(1) All defenses, supporting facts, and “new matters” constituting a defense must be included in the Answer. Cal. Civ. Proc. Code. § 431.30(b)(2). “The defenses shall be separately stated, and the several defenses shall refer to the causes of action which they are intended to answer, in a manner by which they may be intelligibly distinguished.” Id. at § 431.30(g). “An affirmative defense may be waived if it is not raised below.” Ekstrom v. Marquesa at Monarch Beach Homeowners Ass’n, 168 Cal. App. 4th 1111, 1123 (2008).
(2) Accord and satisfaction: “For the affirmative defense of accord and satisfaction to apply in disposition of an unliquidated claim, the defendant must establish: (1) that there was a ‘bona fide dispute’ between the parties, (2) that the debtor made it clear that acceptance of what he tendered was subject to the condition that it was to be in full satisfaction of the creditor's unliquidated claim, and (3) that the creditor clearly understood when accepting what was tendered that the debtor intended such remittance to constitute payment in full of the particular claim in issue. . . . A writing is not essential to an accord and satisfaction; it may be implied.” Thompson v. Williams, 211 Cal. App. 3d 566, 571 (1989); see Potter v. Pacific Coast Lumber Co., 37 Cal. 2d 592, 597 (1951); see also Cal. Civ. Code §§ 1521-1523. “‘“[I]t matters not that there was no solid foundation for the dispute” as the test is whether “the dispute was honest or fraudulent.”’ [which is] an objective standard as the word ‘honest’ when juxtaposed with the word ‘fraudulent’ conveys the meaning that the dispute must be actual, real or ‘bona fide.’” FEI Enterprises, Inc. v. Yoon, 194 Cal. App. 4th 790, 803 (2011). However, “[i]t has long been settled that a claim will not be discharged when the purported accord and satisfaction violates the state law.” Reid v. Overland Machined Products, 55 Cal. 2d 203, 208 (1961).
“The requirements for an accord and satisfaction based on acceptance of a negotiable instrument are governed by California Uniform Commercial Code section 3311.” Bellows v. Bellows, 196 Cal. App. 4th 505, 510 (2011). Under that statute “‘a debtor must prove that: “(1) [the debtor] in good faith tendered an instrument to the claimant as full satisfaction of the claim, (2) the amount of the claim was unliquidated or subject to a bona fide dispute, and (3) the claimant obtained payment of the instrument … .” If the debtor further proves that he accompanied the tender with a conspicuous statement that the amount was tendered as full satisfaction of the claim, and if the claimant does not prove that he tendered repayment of the amount within 90 days, the debt is discharged.’” Id.
(3) Arbitration: section needs to be redone When[MMD1] determining whether a defendant has waived the right to arbitration, the court considers
(1) “‘whether the party’s actions are inconsistent with the right to arbitrate; (2) whether ‘the litigation machinery has been substantially invoked’ and the parties ‘were well into preparation of a lawsuit’ before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) ‘whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place’; and (6) whether the delay ‘affected, misled, or prejudiced’ the opposing party.’”
St. Agnes Medical Center v. Pacificare of California, 31 Cal. 4th 1187, 1196 (2003); see Cal. Civ. Code § 1281.
(4) Assumption of the Risk. There are two types of assumption of the risk, primary and secondary.
(a) Primary Assumption of Risk: “‘Although persons generally owe a duty of due care not to cause an unreasonable risk of harm to others (Civ. Code, § 1714, subd. (a)), some activities—and, specifically, many sports—are inherently dangerous. Imposing a duty to mitigate those inherent dangers could alter the nature of the activity or inhibit vigorous participation.’” Nalwa v. Cedar Fair, L.P., 55 Cal. 4th 1148, 1154 (2012). “The primary assumption of risk doctrine, a rule of limited duty, developed to avoid such a chilling effect. . . .Where the doctrine applies to a recreational activity, operators, instructors and participants in the activity owe other participants only the duty not to act so as to increase the risk of injury over that inherent in the activity.” Id.; accord Cann v. Stefanec, 217 Cal. App. 4th 462, 468 (2013). “The primary assumption of risk doctrine operates to limit the duty owed by the defendant.” Shin v. Ahn, 42 Cal. 4th 482, 499 (2007). If applicable, it is a complete bar to the plaintiff’s recovery. Kahn v. East Side Union High School Dist., 31 Cal. 4th 990, 1003 (2003).
