Filed 11/22/13 Rathee v. Marek CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION EIGHT


NEETA RATHEE,                                                        B244400

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. BC 430741)
         v.

LEE MAREK,

         Defendant and Appellant.




         APPEAL from a judgment and order of the Superior Court of Los Angeles
County, Michelle R. Rosenblatt, Judge. Judgment affirmed; order reversed.


         Law Offices of Edward M. Bialack and Edward M. Bialack for Plaintiff and
Appellant.


         Law Office of Edward S. Orchon and Edward S. Orchon for Defendant and
Appellant.


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        Defendant Lee Marek admits that he owes plaintiff Neeta Rathee $167,000.
Nevertheless he challenges the judgment awarding Rathee that amount, arguing that the
statute of limitations had expired before Rathee filed her lawsuit. We conclude Marek
failed to show that he was entitled to judgment as a matter of law, and therefore affirm
the judgment in favor of Rathee.
        Rathee cross-appeals, challenging the amount of the prejudgment interest awarded
by the trial court. We conclude that Rathee was entitled to prejudgment interest at the
rate of 10 percent from the date she filed her complaint until the date of judgment.
                                          FACTS
        Neeta Rathee and Vikram Singh married in 1989, separated in 2004, and
concluded their dissolution proceedings in 2010. While Rathee and Singh were married,
Singh, a physician, gave community funds to Lee Marek to invest in surgical centers.
The funds were given either in 2000 (according to Marek) or in 2004 (according to
Singh). The funds Marek owed the community were awarded to Rathee as her sole and
separate property at the conclusion of the dissolution proceeding in approximately July
2010.
        Marek testified at trial and acknowledged the debt. According to Marek, Singh
gave him $467,000, and Marek returned $300,000 leaving a balance of $167,000.
Marek admitted he converted the $167,000 to his personal use, and Marek testified that
he spent the Rathee/Singh community funds on his rent and car payments instead of
investing the money in surgical centers. Marek understood he was obligated to return the
money.
        In addition to his trial testimony, Marek previously admitted converting the funds
to his personal use. On July 20, 2004, Marek wrote Singh a letter stating: “The funds
totaling $167,000 that you have sent to me for the investments in the various surgery
centers have been used by me for my personal use as per our agreement. [¶] I presently
do not have the funds to pay back to you as you are requesting. Instead, I suggest that I
pay to you the funds amortized over ten years at 7% per annum interest. [¶] Since I am



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presently short of money I would appreciate it if I could pay you back the loan starting
Jan. 1, 2005.”
       Singh confirmed that he gave Marek community money to invest in surgical
centers. Singh reminded Marek “on and off” about the loan and Marek sent a letter
promising to repay it. Marek also orally promised to repay it.
       Rathee testified that prior to the dissolution proceedings filed in August 2004, she
knew Singh gave Marek money to invest in surgical centers. During the divorce
proceedings, she learned Marek owed the community $167,000 when Singh listed
Marek’s debt on his schedule of assets and liabilities. According to Rathee, Marek
testified during the divorce proceedings about the debt and testified that it was payable in
10 years. Although the date of the testimony is not clear from the record, the parties
appear to agree it was sometime in 2005.
                                      PROCEDURE
       On January 28, 2010, Rathee sued Marek alleging numerous causes of action.
Jurors were asked only about the breach of contract and money had and received causes
of action. In a special verdict jurors found all of the following: Singh and Marek entered
into a written contract whereby Singh loaned Marek $167,000. Marek did not pay the
loan and Rathee was harmed. Marek used community funds for purposes other than to
benefit Rathee, and Rathee was not aware of such use prior to January 28, 2008.
       Marek moved for a judgment notwithstanding the verdict on the ground that the
evidence was insufficient to support the jury finding that a written contract was entered
into and that the cause of action for money had and received was barred by the applicable
statute of limitations. The court entered judgment notwithstanding the verdict on the
cause of action for breach of written contract because there was no written acceptance by
Singh.1 The court denied the motion as to the cause of action for money had and
received.



