MOSK, J., Dissenting. I respectfully dissent.
A. Tolling Agreement
Defendant asserts that the Code of Civil Procedure section 360.51 renewal requirement applies to the “tolling agreement” between the parties, and therefore plaintiff’s claim is untimely and barred by the statute of limitations. (§ 337.) The apparent purpose of section 360.5 was to prevent creditors from extracting perpetual waivers of the statute of limitations and thereby emasculating the defense of the statute of limitations. (See California First Bank v. Braden (1989) 216 Cal.App.3d 672, 677 [264 Cal.Rptr. 820].) Moreover, such agreements would be contrary to the public interest in preventing stale claims. (See Addison v. State of California (1978) 21 Cal.3d 313, 317 [146 Cal.Rptr. 224, 578 P.2d 941].) The same policy principles apply to agreements whether labeled as waivers of, or as tolling of, the statute of limitations.
A comment in the Stanford Law Review shortly after the enactment of section 360.5, stated as follows: “More likely ‘waiver’ was included in the first part of [section 360.5] as a generic term to prevent evasion of the [932]section. It would then include acknowledgements, promises, and all other things similarly barring a defense of the statute of limitations. [][]... California courts have used the term ‘waiver’ when referring to promises or acknowledgments that toll the statute of limitations. ‘Waiver’ has been given many different meanings. But for the purposes of the statute of limitations in California, it should be construed as including acknowledgments and promises.” (Comment, California Code of Civil Procedure section 360.5 (1952) 4 Stan. L.Rev. 415, 416, italics added.) The comment goes on to state, “The section seems to envision tolling the statute only by a series of separate transactions. . . . Section 360.5 was to provide a maximum beyond which the statute could not be tolled by any means.” (Id. at pp. 426-427, italics added.)
Another article stated, “In California, waiver [of the statute of limitations] is controlled by section 360.5 of the Code of Civil Procedure. For tolling agreements signed before the expiration of the limitations period, the California Code allows a four-year waiver running from the date of expiration. For agreements signed after the limitations period, the statute may be tolled for four years from the date of signing. California's four-year limit appears to be aimed at avoiding ‘perpetual contracts.’ ” (Note, Reviving Contract Claims Barred by the Statute of Limitations: An Examination of the Legal and Ethical Foundation for Revival (2000) 75 Notre Dame L.Rev. 1571, 1586, italics added & omitted.)2 A prominent authority, citing section 360.5, said, “By law, a tolling agreement is not effective for a period exceeding four years from the expiration of the time otherwise required for commencement of the action, although the parties may execute successive tolling agreements each of which is effective for up to another four years.” (1 Schwing, Cal. Affirmative Defenses (2012) § 25:67, p. 1770, italics added); see Moskowitz, Environmental Liability and Real Property Transactions (2012) Appendix A: Annotated Forms, Form A-21 [referring to § 360.5 in connection with a tolling agreement].) Thus, it appears that legal writers have used “waiver” and “tolling” interchangeably in connection with section 360.5.
Judicial opinions have likewise used the terms interchangeably in connection with the statute of limitations. (See, e.g., ABF Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 835 [30 Cal.Rptr.3d 588] [describing § 360.5 as concerning “California’s . . . four-year tolling limit”]; Abramson v. Brownstein (9th Cir. 1990) 897 F.2d 389, 393 [tolling and waiver used [933]interchangeably]; U.S. v. Stewert (E.D.Va. 2006) 425 F.Supp.2d 727, 737 [“defendant knowingly and voluntarily executed a waiver of indictment for the purposes of tolling the statute of limitations . . .”]; Hexcel Corporation v. Ineos Polymers, Inc. (9th Cir. 2012) 681 F.3d 1055, 1060 [party argues tolling agreement lapsed under § 360.5].) In Hunter-Boykin v. George Washington University (D.C.Cir. 1998) 328 U.S. App.D.C. 22 [132 F.3d 77, 80], the court said, “The defendant purports to see an important distinction between a ‘suspension’ [(tolling)] and a ‘waiver’ of a statute of limitations. We do not, at least as the parties use the words in this case.”
Prominent legal authorities have noted the imprecise meaning of the word “waiver.” Williston has said “waiver” has “different meanings.” (5 Williston on Contracts (3d ed. 1961) § 679, p. 246.) He notes that a promise “to excuse performance of an obligation not due at the time when a promise is made . . . might perhaps also be called ‘waiver’ . . . .” (Id., § 679, pp. 246-253.) Williston added, “In view of these different meanings of the word ‘waiver’ it is obviously futile to attempt to define the requirements of a valid waiver unless its use is first confined to some one or more of its ordinary applications wherein the requirements of the law are identical. Until that is done there will be constant confusion of expression, [f] Thus, one court will say ‘No question of estoppel as distinguished from waiver arises’; another will say ‘The basis of waiver is estoppel’ . ... HO An understanding of the law requires, however, that each of these legal transactions be looked at separately and its requirements determined.” (Id. at pp. 257-258, fns. omitted; see 13 Williston on Contracts (4th ed. 2000) § 39:14, pp. 560-564.)
