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Greene Trio Music, LLC v. Jackson

California Court of Appeals, Second District, Seventh Division
Jul 14, 2008
No. B200087 (Cal. Ct. App. Jul. 14, 2008)

Opinion

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County. No. BC357202 Charles C. Lee, Judge.

Law Offices of Donald K. Wilson and Donald K. Wilson for Plaintiff and Appellant.

Manatt, Phelps & Phillips, Barry E. Mallen, Benjamin G. Shatz and Raaqim Knight for Defendant and Respondent.


ZELON, J.

Appellant Greene Trio Music, LLC (“Greene Trio”) appeals from the trial court’s grant of summary judgment in favor of Respondent Randall Jackson (“Jackson”). In its complaint, Greene Trio asserted a single cause of action against Jackson, one of its founding members, for breach of fiduciary duty. The complaint alleged that Jackson breached his fiduciary duty by conspiring with a songwriter under contract with Greene Trio to transfer certain music publishing rights to a third party through secret dealings with the songwriter and others. The trial court granted summary judgment on two grounds. First, the court ruled that, because the gravamen of the action was constructive fraud, it was barred by the three-year statute of limitations governing fraud claims. Second, the court ruled that Greene Trio could not prove that it sustained any recoverable damages as a result of Jackson’s alleged conduct. We conclude that, although labeled a claim for breach of fiduciary duty, the gravamen of Greene Trio’s complaint against Jackson stated a cause of action for constructive fraud. The action thus was barred by the three-year limitations period set forth in Code of Civil Procedure section 338, subdivision (d). On that basis, we affirm.

Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. Greene Trio’s Co-Publishing Agreement with Lionel Cole

Greene Trio is a music publishing company. It was formed in February 2002 by four individuals, each of whom held a 25 percent interest in the company upon its formation. The four founding members were: (1) Aaron Greene, who held primary responsibility for the day-to-day operations of the company; (2) Anthony Greene, Aaron’s father, who provided the bulk of the operating capital, (3) Richard Joseph (“Joseph”), an attorney; and (4) Jackson, a musician and record producer. The principal roles of Jackson and Joseph were to identify prospective songwriters for Greene Trio to sign to co-publishing agreements and to use their respective contacts in the music industry to assist those songwriters in getting their songs published.

For clarity and convenience, and not out of disrespect, we refer to Aaron and Anthony Greene by their first names.

Jackson, Aaron and Joseph first discussed the formation of a music publishing company in fall 2001. During their initial discussions, Jackson proposed the idea of such a company entering into a co-publishing agreement with Lionel Cole (“Cole”). At that time, Cole was an up-and-coming songwriter and a pianist in the band that performed with the well-known recording artist, Mariah Carey (“Carey”). Jackson also had a pre-existing relationship with Carey as her musical director. Jackson recommended Cole as a potential songwriter for Greene Trio and indicated that he believed Cole would have increased value in the near future.

In or about December 2001 or January 2002, Jackson had another meeting with Aaron and Joseph about the possibility of signing Cole to a co-publishing agreement. According to Aaron, Jackson said that Cole was potentially going to be writing songs with Carey and had a shot at getting some songs placed on her next album. Jackson noted that he was Carey’s musical director and Cole was in her band, and that he would try to arrange for Carey and Cole to write songs together. Jackson did not state that Cole had written or was currently writing songs with Carey or that Cole had signed a prior agreement to write songs for her. Rather, Jackson asserted that Cole had a “shot” at writing songs with Carey and having songs placed on her upcoming album. According to Aaron, Jackson did disclose during this meeting that Carey “sometimes attempts to take the publishing [rights] from the new writers that she works with.” However, when Aaron responded that such an arrangement would not be acceptable, Jackson stated that they “would work something out.”

