Filed 11/27/13 Garrison v. OneWest Bank CA1/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION ONE


ANN GARRISON,
         Plaintiff and Appellant,
                                                                     A136390
v.
ONEWEST BANK, FSB, et al.,                                           (San Francisco City & County
                                                                     Super. Ct. No. CGC-09-491020)
         Defendants and Respondents.


         Plaintiff Ann Garrison sued several defendants involved in the foreclosure of a
mortgage on her residence. Ultimately, the trial court sustained a demurrer without leave
to amend to the sole claim of her sixth amended complaint, finding the claim barred by
the statute of limitations. We affirm.
                                               I. BACKGROUND
         Garrison filed suit against defendants on August 3, 2009, alleging causes of action
for negligence, breach of contract, fraud, and other theories in connection with the
foreclosure on her residential mortgage. After a series of demurrers by defendants,
Garrison filed her sixth amended complaint (complaint) on January 26, 2012. The
complaint alleged Garrison had purchased a home in San Francisco in 1998. In 2005, she
refinanced. At some point in 2008, foreclosure proceedings were instituted, but Garrison
was able to pay the amount demanded. In December of that year, however, defendants
demanded much larger payments, and Garrison ultimately lost the home to foreclosure.
         In the complaint’s only cause of action, for breach of contract, Garrison alleged
that although the promissory note carried an initial interest rate of 1 percent, the interest
rate became variable after May 1, 2005, adjustable monthly. The variable interest rate
was to be determined on the basis of an index calculated according to “the twelve month
average of monthly yields on actively traded United States Treasury Securities, adjusted
to a constant maturity of one year.” The note stated this index was published monthly in
“Federal Reserve Statistical Release G13.” Under the terms of the note, if that index
became “no longer available,” the note holder was entitled to choose a new index “based
upon comparable information,” with notice to the promisor. Garrison alleged the Federal
Reserve had discontinued the specified index in 2002 and she had never been given
notice of a substitute. As a result, she alleged, “Defendants never had any basis for
calculating an interest change from the initial 1% rate.”
       Defendants filed a demurrer arguing the complaint was barred by the statute of
limitations for actions on a written contract, since her original complaint had not been
filed until more than four years after May 1, 2005, when the variable interest rate became
effective. (Code Civ. Proc., § 337, subd. (1).) In her opposition, Garrison explained she
first discovered the discontinuance of the Federal Reserve index after she read a real
estate law guide book while preparing to file this action in 2009. The guide book
suggested investigating whether the borrower’s interest rate had been properly calculated.
When Garrison looked for the index, she discovered it had been discontinued.1
       The trial court sustained the demurrer without leave to amend, explaining in its
order, “Plaintiff’s sole cause of action for breach of contract is barred by the applicable
statue [sic] of limitations and Plaintiff has failed to plead sufficient facts to show her
entitlement to tolling, even though she was previously given a leave to amend to address
this deficiency.”
                                     II. DISCUSSION
       Arguing several theories, Garrison contends the trial court erred in finding her
action barred by the statute of limitations.


       1
         In an earlier pleading, Garrison had acknowledged the discontinuance was
officially posted on the Federal Reserve Web site.


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       “To determine whether a demurrer was properly sustained, we review the
allegations of the operative complaint for facts sufficient to state a claim for relief. In
doing so, we treat the demurrer as admitting all material facts properly pleaded.
‘ “Further, we give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context.” ’ ” (C.A. v. William S. Hart Union High School Dist. (2012)
53 Cal.4th 861, 866.) “The application of the statute of limitations on undisputed facts is
a purely legal question [citation]; accordingly, we review the lower courts’ rulings de
novo. We must take the allegations of the operative complaint as true and consider
whether the facts alleged establish [the] claim is barred as a matter of law.” (Aryeh v.
Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191 (Aryeh).)
       “[T]he statute of limitations exists to promote the diligent assertion of claims,
ensure defendants the opportunity to collect evidence while still fresh, and provide repose
and protection from dilatory suits once excess time has passed. [Citations.] . . . [¶] The
limitations period, the period in which a plaintiff must bring suit or be barred, runs from
the moment a claim accrues. [Citations.] Traditionally at common law, a ‘cause of
action accrues “when [it] is complete with all of its elements”—those elements being
wrongdoing, harm, and causation.’ [Citation.] This is the ‘last element’ accrual rule:
ordinarily, the statute of limitations runs from ‘the occurrence of the last element
essential to the cause of action.’ [Citations.] [¶] To align the actual application of the
limitations defense more closely with the policy goals animating it, the courts and the
Legislature have over time developed a handful of equitable exceptions to and
modifications of the usual rules governing limitations periods. These doctrines may alter
the rules governing either the initial accrual of a claim, the subsequent running of the
limitations period, or both.” (Aryeh, supra, 55 Cal.4th at pp. 1191–1192.)
       Garrison first contends the trial court’s order failed to comply with Code of Civil
Procedure section 472d, which requires an order sustaining a demurrer to contain “a
statement of the specific ground or grounds upon which the decision or order is based.”
As noted above, the trial court stated in its order: “Plaintiff’s sole cause of action for
breach of contract is barred by the applicable statue [sic] of limitations and Plaintiff has


