Au v. PurpleLotusTemple

Filed 4/10/07 Au v. Purple Lotus Temple 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

The wife of plaintiff Thomas Ho-Nien Au made a substantial charitable donation to defendant Purple Lotus Temple (Temple) in 1992. After Au objected, she agreed not to make any further large donations to the Temple. Yet in 2002, Au learned that his wife had made many substantial subsequent donations to the Temple without his knowledge. After the couple divorced in 2003, Au sued the Temple to recover his community property share of the donations.

The jury found that Au had not consented to the donations and that his claims to recover the donations made after the initial large donation were not barred by the statute of limitations. Au was awarded his share of these later donations, partially reduced to account for his negligence. The Temple argues that the jurys decision must be reversed because Aus claims were all time-barred, either because he was deemed to have knowledge of the donations disclosed in his federal income tax returns or because his claims accrued when he became suspicious that his wife would not keep her word. Au cross-appeals, arguing that the trial court erroneously precluded him from arguing that the Temple was estopped from asserting a statute of limitations defense regarding the initial large donation. We affirm.

I. BACKGROUND

Au is a successful professional artist and a professor of art at a Taiwan university. Au, his then-wife, Rose, and their children first came to the United States in 1981. From 1981 through 2003, when the couple divorced, Rose lived in the San Francisco Bay Area, while Au lived in Taiwan during the academic year and with his family in California during summer and winter vacations.

The couple divided responsibility for their financial affairs. Au worked in Taiwan, sending money to Rose in California. Rose handled their financial affairs here, including overseeing real estate investments and filing income tax returns. Until 1992, Au had no reason to question Roses handling of the familys American interests.

Rose was a member of the Temple. Located in San Bruno, the Temple is one of over 500 chapters worldwide following the True Buddha School of Buddhism. Defendant Samantha Chou, referred to as Master Chou or Master Samantha at trial, is the chief of the Temple. The spiritual head of the True Buddha School is Lian-sheng Sheng-Yen Lu, referred to at trial as Grand Master Lu, whose headquarters are in Seattle.

In June 1992, Rose made a donation of $101,000 to the Temple, bidding that amount at a charity auction for a Rolex watch donated by Lu. At the time, Rose was entertaining hopes of reuniting her family by purchasing a ranch in coastal San Mateo County and building a school at which Au could teach. She envisioned affiliating the school with the Temple. Within days of the charity auction, Rose and a few other Temple members visited this ranch property with Chou and Lu. An adviser to the Temple concluded that the ranch parcel was impractical for the Temples use because access was difficult.

Au learned about the donation after he arrived in California in September 1992. Au disagreed with his wife about the wisdom of the donation, which he felt the family could not afford. Au asked Rose to return the watch and get the money back, but she refused. Rose did, however, promise Au that she would not make any further donations, other than small, routine donations of a few dollars upon visiting the Temple.

Out of respect for his wife, Au did not ask the Temple to return any portion of the $101,000 donation. Nonetheless, he met with Chou the following year to assure that such a donation would not happen again. Au had asked Rose to arrange the meeting, which occurred at a restaurant next to the Temple, with Rose in attendance. During the meeting, Au testified, he asked for Chous commitment that the Temple would not accept further large donations from Rose. According to Au, Chou responded that she understood that our family was not the kind of family that could afford that kind of donation and that the Temple would not accept further large donations from Rose.[1] Au apparently spoke only of future donations; there is no evidence that he indicated to Chou that he did not approve of the $101,000 donation or that he had considered seeking its return.

At some point following his meeting with Chou, apparently on September 14, 1993, Au sent a letter, handwritten in Chinese, to Lu.[2] As translated in the record, the letter explained that Au recently learned that Rose planned to liquidate the familys real estate holdings in the United States and donate the proceeds to the Temple. According to Aus daughter, Rose had been told during counseling at the Temple that in a previous life she had promised to donate a big rite hall to honor Buddha but was unable to do so. That is why she is so eager now to achieve that.[3] Au wrote that the real estate holdings were instead needed by the family to support their children and retirement. He explained that he would be unable to supervise his wifes activities closely from Taiwan and asked Lu to instruct [Rose] not to help build the college at the expense of destroying our family. I also hope you not to believe her [sic] if she says she has her husbands approval or we have reached an agreement. The letter did not mention or request return of the $101,000 donation.

