Peterson v. Groves

111 Wash. App. 306
CourtCourt of Appeals of Washington
DecidedApril 22, 2002
DocketNo. 49071-1-I
StatusPublished
Cited by42 cases

This text of 111 Wash. App. 306 (Peterson v. Groves) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peterson v. Groves, 111 Wash. App. 306 (Wash. Ct. App. 2002).

Opinion

Kennedy, J.

Bernard Peterson appeals the summary dismissal of his suit to collect on two promissory notes for loans he made to his stepson James Groves. Peterson argues that Groves is equitably estopped from asserting the statute of limitations as a defense, in that Groves lulled him into inaction by falsely promising to pay off the notes with proceeds from the sale of land. Peterson has presented sufficient evidence to establish the elements of equitable estoppel. However, because Peterson has not shown due diligence in bringing his claim once the estoppel period ended, we affirm.

I

Bernard Peterson is the stepfather of codefendant James Groves. Peterson married Groves’ mother in 1955, when Groves was 11 years old. Although Peterson never adopted Groves, Peterson stated that he became a father figure for the boy, that he thought of Groves as his son, and that they “developed a long, trusting relationship over the years that seemed to grow stronger with age.”

Peterson loaned money to James Groves and his wife Joanna Groves at various times prior to 1985. These loans were reduced to two promissory notes, executed in 1982 and 1985. Both James and Joanna Groves signed the notes. The first note was dated September 14, 1982, in the amount of $58,441.17, carrying 10 percent interest, and payable one year later. Under RCW 62A.3-118(a), that note became time barred 6 years after it became payable, on September 14, 1989. The second note was dated January 23, 1985, in the [309]*309amount of $79,465.20, carrying 12 percent interest, and payable on demand. Under RCW 62A. 3- 118(b), that note became time barred 10 years later, on January 23, 1995.

According to Peterson, sometime after 1985, the defendants informed him that they planned to pay off the notes with the proceeds from the sale of 10 acres of commercial property they owned in Everett. Peterson explained that because of his close relationship with Groves, he trusted and believed the promise to pay off the notes when the property sold. The defendants attempted to sell the property for 10 years, but to no avail. Peterson stated that, during this time, the defendants continued to promise that they would pay off the notes as soon as they sold the property. The defendants sold the property in June 1998 for approximately 3 million dollars, and received the proceeds from the sale early in 1999. However, they did not pay the notes.

On March 15, 1999, Peterson’s attorney wrote a letter to James Groves requesting, among other things,1 that he pay off the notes with the proceeds from the sale of the property. The letter indicated that if Groves did not pay off the notes within 30 days, Peterson would “insist upon a promissory note secured by a deed of trust on real property or other comparable security.” Groves still did not pay off the notes.

The letter to James Groves from Peterson’s attorney also refers to an unrelated business transaction between Peterson and Groves, whereby Peterson invested $128,000 in a recycling project at Groves’ request. The letter stated that, in spite of numerous requests, Peterson still did not have an accounting of how his money was invested, nor of the present status of the project. The letter asked for a complete accounting of the distribution of Peterson’s $128,000 investment, including copies of letters “concerning the promised return on the investment.”

[310]*310Peterson filed suit against James and Joanna Groves in January 2001. This was more than 11 years after the statute of limitations ran on the first note and 6 years after it ran on the second note. It was two and one-half years after the sale of the property. And it was 19 months after Peterson’s attorney’s letter demanding payment within 30 days.

James and Joanna Groves filed a motion for summary judgment, raising the statute of limitations as an affirmative defense. Peterson argued that the defendants were equitably estopped from asserting the statute of limitations because Peterson was lulled into inaction by their promises to pay when the land sold. The trial court granted summary judgment to Groves. Peterson appeals.

II

When reviewing an order granting summary judgment, the appellate court engages in the same inquiry as the trial court. Enter. Leasing, Inc. v. City of Tacoma, 139 Wn.2d 546, 551, 988 P.2d 961 (1999). The appellate court will affirm an order granting summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). All facts and reasonable inferences must be considered in the light most favorable to the nonmoving party. Mountain Park Homeowners Ass’n v. Tydings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994).

“Equitable estoppel is not favored, and the party asserting estoppel must prove each of its elements by clear, cogent, and convincing evidence.” Robinson v. City of Seattle, 119 Wn.2d 34, 82, 830 P.2d 318 (1992). The elements to be proved are: (1) an admission, statement, or act inconsistent with a claim afterward asserted; (2) action by another in reasonable reliance on that act, statement, or admission; and (3) injury to the party who relied if the court allows the first party to contradict or repudiate the prior act, statement, or admission. Id. Estoppel is appropriate to [311]*311prohibit a defendant from raising a statute of limitations defense when a defendant has “ ‘fraudulently or inequitably invited a plaintiff to delay commencing suit until the applicable statute of limitations has expired.’ ” Id. (emphasis omitted) (quoting Del Guzzi Constr. Co. v. Global N.W. Ltd., 105 Wn.2d 878, 885, 719 P.2d 120 (1986)).

The gravamen of equitable estoppel with respect to the statute of limitations is that the defendant made representations or promises to perform which lulled the plaintiff into delaying timely action. Allan E. Korpela, Annotation, Promises To Settle or Perform as Estopping Reliance on Statute of Limitations, 44 A.L.R.3d 482, § 4(a) (1972); Herman v. Brown, 91 Cal. App. 2d 758, 205 P.2d 1086, 1088 (1949).

An unwritten promise may give rise to an estoppel to prevent the use of the statute of limitations if reasonably relied upon. Schroeder v. Young, 161 U.S. 334, 16 S. Ct. 512, 40 L. Ed. 721 (1896); 51 Am. Jur. 2d Limitation of Actions § 445. Courts consider a variety of facts and circumstances in determining whether the plaintiff reasonably relied on such promises in delaying action. In some cases, the case for estoppel is strengthened by the fact that a promise to pay has been related to the happening of a specific event. 51 Am. Jur. 2d, supra, § 445 (citing Langdon v. Langdon, 47 Cal. App. 2d 28,

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111 Wash. App. 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peterson-v-groves-washctapp-2002.