___________ No. 95-1494

___________ Sandra Barry, also known as * Sandra Barry Lieberman, * an individual, * * Appellant, * Appeal from the United States * District Court for the v. * District of Minnesota. * Charles L. Barry, Melanie G. * Barry, Lawrence Swartz, Marcia * Barry Swartz, Twin City Fan * and Blower Company, a * Minnesota corporation, * * Appellees. *

___________ Submitted: October 17, 1995 Filed: March 12, 1996

___________ Before McMILLIAN, BOWMAN, and WOLLMAN, Circuit Judges.

___________ WOLLMAN, Circuit Judge.
Sandra Barry Lieberman appeals the d istrict court's grant of summary judgment to defendant s on her claims for fraud, breach of fiduciary duty, and bre ach of contract surrounding the sale of her shares of stock in a family-owned business . Because we find that factual questions remain, we reverse and remand for a jury determination of the issues.

I.
Lieberman owned one-third of the shares of stock in Twin City F an and Blower Company (Twin City), a Minnesota corporat ion founded by her father. Lieberman's brother, Charles Barry, and his wife,

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Melani e Barry, and Lieberman's sister, Marcia Barry Swartz, and he r husband, Lawrence Swartz (the Barrys), owned the remaining shares in equal propor tions. Charles Barry and Lawrence Swartz managed the company

. Lieberman, who lived in California where she wor ked as a special education teacher, had no involvement in the company.

In May 1983, Lieberman received a telephone call and a letter fro m Richard Fitzgerald, Twin City's attorney, informing her that the company
was lo sing money and that the managing shareholders were contemplatin g moving the company to South Dakota, which would require additional capital input by the shareholders and increased personal financial risks. Th e letter adv ised Lieberman not to undertake those risks, as she was no t involved in the management of the company, and recommended that she sell her shares of the stock to Twin City. The lette r suggested that Twin City would buy Lieberman's stock for a $335,000 lump sum payment due in te n years, plus an additional $25,000 every year until the lump sum payment wa s made.

Lieberman retained California and Minnesota attorneys while sh e consid ered her options. Twin City provided Lieberman's attorneys wit h financial statements that showed a 1982 loss of $138,865 and an "Internal Mgmt Report" for 1983 that showed losses in each of the first five months of t he year totalling $168,895. Lieberman was reluctant to sell he r shares, however, because her father had stressed to her never to sell.

In June 19 83, the Barrys sent Lieberman notice of a Twin Cit y shareholder meeting and announced a merger plan under which Lieberman woul d receive $1 25,000 for her 5,000 shares and informed her that she coul d pursue her dissenting shareholder's rights under Minnesota law. Believing that sh e was being forced to sell her shares and that she would receiv e les s under the Minnesota dissenter's rights statute than the Barrys ha d originally offered ba sed on the financial information she had been given, Lieberman

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accepted the terms set out in Fitzgerald's original letter.

In October 1983, Lieberman signed a stock redemption agreement t o sell her stock according to the terms stated in the letter. The agreement included a general release clause. It also provided that if the Barry s undertook certain stock transactions Lieberman's note would becom e immediatel ydue, with Lieberman to then receive 10% of any profits i n excess of $1 million. Lieberman's mother agreed to guarantee Twin City's note to Lieberman. Lieberman's mother also plac ed one-third of her estate in an irrevocable trust for Lieberman.

In 1988, without informing Lieberman, the Barrys initiated a series of transactions that affected the corporate structure of Twin City an d which resu lted in the Barrys owning stock in their same proportion i n another corporation, which will be discussed in greater detail in Section V. In 1990, Twin City paid Lieberman the $335,000 lump sum that was due in 1993.

In 1991, Lieberman received a call from Charles Barry, who told her that he h ad bought out the Swartzes' stock for $15 million. This le d Lieberman to investigate whether she was entitled to additiona l consideration under the terms of the stock redemption agreement. Lieberma n found that in 1983 Twin City had submitted financial statements to South Dakota bond underwriters showing figures for the company's operation s different from those which she had been given. The numbers submitted to the u nderwriters showed that Twin City had actually made a profit fro m January to May of 1983, whereas the numbers Lieberman had been given showe d
a loss for the company during each of those months. She also discovered the company's 1988 stock transactions.
Lieberman then brought this action a gainst the Barrys and Twin City, alle ging seven causes of action. The district court granted summar y judgment to the Barrys and Twin City on all except the

