Rathee v. Marek

 

 

 

 

 

 

 

 

 

 

 

 

Filed 12/12/13  Rathee v. Marek CA2/8

 

 

 

 

 

 

 

NOT TO BE PUBLISHED IN THE
OFFICIAL REPORTS

 

 

California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b).  This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

 

 

IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA

 

SECOND APPELLATE
DISTRICT

 

DIVISION EIGHT

 

 
>

NEETA RATHEE,               Plaintiff and Appellant,               v.   LEE MAREK,               Defendant and Appellant.

B244400         (Los Angeles County       Super. Ct. No. BC 430741)        ORDER MODIFYING OPINION      AND DENYING PETITION FOR      REHEARING

 

THE COURT:*

 

            The
opinion filed November 22, 2013, in the above entitled matter is href="http://www.mcmillanlaw.com/">modified in the following manner:

 

            1.  The following is added at the end of page 7
after the last sentence on that page and beginning a new paragraph:

            We
also reject Marek’s argument that his promise to pay simply restarted the
two-year statute of limitation when he made the promise.  His argument ignores the evidence that he
promised to pay the money in 10 years. 
While Marek correctly points out that jurors could have disbelieved the
evidence he promised to repay the money in 10 years, for purposes of a judgment
notwithstanding the verdict, Marek must show that there is no substantial
evidence or reasonable inferences in support of the verdict.  (Hansen
v. Sunnyside Products, Inc. (1997) 55 Cal.App.4th 1497, 1510.) 

            >Elke v. Rice (1955) 45 Cal.2d 66 does
not compel a different result.  In that
case, our high court considered the construction of a prior version of Code of
Civil Procedure section 360.  The court
explained that “[t]he acknowledgement of a debt already barred by the statute
gives rise to a new contract and a new cause of action dating from the
acknowledgement. . . .  The
acknowledgment of a debt before the statute has run, however, does not create a
new obligation as of the time of the acknowledgment; it merely continues the
original obligation through a new statutory period.”  (Id.
at p. 73, citations omitted.)  Here, the
evidence supports either a new contract or a continuing obligation as Marek
testified that he received the money in 2000 and Singh testified that it was
given to Marek in 2004.  In short, Marek
fails to show that no evidence supported the judgment.

 

            There
is no change in judgment.

            Appellant’s
petition for rehearing is denied. 

 

 

 

 

 

 

*RUBIN,
Acting P. J.                                    FLIER,
J.                                GRIMES,
J.

Filed
11/22/13 (unmodified version)

NOT TO
BE PUBLISHED IN THE OFFICIAL REPORTS

 


 

IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

 

SECOND
APPELLATE DISTRICT

 

DIVISION
EIGHT

 

 
>

NEETA RATHEE,               Plaintiff and Appellant,               v.   LEE MAREK,               Defendant and Appellant.

B244400         (Los Angeles County       Super. Ct. No. BC 430741)

 

 

            APPEAL from a judgment and order of
the Superior Court of Los Angeles County, Michelle R. Rosenblatt, Judge. 
Judgment affirmed; order reversed.

 

            Law Offices of Edward M.
Bialack and Edward M. Bialack for Plaintiff and Appellant.

 

            Law Office of Edward S. Orchon
and Edward S. Orchon for Defendant and Appellant.

 

* * * * * *

 

            Defendant Lee Marek
admits that he owes plaintiff Neeta Rathee $167,000.  Nevertheless he challenges the judgment
awarding Rathee that amount, arguing that the statute of limitations had
expired before Rathee filed her lawsuit. 
We conclude Marek failed to show that he was entitled to judgment as a
matter of law, and therefore affirm the judgment in favor of Rathee.

            Rathee cross-appeals, challenging
the amount of the prejudgment interest awarded by the trial court.  We conclude that Rathee was entitled to
prejudgment interest at the rate of 10 percent from the date she filed her
complaint until the date of judgment.

FACTS

            Neeta Rathee and Vikram Singh
married in 1989, separated in 2004, and concluded their dissolution proceedings
in 2010.  While Rathee and Singh were
married, Singh, a physician, gave community funds to Lee Marek to invest in
surgical centers.  The funds were given
either in 2000 (according to Marek) or in 2004 (according to Singh).  The funds Marek owed the community were
awarded to Rathee as her sole and separate property at the conclusion of the
dissolution proceeding in approximately July 2010.

