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Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

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w . v i l l a no va . e du/thir dc ir c uit_2003/481NOT PRE CEDENT IAL UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT
No. 02-4297
DONNA R. WALLI N,

Appellant
v. METROPOL IT AN LI FE I NSURANCE COMPANY,

JACK E . D UCKWORTH,

Appellees
On A ppeal from the Un ited States District Co urt for the We stern D istrict of P enns ylvania (D.C. No. 97-CV-1173 ) Distri ct Judge: The Honorable Donetta W. A mbrose
Submitte d under Third Ci rcuit LAR 34.1(a) Friday , May 16, 2003 Befor e: RENDELL , S MITH and AL DI SE RT , Circuit Judges
. (Fil ed: June 4, 2003 )

OPINI ON OF THE COURT
AL DI SE RT , Circuit

Judge
.

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Donna R. Wallin, the ins ured under an i nsurance pol icyissued by Metropolit an Life Insu rance C omp any, appeals from the district court’s decision to g rant summ ary judgment i n favor of the company and agent Jack Duckworth on the gr ounds that the Ap pella nt’s f rau dul ent r epr ese ntati on c laim s w ere b arre d by st ate s tatut es o f lim itatio ns. The law of North Caroli na appli es in t his di versi ty acti on. Because we agree with the district court’s decision, we will affirm w ithout reaching the merits of A ppellant’s subs tantive claim s that D uckw orth h ad m ade f raud ulent o ral misr epres entatio ns in inducing Appellant to purchase a number of insurance policies. I. As we write onlyfor the parti es who are famil iar wit h the fact s and content

ions raised, we will li mit our discussion to t he controlling legalissues. Because Appellant

did not r aise t

he issue of the prope r lengt h of the st atute of limi tati ons for an al leged bre ach of a fiduci ary duty in the di stri ct court , we will not noti ce this a rgu me nt. Gass v. Virgi n Isla nds Tel. Corp. , 311 F.3d 237, 245 (3d Cir. 2002) (noti ng that t

he “fail ure to r aise an i ssue in t he dist rict court cons tit

utes a waive r of that argument”) . We shallinst ead confine our selves to the s tatutes of li mitations for fraudule nt repr esentat

ion. North Caroli na General St atute § 1-52(9) s tate s that a clai m “[f]or rel ief on the ground s of fraud or mistake” must be f iled within three years of the aggrieve d party’s “discovery . . . of

the fact s consti tuti ng the fraud or mist ake.” Under t his provi sion,

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“discovery” means a ctual discovery or when the fraud shoul d have been dis covered i n the
exe rcise of r eas ona ble d ilige nce . Grubb Props. I nc. v. Simms Inv. Co. , 400 S.E. 2d 85, 88 (N.C. App. 1990) (concluding that plaintiff fail ed to exercise reasonable dil igence as a matter of law where it

neglect ed to dis cover for nearlyfour y ears that a tract of land was not included in a deed). A lmost 70 years ag o, the No rth Carolina S uprem e Cou rt
rema rked that:

[a] man should not

be all owed to close hi s ey es to fac ts observable by ordinary attenti on and maintai n for his own advantage the pos iti on of ignorance . Such pri nciple would enable a careles s man, and byreason of his car eless ness, to exte nd his ri ght to recover for an indefi nite l ength of time, and thus defe at the very purpose the stat ute was desi gned and framed to accompli sh. Moore v. Fidel ity

and Casualty Co. , 177 S.E . 406 , 408 (N .C. 1 934 ). II. It i s agains t thes e stat

utes and ca se law prece pts that we examine the adjudi cati ve facts present here. Appellant

contends t

hat Duckworth, Metr opolit an Life’s agent, told her that s he was buyi ng a retirement pol icyissued on November 24, 1989 – Policy Number 895 193 861 A, the “Life 95 Policy .” Joi nt Appendix at 320. The poli cy expl icitly stat ed that the insura nce p rocee ds w ould be pa yable w hen th e insu red d ies, that p remiu ms w ere pa yable for a sta ted p erio d an d th at an nua l div iden ds w oul d be paid
. Id. at 324-327. The origi nal
ann ual p rem ium wa s $3 4.50 a year for a po licy in th e am oun t of $ 35,0 00.0 0. Id. at 349, 351. In February 1993, she deci ded to purcha se “paid- up” additional i nsurance on t he

