Court Opinion

ID: 9352581
Source: CourtListenerOpinion
Date Created: 2023-01-06 22:02:26.021402+00
Date Added: 2024-06-11T16:57:48.847856
License: Public Domain

Filed 1/6/23 Shernaman Enterprises v. American Honda Motor CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

 SHERNAMAN ENTERPRISES,                                                  B312886
 INC., et al.,
                                                                         (Los Angeles County
           Plaintiffs and Appellants,                                    Super. Ct. No. 20STCV24375)

           v.

 AMERICAN HONDA MOTOR CO.,
 INC.,

           Defendant and Respondent.

      APPEAL from a judgment of the Superior Court of Los
Angeles County. Rafael A. Ongkeko, Judge. Affirmed.
      Miller Shah, Kolin C. Tang; Protzman Law Firm, Andrew
B. Protzman and Rebecca J. Ledford for Plaintiffs and
Appellants.
      DTO Law, William A. Delgado and Erik P. Mortensen for
Defendant and Respondent.

                              _________________________________
       Appellant Daniel McCullen (McCullen) was injured in a
motorcycle accident in Missouri. He subsequently sued Co-
Appellant Shernaman Enterprises, Inc. (Shernaman), the
Missouri automobile dealer that sold him the motorcycle, and the
manufacturer and distributer of the motorcycle, Appellee
American Honda Motor Company (Honda), claiming that a defect
in the design of the motorcycle was the cause of his injury.
       McCullen and Shernaman reached an agreement pursuant
to Missouri law that McCullen would not enforce any judgment it
won against Shernaman, but would rather seek to collect from its
insurers and indemnitors, which included Honda. McCullen
subsequently won a judgment against Shernaman for over $11
million dollars. Shernaman and McCullen (Appellants) then filed
suit against Honda in Missouri State Court for indemnification,
voluntarily dismissed it, and then filed suit in Los Angeles
Superior Court.
       The trial court dismissed Appellants’ first amended
complaint on a demurrer after finding that California law applied
and the claims against Honda were barred by the relevant
statutes of limitations. On appeal, Shernaman and McCullen
argue that the trial court erred in applying California, not
Missouri law, and then dismissing their claims as time barred
under California law.
       We affirm.
        FACTUAL AND PROCEDURAL BACKGROUND
I.     Dealership Agreement
       Shernaman and Honda are parties to a contract titled the
Dealership Agreement, which sets forth the terms of their
relationship. Honda is incorporated in California. Shernaman

                                  2
was Honda’s authorized motorcycle dealer in Missouri.1 The
Dealership Agreement contains an indemnity clause providing
that Honda will indemnify Shernaman for judgments in certain
third party lawsuits. It also contains a choice of law clause
stating that the Dealership Agreement “shall be governed by and
construed according to the laws of the State of California.”
II.   McCullen’s Accident and 2011 Lawsuit
      In October 2006, McCullen was injured in a motorcycle
accident in Missouri, ultimately losing his leg. Five years later,
in 2011, McCullen filed a products liability lawsuit in Missouri
State Court against Shernaman and Honda alleging that defects
in the design of the motorcycle caused his injury.
      In November 2013, for reasons that are not clear from the
record, Honda was dismissed from McCullen’s lawsuit.
Meanwhile, Shernaman did not appear, so McCullen moved for
default judgment against Shernaman in December 2013.
      In February 2014, Shernaman and McCullen entered into
an agreement under a Missouri statute, Missouri Revised Statute
section 537.065, providing that McCullen would not levy
execution of any judgment against Shernaman, and would
instead levy it against Shernaman’s insurers and/or indemnitors.
      In April 2014, the Missouri court entered a default
judgment for McCullen against Shernaman for $11,031,096.
III. Attempts to Collect on the Judgment in the 2011
      Lawsuit
      In May 2014, McCullen filed suit in Missouri State Court
against Shernaman’s insurer, but the court ultimately ruled in
favor of the insurer.

