Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County Super. Ct. No. 04CC08140, Charles Margines, Judge.
John M. Boyko for Plaintiff and Appellant.
Nemecek & Cole, Michael McCarthy, Matthew Hafey, and Mark Schaeffer for Defendants and Respondents.
OPINION
IKOLA, J.
In a prior opinion we noted, “The dispute here has been described as a ‘long story of litigation.’” (O’Brien v. Patel (Jan. 11, 2006, G034773) [nonpub. opn.].) We now add another chapter to the story. Defendants Bharat Patel, Ashik Patel, Purushottam Patel, Castle Inn, Inc., and Convention Center Inn, Inc. (defendants) demurred to plaintiff Timothy O’Brien’s complaint. The court sustained the demurrer without leave to amend. It found plaintiff was required to assert his claims in a compulsory cross-complaint in a prior action, which he had filed but voluntarily dismissed. We agree with regard to defendants Bharat Patel, Ashik Patel, and Purushottam Patel (the Patels). We disagree with regard to defendants Castle Inn, Inc., and Convention Center Inn, Inc. (the hotels). But plaintiff’s claims against the hotels are time-barred. Thus, we affirm.
FACTS
In 1997, defendants and others were named as cross-defendants in an action to partition a hotel and appoint a receiver (the prior action). The Patels filed their own 54-page cross-complaint including as cross-defendants, plaintiff and other third parties. They alleged plaintiff was a “shill” officer for a corporation controlled by someone named Kennedy. They further alleged Kennedy helped defendants obtain financing for one of their hotels in exchange for “a piece of the action,” took over operation of the hotel, and looted it. The Patels also alleged Kennedy and an entity he controlled claimed that they were entitled to $300,000 for helping some of the defendants obtain financing for their other hotels. They sought a declaration that they did not owe any such finder’s fee.
Plaintiff filed a cross-complaint against defendants. Plaintiff alleged that defendants fraudulently induced him and Kennedy to find a lender to help them refinance the mortgages on two of their hotels. Plaintiff further alleged defendants falsely promised to pay him a finder’s fee, negotiated extensions of time to pay the fee in bad faith, and ultimately failed to pay the fee.
In response to defendants’ demurrer, plaintiff voluntarily dismissed eight of the nine causes of action in his cross-complaint. Nonetheless, the court sustained the demurrer and entered judgment against plaintiff on all nine causes of action. Plaintiff appealed, and the Court of Appeal reversed the judgment as to the voluntarily dismissed causes of action. (PBA, LLC v. KPOD, Ltd. (2003) 112 Cal.App.4th 965, 980.)
After the appeal, plaintiff filed this action against defendants and three others. The complaint’s allegations were substantially identical to those asserted in plaintiff’s cross-complaint in the prior action. He alleged defendants fraudulently induced him and Kennedy to find a lender to help them refinance their hotels in exchange for a finder’s fee they failed to pay.
The other three defendants, who are not involved in this appeal, are Castle Inn, L.P., Convention Center Inn, Inc., and Peter Pan Motel.
Plaintiff asserted causes of action for breach of an oral contract, breach of the implied covenant of good faith and fair dealing, interference with prospective economic advantage (two causes of action), fraud, and “conspiracy to defraud.”
Defendants filed an anti-SLAPP motion to strike the complaint, contending the complaint arose from their protected activity of suing plaintiff in the prior action. (Code Civ. Proc., § 425.16.) The court granted the motion, and we reversed. (O’Brien v. Patel, supra, G034773.) We recognized plaintiff’s complaint “alleged six causes of action that . . . were taken ‘practically verbatim’ from his cross-complaint,” and that plaintiff alleged defendants sued him in the prior action to avoid paying his fee. But we explained, “a complaint does not arise from prior litigation simply because it concerns the same subject matter.” Rather, “‘it is the principal thrust or gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP statute applies.’” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188.) In this case, we held, “[t]he ‘principal thrust or gravamen’ of the complaint is that defendants failed to pay plaintiff a finders fee, not that they filed a cross-complaint against him in the prior litigation.” We noted defendants had filed a demurrer on which the court had not ruled, and stated, “We leave it for the court to determine, in response to an appropriate filing, whether the prior litigation bars the complaint by res judicata or some other doctrine.” (O’Brien v. Patel, supra, G034773, italic added.)