(b) Secondary Assumption of Risk: The “secondary assumption of risk applies to the calculation of damages” and is merged into the concept of comparative negligence. Shin, 42 Cal. 4th at 499. The concept of secondary assumption of risk arises where “the defendant had breached a duty of care but where the issue was whether the plaintiff had chosen to face the risk of harm presented by the defendant's breach of duty.” Kahn v. East Side Union High School Dist., 31 Cal. 4th 990, 1003 (2003). “In the latter class of cases, . . . the issue could be resolved by applying the doctrine of comparative fault, and the plaintiff’s decision to face the risk would not operate as a complete bar to recovery [but]. . . the plaintiff’s knowing and voluntary acceptance of the risk functions as a form of contributory negligence.” Id.
(5) Collateral Estoppel: “Collateral estoppel precludes re-litigation of issues argued and decided in prior proceedings.” Lucido v. Superior Court, 51 Cal. 3d 335, 341(1990). “Collateral estoppel … involves a second action between the same parties on a different cause of action. The first action is not a complete merger or bar, but operates as an estoppel or conclusive adjudication as to such issues in the second action which were actually litigated and determined in the first action.” Murray v. Alaska Airlines, Inc., 50 Cal. 4th 860, 867 (2010).
“The doctrine applies ‘only if several threshold requirements are fulfilled. First, the issue sought to be precluded from re-litigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.’” Pacific Lumber Co. v. State Water Resources Control Bd. 37 Cal. 4th 921, 943-44 (2006); accord Jackson v. Yarbray, 179 Cal. App. 4th 75, 93 (2009).
(6) Comparative Negligence: In Li v. Yellow Cab Co., 13 Cal. 3d 804, 828-29 (1975) the California Supreme Court abolished contributory negligence as a defense in personal injury and property damage case in favor of comparative negligence. The Li court explained that “in all actions for negligence resulting in injury to person or property, the contributory negligence of the person injured in person or property shall not bar recovery, but the damages awarded shall be diminished in proportion to the amount of negligence attributable to the person recovering.” Id. at 829; see Bostick v. Flex Equipment Co., Inc., 147 Cal. App. 4th 80, 102 (2007) (“Li abrogated the contributory negligence doctrine, which barred recovery if the plaintiff's conduct contributed as a legal cause of injury in any degree, and adopted the comparative negligence doctrine, which reduces the plaintiff's recovery only in proportion to the plaintiff's comparative fault.”).
(7) Corporate Veil (Piercing): The corporate veil can be pierced, and damages sought directly from shareholders, when both of the following two requirements are met:
(1) Unity of Interests – The shareholders in question have treated the corporation as their “alter ego,” rather than as a separate entity; and
(2) Inequitable Result – Upholding the corporate entity and allowing for the shareholders to dodge personal liability for its debts would “sanction a fraud or promote an injustice.”
Automotriz del Golfo de California S. A. de C. V. v. Resnick, 47 Cal. 2d 792, 796 (1957)
(8) Discharge in Bankruptcy See 28 U.S.C. §§ 727 (Chapter 7 Debtor), 1141(d) (Chapter 11 Debtor), 1228 (Chapter 12 Debtor), & 1328 (Chapter 13 Debtor)
(9) Duress: Destroys a defendant’s free agency and constrains the defendant to do what is against defendant’s will. Duress may be exercised by threats or mental coercion. See In re Marriage of Baltins, 212 Cal. App. 3d 66, 84 (1989); see Cal. Civ. Code §§1567(1) & 1569.
(10) Economic Loss Rule: “Simply stated, the economic loss rule provides: ‘“‘[W]here a purchaser's expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only “economic” losses.’” This doctrine hinges on a distinction drawn between transactions involving the sale of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.’ . . . The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.’” Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 988 (2004).
