NOT RECOMMENDED F OR FUL L -TEXT PUB L I CATI ON File Na me: 11a0344n.06 No. 10-5064 UNI TED STATES COURT OF A PPEAL S FOR THE SI XTH CI RCUI T
Rena Purintun Swanson, Plaintiff-Appellant,

v. Rhonda Renee Purintun Wil son; Ki m L ane Wil son; Capitol I ndemnity

Corporation; Def endants-A

ppellees. ) ) ) ) ) ) ) ) ) ) ) ON AP P E AL FROM THE UNI TED STATES DI STRI CT COU R T FOR THE EASTERN DI STRI CT OF KE NTUCKY O P I N I O N

BEF ORE: GUY, CL AY, and Mc KEAGU E, Circuit J udg es. McK eague, Circuit Judge. Plaintiff Rena Swanson filed suit a g ainst her mother, Rhonda Wil son; her step-fa ther, Kim Wil son; and sever al corpor ate entities to rec over her share of a lawsuit settlement rela ted t o her father ’s accidental death when she was y o u n g. S wanson alleg es t hat her mother was a fiduciar

y in sever al respe cts, and brea ched the duties she owed her daug hter by

conce aling the exis tence of settlement proce eds belong ing to Swanson, and by u s ing fra udulent means to g ain ac cess to Swanson’s se ttlement funds for he r own use a nd benef it. The district court conclude d that this action was barr ed b y t he applicable statute of limit ations. Thoug h we disag ree with particula r deter minations made by the district court, we ag ree with its ul timate conclusion and the ref ore AF F IRM the g rant of summar y judgme nt. I. BACK GR OUNDNo. 10-5064

Rena Swanson v. Rhonda W ilson, et al. Plaintiff Rena Swanson (“ Rena” or “Plaintiff” ) was three y ear s old when her fathe r, L eroy Purintun (“L eroy ”), was killed in an oil tank explos ion in I llinois

. Following the acc ident, his wife, Def endant Rhonda Renee Purintun Wil son (“Rhonda” ) broug ht a wrong ful death action in I llinois
state court as administratrix of L eroy ’s estate, and as g uardia n of her two minor children, Rena and her sister, Me lissa. The ca se wa s settled in 1990—at that time, Rena wa s nine y ear s old. Rena’s claims wer e settled for $234,375. The defe nd an t s in that settlement ag ree d to pay $109,37 5 i m mediately , with approximately $95,000 g oing to litigation costs and attorney ’s fee s, $1,193 to pay estate costs and fee s, and the rema ining $12,388.71 to be used to op en a re s t ri cted bank acc ount in Rena’s name. The court an d p ar t i es i n tended that this acc ount is wher e Rena’s portion of the immediate settlement proce eds, as well as future pay ments, would be deposited a nd held until she attained majority (or the Circuit Court of Cook County order ed the funds rele ased)

. The settlement also provided that Safec o I nsuranc e Company of Am er i ca (“Saf eco” ), the liability insurer of the defe ndants in the wrong ful death suit, would make periodic pay ments to Rena. This pay ment schedule included $300 monthly pay ments until Rena rea ched the ag ed of 18, with an interest rate of six perc ent compounded annually —these pay

ments would be made to the secur e bank

acc ount. The settlement also included nine larg e lump-sum pay ments to be paid periodica lly to Rena betwee n the ag es of 18 a

nd 22—these pa

y ments would total $248,000. 1

Safec o made a qualified assig nment of its pay ment obliga tion to Sy

metra Assigne d Be nefits 1 Service Company

. To fund t h e p ayments, Sy metra entere d into an annuity contra ct wit h Sy metra L ife I nsuranc e Company (“Sy metra L ife” ). Safec o also issued a surety bond under which it promised to make the settlement pay ments to Rena if Sy

metra failed to perf

orm. Claims ag ainst the corpor ate succe ssors to these parties wer e s et t l ed an d are not involved in this appea l. The only rema ining parties are R en a S wa n son; her mother, Rhonda Wil son; her stepfathe r, Kim Wil son; and Capitol - 2 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. I n order to fac ilitate the cre ation of the restric ted acc ount and the deposit of the first settlement pay

ment, the Probate Court appointed Rhonda as the g uardia n of Rena’s court estate. Def endant Cap i t o l I ndemnity Corporation obliga ted itself as surety on Rhonda’s fiduciar y bond. Rhonda opened an ac co u n t in Rena’s name at Americ an National Ba nk and Trust Company of C h i ca go (“A merica

n National Ba

nk”) and deposited the orig inal $ 12, 388.71 pay ment into that

acc ount. That same day , following production of the nece ssary documents to the Probate Court, the Court cl o s ed R en a’ s estate, discharg ed Rhonda from further duty as g uardia n of that estate, and rele ased Capitol from further surety obliga tions. Rhonda, howeve r, rema ined Rena’s sol e leg al
g uardia n. For the next nine y ear s, Sy metra L ife deposited all of the schedule d monthly pay ments and the first lump-sum pay

ment direc tly into Rena’s restric ted bank acc ount at Americ an National Ba nk. Tho u gh R h o n da was the signa tory on this acc ount, the Probate Court had indicated that no withdrawa ls could be made without court approva l, and t here is no indication that any funds wer e

remove d from the a ccount dur ing tha t time. I n ear ly 1995, Rhonda and Rena moved to California. L ater that y ea r, R h onda marrie d Def endant Kim Wil son (“K im”), and the family moved to 8500 Todd Court, Riverside, California. Three y ear s later, Rena turned eig hteen on September 28, 1998, at which time, she still resided with Rhonda and Kim. Rena alleg es that in the nine y ear s betwee n the settlement and he r reaching the
ag e of ma jority , she wa s never

informed of the exis tence of the settlement benef itting her. Rena’s

I ndemnity

Corporation, the sure ty

on Rhonda’s fiducia

ry bond. - 3 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. g randmother stated in her deposition that Rhonda told her not to mention the money t o R ena, beca use R ena was t oo immature t o handle it. R ena alleg es t hat her mother i ntentionally withheld the exist ence of the settlement a nd money from her

. Shortly afte r her eig hteenth birthday , Rena had an arg ument with her mother and moved out of the house. She flew to Guam to be with her boy friend, Robert, who was in the U.S. Navy

