

 

 

On September 5, 2014 (over one month before the running of the statute of limitations from the dismissal of Composti II), Bartel again tendered defense to Chicago Title. Under the Supreme Court’s analysis in Lambert, this tender of defense triggered Chicago Title’s duty to defend.  (See Lambert, supra, 53 Cal.3d at p.1077 [“The duty commences upon tender of the defense, and continues until the underlying lawsuit is concluded.”].) We decide that, on these facts, Bartel’s tender of the defense equitably tolled the statute of limitations for bringing suit against Chicago Title as of the date of the tender.  

 

 

 

(California Court of Appeal, Bartel v. Chicago Title Insurance Co., May 30, 2025, Docket No. H052083, Certified for Publication)

 

 

 

 

 

California Court of Appeal, Gutierrez v. Tostado, Docket No. H049983

Personal Injury Claims

 

Statute of Limitations

 

Personal Injury Action for Negligence: Two Years

 

Suits Against Health Care Providers for Professional Negligence: One Year

 

Does MICRA Applies Where the Plaintiff Is Injured During the Provision of Professional Services, as a Result of Those Services, But Was Not the Recipient of the Services?

 

(Action Against an Attorney for a Wrongful Act or Omission, Other Than for Actual Fraud: One Year)

 

Claims Time-Barred

 

 

Procedure:

 

Notice of Appeal

 

Appeal premature

 

Order to Show Cause

 

Dismissal

 

Judgment Filed

 

Notice of Submission of Judgment

 

Order to Show Cause Discharged

 

 

California Law

 

 

 

(Santa Clara County

Super. Ct. No. 20CV361400)

 

 

Francisco Gutierrez appeals from a judgment entered after the trial court granted summary judgment in favor of respondents Uriel Tostado and ProTransport-1, LLC, on the basis that Gutierrez’s personal injury claims were time-barred under the Medical Injury Compensation Reform Act (MICRA). Gutierrez contends that the trial court erred when it found MICRA’s one-year statute of limitations for professional negligence applicable. We conclude that because Tostado was a medical provider rendering professional services at the time the alleged negligence occurred, MICRA’s statute of limitations bars Gutierrez’s claims. We thus affirm the judgment.

 

 

Gutierrez was driving on Interstate 280 when he was forced to stop. Shortly after Gutierrez stopped, Tostado, who was driving an ambulance, rear-ended him.  At the time of the accident, Tostado was an emergency medical technician (EMT) employed by ProTransport-1, LLC and was transporting a patient from one medical facility to another. While Tostado drove, his partner attended to the patient in the rear of the ambulance.

 

 

Gutierrez was injured in the collision and visited a chiropractor for treatment within ten days of the incident. Almost two years later, Gutierrez filed a complaint against Tostado and ProTransport-1, alleging various personal injury claims. The respondents filed a motion for summary judgment on the sole ground that Gutierrez’s claims were time barred under MICRA’s one-year statute of limitations. The trial court agreed that MICRA applied and granted the motion. The trial court concluded that because Tostado was transporting a patient at the time of the accident, he was rendering professional services. The trial court held that Gutierrez’s claims against the defendants were time-barred under the statute. Gutierrez timely appealed from the judgment.

 

 

(Gutierrez filed his notice of appeal on April 19, 2022, after the trial court had granted summary judgment in favor of the defendants but prior to judgment being entered. We issued an order to show cause as to why Gutierrez’s appeal should not be dismissed as premature. After the trial court filed the judgment and Gutierrez submitted a notice of submission of judgment, we discharged the order to show cause and deemed Gutierrez’s notice of appeal filed on July 11, 2022, the date judgment was entered. Fn. 1).

 

 

In this case, the trial court granted summary judgment based on its statutory construction of MICRA. We review issues of statutory construction de novo. (Aldana v. Stillwagon (2016) 2 Cal.App.5th 1, 6 (Aldana).)

 

 

The trial court granted summary judgment on the sole ground that Gutierrez’s action was barred by the statute of limitations set forth in MICRA. Gutierrez contends that the trial court erred in dismissing his claims because MICRA does not apply to his personal injury claims. A personal injury action for negligence must generally be filed within two years of the date on which the injury occurred. (Code Civ. Proc., § 335.1.)

 

 

However, suits against health care providers for professional negligence must be filed within one year. (§ 340.5.) Gutierrez argues that the one-year statute of limitations does not apply to his action because his claims are for general negligence not professional negligence, and the duty that Tostado violated by crashing into his car was a duty of care generally owed to the public, not a professional duty owed by a medical provider to a patient.

