1 Pursuant to Local Rule 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in Local Rule 47.5.4. UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 95-50438

DEAN DALTON, doing business as Dalton Enterprise;

SHIRLENE DALTON, doing business as Dalton Enterprise,

Plaintiffs-Appellants,

VERSUS

PACCAR FINANCIAL CORP.,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Texas

(A-94-CV-316)

July 9, 1996

Before REAVLEY, GARWOOD, and DeMOSS, Circuit Judges.

PER CURIAM: 1

Plaintiffs Dean and Shirl een Dalton appeal an order by the

district court which grants summary judgment to Defen dant Paccar

Financial Co rporation on the basis that, under Georgia law, the

statute of limitations had run on the Daltons’ claims. For the1 The contract contains the followi ng clause: “This contract

entered into in the State of Georgia and is governed by its law.”

2 Truck 339 either had, or was supposed to have had, Seri a l

Number 1XP9D29X5BP145339.

2 following reasons, we AFFIRM.

FACTUAL SUMMARY

Paccar Financial Corporation (“Paccar”), a company domiciled

in the State of Washington, provides third-party financing for the

sale of trucks. In 1985, Paccar repossessed three 1981 Peterbilt

Model 359 conventional truck tractors and stored them at a

Peterbilt dealership in Knoxville, Tennessee. On September 6,

1985, a Georgia branc h of Paccar sold these three trucks to Dean

and Shirleen Dalton, d/b/a Dalton Enterprise, Inc. (“Daltons”), who

were residents of North Carolina. The sales were made pursuant to

contract wh ich contains a “choice of law” clause designating

Georgia as the forum state. 1 This suit involves the sale of one of

these trucks - “Truck 339.” 2

The parties do not dispute that Truck 339 was inoperable at

the time of purchase, in 1985. Several years later, in 1991, the

Daltons brought Truck 339 into operable condition. On June 23,

1993, the Texas Department o f Public Safety (“DPS”) stopped

Appellant Dean Dalton at a border check-point near Van Horn, Texas.

Dean Dalton presented the papers and license tags for Truck 339.

Upon inspection, the officer noticed that Dalton was driving a3 Truck 116 had Serial Number 1XP9D29X1BP146116. This serial

number does not appear anywhere in the sales contract.

3 different truck, Truck 116, 3 which was confirmed to be a stolen

vehicle. The DPS seized the truck. After a judicial proceeding,

a local court ordered that possession of, and title to, Truck 116

be transferred to Culberson County, Texas.

The Daltons sued Pa ccar in federal district court alleging

that Truck 116 -- the truck seized on June 23, 1993 -- is the

vehicle which Paccar sold to them. Paccar disagrees and argues

that the truck which it sold to the Daltons was Truck 339. The

Daltons original complaint alleged violations of the Texas

Deceptive Trade Pr actices Act, unconscionability, and breach of

warranty under Texas state law. The district court, sitting in

Texas, applied Texas' rule on choice of law and concluded that the

substantive law of Georgia applies. The district court allowed the

Daltons to replead under Georgia law. In their amended complaint,

the Daltons ass erted Georgia state law claims including fraud,

negligence, violations of the Georgia Fair Business Practices Act

(“GFBPA”), breach of contract, and breach of implied warranty of

title. Paccar filed a motion for summary judgment asserting a

statute of limitations defense. The matter was referred to a

magistrate judge who recommended that the distric t court grant

summary judgment. On May 16, 1995, the district judge adopted the

magistrate judge’s report and recommendation and entered summary

judgment in favor of Paccar. The Daltons appeal from this order.4 JURISDICTION

Jurisdiction is based upon diversity of citizenship, pursuant

to 28 U.S.C. § 1332.

DISCUSSION

Choice of Law

The Daltons f irst argue that the district court erred in

applying Georgia law rather than Texas law. Specifically, they

argue that Texas law should apply to their claims because the

Georgia choice of law clause in their contract is “narrow” and only

applies to claims for breach of contract. In their amended

complaint, the Daltons pled claims for negligence, fraud, breach of

contract, “unconscionability,” “breach of warranty of title,” and

a GFBPA “laundry list” of violations including: causing act ual

confusion or misunderstanding as to the spo n sorship or

certification of goods; causing actual confusion or

misun derstanding as to certification or connection by another;

representing that goods have sponsorship, approval or

characteristics, which they do not have; and representing that

goods are of a particular standard, if they are of another.

Because the Daltons argue that none of these claims sound in breach

of contract, they assert that the Georgia choice of law clause in

their contract is inapplicable. Instead, the Daltons argue that4 Texas has adopted the significant relationship test as set

f orth in §§ 6 and 145 of the Restatement (Second) of Confl ict of

Laws (the "Restatement")

5 the Texas “significant relationship” test applies. 4

0. Restatement § 6 states: (1) A court, subject to constitutional

restrictions, will follow a statutory directive of its own state on

choice of law. (2) When there is no such directive, the factors

relevant to the choice of the applicable rule of law include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the

relative interests of those states in the determination of the

particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be

applied.

Restatement § 145 states: (1) The rights and liabilities of

the parties with respect to an issue in tort are determined by the. Air Disaster at Ramstein Air Force Base, Germany v. Lockheed

, 81

F.3d 570, 576 (5th Cir. 1996).

Restatement § 6 states: (1) A court, subject to constitutional

restrictions, will follow a statutory directive of its own state on

choice of law. (2) When there is no such directive, the factors

relevant to the choice of the applicable rule of law include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the

relative interests of those states in the determination

of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of

law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to

6 local law of the state which, with respect to that issue, has the

most significant relationship to the occurrence and the parties

under the principles stated in § 6. (2) Contacts to be taken into

account in applying the pri nciples of § 6 to determine the law

applicable to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicile, residence, nationality, place of

incorporation and place of business of the parties, and

(d) the place where the relationship, if any, between the

parties is centered. These contacts are to be evaluated according

to their relative importance with respect to the particular issue.

