IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

SUSAN A. COLOMBU, 

Plaintiff, Civ. No. 6:15-cv-02156-MC 

v. OPINION AND ORDER 

CARL PAWLIK, DOES 1-10, 

Defendants. 

MCSHANE, Judge: 

Defendant Carl Pawlik, an Oregon citizen, requested a $34,000.00 loan from his sister, 

Plaintiff Susan Colombu, a California citizen, on May 3, 2006, to pay off debt related to his then 

principal residence, located in Madison, Wisconsin. Pursuant to a written agreement between the 

parties and as a premise to the loan, Pawlik promised to repay Colom bu if he were to sell the 

residence. Colombu learned in July 2013 that the residence went into foreclosure. The residence 

was then sold at a foreclosure sale in 2015 and Pawlik subsequently wrote Colombu a letter of 

default. Colombu now brings fifteen separate claims against Pawlik for recovery of the loan 

balance of$34,000.00, general damages in the amount of$5,000.00, and punitive damages 

arising from three fraud claims in the amount of $50,000.00. This court has diversity jurisdiction 

over this matter. 

Pawlik moves to dismiss Colombu's claims for intentional misrepresentation, negligent 

misrepresentation, concealment, and conversion pursuant to Fed. R. Civ. P. ("Rule") 12(b )(6). 1 

Pawlik then moves to dismiss Colombu's complaint in its entirety under Rule 12(b )(1) for lack 

1 I note that Colombu concedes Pawlik's motion to dismiss the Fourteenth Claim for conversion. Def. 's Response, 3, 

ECF No. 10. Accordingly, I do not address that aspect of the motion in this opinion. 

OPINION AND ORDER - 1 
of subject matter jurisdiction, based on its failure to reach the amount in controversy 

requirement without the additional punitive damages prayer ofColombu's fraud claims. Because 

Colombu brought her fraud claims after the statute of limitations period had rnn, those claims are 

dismissed. Because the amount in controversy without the punitive damages sought by 

Colombu's fraud claims does not satisfy the statutory requirement, Pawlik's Motion to Dismiss, 

ECF No. 8, is GRANTED and the Complaint is dismissed in its entirety. 

STANDARD OF REVIEW 

To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient 

facts that "state a claim to reliefthat is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 

U.S. 544, 570 (2007). A claim is plausible on its face when the supporting factual allegations 

allow the court to infer the defendant's liability based on the alleged conduct. Ashcroft v. Iqbal, 

556 U.S. 662, 663 (2009). The factual allegations must present more than "the mere possibility 

of misconduct." Id. at 678. In the case of prose litigants, a court reviews the pleadings with a 

less stringent standard than those drafted by lawyers; the court views the complaint liberally but 

will not supplant vague and conclusory allegations. See Erickson v. Pardus, 551 U.S. 89, 94 

(2007); Litman v. Harris, 768 F.3d 1237, 1241 (9th Cir. 2014). 

DISCUSSION 

I. Motion to Dismiss Fraud Claims Under Rule 12(b)(6) 

As noted, Pawlik argues that Colombu's Claims 11-14, for intentional misrepresentation, 

negligent misrepresentation, and concealment are barred by their respective statutes of 

limitations. 

a. Colombu's Claim Eleven 

In Claim Eleven Colombu brings a claim of intentional misrepresentation arising from 

representations made in securing the personal loan. 

OPINION AND ORDER - 2 
Under Oregon law, a claim based on fraud must be commenced within two years subject 

to the discovery rule. ORS 12.110(1 ). A fraud claim "accrues when the plaintiff has discovered 

facts or, in the exercise of reasonable diligence, should have discovered facts that would alert a 

reasonable person to the existence of the three elements of an actionable injury." Mwphy v. 