 

 

MICRA defines professional negligence as “a negligent act or omission to act by a health care provider in the rendering of professional services.” (§ 340.5, subd. (2).) The parties do not dispute that an EMT transporting a patient in an ambulance is providing medical care to the patient for purposes of the statute. (Lopez, supra, 89 Cal.App.5th at p. 347; Canister v. Emergency Ambulance Service, Inc. (2008) 160 Cal.App.4th 388, 407 (Canister).) However, only actions “alleging injury suffered as a result of. . .the provision of medical care to patients” are covered. (Flores v. Presbyterian Intercommunity Hospital (2016) 63 Cal.4th 75, 88, (Flores).) In this appeal we must decide whether a driver in a separate vehicle, injured in a collision with an ambulance transporting a patient, was injured as a result of the provision of medical care, such that MICRA’s one year statute applies. Gutierrez urges us to find that any injury here was caused by ordinary negligence. He argues that where a medical provider owes no professional duty to the plaintiff and allegedly breaches only a duty owed to the general public, a claim for personal injuries should be governed by the two-year statute of limitations applicable to ordinary negligence. Conversely, respondent suggests that the critical question is not whether defendant owed plaintiff a professional duty, but simply whether plaintiff was injured as a result of the provision of medical services by defendant; in other words, was plaintiff’s injury a foreseeable consequence of defendant’s act of providing medical care?

 

 

The Supreme Court in Flores examined what it means for a health care provider to render professional services under MICRA. There, a hospital patient sued the hospital for negligence after the latch on her bedrail broke, causing her to fall and injure herself. (Flores, supra, 63 Cal.4th at p. 89.) The court considered the difference between regular negligence arising out of the duty owed to the general public, the negligence in the maintenance of equipment and premises that are merely convenient for, or incidental to, the provision of medical care to a patient, and the negligence that arises from the duty owed to patients in the rendering of professional services. (Id. at pp. 88-89.) The court found that “Even those parts of a hospital dedicated primarily to patient care typically contain numerous items of furniture and equipment—tables, televisions, toilets, and so on—that are provided primarily for the comfort and convenience of patients and visitors, but generally play no part in the patient’s medical diagnosis or treatment. Although a defect in such equipment may injure patients as well as visitors or staff, a hospital’s general duty to keep such items in good repair generally overlaps with the ‘obligations that all persons subject to California’s laws have.’ [Citation.]” (Ibid.)

 

 

(Lee v. Hanley (2015) 61 Cal.4th 1225, 1237 (Lee): In Lee, the Court considered “section 340.5’s neighboring provision imposing a one-year statute of limitations for ‘an action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services.’ [Citation.]” (Flores, supra, 63 Cal.4th at p. 87.) The court decided «that section 340.6(a) is properly read to apply to claims that ‘depend on proof that an attorney violated a professional obligation in the course of providing professional services.’ [Citation.]” (Ibid.) Explaining that the statute excludes services unrelated to the law or matters that entail violations of professional obligations that may overlap with obligations that all persons have, the court emphasized that the statute applies when an attorney violates a professional obligation as opposed to some generally applicable nonprofessional obligation. (Id. at pp. 87-88.)

 

 

(…) The court concluded that the hospital’s alleged negligence in the maintenance of plaintiff’s bedrail did not overlap with its general duty owed to the public because it was “integrally related to plaintiff’s medical diagnosis and treatment,” and was therefore professional negligence encompassed by MICRA. (Id. at p. 89.)

 

 

Flores and Lee both considered whether the injury to the patient or client was caused by negligence in the provision of professional services or whether the injury was the result of the breach of some broader overlapping duty owed to the public. Gutierrez asks us to conclude that the contrast drawn in those cases, between a professional duty and the general duty owed to the public, means that MICRA only applies where the defendant owes a professional duty to the plaintiff. However, neither Flores nor Lee considered whether MICRA applies where the plaintiff is injured during the provision of professional services, as a result of those services, but was not the recipient of the services. In both of those cases, the plaintiff was either the client or the patient. Multiple courts have considered injuries to third parties who were not patients and have concluded that MICRA applied to their claims.

 

 

(…) The Flores court concluded that by providing the bedrail the hospital was providing medical care, not just a convenience incidental to care. The question before the Flores court was what duty was owed to its patient, not to whom their professional duty of care extended.

