CACI 4120 Affirmative Defense—Statute of Limitations

California Civil Jury Instructions CACI

4120 Affirmative Defense—Statute of Limitations

[Name of defendant] contends that [name of plaintiff]’s lawsuit was not filed within the time set by law. To succeed on this defense, [name of defendant] must prove that [name of plaintiff]’s claimed harm occurred before [insert date four years before complaint was filed] unless [name of plaintiff] proves that before [insert date four years before complaint was filed], [he/she/nonbinary pronoun/it] did not discover, and did not know of facts that would have caused a reasonable person to suspect, [name of defendant]’s wrongful act or omission.

New April 2007; Renumbered from CACI No. 4106 December 2007; Revised December 2012

Crowdsource Lawyers

Directions for Use

Read this instruction only for a cause of action for breach of fiduciary duty. For a statute-of-limitations defense to a cause of action for personal injury or wrongful death due to wrongful or negligent conduct, see CACI No. 454, Affirmative Defense—Statute of Limitations, and CACI No. 455, Statute of Limitations—Delayed Discovery.

This instruction assumes that the four-year “catch-all” statute of limitations of Code of Civil Procedure section 343 applies to claims for breach of fiduciary duty. (See Stalberg v. Western Title Ins. Co. (1991) 230 Cal.App.3d 1223, 1230 [282 Cal.Rptr. 43].) There is, however, language in several cases supporting the proposition that if the breach can be characterized as constructive fraud, the three-year limitation period of Code of Civil Procedure section 338(d) applies. (See Austin v. Medicis (2018) 21 Cal.App.5th 577, 587–588 [230 Cal.Rptr.3d 528]; William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1312 [139 Cal.Rptr.3d 670].) If the court determines that the claim is actually for constructive fraud, a date three years before the complaint was filed may be used instead of a four-year date. It is not clear, however, when a breach of fiduciary duty might constitute constructive fraud for purposes of the applicable statute of limitations. (Compare Thomson v. Canyon (2011) 198 Cal.App.4th 594, 607 [129 Cal.Rptr.3d 525] [suggesting that breach of fiduciary duty founded on concealment of facts would be subject to three-year statute] with Stalberg, supra, 230 Cal.App.3d at p. 1230 [applying four-year statute to breach of fiduciary duty based on concealment of facts].)

Do not use this instruction in an action against an attorney. For a statute-of-limitations defense to a cause of action, other than actual fraud, against an attorney acting in the capacity of an attorney, see CACI No. 610, Affirmative Defense—Statute of Limitations—Attorney Malpractice—One-Year Limit, and CACI No. 611, Affirmative Defense—Statute of Limitations—Attorney Malpractice—Four-Year Limit. One cannot avoid a shorter limitation period for attorney malpractice (see Code Civ. Proc., § 340.6) by pleading the facts as a breach of fiduciary duty or constructive fraud. (See Quintilliani v. Mannerino (1998) 62 Cal.App.4th 54, 67−68 [72 Cal.Rptr.2d 359]; see also Stueve Bros. Farms, LLC v. Berger Kahn (2013) 222 Cal.App.4th 303, 322 [166 Cal.Rptr.3d 116] [constructive fraud].)

Sources and Authority

Four-Year Statute of Limitations. Code of Civil Procedure section 343.

“The statute of limitations for breach of fiduciary duty is four years. (§ 343.)” (Stalberg, supra, 230 Cal.App.3d at p. 1230, internal citation omitted.)

“ ‘[W]here the gravamen of the complaint is that defendant’s acts constituted actual or constructive fraud, the applicable statute of limitations is the [Code of Civil Procedure section 338, subdivision (d) three-year] limitations period,’ governing fraud even though the cause of action is designated by the plaintiff as a claim for breach of fiduciary duty.” (Thomson, supra, 198 Cal.App.4th at p. 607.)

“Defendants argue on appeal that the gravamen of plaintiff’s complaint is that defendants’ acts constituted actual or constructive fraud, and thus should be governed by the fraud statute of limitations. We disagree. Plaintiff’s claim is not founded upon the concealment of facts but upon defendants’ alleged failure to draft documents necessary to the real estate transaction in which they represented plaintiff. The allegation is an allegation of breach of fiduciary duty, not fraud.” (Thomson, supra, 198 Cal.App.4th at p. 607.)

“To be sure, section 340.6, subdivision (a), exempts claims of ‘actual fraud’ from its limitations period—but the exemption does not extend to claims of constructive fraud.” (Austin, supra, 21 Cal.App.5th at p. 587.)

“Breach of fiduciary duty not amounting to fraud or constructive fraud is subject to the four-year ‘catch-all statute’ of Code of Civil Procedure section 343 … . Fraud is subject to the three-year statute of limitations under Code of Civil Procedure section 338. … [¶][¶] However, a breach of a fiduciary duty usually constitutes constructive fraud.” (William L. Lyon & Associates, Inc., supra, 204 Cal.App.4th at pp. 1312, 1313.)