Joseph’s recollection of the meeting with Jackson differed in certain respects. According to Joseph, Jackson indicated during this meeting that Carey “would require publishing” rights from Cole as a condition of writing songs with him. Joseph noted, however, that no one knew at the time what Carey actually would do or what Jackson might be able to persuade her to do. Joseph also recalled that there was a discussion about whether Greene Trio should waive its exclusivity rights in songs co-written by Cole and Carey. In particular, Jackson, Aaron and Joseph discussed the possibility that Carey might not work with Cole if Greene Trio refused to waive its exclusivity rights, and that, if Greene Trio did agree to such a waiver, it could still benefit from Cole’s elevated status as a result of writing with Carey. According to Joseph, Aaron did not agree to waive Greene Trio’s rights at that time, but decided that he needed to discuss the matter with his father. Additionally, Joseph recalled that, at that point, Cole’s opportunity to write songs for Carey’s upcoming album was still “an open question.” Jackson did not disclose that Cole was already writing songs with Carey or that Cole had a pre-existing agreement to write songs for her.

On or about March 15, 2002, Greene Trio entered into a written co-publishing agreement with Cole (the “Co-Publishing Agreement”). Under the terms of the Agreement, Greene Trio held a one-half interest in Cole’s share of the publishing rights in any songs that he wrote during the contract term. In consideration for signing the Agreement, Cole received an advance payment of $45,000 from Greene Trio. Although there had been prior discussions about Cole’s potential opportunity to write with Carey, the Co-Publishing Agreement did not include an exclusivity waiver by Greene Trio in any Carey-Cole compositions.

II. Cole’s Transfer of Certain Publishing Rights to Carey

In late summer 2002, Jackson invited Aaron to a recording session at A&M studios. At that session, Aaron learned for the first time that Cole was writing songs for inclusion in Carey’s upcoming album. Carey’s album, “Charmbracelet,” was released later that year. However, the first single from that album, “Through The Rain,” was released earlier, in fall 2002. The “Charmbracelet” album ultimately included three songs co-written by Cole and Carey – “Through The Rain,” “I Only Wanted,” and “Sunflowers for Alfred Roy.”

Shortly after “Through The Rain” was released, Aaron had a lunch meeting with Cole. At that meeting, Cole told Aaron that he had transferred his publishing rights in the three songs that he had co-written with Carey to her. Cole also said that he thought Aaron already knew that, and that “the paperwork was in the past.” Aaron became upset upon learning this information and immediately telephoned Joseph. When Aaron told Joseph that Cole had relinquished his publishing rights in the three songs co-written with Carey, Joseph responded that he thought Greene Trio had consented to such a transfer. Joseph explained that Jackson had represented to him that Aaron and Jackson had discussed the matter further and that Aaron had agreed to waive Greene Trio’s exclusivity rights in the three Carey-Cole songs. Aaron disagreed, however, asserting that neither he nor his father had consented to waive Greene Trio’s rights in any songs written by Cole. Sometime in fall 2002, Aaron also told Joseph that Greene Trio would be “going after” the Carey-Cole compositions and they discussed a potential lawsuit against both Cole and Jackson.

It is unclear from the record when Cole transferred his publishing rights in the songs co-written with Carey and whether such transfer occurred before or after Cole entered into the Co-Publishing Agreement with Greene Trio.

III. Greene Trio’s Lawsuit against Cole and Jackson

On August 17, 2006, Greene Trio filed suit against Cole and Jackson in Los Angeles County Superior Court. In its complaint, Greene Trio asserted two causes of action against Cole for breach of contract and accounting and one cause of action against Jackson for “breach of fiduciary duty.” The allegations concerning Jackson’s conduct were set forth in the complaint as follows:

Cole is not a party to this appeal.

Beginning in September 2002, and continuing to the present, Jackson breached his fiduciary duty to plaintiff by actively encouraging, assisting, and conspiring with defendant Cole to breach his Co-Publishing Agreement with Greene [Trio], that is, plaintiff is informed and believes and thereon alleges, that Jackson was substantially involved in the improper purported “transfer” of [Greene Trio’s] copyright interests in and to the songs that Cole had co-written with Carey to some music publisher other than Greene [Trio]. Plaintiff is also informed and believes and thereon alleges, that Jackson and those acting with him did so by means of secret dealings with Cole and with others, and kept the details of those acts from the members of plaintiff, all in breach of Jackson’s fiduciary duties to Greene [Trio]. These secret actions and dealings resulted in Cole purporting to transfer the copyrights in and to the songs that Cole had co-written with Carey to another company, all to plaintiff’s substantial damage.