 

 

(…) Because Gutierrez was not the recipient of the medical care, the question here is different from the one raised in Flores. It is not whether the injuries alleged were the result of general or professional negligence.  Instead, the question here is whether an injury to a third party, who is not a patient, is subject to MICRA’s statute of limitations because the injury occurred during, and as a result of, the provision of medical care by a medical provider.

 

 

(…) Because neither Flores nor Lee considered MICRA’s applicability to nonpatients, we must agree with Canister and Lopez and conclude that MICRA is not limited to suits by patients or to recipients of medical services as long as the plaintiff is injured due to negligence in the rendering of professional services and his injuries were foreseeable.

 

 

The provision of ambulance services involves driving on the road, sometimes at a very high speed. Getting a patient to the hospital quickly is often as integral to the provision of this medical service as performing CPR or administering medication intravenously. It is, therefore, entirely foreseeable that collisions may occur where third parties are injured. The fact that Tostado was not driving quickly here or that Gutierrez was in a separate vehicle rather than in the ambulance does not change the analysis or our conclusion that third parties injured in a collision with an ambulance when it is rendering medical care are subject to MICRA.

 

 

(…) Fundamental intent of MICRA to “reduce the cost of medical malpractice insurance ‘by limiting the amount and timing of recovery in cases of professional negligence.’ [Citations.]” (Flores, supra, 63 Cal.4th at p.81.)

 

 

Even though Tostado may owe a duty to the public to drive the ambulance safely when not in use for medical care, the injury to Gutierrez occurred while Tostado, a medical provider, was performing the integral function of transporting a patient by ambulance. The trial court correctly concluded that MICRA’s one-year statute of limitations applied to Gutierrez’s negligence claims.

 

 

 

 

 

(California Court of Appeal, Dec. 1^st, 2023, Gutierrez v. Tostado, Docket No. H049983, Certified for Publication)

 

 

U.S. Court of Appeals for the Fifth Circuit, Noble House, L.L.C. v. Certain Underwriters at Lloyd’s, London, Subscribing to Policy MS-S 5722 (Marine Package), Docket No. 22-20281

Insurance Law

 

Forum Non Conveniens

 

Statute of Limitations (In the Foreign Forum)

 

Return-Jurisdiction Clause

 

Lloyd’s

 

 

 

 

Appeal from the United States District Court for the Southern District of Texas USDC No. 4:21-CV-3585

 

 

 

Plaintiff-appellant Noble House, L.L.C. (“Noble House”) appeals a judgment of dismissal, without prejudice, based on forum non conveniens, granted in favor of defendant-appellee Certain Underwriters at Lloyd’s, London (“Underwriters”). The district court ruled that the parties’ insurance policy contained an enforceable forum-selection clause requiring litigation in the courts of England and Wales and that a return-jurisdiction clause was not required. We affirm.

 

 

On August 20, 2018, Noble House’s yacht lost its port-side rudder while entering a channel in the Bahamas. The following day, Noble House advised Underwriters, its insurer, of the casualty, which was allegedly covered by its marine-insurance policy. Noble House purchased the policy from Underwriters by way of a Texas-based insurance broker on February 1, 2018. The policy contained a forum-selection clause that selected the courts of England and Wales. Attached to the policy was a cover note with its own forum-selection clause that selected any court of competent jurisdiction within the United States. Allegedly, the cover note was not prepared by Underwriters, but by Noble House’s own insurance broker. Approximately two months after the casualty, on October 19, 2018, Underwriters issued a letter advising that coverage “may not exist.” Underwriters has not yet denied coverage. Noble House sued to recover its damages, first in the United States District Court for the Southern District of Florida on October 12, 2020. Months later, on March 2, 2021, that district court granted Underwriters’ motion to dismiss for lack of personal jurisdiction and dismissed the case without prejudice. Then, Noble House filed the instant suit in the United States District Court for the Southern District of Texas on November 1, 2021. Underwriters moved to dismiss on forum non conveniens grounds. On March 23, 2022, after hearing argument, the district court granted Underwriters’ motion and dismissed all claims without prejudice. Noble House filed a motion for reconsideration, which the court denied. This appeal followed.