All further statutory references are to the Code of Civil Procedure.
On remand, defendants again demurred to the complaint. The court sustained the demurrer without leave to amend. It held the complaint asserted the same claims as did plaintiff’s voluntarily dismissed cross-complaint in the prior action, the cross-complaint was compulsory, and plaintiff could not reassert the claims in a new action. (§ 426.30, subd. (a).)
Plaintiff appealed from the order sustaining the demurrer. This order is not appealable. (Hill v. City of Long Beach (1995) 33 Cal.App.4th 1684, 1695.) To save the appeal, we will “deem [the] order sustaining a demurrer to incorporate a judgment of dismissal.” (Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 920.)
In his opening brief, plaintiff asks us to take judicial notice of a judgment entered in this case. He did not provide a copy of any such judgment. We cannot grant his request. (Cal. Rules of Court, rule 8.252(a)(1) & (a)(2) [request for judicial notice must be set forth in separate motion; request must include material to be noticed].)
DISCUSSION
“On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed ‘if any one of the several grounds of demurrer is well taken. [Citations.]’ [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967 (Aubry).)
Plaintiff’s Causes of Action Against the Patels Are Barred by the Compulsory Cross-Complaint Requirement
The compulsory cross-complaint requirement reflects “the strict policy against multiplicity of litigation” and prohibits “piecemeal litigation.” (Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, 1435, 1436 (Carroll).) Section 426.30, subdivision (a), provides, “if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.”
A threshold issue is whether the compulsory cross-complaint requirement applies to cross-defendants — plaintiff was a cross-defendant in the prior action. One case suggests not. In Banerian v. O’Malley (1974) 42 Cal.App.3d 604 (Banerian), the plaintiffs alleged their attorney committed malpractice in a prior action — in which they were defendants — by failing to file cross-complaints against various third parties and certain other defendants. (Id. at p. 609.) The court held the attorney’s demurrer was correctly sustained. (Id. at p. 616.) It held the attorney had no legal duty to file any cross-complaints because cross-complaints against third parties and codefendants are not compulsory. (Id. at p. 612.) It stated, “Except as between plaintiffs and defendants, there is no compulsory cross-complaint in California procedure . . . . Rather, a cross-complaint is permissive as between coparties and between parties and nonparties.” (Ibid, italics added.)
(Accord Maldonado v. Harris (9th Cir. 2004) 370 F.3d 945, 951-952 [quoting Banerian, supra, 42 Cal.App.3d at p. 612]; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) ¶ 6:524, p. 6-137 [“There are no compulsory cross-complaints against parties other than plaintiff”].)
But compulsory cross-complaints are not limited to causes of action “as between plaintiffs and defendants.” (Banerian, supra, 42 Cal.App.3d at p. 612.) Section 426.30 refers to “a party against whom a complaint has been filed and served,” and a “related cause of action which . . . he has against the plaintiff.” (§ 426.30, subd. (a).) The article on compulsory cross-complaints defines “complaint” as “a complaint or cross-complaint,” and “plaintiff” as “a person who files a complaint or cross-complaint.” (§ 426.10, subds. (a), (b).) Thus, the compulsory cross-complaint requirement also applies to causes of actions by cross-defendants against cross-complainants.
The compulsory cross-complaint requirement potentially applies to plaintiff’s claims against the Patels. The Patels filed a cross-complaint against plaintiff in the prior action. If plaintiff had a related cause of action against them, he was required to assert it in a cross-complaint in that action. He “may not thereafter in any other action assert against [the Patels] the related cause of action not pleaded.” (§ 426.30, subd. (a).)
