Filed 1/21/16 Worldwide Subsidy Group v. DW Studios CA2/4
               NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   SECOND APPELLATE DISTRICT

                                                DIVISION FOUR




                                                                     B262200
WORLDWIDE SUBSIDY GROUP,                                             (Los Angeles County
LLC, etc.,                                                           Super. Ct. No. BC511452)

             Plaintiff and Appellant,

v.

DW STUDIOS, LLC, et al.,

              Defendants and Respondents.


         APPEAL from a judgment of the Superior Court of Los Angeles County,
Deirdre Hill, Judge. Affirmed.
         Pick & Boydston and Brian D. Boydston for Plaintiff and Appellant.
         Caldwell Leslie & Proctor, Linda M. Burrow and Craig H. Bessenger for
Defendants and Respondents.
      In the underlying action, appellant Worldwide Subsidy Group (WSG)
asserted claims against respondents DW Studios, LLC (DW Studios) and
Paramount Pictures Corporation (Paramount) for breach of contract, breach of the
implied covenant of good faith and fair dealing, and an accounting. The trial court
granted summary judgment in favor of respondents on WSG’s claims, concluding
that they were time-barred. We find no error in that ruling, and affirm.


       RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
      WSG is engaged in the business of collecting copyright royalties on behalf
of copyright owners. In the late 1990’s, DW Studios was a feature film producer
and owner, often referred to as “DreamWorks.” In or about 2006, Paramount
acquired DW Studios’ rights, obligations, and liabilities.
      There are no disputes regarding the following facts: In May 1999, WSG and
DW Studios entered into an agreement authorizing WSG to register claims for
royalties owed to DW Studios and collect those royalties. The agreement defined
the term “[d]istribution [p]roceeds” to encompass “any and all monies . . .
distributed by audiovisual collection societies throughout the world . . . excluding
. . . Canada, for all audiovisual copyright works owned and/or distributed by
[DW Studios].” Under the agreement, WSG was entitled to a commission of 20
percent of the distribution proceeds it collected. Subject to a two-year minimum
term, the agreement was to end “upon completion of the first full calendar semi-
annual [i.e., six-month] period following written notice [of termination] by either
party . . . .” WSG was entitled to a commission regarding “any [d]stribution
[p]roceeds applicable” to the agreement’s term, “irrespective of when such
[d]istribution [p]roceeds [were] payable.” Under that provision, WSG was entitled
to commissions on distribution proceeds it received arising from exhibitions and
transmissions of DW Studios’s films during, or prior to, the agreement’s term.

                                          2
      In a letter dated July 16, 2002, DW Studios notified WSG that the agreement
was terminated effective December 31, 2002. The letter stated: “[E]ffective
immediately, DreamWorks shall collect [d]istribution [p]roceeds . . . on its own
behalf, and remit WSG’s commission, as applicable, to WSG.”
      On June 11, 2013, WSG initiated the underlying action against respondents,
asserting claims for breach of contract, breach of the implied covenant of good
faith and fair dealing, and an accounting. The complaint alleged that after the July
16, 2002 letter terminating the agreement, respondents breached the agreement and
failed to provide an accounting of the royalties they had collected, “causing
damages to WSG in an amount . . . not less than $100,000.” Respondents sought
summary judgment or adjudication regarding the complaint, arguing that WSG’s
claims were time-barred under the four-year statute of limitations applicable to
actions for breach of a written contract (Code Civ. Proc., § 337, subd. 1).1 The
trial court granted summary judgment and entered judgment in favor of
respondents and against WSG.2


                                  DISCUSSION
      WSG contends the trial court erred in granting summary judgment on its
complaint. For the reasons explained below, we disagree.




1     All further statutory citations are to the Code of Civil Procedure.
2     In addition to opposing respondents’ motion for summary judgment or
adjudication, WSG filed a motion for summary adjudication regarding its breach of
contract claim, which the court denied. WSG does not challenge that ruling on
appeal.