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sam e po licy w ith an ann ual p rem ium of $ 381 .05. Id. at 368-369. By pay ing thi s premium for the pol icyyear s four through seven, she would recei ve additional c overage ra nging fro m $ 9,00 0.00 to $ 16,0 00.0 0. Id. Thereafter , she was not requir ed to paythe addi tional premium, but

the tot al ins urance would then decreas e year by year , except for the y ear that s he died. Upon her death, there would be an additional i nsurance payment of $26 ,0 60. 34. Fro m an a ctuaria l s ta ndp oi nt , a lt hou gh s he wo ul d stop p ay in g pr emi ums after the sevent

h year , the annual di vidend of the company would be us ed to cover the additi onal ins urance. By the t ime the originalpolicy

was issued i n 1989, Appell ant had hel d a number of positions that required fina ncial acumen. From 1984 thr ough 1989, she s erved as assis tant manager

and lat er manager of Vari etyWholesaler s. She was res ponsibl e for bookkeeping, handling t he payr oll, orderi ng merchandise , bal ancing re gist ers and merchandising. She was no n ovice to financial t ransactions. Each policy contained the foll owing general provisions: The Contract. This poli cy i ncludes any rider s and, wit

h the appl ication attach ed w hen th e polic y is issued, m akes up th e entire contra ct. All state me nts in the a ppl icatio n w ill be rep rese ntati ons and not wa rran ty. No stat ement willbe used to contest t he polic y unl ess it

appears i n the applic ation. * * * Limitation on Sales Representative’ s Authorit y. No sales re present ative or other per son except our Preside nt, Sec retary, or a Vice-Pr esident may a) make or change anycontrac t of ins urance; or b) change or waive any of the terms of t

he polic y. Any change must be in writing and si gned by our

### 5 Presid ent, Se cretary or V ice-Pr esiden t. Id. at 328 (emphasi s added). The life i nsurance pol icie s iss ued by Metropol itan Li fe through Duckworth cont ained cl ear la nguage explai ning their terms, the premium payment obligat ions and t

he inabi lit

y of s ales r epresent ative s to modify the te rms of the contra ct. In her comp la in t, Wall in charg ed t hat Duck wort

h ha d t ol d he r that

und erth e t er ms of th e po licy she cou ld re tire a t age 65 w ith a m ont hly inc om e of $48 1.37
. Id. at 37 3. The policy , however, contai ned no provis ion st ating t hat it was a reti rement pol icy entit ling her a m ont hly su m u pon reac hin g th e ag e of 65. Wa llin wa s prov ided a mp le opp ortun ity – and in deed had th e lega l obliga tion – to read the language in the policyand return it i f she were not satisfied. She simplychose not to d o so . Id. at 349. Had she read the policy , she would have s een immediat elythat she had a long- term, ongoing obli gation to pay pr emiums and that she purchas ed a li fe insura nce poli cy pay able onl y upon deat h. Her fai lure t o exerci se the right to return the pol icies con stitute d ac cep tanc e. The limit ations period for their fraudule nt repr esentat

ion claim is t

hree y ears. She purc hase d her policy in N ovem ber 1 989 but d id no t bring s uit until M arch 1 997 – nea rly eight y ears l ater. When she received he r poli cies, she was put on act ual noti ce of the discr epancies between the express writ ten te rms of the pol icie s and the al leged ora l repres entations made to he r. Nevert heless , she di d not begin t he acti on untillong aft er

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the e xpi ratio n of the lo nge st lim itatio ns p erio d fo r he r clai m. Under North Caroli na law, pol icy holders are under aduty to read t heir i nsurance pol icies
. Elam v. Smithde al Realty & Ins. Co. , 109 S.E. 632, 634 (N.C. 1921). Where a partyhas reas onable opport unity to read t he inst rument in que sti on and the l anguage of the ins trument i s clear , unambiguous, and easil y under stood, fail ure to r ead the i nstrument bars that part

y fr om asserting his belie f that the poli cy cont ained provi sions which i t does not . Baggett v. Summerlin Ins . & RealtyCo. , 554 S.E. 2d 336 (N.C. 2001) ( citi ng Bag gett v. Summerli n Ins. & Realty Co. , 545 S.E .2d 4 62, 4 68- 469 (N .C. A pp. 2 001 ) (T yson, J ., dissent ing). Appellant

testifie d that s he did not t horoughlyreview her pol icy , and that she did not r ecallseeing t

he word “retirement” i n her poli cy document s. Joi nt Appendix at 149 -15 0. In light o f the f oreg oing , we a gree w ith the d istrict cou rt that A ppella nt’s claim was barred by the statute of limitati ons. * * * * *

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We have considered a ll contentions rais ed by t he parti es and concl ude that no fu rth er di sc us sio n i s n ec es sa ry. The judgment of the dist rict court wil l be affi rmed.

TO THE C LERK: Please fi le the foregoing opi nion.

/s/ Ru gger o J. A ldisert Circuit

Judge