Court Opinion

ID: 9839968
Source: CourtListenerOpinion
Date Created: 2023-09-14 19:04:26.373239+00
Date Added: 2024-06-11T09:42:45.189716
License: Public Domain

Filed 9/14/23 (unmodified opn. attached)
          CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                   SECOND APPELLATE DISTRICT

                               DIVISION TWO

 PIEDMONT CAPITAL                          B316372
 MANAGEMENT, L.L.C.,
                                           (Los Angeles County
        Plaintiff and Appellant,           Super. Ct. No.
                                           20STCV14138)
        v.
                                           ORDER MODIFYING
 RAYMOND MCELFISH,                         OPINION AND DENYING
                                           REHEARING
      Defendant and
 Respondent.                               NO CHANGE IN THE
                                           JUDGMENT

THE COURT:

It is ordered that the opinion filed herein on August 24, 2023, be
       modified as follows:

*     Pursuant to California Rules of Court, rules 8.1100 and
8.1110, this opinion is certified for publication as to all parts
except Part II of the Discussion.
1. On page 13, line 1, insert “(Jozovich)” immediately after
   “223-224” so the full citation reads:

      (Jozovich v. Central Cal. Berry Growers Assn. (1960)
      183 Cal.App.2d 216, 223-224 (Jozovich) [“a contract
      which calls for the payment of a specified sum for
      performance by the other party is not ‘severable’
      merely because payments are divided into
      installments”].)

2. On page 13, immediately following the paragraph that
   ends with “weight of authority set forth above” insert
   the following new paragraphs:

            McElfish resists our conclusion with three
      arguments.
            First, he argues that the acceleration clause
      was not discretionary (and hence that the duty to pay
      the entire amount is not divisible from the duty to
      make a single payment) because the HELOC
      agreement spells out that he would be “in default”
      the moment he failed to make even one payment.
      McElfish’s conclusion does not follow from its
      premise: Although the HELOC agreement provides
      that a single nonpayment puts the borrower “in
      default,” being in default is merely what gives the
      lender the option of invoking the acceleration clause
      in the first place. McElfish’s argument collapses the
      two events (default and acceleration) into a single

                          2
      event, and robs the discretionary acceleration clause
      of any effect in derogation of the principle that we
      cannot rewrite contracts. (E.g., 24th & Hoffman
      Investors, LLC v. Northfield Ins. Co. (2022) 82
      Cal.App.5th 825, 833 [courts “do not rewrite any
      provision of any contract”].)

3. On page 13, in the first sentence of the first full
   paragraph, delete the words “McElfish asserts” and
   replace them with “Second, and relatedly, McElfish
   argues” so the full sentence reads:

            Second, and relatedly, McElfish argues that
      lenders should not be allowed to include discretionary
      acceleration clauses in contracts because their very
      existence means that lenders are not obligated to sue
      for the full amount of a debt upon the first instance of
      a periodic nonpayment, which McElfish asserts is
      inconsistent with the policy behind statutes of
      limitations to encourage lawsuits as early as possible.

4. On page 14, immediately following the paragraph that
   ends with “undue delay” in line 8, insert the following
   new paragraph:

            Third and lastly, McElfish argues that a
      treatise and California case law dictate that a
      contract is divisible only when “‘performance of each
      party is divided into two or more parts,’” such that
      contractual duties are not divisible merely because

                           3
     the duty to pay for a single performance is broken up
     into multiple payments. (Jozovich, supra, 183
     Cal.App.2d at pp. 223-225, quoting 3 Williston,
     Contracts, p. 2408, § 860A (rev. ed.).) Applying this
     principle, McElfish continues, means that the duties
     owed under the HELOC agreement are not divisible
     because the lender had only a single performance
     (that is, loaning him money), such that McElfish’s
     duty to repay every month is a subset of a single
     performance broken up into multiple payments.
     McElfish’s argument ignores that the case law he
     cites is designed to set up a default rule for assessing
     the parties’ intent regarding divisibility, and when it
     is appropriate to infer divisibility from a contractual
     duty to make payments over time. As explained
     above, in this case, the parties have—by their express
     designation of a maturity date and use of a clause
     that grants the lender discretion over whether to
     accelerate that maturity date—explicitly evinced a
     mutual intent to make the duty to pay the whole
     amount distinct from (and hence divisible from) the
     duty to make a single payment.