1     Shernaman ceased operation as of 2011.

                                   3
       In January 2019, Shernaman sued Honda in Missouri State
Court for failure to defend and indemnify in the 2011 action
against Shernaman by McCullen. Shernaman voluntarily
dismissed Honda in June 2019 after Honda moved for dismissal
on the basis that the Dealership Agreement had a California
forum election clause.
       In June 2020, Shernaman and McCullen filed suit against
Honda in Los Angeles County Superior Court, alleging breach of
the Dealership Agreement by Honda due to failure to defend and
indemnify in the 2011 lawsuit, and related claims. Honda filed a
demurrer, and the trial court issued a tentative in favor of
Honda, but at the hearing on the demurrer the court permitted
Shernaman leave to file a first amended complaint, so the court
withdrew the tentative.
       In January 2021, Shernaman and McCullen filed a first
amended complaint against Honda, again alleging breach of the
Dealership Agreement and related claims. The amended
complaint newly alleged that Shernaman had paid McCullen
$100 towards the underlying $11,031,096 judgment (on the same
day they filed the first amended complaint).
       Honda again filed a demurrer, which the trial court
granted without leave to amend. The trial court found the
California choice of law clause in the Dealership Agreement
enforceable, that the clause encompassed California’s statutes of
limitations, and that the applicable statutes of limitations barred
all of the claims. The trial court then dismissed the case, and
this appeal followed.

                                   4
                            DISCUSSION
I.     Standard of Review
       A general demurrer challenges whether the allegations of a
complaint are sufficient to state a cause of action. (Code Civ.
Proc., § 430.10, subd. (e); SLPR, L.L.C. v. San Diego Unified Port
Dist. (2020) 49 Cal.App.5th 284, 316 (SLPR).) In evaluating the
sufficiency of the allegations, the court must accept the truth of
all material facts properly pleaded, but not contentions,
deductions, or conclusions of fact or law, and may also consider
matters that may be judicially noticed. (SLPR, supra, at p. 316.)
       Our review of the trial court’s judgment after sustaining a
demurrer is de novo. (Rakestraw v. California Physicians’ Service
(2000) 81 Cal.App.4th 39, 43.) On appeal, it is the plaintiff’s
burden to show error by the trial court in sustaining a demurrer,
and we may affirm on any ground stated in the demurrer without
regard to the trial court’s basis for decision. (SLPR, supra, 49
Cal.App.5th at p. 317.) Because a demurrer tests the legal
sufficiency of a complaint, on appeal “the plaintiff must show the
complaint alleges facts sufficient to establish every element of
each cause of action.” (Rakestraw, supra, at p. 43.)
       For the defense that a claim is time-barred to be successful
on general demurrer, the “defect must clearly and affirmatively
appear on the face of the complaint; it is not enough that the
complaint shows merely that the action may be barred.”
(McMahon v. Republic Van & Storage Co., Inc. (1963) 59 Cal.2d
871, 874; see also E–Fab, Inc. v. Accountants, Inc. Services (2007)
153 Cal.App.4th 1308, 1315 (E–Fab).)
II.    The Choice of Law Provision is Enforceable
       The first issue we must address is whether the choice of
law provision in the Dealership Agreement is enforceable.

                                    5
It provides that “[t]he Agreement is and shall be deemed to have
been entered into in California and shall be governed by and
construed according to the laws of the State of California.”
       We previously set forth the applicable analysis. As we
recited in Hughes Electronics Corp. v. Citibank Delaware (2004)
120 Cal.App.4th 251 (Hughes):
       “When California is the forum, disputes arising out of
contractual choice of law provisions are resolved in accordance
with the decision in Nedlloyd Lines B.V. v. Superior Court (1992)
3 Cal.4th 459 (Nedlloyd). In Nedlloyd, the Supreme Court
concluded California courts must apply the principles articulated
in the Restatement Second of Conflict of Laws (Restatement),
section 187, which strongly favor enforcement of choice of law
provisions, so long as those provisions are freely and voluntarily
agreed upon. (Nedlloyd, supra, 3 Cal.4th at pp. 464–465.) The
proper analytical approach, under Nedlloyd and the Restatement,
is to determine whether (1) the chosen state has a substantial
relationship to the parties or their transaction, or (2) any other
reasonable basis exists for the parties’ choice of law. If either test
is met, the choice of law provision will be enforced unless the
chosen state’s law is contrary to a fundamental public policy of
California. [Citations.]” (Hughes, supra, at p. 258.)
       Applying the first prong of the analysis, the Dealership
Agreement’s chosen state of California has a substantial
relationship to the parties because it is undisputed that Honda is
incorporated in California. “As to the initial inquiry, the parties
to a contract have a substantial relationship with the chosen
state if one or more of them is incorporated there. (Nedlloyd,
supra, 3 Cal.4th at p. 467.)” (Hambrecht & Quist Venture
Partners v. American Medical Internat., Inc. (1995)

