Court Opinion

ID: 7275470
Source: CourtListenerOpinion
Date Created: 2022-07-25 18:03:51.297203+00
Date Added: 2024-06-11T16:18:50.158546
License: Public Domain

Filed 7/25/22 Soheyly v. Trenk CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION TWO

 MORTEZA SOHEYLY et al.,                                                B316782

           Plaintiffs and Appellants,                                   (Los Angeles County
                                                                        Super. Ct. No. 21STCV25033)
           v.

 JOSEPH TRENK,

           Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of
Los Angeles County. Terry A. Green, Judge. Affirmed.
     Burgee & Abramoff and John G. Burgee for Plaintiffs and
Appellants.
     Joseph Trenk, in pro. per., for Defendant and Respondent.
              _________________________________
       Morteza Soheyly and Miryam Soheili (Appellants) appeal
from a dismissal order following the trial court’s ruling
sustaining the demurrer of respondent Joseph Trenk without
leave to amend. The trial court concluded that Appellants’ claims
for breach of contract and common counts are barred by the
statute of limitations.
       We have considered the dispute between the parties once
before. Both this lawsuit and a previous action arose from the
settlement in 2003 of a legal malpractice action that Appellants
had filed against Trenk. As part of that settlement, Trenk
provided Appellants with a note promising the payment of money
over time, and agreed to secure the note with a trust deed on his
house. Trenk stopped regular payments on the note in 2003 and
made only one additional payment in 2017 after Appellants had
demanded their money. Trenk then filed a quiet title action
seeking to void the trust deed on the house (the Quiet Title
Action).
       In Trenk v. Soheili (2020) 58 Cal.App.5th 1033 (Trenk), we
affirmed the trial court’s judgment quieting title in the house in
Trenk’s favor. We held that the trust deed was voidable because
the house was community property and Trenk’s wife had not
executed the deed.
       Following that decision, Appellants filed this action seeking
to enforce the note. The trial court ruled that the statute of
limitations had run on the note despite the 2017 payment.
       We affirm. The four-year time period to bring an action on
the note had long since expired at the time Trenk made the 2017
payment. Under Code of Civil Procedure section 360, which
controls here, that payment therefore could not revive Appellants’

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claim.1 Nor could it create a new obligation, which required a
promise “contained in some writing.” (§ 360.) Appellants’
complaint identified no such writing, and Appellants have not
made any showing that the complaint could be amended to allege
such a writing. The trial court therefore properly sustained
Trenk’s demurrer without leave to amend.
                         BACKGROUND
1.    Appellants’ Allegations
      Appellants’ complaint alleges that Appellants settled a
legal malpractice action against Trenk in 2003 for the amount of
$100,000 to be paid over a three-year period. Pursuant to the
written settlement agreement (Settlement Agreement), which
Appellants attached to their complaint, Trenk promised to pay
$10,000 upon execution of the agreement and $2,500 per month
over the next 36 months, beginning in May 2003. The payment
obligation was also evidenced by an “Installment Note” executed
by Trenk (Note). The obligation was secured by a deed of trust on
Trenk’s residence (Trust Deed).
      Trenk made the initial payment of $10,000 and six
subsequent payments of $2,500 each, but then “ceased making
payments after December 2003.” Appellants allege that they
contacted Trenk in or about October 2017 to demand payment.
In response, Trenk “offered to resume payments and made a
payment of $2,500 in October 2017.” Appellants also claim that
Trenk “offered to pay the outstanding principal balance due on
January 5, 2018 (without interest), further acknowledging his
debt.” However, Trenk made no further payment and Appellants

