People v. United States Fire Insurance

Plaintiff, the State of California, acting on behalf of the State Board of Equalization, brought an action to enforce the asserted liability of United States Fire Insurance Company (hereinafter “defendant”), under a written contract of surety by which defendant guaranteed the payment of sales and use taxes incurred by Gibson Products of Lodi, California, Inc. (hereinafter “Gibson Products”). The trial court held for defendant, ruling that plaintiff failed to file suit within the time period provided in the applicable statute of limitations, Revenue and Taxation Code section 6711. Plaintiff appeals.

The case was tried on the following stipulated facts:

Approximately three years and five months after the cause of action arose, plaintiff filed its complaint against defendant, alleging that it was proceeding pursuant to sections 6711-6715 and sections 2787-2854 of the Civil Code. The trial court considered three statutes to determine the applicable limitation period. Section 6711, as amended effective January 1, 1970, provides as follows: “At any time within three years after any tax or any amount of tax required to be collected becomes due and payable and at any time…