Court Opinion

ID: 9482230
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:44:09.212236+00
Date Added: 2024-06-11T17:48:51.093975
License: Public Domain

PREGERSON, Circuit Judge,
dissenting:
I do not believe that the four-year limitations period began to run when Martin inquired about his pension credits and the Construction Laborers Pension Trust (the “Trust”) denied his appeal. Moreover, even if I agreed with the majority’s view of the applicable limitations period, I would hold that equitable considerations preclude the Trust from relying on it in this case. Therefore, I must respectfully dissent.
I
The majority acknowledges that the California statute of limitations applicable to actions on written instruments should apply in this ease. It asserts, however, that when the cause of action arises is a question of federal law. Without disputing that general point, I would resolve that question of law by reference to ordinary principles of contract law. Under these principles, I believe that Martin is entitled to pursue his claims for both declaratory and injunctive relief.
A
The majority opinion overlooks the distinction between an action for coercive relief and an action for a declaratory judgment. Because the four-year statute of limitations has not begun to run on Martin’s claim for declaratory relief, I would reverse the district court’s judgment insofar as it precluded Martin from proceeding with his action for a declaratory judgment.
The Trust has a contractual obligation to pay pension benefits upon Martin’s retirement. If the Trust fails to perform at the time set for that performance, which is the time of Martin’s retirement, Martin may sue for breach of contract. In such a suit for breach of contract, Martin traditionally would be entitled to ask a court for a coercive remedy, such as damages or an injunction. See Wright, Law of Federal Courts 670-71 (4th ed. 1983). Martin’s right to sue for breach of contract is not defeated by the Trust’s announcement, years in advance of the date set for its performance, that it did not intend to perform, or that it did not intend to perform to the degree that Martin believes the contract requires.
The issue in this case is whether Martin can ask a court to adjudicate his rights under the contract before the time set for the Trust’s performance. There is an actual controversy about the rights and obligations of the parties. In such a case, even if the dispute has not yet reached the stage where Martin is entitled to seek a coercive remedy, an action for a declaratory judgment is appropriate. See id. at 671.
*1388The four-year statute of limitations does not bar the action for declaratory relief. Martin’s ability to file an action for a declaratory judgment begins when there is a real controversy about the rights and obligations of the parties and does not end until the statute of limitations forecloses his right to sue for coercive relief. See United Pacific/Reliance Insurance Co. v. DiDomenico, 173 Cal.App.3d 673, 676, 219 Cal.Rptr. 119, 120-21 (1985). In this case, the statute of limitations does not begin to run on Martin’s right to sue for coercive relief until the breach of contract occurs. See id. 219 Cal.Rptr. at 121. That breach could not occur until the Trust’s performance becomes due, after Martin’s retirement. The four-year statute of limitations, therefore, has not yet begun to run. It will not begin to run until sometime after Martin retires, applies for a pension, and the Trust pays out less than Martin believes is required. Thus, even if Martin does not yet have a cause of action for breach of contract, he is entitled to ask a court for a declaratory judgment. See id. 219 Cal. Rptr. at 120-21.
B
In addition to requesting declaratory relief, Martin asked for an injunction. To establish his case for injunctive relief in a contract action, Martin would ordinarily have to show that the Trust had breached its duty to perform. Martin does not allege that the Trust has breached its duty to perform, however, because the occasion for that performance, Martin’s retirement and application for pension benefits, has not yet occurred.
Although the time for the Trust’s performance has not yet arrived, Martin could sue for breach of contract by relying on the doctrine of breach by anticipatory repudiation. Under this doctrine, Martin could regard the Trust’s position on his pre-1962 credits as an announcement that the Trust did not intend to perform fully the contractual duties that Martin believed it was obligated to perform. Martin could thus treat the Trust’s position as a repudiation of its duties under the contract. Instead of waiting to sue until the time that the Trust’s performance became due, Martin could treat this anticipatory repudiation as a breach and ask the court to impose a coercive remedy. Thus Martin could sue for breach of contract even before the date that the Trust’s performance became due.
But although Martin may elect to treat a repudiation as a final breach, he is also entitled to await the repudiating party’s performance. See NAPA Association of Public Employees v. County of NAPA, 98 Cal.App.3d 263, 159 Cal.Rptr. 522, 526 n. 5 (1979); Brewer v. Simpson, 53 Cal.2d 567, 593, 2 Cal.Rptr. 609, 622-23, 349 P.2d 289, 302-03 (1960). Thus, the fact that Martin was entitled to file suit after the Trust’s repudiation does not mean that Martin was required to file such a suit or suffer the running of the statute of limitations.
Ordinarily, the statute of limitations does not begin to run until the allegedly breaching party fails to perform a contractual duty. The question in this case is whether the statute of limitations begins to run when one party announces, in advance of its obligation to perform, that it does not intend to perform as expected. The answer to that question is no. Under the doctrine of anticipatory repudiation, Martin had the choice to treat the repudiation as a final breach or to await the date for performance before regarding the contract as broken. See Brewer v. Simpson, 53 Cal.2d 567, 2 Cal.Rptr. 609, 622-23, 349 P.2d 289, 302-03 (1960), citing 4 Corbin, Contracts § 989 (1951). Applying the statute of limitations to bar Martin’s suit in this case would deprive him of that choice. “Defendant cannot accelerate the period of limitations by declaring in advance that she will not perform when the time comes.” Oeth v. Mason, 247 Cal.App.2d 805, 56 Cal.Rptr. 69, 74 (Cal.App.1967). As the court noted in Oeth:
The law is settled that when a contract is repudiated before the time fixed for performance, the promisee may, but need not, regard the anticipatory repudiation as a final breach. If she does not so elect, she may properly wait until the *1389time performance is due before regarding the contract as broken.

