Filed 1/21/16 Wells Fargo Bank v. Kabbai CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



WELLS FARGO BANK, N.A.,                                             D067531

         Plaintiff and Respondent,

         v.                                                         (Super. Ct. No. 37-2012-00093841-
                                                                     CU-CO-CTL)
RAMIN KABBAI,

         Defendant and Appellant.


         APPEAL from a judgment of the Superior Court of San Diego County, Katherine

Bacal, Judge. Affirmed.

         Ramin Kabbai, in pro. per., for Defendant and Appellant.

         Winn Law Group and Casey M. Jensen for Plaintiff and Respondent.


         Wells Fargo Bank, N.A. sued Ramin Kabbai seeking repayment of money drawn

from his home equity credit line. Wells Fargo moved for summary judgment based on

evidence showing Kabbai owed an outstanding principal balance of $119,655.78. Kabbai

opposed the motion based on a statute of limitations defense. The court found the

undisputed evidence established Kabbai owed $119,655.78 and the evidentiary record did
not support Kabbai's defense as a matter of law. The court thus granted the motion, and

entered judgment in Wells Fargo's favor for $119,655.78.

       On appeal, Kabbai contends the court erred in granting summary judgment

because there are material disputed facts on his statute of limitations defense. We reject

this contention and affirm the judgment.

                     FACTUAL AND PROCEDURAL SUMMARY

       Kabbai has provided a limited appellate record. He designated only certain

appellate filings, the final judgment, and the court's minute order explaining the grounds

for its summary judgment ruling. He did not include the complaint, the parties' moving

and opposing memoranda, the parties' evidentiary submissions, or the hearing transcript.

Our factual summary is thus necessarily derived solely from the court's minute order and

we presume the truth of the court's factual statement. (See Denham v. Superior Court

(1970) 2 Cal.3d 557, 564.)

       In March 2005, Kabbai obtained a loan secured by a first deed of trust on his

residence. Two years later, in August 2007, Kabbai and Wells Fargo executed an

agreement (Agreement) providing Kabbai with a $120,000 home equity line of credit

secured by a second deed of trust on his property. The Agreement required Kabbai to

make minimum monthly payments during a 10-year period. After this period, the

agreement provided Kabbai with a 30-year repayment period during which the remaining

balance must be paid in full. Under the Agreement's terms, upon Kabbai's default in the

monthly payments, Wells Fargo had the right to accelerate and demand the entire

outstanding amount. Wells Fargo was also entitled to waive this acceleration remedy

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without waiving its future right to require repayment of the loan upon a subsequent

default.

          Soon after executing the Agreement, Kabbai withdrew $120,000 from the credit

line. Kabbai later defaulted on the first deed of trust, and the trustee on this deed of trust

scheduled a foreclosure sale. In December 2009, Kabbai stopped making the required

payments on the Wells Fargo home equity line. Nine months later, in September 2010,

the property was sold at a foreclosure sale. Wells Fargo did not receive any funds from

the foreclosure sale and became a sold-out junior lienholder.

          In March 2012, Wells Fargo brought an action against Kabbai, seeking to recover

the outstanding principal balance on the funds withdrawn from the credit line. Wells

Fargo alleged causes of action for breach of contract, open book account, account stated,

and money had and received.

          Wells Fargo moved for summary judgment, submitting evidence showing Kabbai

owed $119,655.78 from his home equity line. In a late-filed opposition, Kabbai did not

challenge the amount of this outstanding balance. But he argued Wells Fargo's claims

were barred by the four-year limitations period set forth in Code of Civil Procedure

section 337. Kabbai claimed the causes of action accrued when he failed to make a

required payment in September 2007, more than four years before Wells Fargo filed the

action.

          After examining the papers and conducting a hearing, the court granted the

summary judgment motion. The court found Wells Fargo met its burden to show Kabbai

owed the claimed amount. Regarding Kabbai's limitations defense, the court stated

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Kabbai waived the right to raise this defense by failing to assert it in his answer. The

court alternatively found Kabbai's evidence did not support the defense. The court

reasoned:

            "Kabbai's argument assumes the entire principal became due before
            3/15/08 (four years prior to this action being filed). The agreement
            required him to make minimum monthly payments during a ten-year
            'draw period.' After the draw period, the account enters a 30-year
            'repayment period' during which the remaining balance must be paid
            in full. Even if Kabbai made only partial payments before 3/15/08,
            the remaining balance did not automatically become due upon the
            first insufficient or missed payment. Trigg v. Arnott (1937) 22
            Cal.App.2d 455, 458 ('acceleration clause does not have a self-
            operative effect so that the statute of limitations begins to run
            immediately upon the happening of a default in a payment which the
            note specifies shall be made on a designated date.') The agreement
            allows Wells Fargo to delay or partially exercise its rights without
            waiving them. . . . Thus, Kabbai cannot take advantage of Wells
            Fargo's decision not to declare the entire balance due immediately
            upon the first default. Here, Wells Fargo was within its rights not to
            declare a default until after Kabbai made his last payment on
            12/31/2009. This action was timely filed less than four years later."