In November 2006, Aaron was deposed in connection with Greene Trio’s action. At his deposition, Aaron was asked specifically about the basis for his belief that Jackson encouraged, assisted, and conspired with Cole to improperly transfer Greene Trio’s publishing interests in the songs that Cole co-wrote with Carey. In response, Aaron pointed to the “fact that [Jackson] told [Joseph] that [Aaron] had agreed to turn these songs over,” the “fact that [Jackson] then attempted to buy out the organization as soon as the songs were coming out and he knew . . . [Aaron] would uncover what he had done,” and the “fact that after he was not successful in buying out the organization, he disappeared, would not return phone calls, and would not participate in the organization.” Additionally, Aaron stated that he knew that “[Cole] at that time was not comfortable making a single move without [Jackson’s] blessing” and “would not sign these songs over to Mariah Carey unless he had been instructed to do so by Randy Jackson.” Aaron also was asked whether the breach of fiduciary duty claim against Jackson was predicated on his belief that Jackson defrauded Greene Trio. In response, Aaron stated that Jackson “did defraud Greene Trio.”

IV. Jackson’s Motion for Summary Judgment

Jackson brought a motion for summary judgment against Greene Trio based on two separate grounds. He first argued that Greene Trio’s action against him was barred by the statute of limitations; although Greene Trio labeled its claim “breach of fiduciary duty,” Jackson contended that the gravamen of the complaint stated a cause of action for either constructive fraud, which was governed by a three-year statute of limitations, or inducement of breach of contract, which was governed by a two-year limitations period. Because Greene Trio did not file its lawsuit until nearly four years after it learned that Cole had relinquished his publishing rights in the songs co-written with Carey, Jackson asserted that the action was time-barred as a matter of law.

As an alternative basis for the motion, Jackson argued that Greene Trio could not prove that his alleged conduct caused any damages. He claimed that the undisputed evidence established that, if Cole had not agreed to transfer his copyright interest in the three songs co-written with Carey, Carey would not have agreed to work with him. In that case, Jackson contended, there would have been no Carey-Cole compositions and no publishing income from such songs for Greene Trio to have earned.

In its opposition, Greene Trio contended that, irrespective of whether its allegations against Jackson might support a claim for constructive fraud, the complaint stated a separate cause of action for breach of fiduciary duty which was governed by a four-year limitations period. Greene Trio further asserted that the trial court should disregard Aaron’s deposition testimony about his belief that Jackson breached his fiduciary duty because that evidence was not specifically set forth in Jackson’s separate statement of undisputed facts. With respect to damages, Greene Trio argued that there was a triable issue of fact as to whether Carey would have required Cole to relinquish his publishing rights as a condition of writing songs with her and whether Greene Trio would have entered into a co-publishing agreement with Cole had it known that Carey-Cole compositions were excluded from the deal. Greene Trio noted that, while Jackson relied on Carey’s customary practice to support his argument, it was wholly speculative as to what Carey would have done in Cole’s particular situation.

Greene Trio filed a written objection and motion to strike portions of Aaron’s deposition testimony on those grounds.

Following a hearing on the motion, the trial court granted summary judgment on both grounds and entered judgment in Jackson’s favor on June 14, 2007. Greene Trio thereafter filed a timely appeal.

DISCUSSION

I. Standard of Review

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) “Once the [movant] has met that burden, the burden shifts to the [other party] to show that a triable issue of one or more material facts exists as to that cause of action . . .” (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra, at p. 850.) A triable issue of material fact exists where “the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co., supra, at p. 850.)