Au testified that Rose subsequently suggested to him that the family should pay down the mortgage on one of the properties they had purchased in California, telling him that the outstanding mortgage was $400,000. He was able to come up with $300,000, which he sent to her. Much later, in September 2002, Au learned that instead of using the funds to pay down the mortgage, Rose had used some of that money to make further donations to the Temple, totaling well in excess of $100,000. The couple divorced in March 2003. Thereafter, on July 29, 2004, Au filed suit against the Temple and Chou to recover one-half of Roses donations, asserting claims for the unauthorized transfer of community property, negligence, and aiding and abetting a breach of fiduciary duty.

The statute of limitations was a substantial issue at trial, the Temple and Chou arguing that Au was or should have been on notice as to the possibility of further donations after 1992. When asked at trial whether he trusted Roses assurances, Au said, At the time, since my wife made the promise to me that she wouldnt make any large donations in the future, I wanted to trust her, but emotionally, of course, I have reserved somewhat, and hope that she would do what she said and not make that donation anymore. Counsel then confronted Au with somewhat inconsistent testimony from his deposition, during which he stated, Honestly, I did not believe her when she make [sic] the promise to me in 1992. However, 1993, 1994, and 1995, I did not see anything unusual happening, so I thought there would be no more trouble. I became convinced that she would keep her promise. Au then acknowledged, Well, I was a bit suspicious at the time but, you know, the thought changed from minute to minute.

It was not clear whether, despite his doubts about Roses commitment, Au thereafter asked her whether she had kept her word. At trial, he said he did not recall whether they spoke about it. At one point in his deposition, he testified, I did not ask her again. Well, usually I would not be staying in the U.S. too long, and I really dont want to say anything to make her upset. Elsewhere in his deposition, however, he testified that they sometimes spoke about the need not to waste family money. On three occasions, he asked her directly whether she was making donations. She denied it, saying, We dont even have enough money for the family. How can I make donation [sic] to the Temple? When he asked her more generally about their American finances, she said, Why d[o] you ask me? and refused to give him any information.

Au testified that he did not take any other obvious steps to learn whether Rose was making further donations, such as contacting his bank or asking the couples accountant. In fact, Rose had asked him not to contact the accountant. Nor did Au follow up with the Temple regarding Roses donations. The couples son, David, testified that Au on a few occasions had asked him whether Rose was continuing to make donations to the Temple. Because David was aware only of his mothers small, occasional donations, he did not alert Au to the substantial donations Rose was making.

The donations were, however, disclosed annually in the couples American income tax returns. Although the returns did not list the recipient of the donations, the 1992 return reported charitable contributions of over $125,235, while subsequent returns reported charitable contributions of $36,000 in 1994, $25,000 in 1995, $30,000 in 1996, $8,000 in 1997, $30,000 in 1998, $15,000 in 1999, $64,000 in 2000, and $52,000 in 2001.^[4] Rose had complete responsibility for the preparation and filing of these returns. Au testified that, while he signed them, he did not read them. Although Au speaks some English, it was his belief that he did not have sufficient command of written English to understand the tax forms.

The Temple also sent thank-you letters to the couples California address, stating the amounts of Roses donations. Au testified that he did not see the letters, which were apparently forwarded to the couples American accountants, until 2002.