                                     6
38 Cal.App.4th 1532, 1545–1546 (Hambrecht).) “It is not
necessary that each of the parties to the contract have an
enduring or permanent connection to the chosen state.
(Nedlloyd, supra, 3 Cal.4th at pp. 462, 467.)” (Hambrecht, supra,
at p. 1546.)
       Although not necessary, the second prong of the analysis is
also satisfied here. A party’s place of incorporation also meets
the alternative “reasonable basis” test. (Hambrecht, supra,
38 Cal.App.4th at p. 1546, citing Nedlloyd, supra, 3 Cal.4th at
p. 467.) Thus, Honda’s incorporation in California also meets the
reasonable basis test.
       Finally, the choice of law provision is not in conflict with
California’s public policy. Appellants do not argue otherwise,
although they assert that Missouri law should apply, specifically
its five year limitations period for contract claims (Mo. Rev. Stat.,
§ 516.120(1)), and its savings statute, which would relate
Appellants’ claims in the original complaint filed in Los Angeles
Superior Court back to the 2019 action in Missouri (Mo. Rev.
Stat., § 516.230). In contrast, applicable California statutes of
limitations are three and four years. (Code Civ. Proc., §§ 338(a),
337.) However, that California’s limitations period is shorter
than Missouri’s is not dispositive. Unless “restricted by statute,
California courts accord contracting parties substantial freedom
to modify the length of the statute of limitations,” including by
shortening the applicable limitations period, so the choice of law
provision is not contrary to California’s public policy.
(Hambrecht, supra, 38 Cal.App.4th at p. 1548.)
       Accordingly, the choice of law provision is enforceable.

                                     7
III.    The Choice of Law Provision Encompasses
        California’s Statutes of Limitations
        We must next determine whether the choice of law clause
incorporates California’s statutes of limitations, or whether there
is a question of fact as to whether Missouri law applies, as
Appellants argue.
        As our court stated previously in Hughes, our analysis is
informed by Hambrecht. (Hughes, supra, 120 Cal.App.4th at
p. 259, citing Hambrecht, supra, 38 Cal.App.4th at p. 1538.)
In Hambrecht, the court held that “a standard choice-of-law
provision (which states that a contract shall be governed by the
‘laws’ of a particular jurisdiction) incorporates the statutes of
limitations of the chosen state.” (Hambrecht, supra, 38
Cal.App.4th at p. 1536.) In Hambrecht, the contract stated that
it “ ‘shall be governed by and construed in accordance with the
laws of the State of Delaware ’ ” and the question before the court
was whether the “ ‘laws’ ” of Delaware included its statutes of
limitations. (Id. at p. 1539.) Here, the choice of law provision is
nearly identical, stating that the Dealership Agreement “shall be
governed by and construed according to the laws of the State of
California.” In Hambrecht, as here, Appellants also argued that
“laws” should not include the state’s statutes of limitations, but
the court concluded otherwise, holding, after reviewing the
Restatement, decisions by the United States and California
Supreme Courts, and several California appellate cases, that the
“unqualified reference to the ‘laws’ of Delaware referred to all of
that jurisdiction’s statutory laws, including its statutes of
limitation.” (Hughes, supra, 120 Cal.App.4th at p. 260, citing
Hambrecht, supra, 38 Cal.App.4th at pp. 1540, 1542.)