1      Rathee does not challenge that finding on appeal.


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       Rathee moved for an award of prejudgment interest. The court awarded
prejudgment interest at 7 percent commencing on January 5, 2005. The court rejected
Rathee’s argument that prejudgment interest should be awarded at the rate of 10 percent
per annum.
                                       DISCUSSION
1. Marek’s Appeal: Denial of Judgment Notwithstanding the Verdict
       Marek argues the trial court should have granted his motion for judgment
notwithstanding the verdict on Rathee’s cause of action for money had and received.
       A motion for a judgment notwithstanding the verdict may be granted only in
limited circumstances. “[G]iven the constitutional right to jury trial and a policy of
judicial economy against willy-nilly disregarding juries’ hard work (even, in the case of a
motion for nonsuit, the work of the jury in listening to the case up to that point), the basic
rules regarding these motions [for judgment notwithstanding the verdict] are predictably
strict. Conflicts in the evidence are resolved against the moving defendant and in favor
of the plaintiff; all reasonable inferences to be drawn from the evidence are drawn against
the moving defendant and in favor of the plaintiff. [Citations.]” (Fountain Valley
Chateau Blanc Homeowner’s Assn. v. Department of Veterans Affairs (1998) 67
Cal.App.4th 743, 750.)
       “‘A cause of action is stated for money had and received if the defendant is
indebted to the plaintiff in a certain sum “for money had and received by the defendant
for the use of the plaintiff.”’” (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 937.)
The cause of action “‘lies whenever one person has received money which belongs to
another, and which in equity and good conscience should be paid over to the latter.’”
(Ibid.) A common count for money had and received is an alternative, common law
means of pleading an unjust enrichment or quasi-contract cause of action and therefore
the applicable statute of limitations depends on the underlying theory on which recovery
is sought. (Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 348.)
Money had and received based on an obligation not founded on a writing is governed by



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a two-year statute of limitations. (Bowden v. Robinson (1977) 67 Cal.App.3d 705, 718;
Code Civ. Proc., § 339.)
       If Marek’s only conduct had been the receipt of money from the community, the
two-year statute of limitations would have expired. Even assuming that the statute of
limitations did not begin to run until Rathee learned Marek converted the funds to his
own use, which Rathee learned in 2005 when Marek testified in the dissolution
proceeding, Rathee’s lawsuit filed in 2010 was not timely.
       But in addition to Marek’s receipt of $167,000 in community funds, Marek also
promised to repay the funds. Specifically on July 20, 2004, Marek wrote: “The funds
totaling $167,000 that you have sent to me for the investments in the various surgery
centers have been used by me for my personal use as per our agreement. [¶] I presently
do not have the funds to pay back to you as you are requesting. Instead, I suggest that I
pay to you the funds amortized over ten years at 7% per annum interest. [¶] Since I am
presently short of money I would appreciate it if I could pay you back the loan starting
Jan. 1, 2005.” Marek testified that he wrote this letter, and the fact that he wrote it was
undisputed. Marek also testified that he understood that he had to pay back the money.
Prior to this trial, in the divorce proceedings Marek testified, and he “acknowledged the
debt, and he said that it was due and payable in ten years.”
       Marek’s promise to pay the loan extended the statute of limitations. As the
Restatement explains: “(1) A promise to pay all or part of an antecedent contractual or
quasi-contractual indebtedness owed by the promissor is binding if the indebtedness is
still enforceable or would be except for the effect of a statute of limitations. [¶] (2) The
following facts operate as such a promise unless other facts indicate a different intention:
[¶] (a) A voluntary acknowledgment to the obligee, admitting the present existence of
the antecedent indebtedness . . . .” (Rest.2d Contracts, § 82, p. 209.) California law
codified this principle in Code of Civil Procedure section 360, which provides that a




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written promise signed by the party to be charged creates a continuing obligation.2
Marek’s writing -- which was undisputed -- is sufficient to constitute a written
acknowledgment. Although Marek implies that Rathee’s testimony that the loan was
payable in 10 years was not credible, he presented no contrary evidence and failed to
provide the transcript of his testimony during the divorce proceedings. Marek therefore
fails to show he was entitled to judgment as a matter of law because the statute of
limitations expired.3