The jury rendered a special verdict finding that, while Au was aware of the initial $101,000 donation, he had no actual knowledge of Roses other large donations to the Temple and was not aware of facts that would put a reasonably prudent person on notice that she had made large donations. The jury then found that Au had consented to donations of $3,000 per year, or $30,000 over the 10 years covered by the lawsuit. With respect to the cause of action for negligence, the jury found that the Temple, Chou, Au, and Rose were all negligent and assigned as percentages of harm 30 percent to the Temple and Chou, 20 percent to Au, and 50 percent to Rose.[5] Au was awarded damages of $87,132.40, the jury adding in explanation, We granted Mr. Au half of the amount caused by the Temples negligence and half of the amount caused by Roses negligence. On an attached worksheet, the jury noted that, as to Aus claim regarding the $101,000 donation, Statute of Limitations Applies.

II. DISCUSSION

A. The Temples Appeal

1. The Discovery Rule

The Supreme Courts most recent decision addressing the discovery rule, Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797 (Fox), contains a lengthy and useful discussion of the rules operation. As an introduction to this issue, we quote the Fox discussion at some length:

Statute of limitations is the collective term applied to acts or parts of acts that prescribe the periods beyond which a plaintiff may not bring a cause of action. [Citations.] There are several policies underlying such statutes. One purpose is to give defendants reasonable repose, thereby protecting parties from defending stale claims, where factual obscurity through the loss of time, memory or supporting documentation may present unfair handicaps. [Citations.] A statute of limitations also stimulates plaintiffs to pursue their claims diligently. [Citations.] A countervailing factor, of course, is the policy favoring disposition of cases on the merits rather than on procedural grounds. [Citations.]

A plaintiff must bring a claim within the limitations period after accrual of the cause of action. [Citations.] In other words, statutes of limitation do not begin to run until a cause of action accrues. [Citation.]

Generally speaking, a cause of action accrues at the time when the cause of action is complete with all of its elements. [Citations.] An important exception to the general rule of accrual is the discovery rule, which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. [Citations.]

A plaintiff has reason to discover a cause of action when he or she has reason at least to suspect a factual basis for its elements. [Citations.] Under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period. [Citations.] Norgart [v. Upjohn Co. (1999) 21 Cal.4th 383 (Norgart)] explained that by discussing the discovery rule in terms of a plaintiffs suspicion of elements of a cause of action, it was referring to the generic elements of wrongdoing, causation, and harm. (Norgart, supra, 21 Cal.4th at p. 397.) In so using the term elements, we do not take a hypertechnical approach to the application of the discovery rule. Rather than examining whether the plaintiffs suspect facts supporting each specific legal element of a particular cause of action, we look to whether the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.

The discovery rule, as described in Bernson [v. Browning-Ferris Industries (1994) 7 Cal.4th 926] allows accrual of the cause of action even if the plaintiff does not have reason to suspect the defendants identity. [Citation.] The discovery rule does not delay accrual in that situation because the identity of the defendant is not an element of a cause of action. [Citations.] As the court reasoned in Norgart, [i]t follows that failure to discover, or have reason to discover, the identity of the defendant does not postpone the accrual of a cause of action, whereas a like failure concerning the cause of action itself does. [Citation.] In Norgart, we distinguished between ignorance of the identity of the defendant and ignorance of the cause of action based on the commonsense assumption that once the plaintiff is aware of the latter, he normally has sufficient opportunity, within the applicable limitations period, to discover the identity of the former. [Citations.]

The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action. The discovery rule does not encourage dilatory tactics because plaintiffs are charged with presumptive knowledge of an injury^[[6]] if they have   information of circumstances to put [them] on inquiry   or if they have   the opportunity to obtain knowledge from sources open to [their] investigation.   [Citations.] In other words, plaintiffs are required to conduct a reasonable investigation after becoming aware of an injury, and are charged with knowledge of the information that would have been revealed by such an investigation. [] . . . [] 

Simply put, in order to employ the discovery rule to delay accrual of a cause of action, a potential plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury. If such an investigation would have disclosed a factual basis for a cause of action, the statute of limitations begins to run on that cause of action when the investigation would have brought such information to light. In order to adequately allege facts supporting a theory of delayed discovery, the plaintiff must plead that, despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period. (Fox, supra, 35 Cal.4th at pp. 806809.)