Allstate Ins. Co., 251 Or. App. 316, 321, 284 P.3d 524 (2012). Aprimafacie fraud claim is made 

when a plaintiff proves: "the defendant made a material misrepresentation that was false; the 

defendant did so knowing that the representation was false; the defendant intended the plaintiff 

to rely on the misrepresentation; the plaintiff justifiably relied on the misrepresentation; and the 

plaintiff was damaged as a result of that reliance." Id. at 324. 

Colombu brought her Complaint on November 17, 2015. ECF No. 1. She bases her fraud 

claims on several alleged misrepresentations: (1) in May 2006, when securing the loan, Pawlik 

attested to ownership of the Wisconsin property as his principal residence when he did not yet 

own it; (2) Pawlik promised that he would use proceeds from any potential sale of the property to 

repay the loan; and (3) Pawlik allowed the property to go into foreclosure without providing 

Colombu notice of the foreclosure. Complaint at ilil 93-100, ECF No. 1. 

Colombu states in the Complaint that she "did not discover Defendant's fraudulent 

actions until after July 16, 2013, when Plaintiff first learned that Defendant had allowed the 

[residence] to go into foreclosure." Complaint at il 101, ECF No. l; see also id. at il 47 ("Plaintiff 

did not learn of Defendant's material breach of the Agreement (voluntary foreclosure of the 

Wisconsin Property) until on or after July 16, 2013." (emphasis added)). The Statute of 

Limitations period following that discovery ran as of July 2015. 

In her response to Pawlik's motion, Colombu attempts an about-face and argues that, 

while she clearly pleads that she discovered the fraudulent conduct giving rise to her Complaint 

OPINION AND ORDER - 3 
in July 2013, the actual foreclosure sale of the Wisconsin residence in December 2014 should 

trigger the discovery period. Colombu's argument, while a colorful interpretation of Oregon's 

discovery rule, collapses under the pleadings. The discovery rule "delays the running of the 

limitation period only until the plaintiff knows or should know that some harm has been incmTed 

and that a claim exists." The Oregon Supreme Court has elaborated on this: 

We emphasize that this is an objective test. In most cases, the inquiry will 

concern what a plaintiff should have known in the exercise of reasonable 

care. In such cases, the relevant inquiry is how a reasonable person of 

ordinary prudence would have acted in the same or similar 

situation. See Woolston v. Wells, 297 Or. 548, 557, 687 P.2d 144 

(1984) (reasonable care means what a reasonable person of ordinary 

prudence would do in the same or similar circumstances). Relevant to this 

analysis will be a plaintiffs failure to make a further inquiry if a 

reasonable person would have done so. The discovery rule does not 

protect those who sleep on their rights, but only those who, in exercising 

the diligence expected of a reasonable person, are unaware that they have 

suffered legally cognizable harm. 

Gaston v. Parsons, 318 Or. 247, 256, 864 P.2d 1319 (1994) (emphases added). With respect to 

the distinction between those sleeping on their rights and those unaware of legal hmm, this case 

falls into the former category. July 16, 2013, is the applicable date on which Colombu's claims 

accrued. That is the date Colom bu alleges she discovered the fraudulent nature of Pawlik' s 

alleged representations to induce her into entering the loan agreement. That is also the date 

Colombu learned that foreclosure proceedings had commenced on the propetty, endangering her 

security interest in the loan. I find that the Oregon Comt of Appeals' reasoning in Widing v. 

Schwabe, Williamson & Wyatt applies here: 

The fact that plaintiffs chose to await the estate's default on the loan 

before bringing their action does not mean that they did not have a claim 

that accrued on their discovery of the breach of the representation that they 

allege [defendant] made. The making of the loan itself was a legally 

cognizable harm, at least in the absence of the security protections that 

Welch allegedly represented would be in place. 

OPINION AND ORDER - 4 
154 Or. App. 276, 285, 961 P.2d 889 (1998) (emphasis in original). Similarly, Colombu's choice 

to delay this action beyond the relevant statutory period does not mean that she did not yet have a 

claim. Rather, Columbu's claim accrued when she learned of Pawlik's various 

misrepresentations and learned that any security interest she had in the Wisconsin residence was 

tlu·eatened, as the property was subject to foreclosure. "The making of the loan itself was a 

cognizable legal harm," at least in the absence of the various protections Pawlik represented 

would be in place. See id. 