 

 

As Underwriters correctly explains, the presence of a mandatory, enforceable forum-selection clause simplifies the “usual” analysis in two ways. Barnett, 831 F.3d at 300. “First, the plaintiff’s choice of forum merits no weight” because, by contracting for a specific forum, “the plaintiff has effectively exercised its ‘venue privilege’ before a dispute arises.” Atl. Marine, 571 U.S. at 63. Second, the private-interest factors “weigh entirely in favor of the preselected forum”; so, the “district court may consider arguments about public-interest factors only.” Id. at 64. “Hence, a valid forum-selection clause controls the forum non conveniens inquiry ‘in all but the most unusual cases.’” Barnett, 831 F.3d at 300 (quoting Atl. Marine, 571 U.S. at 66). “This harmonizes with the Supreme Court’s guidance that contractually selected forums often ‘figure centrally in the parties’ negotiations’ and become part of those parties’ ‘settled expectations’ –so if a plaintiff disregards such a contractual commitment, ‘dismissal works no injustice.’” Id. (quoting Atl. Marine, 571 U.S. at 66 & n.8).

 

 

We apply a “strong presumption” in favor of enforcing mandatory forum-selection clauses. Weber, 811 F.3d at 773 (citing Haynsworth,121 F.3d at 962-63). “The presumption of enforceability may be overcome, however, by a clear showing that the clause is ‘unreasonable’ under the circumstances.” Weber, 811 F.3d at 773 (quoting Haynsworth, 121 F.3d at 963). We’ve stated: Unreasonableness potentially exists where (1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement will for all practical purposes be deprived of his day in court because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the forum selection clause would contravene a strong public policy of the forum state. Haynsworth, 121 F.3d at 963 (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991), and M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13, 15, 18 (1972)).

 

 

If the forum-selection clause is both mandatory and enforceable, the court must decide whether, under Atlantic Marine’s balancing test, the case “is one of the rare cases in which the public-interest forum non conveniens factors favor keeping a case despite the existence of a valid and enforceable forum-selection clause.” Weber, 811 F.3d at 775-76.

 

 

Noble House’s insurance policy details that: “This Insurance shall be governed by and construed in accordance with the law of England and Wales and each party agrees to submit to the exclusive jurisdiction of the courts of England and Wales.” The attached cover note provides: “It is agreed that in the event of the failure of the Underwriters hereon to pay any amount claimed to be due hereunder, the Underwriters hereon, at the request of the Assured (or Reinsured), will submit to the jurisdiction of a Court of competent jurisdiction within the United States.” Importantly, the cover note states that it “is intended for use as evidence that insurance described herein has been effected against which a policy(ies) will be issued and that in the event of any inconsistency therewith the terms and conditions and provisions of the policy(ies) prevail.” (Fn. 2).

 

 

Even if this Court were to rely on the “available and adequate” standard, as Noble House suggests, Noble House’s argument that the courts of England and Wales are not “available and adequate” fails. By contracting for those courts’ exclusive jurisdiction, it necessarily agreed that such courts are available and adequate. See Atl. Marine, 571 U.S. at 63 (noting that a forum-selection clause “represents the parties’ agreement as to the most proper forum”) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 (1988)). (Fn. 4).

 

 

Noble House’s fear that its claims would be time-barred under the foreign fora’s statutes of limitations is not novel. Both the Supreme Court and this Court have acknowledged the risk of time-barred claims in the forum-selection-clause context. Unfortunately for Noble House, controlling caselaw affords it no sympathy. It is no secret that dismissal under forum non conveniens “makes it possible for plaintiffs to lose out completely through the running of the statute of limitations in the forum finally deemed appropriate.” Atl. Marine, 571 U.S. at 66 n.8. But dismissal of a suit “when the plaintiff has violated a contractual obligation by filing suit in a forum other than the one specified in a valid forum-selection clause ... works no injustice on the plaintiff.” Id. That is why we have said: “That an action may be time-barred in the chosen forum does not make a forum-selection clause unreasonable.” Barnett, 831 F.3d at 309 n.14.

 

 

(…) There is an express clause stating that the provisions in the policy supersede that in the cover note.

 

When parties agree to a forum-selection clause, they waive the right to challenge the preselected forum as inconvenient or less convenient for themselves or their witnesses, or for their pursuit of the litigation.” Atl. Marine, 571 U.S. at 64. Any grave inconvenience or unfairness of the selected forum Noble House “would suffer by being forced to litigate in the contractual forum as it agreed to do was clearly foreseeable at the time of contracting.” Bremen, 407 U.S. at 17-18. Because the applicable foreign statutes of limitations were certainly foreseeable at the time the parties executed the policy, their enforcement is not unfair.