Whether a plaintiff has knowledge of circumstances sufficient to put a prudent person on inquiry notice is ordinarily a question of fact for the jury. (Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 440.) It becomes a question of law only if uncontradicted facts . . . are susceptible of only one legitimate inference. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112 (Jolly).)

2. The Income Tax Returns

We first address the Temples claim that Au was deemed by law to have knowledge of the contents of the federal income tax returns he signed, which disclose the annual total of charitable deductions claimed by Rose.[7] The Temples argument is based almost entirely on decisions addressing the innocent spouse provision of the federal income tax laws (former 26 U.S.C.  6013(e) and current 26 U.S.C.  6015(b)), which, under certain circumstances, excuses one spouse from liability for back taxes on unreported income earned by the other spouse. In this context, the federal tax courts have held that [f]ailure to review a tax return, standing alone, does not relieve a taxpayer of liability for any subsequent deficiency. (Schmidt v. United States (1984) 5 Cl. Ct. 24, 27.) As explained in Terzian v. Commissioner (1979) 72 T.C. 1164, the case relied on by Schmidt, this rule was designed to prevent a spouse from avoiding tax liability merely by eschewing responsibility for the return: Petitioners testimony here, which we accept, is that because of her relationship with her husband and his dominance in all of the family financial matters, she signed the returns without looking at the figures on them. Certainly petitioner cannot be excused for her failure to review a return she signed under penalties of perjury, even though it was her habit all during her married life to sign any document her husband asked her to sign. Petitioner was an educated woman and should have realized her responsibility for reviewing a return she signed. (Id. at pp. 11701171.) Over the years, this rule has evolved into the principle that a person who signs a return is attributed constructive knowledge of the returns contents. (E.g., Hayman v. C.I.R. (2d Cir. 1993) 992 F.2d 1256, 1262; Silverman v. Commissioner (1994) 67 T.C.M. (CCH) 2631, 1994 Tax Ct. Memo Lexis 154 at pp. *1617.)

This principle is an application of the more general rule that, in a lawsuit based on the legal obligations imposed by an executed document, a party cannot escape those obligations merely by claiming that he or she did not read the document before signing. In California, the same principle is recognized in the rule that a party to a written contract cannot escape the duties imposed by the contract merely by claiming not to have read it before signing. (See, e.g., 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215 [a plaintiff cannot avoid arbitration clause in employment handbook by claiming not to have reviewed the handbook before signing an acknowledgment].)

The Temple cites no authority suggesting that the tax courts rule of law is binding on this court in the context of this case. The causes of action in this lawsuit are not premised on the legal obligations assumed by Au in executing his tax returns. Rather, the returns played an evidentiary role, providing evidence that Au was on inquiry notice of his wifes donations. In this way, the tax returns were no different from the thank-you letters mailed by the Temple to Aus home. As to both, if the Temple could show that Au actually read the documents, he would have been placed on notice of the donations listed. Aus signature on the returns certainly demonstrates that he was in a position to review them and, even without further evidence, might have supported an inference that he did, in fact, review them. Nonetheless, there is no reason why Au should not have been permitted to rebut this inference. Because the returns were used merely as evidence, rather than as legally operative documents, there was no reason to deem knowledge of their contents as a matter of law, rather than to allow the jury to determine whether Au had actual knowledge of them, based on all relevant evidence. (E.g., Balkema v. Deiches (1949) 90 Cal.App.2d 427, 431 (Balkema).)[8] The rule of law articulated in the innocent spouse cases is simply inapplicable in these circumstances.[9]

3. Aus Suspicion of His Wife

The Temple argues that even if Au was not deemed to have knowledge of his wifes activities, his suspicion that she might not keep her word was sufficient to trigger accrual of the statute of limitations regarding her unconsented donations of community assets.