                                    8
       In Hughes, we applied the reasoning and conclusion of
Hambrecht and found that where the parties’ agreement stated
that it was “ ‘governed by the laws of the state of New York,’ ” the
term “laws” incorporated all of the state’s laws, rejecting the idea
that “when faced with an unqualified choice of law contractual
provision, a court is free to pick and choose which of a chosen
jurisdiction’s laws to apply.” (Hughes, supra, 120 Cal.App.4th at
pp. 259–261 [applying New York’s borrowing statute because it
was part of the laws of New York State].) Accordingly, following
our decision in Hughes, we cannot determine that the California
choice of law provision is enforceable and then pick and choose
which California laws to apply. “Laws” means all of California’s
laws. (See ibid.)
       Appellants’ arguments to the contrary are without merit.
They claim Missouri’s statutes of limitations should apply
because the choice of law clause does not explicitly state that
California’s statutes of limitation apply. But they also
contradictorily argue that California law deems a statute of
limitations a procedural matter and that absent an express
choice of law provision to the contrary a court applies its own
procedural law, citing Mave Enterprises, Inc. v. Travelers
Indemnity Co. (2013) 219 Cal.App.4th 1408, 1429.
       Appellants also attempt to distinguish Hambrecht by
arguing that the procedural posture here of a dismissal on a
demurrer is materially different than the posture in Hambrecht,
where there had been discovery and the defendant had filed an
answer. (See Hambrecht, supra, 38 Cal.App.4th at p. 1537.) But
the reasoned analysis of the meaning of the word “laws” in
Hambrecht, which we found persuasive in our own analysis of the
word in Hughes, concerned purely a legal question. (See Hughes,

                                    9
supra, 120 Cal.App.4th at pp. 259–261.) We do not see how
discovery or an answer by Honda would impact the outcome here.
Appellants simply make the conclusory assertion that the choice
of law analysis at this stage of the proceedings is “premature,”
and then cite facts connecting the parties and the Dealership
Agreement to Missouri. Appellants do not explain how these
facts would change our analysis of the meaning of the word
“laws,” let alone point to any applicable legal authority that
compels a different outcome.
       Based on Hughes and Hambrecht, the term “laws” in the
Dealership Agreement’s choice of law clause includes all
California laws, including its statutes of limitations, so we apply
California’s statutes of limitations.
IV. California’s Borrowing Statute Is Inapplicable
       Appellants next argue that California’s “borrowing statute,”
Code of Civil Procedure section 361, applies, and the trial court
erred by not applying it. Section 361 provides: “When a cause of
action has arisen in another state, or in a foreign country, and by
the laws thereof an action thereon cannot there be maintained
against a person by reason of the lapse of time, an action thereon
shall not be maintained against him in this state, except in favor
of one who has been a citizen of this state, and who has held the
cause of action from the time it accrued.” (Code Civ. Proc., § 361,
italics added.)
       By its plain text, the borrowing statute thus requires the
application of the foreign state’s statute of limitations when the
action both (1) arises in a foreign state and (2) would be
precluded by the limitations period in that state. (See Code Civ.
Proc., § 361.) This reading of the text is supported by the
reasoning behind borrowing statutes in general, which is to

                                   10
prevent forum shopping by plaintiffs seeking to evade another
state’s already-expired limitations period. (See Giest v. Sequoia
Ventures, Inc. (2000) 83 Cal.App.4th 300, 303 [“Many states have
adopted ‘borrowing statutes’ in order to prevent forum shopping
by plaintiffs. These statutes adopt the statute of limitations of
the state in which the action arose”].)
       As the trial court correctly found, the plain language of the
borrowing statute only applies to situations where the statute of
limitations has already lapsed in the foreign state, but, as
Appellant’s assert, the claims here have not yet lapsed under
Missouri’s statutes of limitations.2 The borrowing statute is thus
inapplicable here based on its plain terms.
       Appellants mischaracterize the holding in Dalkilic v. Titan
Corp. (S.D. Cal. 2007) 516 F.Supp.2d 1177 as inconsistent with
our reading and the trial court’s reading of Civil Procedure
section 361. In Dalkilic, the federal court applied California’s
borrowing statute to dismiss claims as untimely that arose in
Turkey and were barred by Turkey’s one-year statute of
limitations, but were not yet barred by California’s longer three-
year statute of limitations. (Dalkilic, supra, at pp. 1185–1186.)
Thus, the facts were directly the opposite of those here where the
statute of limitations in Missouri has not yet lapsed. The other
two cases cited by Appellants are irrelevant as they do not
concern Code Civil Procedure section 361. (See Chappell v.
Thompson (1913) 21 Cal.App. 136; Van Buskirk v. Kuhns (1913)
164 Cal. 472, 475.)