5. On page 14, line 11, immediately after “McElfish makes
   two further arguments” insert “, unrelated to the issue
   of divisibility,” so the full sentence reads:

           McElfish makes two further arguments,
     unrelated to the issue of divisibility, for why the trial

                          4
            court was correct to dismiss Piedmont’s breach of
            contract claim.

                          *     *     *

There is no change in the judgment.

Respondent’s petition for rehearing is denied.

——————————————————————————————
ASHMANN-GERST, Acting P. J. CHAVEZ, J. HOFFSTADT, J.

                                5
Filed 8/24/23 (unmodified opinion)
          CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                   SECOND APPELLATE DISTRICT

                               DIVISION TWO

 PIEDMONT CAPITAL                       B316372
 MANAGEMENT, L.L.C.,
                                        (Los Angeles County
        Plaintiff and Appellant,        Super. Ct. No.
                                        20STCV14138)
        v.

 RAYMOND MCELFISH,

      Defendant and
 Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Maureen Duffy-Lewis, Judge. Reversed.

*     Pursuant to California Rules of Court, rules 8.1100 and
8.1110, this opinion is certified for publication as to all parts
except Part II of the Discussion.
     Wright, Finlay & Zak and Jonathan D. Fink for Plaintiff
and Appellant.

     Raymond McElfish, in pro. per., for Defendant and
Respondent.

                              ******
      The statute of limitations for a breach of contract claim
begins to run at the time of breach (that is, when one party fails
to perform as contractually required). (Aryeh v. Canon Business
Solutions, Inc. (2013) 55 Cal.4th 1185, 1199 (Aryeh).) Where a
contract imposes on a party multiple duties that are divisible,
however, a breach of each divisible duty gives rise to a separate
breach-of-contract claim, each with its own limitations period
that begins to run at the time of each breach. (Eloquence Corp. v.
Home Consignment Center (2020) 49 Cal.App.5th 655, 661
(Eloquence).) Here, we confront how this framework applies to a
home equity line of credit (HELOC) agreement that requires the
borrower to make monthly payments, but also sets a separate due
date for the full debt and contains a discretionary acceleration
clause that grants the lender the choice whether to demand
immediate payment of the full amount if the borrower fails to
make a monthly payment. We must thus ask: Is the borrower’s
duty to make a monthly payment under such a HELOC
agreement indivisible from the borrower’s duty to pay the full
amount (such that the statute of limitations to recover the full
amount begins to run upon the first missed monthly payment), or
are the duties divisible (such that the statute of limitations to
recover the full amount is not necessarily triggered by a missed
monthly payment)? We hold it is the latter, chiefly because the

                                2
HELOC agreement in this case—by setting a fixed maturity date
for the full amount and leaving it to the discretion of the lender
whether to accelerate that date—necessarily contemplates that a
breach as to a monthly payment does not constitute a breach as
to the full amount. Because the trial court came to a contrary
conclusion, and dismissed the lender’s complaint as untimely on
that basis, we reverse.
         FACTS AND PROCEDURAL BACKGROUND
I.     Facts
       In 2006, Raymond McElfish (McElfish) owned real property
located at 3546 Multiview Drive in Los Angeles, California (the
property). That year, he executed two deeds of trust against the
property.
       On March 3, 2006, McElfish executed a deed of trust in
favor of MortgageIt, Inc.
       On June 27, 2006, McElfish obtained a HELOC from
National City Bank, memorialized in an Equity Reserve
Agreement and secured by a deed of trust against the property
(collectively, the HELOC agreement). The Equity Reserve
Agreement states in pertinent part that: (1) McElfish could take
“cash advances” against the credit line (of up to $150,000) during
a “Draw Period” of 10 years; (2) McElfish then had 20 years—
until June 27, 2036—to repay the amount drawn (plus interest
and finance charges)1; (3) McElfish was required to make
monthly payments toward repaying the outstanding balance; and
(4) National City Bank could “require” McElfish to “pay the entire

1     This 20-year maturity date applied because McElfish
borrowed more than $10,000; had he borrowed less, the maturity
date would be 10 years after the draw period ended (that is, June
27, 2026).