We reject this claim for two distinct reasons. First, we do not believe that the suspicion harbored by Au regarding his wife is the type of suspicion that triggers accrual of the statute of limitations. We recognize that courts often say that a plaintiff is placed on notice when a plaintiff has a suspicion of wrongdoing. (Jolly, supra, 44 Cal.3d at p. 1111.) Indeed, the Supreme Court found that accrual of the statute of limitations was triggered in both Jolly and Norgart solely on basis of the plaintiffs concessions that they suspected that a wrong had occurred at a particular point in time. (Jolly, at p. 1114; Norgart, supra, 21 Cal.4th at p. 405.) These plaintiffs suspicions, however, were not the same type that Au acknowledged. Au experienced what is more accurately labeled an apprehensionthe sense that, given the circumstances and parties involved, an injury mightoccur in the future. Inquiry notice, however, requires a true suspiciona belief that arises from specific, external facts or events, such as an experienced injury or other information suggesting that a wrong has occurred.

The principles supporting our conclusion are reflected in the general discussion quoted ante from Fox. As Fox notes, A plaintiff has reason to discover a cause of action when he or she has reason at least to suspect a factual basis for its elements. (Norgart, supra, 21 Cal.4th at p. 398, citing Jolly, supra, 44 Cal.3d at p. 1110; see also Gutierrez v. Mofid [(1985) 39 Cal.3d 892] at p. 897 [the uniform California rule is that a limitations period dependent on discovery of the cause of action begins to run no later than the time the plaintiff learns, or should have learned, the facts essential to his claim].) (Fox, supra, 35 Cal.4th at p. 807.) If a cause of action accrues when a plaintiff has reason to suspect a factual basis for a claim, necessarily that suspicion must arise out of evidence that a wrong has actually occurred, rather than the fear that a wrong might occur in the future.

This point is made explicit in Fox when the court states that in determining whether a cause of action has accrued, we look to whether the plaintiffs have reason to at least suspect that a type of wrongdoing has injured them. (Fox, supra, 35 Cal.4th at p. 807, italics added.) The court later repeats, plaintiffs are required to conduct a reasonable investigation after becoming aware of an injury and are charged with knowledge of the information that would have been revealed by such an investigation. (Id. at p. 808, italics added.) In other words, suspicion sufficient to trigger accrual of a cause of action is suspicion that arises after an injury has occurred, necessarily growing out of knowledge of the injury itself. A generalized apprehension that a future harm may occur, such as that suffered by Au, is insufficient to trigger accrual of a cause of action.[10]

A different result is not required by Hobart v. Hobart Estate Co., supra, 26 Cal.2d 412, the primary case on which the Temple relies. In Hobart, a family member claimed to have been defrauded by a lawyer who allegedly misrepresented the value of the familys holding company. Following the fraud, the plaintiff went to Europe for five years. Only upon returning home did he learn about the true value of the company. (Id. at pp. 420422.) In arguing for preclusion by the statute of limitations, the defendant argued that the plaintiff was required to plead and prove that he had made a diligent inquiry to discover whether or not a fraud had occurred and that such an inquiry would not have disclosed the fraud. This is, in effect, the same argument made by the Temple. The Supreme Court rejected the argument, noting, It is not in every case, however, that a person is barred . . . by failure to pursue an available means of discovering possible fraud. The statute commences to run only after one has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry. (Id. at p. 437.) The court further clarified that where a prudent person would be unaware of facts putting him or her on inquiry, the mere fact that means of obtaining that knowledge are open to the plaintiff does not bar his or her claim. (Ibid.) As discussed ante, there was no evidence that Au was aware of factsas opposed to harboring a generalized apprehensionthat would have suggested to a prudent person that Rose was making large donations. The same is true of Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, which the Temple also discusses at length. The suspicion found conclusive in Miller was doubt formed by the plaintiffs lawyer after, and based on, his factual investigation of the matter at issue. (Id. at p. 875.)[11]

A second reason for rejecting the Temples argument is that the jurys finding that Au was not put on inquiry notice was supported by substantial evidence.[12] The question that the jury was asked to answer with respect to accrual of Aus causes of action was as follows: Did Thomas Ho Nien Au know of facts that would put a reasonably prudent person on notice that large donations had been made to the Purple Lotus Temple by his former wife, Rose Au? Their answer was No. Besides Aus apprehension, the only undisputed evidence suggesting that donations might be occurring was his wifes defensiveness about the couples American financial affairs. Although the jury could have rejected Aus testimony of ignorance with respect to the tax returns and receipts from the Temple, it appears to have accepted that he did not or could not read them, since it found that Au had no actual knowledge of the donations.

