NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

OPINION

O'LEARY, P. J.

Donald Solsby appeals from a summary judgment entered in favor of defendants Carpenter Fund Manager GP, LLC, Carpenter Community Bancfund, L.P., Carpenter Community Bancfund-A, L.P., and Carpenter Community Bancfund-CA, L.P., and PB Holdings, Inc, dba PB Holdings-CA, Inc. (collectively, Carpenter Fund). Solsby sued Carpenter Fund on various fraud theories, arising out of an alleged promise to pay him two bonuses of $165,000 each, in June 2009. The trial court granted summary judgment on the basis that Solsby's causes of action were barred by the statute of limitations.

We find no error in the trial court's ruling, and affirm. The undisputed facts demonstrate Solsby was informed, within a few days of when his bonuses became due, that payment would not be made in the absence of FDIC approval. At that point, Solsby was on notice that Carpenter Fund had never intended the payment of his bonuses to be "unconditional," as allegedly promised, and the statute of limitations period began accruing on his fraud and misrepresentation causes of action.

FACTS

I. Background

This is Solsby's third appeal arising out of the refusal of his former employer, Plaza Bank (the Bank), to pay him two bonuses of $165,000 each. The bonuses were originally provided for in Solsby's 2006 employment agreement with the Bank. The first bonus was to be paid to Solsby if the Bank underwent a "change in control"—meaning a substantial change in ownership—and the second was to be paid as severance compensation in the event Solsby's employment was terminated as a consequence of that change in control.

As we explained in our first opinion, "[i]n late 2007 and early 2008, the Bank began seeking additional capital investment. In October 2008, the Bank entered into a stock purchase agreement with a third party, Carpenter Fund, which all parties agreed qualified as a `change in control' of the Bank. Moreover, the parties agreed that Solsby's employment would be terminated when that `change in control' became effective; i.e., on the date when the stock purchase transaction Carpenter Fund closed. These agreements were memorialized in Solsby's `Severance Agreement,' which was signed on the same day as the Carpenter Fund stock purchase agreement. The severance agreement essentially incorporated, without change, the provisions of Solsby's employment agreement which entitled him to be paid the `change in control' bonus and the severance compensation. . . ." (Solsby v. Plaza Bank (Feb. 17, 2015, G049272) [nonpub. opn.] (Solsby I), slip op., pp. 6-7.)

Thus, under the terms of Solsby's severance agreement, his bonuses were due to be paid in June 2009, when the Bank's stock purchase transaction closed. However, when the transaction did close, the Bank refused to pay Solsby either bonus and he subsequently filed suit against it in April 2012—nearly 3 years later. Solsby's first two appeals arose from that lawsuit against the Bank.

In his first appeal, Solsby I, Solsby challenged the trial court's grant of summary judgment in the Bank's favor. The court based its ruling on a determination that both the change in control bonus and Solsby's severance compensation had qualified as "golden parachutes" under FDIC regulations, which meant the Bank had no obligation to pay either one. In Solsby I, we agreed that Solsby's severance payment qualified as a golden parachute, but concluded the change in control bonus did not qualify because its payment was not contingent on the termination of Solsby's employment with the Bank. (Solsby I, slip op., pp. 16-18.) Consequently, we reversed the summary judgment in favor of the Bank and remanded the case to the trial court for further proceedings.

Solsby's second appeal, Solsby v. Plaza Bank (June 29, 2017, G052986) [nonpub. opn.] (Solsby II), followed the trial court's second grant of summary judgment in favor of the Bank. The summary judgment was based on a determination that because the Bank was deemed significantly undercapitalized by the FDIC on the date Solsby's change in control bonus became due, the Bank was forever excused from paying the bonus absent FDIC approval. (Solsby II, slip op., p. 6.) We again reversed the summary judgment, concluding that once the FDIC deemed the Bank's capitalization restored, its obligation to pay Solsby's change in control bonus was no longer contingent on obtaining FDIC approval. (Id., pp. 16-17.)