                                          3
      A. Standard of Review
      “A defendant is entitled to summary judgment if the record establishes as a
matter of law that none of the plaintiff’s asserted causes of action can prevail.
[Citation.]” (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.) To secure
summary judgment, the defendant may demonstrate that “a complete defense
exists” to the claims. (County of San Diego v. Superior Court (2015) 242
Cal.App.4th 460, 467; § 437c, subd. (c).)
      “‘Review of a summary judgment motion by an appellate court involves
application of the same three-step process required of the trial court. [Citation.]’”
(Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1662.) The
three steps are: (1) identifying the issues framed by the complaint, (2) determining
whether the moving party has made an adequate showing that negates the
opponent’s claim, and (3) determining whether the opposing party has raised a
triable issue of fact. (Ibid.) Following a grant of summary judgment, we review
the record de novo for the existence of triable issues. (Guz v. Bechtel National,
Inc. (2000) 24 Cal.4th 317, 334.)
      Although we independently assess the grant of summary judgment, our
inquiry is subject to two constraints. Under the summary judgment statute, we
examine the evidence submitted in connection with the summary judgment motion,
with the exception of evidence to which objections have been appropriately
sustained. (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 711;
§ 437c, subd. (c).) Furthermore, our review is governed by a fundamental
principle of appellate procedure, namely, that “‘[a] judgment or order of the lower
court is presumed correct,’” and thus, “‘error must be affirmatively shown.’”
(Denham v. Superior Court (1970) 2 Cal.3d 557, 564, italics deleted, quoting 3
Witkin, Cal. Procedure (1954) Appeal, § 79, pp. 2238-2239; see also 9 Witkin,
Cal. Procedure (5th ed. 2008) Appeal, §355, p. 409.) Under this principle, WSG

                                            4
bears the burden of establishing error on appeal, even though respondents had the
burden of proving their right to summary judgment before the trial court. (Frank
and Freedus v. Allstate Ins. Co. (1996) 45 Cal.App.4th 461, 474.) For this reason,
our review is limited to contentions adequately raised in WSG’s briefs. (Christoff
v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125-126.)3


      B. Section 337, Subdivision 1
      We begin by examining the principles governing the application of section
337, subdivision 1, which sets forth a four-year limitations period for “[a]n action
upon any contract, obligation or liability founded upon an instrument in writing,”
absent exceptions not pertinent here. (§ 337, subd. (1).) WSG’s claim for breach
of a written contract is subject to that period, as is its claim for breach of the
implied covenant and fair dealing. (Love v. Fire Ins. Exchange (1990) 221
Cal.App.3d 1136, 1144, fn. 4.) Furthermore, because the purpose of WSG’s claim
for an accounting was to recover money under the written contract, that claim also
is subject to the four-year limitations period. (See Jefferson v. J.E. French Co.
(1960) 54 Cal.2d 717, 718.)
      “In ordinary tort and contract actions, the statute of limitation . . . begins to
run upon the occurrence of the last element essential to the cause of action” (Neel
v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 187), that is,


3       The two constraints narrow the scope of our inquiry. We observe that
respondents asserted several evidentiary objections to WSG’s showing, which the
trial court sustained in part and overruled in part. In addition, the court struck a
document filed by WSG entitled “Plaintiff’s Separate Statement of Undisputed
Material Facts in Support of Opposition to Motion for Summary Judgment.”
Because WSG does not challenge these rulings on appeal, it has forfeited any
contention of error regarding them.