On the other hand, the compulsory cross-complaint requirement does not apply to plaintiff’s claims against the hotels. The hotels were not parties to the Patel’s cross-complaint against plaintiff in the prior action. Nor did they file a separate cross-complaint against plaintiff. Thus, plaintiff’s voluntarily dismissed cross-complaint in the prior action was permissive, not compulsory, as against the hotels. (§ 428.10, subd. (b).) His causes of action against the hotels in this action are not subject to the compulsory cross-complaint requirement.
We turn to whether plaintiff’s complaint in this action is related to the Patel’s cross-complaint against him in the prior action. A “related cause of action” is one that “arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.” (§ 426.10, subd. (c).) To determine whether one cause of action arises from the same transaction or occurrence as another, “[t]he California courts have also adopted the expansive logical relationship test of United Artists [Corp. v. Masterpiece Productions (2d Cir. 1955) 221 F.2d 213].” (Currie Medical Specialties, Inc. v. Bowen (1982) 136 Cal.App.3d 774, 777 (Currie).) This test “requires ‘not an absolute identity of factual backgrounds for the two claims, but only a logical relationship between them.’” (Ibid.) “At the heart of the approach is the question of duplication of time and effort; i.e., are any factual or legal issues relevant to both claims?” (Ibid.)
A logical relationship exists between plaintiff’s complaint and the Patels’ cross-complaint against him in the prior action. In his complaint, plaintiff asserts defendants fraudulently induced him and Kennedy to find a lender to help them refinance their hotels, and failed to pay him the promised finder’s fee. In their cross-complaint against plaintiff in the prior action, the Patels alleged plaintiff was a “shill” for Kennedy, and that plaintiff and Kennedy helped them obtain financing for one of their hotels. They also disputed Kennedy’s and, by extension, O’Brien’s entitlement to a finder’s fee for helping refinance their other hotels. Kennedy and O’Brien’s help in refinancing defendants’ hotels in exchange for a finder’s fee is relevant both to the complaint in this action and the cross-complaint in the prior action. Thus, the claims in plaintiff’s complaint are logically related to, and arise from the same transactions and occurrences as, the claims in the Patels’ cross-complaint. (Currie, supra,136 Cal.App.3d at p. 777; § 426.10, subd. (c).) Plaintiff had to assert these claims, if at all, in a compulsory cross-complaint in the prior action. (§ 426.30, subd. (a).)
Plaintiff has already conceded as much to us. When defendants filed their anti-SLAPP motion to strike the complaint, they asserted plaintiff had no probability of prevailing on the complaint because it was time-barred. When plaintiff appealed the order granting the anti-SLAPP motion, he contended his complaint was not time-barred because it should be treated as a compulsory cross-complaint related back to the prior action. He asserted his complaint was “subject-matter related” to the prior action and thus “should have related back” to its filing date. We did not reach the merits of this contention in that appeal, so plaintiff is not judicially estopped from arguing otherwise now. (MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co. (2005) 36 Cal.4th 412, 422 [judicial estoppel requires that the court adopt or accept the asserted position].) Still, “‘“briefs and arguments . . . are reliable indications of a party’s position on the facts as well as the law, and a reviewing court may make use of statements therein as admissions against the party.”’” (Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1152.)
Plaintiff argues he may renew his claims in the current action because he did, in fact, file a compulsory cross-complaint in the prior action. But plaintiff voluntarily dismissed his cross-complaint in the prior action. “[A] voluntary dismissal does not protect a cross-complainant from a later contention that a dismissed cause of action in a cross-complaint was compulsory and therefore required to be brought and adjudicated in the action initiated by the plaintiff.” (Hill v. City of Clovis (1998) 63 Cal.App.4th 434, 445 (Hill).) “To permit the dismissal and refiling of an action to function as an automatic exception to the compulsory cross-complaint requirement would encourage just the kind of piecemeal litigation section 426.30 is intended to prohibit.” (Carroll, supra, 33 Cal.App.4th at p. 1436.)