II. The Current Lawsuit

Solsby filed this lawsuit in March 2013, nearly a year after he filed his initial lawsuit against the Bank, and two months after the Bank filed its first motion for summary judgment in that prior case. As relevant to this appeal, Solsby's complaint included causes of action against the Carpenter Fund for intentional misrepresentation, fraudulent promise, and fraudulent concealment.1

In support of its misrepresentation and fraud claims, Solsby alleged that representatives of Carpenter Fund made various promises to him in an effort to persuade him to remain as the Bank's CEO during the period in which Carpenter Fund was negotiating to recapitalize the Bank and takeover its ownership. Specifically, Carpenter Fund promised Solsby that if his employment as CEO were terminated without cause, he would be paid "$330,000 which represents one year of severance pay and one year of change of control pay." That promise was allegedly portrayed as unconditional, and at no time did Carpenter Fund state that payment would require FDIC approval.

However, according to Solsby, the promise made by Carpenter Fund was false, and Carpenter Fund knew it was false at the time it was made. Moreover, Solsby alleged he relied upon Carpenter Fund's promise by continuing to work for the Bank, and giving up opportunities to work at other banks. Had Solsby known the Carpenter's Fund had no intention of paying him the bonus it promised, he would allegedly have left his employment with the Bank, taking numerous customers with him and "quashing any hope that [Carpenter Fund] had to purchase over 80 percent of the [Bank's] stock."

Solsby also alleged he "did not discover the facts constituting the fraud until January of 2013, when [the Bank] filed a Motion for Summary Judgment in the case entitled Donald Solsby v. Plaza Bank, Orange County Superior Court Case No. 30-2012-000564559. In papers filed with the court, [the Bank] admitted that Defendants never intended to honor their promise to pay Plaintiff $330,000. That is because they believed that the promise to pay the $330,000 was a golden parachute barred by the provisions of 12 U.S.C. § 18289(k)(4). . . . [Carpenter Fund] never advised Plaintiff that they were going to take the position that all payments referred to in their representations and promises were going to be conditioned on FDIC approval."

Carpenter Fund moved for summary judgment, arguing (among other things) that Solsby's claims were barred by the three year statute of limitations applicable to fraud claims. In support of its motion, Carpenter Fund asserted, as undisputed facts, that on June 9, 2009, four days after Solsby's bonus payments became due, a letter was sent to the FDIC asking for its approval to pay the bonuses, and noting payment would hinge on that approval. Solsby was copied on that letter. And later in June 2009, Solsby was told the FDIC had stated informally that it would not approve the payments to him. Solsby offered no evidence contradicting those facts.2

The trial court granted the summary judgment, concluding Solsby was on notice of the alleged fraud in June of 2009: "it is undisputed that Plaintiff received a copy of a [June 2009] letter that sought FDIC approval for the payments and stated that payment hinged on FDIC approval. . . . [¶] . . . [¶] Under Miller v. Bechtel Corp. (1983) 33 Cal.3d. 868, 875, if a plaintiff learns facts that would make a reasonably prudent person suspicious, he must investigate and is charged with knowledge of facts [the] investigation would disclose." Thus, the court concluded, the alleged fraud "was discovered when the [June 2009] letter was received."

DISCUSSION

On appeal, Solsby argues the trial court erred in granting summary judgment because there is a triable issue of fact as to when he discovered the fraud he alleges. We cannot agree.

The statute of limitation applicable to a fraud cause of action is three years. (Code Civ. Proc., § 338, subd. (d).) And the general rule is that "`"[a] cause of action accrues `upon the occurrence of the last element essential to the cause of action.'"'" (Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 815, italics added.) In this case, the last element essential to Solsby's fraud cause of action occurred on June 5, 2009, when his contract with the Bank required it to pay the promised bonuses he had allegedly relied upon in choosing to remain in the Bank's employ, but the Bank refused to do so. At that point, Solsby was damaged by the alleged fraud. Thus, under the general rule, the statute of limitations would have expired on Solsby's claim on June 5, 2012.

However, a plaintiff such as Solsby can also rely on the delayed discovery rule to delay the accrual of his cause of action. That rule "postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action." (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397, italics added (Norgart); Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (Fox) ["until the plaintiff has, or should have, inquiry notice of the cause of action"].) And a plaintiff "has reason to discover the cause of action when he has reason at least to suspect a factual basis for its elements," meaning he has "`"`"notice or information of circumstances to put a reasonable person on inquiry."'"'" (Norgart, supra, 21 Cal.4th at p. 398.)