     1  Subsequent undesignated statutory references are to the
Code of Civil Procedure.

                                3
“began to foreclose” on the Trust Deed. In response, Trenk filed
his Quiet Title Action.
       The complaint asserts two causes of action for breach of
contract and one cause of action based on “common counts.”
2.     Procedural History
       In the Quiet Title Action, Trenk obtained a judgment
invalidating the Trust Deed. The facts and issues in that action
are described in our opinion in Trenk, and we therefore do not
repeat them here.
       On appeal from the judgment in that action, we affirmed
the trial court’s ruling canceling the Trust Deed on the ground
that Trenk’s wife had not executed the deed. (Trenk, supra, 58
Cal.App.5th at p. 1049.) We did not decide the question of
whether the statute of limitations had run on the obligation
created by the Note because we concluded that issue was
irrelevant to the validity of the Trust Deed. (Id. at p. 1049, fn.
11.) We explained that we left “the question whether the Note is
enforceable for future determination in the event that Appellants
attempt to collect on the Note as an unsecured debt.” (Ibid.)
       Appellants then made such an attempt by filing this action
on July 7, 2021. Trenk filed a demurrer raising the defenses of
res judicata and the statute of limitations.
       On September 24, 2021, the trial court sustained the
demurrer without leave to amend. The court rejected Trenk’s res
judicata arguments. With respect to the doctrine of claim
preclusion, the court concluded that the judgment in the Quiet
Title Action did not bar Appellants’ causes of action in this action
because Appellants’ causes of action based on the Note are
different from the claim at issue in the Quiet Title Action that the
Trust Deed was unenforceable. With respect to the doctrine of

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claim preclusion, the court concluded that, in light of this court’s
opinion in the Quiet Title Action, the issue of the statute of
limitations on the Note had not been finally adjudicated in that
action.
       However, the trial court ruled that the four-year statute of
limitations set forth in section 337 had run on the obligation
created by the Settlement Agreement and the Note. The court
found that the statute began to run on the date of the contract
breach, “which in this case would be the first missed payment.”
Thus, the statutory period expired “no later than the end of
2007.”
       The court rejected Appellants’ argument that Trenk’s 2017
payment extended the statutory time period. Citing section 360
and the decision in Kaichen’s Metal Mart, Inc. v. Ferro Cast Co.
(1995) 33 Cal.App.4th 8, the court reasoned that, absent a
written agreement, a payment on a promissory note can restart
the time period for filing a claim under the statute of limitations
“if and only if the statute has not yet fully run.” Because the
statute of limitations had already run by the time of Trenk’s 2017
payment, the court concluded that Trenk’s debt could be collected
only if Trenk had signed a new contract, and “[t]here is no
indication that such a new contract exists.”
                            DISCUSSION
1.     Standard of Review
       An order sustaining a demurrer is reviewed de novo to
determine whether the complaint states a cause of action as a
matter of law. (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494,
1501.) On appeal, we “ ‘treat the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions

                                 5
or conclusions of fact or law.’ ” (Blank v. Kirwan (1985) 39 Cal.3d
311, 318 (Blank).)
       In determining whether a complaint states a cause of
action, its allegations “must be liberally construed, with a view to
substantial justice between the parties.” (§ 452.) The complaint
must be given “a reasonable interpretation, reading it as a whole
and its parts in their context.” (Blank, supra, 39 Cal.3d at
p. 318.) A demurrer should not be sustained “ ‘when the plaintiff
has stated a cause of action under any possible legal theory.’ ”
(Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810,
quoting Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962,
967.)
       When a trial court sustains a demurrer without leave to
amend, the court’s decision not to permit further amendment is
reviewed for abuse of discretion. (§ 472c, subd. (a); Ellenberger v.
Espinosa (1994) 30 Cal.App.4th 943, 947.) If the complaint does
not state facts sufficient to constitute a cause of action, the
appellate court must determine whether there is a reasonable
possibility that the defect can be cured by amendment.
(Ellenberger, at p. 947.)
2.     Appellants’ Breach of Contract Claim Is
       Untimely
       Appellants do not dispute that their first cause of action for
breach of contract is barred by the statute of limitations. That
cause of action is based upon the original Settlement Agreement
and Promissory Note, which were executed in 2003. Appellants’
claim accrued in 2004 when Trenk breached these agreements by
failing to make required payments. (See Professional Collection
Consultants v. Lauron (2017) 8 Cal.App.5th 958, 966 [breach of
contract claim accrued upon failure to make payments at the

