Plaintiff Eloquence Corporation (Eloquence) sued defendants Home Consignment Center (HCC), Johnny Crowell, and John Fondnazio, asserting breach of contract and open book account causes of action for failure to pay invoices pursuant to a consignment agreement.
Defendants moved for summary judgment, arguing that the causes of action were barred by the four-year statute of limitations and that Eloquence could not show the creation of an open book account.
The trial court granted defendants’ motion for summary judgment. Eloquence appeals.
A cause of action for breach of a written contract is subject to a four-year statute of limitations. (§ 337, subd. (a).) As a general rule, the statute of limitations begins to run “when a controversy is ripe—that is, when all of the elements of a cause of action have occurred and a suit may be maintained.” (Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1388 (Armstrong Petroleum).)
Under the continuous accrual doctrine, each breach of a recurring obligation is independently actionable. (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1199.) A cause of action accrues upon each new breach of such an obligation, and thus triggers a new limitations period. (Ibid.) The continuous accrual doctrine has been applied where performance of contractual obligations is divisible into intervals. (Armstrong Petroleum, supra, 116 Cal.App.4th at p. 1388.) 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. (Ibid.)
The rule of delayed commencement provides that where the defendant, obligated to perform over a period of time, is guilty of material breach, the plaintiff may waive it and stand on the contract until the time for final performance. (Israelsky v. Title Ins. Co. (1989) 212 Cal.App.3d 611, 618.) The rule is “based largely on considerations of fairness to the nonbreaching party” as it allows that party “ ‘either to sue immediately or to wait till the time when the act was to be done.’ ” (Ibid.) The rule has been applied in cases where there is a “continuing duty” that has been breached, and plaintiff waits to file suit until the time for “complete performance” has passed. (Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1078.)
The term “book account” is defined by statute to mean “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 against whom and in favor of whom entries are made, is entered in the regular course of business as conducted by such creditor or fiduciary, and is kept in a reasonably permanent form and manner and is (1) in a bound book, or (2) on a sheet or sheets fastened in a book or to backing but detachable therefrom, or (3) on a card or cards of a permanent character, or is kept in any other reasonably permanent form and manner.” (§ 337a.) A book account is “open” where a balance remains due on the account. (Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708.)
The California Court of Appeal affirmed.
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