       The court found Wells Fargo was entitled to recover $119,655.78 from Kabbai and

entered judgment in this amount, noting that Wells Fargo had waived prejudgment

interest and attorney fees and costs.

       Kabbai appeals.

                                        DISCUSSION

                               I. Appellate Review Principles

       It is a fundamental tenet of appellate law that the lower court's judgment is

presumed to be correct. As the party seeking reversal, it is the appellant's burden to

provide an adequate record to overcome the presumption of correctness and show


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prejudicial error. (See Denham v. Superior Court, supra, 2 Cal.3d at p. 564; Aguilar v.

Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132.)

       We must make all reasonable inferences favoring the court's order, and must

affirm the judgment if any possible grounds exist for the trial court to have reached its

conclusions. (See Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th

1412, 1416; Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 447-

448.) Any ambiguity in the record is resolved in favor of the judgment. (Ibid.) To

overcome this presumption of correctness, Kabbai must show legal error on the face of

the appellate record, which consists solely of the clerk's transcript containing four

documents: the final judgment, the minute order (summarized above), the notice of

appeal, and the notice designating the appellate record.

       Wells Fargo requests we strike Kabbai's briefs because he failed to support his

factual assertions with record citations and discussed facts outside the record. An

appellate court is limited to evaluating the facts contained in the appellate record, and an

appellant is not permitted to rely on or discuss facts outside the record. (See Cal. Rules

of Court, rule 8.204(a)(1)(C); Kendall v. Barker (1988) 197 Cal.App.3d 619, 625.)

Kabbai's briefs violate these fundamental appellate rules. However, in the interests of

justice, we decline to strike the briefs and shall reach the merits of his appeal. Our

factual review is based solely on the matters contained in the appellate record. (See

Kendall, supra, 197 Cal.App.3d at p. 625.)




                                              5
                            II. Summary Judgment Standards

       Summary judgment is properly granted when there is no triable issue of material

fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc.,

§ 437c, subd. (c).) We review a summary judgment de novo. (Buss v. Superior Court

(1997) 16 Cal.4th 35, 60.) "We liberally construe the evidence in support of the party

opposing summary judgment [citation], and assess whether the evidence would, if

credited, permit the trier of fact to find in favor of the party opposing summary judgment

under the applicable legal standards." (Millard v. Biosources, Inc. (2007) 156

Cal.App.4th 1338, 1346.) "[W]here, as here, the underlying facts are not in dispute, the

question when a statute of limitations begins to run is one of law, subject to independent

review." (Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co. (2004) 116

Cal.App.4th 1375, 1388 (Armstrong Petroleum); see Internat. Engine Parts, Inc. v.

Feddersen & Co. (1995) 9 Cal.4th 606, 611; McLeod v. Vista Unified School Dist. (2008)

158 Cal.App.4th 1156, 1164.)

            III. Legal Standards Applicable to Kabbai's Limitations Defense

       Kabbai does not dispute the existence of an outstanding debt of $119,655.78 on

his Wells Fargo line of credit. But he argues Wells Fargo is barred from seeking

repayment because Wells Fargo brought the action more than four years after his initial

late payment in September 2007. He relies on the four-year limitations period in Code of

Civil Procedure section 337, which applies to the breach of a written agreement. Wells

Fargo counters that the six-year statute of limitations set forth in Commercial Code

section 3118 applies, and alternatively, the accrual date on the default occurred on

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December 2009, which is less than four years before the action was filed. Because the

record is unclear whether Wells Fargo raised the six-year limitations rule in the

proceedings below, we assume for purposes of this appeal that the four-year limitations

period governs the action.