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breach of contract claim. The court found that the six-year statute o f limitations barred Lieberman's remaining claims, including her fraud and breach of fiduciary duty claims, because "through the exercise o f reasonable diligence plaintiff could have discovered those allege d misrep resentations more than six years prior to commencement of thi s action." The court additionally held that the claims would be barred by the re lease Lieberman signed, finding that because the statute o f limitations barred her fraud claim, Lieberman could not claim that th e stock redemption agreement was unenforceable. The court denied summar y judgment, however, on Lieberman's breach of contract claim relating to Twi n City's 1988 transactions, after finding that a question of fact existed as to whether the corpor ate changes that took place in 1988 were included in the contract language and required a determinati on of the parties' intent.

After the case was transferred to another judge, however, the court granted the Barrys and Twin City summary judgment on the breach of contrac t claim as well, finding that because ownership of the stock did not change, the reorganization wa s not a "sale" within the plain meaning of the word. Lieberman appeals only the dismissal of her fraud, breach of fiduciar y duty, and breach of contract claims.
We review the district court's grant of summary judgment de nov o, and we will affirm if the evidence, viewed in the light most favorable to the non-moving party, shows that no dispute of material fact exists and that the moving party is entitled to judgment as a ma tter of law. Michalski v. Bank of America Ariz. , 66 F.3d 993, 995 (8th Cir. 1995). Because this is
a d iversity case, we also review de novo the district court' s interpretation of state law. Id. (citing Salve Regina College v. Russell , 499 U.S. 225, 231 (1991)).

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We first address Lieberman's motion to strike supplemental documents submitted to this court by the Barrys and Twin C ity. These documents were not part of the record before the district court when it entered its order granti ng partial summary judgment. We will consider only evidentiar y materials that were before the trial court at the time the summary judgmen t ruling was made. Fed. R. App. P. 10(a); Amerinet, Inc. v. Xerox Corp. , 97 2 F.2d 1483, 1489-90 (8th Cir. 1992), cert. denied , 506 U.S. 1080 (1993)

. Excluded from the appellate record is evidence that was submitted to the trial court subsequent to the ruling. United States East Telecommun. v. US West Commun. Servs., Inc. , 38 F.3d 1289, 1301 (2d Cir. 1994). Although the district court had the right to change its previous summary judgment ruling until the order was final, see Fed. R. Ci v. P. 54(b), it did not do
so; thus, the district court did not address the significance of th e additional information to the statute of limitations and release issues.

Those cases which hold that we may expand the record on appeal ar e readily distinguishable. In Dakota Industries, Inc. v. Dakota Sportswear, Inc. , 988 F.2d 61, 63-64 (8th Cir. 1993), we all owed the parties to expand the record because th e parties had not had a chance to complete discovery and because one party 's misrepresentation left the district court with an incomplet e picture. We noted that the authority to enlarge a record i s
rar elyexercised and constitutes a narrow exception to the general rul e that it i s only the record made before the district court which th e appel late court may consider. Id. at 63. In Miller v. Benson , 51 F.3 d 166, 16 8 (8th Cir. 1995), we allowed the pro se appellant to expand th e record because he did not learn that the district court had not received his motion until after that court dismissed his case.

### -6- The Barry s and Twin City offer no reason why the records they no w wish to su bmit were not submitted with the initial motion for summar y judgment. We thus gr ant Lieberman's motion to strike portions of Barrys' and Twin City's addendum and appendix, and we will not consider th e arguments which rely on the stricken evidence.

III.
We next address the Barrys' and Twin City's argument that Liebe rman's fraud claim is barredby Minnesota's six-year limitations period for such cla ims. See Minn. Stat. § 541.05, subd. 1(6) (1992). We find that a factual question exists as to whether Lieberman could have discovered with reasonable diligence that Barrys gave her false financial figures.
The six-y ear limitations period begins to run when a plaintiff knew
or s hould have known of the fraud. See Estate of Jones v. Kvamme , 44 9 N.W.2d 428, 431 (Minn. 1989). The question of when discovery could o r should have reasonably been made is one of fact. Id. The plaintiff bears the burden of proving that she could not, through reasonable diligence , have discovered the facts constituting the frauduntil within six years of the commencement of the action. Blegen v. Monarch Life Ins. Co. , 36 5 N.W.2d 356, 357 (Minn. Ct. App. 1985).
In finding that Lieberman did not ex ercise reasonable diligence, the distr ict court stated that Lieberman was "sufficiently skeptical o f defend ants' motivations in pursuing the buyout to raise suspicions tha t defendants might not be completely forthcoming i n the information provided to [her]." The court pointed out that Liebermanfelt as though the Barrys
were telling her they wanted a "divorce"; she felt the Barrys would d o whatever it took to force her out of the company ; she immediately retained attorneys, who negotiated a detailed contract for her; she enlisted

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a friend to help her analyze the company's financial position; she obtaine d
a guaran ty on the note from her mother; and she protected her right t o inherit one-third of her mother's estate.