            Marek testified at trial and
acknowledged the debt.  According to
Marek, Singh gave him $467,000, and Marek returned $300,000 leaving a balance
of $167,000.    Marek admitted he
converted the $167,000 to his personal use, and Marek testified that he spent
the Rathee/Singh community funds on his rent and car payments instead of
investing the money in surgical centers. 
Marek understood he was obligated to return the money.

            In addition to his trial testimony,
Marek previously admitted converting the funds to his personal use.  On July 20, 2004, Marek wrote Singh a letter
stating:  “The funds totaling $167,000
that you have sent to me for the investments in the various surgery centers
have been used by me for my personal use as per our agreement.  [¶]  I
presently do not have the funds to pay back to you as you are requesting.  Instead, I suggest that I pay to you the
funds amortized over ten years at 7% per annum interest.  [¶] 
Since I am presently short of money I would appreciate it if I could pay
you back the loan starting Jan.
1, 2005.”

            Singh confirmed that he gave Marek
community money to invest in surgical centers. 
Singh reminded Marek “on and off” about the loan and Marek sent a letter
promising to repay it.  Marek also orally
promised to repay it.

            Rathee testified that prior to the
dissolution proceedings filed in August 2004, she knew Singh gave Marek money
to invest in surgical centers.  During
the divorce proceedings, she learned Marek owed the community $167,000 when
Singh listed Marek’s debt on his schedule of assets and liabilities.  According to Rathee, Marek testified during
the divorce proceedings about the debt and testified that it was payable in 10
years.  Although the date of the
testimony is not clear from the record, the parties appear to agree it was
sometime in 2005.

PROCEDURE

            On January 28, 2010, Rathee sued Marek alleging
numerous causes of action.  Jurors were
asked only about the breach of contract and money had and received causes of
action.  In a special verdict jurors
found all of the following:  Singh and
Marek entered into a written contract whereby Singh loaned Marek $167,000.  Marek did not pay the loan and Rathee was
harmed.  Marek used community funds for
purposes other than to benefit Rathee, and Rathee was not aware of such use
prior to January
28, 2008.

            Marek moved for a judgment
notwithstanding the verdict on the ground that the evidence was insufficient to
support the jury finding that a written contract was entered into and that the
cause of action for money had and received was barred by the applicable statute
of limitations.  The court entered judgment
notwithstanding the verdict on the cause of action for breach of written
contract because there was no written acceptance by Singh.href="#_ftn1" name="_ftnref1" title="">>^>[1]  The court denied the motion as to the cause
of action for money had and received.

            Rathee moved for an award of
prejudgment interest.  The court awarded
prejudgment interest at 7 percent commencing on January 5, 2005.  The court rejected Rathee’s argument that
prejudgment interest should be awarded at the rate of 10 percent per annum.

DISCUSSION

1.  Marek’s Appeal:  Denial of Judgment Notwithstanding the Verdict

            Marek argues the trial court should
have granted his motion for judgment notwithstanding the verdict on Rathee’s
cause of action for money had and received.

            A motion for a judgment notwithstanding the verdict may
be granted only in limited circumstances. 
“[G]iven the constitutional right to jury trial and a policy of judicial
economy against willy-nilly disregarding juries’ hard work (even, in the case
of a motion for nonsuit, the work of the jury in listening to the case up to
that point), the basic rules regarding these motions [for judgment
notwithstanding the verdict] are predictably strict.  Conflicts in the evidence are resolved >against the moving defendant and in
favor of the plaintiff; all reasonable inferences to be drawn from the evidence
are drawn against the moving defendant and in favor of the plaintiff.  [Citations.]” 
(Fountain Valley Chateau Blanc
Homeowner’s Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th
743, 750.)

            “‘A cause of action is stated for
money had and received if the defendant is indebted to the plaintiff in a
certain sum “for money had and received by the defendant for the use of the
plaintiff.”’”  (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 937.)  The cause of action “‘lies whenever one
person has received money which belongs to another, and which in equity and
good conscience should be paid over to the latter.’”  (Ibid.)  A common count for money had and received is
an alternative, common law means of pleading an unjust enrichment or
quasi-contract cause of action and therefore the applicable statute of
limitations depends on the underlying theory on which recovery is sought.  (Federal
Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 348.)  Money had and received based on an obligation
not founded on a writing is governed by a two-year statute of limitations.  (Bowden
v. Robinson (1977) 67 Cal.App.3d 705, 718; Code Civ. Proc., § 339.)