 

 

(…) Courts enforce a forum-selection clause unless the contracted forum accords the plaintiff no remedies whatsoever. Id. at 774 & n.24; see also Barnett, 831 F.3d at 308 n.14. That’s because “it is the availability of a remedy that matters, not predictions of the likelihood of a win on the merits.” Weber, 811 F.3d at 774 (emphasis in original). Noble House’s failure to point to a substantive law that bars its claim for relief is fatal.

 

 

(…) “A return jurisdiction clause remedies the concern that the identified forum will remain available or that defendants will submit to its jurisdiction by permitting parties to return to the dismissing court should the lawsuit become impossible in the foreign forum.” Vasquez, 325 F.3d at 675. “The ‘failure to include a return jurisdiction clause in an f.n.c. i.e., forum non conveniens dismissal constitutes a per se abuse of discretion.’” Vasquez, 325 F.3d at 675 (quoting Robinson v. TCI/US West Communications, Inc.,117 F.3d 900, 907-08 (5th Cir. 1997)). “This is because, as this Court has repeatedly made clear, ‘courts must take measures, as part of their dismissals in forum non conveniens cases, to ensure that defendants will not attempt to evade the jurisdiction of the foreign courts.’” Rajet Aeroservicios S.A. de C.V. v. Castillo Cervantes, 801 F. App’x 239, 244 (5th Cir. 2020) (unpublished) (per curiam) (quoting Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1551 (5th Cir. 1991)). “Such measures often include agreements between the parties to litigate in another forum, to submit to service of process in that jurisdiction, to waive the assertion of any limitations defenses, to agree to discovery, and to agree to the enforceability of the foreign judgment.” Baris, 932 F.2d at 1551. “A return-jurisdiction clause assists in preventing defendants from circumventing these measures and ensures plaintiffs have the opportunity to proceed with the action in one of the forums.” Rajet Aeroservicios, 801 F. App’x at 244. The existence of a mandatory, enforceable forum-selection clause swallows the purpose of a return-jurisdiction clause whole. See Baris, 932 F.2d at 1551. As noted, an agreement is one of the express “measures” to ensure that defendants will not attempt to evade the jurisdiction of the foreign courts. See Baris, 932 F.2d at 1551. By agreement, Noble House and Underwriters are contractually bound to litigate their dispute in the courts of England and Wales. Accordingly, there is no concern that Underwriters will “attempt to evade jurisdiction of the foreign courts” or flout the litigation procedure and outcome. The clause ensures that Noble House will have the opportunity to proceed with the action in the foreign fora. See Rajet Aeroservicios, 801 F. App’x at 244. Moreover, should Underwriters evade the jurisdiction of the foreign courts, Noble House has a remedy in a breach-of-contract action, a protection which does not exist in the forum non conveniens context where there is no forum-selection clause. The parties’ agreement to proceed with the action in the selected fora obviates the need for a return-jurisdiction clause. See Baris, 932 F.2d at 1551.

 

 

A “total waiver of any statute of limitations defense” or laches defenses is similarly unnecessary. First, while such a waiver is one of the many “measures” provided to “ensure” that defendants will not evade the jurisdiction of foreign courts, none of those measures is mandatory. See id. (listing examples of protective measures that a court may often –but not “must” –utilize). Again, the primary concern that a defendant will evade jurisdiction is not present where the parties willingly submitted to foreign fora by agreement. So, waiver as a protective measure is redundant, gratuitous, and serves no purpose. Although not required, the district court confirmed that Underwriters’ statute-of-limitations defense did not encompass the time period including “the duration of the pendency of this action.” This exceeds what was expected of the court to ensure Underwriters would not “evade” jurisdiction. Accordingly, the district court did not err.

 

 

 

 

(U.S. Court of Appeals for the Fifth Circuit, May 1, 2023, Noble House, L.L.C. v. Certain Underwriters at Lloyd’s, London, Subscribing to Policy MS-S 5722 (Marine Package), Docket No. 22-20281)

 

 

 

Statute of Limitations - Non-Jurisdictional Affirmative Defense

Statute of Limitations

 

Non-Jurisdictional Affirmative Defense

 

 

 

 

That the statute of limitations has run is a non-jurisdictional affirmative defense, see Flagg v. Stryker Corp., 819 F.3d 132, 143 (5th Cir. 2016) (Haynes, J., concurring in part), not a jurisdictional pre-requisite. (Fn. 5).