                                3
outstanding balance in one payment” if he “breach[ed] a material
obligation,” which was defined to include “not meet[ing] the
repayment terms.” The deed of trust contained parallel
provisions, including that National City Bank had the “option” to
“accelerate” the debt and demand that “all or any part” of the
outstanding debt “become immediately due and payable” “upon
the occurrence . . . or anytime thereafter” of a “default” by
McElfish by “fail[ing] to make a payment when due.” National
City Bank further reserved the right to “delay exercising any of
its rights” under the agreement “without losing” those rights.
       On April 1, 2011, McElfish did not make his monthly
HELOC payment. He has not made a payment since.
       In December 2012, MortgageIt, Inc. foreclosed on its deed of
trust and sold McElfish’s property. The foreclosure sale did not
net any surplus funds that could pay off the HELOC debt.
       On October 10, 2019, Piedmont Capital, L.L.C.
(Piedmont)—a debt buyer—purchased the HELOC debt.2 That
same day, Piedmont sent McElfish a “Notice of Acceleration of
Debt and 30-Day Demand for Payment.” Piedmont formally
notified McElfish that it was accelerating the full amount of the
HELOC debt owed (that is, $147,569.80 as of the date of the
notice) because he was “in default . . . for failing to pay the
required monthly Loan installments when due.”3 McElfish did
not make any payments in response.

2    There were two interim transfers of the debt between
National City Bank’s predecessor and Piedmont.

3     The HELOC agreement defined “default” to also include
“[a]ny action or inaction” by McElfish that “adversely affect[ed]”
the collateral securing the HELOC debt, and Piedmont’s

                                 4
II.     Procedural Background
        On April 13, 2020, Piedmont sued McElfish. Following a
demurrer to the original complaint sustained with leave to
amend, Piedmont filed the operative first amended complaint for
(1) breach of contract, (2) money lent, (3) money had and
received, and (4) declaratory relief. Although Piedmont alleged
that the full amount of the HELOC debt McElfish owed totaled
$186,587.26, Piedmont conceded that it was “not seeking to
collect on any [amounts] that were already barred by the
applicable statute of limitations at the time [the] action was
filed.”
        McElfish demurred, chiefly on the ground that Piedmont’s
2020 lawsuit was barred by the four-year statute of limitations
for breach of contract because the limitations period was
triggered when defendant first missed a payment in 2011—not
when Piedmont exercised the acceleration clause in October 2019
as alleged in the operative complaint. Following briefing and a
hearing, the trial court sustained McElfish’s demurrer without
leave to amend. The court ruled that the HELOC agreement was
“not an installment contract,” so the limitations period ran “from
the date of the last payment in 2011” and Piedmont’s 2020
lawsuit therefore was time-barred.
        Following the entry of judgment for McElfish, Piedmont
filed this timely appeal.
                            DISCUSSION
        Piedmont argues that the trial court erred in sustaining the
demurrer without leave to amend on statute of limitations
grounds.

acceleration notice identified the foreclosure sale of McElfish’s
property as another way in which he had defaulted.

                                 5
       In assessing whether the trial court erred in this ruling, we
ask two questions: “(1) Was the demurrer properly sustained;
and (2) Was leave to amend properly denied?” (Shaeffer v. Califia
Farms, LLC (2020) 44 Cal.App.5th 1125, 1134 (Shaeffer).)
       In answering the first question, we ask “‘“whether the
complaint states facts sufficient to constitute a cause of action.”’”
(Centinela Freeman Emergency Medical Associates v. Health Net
of Cal., Inc. (2016) 1 Cal.5th 994, 1010; Cal. Dept. of Tax & Fee
Admin. v. Superior Court (2020) 48 Cal.App.5th 922, 929 (Tax &
Fee Admin.); see generally Code Civ. Proc., § 430.10, subd. (e).)
In undertaking this inquiry, we accept as true “all material facts
properly pled” in the operative complaint (Winn v. Pioneer
Medical Group, Inc. (2016) 63 Cal.4th 148, 152; Tax & Fee
Admin., at p. 929) as well as those facts appearing in the exhibits
attached to it, giving “‘“precedence”’” to the facts in the exhibits if
they “‘“contradict the allegations”’” (Gray v. Dignity Health (2021)
70 Cal.App.5th 225, 236, fn. 10; Brakke v. Economic Concepts,
Inc. (2013) 213 Cal.App.4th 761, 767). A complaint does not state
facts sufficient to constitute a cause of action when it shows, on
its face, that the cause of action is barred by the applicable
statute of limitations. (County of Los Angeles v. Commission on
State Mandates (2007) 150 Cal.App.4th 898, 912; Doe v. Roman
Catholic Archbishop of Los Angeles (2016) 247 Cal.App.4th 953,
960.)
       In answering the second question, we ask “‘“whether
‘“‘there is a reasonable possibility that the defect [in the operative
complaint] can be cured by amendment.’”’”’” (Shaeffer, supra, 44
Cal.App.5th at p. 1134; Loeffler v. Target Corp. (2014) 58 Cal.4th
1081, 1100.) We review the trial court’s ruling regarding the first
question de novo, and review its ruling regarding the second for