                                            5
“when the cause of action is complete with all of its elements” (Norgart v. Upjohn
Co. (1999) 21 Cal.4th 383, 397). Thus, under section 337, subdivision 1, a claim
upon a written contract “ordinarily accrues at the time of breach, and the statute
begins to run at that time regardless of whether any damage is apparent or whether
the injured party is aware of his or her right to sue.” (3 Witkin, Cal. Procedure (5th
ed. 2008) Actions, § 520, p. 664, italics deleted.)
      Nonetheless, claims based on a written contract are potentially subject to
rules that toll accrual of the claim. As explained in April Enterprises, Inc. v. KTTV
(1983) 147 Cal.App.3d 805, 827-833 (April Enterprises), the so-called “discovery
rule” tolls the accrual of contract-based claims involving the breach of a fiduciary
relationship, as well as certain “unusual” breach of contract actions. There, a party
filed a complaint against a television station for breach of contract, alleging that
the station had erased recordings of a television program consigned to its care
under a written contract. (Id. at pp. 813-815.) After the party’s opening statement
at trial, the trial court granted nonsuit on the grounds that the breach of contract
claim was time-barred. (Id. at p. 815.) The appellate court applied the discovery
rule to the breach of contract claim, concluding that the rule governs the accrual of
claims when the injury or injury-causing act is difficult to detect, the defendant
was “in a far superior position to comprehend” the act and injury, and the
defendant has “reason to believe the plaintiff remained ignorant he had been
wronged.” (Id. at pp. 828-833.)
      When applicable, “[t]he discovery rule protects those who are ignorant of
their cause of action through no fault of their own. It permits delayed accrual until
a plaintiff knew or should have known of the wrongful conduct at issue.” (April
Enterprises, supra, 147 Cal.App.3d at p. 832.) The rule thus tolls the accrual of a
claim “until the aggrieved party has notice of the facts constituting the injury.”
(E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1318

                                           6
(E-Fab).) In this context, “[n]otice may be actual or constructive. [Citation.]
Actual notice is ‘express information of a fact,’ while constructive notice is that
‘which is imputed by law.’ [Citation.] A person with ‘actual notice of
circumstances sufficient to put a prudent man upon inquiry’ is deemed to have
constructive notice of all facts that a reasonable inquiry would disclose.
[Citations.]” (Id. at pp. 1318-1319.) To trigger the requisite constructive notice,
“‘[t]he circumstances must be such that the inquiry becomes a duty, and the failure
to make it a negligent omission.’” (Hobart v. Hobart Estate Co. (1945) 26 Cal.2d
412, 438, italics deleted, quoting Tarke v. Bingham (1898) 123 Cal. 163, 166.)
Although the existence of notice ordinarily presents a question for the trier of fact,
that issue may be resolved on summary judgment when only one reasonable
inference can be drawn from undisputed facts. (Cleveland v. Internet Specialties
West, Inc. (2009) 171 Cal.App.4th 24, 33.)
      Also applicable to contract-based claims is the doctrine of fraudulent
concealment, which is “[a] close cousin of the discovery rule” (Bernson v.
Browning-Ferris Industries (1994) 7 Cal.4th 926, 931 (Bernson)) that is “available
‘in all cases’” (Regents of University of California v. Superior Court (1999) 20
Cal.4th 509, 533, quoting Kane v. Cook (1857) 8 Cal. 449, 458). “‘It has long been
established that the defendant’s fraud in concealing a cause of action against him
tolls the applicable statute of limitations, but only for that period during which the
claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of
reasonable diligence, should have discovered it.’” (Bernson, supra, 7 Cal.4th at
p. 931, quoting Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 99.) The
fraudulent concealment nullifies any negligence or fault on the plaintiff’s part in
failing to discover the facts relevant to the cause of action (Baker v. Beech Aircraft
Corp. (1974) 39 Cal.App.3d 315, 321 (Baker)) and tolls the statute of limitations
“as long as [the] plaintiff’s reliance on the misrepresentations is reasonable”

                                           7
(Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 637). Although the
reasonableness of that reliance is ordinarily a question for the trier of fact, it may
be decided as a matter of law when the facts permit only one conclusion.
(Grisham, supra, 40 Cal.4th at p. 637.)