. Rena and Robert wer e marrie d in Dec ember 1998, and they rema ined in Guam until Aug ust 1999. At that time, Robert was discharg ed fr om the U.S. Navy , and the family moved back in with Rhonda and Kim. When Robert found another job, he and Rena made plans to move into their own apar tment. Howeve r, before they moved, R honda induce d Rena to sig n a Durable P ower of Att orney , which empower ed Rhonda to act on Rena’s behalf with respe ct to various matters, including banking
t ransa ctions. She told Rena this would allow her to “help” with various matters. The document stated that Rhonda was g rante d a g ener al power of attorney , appointed as Rena’s “attorne y -in-fa ct,” and authoriz ed R honda to “ac t in my name, place, and stead in any way which I my self could do” with respe ct to cer

tain matters. Specifica lly , Rena initialed space s on the document authorizing her mother to act for her in “tang ible persona l proper ty transac tions,” “bond, share and commodity
t ra n s ac tions,” and importantly , “banking transac tions” and “re cords, repor ts and statements.” R h o n da then signe d the form, stating that she “ac cepts this appointment” and “ag ree s to ac t an d perf orm in said fiduciar

y capa city consistent with [R ena’ s] best interests.” This Power of Attorney

was e x ecute d on October 25, 1999. I n November 1999, Rena and Robert m oved int o their own apar tment in California. Al s o during that month, Americ an National Ba nk in I llinois rec eived a letter, purportedly signe d by Rena, - 4 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. which stated: “I , Rena S. Purintun, have rea ched the ag e of majority and would like all of my funds rele ased, including the CD deposit. I have enclose d all of the documents y ou require

. Please send the chec k promptly .” The letter included copies of Rena’s birth cer tificate, California identification

car d, and Social Security car d. The return addre ss on the letter wa s “8500 Todd Court, Riverside, California,” her mother’s addre ss wher e Rena no longe r resided. Although denied by Rhonda, Rena alleg es that she did not send or authorize this letter, an d t h at her mother signe d her name and
reque sted the money

. On November 9, 1999, pursuant to the letter, Americ an National Ba nk closed the restric ted

acc o u n t an d i s sued two cashie r’s chec ks, made pay able to Rena, for a total of $67,957.05. Both chec ks wer e sent to California and wer e appar ently cashe d on November 17, 1999. The defe ndants contend that R en a ca s h ed these chec ks, but Rena asser ts that she did not; rec ords do not exis t to demonstrate w here or by

whom the che cks we re c ashed. On Dec ember 19, 2000, Sy metra L ife also rec eived a notarized letter, purportedly signe d by R ena, reque sting that Sy

metra L ife “[p] lease forwa rd all of the pay

ments y ou are holding on m y Annuit y C o n trac t

. . . to my above addre ss.” The return addre ss was ag ain “8500 Todd Court,” Rhonda and Kim’s home, wher e Rena had not l i v ed fo r over a y ear . Sy metra L ife honored the
reque st and sent the rema ining chec ks to Re na at Rhonda’s addre ss. The first chec k was cashe d at

a Ba nk of Americ a branc h. Rena denies that she was the one who reque sted this chang e, but states
t h at her mother had her sign sever al documents she did not understand, and had her s i gn a b l an k sheet of pa

per, in orde r to help her

with her fina

nces.

- 5 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. I n ear ly 2001, Robert lost his job and he and Rena planned to move with their two daug hters
to Geor g ia, t o be near Robert’s mother. Be fore this move, R honda and Rena opened a j o i n t bank

acc ount wi th Ba

nk of Americ a. Rhonda told Rena that having such an acc ount would help her, beca use she would put her o wn (R h o n d a’s) money in it occa sionally to help Rena pay living
expenses. Rhonda also prom i s ed t h at when Rena boug ht a house, she would help with the down
pay ment. Be sides the first chec k, all rema ining chec ks from Sy metra L ife wer e deposited into this joint acc ou n t

. E ac h wa s purportedly endorse d by “Rena S. Purintun,” with a few additionally b e a ring the endorse ment of “Rhonda Renee Wil son.” Rhonda admits signing Rena’s name to c h e c k s , but denies that these w ere unauthorized forg erie s. After living in Geor g ia for about s ix months, Rena and Ro b er t again moved in September 2001, to live with Robert’s fathe r in Minnesota. I n November of that y ear , Rhonda appar ently asked her mother for financ ial help. Her mother s en t R en a an email, say ing she would send a couple hundred dollars that Rena reque sted, but that “w e won’t be able to send y ou any more for a long time.” Rhonda continued that “I can’ t c ontinue to he lp y ou and Melissa with money beca use I will end up with no home and no money . . . . After all I have g iven a lot alre ady .” At this time, howeve r, the joint acc ount contained at least $62,000 of Rena’s money ; Rena claims she was unawa re of these funds. I n April 2002, Rena visited her (estra ng ed) sister, Melissa, in Wis consin. Rena lear ned from Melissa that she mig ht be entitled to rec eive some money in connec tion with their father’s death. Melissa told her that she had rec eived a larg e amount of money , and that Rena had a rig ht to rec eive a si milarly larg e sum from their mother, R honda. Foll o wi n g t h i s discussion, Rena asked R honda - 6 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. about the money , but Rhonda told Rena that Melissa had lied about the money . As the district court in this case stated, “Rena appar ently believed Rhonda’s explanation, for she did not contac t Melissa
ag ain, nor did she speak to any one else about the settlement money .” Rena claims that even at this time, she “had no idea about the settlement and the signific ant funds that had been funnele d” from her I llinois acc ount to Rhonda and Kim. I n October 2002, Robert and Rena wanted to buy a house, but when Rena asked Rhonda to assist them, she ref

used. Worried that her family might s o o n have nowher e to live, Rena

reme mbere d the joint ba

nk acc ount ope ned in 2001. She called B ank of A merica to inquire about the acc ount’s balanc e, and was surprised to lear n that the acc ount contained $62,520.71. Acc ording to Re na, she lear

ned on November 29, 2002 that the source of the funds had been chec ks that bore her na me, coming from an a

nnuity company in Washington. On Dec ember 3, 2002, Safec o L ife rec eived a notarized letter from Rena ,which rea d: “I have

n o t re ce i v ed, deposited, or cashe d any chec ks from Safec o I nsuranc e. I first beca me awa re th at chec ks issued to my name from Safec o I nsuranc e wer e being signe d, deposited, and withdrawn on 11/29/2002.” I n response , Safec o L ife faxed two letters to Re na. The first, on Dec ember 3, 2002, explained tha t its annuity contra ct was pur chase d “to fund pa y ment obliga

tions unde r a settlement
ag ree ment for a persona l injury or wrong ful death claim.” I t further detailed all of its pay ments made
to Rena’s restric ted minor’s acc ount at Americ an National Ba nk (totaling approximately $29,000), and chec k pay

ments made out to Rena—be g inning in 1998—totaling approximately $248,000. The second fax, sent on Dec ember 6, 2002, included copies of the settlement ag ree ment and the last three settlement che cks, all of whic h wer e deposited into the joint acc ount (these totaled $173,000)

. - 7 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. When she rec eived the first letter from Safec o, Rena promptly open ed an i n d ividual bank

acc ount at Ba

nk of Americ a and transfe rre d the entire balanc e of the joint acc ount into her persona l

acc ount. Howeve r, Rena testified that at this time, she did not understand what all of this meant, and

was try ing to fig ure out what was g oing on. She states that transfe rring the funds “would protec t this part of the money

while Rena c ontinued her inve stiga tion.” I n Fe bruar

y 2003, Rena and Robert purcha sed a house in Minnesota. I n J une 2003, Rhonda and Kim moved to Kentucky