There is also no other evidence suggesting that Au did know, or should have known, of the donations. There is no evidence, for example, that Au was ever told about the donations. On the contrary, Aus son testified that he told Au the opposite, since the son was unaware of his mothers large donations. The jury could have concluded that Roses apparent exclusive control of the couples American finances, coupled with Aus deferential treatment of her, precluded him from learning of the donations in the other ways open to him. In addition, the jury could have found that Rose committed not to make, and the Temple committed not to accept, further large donations, allaying any suspicions Au might have had. Because the jurys response to the special verdict question is supported by substantial evidence, there is no basis for reversal on statute of limitations grounds.[13]

We note that there is nothing inconsistent in the jurys finding of negligence on Aus part and its finding regarding the statute of limitations. The members of the jury could easily have concluded that Au was negligent in handling his financial affairs. Knowing that his wife had a strong desire to benefit the Temple, a reasonably prudent husband would have taken steps to prevent the unconsented donation of his community property by using the means available to Au, not least the tax returns and accountants, to monitor his wifes giving. According to Aus testimony, he did nothing of the sort, despite his wifes suspicious refusal to discuss the issue. In contrast, the statute of limitations is not concerned with the prevention or detection of wrongs. Rather, the statute of limitations is concerned with the prompt assertion of claims once their basis has been discovered or, at least, reasonably suggested. For the reasons discussed ante, the jurys conclusion that Au had not been put on inquiry notice of facts suggesting his causes of action prior to 2002 is supported by substantial evidence.

B. Aus Appeal

Au testified that if he had known the Temple would not adhere to Chous promise not to accept further large donations from Rose, he would have insisted on the return of the original large donation. Based on this testimony, Au proposed a jury instruction permitting the jury to find that the Temple was equitably estopped from asserting the statute of limitations:[14]

To establish his claim that a defendant by the defendants conduct cannot assert the statute of limitations as a defense to his claims, plaintiff Thomas Au must prove all of the following:

1. Defendant was apprised of the true state of the facts.

2. Plaintiff was ignorant of the true facts.

3. Defendant intended that defendants conduct be acted upon, or so act that plaintiff had a right to believe that it was so intended.

4. Plaintiff relied on the conduct to his detriment.

No party to a lawsuit is permitted to profit from his own wrongdoing.

After hearing argument, the court denied the requested instruction, ending with the following colloquy:

THE COURT: [The Temples counsels] position is with respect to that, as I understand it, that nobody said that anybody told Ms. Chou that [Au] would refrain from filing suit on the watch, which was an existing cause of action. How is she supposed to know? How is she supposed to know that her alleged promise is having that effect on him?

[AUS COUNSEL]: I dont think thats an element of estoppel.

THE COURT: Okay. Well, I do. So estoppel I will not instruct on. And mark that one refused.

It is well established that a defendant can be estopped from asserting the statute of limitations as a result of his or her conduct. The clearest case occurs when the defendant makes misrepresentations of fact that could reasonably be expected to, and do, induce a party to delay filing suit. (Vu v. Prudential Property & Casualty Ins. Co. (2001) 26 Cal.4th 1142, 11521153.) In a more recent case, the Supreme Court stated the estoppel doctrine in more general terms, explaining that  a party will be estopped from asserting the statute of limitations as a defense to an admittedly untimely action [when] his conduct has induced another into forbearing suit within the applicable limitations period. . . .  [Citations.] . . . [] . . . [W]henever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement or conduct, permitted to contradict it. [Citation.] . . . . . . Where the delay in commencing action is induced by the conduct of the defendant it cannot be availed of by him as a defense.    (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383384.)