       C. Respondents’ Showing
       In seeking summary judgment, respondents submitted evidence supporting
the following version of the underlying events: Prior to July 16, 2002, WSG
collected and remitted some distribution proceeds to DW Studios, even though
royalties may remain unpaid for five years or longer after a claim for them is
registered. On July 16, 2002, DW Studios notified WSG that their agreement was
terminated effective December 31, 2002, and that DW Studios would henceforth
collect its royalties and remit WSG’s commission as appropriate. Two days later,
Raul Galaz responded on behalf of WSG, stating that under the agreement, “a July
16[, 2002] notice of termination result[s] in termination effective June 30, 2003,
not December 31, 2002.” Galaz nonetheless acquiesced to DW Studios’ demand
that it alone would collect its royalties.
       On October 17, 2003, DW Studios wrote to WSG, stating: “DreamWorks
has received information that you have contacted certain collection societies
purporting to represent DreamWorks with respect to amounts that are currently due
and payable to DreamWorks by such collection societies. [¶] We hereby demand
that you immediately cease and desist from any such contacts as the purported
representative of DreamWorks. As you know, the . . . [a]greement between
[WSG] and DreamWorks was terminated by letter . . . effective December 31,
2002 . . . .”
       After the July 16, 2002 letter terminating the contract, WSG received no
commissions from DW Studios, and made no inquiries regarding them prior to

                                             8
2008. In May 2008, Screenrights -- a copyright collection society in Australia and
New Zealand -- notified WSG and Paramount that they had registered competing
claims for distribution proceeds relating to the movie Galaxy Quest (DreamWorks
SKG 1999) (Galaxy Quest). The claims concerned royalties that had accrued to
DW Studios in 2002. In an e-mail to WSG dated June 11, 2008, Jean McBride, a
Paramount director responsible for copyright royalties, stated: “In the interest of
getting the matter resolved . . . , Paramount . . . agrees to remit WSG a 20% fee
after Paramount has collected from Screenrights the total royalty amount due to
DreamWorks. [¶] Based on the foregoing, I must once again respectfully demand
that you withdraw your claim as soon as possible . . . .”
      In a June 13, 2008 e-mail, Galaz replied on behalf of WSG that Paramount’s
proposal was acceptable with respect to the claims submitted to Screenrights,
which he noted also potentially encompassed royalties arising from the movie
Saving Private Ryan (DreamWorks SKG 1998) (Saving Private Ryan). Galaz
further stated: “The [July 16, 2002] letter . . . raises the issue as to whether
DreamWorks (or its successor) has collected any royalties that should have been
remitted to WSG, as the letter states that DreamWorks says that it will do [so].
WSG has received no accountings from Dreamworks (or Paramount), so am I
correct to presume that no royalties have been collected for any DreamWorks
titles? . . . [¶] Your prompt response is appreciated. ”
      On June 24, 2008, Screenrights notified WSG and Paramount that it would
pay all the royalties arising from Galaxy Quest and Saving Private Ryan to
Paramount. On the same date, at 6:21 a.m., Galaz sent an e-mail to Paramount and
Screenrights acknowledging WSG’s agreement permitting the disputed royalties to
be paid over to Paramount, subject to WSG’s right to a 20 percent commission on
them. Galaz stated: “This is not a concession of WSG’s claim to royalties
attributable to DreamWorks programming . . . . [¶] . . . I would appreciate if you

                                           9
could share with [WSG] the amount of royalties being paid over to Paramount for
this programming.”
           Later, during the evening of June 24, 2008, Mary Basich, a Paramount
executive vice president, replied by e-mail to Galaz’s June 13 and June 24, 2008
e-mails. Basich stated that Paramount would pay WSG’s 20 percent commission
on royalties from Screenrights relating to Galaxy Quest “subject to receipt of a
complete and up to date worldwide accounting from WSG of all amounts it has
received (authorized or unauthorized) in connection with the exploitation of any
DreamWorks motion pictures . . . .” (Italics added.) Basich also stated that
Paramount would pay no commission to WSG on royalties from Screenrights
relating to Saving Private Ryan because “[t]he international rights to [that movie]
were not controlled by DreamWorks during the [t]erm of the [parties’] agreement
. . . .”
           WSG did not provide the accounting required by Paramount as a condition
of payment, and although aware that Screenrights usually paid royalties in a timely
manner, WSG took no action regarding its commission until June 12, 2009, nearly
a year after Basich’s June 24, 2008 e-mail. Galaz testified in his deposition that
after resolving conflicting claims for royalties, Screenrights’ “typical” response
was to pay the royalties “[f]airly promptly,” that is, “within six months, or
something like that.” However, WSG made no inquiry regarding its commission
before June 12, 2009, when Galaz sent an e-mail to Paramount, stating: “[B]y
e[-]mail of June 24, 2008, Mary Basich . . . confirmed that an accounting for such
monies would be made to WSG for ‘Galaxy Quest’ . . . . [¶] Notwithstanding, no
accounting for the ‘Galaxy Quest’ royalties collected by Paramount has
occurred. . . . [¶] At this time, I would formally request an accounting from
Paramount for the Screenrights royalties attributable to ‘Galaxy Quest,’ and any
other royalties covered by the [parties’] agreement.” (Italics added.)