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failed to plead sufficient facts to show her entitlement to tolling.” This is sufficient to
satisfy section 472d, which requires the court “to state the specific grounds for its
decision” but does not require the court “to state its reasons for sustaining the demurrer
on the specified grounds.” (Fremont Indemnity Co. v. Fremont General Corp. (2007)
148 Cal.App.4th 97, 111.)
       Garrison also argues her cause of action should be deemed to have accrued on a
later date than May 1, 2005, alternatively proposing the dates when defendants
commenced foreclosure proceedings, when she first consulted counsel, when she
commenced her action, or when she first learned of the failure to notify her of the
changed index. A cause of action ordinarily accrues when suit may be maintained, such
as when a wrongful act occurs or upon the occurrence of the last element essential to the
cause of action. (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th
809, 815.) Garrison could have brought her action as soon as defendants began to charge
her a rate of interest above 1 percent, since all of the elements of the cause of action—
defendants’ breach and injury as a result of the breach— had occurred when defendants
first began to calculate her interest charges on the basis of an undisclosed index.
According to the allegations of her complaint, that date was May 1, 2005.
       Garrison argues she might not have suffered net injury from the charging of a
higher interest rate at that time, since “she was reported to the IRS to have paid more
interest than she actually had.” The charging of an unauthorized interest rate above 1
percent necessarily caused damage to Garrison, even if she mitigated that impact by
taking a larger income tax deduction than was actually warranted.2



       2
         Garrison also claims damages at this time were “nominal,” and therefore did not
trigger the statute of limitations. The “nominal damages” doctrine is ordinarily applied to
tort claims, when breach of a duty does not cause immediate appreciable harm (see
International Engine Parts, Inc. v. Fedderson & Co. (1995) 9 Cal.4th 606, 614), rather
than to contract claims. Regardless, because the complaint does not contain allegations
about the nature of Garrison’s damages at the time, we have no basis to invoke the
doctrine.


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       Garrison argues accrual should be delayed until she discovered the failure to
notify, but the “discovery rule” is applied in breach of contract actions only when the
breach “is committed in secret” or is concealed. (William L. Lyon & Associates, Inc. v.
Superior Court (2012) 204 Cal.App.4th 1294, 1309, 1311.) There is no allegation
defendants attempted to conceal their failure to notify her, and their change in the interest
rate was necessarily disclosed. In any event, defendants’ decision to raise the interest rate
was sufficient to put Garrison on inquiry notice, thereby triggering accrual even under the
discovery rule. A reasonable person would view the imposition of a higher interest rate
as sufficient reason to inquire whether the increase was contractually permitted. (See,
e.g., Utility Audit Co., Inc. v. City of Los Angeles (2003) 112 Cal.App.4th 950, 962.)
       Garrison next seeks to invoke the “continuing accrual” doctrine. As explained in
the leading case, Aryeh, “we have long settled that separate, recurring invasions of the
same right can each trigger their own statute of limitations. . . . [¶] Generally speaking,
continuous accrual applies whenever there is a continuing or recurring obligation: ‘When
an obligation or liability arises on a recurring basis, a cause of action accrues each time a
wrongful act occurs, triggering a new limitations period.’ [Citation.] Because each new
breach of such an obligation provides all the elements of a claim—wrongdoing, harm,
and causation [citation]—each may be treated as an independently actionable wrong with
its own time limit for recovery.” (Aryeh, supra, 55 Cal.4th at pp. 1198–1199.)
       In order to determine whether the continuous accrual doctrine applies to a
particular transaction, the court must look to “the nature of the obligation allegedly
breached.” (Aryeh, supra, 55 Cal.4th at p. 1200.) In Aryeh, the defendant was alleged to
have included illegal charges in its periodic bills for equipment leasing. The court found
the continuous accrual doctrine applicable because “the duty [the defendant] owed—the
duty not to impose unfair charges in monthly bills—was a continuing one, susceptible to
recurring breaches. Accordingly, each alleged breach must be treated as triggering a new
statute of limitations.” (Ibid.) It is not unusual to apply the doctrine when a breach
involves the making of periodic payments, since each payment may constitute a new
breach of the agreement. (E.g., Tsemetzin v. Coast Federal Savings & Loan Assn. (1997)