To give structure to these principles, courts have consistently applied the general elements of estoppel in statute of limitations cases. These are the same elements reflected in the jury instruction requested by Au. As summarized recently in Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145,   [b]efore an estoppel to assert an applicable statute of limitations may be said to exist, certain conditions must be present: [T]he party to be estopped must be apprised of the facts; the other party must be ignorant of the true state of facts, the party to be estopped must have intended that its conduct be acted upon, or so act that the other party had a right to believe that it was so intended; and the other party must rely on the conduct to its prejudice.    (Id. at pp. 11651166, quoting Muraoka v. Budget Rent-A-Car, Inc. (1984) 160 Cal.App.3d 107, 116; see also Honig v. San Francisco Planning Dept. (2005) 127 Cal.App.4th 520, 529.)

Given these elements, it was not sufficient for Au merely to testify that he relied on Chous promise in forbearing from filing suit over the $101,000. It was also necessary for him to prove that Chou    intended [her promise] be acted upon [through his forbearance], or so act[ed] that [Au] had a right to believe that it was so intended.    (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc., supra, 115 Cal.App.4th at pp. 11651166.)

We agree with the trial court that there was no substantial evidence to support this element, thereby justifying refusal to give the instruction. (See Morgan v. Southern Pacific Trans. Co. (1974) 37 Cal.App.3d 1006, 1014 [error to refuse jury instruction only if there is substantial evidence to support the theory of the instruction].) There is no evidence that Au even mentioned the $101,000 donation during his meeting with Chou, let alone that he told her the donation was made without his consent. If Chou was unaware that Au disapproved of the $101,000 donation, there is no evidence from which the jury could have concluded that Chou intended to forestall suit over that donation by promising not to accept further large donations. On the contrary, as the trial court noted, she had no way of knowing that his forbearance would be the result of her promise. Nor is there evidence from which Au could reasonably conclude that Chou intended that result. If Au failed even to mention his displeasure with the donation, it would have been unreasonable for him to assume that Chous promise was intended to prevent him from bringing suit over the donation.

Au argues that Master Chou knew from the context of the 1993 discussion that [Au] had been willing to allow [the Temple] to keep the $101,000 if [the Temple] refrained from accepting additional donations. There is nothing in the context of that discussion, however, from which to impute such knowledge to Chou. Although Au pleaded poverty to Chou with respect to future donations, there was no evidence presented at trial that Au expressed the slightest discomfort with the donation already given. Regardless of his protestations, his failure to challenge the sizable past donation suggested, if anything, that the family was able to afford it. In any event, because Au did not raise the issue, there is no basis from which to impute any knowledge to Chou about the financial impact of this donation, let alone the knowledge that Au was forbearing from filing suit because she had promised not to accept future large donations.

III. DISPOSITION

The judgment of the trial court is affirmed.

_________________________

Margulies, J.

We concur:

_________________________

Marchiano, P.J.

_________________________

Swager, J.

Publication courtesy of California pro bono legal advice.

Analysis and review provided by La Mesa Property line attorney.

[1] Although Chou acknowledged that she met with Au and Rose at the restaurant, she denied that donations were discussed during this meeting, testifying that she was unaware that Au did not support Roses giving to the Temple.

[2] Born in mainland China, Au is not a native speaker of English. He testified at trial through interpreters in both Mandarin and Cantonese.

[3] Other than this statement attributed to Aus daughter, there is no evidence to support the claim that Rose intended to sell the familys real estate to build a hall for the Temple. The testimony at trial revealed that around the time of the auction, Rose consulted with Chou with regard to sale of the Aus California home, apparently one of several real estate holdings of the family. Rose had considered using the proceeds from sale of this home to purchase the ranch. Chou did not encourage Rose to sell the house. Chou did, however, acknowledge that she had suggested frustration in a prior life to explain Roses obsession with building the school.