                                            10
       On June 11, 2013, WSG initiated the underlying action.


       D. WSG’s Showing
       WSG’s opposition disputed little of respondents’ showing.4 WSG
acknowledged that pursuant to the contract, it had remitted $248,000 in royalty
proceeds to DW Studios. Regarding this matter, WSG submitted a declaration
from Galaz, who stated that in January 2001, he gave DW Studies a $30,000 check
representing its share of certain royalties, and that WSG later paid DW Studios
additional royalties exceeding $218,000. WSG also maintained that after the
contract’s termination, respondents collected royalties for the transmission of films
during the term of the contract that they were obliged to share with WSG. WSG
pointed to a November 30, 2005 internal DW Studios e-mail that stated: “We
should be receiving our first payment . . . any day now (or it may have already
come in . . . ) . . . covering cable retransmissions in Denmark. . . . [¶] . . . It is
possible we will need to pay WSG a 20% commission on the amounts that were
paid for 2002 transmissions . . . .” In addition, WSG submitted evidence that in
2006, DW Studios collected additional royalties subject to the contract.
       In an effort to raise triable issues regarding the triggering of the limitations
period, WSG relied primarily on evidence regarding communications between the
parties after Galaz’s June 12, 2009 e-mail to Paramount. On October 30, 2009, in
an e-mail to WSG’s counsel, Basich stated: “[D]espite our repeated requests,


4      WSG disputed respondents’ suggestion that it affirmatively rejected the
termination date for the contract specified in DW Studios’ July 16, 2002 letter. In
addition, WSG disputed whether the contract precluded it from sharing in certain
royalties collected in Canada. As neither issue is relevant to our determination
regarding the propriety of trial court’s grant of summary judgment, we do not
discuss it further.


                                             11
WSG has failed to provide DW [Studios] with any accounting and/or payments for
the monies collected on DW’s behalf. [¶]. . . Nonetheless, in an attempt to
amicably resolve this matter, DW [Studios] reiterates its willingness to
acknowledge and remit any properly earned commissions . . . upon receipt of a full
and complete worldwide accounting from WSG . . . .” In November 2009 and
October 2010 e-mails to Basich, WSG’s counsel maintained that Paramount was
obligated to provide an accounting of the royalties it had collected.


      E. Analysis
      In granting summary judgment, the trial court concluded that WSG’s claims
were time-barred. We agree.5 Absent application of a tolling rule, WSG’s claims
accrued no later than 2006, as there is unchallenged evidence that in 2005 and
2006, respondents collected royalties potentially subject to the contract that they
did not share with WSG. For the reasons explained below, neither the discovery
rule nor the doctrine of fraudulent concealment operated to toll the accrual of




5       WSG suggests that the summary judgment was improperly granted because
the trial court previously overruled a demurrer to the complaint by respondents,
which also asserted that WSG’s claims were time-barred under section 337,
subdivision 1. We disagree. A trial court is not precluded from granting a motion
for summary judgment raising the same legal issues as a previously overruled
demurrer, as they are “two different motions.” (Community Memorial Hospital v.
County of Ventura (1996) 50 Cal.App.4th 199, 205.) In overruling respondents’
demurrer, the court concluded that “the allegations [in the complaint] only show
that the claims might be barred, not that they are in fact barred.” (Underscore
omitted.) That ruling cannot reasonably be regarded as precluding the court from
determining there were no triable issues regarding the application of the limitation
period following the presentation of evidence on a motion for summary judgment.