                                  6
an abuse of discretion. (People ex rel. Harris v. Pac Anchor
Transportation, Inc. (2014) 59 Cal.4th 772, 777; Branick v.
Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.)
I.     Timeliness of Breach of Contract Claim
       The trial court dismissed Piedmont’s breach of contract
claim as untimely.
       A statute of limitations is the period during which, “in the
judgment of the Legislature,” a plaintiff must “‘institut[e] suit’” or
be barred. (Pooshs v. Philip Morris USA, Inc. (2011) 51 Cal.4th
788, 797; Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th
797, 806 (Fox); Aryeh, supra, 55 Cal.4th at p. 1191.) A statute of
limitations is triggered, and thus the legislatively prescribed
limitations period begins to run, when a claim “accrues”—that is,
when all elements of the claim have occurred. (Fox, at p. 806;
Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25
Cal.4th 809, 815; Code Civ. Proc., § 312.) A breach of contract
claim has four elements—namely, “(1) the existence of [a]
contract, (2) plaintiff’s performance or excuse for
nonperformance, (3) defendant’s breach, and (4) the resulting
damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman
(2011) 51 Cal.4th 811, 821.) Because the very existence of a
contract is what gives rise to the duty to perform, and because
damages generally flow from the breach of that duty, the statute
of limitations period for most breach of contract claims begins to
run when a party breaches that contract. (E.g., Church v.
Jamison (2006) 143 Cal.App.4th 1568, 1583 [“a cause of action for
breach of contract accrues for statute of limitations purposes only
after there has been a breach of the contract”]; Cochran v.
Cochran (1997) 56 Cal.App.4th 1115, 1120 [same].)

                                  7
       Applying these principles is relatively simple when a
contract obligates a party to the contract to perform its
contractual duties on a single, specified occasion. In that
instance, the party’s failure to perform on that occasion
constitutes a breach of the whole contract, and the statute of
limitations for a claim for breach of that whole contract begins to
run when the party fails to perform. (Armstrong Petroleum Corp.
v. Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1389
(Armstrong) [if parties intend to make “an entire contract, not a
severable one, the courts will not find it divisible despite periodic
performance”].) But what if the contract obligates a party to the
contract to perform its duties on several separate occasions?
Does the failure to perform on one occasion constitute a breach of
the whole contract? If so, the statute of limitations for a claim for
breach of a portion and the whole contract would begin to run
upon the first breach. (Armstrong, at p. 1389.) Or does each
failure to perform on a particular occasion give rise to a separate
breach of contract? If so, each breach would trigger its own
statute of limitations, and a plaintiff could sue for any breaches
falling within the limitations period. (Aryeh, supra, 55 Cal.4th at
pp. 1198-1200 [“separate, recurring invasions of the same right
can trigger their own statute of limitations” and “damages arising
from those breaches falling within the limitations period” are
recoverable].)
       The answer turns on whether the various contractual
duties are divisible. (Armstrong, supra, 116 Cal.App.4th at pp.
1388-1389 [where “‘breaches of [a contract’s] severable parts give
rise to separate causes of action, the statute of limitations will
generally begin to run at the time of each breach’” and “‘each
cause of action for breach of a divisible part may accrue at a