(11) Equitable Estoppel: “Generally speaking, four elements must be present . . . : (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.” Lentz v. McMahon, 49 Cal. 3d 393, 399 (1989). See also Chapter 28 on Equitable Estoppel.
(12) Equitable Indemnity: As a result of Proposition 51, since 1986 “‘based upon principles of comparative fault,’ each defendant is liable for all the plaintiff's economic damages but only ‘for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant's percentage of fault.’” Diaz v. Carcamo, 51 Cal. 4th 1148, 1156 (2011) (discussing Proposition 51 as codified in Cal. Civ. Code § 1431).
(13) Equitable tolling may delay the running of the statute of limitation and applies only in “carefully considered situations to prevent the unjust technical forfeiture of causes of action, where the defendant would suffer no prejudice.” Lantzy v. Centex Homes, 31 Cal. 4th 363, 370 (2003). Most often, it applies when the plaintiff has multiple potential remedies in different forums and, within the limitations period, diligently pursues one in good faith that turns out to be unfruitful. See Addison v. State, 21 Cal. 3d 313, 317-21 (1978).
(14) Failure of Consideration is the failure to execute a promise, the performance of which has been exchanged for performance by the other party. This failure may arise from a willful breach of the promise. Bliss v. California Coop. Producers, 30 Cal. 2d 240, 248 (1947); Taliaferro v. Davis, 216 Cal. App. 2d 398, 410-11 (1963).
(15) Failure to Exhaust Administrative Remedies: “‘[T]he rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.’” Campbell v. Regents of the Univ. of California, 35 Cal. 4th 311, 321-322 (2005).
“There are numerous exceptions to the rule including situations where the agency engages in unreasonable delay, when the subject matter lies outside the administrative agency’s jurisdiction, when pursuit of an administrative remedy would result in irreparable harm, when the agency is incapable of granting an adequate remedy, and when resort to the administrative process would be futile because it is clear what the agency’s decision would be.” Green v. City of Oceanside, 194 Cal. App. 3d 212, 222 (1987).
(16) Federal Preemption: The Supremacy Clause (U.S. Const. Art. VI, cl. 2) provides that state law claims are not available when preempted by federal law. The Supreme Court explained “‘. . . that a federal statute implicitly overrides state law either when the scope of a statute indicates that Congress intended federal law to occupy a field exclusively, . . ., or when state law is in actual conflict with federal law. We have found implied conflict pre-emption where it is “impossible for a private party to comply with both state and federal requirements,” or where state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”’” Sprietsma v. Mercury Marine, 537 U.S. 51, 64-65 (2002).
(17) Fraud: See Chapter 30, discussing the elements of fraud.
(18) Illegality: “If any part of the consideration is unlawful the entire contract is void. (Civ. Code, § 1608.) Consideration is unlawful if it is contrary to an express provision of law, contrary to the policy of express law, though not expressly prohibited, or is otherwise contrary to good morals.” Russell v. Soldinger, 59 Cal. App. 3d 633, 641 (1976); see Cal. Civ. Code § 1596. Contract that are illegal are “‘(1) those contrary to express statutes; (2) those contrary to the policy of express statutes; (3) those otherwise contrary to good morals.’” Duffens v. Valenti, 161 Cal. App. 4th 434, 450 n.5 (2008).
(19) In Pari Delecto: “In pari delicto means, ‘[i]n equal fault; equally culpable or criminal; in a case of equal fault or guilt.’ . . . ‘[h]e who comes into equity must come with clean hands. A court will neither aid in the commission of a fraud by enforcing a contract, nor relieve one of two parties to a fraud from its consequences, where both are in pari delicto.’ The doctrine ‘“closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been the behavior of the defendant.”’ ‘In California, the doctrine of unclean hands may apply to legal as well as equitable claims and to both tort and contract remedies.’” Jacobs v. Universal Dev. Corp., 53 Cal. App. 4th 692, 699 (1997).