2      This is true unless the plaintiff has been a “citizen of this
state, and who has held the cause of action from the time it
accrued,” which Appellants do not argue is the case here.
(Code Civ. Proc., § 361.)

                                     11
       Code of Civil Procedure section 361 does not apply because
Appellant’s claims are not time-barred in Missouri.
V.     The Claims Are Time-Barred
       Having determined that California’s statutes of limitations
apply, we must determine whether the trial court correctly held
that Appellants’ claims are barred by the applicable statutes of
limitations. In evaluating whether a claim is time-barred, we
must determine (1) which statute of limitations applies and
(2) when the claim accrued. (E–Fab, supra, 153 Cal.App.4th at
p. 1316.) On appeal, the Appellants argue that the trial court
erred in its determination of when their claims began to accrue.3
       A.     Contract Based Claims (Four-Year Limitations
              Period)
       Appellants contend that the trial court erred in concluding
that the Dealership Agreement’s indemnification clause was only
for liability and not for loss, and thus determined that their
claims for (1) breach of contractual duty to defend, (2) breach of
contractual duty to indemnify, and (3) breach of implied covenant
of good faith and fair dealing began to accrue when the Missouri
judgment was entered against Shernaman in 2014. Using this
accrual date, the trial court concluded that the four-year
limitations period in Code of Civil Procedure section 337 ended in
April 2018, and this case was filed in June 2020—two years too
late.

3     The trial court found the claims barred by the applicable
four- and three-year statutes of limitations in Code of Civil
Procedure section 337 (breach of contract claims) and section 338,
subdivision (a) (California Vehicle Code claim).

                                   12
       “There are two classes of contracts of indemnity. In one
class the indemnitor engages to save the indemnitee from loss,
meaning actual loss. In the other class the indemnitor engages to
save the indemnitee from liability.” (Alberts v. American
Casualty Co. (1948) 88 Cal.App.2d 891, 898–899 (Alberts).) “The
same instrument may indemnify against actual loss and against
liability.” (Id. at p. 899.) “In the first class [loss] the indemnitee
must prove loss actually suffered by him.” (Ibid.) “In the second
class the indemnitee need not prove actual loss but only that he
has become liable.” (Ibid.)
       This distinction in the types of indemnity is critical because
claims for indemnity from liability and for indemnity from loss
accrue at different times. For indemnity against liability, the
statute of limitations begins to accrue “upon becoming liable.”
(Civ. Code, § 2778, subd. 1.) This is when “liability is legally
imposed.” (Alberts, supra, 88 Cal.App.2d at p. 899.) For
indemnity against loss, the statute of limitations begins to accrue
when the indemnitee makes a payment and thus suffers an
actual loss. (Civ. Code, § 2778, subd. 2; Alberts, supra, at p. 899
[“[L]iability for the loss does not arise until the debt has been
paid and the indemnitee has thus suffered a loss”].) In sum,
there is a distinction between when a claim begins to accrue for
what the Civil Code calls “an indemnity against liability” (Civ.
Code, § 2778, subd. 1) and when a claim begins to accrue for
indemnity against “loss,” which is defined by statute as
“indemnity against claims, or demands, or damages, or costs”
(id., subd. 2).
       The Dealership Agreement’s indemnification clause
provides that Honda “agrees to assume the defense of Dealer and
to indemnify Dealer against any money judgment, less any offset