. Shortly afte r th e m ove, Rena called Rhonda and Kim, confr onting them about the money and dema n d i n g an explanation reg arding the exis tence and location of her settlement money . Rhonda and Kim denied the exis tence of any settlement money belong ing to Rena or any wrong doing. I nstead, Rhonda told Rena that she (Rhonda) had commit ted t ax fra ud: she insinuated that the money was rea lly hers (Rhonda’s) , the tax fra ud scheme was why the money was in Rena’ s name, a

nd that she had done nothing wr ong to Rena. I n J uly 2003, Rena sent aff idavits to Safec o which stated that the signa tures on the lump-sum chec ks issued in her name wer e “f org erie s.” She also sent a letter dated July 21, 2003, reque sting that Safec o send her all information re gar d i ng her annuity acc ount, including the acc ount number for the Americ an National Ba nk acc ount. She stated, “I need these numbers to inquire about this

acc ount as it may have been taken by my mother in the same fashion as the chec ks made pay able to

me from Safec o.” Rena contac ted Americ an National Ba nk on J uly 22, 2003, and was informed that her restric ted acc ount had bee n em p t i ed in 1999. Rena denied sending the notarized letter authorizing the closing of the acc ount, and reque sted that the bank send her all bank statements for

- 8 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. the acc ount. Rena rec eived those rec ords—showing all deposits and the withdrawa l—on Aug ust 25, 2003. On October 29, 2003, Rena filed a Motion for Acc ounting befor e the Circuit Court of Cook County Probate Division, in I llinois

. Rena alleg ed in that moti o n t h at Rhonda had not only

conce aled the exis tence of the settlement funds, but had forg ed her signa ture on various letters and chec ks in order to g ain control and use of the money intended for Rena. The rec ord does not ref lect whether or how the Probate Court ruled on this motion. Then on J anuar y 26, 2004, Rena formally filed a Complaint ag ainst Rhonda in the Chance ry Division of Cook Count y . She alleg ed that her mother was in a fiduciar

y rela tionship with her, and that she had hidden the exis tence of the funds, used her Power of Attorney to withdraw the Americ an National Ba nk funds, and direc ted the annuity
pay ments to her own California addre s s . T h e co mplaint demande d a complete acc ounting of all funds rec eived; but also asked that (1) Rhonda p ay t h e co sts of the acc ounting, (2) Rhonda pay Rena’s attorney ’s fee s, (3) Rhonda be “orde red to cea se and desist dissipating funds intended for the Plaintiff, and (4) “any further relief the court deems just and proper .” The rec ord does not indicate how the Probate Court ruled on this motion. Rena filed t h e i n s t an t action on Marc h 9, 2007. I n the Complaint, Rena repe ated these alleg ations aga inst Rhonda, and added claims ag ainst Kim and the various corpor ate entities. Shortly , the claims ag ainst J PMorga n Chase, S afe co, S y

metra, and Sy

metra L i fe we re all settled. The only rema ining claims wer e ag ainst Rhonda for (1) an acc ounting, (2) brea ch of fiduciar y duty and/or constructive fra

ud, (3) conver sion, and (4) fra ud; ag ainst Kim Wil son for (1) conver sion, and

- 9 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. (2) aiding and abetting fra ud; and ag ainst Capital I ndemnity Corporation for indemnification of Rhonda. Def endants filed a Motion for S u mmary J udg ment, and Rena filed a Motion for Partial Summary J udg ment. On Dec ember 22, 2009, the district court conclude d that all of Rena’s claims

wer e time-barr ed by the applicable statute of limitations, and thus gra nted Def endants’ motion for
summary judgme nt. Rena timely

appea led. II. Stand ard of Review This Court reviews a

district court’s g rant of summar y judgme nt de novo

. Parsons v. City of Pontiac , 533 F.3d 492, 499 (6th Cir. 2008). Summary judgme nt is appropr iate wher e “the movant shows that there is no g enuine dispute as to any materia l fac t and the movant is entitled to judgme nt

as a matter of law.” F E D . R. C I V . P

. 5 6 (a ). Where, as here , the defe ndant moves for summary judgme nt based on statute-of- limit ation g rounds, summary judgme nt is appropr iate if the statute of limit ations has run and there is no g enuine issue of materia l f act as to when the plaintiff’s cause of action acc rued. Campbell v. Grand Trunk W

. R.R. C o . , 2 3 8 F. 3 d 772, 775 (6th Cir. 2001). The b u rd en is on a defe ndant to show that the statute of limit ations has run. Id. However , o n ce t h e defe ndant car

ries th at b u rd en , the plaintiff has the burden to establish an exception to the statute, such as tolling or

late discove ry

of the injury

. Id. Her e, the injury clea rly beg an in 1999, which is bey ond the applicable statute of limit ations in any rele vant jurisdiction. There fore , the burden falls on the Plaintiff to demonstrate that a n exception to the statute makes her suit ti mely

. III. Th e Applicable State Law

- 10 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. A district court, sitti ng in diversity , must apply the law of the fo ru m s t at e i n deter mining
statute of limit ations questions. See, e.g., Atl. Ric hfield Co. v. Monarch Leasing Co. , 84 F.3d 204, 205 (6th Cir. 1996). Her e, that is Kentucky

. See Combs v. Int’l Ins. Co. , 354 F.3d 568, 577 (6th Cir. 2004). The district court corr ectly deter mined that the statute of limit ations is go v er n ed by Kentucky ’s borrow ing sta tute, Kentucky Revised Statutes § 413.320, which states: When a cause of action has arisen in another state or country , and by the laws of this state or country wher e the cau se of action accr ued the time for the commence ment of an action there on is limit ed to a shorter period of time than the period of limit ation presc ribed by the l aws of this state for a li ke cause of action, then sai d ac t ion shall be bar red in this state at the e x piration of said shorte r per iod. K Y . R E V . S T A T . AN N . § 413.320. A three -step analy sis is there fore nece ssary t o d et ermine the applicability of this statute: (1) did the cause o f action acc rue in another state? (2) I f so, is that state’s statute of limit ations for the particula r cause o f action shorter than the corr esponding Kentucky statute of limit ations? (3) I f so, application o f t h e acc rual state is applied; if not, Ke n t u ck y ’s statute of limit ations is applied. See W illit s v. Peabody Coal Co. , Nos. 98-5458, 98- 5527, 1999 WL 701916, at *12 (6th Cir. Sept. 1, 1999). Her e, the rele vant Kentucky statute of l imitations is five y ear s. See K Y . R E V . S T A T . A N N . § 413.120. The I llinois provision applicable to these cause s of action is also five y ear s. See 735 I L L . C O M P . S T A T . 5/13-205. California, howeve r, provides for either a three - o r fo ur- y ear limit ation period. See C A L . C I V . P R O C
. C O D E §§ 3 3 8 (d ), 3 4 3. There fore , if the cause of action acc rued in California, that state’ s statute of limitation would apply in place of