                                  6
contractually required time].) Even if the Settlement Agreement
and Promissory Note created a severable contract, with each
scheduled payment as a separately enforceable obligation,
Appellants’ claim expired in May 2010, four years after the date
for the last scheduled payment. (Armstrong Petroleum Corp. v.
Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1388
[“where performance of contractual obligations is severed into
intervals, as in installment contracts, the courts have found that
an action attacking the performance for any particular interval
must be brought within the period of limitations after the
particular performance was due”].)
       Appellants defend only the breach of contract claim that
they allege in their second cause of action. Appellants argue that
claim is viable because it is based on an alleged new contract that
was formed in 2017 when Trenk agreed to honor his debt and
made one additional payment. The fatal problem with this
theory is that Trenk’s promise to pay was not made in a new
writing.
       Section 360 requires such a writing. That section governs
the effect of an “acknowledgment or promise” on the running of
the statute of limitations. It provides that no such
acknowledgment or promise “is sufficient evidence of a new or
continuing contract” sufficient to avoid the bar of the statute of
limitations “unless the same is contained in some writing, signed
by the party to be charged thereby.” This requirement is
modified by a proviso that a payment on a promissory note in the
case of a “continuing contract” may start a new statutory period.
However, as the trial court correctly recognized, and as
Appellants acknowledge on appeal, this proviso applies only
when the statute of limitations has not yet run. That limitation

                                 7
is perfectly clear from the last clause of the section, which
provides that no payment “of itself shall revive a cause of action
once barred.” Section 360 therefore requires proof of a written
promise to create a new contract based on a prior debt.
        Appellants claimed at oral argument that the parties
created an entirely new oral contract as a result of Trenk’s
alleged promise to pay the prior debt, supported by the
consideration of Appellants’ forbearance in enforcing the Trust
Deed. Appellants claim that this new oral agreement, combined
with the 2017 payment, takes Trenk’s promise out of the scope of
section 360.
        The argument cannot be reconciled with the plain language
of section 360. The first sentence of that section provides in
relevant part that “[n]o . . . promise is sufficient evidence of a new
. . . contract, by which to take the case out of the operation of this
title, unless the same is contained in some writing, signed by the
party to be charged thereby.” (Italics added.) We need not
consider whether there might be some circumstance in which a
debtor could enter into a new oral contract with new rights and
responsibilities that would take the debtor’s promise outside the
scope of section 360. Appellants do not allege, nor do they argue,
that they entered into some entirely new contractual relationship
with Trenk of which their promised forbearance in foreclosing on
the Trust Deed was only a part. Rather, they allege that “Trenk’s
offer to resume payments and the payment made in October 2017
constitutes an acknowledgment of his debt to Plaintiffs.” Their
claim is that Trenk entered into a new agreement to pay his
preexisting debt. To be enforceable under section 360, such an
agreement had to be in writing.

                                  8
        Appellants did not allege any such written agreement in
their complaint. Appellants claimed only that when they
contacted Trenk in October 2017 to demand payment, “Trenk
offered to resume payments and made a payment of $2,500.00 in
October 2017.” Their allegation that Trenk “offered to pay the
outstanding principal balance due on January 5, 2018 (without
interest)” is similarly general. The complaint does not allege that
these promises to pay were memorialized in any writing.
        Appellants also do not identify any such written agreement
on appeal. Instead, citing the broad definition of a “writing”
under section 250 of the Evidence Code, Appellants claim that
Trenk’s October 2017 payment check satisfied the requirement
for “some writing” under Code of Civil Procedure section 360.
        Trenk’s October 2017 check was not sufficient to satisfy the
requirement of a written promise under section 360 for two
reasons. First, while the check might constitute a “writing”
signed by Trenk, it does not satisfy the further requirement that
Trenk’s “acknowledgment or promise” be “contained in” the
writing. (§ 360.) Section 360 plainly requires that the promise
itself be written. The check was simply a payment and did not
itself include any written promise other than a commitment to
honor the check.2

      2 The evidentiary importance of the requirement for a
written promise to support a new agreement to pay a time-barred
debt is apparent from the allegations in this case. Appellants
allege that Trenk promised to pay the outstanding principal on
January 5, 2018, but “without interest.” There is no allegation
that Appellants accepted this offer, and they later filed suit
seeking the principal amount along with “at least $126,000.00” in

