Case Name: Neal GOLDEN, Plaintiff-Appellant, v. Elwood L. FAUST and Dorothy Faust, Defendants-Appellees
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1985-07-23
Citations: 766 F.2d 1339
Docket Number: No. 84-6069
Parties: Neal GOLDEN, Plaintiff-Appellant, v. Elwood L. FAUST and Dorothy Faust, Defendants-Appellees.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 766
Pages: 1339–1342

Head Matter:
Neal GOLDEN, Plaintiff-Appellant, v. Elwood L. FAUST and Dorothy Faust, Defendants-Appellees.
No. 84-6069.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted April 3, 1985.
Decided July 23, 1985.
Norris, Circuit Judge, filed dissenting opinion.
Joanne M. Brown, Joseph D. Joiner and Eric D. Berkowitz, Patton, Watson, Joiner & Brown, San Francisco, Cal., for plaintiff-appellant.
Jonathan G. Maile, Tharpe & Howell, Los Angeles, Cal., for defendants-appellees.
Before BROWNING and NORRIS, Circuit Judges, and SOLOMON, District Judge.
The Honorable Gus J. Solomon, Senior United States District Judge for the District of Oregon, sitting by designation.

Opinion:
SOLOMON, District Judge:
Neal Golden appeals from a summary judgment in favor of the Fausts. The court held that the action was time barred. We reverse.
FACTS
On December 23, 1982, Neal Golden (Golden), a New Mexico resident, was in his automobile with his wife and son on the side of the road on S.R. 58 near Tehachapi Pass when a car driven by Elwood Faust, a California resident, struck and destroyed the Goldens' automobile and injured all of the occupants.
The Golden family filed an insurance claim against the Fausts for personal injuries and automobile damage. National General Insurance Company (insurance company), Fausts' insurance carrier, entered into settlement negotiations with Golden's attorney in New Mexico. The only issue was the amount of settlement for each claimant. The insurance company never contested liability.
During October, 1983, the claims adjuster, in response to a letter from Golden's attorney in which he sought the policy limits, telephoned him and requested that he not file an action for damages for all three claims because the policy limits were sufficient to cover all the claims. On December 22, 1983, one day before the expiration of the California one-year statute of limitations, the insurance company settled the claim of Golden's son. On that day, the insurance adjuster told the Goldens' attorney that "we'll settle the other two right after the first of the year." Yet, when Goldens' attorney called the insurance company on January 4, 1984, he was asked if the Goldens had filed an action. When he answered "no," the insurance representative told him that she would not discuss the other claims because the statute of limitations had run. The Goldens immediately filed this action against the Fausts for personal injuries and property damage.
On March 7, 1984, the insurance company settled the claim of Golden's wife even though the statute of limitations had run more than two months earlier. The insurance company refused to settle the claim of Golden whose injuries were much more severe and who, in addition, had a claim for property damage.
Golden alleges in his complaint that the defendant's insurance carrier, through the conduct and statements of its adjuster, induced him to delay filing his lawsuit, and as a result, the insurance company is estopped from asserting the statute of limitations. Golden specifically alleges that 1) the claims adjuster never denied the defendant's liability, and the only issue was the amount of damages; 2) the adjuster asked Golden's attorney to not file a lawsuit because the policy limits were more than adequate to cover all three injuries (Golden, his wife and his son); and 3) the adjuster on December 22, 1983, after settling the son's claim, told Golden's attorney "let's settle the other two right after the first of the year." The statute of limitations ran on December 23, 1983.
The district court entered summary judgment in favor of the Fausts based on the statute of limitations defense. Golden, in his appeal, contends that defendants are estopped from asserting a statute of limitations defense because of the fraud of their insurance carrier.
DISCUSSION
A de novo review is the appropriate standard for a summary judgment. Lojek v. Thomas, 716 F.2d 675, 677 (9th Cir.1983).
Golden asserts that he refrained from filing an action because of his reliance on the claims adjuster's representations. He contends that defendants are estopped from asserting the statute of limitations because of their representations.
In Kunstman v. Mirizzi, 234 Cal.App.2d 753, 44 Cal.Rptr. 707, 709 (1965), the case upon which the Fausts rely, the California court found the primary issue was whether the complaint alleged "sufficient facts to estop defendants from relying on the statute of limitations to bar the action by means of a demurrer." 44 Cal.Rptr. at 709. In that case, the court granted defendant's demurrer because the plaintiff failed to allege facts in the complaint showing that the insurance company made representations amounting to fraud or constructive fraud. Id. at 710.
In Muraoka v. Budget Rent-A-Car, 160 Cal.App.3d 107, 206 Cal.Rptr. 476 (1984), the court distinguished Kunstman and pointed out that in Muraoka the plaintiff alleged that she did not consult with counsel or file a lawsuit within the statutory time because she relied on Budget's conduct.
The trial court allowed the case to go to trial on the limitations issue, holding that "[i]n contrast to Kuntsman, in the case at bench plaintiff alleges that Budget was the protagonist for the delay in the settlement discussions in order to conduct an investigation and that in reliance on this conduct plaintiff 'was induced to delay filing a civil action until after the statute of limitations expired.' "
Before estoppel can toll the statute of limitations, certain conditions must be met: 1) the party to be estopped must be apprised of the facts; 2) the other party must be ignorant of the true state of facts, and the party to be estopped must have acted so that the other party had a right to believe that the party intended its conduct to be acted upon; and 3) the other party relied on the conduct to its prejudice. Muraoka, 206 Cal.Rptr. at 480. Golden alleges that he met these conditions. He relied on the adjuster's representations that she would settle the remaining claims after the first of the year, which was after the statute of limitations had run. Once it is determined that elements of estoppel have been sufficiently pleaded, the question of whether the statute of limitations is tolled by conduct of defendant is one of fact which should be left for resolution by the trier of fact. Muraoka, 206 Cal.Rptr. at 481.
The law encourages settlements to quiet litigation. Williams v. First National Bank, 216 U.S. 582, 595, 30 S.Ct. 441, 445, 54 L.Ed. 625 (1910); United States v. McInnes, 556 F.2d 436, 441 (9th Cir.1977). Although Golden's complaint is not a model of good pleading, the allegations are sufficient to allege estoppel and permit Golden to try that issue before a jury. Muraoka, 206 Cal.Rptr. at 480.
REVERSED and REMANDED.