Argonaut Insurance v. Halvanon Insurance

MEMORANDUM ***

Czarina 1 appeals the district court’s dismissal of its suit against ADA VIS 2 (“Territorial”) on the basis that the statute of limitations had expired. According to the district court, the statute of limitations on Czarina’s claims was not tolled by Section 351 of the California Code of Civil Procedure because Territorial could have been served through the Secretary of State in accordance with Section 2111 of the California Corporations Code. Czarina alleges the district court’s interpretation of California’s tolling statute was erroneous. For the following reasons, we agree, and reverse the decision below.

I. Statute of Limitations

We review the district court’s interpretation of state law de novo. Downey v. Crowley Marine Services, 236 F.3d 1019, 1022 (9th Cir.2001). Section 337.5 of the California Code of Civil Procedure places a ten year limitations period on actions upon a judgment of any court. Generally, the limitations period is tolled when the defendant is absent from the state. CAL. CIV. *758 PROC. CODE § 351 (West 1982) (“ § 351”). However, because Section 2111 of the California Corporations Code (“Section 2111”) provides for service of process on a…

dissenting.

I agree with the district court that Cal. Code Civ. Proc. § 351 does not toll the 10-year statute of limitations imposed by § Cal.Code Civ. Proc. § 337.5 as to Territorial because § 351 does not apply to foreign corporations. Loope v. Greyhound Lines, Inc., 114 Cal.App.2d 611, 614 , 250 P.2d 651 (1952); Cardoso v. American Medical Systems, Inc., 183 Cal.App.3d 994, 999 , 228 Cal.Rptr. 627 (1986); see also Abramson v. Brownstein, 897 F.2d 389 , 393 n. 6 (9th Cir.1990) (noting that § 351 does not apply to foreign corporations). Territorial is a foreign corporation that Czarina failed to show could not have been served by substituted service on the California Secretary of State, see Cal. Corp. Code § 2111 , or through the Inter-American Convention on Letters Rogatory, see 28 U.S.C. § 1781 .

In any event, we have held that § 351 unconstitutionally burdens commerce. Abramson, 897 F.2d at 393 (holding that the California tolling statute is unconstitutional). Territorial is clearly engaged in foreign commerce. Thus, even if § 351 could apply to Territorial despite its being a foreign corporation, the statute of limitations cannot be tolled as to it without running afoul of…