Accordingly, on this record the Court concludes Plaintiffs Claim Eleven is barred by the 

two-year statute oflimitations pursuant to § 12.110(1 ). 

b. Colombu's Claims Twelve and Thirteen 

In Claims Twelve and Thirteen Colombu brings claims of negligent misrepresentation 

and fraudulent concealment, respectively, arising from representations made in securing the 

personal loan. 

A claim for negligent misrepresentation under Oregon law must be commenced within 

two years subject to the discovery rule. Spirit Partners, LP v. Stoel Rives, LLP, 212 Or. App. 

295, 308, 157 P.3d 1194 (2007); see also ORS 12.110(1). A claim for concealment similarly 

sounds in fraud and the same statutory period applies. ORS 12.110(1 ). Because the facts 

underlying Claims Twelve and Thirteen are the same as those underlying Claim Eleven, and 

because the statute of limitations is the same for both claims, those claims are also barred by the 

statute of limitations. 

Accordingly, on this record the Court concludes Colombu's Claims Twelve and Thitteen 

are baned by the two-year statute oflimitations pursuant to ORS 12.110(1 ). 

OPINION AND ORDER- 5 
II. Motion to Dismiss Due to Lack of Subject Matter Jurisdiction Under Rule 12(b )(1) 

Pawlik next moves to dismiss the Complaint in its entirety for lack of subject matter 

jurisdiction under Rule 12(b )(1 ). Pawlik argues that, without the fraud claims seeking punitive 

damages, the amount in controversy requirement of28 U.S.C. 1332(a) is not met. Based on my 

findings above, Pawlik's motion is well taken. 

Federal courts are coutts of limited jurisdiction, having subject matter jurisdiction only 

over matters authorized by the Constitution and Congress. See Kokkonen v. Guardian Life Ins. 

Co. of Am., 511 U.S. 375, 377 (1994). To establish subject matter jurisdiction pursuant to 

diversity of citizenship, the patty asse1ting jurisdiction must show: (1) complete diversity of 

citizenship among opposing patties and (2) an amount in controversy exceeding $75,000. 28 

U.S.C. § 1332(a). In determining the amount in controversy, a district court may consider 

the amount of compensatory and punitive damages recoverable based on the plaintiff's complaint 

as well as attorney fees, but may not consider interest and cost of suit. lYfeisel v. Allstate Indenz. 

Co., 357 F. Supp. 2d 1222, 1225 (E.D. Cal. 2005) (citing Hunt v. Wash. State Apple. Adver. 

Comm'n, 432 U.S. 333, 347-48 (1977)). Additionally, the "mere possibility of 

a punitive damages award is insufficient to prove that the amount in controversy requirement has 

been met." Burk v. lYfed. Sav. Ins. Co., 348 F. Supp. 2d 1063, 1069 (D. Ariz. 2004). 

Here, Colombu initially sought the value of the loan, $34,000.00, "general damages" in 

the amount of $5,000.00, and punitive damages related to her fraud claims in the amount of 

$50,000.00. With the dismissal of Claims 11-13, none of the remaining claims seek punitive 

damages, nor does Colombu argue those claims watrnnt punitive damages, nor do I find that 

punitive damages are wan-anted for those claims. 

OPINION AND ORDER - 6 
As I am left to guess the value ofColombu's suit, which appears to amount to under 

$40,000, this matter must be dismissed pursuant to Rule 12(b)(l). 

CONCLUSION 

Based on the foregoing, Defendant Pawlik's Motion to Dismiss, ECF No. 8, is 

GRANTED. This action is dismissed in its entirety. 

IT IS SO ORDERED. 

Dated this 1.. '5 day of February, 2016. 

OPINION AND ORDER - 7 

Michael McShane 

United States District Judge