2       Code of Civil Procedure section 360 provides: “No acknowledgment or promise
is sufficient evidence of a new or continuing contract, by which to take the case out of the
operation of this title, unless the same is contained in some writing, signed by the party to
be charged thereby, provided that any payment on account of principal or interest due on
a promissory note made by the party to be charged shall be deemed a sufficient
acknowledgment or promise of a continuing contract to stop, from time to time as any
such payment is made, the running of the time within which an action may be
commenced upon the principal sum or upon any installment of principal or interest due
on such note, and to start the running of a new period of time, but no such payment of
itself shall revive a cause of action once barred.”
3       Rathee argues the statute of limitations was tolled until she discovered the claim
for money had and received and that the statute of limitations was tolled during the
pendency of the family law proceedings governing her dissolution and division of
community property. Her arguments are not persuasive. Even assuming the doctrine of
delayed discovery is applicable to a cause of action for money had and received, Rathee
testified that she was aware that Marek held community funds in August 2004. Rathee
also testified that Marek testified about the debt during the divorce proceedings and, at
that time, testified that he converted the money to a personal loan. Therefore Rathee had
reason to suspect an injury when Marek testified he used her community funds for his
personal use. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 803 [“[U]nder
the delayed discovery rule, a cause of action accrues and the statute of limitations begins
to run when the plaintiff has reason to suspect an injury and some wrongful cause, unless
the plaintiff pleads and proves that a reasonable investigation at that time would not have
revealed a factual basis for that particular cause of action.”].)
        Nor is there merit to Rathee’s argument that her claim for money had and received
was tolled during the family law proceedings. Although a family law court may assume
jurisdiction over a third party with an interest in community property (Glade v. Glade
(1995) 38 Cal.App.4th 1441, 1451), the family law court did not assume jurisdiction over
Marek. Because the family law court did not assume jurisdiction over Marek, there is no
merit to Rathee’s argument that the family law court’s assumption of jurisdiction

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2. Rathee’s Cross-appeal: Amount of Prejudgment Interest
       The court awarded Rathee prejudgment interest at the rate of 7 percent per annum
commencing on January 1, 2005. In her cross-appeal, Rathee challenges the trial court’s
denial of her request for prejudgment interest at the rate of 10 percent per annum. She
argues that she was entitled to interest at the greater rate because the court should have
relied on the legal rate of interest not the rate specified in Marek’s July 20, 2004 letter.
Civil Code section 3289 provides: “(a) Any legal rate of interest stipulated by a contract
remains chargeable after a breach thereof, as before, until the contract is superseded by a
verdict or other new obligation. [¶] (b) If a contract entered into after January 1, 1986,
does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10
percent per annum after a breach.”
       Here, the trial court found no written contract existed and therefore erred in
applying the 7 percent rate contained in Marek’s 2004 promising to repay the funds. As
Rathee argues, the court should have instead applied the 10 percent rate in Civil Code
section 3289. Marek does not argue otherwise.
       The court also erred in calculating interest from 2005. By its terms, Civil Code
section 3289 applies “after a breach.”4 Here the breach occurred when Marek failed to
pay the loan after Rathee made demand by filing the complaint. Based on this breach,
Rathee is entitled to prejudgment interest at the rate of 10 percent from the date of the
filing of the complaint to the date of the judgment.


prevented another court from doing so. Nor is this a case like Burkle v. Burkle (2006)
144 Cal.App.4th 387, 394 in which the wife filed a civil action to obtain money ordered
in a dissolution proceeding by a party to the dissolution proceeding. As noted, Marek
was not a party in the dissolution proceeding and a claim against him was not duplicative
of the prior dissolution lawsuit. Rathee did not seek to enforce the same rights in her
lawsuit against Marek as in the family law dissolution proceedings, which was concerned
about dividing the community property not adjudicating the amount of Marek’s debt.
(Cf. Elkins v. Derby (1974) 12 Cal.3d 410, 412-413 [statute of limitations tolled in
personal injury claim when worker sought workers compensation benefits for same injury
against same defendant within limitations period].)
4      Rathee argued that interest follows “both a breach and a liquidated claim.”

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                                      DISPOSITION
       The judgment is affirmed. The postjudgment order awarding Rathee prejudgment
interest is reversed. The case is remanded to the trial court for the court to recalculate the
amount of prejudgment interest from the date of Rathee’s complaint to the date of
judgment. Each party shall bear his or her own costs.




                                                  FLIER, J.
WE CONCUR:




       RUBIN, Acting P. J.




       GRIMES, J.




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