Once a plaintiff has inquiry notice, the limitations period commences, and "within the applicable limitations period, he must indeed seek to learn the facts necessary to bring the cause of action in the first place—he `cannot wait for' them `to find' him and `sit on' his `rights'; he `must go find' them himself if he can and `file suit' if he does [citation]." (Norgart supra, 21 Cal.4th at p. 398, fn. omitted.)

The delayed discovery rule requires a plaintiff to plead facts showing "`(1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.' [Citation.]" (Fox, supra, 35 Cal.4th at p. 808, italics added.) Thus, a plaintiff relying on the delayed discovery rule has the burden of alleging facts demonstrating he would have been unable to discover the cause of action earlier despite reasonable diligence.

"The discovery rule does not encourage dilatory tactics because plaintiffs are charged with presumptive knowledge of an injury 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.]" (Fox, supra, 35 Cal.4th at pp. 807-808, fn. omitted.)

Indeed, Solsby himself acknowledges "that `a cause of action for . . . fraud accrues, and the limitations period commences to run, when the aggrieved party could have discovered the . . . fraud through the exercise of reasonable diligence.'" (Quoting Sun `n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 701, italics added.)

In this case, the undisputed evidence shows that whatever bonuses were promised to Solsby upon his termination as CEO of the Bank, those bonuses were due to be paid on June 5, 2009. But no bonuses were paid to him that day, and instead Solsby was informed within days that the Bank—then owned by Carpenter Fund—took the position no bonuses could be paid to him absent FDIC approval. At that point, Solsby was on notice that his right to receive the bonuses was not unconditional as the Bank and Carpenter Fund had allegedly led him to believe. In short, Solsby had reason to believe he was not getting the unconditional benefit he alleges had been promised to him.

Moreover, given how promptly the Bank asserted that FDIC approval was required before his bonuses could be paid, Solsby had reason to suspect that both the Bank and Carpenter Fund were at all times aware the payment would be subject to FDIC approval. And because Solsby had reason to suspect those facts in June 2009, he was obligated to begin diligently investigating his potential claim, and in the absence of affirmative evidence demonstrating that his diligent investigation would not have revealed the facts underlying his cause of action, the cause of action accrued at that point. Consequently, the statute of limitations expired on Solsby's claim three years later, in June 2012, which is nine months before he filed this lawsuit.

In arguing he did not "discover" his cause of action until the Bank filed its first summary judgment in the earlier lawsuit, Solsby confuses inquiry knowledge—the standard for commencing a delayed statute of limitations, with actual knowledge. Thus, Solsby claims his cause of action for fraud did not accrue until 2013, when he reviewed court filings by representatives of the Bank, in which they purportedly "admitted that they never intended to honor their promise to pay." But such evidence, if it exists, would represent the conclusion of a fraud inquiry, not the beginning of one. And significantly, Solsby makes no effort to demonstrate why he could not have discovered that evidence earlier.

Finally, Solsby also places great emphasis on his assertion that Carpenter Fund (as distinguished from the Bank itself), would not have been required to seek FDIC approval before paying the bonuses it allegedly promised to him, and thus that its refusal to pay on that basis was unjustified. The assertion is misplaced. Solsby's fraud claims depend on establishing that Carpenter Fund never intended to pay him the bonuses as promised, not on the merits of its justification for later refusing payment. And to the extent Carpenter Fund's justification was especially weak, that would only tend to support the inference it never intended to pay Solsby at all.

The undisputed facts of this case demonstrate Solsby was on inquiry notice, within days of when of his bonuses became due in June 2009, that Carpenter Fund never intended to pay them in the absence of FDIC approval. At that point, Solsby was obligated to exercise diligence in ascertaining whether the facts supported any fraud claims arising out of Carpenter Fund's failure to pay. And while Solsby claims he did not actually discover those facts until 2013, he fails to offer any evidence demonstrating his `"inability to have made earlier discovery despite reasonable diligence.' [Citation.]" (Fox, supra, 35 Cal.4th at p. 808.) We consequently find no error in the trial court's grant of summary judgment.

DISPOSITION

The judgment is affirmed. Carpenter Fund is to recover its costs on appeal.

ARONSON, J. and THOMPSON, J., concurs.