                                 9
       Second, Appellants’ argument that a check paying a portion
of a time-barred contractual obligation can create sufficient
written evidence of a new enforceable promise is inconsistent
with the language of section 360. As mentioned, the last clause of
that section expressly states that “no such payment [on a
promissory note] of itself shall revive a cause of action once
barred.” Appellants’ interpretation would, in effect, create an
exception to this rule if such a payment is made by a signed check
rather than through some other payment method. There is no
legal or logical reason to read such an exception into the plain
language of section 360.
       Appellants’ breach of contract claim is therefore time-
barred.
3.     Appellant’s Third Cause of Action Does Not
       State a Timely Claim for Relief
       Appellants’ third cause of action is styled as a common
counts claim. The term “common counts” does not identify a
particular cause of action, but is simply a pleading device. “ ‘A
common count is not a specific cause of action . . . rather, it is a
simplified form of pleading normally used to aver the existence of
various forms of monetary indebtedness.’ ” (Korchemny v.
Piterman (2021) 68 Cal.App.5th 1032, 1047–1048, quoting
McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.) This
means that “ ‘[w]hen a common count is used as an alternative
way of seeking the same recovery demanded in a specific cause of

prejudgment interest. Thus, from the allegations in the
complaint it is not even clear that there was an oral agreement
on the terms of repayment. A written agreement is less likely to
suffer from such uncertainty.

                                10
action, and is based on the same facts, the common count is
demurrable if the cause of action is demurrable.’ ” (Ibid.) Thus,
to the extent Appellants’ common counts claim is based upon an
alleged breach of contract, it is untimely for the same reason as
their second cause of action.
       Appellants’ complaint refers to two other possible theories
of relief. Appellants’ third cause of action alleges that Trenk’s
“January 2018 offer to pay the principal balance constituted an
account stated between the parties that money was owed by
Defendants to Plaintiffs.” It also alleges that “the settlement
terms established an open book account pursuant to which
Defendants made payments applicable to reduce their debt to
Plaintiffs.” Neither theory will support a timely claim.
       Appellants’ “account stated” theory fails for two separate
reasons. First, the complaint does not state such a theory. An
“account stated” refers to the agreement that is formed when
parties resolve a dispute over the amount of a debt that is owed
and one party agrees to pay a specific sum. (See Fogarty v.
McGuire (1959) 170 Cal.App.2d 405, 409.) In contrast, when the
obligation to pay a specific amount arises from “a specialty, such
as a promissory note . . . no subsequent statement of the amount
due thereon, although agreed to by the payer, can supersede the
special promise so as to form the basis of an action as upon an
account stated to recover the original debt. The written promise
being higher evidence of the debt and the debtor being already
bound thereby, there could be no necessity for a resort to a
subsequent statement and promise to pay. Moreover, the debtor
being already completely bound for a specified sum, there is no
element of uncertainty to be settled, and no difficulty in
ascertaining the balance upon conflicting claims, which could

                                11
constitute a consideration for a new promise to pay, and therefore
such promise would be a nudum pactum.” (Rio Linda Poultry
Farms v. Fredericksen (1932) 121 Cal.App. 433, 435–436, citing
Bennett v. Potter (1919) 180 Cal. 736, 738–745.) Thus, where, as
here, a party simply promises to pay an already existing debt
that was created by an express contract, there is no “account
stated” forming a new contract.
      Second, even if Trenk’s alleged promise to pay the amount
that he owed constituted a new contract, it did not meet the
requirements of section 360. Section 337, which describes the
four-year statute of limitations applicable to written contracts,
also specifically applies to actions to recover upon a “book
account” and “an account stated based upon an account in
writing.” (§ 337, subd. (b).) Subdivision (d) of section 337 states
that the “period in which an action may be commenced under this
section shall only be extended pursuant to Section 360.” Thus,
the requirement in section 360 of a written agreement
establishing a new contract to pay a debt also applies to claims
based upon an account stated and an open book account.
      Appellants’ theory that Trenk’s debt was based on an open
book account fails for similar reasons. A book account is what the
name suggests. As defined in section 337a, it is a “detailed
statement which constitutes the principal record of one or more
transactions between a debtor and a creditor arising out of a
contract or some fiduciary relation, and shows the debits and
credits in connection therewith . . . and is kept in a reasonably
permanent form and manner,” such as a bound book or other
permanent form. Thus, the term typically refers to a record of
transactions in an ongoing financial relationship. Importantly,
absent an agreement, the concept cannot be applied to an

