Eloquence Corp. v. Home Consignment Center
A156925
Cal. Ct. App.May 28, 2020Background
- Eloquence and Home Consignment Center (HCC) had a consignment agreement requiring HCC to send monthly sales reports and to pay each consignor invoice within 30 days.
- After a biannual reconciliation, MWI (later merged into Eloquence) issued two invoices dated November 10, 2009 for missing inventory totaling $64,085; Eloquence granted a payment extension making them due May 9, 2010.
- Consignments and discrete invoicing continued for several years; total invoices over the relationship exceeded $600,000.
- Eloquence sued HCC and HCC’s partners in 2017 for breach of contract (failure to pay the two 2009 invoices) and for an open book account for the same amount.
- Defendants moved for summary judgment arguing the breach claim was time-barred by the 4-year statute of limitations and that no open book account existed; the trial court granted summary judgment and the Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach claim was timely under statute of limitations | Eloquence: delayed-commencement rule lets plaintiff wait until contract termination (2016) to sue | HCC: continuous accrual applies; each invoice is a discrete breach that starts a 4-year clock from its due date | Held: continuous accrual applies; invoices were divisible obligations and claim expired in May 2014 (untimely) |
| Whether an open book account exists for the 2009 amounts | Eloquence: parties’ conduct/documents show an open book account kept or agreed to, keeping account open through 2016–2017 | HCC: express contract governs payment terms; no contrary agreement and post-hoc summaries are not principal business records | Held: general rule bars open book where express contract governs; Eloquence’s documents were secondary/litigation-era and not a book account — no triable issue |
Key Cases Cited
- Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co., 116 Cal.App.4th 1375 (Cal. Ct. App. 2004) (applies continuous-accrual doctrine where contract creates divisible, periodic invoicing)
- Aryeh v. Canon Business Solutions, Inc., 55 Cal.4th 1185 (Cal. 2013) (each breach of recurring obligation accrues separately)
- Israelsky v. Title Ins. Co., 212 Cal.App.3d 611 (Cal. Ct. App. 1989) (delayed-commencement rule allows plaintiff to wait until time for final performance after material breach)
- Lambert v. Commonwealth Land Title Ins. Co., 53 Cal.3d 1072 (Cal. 1991) (delayed-commencement applied where continuing duty was breached)
- Warda v. Schmidt, 146 Cal.App.2d 234 (Cal. Ct. App. 1956) (parties’ agreement or conduct may convert contract sums into book-account items)
- Parker v. Shell Oil Co., 29 Cal.2d 503 (Cal. 1946) (open book account may exist despite express contract only with contrary agreement)
- Durkin v. Durkin, 133 Cal.App.2d 283 (Cal. Ct. App. 1955) (general rule that express contracts are not open book accounts)
- Leighton v. Forster, 8 Cal.App.5th 467 (Cal. Ct. App. 2017) (incidental or litigation-prepared records cannot convert an express contract claim into a book account to evade limitations)