Kentucky ’s. The d i s t ri ct court deter

mined that the place of acc rual was California. First, it stated that looking to “whe re the injury is sustained” is not helpful in a case —like this one— t h at i n v olves - 11 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. purely economic injury

. I t then reje cted Plaintiff’s arg ument that I llinois is the “log ical choice ” for wher e t he action acc rued, construing her arg ument as a contention that I llinois had the “most signific ant re lationship” to the case , which is a standard that has been reje cted by this Court under Kentucky ’s borrowing statute. See Combs , 354 F.3d at 592. L astly , the district court stated that instead, this Court has looked to when a cause of action acc rued to deter mine the place of acc rual. I t then deter

mined that the “whe n” in this case was when the defe ndant committed the first alleg edly
wrong ful conduct of reque sting the funds—bef ore any money was actua lly remove d from the Plaintiff’s acc ounts—and that there fore , the “whe re” was wher e the defe ndant acte d—in California. A. The Plac e of A ccr

ual “Where ” a cause of action acc rues, for purposes of Kentucky ’s borrowing statute, is unclea r. I n case s, like this one, where the location of acc rua l i s not rea dily appar ent, t his Court has l ooked
to when a cause of action accr ued to deter

mine the place o f acc rual. “[T] he elements of t ime and place of acc rual are inext rica bly intertwined: ‘The time when a cause of action arises and the place wher e it arises are nece ssarily connec ted, s ince the same act is the critical event in eac h instance. The final act which transfor ms the liability into a cause of action nece ssarily has both aspec ts of time and place .’” CMACO Auto. Sys., Inc. v. W anxiang Am. Corp ., 589 F.3d 235 (6th Cir. 2009) (quoting W illit s, 188 F.3d 510, at *12. There fore , we must de termine both w hen and wher e Rena’s cause of action ac crue d. This Court has previously predic ted how Kentucky would deter mine wher e an action acc rues for purposes of its borrowing statute. Howeve r, in W illit s v. Peabody Coal Co. , 188 F.3d 510, 1999

- 12 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. WL 701916 (6th Cir. 1999), we a ddresse d a bre ach of contra ct claim, not a tort c laim, but ag ree d 2 with the parties that “a ca u s e o f action acc rues when and wher e the brea ch occurs and the i njured part y holds the rig ht to sue.” Id. at *12 (citation omitted). W illit s went on to deter

mine that the
contra ct action ac cr u ed in Missouri, wher e the defe ndant brea ched the contra ct, not wher e the plaintiffs ea ch re ceive d their roy alty chec ks by

mail. Id . at *13. Ho weve r, we do not find W illit s ’ result to be controlling in this case . First, it rel i ed u p o n Kentucky ’s Uniform Commercial Code statute of limit ations, reg arding contra cts of sale, not on any Kentucky law of torts. Fur thermore , the rea soning that “a cause of action acc rues wher e the brea ch

occur s and the injured party holds the rig ht to sue” is not helpful here , for unlike in a contra ct-bre ach action, the time of the defe ndant’s fra udulent conduct in this tort case is not also the time the plaintiff held the rig ht to sue—bec ause it was not the time when injury actua lly occur red. To the extent that W illit s is instruc tive, it must be interpre ted corr ectly in the tort context: “a cause of action acc rues when and wher e the brea ch occur s and the injured party holds the rig ht to sue,” id

. at 12, and there fore , a cause of action does not acc rue u n t il both the wrong (bre ach) occur s and the injured party holds the rig ht to sue: in other words, injury must occur be fore the ac tion accr ues. L ater , in a p ublished case , Combs v. International Insurance Co. , 354 F.3d 568 (6th Cir. 2004), this Court ag ain dealt with Kentucky ’s borrowing statute, althoug h this time it was primarily
g rappling with th e plaintiff’s contention that the statute should incorpora te a “most signific ant

There are indications that Kentucky trea ts such issues differ ently for torts and for contra cts. 2 See, e.g., Combs, 354 F.3d at 592-93 (deta iling differ ent trea tment of contra ct and t o rt cases, and concluding “Ke ntucky beg an to depar t from the lex loci approa ch to torts

. . . . The Kentucky Supreme Court, howe ver, did not make the same c hang e with re spect to contra ct ca ses”)

. - 13 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. rela tionship test,” which Combs declined to do. Combs acknow ledg ed that “[t] his is a highly

uncer tain are a of state law, for cing us to make an e ducate d ‘ Erie Guess.’” Id. at 577. The Court noted problems in the application of borrowing statutes, and stated that the “most signific ant rela tionship” test “has at least arg uable policy advanta g es over lex fori beca use the state with the most signific ant rela tionship with the parties and the dispute is probably the state with the
gre atest interest in the action’s outcome.” Id. at 580. Howeve r, the Court also noted that t h e “ac crua l approa ch” found in the t ext of Kentucky ’s s tatute “produce[s] s ev er al meaning ful policy advanta g es” as well. Id. at 589. “I f Kentucky fails to respe ct that a cause of act i o n ac cr u es in a forei gn j urisdiction, like New York, althoug h the final event nece ssary for the cause of action

o cc u rred in New York, Kentucky shows disrespec t for New York’s territoria lity in derog ati o n o f comity principles that the Kentucky Supreme Court may value.” Id. at 591. Ultimately , the Court deter mined that “Ke ntucky would not apply a ‘most signific ant rela tionship’ analy sis when apply ing Kentucky ’s borrow ing sta tute.” Id. at 592. 3

T h ere is at least some indication that this predic tion, too, was incorre ct. Combs relied in 3 larg e part on its conclusion that while “Ke ntucky beg an to depar t from the lex loci approa ch to torts,” it “did not make the same chang e with re spect to contra ct ca ses.” Combs , 354 F.3d at 592. But in Schnuerle v. Insight Comm. Co., L.P. , —S.W .3d—, 2010 WL 5129850 (Ky

. 2010), t he Kentucky Supr em e C o u rt cit ed the Restatement for the rationale of discarding “lex loci contra ctus”: “[t] he modern test is which state ha s the most significa nt relationship to the t ransa ction and the parties.” Id. at *4. I n Saleba v. Sc hrand , 300 S.W .3d 177 (Ky

. 2009), the Kentucky Supreme Court note d that—at least in a choice of law dispute—“Ke ntucky has consistently applied § 1 8 8 of the Restatement (Second) of Conflict of L aws to resolve choice of law issues that arise in contract disputes. [That section] states i n its entirety : ‘[t] he rights and duties of t he parties with respe ct t o an issue in contract are deter mined by the local law of the state which, with respe ct to that issue, has the most significa

nt relationship to the transac tion and the par ties. . . .’” Id. at 181. - 14 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. There fore , this Court predic t ed t h at in Kentucky , when the “fina l event nece ssary for the

cause of action occur

red” elsewhe re, that state’s law should g overn. I n strug g ling with what test to apply , howeve r, the Court then stated: [T] he notion that the cause of action acc rue s wh ere the injury is sustained is not particula rly helpful in this case becau s e it beg s the question of wher e the plaintiff sustained the injury