                                         12
WSG’s claims beyond the end of 2008. Accordingly, the claims accrued more
than four years before WSG commenced the underlying action on June 11, 2013.6
      In our view, the record discloses circumstances supporting the application of
the discovery rule. As explained in April Enterprises, “the discovery rule may be
applied to breaches which can be, and are, committed in secret and, moreover,
where the harm flowing from those breaches will not be reasonably discoverable
by plaintiffs until a future time.” (April Enterprises, supra, 147 Cal.App.3d at
p. 832.) Those circumstances are present here, as respondents’ royalty collection
activities were not directly observable by WSG, rendering it difficult for WSG to
determine whether respondents’ failure to pay commissions was attributable to
ordinary delays in the receipt of those royalties.
      The key question thus concerns when WSG had actual or constructive notice
of its claims. (E-Fab, supra, 153 Cal.App.4th at pp. 1318-1319.) For purposes of
the discovery rule, constructive notice is “triggered by suspicion.” (Id. at p. 1319.)
As our Supreme Court has explained, “[u]nder the discovery rule, the statute of
limitations begins to run when the plaintiff suspects or should suspect that her
injury was caused by wrongdoing, that someone has done something wrong to
her.[] . . . A plaintiff need not be aware of the specific ‘facts’ necessary to
establish the claim; that is a process contemplated by pretrial discovery. Once the
plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must
decide whether to file suit or sit on her rights. So long as a suspicion exists, it is




6     Although our conclusions rely in part on WSG’s evidentiary showing, we
may properly consider all the evidence submitted by the parties to determine the
propriety of summary judgment. (Villa v. McFerren (1995) 35 Cal.App.4th 733,
750-751.)


                                           13
clear that the plaintiff must go find the facts; she cannot wait for the facts to find
her.” (Jolly v. Eli Lilly & Co.(1988) 44 Cal.3d 1103, 1010-1111, fn. omitted.)
      Here, the record conclusively shows that WSG knew, or should have known,
of the misconduct alleged in the complaint as early as June 2008 and no later than
December 2008. In June 2008, when Galaz and Basich exchanged e-mails
regarding the disputed Screenrights royalties, WSG knew that respondents had
paid no commissions to WSG after the July 16, 2002 letter of termination, even
though WSG had collected substantial royalties pursuant to the contract prior to
that letter. Galaz’s June 13, 2008 e-mail to Paramount expressly raised the issue
“whether DreamWorks (or its successor) ha[d] collected any royalties that should
have been remitted to WSG . . .”and expressly inquired whether he was “correct to
presume that no royalties ha[d] been collected for any DreamWorks titles[.]”
However, Galaz received no direct response to that question. On June 24, 2008,
when Screenrights informed the parties that it would pay the disputed royalties to
Paramount and Galaz asked Paramount to share them with WSG, Basich told
Galaz that WSG would receive no commission on the royalties until WSG
provided a full accounting of its collection activities. WSG never provided the
requested accounting, and otherwise took no action relating to the commissions for
nearly a year, even though it knew that Screenrights would probably pay the
royalties to Paramount within approximately six months, that is, by the end of
2008. These undisputed facts establish that under the discovery rule, WSG’s
claims accrued as early as June 2008 and no later than the end of 2008, that is, six
months after the communications between Galaz and Basich.
      WSG contends it acted reasonably in taking no action until June 12, 2009,
when Galaz sent an e-mail to Paramount, asserting that Paramount had failed to
provide the accounting of the Screenrights royalties Basich promised in her June
24, 2008 e-mail, and demanding a full accounting of all royalties collected. WSG