 

 

 

 

(U.S. Court of Appeals for the Fifth Circuit, May 1, 2023, Noble House, L.L.C. v. Certain Underwriters at Lloyd’s, London, Subscribing to Policy MS-S 5722 (Marine Package), Docket No. 22-20281)

 

 

California Court of Appeal, Carrillo v. County of Santa Clara, Docket No. B322810

Statute of Limitations

 

Demurrer Without Leave to Amend

 

Civil Procedure

 

Suit Brought Against a Public Entity

 

Accrual of a Cause of Action

 

Discovery Rule

 

Delayed Discovery Exception

 

Medical Malpractice

 

California Law

 

 

 

Appellant Emilio Carrillo appeals from a judgment of dismissal of his medical negligence claim against respondent County of Santa Clara after the trial court sustained the County’s demurrer without leave to amend on statute of limitations grounds. We affirm.

 

 

On July 12, 2019, the County demurred to Carrillo’s FAC. The County argued that Carrillo’s medical negligence claim was time-barred, citing Code of Civil Procedure section 340.5 (MICRA),1which provides that a plaintiff must file suit “within three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first.” (Code Civ. Proc., § 340.5.) Because Carrillo’s foot was amputated on December 20, 2017, the County argued he was required to file suit no later than December 20, 2018, making his January 18, 2019, complaint untimely.

 

 

1 MICRA is the Medical Injury Compensation Reform Act. (Anson v. County of Merced (1988) 202 Cal.App.3d 1195, 1199 (Anson).)

 

 

The County also argued that MICRA’s one-year limitations period was not extended by Government Code section 945.6 (the Government Claims Act), which provides that “any suit brought against a public entity on a cause of action for which a pre-filing claim is required to be presented” to the public entity must be filed within six months after the public entity’s rejection of the claim. The County argued that, for his claim against the County to be timely, Carrillo was required to satisfy the deadlines in both statutes.

 

 

Except in circumstances inapplicable here, “any suit brought against a public entity on a cause of action for which a claim is required to be presented” must be brought within six months after the County’s rejection of the claim. (Gov. Code, § 945.6, subd. (a)(1).) Additionally, under MICRA, a plaintiff alleging medical negligence must file suit within “three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first.” (Code Civ. Proc., § 340.5.) As to the one-year limitations period, MICRA “sets forth two alternate tests for triggering the limitations period: (1) a subjective test requiring actual suspicion by the plaintiff that the injury was caused by wrongdoing; and (2) an objective test requiring a showing that a reasonable person would have suspected the injury was caused by wrongdoing.” (Kitzig v. Nordquist (2000) 81 Cal.App.4th 1384,1391.)

 

 

(…) We hold that, here, where both section 945.6 and MICRA apply, Carrillo was obligated to meet the deadlines set forth in both statutes.

 

 

Generally speaking, a cause of action accrues at the time when the cause of action is complete with all of its elements. (Fox v. Ethicon Endo-Surgery, supra, 35 Cal.4th 797 at 806). The “discovery rule” is an exception to this general rule and postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. (Id. at 807.) To rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. (Id. at 808.) In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to show diligence. (Ibid.) Conclusory allegations will not withstand demurrer. (Ibid.)

 

 

(…) Because Carrillo filed his suit more than a year after his amputation, the trial court did not err in sustaining the County’s demurrer on statute of limitations grounds.

 

 

 

 

(California Court of Appeal, March 13, 2023, Carrillo v. County of Santa Clara, Docket No. B322810, Certified for Publication)

Supreme Court of Texas, Marcus & Millichap Real Estate Investment Services of Nevada, Inc. v. Triex Texas Holdings, LLC, Docket No. 21-0913

Statute of Limitations

 

Accrual and Limitations

 

Tolling

 

Discovery Rule

 

Fraudulent Concealment Distinguished from the Discovery Rule

 

Fraud Distinguished from the Discovery Rule

 

Equitable Estoppel

 

Breach of Fiduciary Duty

 

Texas Law

 

 

 

 

A cause of action for breach of fiduciary duty generally accrues, and limitations begins to run, when the claimant knows or should know of the wrongful injury. See Berry v. Berry, 646 S.W.3d 516, 525-26 (Tex. 2022). The court of appeals held that the discovery rule delays accrual and limitations until the claimant also knows of the wrongful acts and actors, without requiring the plaintiff to exercise reasonable diligence. 2021 WL 4318406 (Tex. App.—Amarillo Sept. 23, 2021). Because that holding conflicts with the established rule, and because respondents’ actions for fraud and conspiracy are also barred by limitations, we reverse the judgment of the court of appeals and reinstate the trial court’s summary judgment for respondents.