. Plaintiff’s action i nvolves an abstrac t injury —by alleg edly brea ching its promise to pay in a letter Def endant mailed from New York to three jurisdictions, Dec edent was not reimburse d for litigation expenses accum ulated primarily in California but rela ted to a Kentucky enter prise. Asking wher e Dec edent “g ot hurt” does not help us. Id. at 582. Combs ultimately predic ted that under K entucky law, the c ause of

action “a ccr

ued” in the place of brea ch for a contra ct suit. I t did not, howeve r, rea ch the issue here —whether , in a torts

case , the place of bre ach or place of injury

is “wher e” the claim ac crue d. Her e, the unpublished W illit s and, arg uably , Combs would sug g est that “whe re” a cl aim

acc rues for purposes of Kentucky ’s statute must be deter mined by wher e the defe ndant’s wrong ful conduct occur

red. This is what the district cou rt co n cl u d ed. A panel cannot rec onsider a prior published case that interpre ted state law, “abse nt an indication by the [st ate] courts that they would have decide d [t he prior case ] differ ently .” Blaine Constr. Corp. v. Ins. Co. of N. Am., 171 F.3d 343, 350 (6th Cir. 1999). Howe ver, it see ms just s uch a de cision has come down in Kentucky

. I n Quee nsway Financial Holdings Ltd. v. Cotton & Allen, P.S.C. , 237 S.W .3d 141 (Ky

. 2007), the Kentucky Supreme Court, considering a claim of profe ssional ne g lige nce, dealt with its own statute of limitations, and directly answe red the question of when a cause of ac tion accr

ues. The acc rual rule is rela tively simple: “‘[A] cause of act i o n is deeme d to acc rue in Kentucky wher e neg lige nce and damag es have both occur red.” [ Miche ls v. Sklavos , 869 S.W .2d 728 (K y . 1 9 9 4 )] at 730 [i nterna l citations omitted]

. . . . Ba sically , “a - 15 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. ‘wrong ’ require s both a neg lige nt a ct and resulting injury

. Damnum absque injuria, harm without injury , does not g ive rise to an action for da mag es ag ainst the person causing it.” Id. at 731. The difficult ques tion when apply ing the rule is usually not whether neg lige nce has occur red but whether an “‘irr evoca ble non-spec ulative injury ’” has arisen. Id. at 730 (quoting Northw estern Nat. Ins. Co. v. Osborne , 610 F. Supp. 126, 128 (E.D. K y . 1985)). Quee nsway , 237 S.W .3d at 147. The Court f urther stated that “mer e knowledg e of some elements of a tort claim, such as neg lige nce without harm , i s i nsufficie nt to beg in running the limit ations period wher e the cause of action does not y et exis t.” Quee nsway, 237 S.W .3d at 148 (citing Miche ls , 869 S.W .2d at 721-32). This is beca use wrong ful conduct, without injury , “does not g ive rise to an action,” and there fore the action accrue s once all of the elements supporting liability have actua lly

occur red. See id. Her e, an action for fra

ud require s not only the alleg edly wrong ful conduct by the defe ndant, but also a loss to the plaintiff. Thus, the “whe n” for acc rual purposes in Ke n t u ck y

— an d i n this

case —is not judge d by when the defe ndant brea ched, as the district cour t fo u n d

. I nstead, it is deter mined by when the injury occur red. Her e, that is the time that the fra udulent communications from the de fenda

nt actually

resulted in the f

unds being wrong ly

taken f rom the Plaintiff. The When in this Case The time at which Plaintiff actua lly suffe red injury is also not clea r in this case . On one hand, during the rele vant time period, Rhonda held a Power of Attorney over Rena’s banking transac tions. Arg uably , then, Rhonda’s remova l of the funds from the I llinois bank acc ount w as not itself a loss
to Plaintiff. For example, if Rhonda—as a fiduciar y —had remove d the funds from the I llinois

acc ount, but handled them faithfully on Rena’s behalf , no injury would actua lly have resulted to

- 16 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. Rena. I nstead, it was whe n the fiducia ry acquir ed the f

unds and misappropriated them for he rself that injury actua lly resulted. Since Rena focuses o n her mother’s position as a fiduciar y , this is a logic al appr oach to de termining the injury

. On the other hand, it is unclea r whether Rh o n d a’s alleg ed acts to remove the funds constituted fiduciar

y acts, b ec au s e s h e did not sign the forms under her Power of Attorney status, clea rly acting on Rena’s beh al f. I nstead, the documentation sent to the bank could be viewed as strictly fra udulent, beca

use Rhonda prete nded to be Rena herse lf. I f the act is viewed as one of mere fra ud, not an act within Rhonda’s fiduciar y power , th en t h e injury occur red when the funds wer e wrong ly remove d from Plaintiff’s I llinois annuity acc ount. I n that scena rio, the funds wer e remove d under false prete nses, and as soon as the funds wer e emptied, the Plaintiff suffe red the loss. I f that is true, then the c laim acc rued w hen the ba nk emptied the ac count. Howeve r, we need not de cide whic h approa ch to take, f or both ultimately lead to the same conclusion as to where the claim ac crue d. The Where in this C ase Under this Court’s prec edent, the “whe n” also tells us the “where

. ” I f R h o n da was a fiduciar y and thus no loss occur red until the funds wer e actua lly misappropriate d, t h en t h e loss

occur red when Rhonda actua lly took the funds, and where the loss occur red—Califor

nia. The monies from the I llinois acc ount wer e sent to California, and it was there that Rhonda rec eived them, signe d Rena’s name to them, and took the funds for herse lf. There fore , California is both the place wher e the loss actua lly occur red, and wher e Rena “fe lt” it—because she was living in California at that time. - 17 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. I f, in the alterna tive, Rhonda simply committed fr au d , then the injury occur red when the funds wer e remove d from the I llinois acc ount. Howeve r, this does not mean that the injury occur red in I llinois

. Whil e Kentucky has not spoken on this issue, sever al jurisdictions have rec og nized that economic loss case s prese nt a specia l situation. I n these case s, the injury is said to happen wher e the plaintiff resides and thus “fe els” the loss, not wher e the acc ount happens to b e. I n Caproni v. Prudential Sec., Inc

. , 1 5 F. 3 d 614 (6th Cir. 1994), this Court interpre ted Michig an’s simil ar borrowing statute in a secur ities fra ud action. Caproni “adopte d the Second Circuit’s ‘sensible rule’ that the place wher e the economic impact is felt, normally the pl aintiff’s residence , is the place of

acc rual.” Freem an v. Laventhol & Horwath , 34 F.3d 333, 340 (6th Cir. 1994) (quoting Caproni , 15 F.3d at 618). Th e C o u rt h el d t h at “to the extent these four plaintiffs resided in states other than Kentucky and felt the economic impact of the bond defa ult in their resp ec t i v e s t at es of residence , those states re prese nt the place wher e the e conomic injury was suff ere d.” Id. at 341. I n doing so, the Court cited to Arneil v. Ramsey , 550 F.2d 774 (2d Cir. 1977), which rea soned that, “to the extent [t he plaintiffs] suffe red a financ ial loss from their transac tion with [t he defe ndant], they suffe red it in Washington [ wher e they resided], [t ]o the ex t en t they beca me poorer m en, they beca me poorer Washingtonians.” Caproni , 15 F.3d a t 619 (quoting Arneil , 550 F.3d a t 780). Fur thermore , this Court later assessed a simil ar action in Kentucky