Nor can plaintiff rely upon the declaratory relief exception to the compulsory cross-complaint requirement. The exception applies “where the only relief sought is a declaration of the rights and duties of the respective parties in an action for declaratory relief . . . .” (§ 426.60, subd. (c), italics added.) On the other hand, “[i]f any party to an action seeks a remedy other than declaratory relief, the compulsory joinder provisions apply.” (Legis. Com. com., 14B West’s Ann. Code Civ. Proc., § 426.60 (2004 ed.) p. 491.) While the Patels mentioned the finder’s fee in the declaratory relief cause of action in their cross-complaint in the prior action, they also asserted 17 other causes of action. They sought compensatory damages, punitive damages, and a temporary restraining order against plaintiff and the other cross-defendants, in addition to declaratory relief. And the initial complaint filed in the prior action sought to partition a hotel and appoint a receiver. Because declaratory relief was not “the only relief sought” in the prior action, the declaratory relief exception does not apply. (§ 426.60, subd. (c).)
Plaintiff’s claims against the Patels are thus barred by the compulsory cross-complaint requirement. Plaintiff suggests no possible amendment to satisfy the requirement. We see none. The demurrer was correctly sustained as to the Patels without leave to amend.
Plaintiff’s Causes of Action Against the Hotels Are Barred by the Statute of Limitations
Because the compulsory cross-complaint requirement does not bar plaintiff’s claims against the hotels, we must determine whether the hotels have asserted any other valid ground for sustaining their demurrer. (Aubry, supra, 2 Cal.4th at p. 967 [“[t]he judgment must be affirmed ‘if any one of the several grounds of demurrer is well taken’”].) The hotels assert several potential grounds, including the statute of limitations. This is the only ground we need to address.
Plaintiff’s causes of action against the hotels are time-barred. Plaintiff alleged in his complaint and asserted in his opposition to the demurrer that his claims accrued in September 1996, when defendants refused to pay his finder’s fee. He had two years thereafter to assert his causes of action for breach of contract, breach of the implied covenant, and interference with prospective economic advantage. (§ 339 [breach of oral contract]; Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 614 [breach of implied covenant of oral contract]; Knoell v. Petrovich (1999) 76 Cal.App.4th 164, 168 [interference].) He had three years thereafter to assert his causes of action for fraud. (§ 338, subd. (d).) But plaintiff filed his complaint in 2004, eight years later. His complaint is therefore time-barred.
Plaintiff does not assert on appeal any basis to toll the statute of limitations. No valid ground appears. While plaintiff initially asserted his claims against the hotels in a timely cross-complaint in the prior action, he voluntarily dismissed it. “[A] party’s voluntary dismissal without prejudice does not come equipped by law with an automatic tolling or waiver of all relevant limitations periods; instead, such a dismissal includes the very real risk that an applicable statute of limitations will run before the party is in a position to renew the dismissed cause of action.” (Hill, supra, 63 Cal.App.4th at p. 445.) Plaintiff’s appeal in the prior action may have equitably tolled the limitations period for any causes of action he was required to assert (if at all) in that action. (Pantiagua v. Orange County Fire Authority (2007) 149 Cal.App.4th 83, 88 [pending appeal tolled statute of limitations]; §§ 356, 916.) But plaintiff’s causes of action against the hotel were permissive, not compulsory. He could have asserted these claims in a separate action against the hotels while the appeal was pending. And plaintiff’s causes of action against the hotels do not “relate back” to the filing of any pleadings in the prior action. (Luna Records Corp., Inc. v. Alvarado (1991) 232 Cal.App.3d 1023, 1030 [separate action does not relate back to prior action].)
Because the statutes of limitations on plaintiff’s causes of action against the hotels expired without any tolling, the claims are time-barred. Plaintiff suggests no possible amendment to revive his claims. The demurrer was correctly sustained as to the hotels without leave to amend.
DISPOSITION
The judgment of dismissal is affirmed. Defendants shall recover their costs on appeal.
WE CONCUR: O’LEARY, ACTING P. J., MOORE, J.