Court Opinion

ID: 9565701
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:26:12.491669+00
Date Added: 2024-06-11T09:19:50.114073
License: Public Domain

RICHARDSON, J.
— I concur in the reasoning of parts II and III of the majority opinion; I also agree that punitive damages, if properly awarded on all counts of the complaint, were not excessive. I respectfully dissent, however, from the judgment of affirmance, because I believe the statute of limitations barred much of respondents’ complaint. In my view, the “last overt act” doctrine should not be applied in civil cases.
As the majority concedes, the maxim that the statute of limitations on a “conspiracy” is tolled until commission of the “last overt act” originated in criminal law, where it remains the prevailing rule. (Grunewald v. United States (1957) 353 U.S. 391, 396-397 [1 L.Ed.2d 931, 938-939, 77 S.Ct. 963, 62 A.L.R.2d 1344]; People v. Zamora (1976) 18 Cal.3d 538, 548 [134 Cal.Rptr. 784, 557 P.2d 75]; People v. Crosby (1962) 58 Cal.2d 713, 728 [25 Cal.Rptr. 847, 375 P.2d 839]; see generally, Annot. 62 A.L.R.2d 1369, 1371-1375.) Criminal conspiracy is a punishable offense separate from the substantive crime to the commission of which the conspirators have agreed. (Pen. Code, § 182.) At common law, criminal sanctions could be imposed even where the conspirators had taken no action to accomplish the unlawful purpose of the conspiracy. (See Hyde v. United States (1912) 225 U.S. 347, 359 [56 L.Ed. 1114, 1123, 32 S.Ct. 793].) Modem statutes require some “overt act” in furtherance of the conspiracy as an element of the crime (e.g., Pen. Code, § 184); the most frequently stated reason for this rule is that it permits a conspirator to repent and withdraw from the scheme before any decisive action is taken. (E.g., People v. Olson (1965) 232 Cal.App.2d 480, 490 [42 Cal.Rptr. 760].) However, the substantive crime need not have been completed, nor must the “overt act” itself be criminal, because it is the agreement itself which forms the basis of prosecution. (People v. Saugstad (1962) 203 Cal.App.2d 536, 540 [21 Cal.Rptr. 740]; People v. Reed (1961) 188 Cal.App.2d 395, *792407 [10 Cal.Rptr. 536]; People v. Klinkenberg (1949) 90 Cal.App.2d 608, 635-636 [204 P.2d 47, 613]; People v. Corica (1942) 55 Cal.App.2d 130, 134 [130 P.2d 164].)
As we explained in Zamora, the “last overt act” rule in criminal conspiracy thus arises from an analytical focus on the continuation of the unlawful agreement as a criminal offense in and of itself (18 Cal.3d at pp. 548-549, fn. 7.) Where the purposes of the conspiracy can be consummated, if at all, only by successive acts over a period of time, the crime of conspiracy is deemed a “continuing” one; the successive “overt acts” in furtherance of the unlawful agreement “mark the duration, as well as the scope” of the crime. (Fiswick v. United States (1946) 329 U.S. 211, 216 [91 L.Ed. 196, 200, 67 S.Ct. 224]; see Yates v. United States (1957) 354 U.S. 298, 334 [1 L.Ed.2d 1356, 1384, 77 S.Ct. 1064].)
Civil conspiracy, on the other hand, has experienced an entirely different and separate development, (de Vries v. Brumback (1960) 53 Cal.2d 643, 649-650 [2 Cal.Rptr. 764, 349 P.2d 532].) The gist of an action charging civil conspiracy is not the agreement itself, but the damage suffered as the result of a tort or torts committed in furtherance of the joint design. No conspiracy, however atrocious, gives rise to any civil cause of action unless an underlying civil wrong, resulting in damage, is alleged and proven. (Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616, 631 [102 Cal.Rptr. 815, 498 P.2d 1063]; Chicago Title Ins. Co. v. Great Western Financial Corp. (1968) 69 Cal.2d 305, 316 [70 Cal.Rptr, 849, 444 P.2d 481]; Orloff v. Metropolitan Trust Co. (1941) 17 Cal.2d 484, 488 [110 P.2d 396].) Allegations of conspiracy add nothing whatever that is substantive to a civil complaint; their only purpose is to permit joinder as defendants of all parties who agreed to the tort, regardless of whether they directly participated in its commission. (Max Incorporated v. Woods (1927) 202 Cal. 675, 677-678 [262 P. 302]; Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, 64 [35 Cal.Rptr. 652].) The applicable statute of limitations for a civil conspiracy is that for the underlying tort. (Kenworthy v. Brown (1967) 248 Cal.App.2d 298, 301 [56 Cal.Rptr. 461]; Agnew v. Parks (1959) 172 Cal.App.2d 756, 765 [343 P.2d 118].)