            If Marek’s only conduct had been the
receipt of money from the community, the two-year statute of limitations would
have expired.  Even assuming that the
statute of limitations did not begin to run until Rathee learned Marek
converted the funds to his own use, which Rathee learned in 2005 when Marek
testified in the dissolution proceeding, Rathee’s lawsuit filed in 2010 was not
timely.

            But in addition to Marek’s receipt
of $167,000 in community funds, Marek also promised to repay the funds.  Specifically on July 20, 2004, Marek
wrote:  “The funds totaling $167,000 that
you have sent to me for the investments in the various surgery centers have
been used by me for my personal use as per our agreement.  [¶]  I
presently do not have the funds to pay back to you as you are requesting.  Instead, I suggest that I pay to you the
funds amortized over ten years at 7% per annum interest.  [¶] 
Since I am presently short of money I would appreciate it if I could pay
you back the loan starting Jan. 1, 2005.” 
Marek testified that he wrote this letter, and the fact that he wrote it
was undisputed.  Marek also testified
that he understood that he had to pay back the money.  Prior to this trial, in the divorce
proceedings Marek testified, and he “acknowledged the debt, and he said that it
was due and payable in ten years.”

            Marek’s promise to pay the loan
extended the statute of limitations.  As
the Restatement explains:  “(1) A promise
to pay all or part of an antecedent contractual or quasi-contractual
indebtedness owed by the promissor is binding if the indebtedness is still
enforceable or would be except for the effect of a statute of limitations.  [¶] 
(2) The following facts operate as such a promise unless other facts
indicate a different intention:  [¶]  (a) A voluntary acknowledgment to the
obligee, admitting the present existence of the antecedent
indebtedness . . . .” 
(Rest.2d Contracts, § 82, p. 209.)  California law codified this principle in
Code of Civil Procedure section 360, which provides that a written promise
signed by the party to be charged creates a continuing obligation.href="#_ftn2" name="_ftnref2" title="">>^>[2]  Marek’s writing ‑‑ which was
undisputed ‑‑ is sufficient to constitute a written
acknowledgment.  Although Marek implies
that Rathee’s testimony that the loan was payable in 10 years was not credible,
he presented no contrary evidence and failed to provide the transcript of his
testimony during the divorce proceedings. 
Marek therefore fails to show he was entitled to judgment as a matter of
law because the statute of limitations expired.href="#_ftn3" name="_ftnref3" title="">^>[3]

2.  Rathee’s Cross-appeal:  Amount of Prejudgment Interest

            The court awarded Rathee prejudgment
interest at the rate of 7 percent per annum commencing on January 1, 2005.  In her cross-appeal, Rathee challenges the
trial court’s denial of her request for prejudgment interest at the rate of 10
percent per annum.  She argues that she
was entitled to interest at the greater rate because the court should have
relied on the legal rate of interest not the rate specified in Marek’s
July 20, 2004 letter.  Civil Code
section 3289 provides:  “(a) Any legal
rate of interest stipulated by a contract remains chargeable after a breach
thereof, as before, until the contract is superseded by a verdict or other new
obligation.  [¶]  (b) If a contract entered into after January
1, 1986, does not stipulate a legal rate of interest, the obligation shall bear
interest at a rate of 10 percent per annum after a breach.”

            Here, the trial court found no
written contract existed and therefore erred in applying the 7 percent rate
contained in Marek’s 2004 promising to repay the funds.  As Rathee argues, the court should have
instead applied the 10 percent rate in Civil Code section 3289.  Marek does not argue otherwise.

            The court also erred in calculating
interest from 2005.  By its terms, Civil
Code section 3289 applies “after a breach.”href="#_ftn4" name="_ftnref4" title="">^>[4]  Here the breach occurred when Marek failed to
pay the loan after Rathee made demand by filing the complaint.  Based on this breach, Rathee is entitled to
prejudgment interest at the rate of 10 percent from the date of the filing of
the complaint to the date of the judgment.

DISPOSITION

            The judgment is affirmed.  The postjudgment order awarding Rathee
prejudgment interest is reversed.  The
case is remanded to the trial court for the court to recalculate the amount of
prejudgment interest from the date of Rathee’s complaint to the date of
judgment.  Each party shall bear his or
her own costs.

 

 

                                                                                    FLIER,
J.

WE CONCUR:

 

 

            RUBIN, Acting P. J.

 

 

            GRIMES, J.