                                 8
different time’”]; Conway v. Bughouse, Inc. (1980) 105 Cal.App.3d
194, 199-200 [where “each payment is separable from the others
and is not a part of a total payment, the agreement” was
considered severable “for purposes of determination of the
application of the statute of limitations”]; Eloquence, supra, 49
Cal.App.5th at p. 661 [“Where divisible, a cause of action for
breach of performance as to any particular interval must be
brought within the period of limitations after that particular
performance was due”]; County of El Dorado v. Superior Court
(2019) 42 Cal.App.5th 620, 627 [“Where there is an ongoing
severable wrong, a limitations period generally runs at the time
of each breach, making actionable any breaches that occur within
the limitations period, even if the earlier breaches are untimely”];
Gilkyson v. Disney Enterprises, Inc. (2016) 244 Cal.App.4th 1336,
1341 [continuous accrual doctrine makes “each breach of a
recurring obligation . . . independently actionable”].)
       Because the very existence of a contract is the product of
the contracting parties’ mutual intent (American Employers
Group, Inc. v. Employment Development Dept. (2007) 154
Cal.App.4th 836, 846-847 [“‘[t]here is no contract until there has
been a meeting of the minds on all material points’”]), the
subsidiary question of whether contractual duties are divisible—
and hence constitute separate breaches each triggering a
separate statute of limitations periods—is also a function of the
“‘“objective manifestations of the parties’ [mutual] intent.”’”
(Eloquence, supra, 49 Cal.App.5th at p. 661; Armstrong, supra,
116 Cal.App.4th at p. 1389; Civ. Code, § 1636 [“mutual intention
of the parties” controls].) In ascertaining this intent, courts are
to examine (1) the plain text of the contract; and, to the extent it
exists, (2) “‘“extrinsic evidence of such objective matters,”’” such

                                 9
as (a) “‘“the surrounding circumstances under which the parties
negotiated or entered into the contract,”’” (b) the “‘“nature and
subject matter of the contract,”’” and (c) “‘“the subsequent
conduct of the parties.”’” (Eloquence, at p. 661; see generally
Nelson v. Dual Diagnosis Treatment Center, Inc. (2022) 77
Cal.App.5th 643, 654 [“the best indicator of the parties’ intent in
a written contract is the words they chose for the agreement”];
Civ. Code, § 1638 [“language of a contract is to govern its
interpretation”].)
       It is undisputed that the HELOC agreement in this case
obligated McElfish to make monthly payments, and thus to
perform his contractual duties on several occasions. (Cf. First-
Trust Joint Stock Land Bank of Chicago v. Meredith (1936) 5
Cal.2d 214, 218 [promissory note and mortgage deed “should be
construed together and read as one contract”].) But was
McElfish’s duty to make those monthly payments divisible from
his duty to pay the full amount of the loan? We conclude that the
answer is “yes.” That is because the plain terms of the HELOC
agreement4 obligated McElfish to pay the full, outstanding
balance on the line of credit in 2036 while simultaneously
granting the lender—now, Piedmont—the choice whether to
accelerate that maturity date when McElfish missed a monthly
payment or at “anytime thereafter.” By granting the lender that
choice, and by explicitly reserving the lender’s ability to “delay
exercising” this right “without losing [it],” the HELOC agreement
necessarily contemplates that a breach of McElfish’s duty to
make monthly payments was divisible from his duty to pay the

4     Not surprisingly given that this case is on appeal from a
demurrer, the parties did not—and, indeed, could not—adduce
any extrinsic evidence of intent.

                                10
full amount.5 (See Burrill v. Robert Marsh & Co. (1934) 138
Cal.App. 101, 107 [phrase “any time thereafter” grants the
creditor “the widest possible latitude in time within which to
act”]; see generally Aristocrat Highway Displays, Inc. v. Stricklen
(1945) 68 Cal.App.2d 788, 791-792 [acceleration clause advances
the date of payment for the total, as-yet-unpaid balance before
that balance otherwise matures]; 5 Miller & Starr, Cal. Real
Estate (4th ed. 2015) § 13:130, p. 488 [same].) Thus, each breach
of duty to make a monthly payment gives rise to its own breach-
of-contract claim with its own limitations period.
       Because the statute of limitations period for a breach of
contract claim is four years (Code Civ. Proc., § 337),6 this means

5      Both discretionary acceleration clauses and mandatory
(that is, automatic) acceleration clauses require the lender to
take “affirmative action”—either to elect acceleration (as to
discretionary clauses) (Trigg v. Arnott (1937) 22 Cal.App.2d 455,
458 (Trigg)) or to invoke acceleration (as to mandatory clauses)
(ibid.; Jones v. Wilton (1938) 10 Cal.2d 493, 500). Because the
HELOC agreement in this case contains a discretionary
acceleration clause, we need not decide whether one with a
mandatory acceleration clause—even if the law requires some
affirmative act to invoke it—reflects an intent to make a breach
of a monthly payment obligation indivisible from a breach of the
obligation to pay the full debt.