These long established principles were applied by us in Bowman v. Wohlke (1913) 166 Cal. 121 [135 P. 37], to prevent the improper inclusion of separate torts in a single complaint under a “conspiracy” theory. There, plaintiffs joined claims for injury to person, property, and reputation, then generally not permitted under former Code of Civil *793Procedure section 427. (But see Code Civ. Proc., § 427.10.) When defendants appealed the verdict and denial of their new trial motion on grounds of misjoinder, plaintiffs asserted that such separate claims could be combined since the various torts alleged had been committed pursuant to a continuing conspiracy against them.
We rejected that view. “[I]t has been said,” we observed, “that ‘the allegation and proofs of a conspiracy in an action of this character is [sic] only important to connect a defendant with a transaction and to charge him with the acts and declarations of his co-conspirators, where otherwise he could not have been implicated.’ (Brackett v. Griswold, 112 N.Y. 454, . . . See, also, 8 Cyc. 647; Doremus v. Hennessey, 62 Ill.App. 391.) The effect of this well-settled doctrine in so far as the case before us is concerned is clear. The complaint alleged various causes of action for different torts, all committed, it is true, in pursuance of a single conspiracy, but each, nevertheless, giving rise to a separate cause of action for the injury caused by the particular wrongful act. Whether or not the various causes of action could properly be united depended on our statutes relating to the joinder of causes of action in one complaint.” (P. 126.)
Bowman thus represents this court’s clear view, not heretofore repudiated, that allegations of civil “conspiracy” do not change the legal nature and effect of causes of action for the separate underlying torts. Nonetheless, the majority, in a footnote, dismisses Bowman as inapposite. Rather, it relies upon a Court of Appeal decision, Schessler v. Keck (1954) 125 Cal.App.2d 827 [271 P.2d 588]. There, plaintiff sued three defendants for slanderous remarks allegedly made by them over a period of several years. She asserted that the remarks were part of a conspiracy to injure her in her profession. Only one of the publications had occurred within the one-year limitations period normally applicable to defamation actions. (Code Civ. Proc., § 340, subd. 3.) The two defendants to whom the earlier statements were attributed successfully demurred on grounds of the statute. The Court of Appeal reversed the judgment of dismissal.
Citing People v. Hess (1951) 104 Cal.App.2d 642 [234 P.2d 65], a criminal case, as its sole primary authority, the Schessler court concluded that the conspiracy allegations permitted suit against all defendants on all publications, since the statute did not begin to run on any of the torts until there was “a cessation of the wrongful acts committed in furtherance of the conspiracy.” (125 Cal.App.2d at p. 832.) This doctrine has *794concededly been acknowledged in a number of subsequent California appellate decisions. (E.g., Bedolla v. Logan & Frazer (1975) 52 Cal.App.3d 118, 136 [125 Cal.Rptr. 59] [finding “last overt act” occurred outside limitation period]; Kenworthy v. Brown, supra, 248 Cal.App.2d 298, 302 [same]; see Filice v. Boccardo (1962) 210 Cal.App.2d 843, 846 [26 Cal.Rptr. 789].)
Recognizing the confusion and potential abuse inherent in the Schessler rule, however, other districts of the Court of Appeal have resisted its full implications. In Agnew v. Parks, supra, 172 Cal.App.2d 756, for example, it was held that, despite allegations of “conspiracy,” the statute of limitations runs separately on each “separate, distinct and complete” act which violates the rights of another. Schessler was not mentioned. (P. 765.)
As the majority indicates, Agnew found plaintiff’s claim barred because her complaint revealed that the last “fraudulent” act therein alleged had occurred more than three years before suit was commenced. (P. 766.) Read in context, however, this holding only reaffirms the unassailable principle that an action for fraud, even if joined with conspiracy claims, must be filed within three years after the act constituting “fraud” takes place. (See Code Civ. Proc., § 338, subd. 4.) Agnew does not support a rule that commencement of the statute of limitations for all tortious acts in a conspiracy is blindly deferred until commission of the last “overt” act in the conspiracy.