Corbin on Contracts (rev. ed. 1999) section 40.1, page 514 states, “The term ‘waiver’ has been given various definitions and is used under many varying circumstances. Lawyers might like greater definition but judges are not precise, perhaps deliberately leaving flexibility in the concept and use of waiver. There is no one ‘correct’ definition. Waiver cannot be defined without reference to the kind of circumstances to which it is being related. Nor can we determine the legal operation of a ‘waiver’ without knowing the facts that the term is being used to describe.” Gamer has said, “Waiver is ‘an imprecise and generic term.’ ” (Gamer, Diet, of Modem Legal Usage (2d ed. 1995) p. 923 (Gamer).) Thus, defendant argues that “waiver” can be used in different contexts and is consistent with the use of tolling in this situation.
On the other hand, tolling generally has been viewed as technically different from waiver—the position of plaintiff in arguing that the tolling agreement is not subject to section 360.5. A tolling agreement “extend[s] the [934]statutory limitations period on the plaintiff’s claim.” (Black’s Law Diet. (9th ed. 2004) p. 1625 (Black’s).) Tolling “means ‘to abate’ or ‘to stop the running of (the statutory period).’ ” (Gamer, supra, at p. 884.) When the statute of limitations is tolled, it is “suspended.” (Mellinkoff’s Diet, of American Usage (1992) p. 616.) Commonly, a statute of limitations is tolled when a plaintiff is a minor or has disabilities or when a defendant is absent from the jurisdiction or in other comparable situations. (See ibid.; Black’s, supra, at p. 1625; §§ 340.4-340.6, 352, 354.) But there can be a “tolling agreement,” which has been defined as one in which the potential defendant “agrees to extend the statutory limitations period on the plaintiff’s claim.” (Black’s, supra, at p. 1625.) The Legislature has used the words “toll” or “tolled” (see, e.g., §§ 340.5, 340.6, subd. (a)(3), 340.7) and thus knows how to use that word when applicable. In section 360.5, the Legislature used the word “waiver” and not “toll.” “Waiver is the intentional relinquishment of a known right after knowledge of the facts” (Roesch v. De Mota (1944) 24 Cal.2d 563, 572 [150 P.2d 422]), and extends the time to sue (Rylaarsdam & Turner, Cal. Practice Guide: Civil Procedure Before Trial, Statute of Limitations (The Rutter Group 2012) | 1:101, p. 1-18) rather than suspending the applicable statute of limitations (see Ashou v. Liberty Mutual Fire Ins. Co. (2006) 138 Cal.App.4th 748, 757 [41 Cal.Rptr.3d 819] [distinguishing waiver, tolling and estoppel]; State v. Blackburn (2008) 118 Ohio St.3d 163 [2008 Ohio 1823, 887 N.E.2d 319, 323] [“Unlike waiver, statutory tolling does not necessarily require an informed, tactical decision.”]). Absent legislative intent to the contrary, or other evidence of a different meaning, legal terms in a statute are presumed to have been used in their legal sense. (2A, Singer & Singer, Sutherland Statutes and Statutory Construction (7th ed. 2007) § 47:30, pp. 478-479.) The words used both in the statute and the agreement generally are supposed to govern unless there is some ambiguity or unless contrary to the intent of the statute or agreement. (See Civ. Code, § 1638; Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18-19 [44 Cal.Rptr.2d 370, 900 P.2d 619]; Delaney v. Superior Court (1990) 50 Cal.3d 785, 798 [268 Cal.Rptr. 753, 789 P.2d 934]; MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1082-1084 [36 Cal.Rptr.3d 650] (MacIsaac); Scalia & Gamer (2012) Reading Law: The Interpretation of Legal Texts [textualism].) “Technical words are to be interpreted as usually understood by persons in the profession or business to which they relate, unless clearly used in a different sense.” (Civ. Code, § 1645.)
In order to resolve these conflicting views, because of the imprecise meaning of “waiver” in section 360.5, the task here is to ascertain if the “tolling agreement” appropriately fits within the logical meaning of waiver in [935]that statute. “The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.” (Civ. Code, § 1644.) Similarly, if there is any ambiguity in the statute, we should interpret and apply it in a reasonable manner to effectuate its purpose. (Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1165-1166 [278 Cal.Rptr. 614, 805 P.2d 873], superseded by statute on another ground [“When uncertainty arises in a question of statutory interpretation, consideration must be given to the consequences that will flow from a particular interpretation. [Citation.] In this regard, it is presumed the Legislature intended reasonable results consistent with its expressed purpose, not absurd consequences. [Citations.] ‘ “[W]here the language of a statutory provision is [susceptible] of two constructions, one of which, in application, will render it reasonable, fair and harmonious with its manifest purpose, and another which would be productive of absurd consequences, the former construction will be adopted.” ’ [Citation.]”].)