                                           14
argues that the amount of the Screenrights royalties was insufficient to trigger a
more vigorous response, and that the June 12, 2009 e-mail was “a reasonable
follow-up investigation . . . .” WSG further argues: “Prior to June 12, 2009, there
could have been any number of reasons why [DW Studios] had not yet accounted
to WSG, including the possibility that Screenrights had been dilatory in making the
payment to [DW Studios], the fact that [DW Studios] might have delayed payment
to WSG due to an oversight, or some other internal [DW Studios] accounting issue
. . . .”
           WSG’s contention fails in light of Basich’s June 24, 2008 e-mail to Galaz,
which notified WSG that absent an accounting from WSG, its commission would
not be paid regardless of when Paramount received the Screenrights royalties.
WSG thus could not reasonably attribute respondents’ failure to pay the
commission to some other cause, or complain -- as Galaz did in the June 12, 2009
e-mail -- that respondents had reneged on a purported June 24, 2008 promise by
Basich to provide an accounting to WSG. Furthermore, by the end of 2008, WSG
knew that respondents had paid no commissions, including the commission
relating to the Screenrights royalties. These facts leave no doubt that as early as
June 2008 and no later than the end of 2008, WSG had “‘[a]ctual notice of
circumstances sufficient to put a prudent man upon inquiry’” whether respondents
had breached the contract, for purposes of the discovery rule. (E-Fab, supra, 153
Cal.App.4th 1308 at p. 1319.)7


7     During oral argument, WSG’s counsel maintained that respondents’ refusal
to pay the commission owed to WSG absent an accounting from WSG, as reflected
in Basich’s June 24, 2008 e-mail, constituted no potential breach of the contract,
arguing that the contract obliged WSG to provide such an accounting. Because no
such contention was raised in WSG’s brief, it has been forfeited. Moreover, we
would reject the contention were we to address it, as its key premise -- namely, that
under the contract, respondents were entitled to withhold payment of WSG’s
(Fn. continued on next page.)


                                            15
        In a related contention, WSG maintains that its inaction regarding the
commissions owed to it after the July 16, 2002 termination letter is reasonably
attributed to its awareness of the potentially lengthy “lag time” in collecting
royalties. WSG asserts that “royalties for claims made in ‘Year One’ (if existent)
are generally not collected until ‘Year Four or Five’ and in many cases ‘Year
Ten.’” However, in June 2008, WSG could not reasonably believe that all the
royalties relating to its commissions were then uncollected. Galaz acknowledged
in his deposition that not all royalties take ten years to collect. Indeed, WSG
submitted a declaration from Galaz stating that in January 2001, he gave DW
Studios a $30,000 check representing its share of certain royalties, and that WSG
later paid DW Studios additional royalties exceeding $218,000. Thus, in June
2008, WSG knew that it had collected significant royalties in a relatively brief
period before the contract was terminated, and that the Screenrights royalties were,
in fact, to be paid shortly to Paramount. That knowledge precluded any reasonable
belief by WSG that no royalties had been collected.8


commissions in the absence of an accounting from WSG -- is inconsistent with
WSG’s claims. “It is elementary a plaintiff suing for breach of contract must prove
it has performed all conditions on its part or that it was excused from
performance.” (Consolidated World Investments, Inc. v. Lido Preferred Ltd.
(1992) 9 Cal.App.4th 373, 380.) WSG’s claims for unpaid commissions thus fail if
respondents properly predicated payment of WSG’s commissions on WSG’s
provision of an accounting, as it is undisputed that WSG has never provided the
accounting demanded by respondents.
8      During oral argument, WSG’s counsel maintained that in June 2008, WSG
reasonably believed that no significant royalties were collected after the contract’s
termination, pointing to evidence that the United States Copyright Office has only
recently awarded certain royalties attributable to the period from 2000 to 2003.
However, WSG has identified no evidence that it reasonably viewed those
royalties as constituting the only significant ones to be collected after the contract’s
termination. On the contrary, WSG submitted evidence that in January 2001,
Galaz presented DW Studios with a $30,000 check representing royalties collected
(Fn. continued on next page.)