 

 

Taylor’s and Dorris’s deposition testimony caused Triex to suspect that Marcus & Millichap misrepresented the sale to Triex by omitting key details about the nature of the lease and overvaluing the property in order to raise its commission. As a result, Triex added Marcus & Millichap to the lawsuit in March 2017—more than four years after Taylor Petroleum breached the lease and more than eight years after Marcus & Millichap brokered the sale. In its amended petition, Triex asserted claims for breach of fiduciary duty, fraud by nondisclosure, and conspiracy.

 

 

Actions for breach of fiduciary duty are governed by a four-year statute of limitations.1 TEX.CIV.PRAC. & REM.CODE § 16.004(a)(5). Generally, a claim accrues when the defendant’s wrongful conduct causes the claimant to suffer a legal injury. Am. Star Energy & Mins. Corp. v. Stowers, 457 S.W.3d 427, 430 (Tex. 2015). This is true “even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred.” S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996).

 

 

1 Triex’s claims for fraud and civil conspiracy also have a four-year limitations period. TEX.CIV.PRAC. & REM.CODE § 16.004(a)(4); see Agar Corp. v. Electro Cirs. Int’l, LLC, 580 S.W.3d 136, 142 (Tex. 2019) (holding that “civil conspiracy . . . shares a limitations period with that of its underlying tort”). “Generally, in a case of fraud the statute of limitations does not commence to run until the fraud is discovered or until it might have been discovered by the exercise of reasonable diligence.” Little v. Smith, 943 S.W.2d 414, 420 (Tex. 1997). Like its breach of fiduciary duty claim, Triex based its fraud claim on allegations that Marcus & Millichap failed to disclose certain information despite its duty to do so. Accordingly, we apply the same analysis to all three claims.

 

 

The discovery rule is a “narrow exception” to the legal injury rule that “defers accrual of a cause of action until the plaintiff knew or, exercising reasonable diligence, should have known of the facts giving rise to the cause of action.” Berry, 646 S.W.3d at 524 (quoting Comput. Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996)). It “applies when the injury is by its nature inherently undiscoverable.” Agar Corp., 580 S.W.3d at 139 (citing Childs v. Haussecker, 974 S.W.2d 31, 36-37 (Tex. 1998)). “An injury is inherently undiscoverable if it is by nature unlikely to be discovered within the prescribed limitations period despite due diligence.” Berry, 646 S.W.3d at 524 (quoting S.V., 933 S.W.2d at 25). “The determination of whether an injury is inherently undiscoverable is made on a categorical basis rather than on the facts of the individual case.” Archer v. Tregellas, 566 S.W.3d 281, 290 (Tex. 2018) (citing HECI Expl. Co. v. Neel, 982 S.W.2d 881, 886 (Tex. 1998)). The question is whether the injury is “the type of injury that could be discovered through the exercise of reasonable diligence.”BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 66 (Tex. 2011) (citing Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734-35 (Tex. 2001)). We have held that “in the fiduciary context, . . . the nature of the injury is presumed to be inherently undiscoverable” because “fiduciaries are presumed to possess superior knowledge.” Comput. Assocs., 918 S.W.2d at 456. So “a person to whom a fiduciary duty is owed may be unable to inquire into the fiduciary’s actions or may be unaware of the need to do so.” Valdez v. Hollenbeck, 465 S.W.3d 217, 231 (Tex. 2015). Accordingly, “even if inquiry is made, ‘facts which might ordinarily require investigation likely may not excite suspicion where a fiduciary relationship is involved.’” Id. (quoting Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988)). Here the discovery rule applies, but it does not save Triex’s claims. The rule applies because a fiduciary relationship existed, and before Taylor Petroleum’s breach, Triex was unaware of the need to inquire into its fiduciary’s actions. See S.V., 933 S.W.2d at 8 (explaining that the rationale for finding a fiduciary’s misconduct to be inherently undiscoverable is that “a person to whom a fiduciary duty is owed is either unable to inquire into the fiduciary’s actions or unaware of the need to do so”). When the discovery rule applies, the statute of limitations does not begin to run “until the plaintiff knew or in the exercise of reasonable diligence should have known of the wrongful act and resulting injury.” Id. at 4. We have stated this rule in slightly different ways. But last Term, we explained that this means the discovery rule defers accrual “until the claimant knew or should have known of facts that in the exercise of reasonable diligence would have led to the discovery of the wrongful act.” Berry, 646 S.W.3d at 524 (quoting Little, 943 S.W.2d at 420). Or, in other words, accrual is deferred “until the plaintiff knew, or exercising reasonable diligence, should have known of the facts giving rise to the cause of action.” Id. (quoting Comput. Assocs., 918 S.W.2d at 455). Consistent throughout our cases is the requirement of reasonable diligence. We have also explained that “the discovery rule does not linger until a claimant learns of actual causes and possible cures.” PPG Indus., Inc. v. JMB/Hous. Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 93 (Tex. 2004); see also KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 749 (Tex. 1999). Nor does it defer accrual until the plaintiff knows “the specific nature of each wrongful act that may have caused the injury,”KPMG, 988 S.W.2d at 749, or “the exact identity of the wrongdoer.” Childs, 974 S.W.2d at 40; see also PPG Indus., 146 S.W.3d at 93.