More recently, in Rodriguez v. North American Aviation, Inc. (1967) 252 Cal.App.2d 889 [61 Cal.Rptr. 579], another conspiracy case involving multiple slander, the court applied the “last overt act” rule at the pleading stage, but only because it concluded that the complaint essentially sought damages only for the most recent, still timely publication. Significantly, and voicing its doubts, the Rodriguez court observed: “We have not been cited any case, nor has our research produced one, in which one overt act committed within the statutory period and one prior thereto executed in pursuance of a conspiracy, have been considered in relation to the statute of limitations, except Schessler v. Keck, supra, and in that case the issue is not clear-cut. . . . [If] If. . . plaintiff were to . . . seek recovery [for damages] . . . resulting from separate and completed acts of slander committed before the statutory period, it is doubtful that the action as to such acts and damages could escape the bar of the statute of limitations.” (Pp. 893-894.)
*795The majority suggests that appellants’ acts may be linked by the conspiracy into a “continuing wrong,” thereby tolling the statute of limitations until appellants’ tortious conduct finally ceased. For several reasons, I disagree.
First, the majority’s proposal ignores the well settled principle, discussed above, that the focus of a civil conspiracy action is indeed upon the separate torts, not the “continuing” nature of the scheme itself. Despite the majority’s protestations to the contrary, acceptance of any “last overt act” rule amounts to a concession that the continuing unlawful scheme is in itself a tort. This is clearly not the law (Bowman v. Wohlke, supra, 166 Cal. 121, 126), and the majority errs in characterizing the fraud as “a continuing wrong” (ante, pp. 787-788). Rather, there were several, separate, successive tortious acts, each one independently actionable.
Second, contrary to the majority’s suggestion, a “continuing wrong” doctrine is not justified by the equitable considerations raised in its defense. Rules in this area seek to balance “the practical purposes that a statute of limitations serves in our legal system” — i.e., avoidance of stale and open-ended claims — against “the practical needs of prospective plaintiffs” — i.e., preservation of an effective remedy for wrongful conduct. (Davies v. Krasna (1975) 14 Cal.3d 502, 512 [121 Cal.Rptr. 705, 535 P.2d 1161, 79 A.L.R.3d 807].) Accordingly, the law has developed numerous general safeguards, applicable to “conspiratorial” and “non-conspiratorial” torts alike, to assure that the strong public policies represented by the statute of limitations do not foreclose a plaintiff’s remedy for wrongs committed against him. For example, the statute of limitations on any claim is deferred until a cause of action has “accrued.” (Code Civ. Proc., § 312.) This occurs, at the earliest, when some “actual and appreciable damage” has resulted from a defendant’s wrongful act. (Davies v. Krasna, supra, 14 Cal.3d at pp. 513-514; Budd v. Nixen (1971) 6 Cal.3d 195, 200 [98 Cal.Rptr. 849, 491 P.2d 433].) Moreover, in appropriate cases, “accrual” may be further delayed until actual or constructive discovery of the claim (e.g., Code Civ. Proc., §§ 338, subd. 4 [fraud], 340.5 [medical malpractice]; Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 194 [98 Cal.Rptr. 837, 491 P.2d 421] [legal malpractice]; Coots v. Southern Pacific Co. (1958) 49 Cal.2d 805, 810 [322 P.2d 460] progressive industrial condition leading to disability; statute commences when disability occurs]; Avner v. Longridge Estates (1969) 272 Cal.App.2d 607, 616 [77 Cal.Rptr. 633] latent defects in *796subdivision lot]; Howe v. Pioneer Mfg. Co. (1968) 262 Cal.App.2d 330, 348 [68 Cal.Rptr. 617] [latent product defect].)
Each of these doctrines deals directly with the “practical problems of prospective plaintiffs” in asserting an effective remedy for damage wrongfully caused by another. They ensure that the limitations period will.not run before an injured party has had a realistic opportunity to sue. In contrast, the “last overt act” doctrine operates mechanically, without reference to plaintiff’s diligence, affording plaintiff the bonanza of a tolled statute for torts upon which he long since could have commenced suit.