Where summary judgment has been granted, we review the trial court’s ruling de novo and independently examine the record to determine whether there is a triable issue of material fact. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 860.) In performing our de novo review, we consider all of the evidence presented by the parties in connection with the motion (except that which the trial court properly excluded) and all of the uncontradicted inferences that the evidence reasonably supports. (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) In so doing, we strictly construe the moving party’s evidence and liberally construe the opposing party’s, “accept[ing] as undisputed only those portions of the moving party’s evidence that are uncontradicted.” (Hernandez v. Department of Transportation (2003) 114 Cal.App.4th 376, 382.) We affirm summary judgment where the papers and pleadings show that there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (§ 437c, subd. (c).)

II. Statute Of Limitations

A. Jackson Produced Sufficient Evidence to Satisfy His Burden of Production

Greene Trio first contends that Jackson failed to meet his burden of production on summary judgment because certain alleged material facts on which Jackson relied to support his statute of limitations defense were not referenced in his separate statement of undisputed facts. The specific evidence at issue was Aaron’s deposition testimony about the basis for his belief that Jackson breached his fiduciary duty. Greene Trio asserts that, even though such evidence was submitted with Jackson’s moving papers, it should have been disregarded by the trial court because it was not cited in his separate statement. In making this argument, Greene Trio points to the oft-cited “Golden Rule” of summary judgment which provides that if an alleged material fact “‘is not set forth in the separate statement, it does not exist.’” (United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.) We find, however, that Greene Trio’s argument fails for two separate reasons.

First, we disagree that the trial court was precluded from considering evidence that was presented with Jackson’s moving papers, but not specifically set forth in his separate statement. It is true that a party moving for summary judgment must support the motion with “a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed,” and that “[e]ach of the material facts stated shall be followed by a reference to the supporting evidence.” (§ 437c, subd. (b)(1).) It is also true that the “failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denial of the motion.” (Ibid.) The summary judgment statute does not, however, mandate denial of the motion based solely on a deficient separate statement nor does it prohibit the trial court from considering evidence that is excluded from the separate statement. Instead, it leaves such a determination to the discretion of the trial court. (Frazee v. Seely (2002) 95 Cal.App.4th 627, 636 [moving party’s failure to comply with separate statement requirement is, “in the court’s discretion, proper grounds to deny the motion”]; San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 316 [“Whether to consider evidence not referenced in the moving party’s separate statement rests with the sound discretion of the trial court . . .”].)

The requirement of a separate statement serves two functions: “to give the parties notice of the material facts at issue in the motion and to permit the trial court to focus on whether those facts are truly undisputed.” (Parkview Villas Assn., Inc. v. State Farm Fire & Casualty Co. (2005) 133 Cal.App.4th 1197, 1210.) The trial court thus has discretion to consider evidence submitted with the moving papers but not specifically referenced in the separate statement provided that the party opposing summary judgment is on notice of the evidence and has the opportunity to respond to it. (San Diego Watercrafts, Inc. v. Wells Fargo Bank, supra, 102 Cal.App.4th at p. 316 [where consideration of evidence not contained in a separate statement presents no due process concerns, the trial court has discretion to consider the evidence]; Security Pacific Nat. Bank v. Bradley (1992) 4 Cal.App.4th 89, 93-94 [where a case involves simple issues with minimal evidentiary support, there is no due process impediment to considering the motion even in the absence of an accompanying separate statement]; Fenn v. Sherriff (2003) 109 Cal.App.4th 1466, 1481 [appellate court has “the same discretion as the trial court to consider evidence not referenced in the moving party’s separate statement in determining whether summary judgment was proper”].)

In this case, the evidence concerning Aaron’s belief that Jackson breached his fiduciary duty to Greene Trio was attached to Jackson’s appendix of evidence and was repeatedly referenced in his memorandum of points and authorities. Moreover, the evidentiary material presented by Jackson in support of his motion was not extensive and the legal issues involved in considering his statute of limitations defense were not complex. Therefore, although Jackson failed to set forth this testimony in his separate statement, his moving papers provided Greene Trio with adequate notice of the testimony and an opportunity to respond to it. The trial court was well within its discretion in considering such evidence.

