Does the statute of limitations bar a party from asserting a defense that makes the contract unenforceable?

Further, under California law, "a defense may be raised at any time, even if the matter alleged would be barred by a statute of limitations if asserted as the basis for affirmative relief." Styne v. Stevens, 26 Cal. 4th 42, 51, 26 P.3d 343 (2001). This applies to contract actions where a party sued on a contract can assert a defense that makes the contract unenforceable. Id. Where the result of the defense asserted is to render the contract unenforceable, it is a defense to which

Page 18

the statute of limitations does not apply. Id. at 54. Similarly, where the party asserts a counter claim seeking rescission and is not seeking any relief other than a declaration of the contract's invalidity, it is considered a defense to which the statute of limitations is not applicable. Pringle v. Water Quality Ins. Syndicate, 646 F.Supp.2d 1161, 1172 (C.D. Cal. 2009).

The statute of limitations does not bar Defendant from asserting a counter claim for rescission in this action.

4. Laches does not preclude Defendant from rescinding the policy