(20) Judicial Estoppel precludes a party from taking inconsistent positions in separate judicial proceedings. “[T]he following [are] five requirements for the application of judicial estoppel: ‘(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.’” The Swahn Group, Inc. v. Segal, 183 Cal. App. 4th 831, 842 (2010); see People v. Castillo, 49 Cal. 4th 145, 155 (2010).
(21) Laches: “A defendant must demonstrate three elements to successfully assert a laches defense: (1) delay in asserting a right or a claim; (2) the delay was not reasonable or excusable; and (3) prejudice to the party against whom laches is asserted.” Magic Kitchen LLC v. Good Things Internat., Ltd., 153 Cal. App. 4th 1144, 1146 (2007) see also Cal. Civ. Code § 3527.
(22) License: “‘An implied license is one which is presumed to have been given from the words, acts or passive acquiescence of the party authorized to give it.’ Such a license must be established by proof, and it is not to be inferred from equivocal declaration or acts of the owner of the land.’” Zellers v. State, 134 Cal. App. 2d 270, 273 (1955).
(23) Litigation Privilege: The litigation privilege “precludes recovery for tortiously inflicted injury resulting from publications or broadcasts made during the course of judicial and quasi-judicial proceedings, but does not bar recovery for injuries from tortious conduct regardless of the purpose for which such conduct is undertaken.” Kimmel v. Goland, 51 Cal. 3d 202, 205 (1990); see also Cal. Civ. Code § 47(2).
(24) Payment: The defense of “payment” arises when the defendant has already satisfied the plaintiff’s claim through payment of money or discharge of obligation. See Pastene v. Pardini, 135 Cal. 431, 434 (1902) (payment is an affirmative defense that must be pleaded).
(25) Ratification: “Ratification is the voluntary election by a person to adopt in some manner as his own an act which was purportedly done on his behalf by another person, the effect of which, as to some or all persons, is to treat the act as if originally authorized by him.” Rakestraw v. Rodriguez, 8 Cal. 3d 67, 73 (1972); see Cal. Civ. Code § 2307.
(26) Res Judicata: “The prerequisite elements for the defense of res judicata are: (1) a claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.” Brinton v. Bankers Pension Servs., Inc.,76 Cal. App. 4th 550, 556 (1999). “The doctrine has two aspects. It applies to both a previously litigated cause of action, referred to as claim preclusion, and to an issue necessarily decided in a prior action, referred to as issue preclusion.” Id. To raise the defense of res judicata, the defendant must specifically identify the prior final judgment which bars the present action. 5 Witkin, Cal. Proc. (4th ed. 1997), Plead § 1055, p. 505.
(27) “Single Publication Rule”: “No person shall have more than one cause of action for damages for libel or slander or invasion of privacy or any other tort founded upon any single publication or exhibition or utterance, such as any one issue of a newspaper or book or magazine or any one presentation to an audience or any one broadcast over radio or television or any one exhibition of a motion picture. Recovery in any action shall include all damages for any such tort suffered by the plaintiff in all jurisdictions.” Cal. Civ. Code § 3425.3.
“The single-publication rule limits tort claims premised on mass communications to a single cause of action that accrues upon the first publication of the communication, thereby ‘spar[ing] the courts from litigation of stale claims’ where an offending book or magazine is resold years later.” Roberts v. McAfee, Inc., 660 F.3d 1156, 1166-67 (9th Cir. 2011) (quoting Christoff v. Nestle USA, Inc., 47 Cal. 4th 468, 479 (2009)). “The rule likewise ‘provide[s] repose to defendants by precluding stale claims based on dated but still-lingering mass communications,’” id. at 1168, and also “protect[s] defendants from harassment through multiple suits.” Oja v. U.S. Army Corps of Eng’rs, 440 F.3d 1122, 1131 (9th Cir. 2006).
Doe v. Gangland Prods., No. 11-56325, 2013 U.S. App. LEXIS 19102, at *35-36 (9th Cir. Sept. 16, 2013).
