Sunrise Financial v. Sarbaz CA2/3
B324659
| Cal. Ct. App. | Jan 17, 2025Background
- Sunrise Financial, LLC (Sunrise) sued Manoucher Sarbaz and High Desert Solar, LLC over unpaid balances on two promissory notes totaling $190,000, which Sarbaz signed but claimed were for the benefit of High Desert.
- The notes were allegedly meant for the refinancing of a property owned by Lucerne Valley, LLC, but proceeds were disbursed to Sarbaz and used for High Desert instead.
- Manoucher Sarbaz signed the notes as an individual, while the notes named Lucerne as the maker, though Sarbaz admitted to lacking authority to sign for Lucerne.
- Sunrise did not receive repayment by the due date (July 8, 2013), and filed suit on July 5, 2017, alleging breach of contract, money had and received, fraud in the inducement, and unjust enrichment.
- The trial court found for Sarbaz/High Desert on all claims, ruling Sunrise’s contract claims as untimely and finding against Sunrise on the fraud merits.
- On appeal, the key question was the applicable statute of limitations to the written contract claims and adequacy of other causes of action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of Limitations Defense Pleading | Defendants waived by not citing statutes correctly | Cited facts, not code, suffices for adequate pleading | Defense adequately raised; no waiver |
| Statute of Limitations (Contract) | Four-year limit applies—written contract | Two-year limit applies—oral agreement only | Four-year limit applies; claim is timely |
| Common Counts Timeliness | Accrual delayed by oral assurances/fraudulent concealment | Claims accrued on note default; no fraudulent concealment | Claims time-barred; no tolling or concealment found |
| Fraud in the Inducement | Sarbaz knowingly made false representations about tax refund repayment | No proof of intent to deceive; Sunrise relied unreasonably | No fraud; Sunrise didn’t prove intent or justifiable reliance |
Key Cases Cited
- O'Brien v. King, 174 Cal. 769 (1917) (loan implies agreement to repay)
- Amen v. Merced County Title Co., 58 Cal.2d 528 (Cal. 1962) (written contract statute of limitations applies even if acceptance is oral or by conduct)
- Comunale v. Traders & General Ins. Co., 50 Cal.2d 654 (Cal. 1958) (implied promise is part of written contract for statute of limitations)
- Ersa Grae Corp. v. Fluor Corp., 1 Cal.App.4th 613 (Cal. Ct. App. 1991) (enforceability of sufficiently definite contract terms)
- Edmunds v. Valley Circle Estates, 16 Cal.App.4th 1290 (Cal. Ct. App. 1993) (truth of statement about intention judged at time made)