                                12
obligation created by an express contract with a fixed payment
date to which the statute of limitations applies. “It seems to be
well settled that monies which become due under an express
contract (such as rent due under a lease) cannot, in the absence of
a contrary agreement between the parties, be treated as items
under an open book account so as to allow the unpaid creditor to
evade or extend the statutory limitations period.” (Tsemetzin v.
Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334,
1343–1344, citing, inter alia, Parker v. Shell Oil Co. (1946) 29
Cal.2d 503, 507.)
       Moreover, section 360 would apply to any such agreement.
As mentioned, the four-year statute of limitation in section 337
also applies to a “book account,” and the statutory time period
may therefore be extended only as permitted under section 360.
(§ 337, subds. (b) & (d).) And section 360 requires a writing to
evidence both a “new or continuing contract.” (Italics added.)
Thus, Appellants’ “book account” theory requires a written
agreement showing that Trenk’s 2017 payment was based upon a
continuing obligation. Appellants have not alleged such a written
agreement.
4.     The Record Does Not Show Any Possibility of
       an Amended Complaint Alleging a Timely
       Claim
       “The issue of leave to amend is always open on appeal, even
if not raised by the plaintiff.” (City of Stockton v. Superior Court
(2007) 42 Cal.4th 730, 746.) However, “[t]he plaintiff has the
burden of proving that an amendment would cure the defect.”
(Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
       Although Appellants assert that the trial court should have
granted leave to amend, they do not explain how they could

                                13
amend their complaint to state a timely claim. As discussed
above, any such amendment would need, at a minimum, to
include an allegation of a written agreement by Trenk evidencing
a new or continuing obligation to pay on the Note. Appellants’
factual allegations do not identify any such written agreement.
Nothing in the record or in the argument on appeal suggests that
one exists. Under these circumstances, the trial court did not
abuse its discretion in denying leave to amend.3

      3  In light of our disposition, we do not reach Trenk’s
alternative contention that Appellants’ claims are barred under
res judicata principles. Trenk’s argument that collateral
estoppel, or issue preclusion, applies to Appellants’ statute of
limitations argument depends upon a showing both that the issue
was actually litigated and finally decided. (See Samara v. Matar
(2018) 5 Cal.5th 322, 326–327.) Both aspects of this showing are
questionable in light of our prior opinion in Trenk, which
expressly left open the question of the enforceability of the Note
for “future determination,” because deciding that question was
not necessary for the holding and the parties did not need to fully
litigate the issue. (See Trenk, supra, 58 Cal.App.5th at p. 1049,
fn. 11; see also Parkford Owners for a Better Community v.
Windeshausen (July 14, 2022) 2022 Cal.App.LEXIS 619 at *15
[“A trial court judgment determined to be moot on appeal and
dismissed has not been fully litigated, as appellate review of the
merits was never completed”].) Trenk’s argument that claim
preclusion applies to bar this action raises other complex
questions. Trenk’s argument is based on the proposition that
Appellants’ claim on the Note was a compulsory counterclaim in
his Quiet Title Action seeking to invalidate the Trust Deed. The
proposition is far from clear in light of the “one form of action
rule,” which requires a creditor to elect whether to sue on a note
or foreclose under a trust deed securing the note, and may result

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                       DISPOSITION
     The judgment is affirmed. Trenk is entitled to his costs on
appeal.
     NOT TO BE PUBLISHED.

                                            LUI, P. J.
We concur:

      ASHMANN-GERST, J.

      HOFFSTADT, J.

in waiver of the security if the creditor elects to sue on the note.
(See § 726; Security Pacific National Bank v. Wozab (1990) 51
Cal.3d 991, 997.) Because Appellants’ claims are clearly time
barred, we need not decide these procedural questions.

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