Lieberman submitted the affidavit of Robert Bartkus, Twin City' s Controller from 1976-80 and 1982-86, who atteste d that he had prepared the books for the South Dakota bond issue, that he did not prepare th e statem ents that Lieberman received, and that both sets of financia l statements could not be correct. He attested th at the statements given to Lieberman were truthful in the areas that could be easily verified, an d
were believable based on the 1982 statement, but that one principa l dif ference between the two sets of statements related to "material fro m inventory." According to Bartkus, finding the true data in that area woul d have required an audit of physical inventory, which might have necessitate d
a one-day plant shutdown. Such verification was not required even for Twi n City's bond offering.

We di sagree with the district court's conclusion that th e circumstances triggered a duty by Lieberman to c heck into the truthfulness of the da ta the Barrys provided to her. Although some of the factor s recited by the distri ct court may have made it unreasonable for Lieberman to rely on the Barrys ' characterization of the financial condition of the company, Lieberman di d not rely on those characterizations. Instead, she hired attorneys and c onsulted a financial advisor to advise her about the company's financial p osition. Lieberman's advisors, however, were unable to discover the compa ny's true financial condition because of the Barrys' fraudulent concealment of the profits for 1983. See Continental Assurance Co. v. Ce dar Rapids Pediatric Clinic , 957 F.2d 588, 593 (8th Cir. 1992 ) (false financial statements on company's letterhead were sufficient for th e jury to find active c oncealment and toll federal statute of limitations); Cohen v. Appert , 463 N.W.2d 787, 790 (Minn. Ct. App. 1990) (to tol l limitation period, fraudulent concealment must be intentional and

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must prevent discovery of cause of action).

The B arrys and Twin City argue that because the correct financia l information was a matter of public record during Twin City's bond offering , Lieberman could have found the information at that time, and that Lieberma n foreclosed any opport unity to later discover the fraud by cutting herself off fromher family and refusing to communicate with them. We find n o obliga tion under Minnesota law, however, for a plaintiff to investigat e after the fact. Beca use the bond offering and lack of communication came after Lieberman had already sold her stock, she was not guilty of lack due diligence by failing to later discover the fraud.

The Barrys and Twin City also argue that Lieberman would hav e discovered the false information if she had purs ued her dissenter's rights under the Minnesota statute. Lieberman argues, however, that according to the financ ial information available to her at the time, she had ever y
reason to believe such action would leave her in a worse position tha n accepting the Barrys' original offer.

We conclude that a jury could reasonably believe that Lieberma n exerci sed due diligence in accepting the financial statements as tru e without putting the company through an extensive audit of its physica l inventory or without fruitlessly pursuing her dissenter's rights.

IV.
We next turn to the issue whether the release signed by Lieberm an was valid and whether it bars her fraud claim. We find, again, that factual issues remain to be determined whether the Barrys fraudulently induce d Lieberman to sign the release.

A release may be invalidated if fraud "touches" it. Noble v

. C.E.D.O., Inc. , 374 N.W.2d 734, 744 (Minn. Ct. App. 1985).

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Lieberman argues that the Barrys' fraudulent fin ancial figures induced her to sign the release. The Barrys and Twin City argue that Lieberman could not justifiably rely on the financial information, given the relationship of the parties at the time of the release.

The Barrys and Twin City submitted to the district court a lette r fromTwin City's attorney, Fitzgerald, to Lieberman's attorney, which in part refused an apparent attempt by Lieberman's attorney to have the Barry s warrant that the financial information they provided was true. The refusa l
was based on a desire to "wipe[] the slate clean," and on the Barrys ' belief that if they made a lot of money by movin g to South Dakota a future claimby Lieberman would be unfair. The Barrys and Twin City argue that the refusal to provide the requested warranty rendered Lieberman's relianc e on the financial information unjustified.