. I n Freem an , this Court held that for the purpose of deter mini n g t h e appli cability of Kentucky ’s borrowing statute, the residenc e of the plaintiffs controlled. Freem an , 34 F.3d at 341 (“We find that to the extent these four plaintiffs resided in states other than Kentucky and felt the economic impact of the bond defa ult in their respe ctive states of residenc e, those states repr esent the place wher e the economic injury was - 18 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. suffe red.” ). The rationale in these case s is not limit ed to sec u ri t i es case s; instead, it is that “ec onomic” harm is f

elt wher e a plaintiff resides. There fore , this Court has alre ady predic ted how Kentucky would apply its borrowing statute in this case : it would find that Rena’s harm was felt wher e she w as living w hen first injured—Ca lifornia. L astly , at least one Kentucky case sug g ests that Kentucky would elec t to apply the California
statute of limit ations in this case eve n if Rena was injured in I llinois

. I n Abel v. Austin , –S.W .3d –, 2010 WL 2132745 (Ky

. App. 2010), the Kentucky Court of Appea ls addre ssed a choice of law question, and beg an with examination of the borrowing statute. The case involved claims of brea ch of fiduciar

y duty , misrepre sentation, and fra udulent convey ance , wher e the plaintiffs all ege d t h at their lawy ers had mishandled or misappropriate d cla s s ac tion settlement funds. Id. at *1. The appellants relied on Quee nsway to arg ue that both neg lige nce and damag es must occur in order for

a cause of action to arise, and there fore that t h e ca u ses of action acc rued in Kentucky beca use depriva tion of funds occur red the re, r ather

than in Alabama , wher e the br eac h occur red. I d

. a t * 8

. The court reje cted t h e ap p el l ants’ arg ument: “[E] ven though the action may have acc rued in Kentucky [because the injury occur red t h er e] , nothing mitigates ag ainst a deter mination that the action also acc rued in Alabama .” Id. at *8 (empha sis added)

. The court noted that the defe ndants’ actions occur

red only in Alabama , that the defe ndants never met with any of the appellants beca use they simply sent the funds from Alabama to Kentucky , and that the events wer e “proc essed, settled, revie wed, and confirme d by an Alabama court.” Id. Be cause the applicable Alabama s t at u t e of limit ations was shorter , the cour t applied the Alaba

ma statute and dismissed the cla ims.

- 19 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. Abel , then, indicates that a cause of action in this context can “ac crue ” in more than one state, and that when that occur s, the shorter statute of limit ations should g overn. Under Abel , both parties
may be corr ect: the action acc rued in California beca use the parties both resided there and the defe ndant’s alleg ed misconduct oc curr ed ther e, and it ac crue d in I llinois beca use that is wher e the
money was fra

udulently taken. But in such a conflict, if a state’s statute of limit ations is shorter than Kentucky ’s, it controls. Be cause California’s statute is shorte r her e, that law w ould stil l apply

. Simpl y put, all roads lead to Californ i a. T h i s Court need not decide whether Rena was injured when Rhonda m i s appropr iated the funds, Rena was injured by the I llinois loss but felt it wher e she resided, or the action acc rued i n m o re than one place , for the California statute of limit ations inevitably

applies. IV. The Length of

the Statute of Lim itations I n California, the limit ations period for an ac t i o n based on fra ud or m istake i s three y ear s, C A L . C I V . P R O C
. C O D E § 338(d), but the limit ations period for brea ch of fiduciar y duty is usually four
y ear s, id. § 343. Plaintiff arg ues that if Californi a l aw ap plies, the four- y ear provision g overns; 4 Def endants arg ue that the three -y ear provision controls. Howeve r, in California, “[ t ]he statute of limit ations to be applied is deter mined by the nature of the rig ht sued upon, not by the form of

the action or the relief demande d.” Day v. Gree ne , 59 Cal. 2d 404, 411 (1963). There fore , in deciding what statute of limit ations to apply to Rena’s claims, we must look to the g rava men of her complaint

No statute of limit ations expressly applies to a cause of action for brea ch of fiduciar y duty , 4 but a cause of action not specific ally subject to a nother statute of limit ations is g overne d by § 343, including brea ch of fiduciar y duty

. Stalberg v. W

. Titl e Ins. Co. , 230 Cal. App.3d 1223, 1230 (Cal. App. 6 Dist. 1991). - 20 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. rathe r than the cause of action pled. City of Vista v. Robert Thomas Sec., Inc ., 84 Cal. App. 4th 882, 889, 101 Cal. Rptr. 2d 237 (2000). Where the g rava men of the brea ch of fiduciar y cause of action is fra ud, the applicable limit ation period is the three y ear period found in § 338. Mullin v. Valley of Cal., Inc ., No. A124641, 2010 WL 3158617, at *4 n.2 (Cal. App. 1 Dist. Aug . 11, 2010). California courts have consistently applied the three -y ear period to case s like this one that involve both fra

ud and fiduciar

y issues

. Fo r instance, in City of Vista, Vista broug ht a claim for “bre ach of fiduciar

y duty ” ag ainst its former secur ities deale rs based on the deale rs’ alleg ed conduct in misrepre senting the nature of secur ities sold to the city and char g ing a markup ra t e fo r t hose

secur ities. See 84 Cal. App. 4th at 885. On appe al, the city contende d that a four -y ear limit ations period applied to its claim. The Court of Appea ls disag ree d, holding that beca use “[t] he g rava

men of Vista' s complaint is that [defendants' ] acts constituted actua l or constructive fra ud,” the three -y ear statute of l imitations applicable to fra ud claims g overne d the breach of fiduciar y dut y action. Id. The state’s courts have rea ched the same result in a varie ty of case s. See, e.g., W yatt v. Union Mortg. C o . , 24 Cal. 3d 773, 786 n.2 (1979) (holding that wher e the “g rava men of responde nts’ cause o f action is that the appe llants committ ed ac tual and constructive fraud by conspiring to brea ch their fiduciar y duties[,]

. . . Code of Civil Procedur e section 338, subdivision 4 states the applicable statute of limit ations”); Hatch v. Colli ns , 225 Cal. App. 3 d 1 1 0 4 , 1110 (Cal. App. 1990) (apply ing the three -y ear statute of limit ations to a claim for brea ch of fiduciar y duty wher e the action was “founde d
upon a fra udulent conspirac y ” by defe ndants to defr aud plaintiff in a rea l estate transac tion); Gree ne Trio Music, LLC v. Jack

son , No. B200087, 2008 WL 2719582 (Cal. App. 2 Dist. J uly 14, 2008)