Second, even if we were to disregard Aaron’s deposition testimony about his belief that Jackson breached his fiduciary duty, we still would find that Jackson presented sufficient evidence for the trial court to rule on his statute of limitations defense. The statute of limitations in a particular action is governed by the gravamen of the plaintiff’s complaint. (City of Vista v. Robert Thomas Securities, Inc. (2000) 84 Cal.App.4th 882, 889 [“The statute of limitations that applies to an action is governed by the gravamen of the complaint, not the cause of action pled.”].) Accordingly, once the trial court determined the applicable limitations period based on the allegations in Greene Trio’s complaint, the only other “facts” that the court needed to consider in deciding whether the action was time-barred were the date on which the action accrued and the date on which the action was filed. Jackson’s separate statement included such alleged facts. In particular, the separate statement set forth alleged material facts regarding the date on which Greene Trio first learned that Cole had relinquished his publishing rights in the three Carey-Cole songs as a result of Jackson’s conduct and the date on which Greene Trio filed its lawsuit against Jackson. In opposing Jackson’s summary judgment motion, Greene Trio did not dispute those facts.

Therefore, contrary to Greene Trio’s contention, all material undisputed facts concerning Jackson’s statute of limitations defense were properly before the trial court. The only disputed issue – i.e., what statute of limitations applied to the action – was one of law. (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1142-1143 [“Where the operative facts are undisputed, the question of the application of the statute of limitations is a matter of law.”]; Wells Fargo Bank v. Superior Court (1977) 74 Cal.App.3d 890, 895 [“When there is no dispute over the decisive facts, the question of limitations is one of law, amenable to disposition by summary judgment.”].)

B. Greene Trio’s Action Was Barred By the Three-Year Statute Of Limitations Applicable to Constructive Fraud.

“The statute of limitations to be applied is determined by the nature of the right sued upon, not by the form of the action or the relief demanded.” (Day v. Greene (1963) 59 Cal.2d 404, 411.) Accordingly, in deciding what statute of limitations applied to Greene Trio’s breach of fiduciary action against Jackson, we must look to the gravamen of the complaint rather than the cause of action pled. (City of Vista v. Robert Thomas Securities, Inc., supra, 84 Cal.App.4th at p. 889; Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 786, fn. 2.) Jackson argues that the gravamen of Greene Trio’s complaint alleged a cause of action for constructive fraud which was subject to the three-year statute of limitations set forth in section 338, subdivision (d) for “[a]n action for relief on the ground of fraud or mistake.” (§ 338, subd. (d).) Greene Trio, on the other hand, contends that its complaint stated an actionable claim for breach of fiduciary duty and was governed by the four-year “catch-all” limitations period prescribed in section 343 for “[a]n action for relief not hereinbefore provided.” (§ 343.) Based on the gravamen of Greene Trio’s complaint, we conclude that its action against Jackson was for constructive fraud and governed by a three-year limitations period.

Alternatively, Jackson asserts that Greene Trio’s allegations supported a cause of action for inducement of breach of contract which was subject to the two-year statute of limitations provided in section 339, subdivision (1) for “[a]n action upon a contract, obligation or liability not founded upon an instrument of writing.” (§ 339, subd. (1).)

Constructive fraud is a unique species of fraud that applies solely to a fiduciary or confidential relationship. (Assilzadeh v. California Federal Bank (2000) 82 Cal.App.4th 399, 415.) Civil Code section 1573 defines constructive fraud, in pertinent part, as follows: “[i]n any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him . . .” (Civ. Code, § 1573.) “‘[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.’” (Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555, 562.) For instance, the failure of a fiduciary to disclose a material fact which is known or should be known to the fiduciary may constitute constructive fraud. (Ibid.) Constructive fraud thus “‘arises on a breach of duty by one in a confidential or fiduciary relationship to another which induces justifiable reliance by the latter to his prejudice. (Civ. Code, § 1573.)’ [Citation.]” (Estate of Gump (1991) 1 Cal.App.4th 582, 601.)