“The statute of limitations for breach of fiduciary duty is three years or four years, depending on whether the breach is fraudulent or nonfraudulent.” (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1479 [171 Cal.Rptr.3d 548].)

“A breach of fiduciary duty claim is based on concealment of facts, and the statute begins to run when plaintiffs discovered, or in the exercise of reasonable diligence could have discovered, that facts had been concealed.” (Stalberg, supra, 230 Cal.App.3d at p. 1230, internal citation omitted.)

“We also are not persuaded by [defendant]’s contention breach of fiduciary duty can only be characterized as constructive fraud (which does not include fraudulent intent as an element). This simply is not true: ‘A misrepresentation that constitutes a breach of a fiduciary or confidential a [sic] relationship may, depending on whether an intent to deceive is present, constitute either actual or constructive fraud. However, the issue is usually discussed in terms of whether the misrepresentation constitutes constructive fraud, because actual fraud can exist independently of a fiduciary or confidential relationship, while the existence of such a relationship is usually crucial to a finding of constructive fraud.’ ” (Worthington v. Davi (2012) 208 Cal.App.4th 263, 283 [145 Cal.Rptr.3d 389].)

“ ‘Where a fiduciary obligation is present, the courts have recognized a postponement of the accrual of the cause of action until the beneficiary has knowledge or notice of the act constituting a breach of fidelity. [Citations.] The existence of a trust relationship limits the duty of inquiry. “Thus, when a potential plaintiff is in a fiduciary relationship with another individual, that plaintiff’s burden of discovery is reduced and he is entitled to rely on the statements and advice provided by the fiduciary.” ’ ” (WA Southwest 2, LLC v. First American Title Ins. Co. (2015) 240 Cal.App.4th 148, 157 [192 Cal.Rptr.3d 423].)

“Delayed accrual due to the fiduciary relationship does not extend beyond the bounds of the discovery rule, which operates to protect the plaintiff who ‘ “despite diligent investigation … is blamelessly ignorant of the cause of his injuries” ’ and should not be barred from asserting a cause of action for wrongful conduct ‘ “before he could reasonably be expected to discover its existence.” ’ ” (Choi v. Sagemark Consulting (2017) 18 Cal.App.5th 308, 334 [226 Cal.Rptr.3d 267].)

“The distinction between the rules excusing a late discovery of fraud and those allowing late discovery in cases in the confidential relationship category is that in the latter situation, the duty to investigate may arise later because the plaintiff is entitled to rely upon the assumption that his fiduciary is acting on his behalf. However, once a plaintiff becomes aware of facts which would make a reasonably prudent person suspicious, the duty to investigate arises and the plaintiff may then be charged with knowledge of the facts which would have been discovered by such an investigation.” (Hobbs v. Bateman Eichler, Hill Richards, Inc. (1985) 164 Cal.App.3d 174, 202 [210 Cal.Rptr. 387], original italics, internal citations omitted.)

“ ‘[R]esolution of the statute of limitations issue is normally a question of fact … .’ ” (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487 [59 Cal.Rptr.2d 20, 926 P.2d 1114].)

“[T]he statute of limitations for aiding and abetting a breach of fiduciary duty is the same as the statute of limitations for breach of fiduciary duty.” (American Master Lease LLCsupra, 225 Cal.App.4th at p. 1479].)

“ ‘Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship.’ [Citation.] [¶] ‘[A]s a general principle constructive fraud comprises any act, omission or concealment involving a breach of legal or equitable duty, trust or confidence which results in damage to another even though the conduct is not otherwise fraudulent. Most acts by an agent in breach of his fiduciary duties constitute constructive fraud. The failure of the fiduciary to disclose a material fact to his principal which might affect the fiduciary’s motives or the principal’s decision, which is known (or should be known) to the fiduciary, may constitute constructive fraud. …’ ” (Mark Tanner Constr. v. Hub Internat. Ins. Servs. (2014) 224 Cal.App.4th 574, 588 [169 Cal.Rptr.3d 39].)

Secondary Sources

4 Witkin, California Procedure (5th ed. 2008) Actions, §§ 677–679
Vapnek et al., California Practice Guide: Professional Responsibility, Ch. 6-D, Professional Liability, ¶ 6:425.4 (The Rutter Group)
3 Levy et al., California Torts, Ch. 32, Liability of Attorneys, § 32.60 (Matthew Bender)
7 California Forms of Pleading and Practice, Ch. 76, Attorney Professional Liability, § 76.170 (Matthew Bender)
30 California Forms of Pleading and Practice, Ch. 345, Limitation of Actions, § 345.19[4] (Matthew Bender)
2A California Points and Authorities, Ch. 24A, Attorneys at Law: Malpractice, § 24A.29 (Matthew Bender)