                                          16
       WSG also contends that under the doctrine of fraudulent concealment, the
accrual of its claims was tolled until November 2009 or October 2010, when its
counsel demanded an accounting from respondents. WSG argues: “[D]iscovery
. . . revealed that [DW Studios] did collect royalty proceeds for which WSG was
entitled a share as long ago as 2005 and 2006, and kept it a secret from WSG,
despite inquiries by WSG as to such collections.” As explained below, we reject
the contention.
       To establish fraudulent concealment, WSG must show that “it was not at
fault for failing to discover [its claims] or had no actual or presumptive knowledge
of facts sufficient to put [it] on inquiry.” (Baker, supra, 39 Cal.App.3d at p. 321.)
Thus, “[m]ere ignorance, not induced by fraud of the existence of facts constituting
a cause of action does not prevent the running of the statute of limitations.” (Ibid.)
Fraudulent concealment may take the form of active misrepresentations or silence
and nondisclosure. (Scafidi v. Western Loan & Bldg. Co. (1946) 72 Cal.App.2d
550, 562-563.) Silence does not constitute concealment absent a fiduciary or
confidential relationship between the parties, or “some specially appearing
circumstances . . . which of themselves equitably estop a person from relying on
his silence or inaction, and which of themselves are sufficient to create on the part
of the nonrevealor a positive duty to speak or act . . . .” (Id. at p. 562.)
       Here, there is no evidence that WSG’s tardy assertion of its claims was
induced by fraudulent concealment. “‘The doctrine of fraudulent concealment [for
tolling the statute of limitations] does not come into play . . . if a plaintiff is on
notice of a potential claim.”’ (Rita M. v. Roman Catholic Archbishop (1986) 187
Cal.App.3d 1453, 1460, quoting Hobson v. Wilson (D.C. Cir. 1984) 737 F.2d 1,

from “[w]orldwide” sources. In addition, respondents’ showing included evidence
that prior to March 2002, WSG collected royalties from Spain and the Netherlands.



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35.) As explained above, WSG had notice of its claims as early as June 2008, and
no later than the end of 2008, for purposes of the discovery rule. Nothing before
us suggests that some act of fraudulent concealment induced WSG not to act on
that notice. There is no evidence of an active misrepresentation. Nor was there
any potential fraudulent concealment by silence sufficient to toll the accrual of
WSG’s claims, as WSG has identified no fiduciary or confidential relationship
between the parties, and no circumstances capable of imposing a positive duty on
respondents to speak or act arose before June 2008, when Galaz inquired whether
he was “correct to presume that no royalties ha[d] been collected for any
DreamWorks titles.” Because respondents’ conduct following that inquiry --
namely, their failure to answer Galaz’s question, and refusal to pay WSG’s
commission in the absence of an accounting -- operated to give WSG notice of its
claims, no fraudulent concealment by silence occurred.
      WSG suggests that respondents’ failure to disclose its breaches of the
contract in 2005 and 2006, by itself, constituted fraudulent concealment. We
disagree. In Mark K. v. Roman Catholic Archbishop (1998) 67 Cal.App.4th 603,
606-609, the plaintiff asserted claims predicated on allegations that he was
sexually abused by a priest in 1975 and 1976. The trial court sustained a demurrer
to the complaint without leave to amend, concluding that the claims were time-
barred. (Id. at p. 609.) Affirming that ruling, the appellate court rejected the
plaintiff’s contention that the defendant’s mere failure to disclose evidence of the
sexual abuse constituted fraudulent concealment, stating: “If plaintiff’s approach
were to prevail, then any time a tortfeasor failed to disclose evidence that would
demonstrate its liability in tort, the statute of limitations would be tolled under the
doctrine of concealment. . . . [T]his is not the law.” (Mark K., supra, 67
Cal.App.4th at p. 613.) That rationale applies here as well. In sum, summary
judgment was properly granted.

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                               DISPOSITION
     The judgment is affirmed. Respondents are awarded their costs on appeal.
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS




                                           MANELLA, J.


We concur:




EPSTEIN, P. J.




COLLINS, J.




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