“Where constructive fraud is the gravamen of the action[,] the three-year period prescribed in section 338 . . . of the Code of Civil Procedure applies.” (Day v. Greene, supra, 59 Cal.2d at p. 411.) California courts accordingly have applied a three-year statute of limitations to claims labeled “breach of fiduciary duty” where the gravamen of the cause of action was constructive fraud. For instance, in City of Vista v. Robert Thomas Securities, Inc., supra, 84 Cal.App.4th 882, the City of Vista brought a claim for “breach of fiduciary duty” against its former securities dealers based on the dealers’ alleged conduct in misrepresenting the nature of securities sold to the city and charging a markup rate for those securities. (Id. at p. 885.) On appeal, the city contended that a four-year limitations period applied to its claim. (Id. at p. 889.) The Court of Appeal disagreed, holding that because “[t]he gravamen of Vista’s complaint is that [defendants’] acts constituted actual or constructive fraud,” the three-year statute of limitations applicable to fraud claims governed the breach of fiduciary duty action. (Ibid.; see also Wyatt v. Union Mortgage Co., supra, 24 Cal.3d at p. 786, fn. 2 [where the “gravamen of respondents’ cause of action is that the appellants committed actual and constructive fraud by conspiring to breach their fiduciary duties[,] . . . Code of Civil Procedure section 338, subdivision 4 states the applicable statute of limitations”]; Hatch v. Collins (1990) 225 Cal.App.3d 1104, 1110 [three-year statute of limitations applied to a claim for breach of fiduciary duty where the action was “founded upon a fraudulent conspiracy” by defendants to defraud plaintiff in a real estate transaction].)

Here, Greene Trio’s sole cause of action against Jackson sounded in constructive fraud. In its complaint, Greene Trio alleged that Jackson breached his fiduciary duty by “actively encouraging, assisting, and conspiring with defendant Cole to breach his Co-Publishing Agreement with Greene [Trio], that is, . . . Jackson was substantially involved in the improper ‘transfer’ of [Greene Trio’s] copyright interests . . . to some music publisher other than Greene [Trio].” Greene Trio further alleged that “Jackson . . . did so by means of secret dealings with Cole and with others,” and that “he kept the details of those acts from the members of [Greene Trio], all breach of [his] fiduciary duties.” The gravamen of the complaint was thus that Jackson committed “an act, omission, or concealment involving a breach of [his] legal or equitable duty” in that he secretly assisted or conspired with Cole to transfer his publishing rights to Carey which resulted in damage to Greene Trio. (Salahutdin v. Valley of California, Inc., supra, 24 Cal.App.4th at p. 562.) Notwithstanding its label, this was a claim for constructive fraud.

In both its opening appellate brief and summary judgment opposition, Greene Trio asserted that “Jackson breached his fiduciary duty to Greene Trio in his failure to disclose his knowledge concerning the nature and status of Cole[’s] relationship with Carey . . ., and thereafter.” Greene Trio did not provide any argument as to how Jackson breached his fiduciary duty “thereafter,” but simply cited to an alleged fact in its separate statement which stated that Jackson acted in bad faith by not fulfilling his principal role in the company which was to use his contacts in the music industry to create publishing opportunities for Greene Trio’s contracted songwriters. However, as alleged in Greene Trio’s complaint, the suit against Jackson was based solely on his purported involvement in Cole’s transfer of his publishing rights in the songs co-written with Carey, and as discussed above, those allegations stated a cause of action for constructive fraud. The complaint never alluded to any separate failure by Jackson to create opportunities for Greene Trio’s songwriters. It is well-settled that a defendant moving for summary judgment need only negate the theories of liability that are alleged in the complaint and that a plaintiff may not defeat summary judgment by advancing a new, un-pleaded theory of liability. (Government Employees Ins. Co. v. Superior Court (2000) 79 Cal.App.4th 95, 98, fn. 4 [“A defendant moving for summary judgment need address only the issues raised by the complaint; the plaintiff cannot bring up new, unpleaded issues in his or her opposition papers. [Citation.]”].) Therefore, while it is unclear from Greene Trio’s papers whether it was contending that Jackson breached his duty by engaging in conduct separate from his actions involving Cole, it is clear that no such theory of liability was alleged in its complaint. Greene Trio thus was precluded from asserting any such theory for the first time at the summary judgment stage.