- 21 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. (holding that the three -y ear provision, not the four- y ear “ca tch-a ll,” was applicable when the brea ch of fiduciar

y duty claim essentially alleg ed constructive fra ud on the part of the defe ndant fiduciar y ). There fore , under Califor

nia law, the thr ee- y ear

statute of limitations applies. V. The Date of Discover y The district court found t h at t h e “discove ry rule” was applicable to toll the statute of limit ations in this case . There fore , the true date of injury —when the plaintiff was first alleg edly deprive d of her funds—was not used as th e s tart date for the limit ations period. I n apply ing the discovery rule, the district court stated that th e s t at u t e of limit ations beg ins to run “whe n [t he plaintiff] has been put on n o t i ce that she may have been injured,” and that this is a “re asonable person” standard, not a subjecti v e o n e. Ul timately , the court relied on Rena’s letter to Sy metra, which expli citly stated, “I first beca me awa re that chec ks issued to my name from Safec o I nsuranc e

wer e being signe d, deposited, and withdrawn on 11/29/2002.” The court conclude d that this letter established that “no later than November 29, 2002, Plaintiff had knowledg e of sufficie nt fac ts to put her on notice that funds had been stolen from h er , there by trig g ering her obliga tion to investiga te further in order to de termine the e x tent and ca use of he r injury .” First, the court corr ectly conclude d that the “discove ry rule” tolls the statute of limit ation in

a case such as this, whe re the plaintiff is una war e of the exis tence of his or her cause of action due
to conce alment by another

. See Jolly v. Eli Lilly & Co. , 751 P.2d 923, 928 (Cal. 1988). “‘[U]nder the delay ed discovery rule, a cause of action acc rues and the statute of limit ations beg ins to run when the p laintiff has reason to suspect an injury and some wrong ful cause . . . .’” E-Fab, Inc. v. Acc ountants, Inc

. Serv’

s, 153 Cal. App. 4th 1308, 1319 (empha sis a dded) (quoting Fox v. Ethicon

- 22 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. Endo-Surgery

, Inc., 35 Cal. 4th 797, 803 (2005))

. Notice sufficie nt to trig g er acc rual of a cause of action under the delay ed discovery rule may be actua l or constructive. E-Fab, 153 Cal. App. 4th at 1318. Howeve r, R ena arg ues t hat t he dis trict court erre d in apply ing t h e ordinary discovery rule, beca use her mother was he r f

id u c ia r y a n d th e r e f o r e “ inquiry ” or “construc tive” notice does not apply

. I nstead, she arg

ues, t he ac crua l is postponed “until the beneficiar y has knowledge or not ice of the
act c onstitut ing a breach of fidelity .” United States Liab. Ins. Co. v. Haidinger-Haye s, Inc ., 1 Cal. 3d 586, 596 (Ca. 1970). Her arg ument is essentially t h at t h e plaintiff has place d trust in the defe ndant fiduciar

y and thus, there is no duty to exer ci s e d u e d iligenc e in discovering the fra ud. I nstead, she arg ues, the clock does not beg in to run until the plaintiff has actual notice of the fra ud. 5

Def endants arg

ue strenuously that Rhonda was no longe r in a fiduciar y capa city to her 5 daug hter at all. This arg ument is unpersua sive, as Rhonda serve d in a fiduciar y capa city both as the administratrix of Rena’s fathe r’s estate, and as Rena’s g uardia n when Rena was a minor. These roles included the duty to protec t the interest of benef iciarie s, and the duty to manage p ro p er t y in the minor’s name. S

ee Mo rgan v. Asher , 49 Cal. App. 172 (Cal. App. 1920) (finding that wher e a mother was both the trustee of her husband’s estate and the g uardia n of her daug hter, “[i] t w as her duty . . . independe nt of and a part from such probate proce eding s . . . to see to it that those sever al persons entitl ed t o their distribute share in said estate wer e fully informed as to their rig hts in the premises, to the end that said rig hts might be fully protec ted in the distribution of said estate” ); see also Sohler v. Sohler , 135 Cal. 323 (1902) (holding that as a child’s mother and leg al g uardia n, the defe ndant “wa s under most solemn obliga tion to protec t the leg al rig hts of her infant and depende nt offspring ”). “The duty of a fiduciar y embra ces the obliga

tion to rende r a full and fair disclosure to the benef iciary of all fac ts which materia lly aff ect his rig hts and interests. ‘Where there is a duty to disclose, the disclosure must be full and complete, and any materia l conce alment or misrepre sentation will amount to fra ud.

. . .’” Neel v. Magana, Olney, Levy, Cathcart & Gelfand , 6 Cal.3d 176, 188-89 (1971) (quoting Pashley v. Pac. E l ec . R y. C o. , 25 Cal. 2d 226, 235 (1944))

. There fore , at the very least, Rhonda’s wilful conce alment of the settlement’s exis tence and location was a brea ch of her fiduciar y duty as Rena’s g uardia

n, and such bre ac h d i d n o t disappea r simply beca use Rena r eac hed the a g e of ma jority

. - 23 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. Howeve r, th e v er y ca s e relied upon by Plaintiff g oes on to say that “[u] nder the fiduciar y rules above stated

. . . the cause of action did not commence to run until plaintiff knew or should have known of the brea ch.” Id. at 597 (empha sis added)

. Moreove r, while Plaintiff does cite sever al

case s (mostly from Kentucky ) that toll the statute bey ond the “norma l” inquiry notice period, these

case s focus on the fac t that the plaintiff’s trust in the fiduciar y actua lly preve nted the plaintiff from having notice of the defe ndant’s wr ong doing—the ir trust rea sonably fore closed suspicion. 6 The distinction betwee n the usual “discove ry rule” and the rule allowing late discovery in fiduciar y case s “is that in the latter situation the duty to investiga te may arise later by rea son of the fac t that the plaintiff is entitled to rely upon the assumption that his fiduciar y is acting in his behalf

.” Eisenbaum v. W

. Energy Res., Inc ., 218 Cal. App. 3d 314, 325 (1990) (quoting Bedolla v. L o g an & Frazer , 52 Cal. App. 3d 118, 1 3 1 (1 9 7 5 ) (empha sis omitted). Ultimately , as Plaintiff acknow ledg es, the rea son for the somewhat-d iffer ent trea tment of “discove ry ” in the fiduciar y context is tha t “ [w] here a fiduciar y rela tionship exists , fac ts w hich ordinarily require investiga tion
may not incite suspicion.” Eisenbaum , 218 Cal. App. 3d at 325 (inter nal citation omitted).