[4] Although the returns themselves did not list the recipient of the reported contributions, the record contains financial schedules, apparently prepared by the Aus accountants, that list the donation recipients for certain of the years. In those years, the bulk of the charitable contributions were made to the Temple or to other Buddhist activities apparently related to the Temple.

[5] The jury rejected the third cause of action, finding that the Temple and Chou did not assist or encourage Rose in breaching her fiduciary duty to Au.

[6] At common law, the term injury, as used in determining the date of accrual of a cause of action, means both a persons physical condition and its negligent cause.   [Citations.] Thus, physical injury alone is often insufficient to trigger the statute of limitations.

[7] While the donees of the gifts are not listed in the return itself, we assume for purposes of argument that knowledge of the large donation totals, relative to the couples American income, would have placed Au on inquiry notice as to the identity of the donees, particularly given his wifes prior donation to the Temple.

[8] Au argues that this case is governed by such decisions as Balkema, in which the court held that a taxpayer is not bound in a lawsuit by the characterization of certain income in his tax returns as community property. (Balkema, supra, 90 Cal.App.2d at p. 430.) While we do not find the case controlling because it did not concern the taxpayers knowledge of the contents of the tax return, Balkema illustrates the proper evidentiary treatment of such returns. In Balkema, the court held that the tax returns were admissible as an admission against interest with respect to the nature of the property, but it permitted the taxpayer to rebut that admission through testimony about the circumstances of the returns creation. (Id. at pp. 430431.)

[9] Because we conclude that Au was not deemed to have knowledge of the contents of his tax returns, we find no error in the trial courts refusal to give the Temples requested instruction on this issue.

[10] This principle is consistent with the purpose of the statute of limitations, which is, in addition to granting repose to potential defendants, to stimulate[] plaintiffs to pursue their claims diligently. (Fox, supra, 35 Cal.4th at p. 806.) Once a plaintiff becomes aware that he or she has suffered injury that might have been caused by wrongdoing, the statute of limitations serves as a prod to the investigation and assertion of any claim arising from the injury. The statute of limitations is not intended, however, to require a potential plaintiff toexercise diligence in discovering whether he or she has even been injured.

[11] It is worth noting that the general rule is that a cause of action accrues at the time when the cause of action is complete with all of its elements. (Fox, supra, 35 Cal.4that p. 806, quoting Norgart, supra, 21 Cal.4th at p. 397.) Au testified that his doubt about his wifes commitment to keeping her word existed at the time she made the commitment, prior to any further unconsented donations. Accordingly, if the Temples theory were accepted, we would be forced to adopt the anomalous holding that Au was placed on inquiry notice, and therefore that the statute of limitations for all of Aus claims accrued, before any of his causes of action were complete.

[12] Although the Temple argues that we should review the jurys findings de novo, the mere fact that Aus testimony as to his doubts was undisputed did not create a situation in which uncontradicted facts . . . are susceptible of only one legitimate inference. (Jolly, supra, 44 Cal.3d at p. 1112.) Aus testimony was not the only evidence bearing on accrual of the statute of limitations.

[13] The Temple also states in a conclusory manner its reply brief that Au should be deemed to have had knowledge of the donations because his wifes accountants were his agents. The Temple makes no attempt to demonstrate that a principal/agent relationship existed between Au and the accountants, and cites no legal authority for the applicable standard. Ordinarily, an agency relationship arises from an express contract. (vant Rood v. County of Santa Clara (2003) 113 Cal.App.4th 549, 571.) The Temple provided no evidence of a contract with these accountants, who were retained by Rose. Although an agency may also be implied from the parties conduct (ibid.), we find no reason for such an implication here. On the evidence presented, these accountants did nothing more for Au than prepare the American tax returns that he signed annually. There is no factual basis for the Temples claim of agency.

[14] As originally proposed, Au intended the estoppel instruction to apply to all of Roses donations, not just the initial donation. Any claim of error as to the subsequent donations, however, has been mooted by the jurys rejection of the statute of limitations defense as to these donations.