Indeed, the majority so applies the rule here. Apparently conceding respondents’ April 1970 discovery of appellants’ previous tortious conduct, the majority would nonetheless toll the statute in spite of full discovery so long as unsophisticated plaintiffs continue to suffer the effects of the fraud. (Ante, pp. 787-788.) For obvious reasons, this novel theory is clearly contrary to prior California law, as the majority elsewhere {ante, pp. 788, 789) acknowledges (Davies v. Krasna, supra, 14 Cal.3d 502, 514; Teitelbaum v. Borders (1962) 206 Cal.App.2d 634, 637-638 [23 Cal.Rptr. 868]), and notions of fundamental fairness do not compel its adoption. Discovery of a cause of action necessarily implies the ability to act in vindication of one’s legal rights. (See, e.g., Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 101-103 [132 Cal.Rptr. 657, 553 P.2d 1129].)
The most fundamental difficulty with the “last overt act” rule, of course, is its fortuitous and random inequity. Where a single defendant is involved, plaintiff may clearly not avoid the statute of limitations on an earlier tort by waiting to commence suit until further tortious acts of the defendant have produced even greater damage. (Davies v. Krasna, supra, 14 Cal.3d at pp. 512-515.) There appears absolutely no reason why a different rule should apply simply because two or more persons “conspired” to commit the identical wrongs. On policy grounds plaintiffs should be encouraged to nip “conspiracies” in the bud. The “last overt act” rule applied to civil wrongs, on the other hand, encourages injured parties to sit by until the conspiratorial scheme has operated with full force and has run its extended ultimate course. The statute of limitations on each of the precedent causes of action which have fully accrued is meanwhile suspended in midair, as it were. Such a rule makes no sense, and defeats the purposes of the statute of limitations while serving no legitimate needs of injured plaintiffs.
*797Contrary to the majority’s suggestion the statute of limitations is not intended primarily to confer “repose” on deserving defendants. Its most important function, one the majority declines to analyze, is to avoid the problems of proof inherent in actions based on incidents long past. (Davies v. Krasna, supra, 14 Cal.3d at p. 512; Elkins v. Derby (1974) 12 Cal.3d 410, 417 [115 Cal.Rptr. 641, 525 P.2d 81, 71 A.L.R.3d 839].) By the time this action was filed in July 1973, acts occurring seven years before may well have receded in the memories of available witnesses. In fact, only one witness to the actual conspiracy was presented at trial. The instant case thus illustrates, rather than refutes, the need for certitude in the application of a statute of limitations.
It has been said that the numerous decisions of other jurisdictions on this issue present “a melange of inconsistent, irreconcilable, even contradictory statements of general ‘rules’ relating to the subject.” (Annot. 62 A.L.R.2d 1369, 1385.) My examination of these authorities fails to persuade me of the efficacy of a “last overt act” rule. The better reasoned view, I think, is that which is expressed in Universal Film Exchanges v. Swanson (D.Minn. 1958) 165 F.Supp. 95. There, the court succinctly repudiated the notion that separate torts may be “welded” into a single claim under the “hammer” of conspiracy allegations. (P. 98.)
I therefore reject the majority’s conclusion that the statute of limitations for separate tortious acts committed pursuant to a civil “conspiracy” is tolled until the “last overt act” in the conspiracy. Rather, the limitations period should be deemed to commence for each underlying tort when, a known injury to plaintiff occurring, a cause of action has “accrued” thereon according to the rules normally applicable, and in no event later than plaintiffs’ discovery of grounds for a cause of action. I would, accordingly, cling to our earlier Bowman rationale and disapprove Schessler v. Keck, supra, to the extent that it conflicts with these views.
Since the evidence before us would justify a finding that causes of action based on the 1966 loan “accrued” and were discovered no later than April 1970, more than three years prior to suit, appellants were entitled to instructions on the statute of limitations as to those claims. On the other hand, respondents’ claims that late charges were improperly extracted on the 1970 loan appear to have been asserted in timely fashion. Discovery and damage with respect to these fraudulent acts could not have arisen until March or April 1973, when plaintiffs were again faced *798with an unexpectedly high balloon payment. Suit was filed within three to four months thereafter. Accordingly, as a matter of law, this latter claim is not barred.
I would reverse the judgment.
Clark, J., concurred.
Appellants’ petition for a rehearing was denied September 12, 1979. Clark, J., and Richardson, J., were of the opinion that the petition should be granted.