For example, in a case involving a fra udulent land convey ance , Lemaster v. Caudill , 328 6 S.W .2d 276, 281-82 (Ky . 1959), the Ke ntucky Supreme Court did not apply normal “c onstructive notice” rules to the defe ndant’s rec ording of a deed, beca use t h e fi d u ciar

y rela tionship and the defe ndant’s actions “lulled [t he plaintiff] into a fa l s e s en s e o f secur ity .” Id. at 281. I nstead of running the clock from when the deed was filed, the court found that the clock ran from the time that one of the rig htful heirs chec ked the county rec ords and found a rec ord of the deed in controve rsy . See id. at 279. The Kentucky Supreme Court later explained that the actua l notice require ment in the land convey ance context is nece ssary beca use “per sons in a confide ntial rela tionship do not have the rea son or occa sion to chec k up on eac h other that would exis t if they wer e dealing at arm’s leng th.” McM urray v. M

cMurray , 410 S.W .2d 139, 142 (Ky . 1966). - 24 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. Plaintiff there fore contends t h at b ec ause her mother was a fiduciar y , “inquiry notice” is inapplicable beca

use she had no duty to inquire. But this is not so. Eisenbaum stat es t h at “[t] he exis tence of a trust rela

tionship limits the duty of inquiry ”—it does not completely eliminate it. Id.
at 324 (empha sis added)

. The duty is limited to the extent that a plaintiff is “ entitled to r ely on the

s t at em en t s and advice provided by the fiduciar y .” Id. The duty to inquire does not arise until the fac ts—considering the fiduciar y rela tionship—warra

nt suspicion. See id. (citing Hobbs v. Bateman Eichler, Hi ll Richards, Inc ., 164 Cal. App. 3d 174 (1985))

. Howeve r, “once a plaintiff become s

aware of facts which would make a rea sonably prudent p er s o n s u s p icious, the dut y to investiga te arises and the plaintiff may then be charged wi t h knowledg e of the fac ts which would have been discovere d by

such an inve stiga tion.” Hobbs , 164 Cal. App. 3d at 202. Her e, if Plaintiff had lear

ned of the peculiar activity in the joint acc ount and the exis tence of chec ks with her name on them, but ha d asked he r mother a nd relied upon he r mother’ s assuranc es that ever y thing was fine, this rule would be applicable

. Rena would not be penalized for trusting her fi d u ci ary and failing to see throug h the lies in order to investiga te. The district court corr ectly applied this rule in its opinion: the court found that the first time Rena was told about the settlement—by her sister in April 2002—that the clock di d n o t b egi n t o run beca use her mother denied it and “ Rena a

ppare ntly believed Rhonda ’s explanation.” I nstead, the district court found that Rena had notice of wrong ful conduct on November 29, 2002, when Rena admits she lear ned that chec ks, in her n am e, fr om an annuity company , “we re being signe d, deposited, and withdrawn.” Rena testified at her deposition that at this time, she did not understand what all of this meant, and was “try ing to f igur e out what wa s g oing on.” We find - 25 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. that, g iven t he fi d u ciar

y rela tionship with her mother and our duty on summary judgme nt to view all fac ts in the light m o s t fa v o ra b l e to the non-moving party , the district court inappropria tely attributed knowledg e to Rena as of November 29, 2002, when she had simply lear ned of the chec ks’ exis tence

. At this time, arg uably , Rena could have believed that the funds wer e not truly hers, that her mother

had simply

banked on he r beha lf, or that a le g itimate expl anation wa s possible. Bu t the district court’s deter mination was only off by a matter of day s. Startin g wi t h t h e discovery of the chec ks, it does not appea r that Rena was still trusting and rely ing upon her fiduciar

y . See Mills v

. Forestex Co. , 108 Cal. App. 4th 625, 648 (2003) (noting that the discovery rule is a n objective test, looking to what a rea sonable inquiry would have reve aled)

. The fac ts show that, upon speaking with the bank, Rena immediately wrote a letter to Sy metra, stating that she was not the one who had deposited or withdrawn the funds, and she promptly rec eived information in return that told her the full details of the settlement and amounts of the funds involved. She promptly remove d all funds from the joint acc ount and place d them in a p ri v at e o n e. All of this occur red betwee n November

29, 2002 and De cembe r 6, 2002. By Dec ember 6, 2002, Rena knew (1) that ch ecks with her name had been deposited and withdrawn from an acc ount that, besides herse lf, only her mother had acc ess to; (2) the chec ks had

come from an annuity fund to satisfy “pay ment obliga tions under a settl em en t ag ree ment for a persona l injury or wrongf ul death c laim,” despite he r mother’ s prior statements that no settlement exis ted; (3) the amounts and dates of eac h chec k made out to Rena, and the fac t that she never

rec eived these funds; (4) the exact details—including actua l copies—of the settlement ag ree ment for her bene fit; (5) that at lea st $173,000 of these funds had been deposit ed int o the j oint acc ount, - 26 -No. 10-5064

Rena Swanson v. Rhonda W ilson, et al. but less than $70,000 now rema ined

. W h i l e s h e may not have understood the full details of the alleg ed fr aud, Rena

had “[bec ome] a

war e of fac ts w hich would make a rea sonably

prudent pe rson suspicious.” Hobbs , 164 Cal. App. 3d at 202. Moreove r, Rena was subjectively suspicious, a s she responde d by transfe rring the money and removing the funds from her mother’s rea ch. Rena Dep.
at 77, 170, 242. There fore , no later than Dec ember 6, 2002, the duty to investiga te did arise, and the statute of limitations bega n to run. 7 Consequently , under the three -y ear statute of l imitations , Rena’s claim was r eq u i re d t o be filed no later than Dec ember 6, 2005. Her claim was fiftee n months too late. The d istrict court

corr ectly deter

mined that Rena Swanson’s claims wer e b a r r e d b y th e a

p p li c a b le s ta tu te o f limitations. There fore , we AF F IRM the district court’s g rant of summar y judgme nt.

There are no hard and fast rules for deter mining what fac ts or circ umstances will compel 7 inquiry by the i njured party and render her charg eable with knowledg e. See D abney v . Philleo , 38 Cal. 2d 60, 60-65 (1951). Ordinar ily , it is a question for the trier of fac t. Howeve r, the district court was addre ssing a motion f o r s ummary judgme nt, and thus, once Def endant demonstrated the absenc e of g enuine issues of materia l fac t, Rena’s burden was to show more than “some metaphy sical doubt,” Matsushita Elec. Indus. Co. v. Zenit h Radio Corp ., 475 U.S. 574, 586 (1986), and to produce evidenc e showing that a g enuine issue rema ined. See Plant v. Morton Int’l, Inc ., 212 F.3d 929, 934 (6th Cir. 2000). Be cause Plaintiff’s own statements s h o w t hat she was awa re of the information g iven to her by Safec o and acte d upon it at an asc erta inable date , no rational fa ct finder could find for her, and it was appropr iate for the district court to deter mine that Rena was on notice as a matter of law . See E

rcegov ich v. Goody ear Tire & Rubber Co. , 154 F.3d 344, 349 ( 6th Cir. 1998). - 27 -