Contract Actions

California has a four year statute of limitations for written contracts. (Code Civil Procedure Sec. 337.)

The two-year statute of limitations in Code of Civil Procedure section 339 applies to quasi-contractual actions. (Davies v. Krasna (1975) 14 Cal.3d 502, 509, fn. 6). "The general rule for defining the accrual of a cause of action sets the date as the time when the cause of action is complete with all of its elements." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 389, finding that plaintiff's action was barred by applicable statute of limitations and not saved by delayed discovery rule.)

Contracts and Choice of Law Provisions and Statute of Limitations

A standard choice-of-law provision incorporates the statutes of limitations of the chosen state. (Hambrecht & Quist Venture Partners v. American Medical Internat., Inc. (1995) 38 Cal.App.4th 1532, 1536.) As a result, the choice-of-law provision requires application of a foreign statute of limitations which is shorter than the otherwise applicable California statute of limitations. (Id.) The law of the state chosen by the parties to govern their contractual rights and duties will be applied unless either:

(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue, and which would be the state of the applicable law in the absence of an effective choice of law provision.

(Id. at 1544 citing Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th 459, 464-465 and Section 187 of the Restatement Second of Conflict of Laws.)

Actions Based on Statute of Limitations

Demurrer

A demurrer on the ground a cause of action is barred by the statute of limitations should be sustained only where the facts alleged on the face of the complaint “clearly and affirmatively” show that the cause of action is barred. It is not enough that the complaint might be barred. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403. See Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324 stating: “A general demurrer based on statute of limitations is only permissible where the dates alleged in the complaint show that the action is barred by the statute of limitations... The running of the statute must appear ‘clearly and affirmatively’ from the dates alleged. It is not sufficient that the complaint might be barred.”)

Moreover, it is held that if a complaint alleges wrongful conduct commencing at a time now barred by the statute of limitations, but continuing until a date not barred, there is no ground for general demurrer based on the statute of limitations. (See Wyatt v. Union Mortgage Co. (1979) 24 Cal.App.3d 773, 786.)

To raise a statute of limitations defense on demurrer, “the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42, internal quotation marks omitted.) In general, a statute of limitations begins to run “when the cause of action is complete with all of its elements,” namely, wrongdoing, causation, and resulting harm. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.)

Motion to Strike

A motion to strike is the proper procedure to challenge a pleading when it appears on the face of the complaint that a portion of the cause of action is barred by the statute of limitations. (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682–1683.) Therefore, if the claims are found to be barred, the motion to strike should be granted; and if the claims are found not to be barred, the motion should be denied.