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57 Cal.App.4th 1334, 1344 [lease]; Conway v. Bughouse, Inc. (1980) 105 Cal.App.3d
194, 200 [installment contract].) However, continuing injury from a completed breach
does not extend accrual of the cause of action. (Vaca v. Wachovia Mortgage Corp.
(2011) 198 Cal.App.4th 737, 743.)
       According to the allegations of Garrison’s complaint, defendants were entitled to
use an index different from the one disclosed by Federal Reserve Statistical Release G13
if the G13 index became no longer available, so long as the new index was “based upon
comparable information” and notice was given to the promisor. Defendants were
therefore not in breach of the note merely by charging an interest rate calculated under an
index different from the one specified in the note. Further, Garrison does not allege that
the substitute index selected by defendants violated the requirements of the note—for
example, by not being based upon “comparable information.” Rather, her allegation is
that defendants adopted use of a new index without providing her proper notice under the
terms of the note. The duty to provide such notice, of course, arose simultaneously with
defendants’ first use of a new index, in May 2005.
       Under these circumstances, we find the continuous accrual doctrine inapplicable to
extend the time for filing suit. Defendants’ breach occurred in 2005, when they adopted
use of a new index without providing notice to Garrison. In the absence of an allegation
the new index was in some manner improper or not in compliance with the requirements
of the note, there was no new breach each time defendants used it. Rather, the breach
occurred once, when the index was adopted without notice, and had, at most, a continuing
effect through the repeated calculation of interest due. This insufficient to allow
invocation of the continuous accrual doctrine. (Vaca v. Wachovia Mortgage Corp.,
supra, 198 Cal.App.4th at p. 743.)
       Garrison next invokes the doctrine of equitable tolling. That doctrine stays the
time for pursuing one remedy “when a plaintiff has reasonably and in good faith chosen
to pursue one among several remedies” (Aryeh, supra, 55 Cal.4th at p. 1192), ordinarily
while a plaintiff pursues a formal administrative remedy rather than litigation. (See
generally Bjorndal v. Superior Court (2012) 211 Cal.App.4th 1100, 1106–1107.)


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Garrison does not allege the pursuit of any other formal remedy prior to bringing suit.
Although she claims to have engaged in negotiations with defendants, she cites no case
law holding that the doctrine of equitable tolling is triggered by informal attempts to
resolve a dispute.
       Garrison also contends in her brief she was mentally incapacitated during a portion
of the time, as stated in her second and third amended complaints. We have examined
those pleadings, which are in the clerk’s transcript, and we found no allegations of
incapacity. Although her fourth amended complaint does allege Garrison suffered a
“slow mental breakdown,” the circumstances alleged do not describe sufficient incapacity
to qualify for tolling. Garrison, for example, alleges that during this time of purported
incapacity, she “somehow managed to keep my bills paid . . . and maintain a credit score
above 700.” Those are beyond the ability of a legally incapacitated person. (See Hsu v.
Mt. Zion Hospital (1968) 259 Cal.App.2d 562, 571 [mental incapacity requires “a
condition of mental derangement which renders the sufferer incapable of caring for his
property or transacting business, or understanding the nature or effects of his acts”].)
       Finally, Garrison contends she should be treated differently because she is a pro.
per. litigant. (E.g., Bach v. County of Butte (1983) 147 Cal.App.3d 554, 564 [“Where a
section 1983 [(42 U.S.C. § 1983)] complaint is drafted by a pro. per. litigant, it is held ‘to
less stringent standards than formal pleadings drafted by lawyers.’ ”].) Although pro.
per. litigants are certainly entitled to greater leeway than counsel, it has never been
suggested that “procedural rules in ordinary civil litigation should be interpreted so as to
excuse mistakes by those who proceed without counsel.” (McNeil v. United States
(1993) 508 U.S. 106, 113, fn. omitted.) Garrison has already been given exceptional
consideration by the trial court; she was allowed to amend her complaint five times
before the court finally dismissed her action.3 The failure to comply with the statute of



       3
         We do not understand Garrison to argue the trial court abused its discretion in
refusing to permit the filing of a seventh amended complaint, but we would find no abuse
of discretion on this record in any event.


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limitations bars a cause of action equally for all plaintiffs, whether or not represented by
counsel.
                                   III. DISPOSITION
       The judgment of the trial court is affirmed.




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                                                 _________________________
                                                 Margulies, Acting P.J.


We concur:


_________________________
Dondero, J.


_________________________
Sepulveda, J.*




       *
        Retired Associate Justice of the Court of Appeal, First Appellate District
assigned by the Chief Justice pursuant to article VI, section 6 of the California
Constitution.


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