                                     13
recovered by Dealer, in any lawsuit naming Dealer as a
defendant, where such a lawsuit relates to” breach of any Honda
warranty, “bodily injury or property damages claimed to have
been caused by a defect in design, manufacture, or assembly . . .”
or a misrepresentation by Honda.
      Honda argues, and the trial court concluded, that this is a
provision for indemnity against liability only, and not loss, based
on the phrase “any money judgment . . . in any lawsuit naming
Dealer as a defendant.” While Appellants concede that the
contact’s language covers indemnity against liability, they also
argue that it is a provision for indemnity against loss. They
argue that the phrase “American Honda agrees to assume the
defense of Dealer and to indemnify Dealer against any money
judgment” creates an “obligation to indemnify against loss.”
This argument is without merit.
      As Appellants recognize, the contractual language in the
Dealership Agreement must be given its plain and ordinary
meaning. (County of Fresno v. Fresno Deputy Sheriff’s Assn.
(2020) 51 Cal.App.5th 282, 292.) “Courts interpret contractual
indemnity provisions under the same rules governing other
contracts, with a view to determining the actual intent of the
parties.” (Maryland Casualty Co. v. Bailey & Sons, Inc. (1995) 35
Cal.App.4th 856, 864.) The indemnity provision states that
Honda agrees to “indemnify Dealer against any money judgment,
less any offset recovered by Dealer, in any lawsuit naming Dealer
as a defendant . . . . (Italics added.)” This plain language
commits Honda to indemnify Shernaman for its liability to a
third party in a “judgment” stemming from a “lawsuit,” and is
thus an indemnification clause for liability, not loss. (See, e.g.,
Alberts, supra, 88 Cal.App.2d at p. 899 [“Liability is established

                                   14
upon the rendition of a judgment against the indemnitee”].)
       Appellants claim that indemnification against a “judgment”
is indemnification against “loss,” but the cases they cite do not
support this proposition. They cite Gribaldo, Jacobs, Jones &
Associates v. Agrippina Versicherunges A. G. (1970) 3 Cal.3d 434,
446 (Gribaldo), which concerns a policy that “ ‘indemnifies the
Assured against any claim or claims for breach of professional
duty . . .’ ” and thus the court concluded “constitutes a contract of
indemnity as against loss or damage, rather than indemnity
against liability.” (Id. at p. 446.) Under Civil Code section 2778,
subdivision 2 and applicable case law, language regarding
indemnity for “claims” is categorized as indemnity for loss.
(Gribaldo, supra, 3 Cal.3d at pp. 446–447.) Appellants also cite
Valley Crest Landscape Development, Inc. v. Mission Pools of
Escondido, Inc. (2015) 238 Cal.App.4th 468, which involved an
indemnification provision expressly referring to “ ‘losses.’ ” (Id. at
p. 474.) There, the court found that the indemnity action
“accrue[d] when the indemnitor sustains the loss by paying the
money sought to be indemnified from the indemnitee.
[Citations.]” (Id. at p. 481.)
       In sum, the plain text of the Dealership Agreement applies
to indemnity for a “judgment” in a “lawsuit” and thus indemnity
for liability, not loss. (See Alberts, supra, 88 Cal.App.2d at
p. 899.)
       B.      California Vehicle Code Claim (Three-Year
               Limitations Period)
       Finally, Appellants claim that the trial court erred in
concluding that the three-year limitations period for their Vehicle
Code claim had expired. Appellants do not dispute that the
applicable statute of limitations for a claim under Vehicle Code

                                    15
section 11713.13, subdivision (f)(1) is that of an “action upon a
liability created by statute,” which is three years. (Code Civ.
Proc., § 338, subd. (a).) They argue only that their claim did not
begin to accrue until January 2019 when they filed suit against
Honda in Missouri state court seeking indemnification. Honda
asserts that the Vehicle Code claim began to accrue in April 2014
when the judgment was issued and the need for indemnification
arose.
       Vehicle Code section 11713.13, subdivision (f)(1) makes it
unlawful for a vehicle manufacturer to “[f]ail, upon demand, to
indemnify against any existing or former franchisee . . . from any
and all damages sustained and attorney’s fees and other expenses
reasonably incurred by the franchisee that result from or relate
to any claim made or asserted by a third party against the
franchisee to the extent the claim results from any of the
following [enumerated claims] . . . .”
       We are not aware of any case law directly examining when
a cause of action under Vehicle Code section 11713.13,
subdivision (f)(1) begins to accrue, and the parties do not point us
to any. Appellants rely solely upon Strafford v. Oil Tool Corp.
(1955) 133 Cal.App.2d 763 (Strafford) for the proposition that
“[w]here a demand is an integral part of a cause of action, the
statute of limitations does not run until demand is made,” (id. at
p. 765.), in support of their argument that the statute of
limitations commenced when they filed their January 2019
lawsuit against Honda demanding indemnification. However,
Appellants cite Strafford selectively, which in full states:
       “Where a demand is an integral part of a cause of action,
the statute of limitations does not run until demand is made.
The plaintiff cannot, however, indefinitely suspend the running of