(28) Standing (Lack of): “‘As a general principle, standing to invoke the judicial process requires an actual justiciable controversy as to which the complainant has a real interest in the ultimate adjudication because he or she has either suffered or is about to suffer an injury of sufficient magnitude reasonably to assure that all of the relevant facts and issues will be adequately presented to the adjudicator. To have standing, a party must be beneficially interested in the controversy; that is, he or she must have “some special interest to be served or some particular right to be preserved or protected over and above the interest held in common with the public at large.” The party must be able to demonstrate that he or she has some such beneficial interest that is concrete and actual, and not conjectural or hypothetical.’” CashCall, Inc. v. Superior Court, 159 Cal. App. 4th 273, 286 (2008); see Cal. Code Civ. Proc. § 367.
“Lack of standing is not waived by failure to raise it in the trial court and may be raised at any point in the proceedings, in that the question of standing to sue goes to the existence of a cause of action against the defendant.” Marshall v. Pasadena Unified School Dist., 119 Cal. App. 4th 1241, 1251 (2004); see Cal. Code Civ. Proc. § 430.80(a) (“If the party against whom a complaint or cross-complaint has been filed fails to object to the pleading, either by demurrer or answer, that party is deemed to have waived the objection unless it is an objection that the court has no jurisdiction of the subject of the cause of action alleged in the pleading or an objection that the pleading does not state facts sufficient to constitute a cause of action.”).
(29) Statute of Frauds: “The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent:
(1) An agreement that by its terms is not to be performed within a year from the making thereof.
(2) A special promise to answer for the debt, default, or miscarriage of another, except in the cases provided for in Section 2794.
(3) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; such an agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged.
(4) An agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission.
(5) An agreement that by its terms is not to be performed during the lifetime of the promisor.
(6) An agreement by a purchaser of real property to pay an indebtedness secured by a mortgage or deed of trust upon the property purchased, unless assumption of the indebtedness by the purchaser is specifically provided for in the conveyance of the property.
(7) A contract, promise, undertaking, or commitment to loan money or to grant or extend credit, in an amount greater than one hundred thousand dollars ($100,000), not primarily for personal, family, or household purposes, made by a person engaged in the business of lending or arranging for the lending of money or extending credit. For purposes of this section, a contract, promise, undertaking or commitment to loan money secured solely by residential property consisting of one to four dwelling units shall be deemed to be for personal, family, or household purposes.
Cal. Civ. Code § 1624.
(30) Statute of Limitations: Most, but not all, statutes of limitations are found at California Code of Civil Procedure sections 335, et seq. See the individual causes of action discussed herein for the applicable statutes of limitations. Also see Equitable Estoppel and Equitable Tolling herein.
(31) Unclean Hands: The doctrine of “unclean hands” “is invoked when one seeking relief in equity has violated conscience, good faith or other equitable principles in his prior conduct” because “one who violates his contract cannot have recourse to equity to support that violation.” Fiberboard Paper Prods. Corp. v. East Bay Union of Machinists, 227 Cal. App. 2d 675, 727 (1964); see also Cal. Civ. Code § 3517. The defense “must be raised in the trial court to be available.” Fiberboard, 227 Cal. App. 2d at 726.
(32) Voluntary Payment Doctrine: “‘Payments voluntarily made, with knowledge of the facts, cannot be recovered.’” Steinman v. Malamed, 185 Cal. App. 4th 1550, 1557 (2010); accord Ellsworth v. U.S. Bank, N.A., 908 F. Supp. 2d 1063, 1083 (N.D. Cal. 2012) (“The voluntary payment doctrine is an affirmative defense that bars the recovery of money that was voluntarily paid with knowledge of the facts.”).
(33) Waiver: The equitable defense of waiver requires the “intentional relinquishment of a known right after knowledge of the facts.” See Harper v. Kaiser Cement Corp., 144 Cal. App. 3d 616, 619 (1983).
(34) Workers’ Compensation Preemption: “The workers’ compensation law applies to employee injuries ‘arising out of and in the course of the employment’ when the statutorily specified ‘conditions of compensation concur.’ . . . Generally, it is the exclusive remedy for such injuries.” Claxton v. Waters, 34 Cal. 4th 367, 368 (2004); see Cal. Lab. Code §§ 3600 & 3601.