 

 

In 2012, Triex had actual knowledge of its injuries and became aware of the need to inquire into Marcus & Millichap’s actions. The court of appeals concluded that “the evidence conclusively established that appellants were aware that they had sustained an injury by December 1, 2012,” the date Taylor Petroleum defaulted. 2021 WL 4318406, at *4. But it determined that a fact issue existed as to whether Triex “knew or should have known on December 1, 2012, that the injury was the result of wrongful acts committed by Marcus & Millichap.” Id. The court of appeals came to this conclusion by “relieving Triex of the responsibility of diligent inquiry” because of its fiduciary relationship with Marcus & Millichap. Id. at *3. But as we reiterated last Term, “those owed a fiduciary duty are not altogether absolved of the usual obligation to use reasonable diligence to discover an injury.”Berry, 646 S.W.3d at 526 (citing Little, 943 S.W.2d at 420); see also Comput. Assocs., 918 S.W.2d at 456. Recognizing that “the presence of a fiduciary relationship can affect application of the discovery rule,” we explained that “it remains the case that ‘a person owed a fiduciary duty has some responsibility to ascertain when an injury occurs.’ ‘When the fact of misconduct becomes apparent it can no longer be ignored, regardless of the nature of the relationship.’” Id. (citations omitted) (quoting Comput. Assocs., 918 S.W.2d at 456, then quoting S.V., 933 S.W.2d at 8). Had Triex exercised reasonable diligence, it would have discovered Marcus & Millichap’s allegedly wrongful acts. See Little, 943 S.W.2d at 420. Part of Triex’s claim against Marcus & Millichap is that it misrepresented that “this was a sure-fire and financially sound investment,” and that “rent would be coming in every month without any issues or risk.” When Taylor Petroleum defaulted on the lease, Triex “knew or should have known that something was amiss.” See Berry, 646 S.W.3d at 525. Indeed, Weiner’s affidavit in response to the summary judgment motion admitted that at the time of the breach, he knew Marcus & Millichap did a “poor job” of representing him. His awareness of his injury and of Marcus & Millichap’s poor representation “obligated him to make further inquiry on his own if he wanted to preserve a timely claim.” Id. Instead, Triex waited three years to sue the initial defendants, and an additional year to take depositions (…)

 

 

(…) (Comput. Assocs., 918 S.W.2d at 455). But in that case, we explained that although fraudulent concealment is “similar in effect” to the discovery rule, it is a different doctrine that exists for different reasons: “Unlike the discovery rule exception, deferral in the context of fraud or concealment resembles equitable estoppel. ‘Fraudulent concealment estops the defendant from relying on the statute of limitations as an affirmative defense to the plaintiff’s claim.’” Comput. Assocs., 918 S.W.2d at 456 (alterations in original) (quoting Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1983)); see also Wagner & Brown, 58 S.W.3d at 736 (distinguishing fraudulent concealment from the discovery rule); Draughon, 631 S.W.3d at 93 (collecting cases).

 

 

 

(Supreme Court of Texas, Marcus & Millichap Real Estate Investment Services of Nevada, Inc. v. Triex Texas Holdings, LLC, Jan. 13, 2023, Docket No. 21-0913, Per Curiam)