                                   16
the statute by delaying to make a demand. The general rule is
that where demand is necessary to perfect a right of action and
no time therefor is specified in the contract, the demand must be
made within a reasonable time after it can lawfully be
made. What is a reasonable time depends upon the
circumstances of each case; but in the absence of peculiar
circumstances, a time coincident with the running of the statute
will be deemed reasonable, and if a demand is not made within
that period, the action will be barred. [Citations.] Where, as
here, a plaintiff has it in his power at all times to fix his right of
action by making a demand on defendant, such demand must be
made within a reasonable time after it can be lawfully made, and
such a demand must be made within the period of the statute of
limitations. [Citation.]” (Stafford, supra, 133 Cal.App.2d at pp.
765–766, italics added.)
       Accordingly, even assuming that Stafford, supra, is
applicable, which we need not decide, Shernaman should have
demanded indemnification within three years of when it could
have made a demand for indemnification under the Vehicle Code
(so, within three years of the Missouri judgment in 2014) and
could not indefinitely wait to make a demand of Honda. Here, it
first made a demand for indemnification five years later when it
filed the 2019 action, which is two years too late under Stafford.
(Stafford, supra, 133 Cal.App.2d at p. 766.)
       Honda cites Carrasco v. Greco Canning Co. (1943) 58
Cal.App.2d 673 for the proposition that “ ‘a cause of action for
money payable on demand accrues with the inception of the
obligation and without the necessity for any demand . . . .’ ”
(Id. at p. 675; see also Miguel v. Miguel (1920) 184 Cal. 311, 314
[“That a cause of action for money payable on demand accrues

                                     17
with the inception of the obligation and without the necessity for
any demand hardly requires the citation of authority”].) It thus
argues that Shernaman’s cause of action for indemnification
under the Vehicle Code began to accrue on April 24, 2014, when
the judgment was issued against it; therefore, Appellants were
required to bring suit within three years, by April 24, 2017. Thus
this suit, filed on June 26, 2020, is over three years too late.
       Regardless, we need not determine (for what appears would
be the first time) when a “demand” to indemnify under Vehicle
Code section 11713.13, subdivision (f)(1) needs to be made, or
when the limitations period begins to accrue. Appellants have
failed to carry their burden on appeal of establishing that the
trial court erred in finding their Vehicle Code claim barred by the
statute of limitations. We begin with the presumption that the
trial court’s judgment is correct, and the burden is on Appellants
to overcome this presumption. (Jameson v. Desta (2018) 5
Cal.5th 594, 608–609.) Appellants can overcome this
presumption only by supporting their contention with argument
and citations to authority and the record that demonstrate error.
(Cal. Rules of Court, rule 8.204(a)(1)(C); Hernandez v. First
Student, Inc. (2019) 37 Cal.App.5th 270, 276–277.) Appellants
rely solely on Stafford, which, as discussed above, does not help
them. Having cited only Stafford, which supports the trial court’s
conclusion that the demand from Shernaman to Honda for
indemnity must be made within three years of when the
judgement was entered in April 2014, Appellants have not met
their burden of showing that the trial court erred in finding their
Vehicle Code claims filed in June 2020 untimely.

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                         DISPOSITION
       The judgment of the trial court is affirmed. Defendant and
Respondent American Honda Motor Company, Inc. is entitled to
costs on appeal.

                                                               *
                                           HARUTUNIAN, J.
We concur:

             STRATTON, P. J.

             GRIMES, J.

*     Judge of the San Diego Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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