We believ e that Fitzgerald's refusal leaves the impression that the Barrys were unwilling to warrant the future proj ections they had provided, rather than that the historical financial information was false. We canno t say th at Fitzgerald's refusal made Lieberman's reliance on the fals e financial information unjustified as a matter of law. Cutting against the ref usal are the apparent truthfulness of the information and the famil y relationship. Under Minnesota law, a party may rely on the truthfulness of business records unless their falsity is obvi ous. Speiss v. Brandt , 41 N.W.2d 561, 566 (Minn. 1950).
The Barrys and Twin City also argue that fraud claims can be re leased and that if the release in this action is not valid, no release could be valid. The Barrys and Twin City fail to recognize, however, the differenc e bet ween releasing mature fraud claims that a plaintiff knows exist, an d releasing the very fraud that induced the plaintiff to sign the release. Althoughthe later discovery of additional fraud does not invalidate the release of a

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mature fraud claim, see Bellefonte Re Ins. Co. v. Argonaut Ins. Co. , 757 F.2d 523 , 527 (2d Cir. 1985), the same principle does not apply when a plaintiff who justifiably relies on fraudulent information is induced to sign a release for fraud claims that she did not know existed.

V.
Finally, we address Lieberman's breach of contract claim. Amon g other things, the contract provided that Lieberman would receive additiona l consideration in the event "(4) the sale of shares of the Corporation . .

. to the Corporation which results in . . . the Corporation owning 80% o r more of the outstanding shares of the Corporation."

The sp ecific corporate changes that took place in 1988 were a s follows: (1) Twin City was renamed TCF Blower Division; (2) the Barry s formed two other separate corporations, TCF Axial Division, Inc. and TCF Indu stries, Inc.; (3) the Barrys' shares in TCF Blower Division wer e cancell ed; (4) both the Blower Division and the Axial Division issue d 10,000 sha res of stock each to TCF Industries; and (5) TCF Industrie s issued 2,500 shares of stock to each of the Barr ys. Lieberman argues that the transaction constituted a sale of shares to the corporation in exchang e fo r stock in TCF Industries and that she is thus owed additiona l consideration under the fourth scenario in the contract.

In the fi rst district court opinion, the court found that "the 1988 cha nges were arguably triggering events within the literal terms of th e contract," but found that there was evidence that the parties did no t intend Lieberman to receive additional consideration unless the corporatio n
came un der the control of outsiders. Thus, the court found that a jur y issue remained. After the case was transferred, the successor court found that there was "no sale in the traditional or common sense of the term,"

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as there was not a buyer and seller.

Under M innesota law, the court must first determine as a matter o f law whether a contract is ambiguous. Lamb Plumbing & Heating Co. v. Kraus

Anderson of Minneapolis, Inc. , 296 N.W.2d 859, 862 (Minn. 1980). A
con tract is ambiguous if its language is reasonably susceptible to mor e than one interpretation. Trondson v. Janikula , 458 N.W.2d 679, 681 (Minn. 1990). The court should consider the context in which a word is being use d to determine whether it is ambiguous, Board of Regents v. Royal Ins. Co. of America , 517 N.W.2d 888, 892 (Minn. 1994), and must give all terms thei r plain, ordinary meaning so as to effect the intent of the parties, Davis

v. Outboard Marine Corp. , 415 N.W.2d 719, 723 (Minn. Ct. App. 1987). If
a cont ract's terms are ambiguous, the court will consider extrinsi c evidence, and construction of the contract becomes a question of fact. Id

.

Even un der the plain, ordinary meaning of the term "sale," we fin d that th e term is ambiguous in the context of selling shares back to th e corporatio n. A sale is defined as "[a] contract between two parties , called , respectively, the "seller" (or vendor) and the "buyer" (o r purchaser), by which the former, in consideration of the payment . . . of a certain price in mo ney, transfers to the latter title and possession of the prop erty." Blacks Law Dictionary (6th ed. 1990) at 1337. In thi s instance, the Barrys transferred their stock to Twin City and received as consideration shares of stock in another corpora tion, TCF Industries. The definition does not contemplate whether the actual control of the shares must be transferred i n a real sense, and we find both Lieberman's and the Barrys' and Twin City 's interpretations plausible. There appear to be no Minnesota decisions determining as a matter of law whether a true change of control is necessary for a party to sell shares back to the corporation

. We thus re mand for a jury to consider extrinsic evidence to determin e whether the parties intended that the shares

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needed to change control in a real sense before Lieberman's rights under the agreement would be triggered.
The judgment is reversed and the case is remanded for trial.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.