6      For the first time in its reply brief, Piedmont suggests that
the agreement is governed by a six-year limitations period under
Ohio law. Because Piedmont failed to timely or substantively
preserve this argument, we deem it waived. (People v. Tully
(2012) 54 Cal.4th 952, 1075 [“arguments made for the first time
in a reply brief will not be entertained”]; Cahill v. San Diego Gas
& Electric Co. (2011) 194 Cal.App.4th 939, 956 [argument not
supported with “‘“reasoned argument”’” is waived].)

                                 11
that Piedmont’s 2020 lawsuit is timely as to all missed monthly
payments within the four years preceding its filing as well as
timely as to all future payments because Piedmont accelerated
those payments within that four-year “look back” period. (Trigg,
supra, 22 Cal.App.2d at pp. 458-459; Webster Bank NA v. Mutka
(Ariz.Ct.App. 2021) 481 P.3d 1173, 1174-1175 [holding that “the
statute of limitations does not begin to run on future installments
due under a HELOC until the lender accelerates the debt”]; see
also Aryeh, supra, 55 Cal.4th at p. 1192 [noting that suit “may be
partially time-barred as to older events but timely as to those
within the applicable limitations period”]; Armstrong, supra, 116
Cal.App.4th at p. 1388 [same].)
       The trial court and the parties below focused solely on
whether the HELOC agreement was a so-called “installment
contract,” and treated that determination as being dispositive of
the statute of limitations issue. This was error. To begin, the
term “installment contract” is a term of art used in a panoply of
contexts, many of which have nothing to do with statutes of
limitations for breach of contract claims. (E.g., Civ. Code, §§
1802.6, 1803.2 [defining “retail installment contract” for purposes
of the Unruh Act (Civ. Code, § 1801 et seq.) governing rules for
financing such contacts]; Hartford Life & Accident Ins. Co. v.
White (N.D.Cal. June 25, 2010, No. C 09-05668 JSW) 2010
U.S.Dist.LEXIS 63747, *9-*11 [examining timeliness of claim for
attorney fees under an installment contract].) More to the point,
the fact that the HELOC agreement in this case was or was not
an “installment contract” because it obligated McElfish to make
periodic (in this case, monthly) payments is—as we explain
above—merely “step one” of the pertinent inquiry into how to
apply the statute of limitations. (Jozovich v. Central Cal. Berry

                                12
Growers Assn. (1960) 183 Cal.App.2d 216, 223-224 [“a contract
which calls for the payment of a specified sum for performance by
the other party is not ‘severable’ merely because payments are
divided into installments”].) “Step two” requires a court to
determine whether or not the duty to make a monthly payment is
divisible from the duty to pay the full amount of the debt.
Neither the trial court nor Piedmont took that second step. To be
sure, the decision in Bank of America National Trust & Savings
Assn. v. McLaughlin (1957) 152 Cal.App.2d Supp. 911, 915
(McLaughlin) suggests that there is no need for a second step and
any contract that calls for periodic payments is an “installment
contract” which gives rise to separate breach of contract claims
without any need to examine the parties’ intent as to divisibility.
We reject that suggestion—and McLaughlin—as being
inconsistent with the greater (and more binding) weight of
authority set forth above.
       McElfish asserts that lenders should not be allowed to
include discretionary acceleration clauses in contracts because
their very existence means that lenders are not obligated to sue
for the full amount of a debt upon the first instance of a periodic
nonpayment, which McElfish asserts is inconsistent with the
policy behind statutes of limitations to encourage lawsuits as
early as possible. (Fox, supra, 35 Cal.4th at p. 806 [discussing
policies].) We reject this assertion. Contrary to what McElfish
urges, we are not at liberty to disregard a discretionary
acceleration clause because it is a mutually agreed-upon term of
the contract. (Boghos v. Certain Underwriters at Lloyd’s of
London (2005) 36 Cal.4th 495, 503 [courts must “disfavor
constructions of contractual provisions that would render other
provisions surplusage”]); Brandwein v. Butler (2013) 218