Greene Trio argues that its action against Jackson may be grounded in more than one legal theory and that a claim for breach of fiduciary duty may co-exist with a claim for constructive fraud. In defense of this argument, Greene Trio relies on the First Appellate District’s decision in c v. Evans (1944) 66 Cal.App.2d 677. That decision, however, stands for the distinct proposition that where a plaintiff pleads and proves both a cause of action for fraud and a cause of action for “breach of an oral voluntary continuing trust,” the voluntary trust claim is not barred by section 338, subdivision (d) and does not accrue until the beneficiary knows that the trust has been repudiated. (Id. at pp. 683-684, 686.) The Court of Appeal in Kornbau v. Evans did not address the legal issue presented here: what statute of limitations applies when the plaintiff’s complaint pleads a cause of action for “breach of fiduciary duty” based solely on allegations that the defendant committed actual or constructive fraud. The courts that have addressed that issue have held that the three-year limitations period governing fraud actions also applies to the breach of fiduciary duty claim. (See, e.g., City of Vista v. Robert Thomas Securities, Inc., supra, 84 Cal.App.4th at p. 889; Hatch v. Collins, supra, 225 Cal.App.3d at p. 1110.) Greene Trio is correct that, under certain circumstances, a plaintiff may plead both a cause of action for constructive fraud and a separate cause of action for breach of fiduciary duty. However, where, as here, the gravamen of the breach of fiduciary duty claim is that the defendant committed constructive fraud, then the statute of limitations contained in section 338, subdivision (d) likewise governs that claim.

Given that Greene Trio’s cause of action against Jackson was for constructive fraud, we need not decide whether a breach of fiduciary duty claim could be alleged that would be governed by the four-year “catch-all” limitations period prescribed in section 343.

Because the gravamen of Greene Trio’s complaint against Jackson was constructive fraud, the action was governed by the three-year limitations period set forth in section 338, subdivision (d). Under that statute, the cause of action “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (§ 338, subd. (d).) In this case, it is undisputed that Greene Trio’s cause of action accrued at the latest in fall 2002, which was when Cole first informed Aaron that he had transferred his publishing rights in the three Carey-Cole songs to Carey and Joseph reported to Aaron that Jackson had represented that such transfer was approved by Greene Trio. It is also undisputed that Greene Trio did not file its complaint against Jackson until nearly four years later on August 17, 2006. The action accordingly was barred by the three-year statute of limitations and summary judgment was proper on those grounds.

Because we conclude that Greene Trio’s lawsuit against Jackson was barred by the statute of limitations, we need not address Greene Trio’s remaining argument regarding whether it could prove recoverable damages.

DISPOSITION

The judgment is affirmed. Jackson shall recover his costs on appeal.

We concur: PERLUSS, P. J., WOODS, J.


Summaries of

Greene Trio Music, LLC v. Jackson

California Court of Appeals, Second District, Seventh Division
Jul 14, 2008
No. B200087 (Cal. Ct. App. Jul. 14, 2008)
Case details for

Greene Trio Music, LLC v. Jackson

Case Details

Full title:GREENE TRIO MUSIC, LLC, Plaintiff and Appellant, v. RANDALL JACKSON…

Court:California Court of Appeals, Second District, Seventh Division

Date published: Jul 14, 2008

Citations

No. B200087 (Cal. Ct. App. Jul. 14, 2008)