Plaintiff appeals from a judgment entered upon an order sustaining demurrer without leave to amend to plaintiff’s second amended complaint, presenting as the sole question whether the limitation provided in the lease for bringing an action is, as a matter of law, unreasonable. 1 Defendant demurred to the second amended complaint on the ground that the complaint did not state a cause of action in that it appeared that the alleged cause of action was barred by the provisions of the lease upon which it was based. The court sustained the demurrer without leave to amend.
Record
The second amended complaint alleges that on October 12, 1955, the parties entered into a "seven year written lease,” copy of which was attached to the complaint; 2 that plaintiff performed all the conditions of the lease including the payment of rent, except as to conditions waived by defendant; that on April 12,1960, defendant served upon plaintiff the attached notice to quit and to vacate the prеmises leased not later than May 14; “That the lease being for a two year term with an option for five more years is a seven year lease . . .”; that defendant had breached the lease for which breach plaintiff sought damages.
The lease states that it is for two years from October 12, 1955, “with option for 5 years.” There is no allegation in
Limitation oe Action
Paragraph 12 of the lease provides: "Claims. Lessee agrees in consideratiоn of Lessor’s execution of this lease that any claim or defense of any kind by Lessee based upon or arising in connection with this lease or otherwise shall be barred unless asserted by Lessee by the commencement of an action or the interposition of a defense within three (3) months after any inaction or in the occurrence of any action to which claim or defense relates. This provision shall survive any termination of this lease however arising.” (Emphasis added.)
This action was filed November 21, 1960. The notice to quit was served April 12 over seven months prior to the filing of the suit.
The parties agree that under California law a provision shortening a statute of limitations can be validly contracted, qualified, however, by the requirement that the period fixed is not in itself unreasonable or is not so unreasonable as to show imposition or undue advantage. (See 31 Cal.Jur.2d, §7, p. 435;
Beeson
v.
Schloss
(1920)
Thus, the real question to be determined here is whether the allegations of the complaint show that the limitation is unreasonable. Plaintiff contends that this is a question of fact for the jury, while defendant claims it is one of law for the court. The question is one of law, namely, is the period of limitation,
in itself,
unreasonable. See
Tebbets
v.
Fidelity & Casualty Co., supra,
The allegatiоns in the complaint which plaintiff contends show that the limitation in the lease constitutes imposition, undue advantage, and unreasonableness follow.
1. Defendant was required to suspend his business to a large extent tо find a new location and to move his tools, machinery and supplies there. He lost customers because thereof, the revenue from the business was reduced and his expenditures increased. His operating funds were so reduced that he was unable to advance the court costs necessary to initiate this legal action within the three months’ period, which period is not long enough to enable a person to recoup his losses and accumulate sufficient funds to start an action, as a business which has moved does not usually operate with the same volume or efficiency for a while as it previously did.
It is obvious that such farts do not show that the three months’ limitation is unreasonable. Financial considerations of the kind set forth here, while possibly to be considered on the question of damages, are not to be considered uрon the question of limitation of action.
They, as well as the other reasons given by plaintiff for failing to recognize the limitation period, are all such as may be the natural consequences of any change of business premises. A lessee should have them in mind, when breaching the terms of his lease. Moreover, the determination of the reasonableness of the limitation period in a lease must be made as of thе date of the lease. There is nothing unreasonable in requiring a service station lessee who claims to have been improperly ousted to assert such claim within three months of the ousting.
2. Paragraph 12 “aрplies to any claim that Lessee might have against the Lessor arising from any source and is not restricted to claims arising from the lease.” The reasonable intent of the parties as appears from a reading of the lease is that the limitation bars only actions arising out of the lease, and that the words “or otherwise” are to be disregarded. In any event, plaintiff’s claim arises out of the lease, and therefоre if the “or otherwise” wording affects other claims, it is completely irrelevant so far as this action is concerned.
3. Plaintiff interprets the clause as starting the limitation to run from the time of any breach by the landlord rather than from the time when the tenant learns of the breach.
4. There is a lack of mutuality in that the shortened period applies only to the lessee and not to the lessor. The agreement in
Beeson
v.
Schloss, supra,
5. The parties negоtiated for two months concerning a settlement and the withdrawal of the notice after the notice to vacate was served. There is no allegation that any act of the defendant induced plaintiff tо believe that defendant would not rely on the limitation clause. At best, the alleged negotiations would extend the time to sue, making some five months in all. Plaintiff did not sue for over seven and a half months.
6. The contract wаs drafted by the lessor and presented on a “take it or leave it’’ basis because of the lessor’s superior bargaining position, and the sole purpose of the limitation is to give the lessor unfair and unjustified prоtection against the lessee. The latter statement is, of course, a conclusion not supported by facts. As to the “take it or leave it’’ argument, what is more of a “take it or leave it’’ contract, than the policy of insurance in which a six months’ limitation
(Tebbets
v.
Fidelity & Casualty Co., supra,
7. The lease was of a service station, the operation of which could not be easily or readily moved because of the tools, equipment, etc. This fact in nowise would prevent the bringing of an action within the time prescribed.
Frankini v. Bank of America
(1939)
None of the matters alleged in thе second amended complaint tend to show that at the time of the making of the lease or at the time of its alleged breach the three months limitation was unreasonable or caused any imposition on plaintiff, or undue advantage to defendant.
Plaintiff’s purported appeal from the order sustaining demurrer to the second amended complaint without leave to amend is dismissed. The judgment is affirmed.
Sullivan, J., and Agee, J., * concurred.
Notes
Demurrers to thе complaint and the first amended complaint were sustained with leave to amend.
No copy was attached. However, a copy was attached to the original complaint. Defendant stipulated that it, as well as a copy of the notice to quit, hereinafter mentioned, he considered as attached to the second amended complaint.
Assigned by Chairman of Judicial Council.