                                13
Cal.App.4th 1485, 1507; Civ. Code, § 1641.) Further, courts have
already adopted the doctrine of waiver to serve as a “backstop” of
sorts and to bar claims if a lender has unduly delayed in
exercising even a discretionary acceleration clause (Fletcher v.
Dennison (1894) 101 Cal.292, 294; Tourny v. Bryan (1924) 66
Cal.App.426, 430; Holland v. Paddock (1956) 142 Cal.App.2d 534,
538), although no argument has been made here regarding such
undue delay.
II.    McElfish’s Other Arguments
       A.     Breach of contract claim
       McElfish makes two further arguments for why the trial
court was correct to dismiss Piedmont’s breach of contract claim.
Neither argument has merit.
       First, McElfish argues that Piedmont waived the issue of
whether the duty to make monthly payments under the HELOC
agreement was divisible from the duty to pay the full amount of
the loan because the case authority Piedmont cites on appeal—
which McElfish erroneously labels as “new evidence”—was not
cited to the trial court. (Italics added.) This argument reflects a
fundamental misunderstanding of appellate practice. What
matters is whether the issue pursued on appeal was “litigated” in
the trial court, and not whether the appellant cited the exact
same authorities regarding that issue; here, the statute of
limitations issue was squarely presented during the demurrer
proceedings. (Newton v. Clemons (2003) 110 Cal.App.4th 1, 11
[only those issues “not litigated in the trial court are waived”];
Premier Medical Management Systems, Inc. v. California Ins.
Guarantee Assn. (2008) 163 Cal.App.4th 550, 564 [same].)
Regardless, it is well settled that an issue raising “a pure
question of law”—such as the issues here regarding the

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interpretation of a contract (Ramirez v. Superior Court (2023) 88
Cal.App.5th 1313, 1335 (Ramirez); RMR Equipment Rental, Inc.
v. Residential Fund 1347, LLC (2021) 65 Cal.App.5th 383, 392;
Gilkyson v. Disney Enterprises, Inc. (2021) 66 Cal.App.5th 900,
915-916) and whether a complaint is time-barred (Raja
Development Co., Inc. v. Napa Sanitary Dist. (2022) 85
Cal.App.5th 85, 91-92; Aryeh, supra, 55 Cal.4th at p. 1191 )—can
be considered “for the first time on appeal.” (Gilliland v. Medical
Board (2001) 89 Cal.App.4th 208, 219; Ramirez, at p. 1335.)
       Second, McElfish argues that the contract claim is
otherwise barred because Piedmont failed to allege certain
disclosures as required by California’s Fair Debt Buying
Practices Act (Civ. Code, § 1788.50 et seq.). To the extent this
Act applies (as it only applies to debt purchased after January 1,
2014 (Civ. Code, § 1788.50, subd. (d)), Piedmont’s operative
complaint includes the required disclosures (Civ. Code, §
1788.58), and if it did not, Piedmont surely could have cured any
defect by amending the complaint.
       B.   Money lent, money had and received, and
declaratory relief claims
       Although the trial court did not expressly rule on
Piedmont’s other claims for money lent, money had and received,
and declaratory relief, the court implicitly sustained the
demurrer to those claims without leave to amend when it entered
judgment for McElfish. This, too, was error for the reasons
explained above, and McElfish’s argument to the contrary is
availing.
       He argues only that Piedmont alleged insufficient facts to
state the common count claims because those claims incorporate
by refence only the first five introductory paragraphs of the

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complaint, but not the further substantive allegations in the
subsequent paragraphs. We do not read the complaint so rigidly.
Rather, we must give the operative complaint “a reasonable
interpretation, reading it as a whole and its parts in their
context,” to determine whether the allegations state a cause of
action on any viable legal theory, regardless of how they are
labeled. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Sims v.
Kernan (2018) 30 Cal.App.5th 105, 110.) Applying those
principles, Piedmont alleged sufficient facts in the complaint, as a
whole, to state the common count claims. And even if the
allegations were deficient to state those claims, it is reasonably
possible that Piedmont could cure that defect by an amendment.
                          DISPOSITION
      The judgment is reversed. Piedmont is entitled to its costs
on appeal.
      CERTIFIED FOR PARTIAL PUBLICATION.

                                     ______________________, J.
                                     HOFFSTADT

We concur:

_________________________, Acting P. J.
 ASHMANN-GERST

_________________________, J.
 CHAVEZ

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