       The statute of limitations for "[a]n action upon any contract, obligation or liability

founded upon an instrument in writing" is four years. (Code Civ. Proc., § 337, subd. 1;

Armstrong Petroleum, supra, 116 Cal.App.4th at p. 1387.) " 'When an instrument is

payable in installments, the cause of action on each installment accrues on the day

following the date the installment is due.' [Citation.]" (White v. Moriarty (1993) 15

Cal.App.4th 1290, 1299.) However, if there is an acceleration clause allowing the

creditor to declare the entire amount due upon a default on an installment amount and the

creditor seeks to exercise this right, the statute begins to run when "the creditor, by some

affirmative act, manifests his election" to enforce the acceleration clause upon a default.

(Garver v. Brace (1996) 47 Cal.App.4th 995, 1000; accord, Jones v. Wilton (1938) 10

Cal.2d 493, 500 (Jones); Trigg v. Arnott (1937) 22 Cal.App.2d 455, 458 (Trigg).) Even

with a mandatory acceleration clause, the limitations period does not accrue until the

creditor affirmatively declares a default. (Trigg, supra, 22 Cal.App.2d at p. 458.)

                                        IV. Analysis

       The court found that in August 2007, Kabbai executed a home equity account

agreement with Wells Fargo. Having reviewed the contract, the court concluded Wells

Fargo agreed to provide Kabbai with a $120,000 line of credit secured by a second deed

of trust on property owned by him. In exchange, Kabbai agreed to repay the funds

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withdrawn by paying a minimum monthly amount during a 10-year period, and then

paying the remaining balance during a 30-year repayment period. The contract allowed

Wells Fargo to call the entire balance due upon a default in a required monthly payment.

The contract also provided that Wells Fargo was entitled to waive its right to assert this

remedy upon a missed or inadequate payment, and that it could instead declare the entire

amount due upon a subsequent default.

       Kabbai stopped making payments on the home equity line of credit after

December 2009. At that point he owed a principal balance of $119,655.78, and Wells

Fargo declared a default. Less than four years after declaring the default, in March 2012,

Wells Fargo filed a complaint seeking to recover the outstanding principal loan balance

of $119,655.78.

       Kabbai does not dispute any of these facts. On this record, the court properly

rejected the limitations defense because Wells Fargo filed the action less than four years

after the December 2009 default.

       Kabbai contends a triable issue of fact exists on his limitations defense because he

presented evidence showing he did not timely pay the September 2007 required payment

and he subsequently made payments "in erratic amounts" that were frequently less than

the minimum required under the Agreement.

       Kabbai does not cite to any facts in the record supporting these assertions. The

argument is thus without merit. But even assuming the evidence showed this payment

history, the evidence is insufficient to create a triable issue of fact on the limitations

defense. Kabbai argues that based on the acceleration clause, the full amount of the loan

                                               8
was due on his first default in September 2007. However, an acceleration clause "is not

self-operative; . . . it is for the benefit of the creditor, and the default cannot be taken

advantage of by the debtor to mature the indebtedness." (Jones, supra, 10 Cal.2d at p.

500; accord, Trigg, supra, 22 Cal.App.2d at p. 458.) Under this settled law, Wells Fargo

was not required to accelerate the amount owed on the first or any subsequent breach.

Wells Fargo was within its contractual rights to first invoke its acceleration remedy upon

Kabbai's breach in December 2009, and thus Wells Fargo timely filed its action less than

four years later in March 2012.

        Kabbai contends there is a triable issue of fact on whether Wells Fargo waived its

right to declare a default by accepting late or inadequate payments. This argument is

without merit because there is no evidence of these late or missed payments. But even

assuming this evidence existed, it is undisputed the parties' agreement contained a clause

providing that Wells Fargo had the right to delay or partially exercise its rights without

waiving its rights to later declare a default. Based on this clause, and absent any evidence

showing Wells Fargo manifested an intent to waive this provision or engaged in conduct

reflecting a waiver, Kabbai's waiver argument fails as a matter of law.

       In support of his waiver argument, Kabbai cites Bowman v. Santa Clara County

(1957) 153 Cal.App.2d 707 and Rubin v. L. A. Fed. Sav. & Loan Assn. (1984) 159

Cal.App.3d 292. These decisions are inapplicable because in those cases there was no

evidence that a written agreement between the parties expressly provided that the plaintiff

did not waive its rights to enforce the contract by accepting inadequate performance.



                                                9
Moreover, in those cases there was evidence supporting a waiver in addition to the mere

acceptance of inadequate payments. In this case, there was no such evidence.

                                    DISPOSITION

      Judgment affirmed. Appellant to bear respondent's costs on appeal.




                                                                            HALLER, J.

WE CONCUR:



HUFFMAN, Acting P. J.



O'ROURKE, J.




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