Id.

In this case, Martin was not obligated to regard the Trust’s 1982 repudiation as a final breach. Thus, the statute of limitations did not begin to run, and Martin was entitled to attempt to persuade the Trust to perform as he believed the contract required. When the Trust decided once again in 1987 that it was not persuaded by Martin’s efforts, then Martin was entitled to regard that 1987 decision as a breach by anticipatory repudiation. He was therefore entitled to bring this coercive action asking for specific performance of the Trust’s contractual duties. Because the final breach by repudiation occurred in 1987, Martin’s filing easily complies with the four-year statute of limitations. Therefore, I would reverse the district court’s judgment insofar as it held that the statute of limitations barred Martin’s action for injunctive relief.
II
Even if the majority were correct in holding that Martin’s suit was not filed within the applicable four-year limitations period, I would hold that equitable considerations preclude the Trust from relying on the protection of the limitations period in this case. Statutes of limitations can be equitably modified under either of the somewhat-related doctrines of equitable tolling and equitable estoppel. See Stallcop v. Kaiser Foundation Hospitals, 820 F.2d 1044, 1050 (9th Cir.1987). The principle of equitable tolling can apply if Martin was “excusably ignorant” of the limitations period. Id. The doctrine of equitable estoppel focuses on the actions of the defendant. See Naton v. Bank of California, 649 F.2d 691, 696 (9th Cir.1981).
If the majority’s view of the statute of limitations is correct, then employees like Martin prompt the running of the limitations period simply by inquiring about their pension credits. Under the majority’s view, employees who make no inquiry preserve their right to challenge the Trust’s calculations for four years after retirement, when the time for performance is due. But employees who inquire about their credits prompt the statute of limitations to begin running against them long before they retire. Under these circumstances, I believe that the Trust had a fiduciary duty, when it denied Martin’s appeal in 1982, to advise Martin that he had four years to challenge the denial in court and that the Trust intended to rely on the protection of that limitations period. The Trust offered Martin no such advice. I would hold that this breach of fiduciary duty estops the Trust from relying on the statute of limitations. Cf. Stallcop, 820 F.2d at 1050 (because defendant had no duty to notify plaintiff of limitations period, plaintiff had no right to equitable modification of limitations period).
Alternatively, I would hold that this breach of fiduciary duty tolled the running of the limitations period until Martin learned of the limitations period or learned of the Trust’s intention to rely on a four-year period. Ordinarily, a plaintiff who was represented by counsel is not “excusably ignorant” of a limitations period. Courts reason that a represented plaintiff has the means to learn her rights and can be charged with constructive knowledge of the law. Id. Although Martin was represented by counsel in this case, I do not believe he can be charged with constructive knowledge of the limitations period. The court decides today for the first time that the four-year limitations period can be triggered long before a pension fund’s performance is due, by an employee’s mere inquiry about pension credits. I do not believe that Martin should be charged with constructive knowledge of a legal development that had not yet occurred. This would be a different case had the Trust informed Martin in 1982 of its theory that a four-year limitations period was applicable and that the Trust intended to rely on the protection of that limitations period.
Because I would reverse the judgment of the district court, I respectfully dissent.