Allowing parties to circumvent easily the policy behind section 360.5 by using the word “toll” instead of “waive” would be an absurd consequence and would contravene public policy. The tolling agreement should be interpreted in a reasonable fashion. (See Pacific Tel. & Tel. Co. v. City of Lodi (1943) 58 Cal.App.2d 888, 892 [137 P.2d 847] [“literal interpretation . . . tends to make . . . paragraph inoperative and to involve an absurdity. Such interpretation is to be avoided if said paragraph can be given an interpretation which will make it operative and reasonable . . .”]; Rest.2d Contracts, § 203(a), p. 92.) Also reading the section 360.5 “waiver” literally to exclude tolling does not “comport[] with its purpose” (California School Employees Assn. v. Governing Board (1994) 8 Cal.4th 333, 340 [33 Cal.Rptr.2d 109, 878 P.2d 1321]; Maclsaac, supra, 134 Cal.App.4th at p. 1083) and would frustrate the purpose of the statute (California School Employees Assn. v. Governing Board, supra, at p. 341). Section 360.5 should be interpreted to cover the tolling agreement in this case. Such an interpretation would be consistent with “reason, practicality, and common sense.” (Halbert’s Lumber, Inc. v. Lucky Stores, Inc. (1992) 6 Cal.App.4th 1233, 1239 [8 Cal.Rptr.2d 298].) Moreover, in effect, by agreeing to toll the statute of limitations, plaintiff waived rights under the statute of limitations.
Perhaps legal authorities incorrectly use “tolling” and “waiver” interchangeably. The use of the word “toll” in its strict legal meaning, however, does not make sense here. Tolling is normally tied to some specific phenomenon and is not used to involve an indefinite period or a period in the discretion of one party. Generally, tolling is provided for by statute or is an equitable doctrine [936]created judicially. (See Rylaarsdam & Turner, Cal. Practice Guide: Civil Procedure Before Trial, Statute of Limitations, supra, f 6:1, p. 6-1; IPF Recovery Co. v. Illinois Ins. Guaranty Fund (2005) 356 Ill.App.3d 658 [292 Ill.Dec. 507, 826 N.E.2d 943, 947-948].) It would appear that here the intent of the parties was not to use “toll” in the strict legal sense, but instead to have plaintiff waive the statute of limitations until notice was given. If, as the legislative history suggests, section 360.5 was to apply to any type of waiver, what was designated as tolling here should be viewed as a type of waiver covered by the statute. There is no meaningful difference here between suspending the statute of limitations and waiving it in this context.
The tolling agreement provided for tolling until “you give us reasonable notice (30 days) rescinding this tolling agreement.” If the words of the tolling agreement are to be applied literally, “rescinding” the tolling agreement would render it a nullity (Holmes v. Steele (1969) 269 Cal.App.2d 675, 677 [75 Cal.Rptr. 216]) and the statute of limitations would likely have run. There is no reason to apply the term “tolling” literally and not “rescinding.” The purpose of the agreement was to waive the statute of limitations as provided in section 360.5.
Section 360 has no applicability here because that provision deals with acknowledgments of debt and promises of payment. Plaintiff made no such acknowledgment or payment.
It is true that the “statute of limitations should not be characterized by courts as either ‘favored’ or ‘disfavored.’ The two public policies ... the one for repose and the other for disposition on the merits—are equally strong, the one being no less important or substantial than the other.” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 396 [87 Cal.Rptr.2d 453, 981 P.2d 79].) But section 360.5 evinces a public policy of precluding agreed-upon, indefinite periods of limitations.
Accordingly, I would reverse the judgment by holding that the plaintiff’s claims are barred by the statute of limitations.
B. Other Issue*
[937]C. Conclusion
I would reverse the judgment.
A petition for rehearing was denied October 29, 2012, and on October 9, 2012, the opinion was modified to read as printed above. Mosk, J., was of the opinion that the petition should be granted. The petitions of appellant Rysher Entertainment, LLC, and appellant Don Johnson Productions, Inc., for review by the Supreme Court were denied January 16, 2013, S206553.
All statutory references are to the Code of Civil Procedure unless otherwise noted.
The Legislative Counsel reported on the proposed section 360.5 as follows: “Invalidates any form of waiver of statutes of limitation unless in writing signed by the person obligated. Provides such waiver is effective for not more than 4 years from expiration of time limit. Authorizes successive renewals of such waivers.” (Legis. Counsel, Rep. on Assem. Bill No. 370 (1951 Reg. Sess.) June 12, 1951, italics added.)
See footnote, ante, page 919.