Id. at 577, n.9. 5be applied.

Restatement § 145 states: (1) The rights and liabilities of

the parties with respect to an issue in tort are determined by the

local law of the state which, with respect to that issue, has the

most significant relatio nship to the occurrence and the parties

under the principles stated in § 6. (2) Contacts to be taken into

account in applying the prin ciples of § 6 to determine the law

applicable to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicile, residence, nationality, place of

incorporation and place of business of the parties, and

(d) the place where the relationship , if any, between the

parties is centered. These contacts are to be evaluated

according to their relati ve importance with respect to

the particular issue.

Id . at 577, n.9.

In applying § 6 to this case, we must first identify the state

contacts that should be considered. G utierrez v. Collins

, 583

S.W.2d 312, 319 (Tex. 1979). Once these contacts are established,

t he question of which state's law will apply is one of law. Id

. The number of contacts with a particular state is not

determinative. D uncan v. Cessna Aircraft Co

. , 665 S.W.2d 414, 421

(Tex. 1984). Some contacts are more important than others because

they implicate state policies underlying the particular substantive

issue. Id . Consequently, selection of the applicable law depends

upon the qualitative nature of the particular contacts. Id

.

Under the significant r elationship test, the Daltons argue

that Texas has the most significant relationship with the

substantive causes of action pled. In support, the Daltons argue

that appellee is authorized to do business in Texas, and that the

seizure of the tr uck, the investigation, and the state court

hearing, all occurred in Texas. For these reasons, the Daltons

argue that Texas law should apply.

7 Paccar disagrees and ar g ues that, “however phrased,” the

“embroidering” of the Dal tons’ claims, does not change their

nature: “the Daltons [sic] complaints are rooted in the sales

contract.” As such, Paccar argues that they should be governed by8

the contracted choice of law clause, which dictates that Georgia

law shall apply. In the alternative, Paccar argues that Georgia

has a more significant relationship to the Daltons’ claims. In

support, Paccar primarily argues that payment was made in Georgia,

“and ther e is no conduct or behavior of Paccar alleged to have

occurred in Texas.”

The choice of law rules in our Circuit are well-established.

“In a diversity action, a federal cou rt must apply the choice of

law rules of the s tate in which it sits.” Klaxon Co. v. Stentor

Elec. Manufacturing Co

. , 313 U.S. 487, 496, 61 S. Ct. 1020, 1021,

85 L.Ed. 1477 (1941). “According to Texas law, in all choice-oflaw cases, except those contract cases in which the parties have

agreed to a valid choice-of-law clause, the law of the state with

the most signific ant relationship to the particular substantive

issue will be applied to resolve that issue. ” D e Aguilar v. Boeing

Co

. , 47 F.3d 140 4, 1413 (5th Cir.), c ert denied

, 116 S. Ct. 180,

(1995) (intern al citations omitted); s ee also

, Air Disaster at

Ramstein Air Force Base, Germany v. Lockheed

, 81 F.3d 570, 576 (5th

Cir. 1996).

To the extent that the parties have contracted to settle their

differences under the laws of a particular forum, we do not apply

the significant relationship test. “A forum selection provision in

a written contract is prima facie valid and enforceable unless the

opposing party shows that enforcement would be unreasonable. This9

rule also applies to form contracts containing a choice of forum

provision.” K evlin Services, Inc. v. Lexington State Bank , 46

F.3d 13, 15 (5th Cir. 1995). To be enforceable, the law chosen by

the parties must have a “reasonable relationship with the parties

and the chosen state, and the law of the chosen state must not be

contrary to a fundamental policy of the state....” C aton v. Leach

Corp

. , 896 F.2d 939, 943 (5th Cir. 1990). The parties' choice of

l aw clause should address the entirety of the parties' relati onship. I d

. If the choice of law clause does not address the

general rights and liabilities of the parties, we must return to

Texas choice of law rules to determine which law applies. I d

. We

review a district court's choice of law determination de novo

. A ir

Disaster at Ramstein Air Force Base, Germany v. Lockheed , 81 F.3d

570, 576 (5th Cir. 1996).

In the instant case, we first must ask whether the Georgia

choice of law clause, which is found in the parties’ sales

contract, applies to some, or all, of the Daltons’ claims. The

answer to this question depends upon how the Daltons’ claims are

characterized: if characterized as sounding in contract, then the

unambiguous choice of Georgia forum provision should prevail and

the findi ng of the district court should be affirmed. To the

extent that some or all of the Daltons’ claims do not sound in

contract, then the significant relationship test applies.

There were at least two complaints filed in this case. The10

controlling complaint is “Plaintiffs’ Second Amended Original

Complaint” (“second amended complaint”). The Daltons characterize

the claims pled in their second amended complaint as asserting

causes of action for, “common law fraud, negligence, breach of

implied warranty of title, breach of contract and violations of the

Georgia Fair Busi ness Practices Act.” After a d e novo review of

the record, we agree with the distr ict court and hold that the

Daltons’ claims, however characterized, are derived from, and

rooted-in, the sales contract.

Next, we look to see if t he law of Georgia is reasonably

related to the parties and the caus es of action at issue. Under

the facts of this case, we hold that it is: Paccar’s branch office

was located in Georgia and the Daltons have offered no evidence

showing that the enforcement of Georgia law would be unreasonable,

or that such enforcement would be contrary to a fundamental policy

of the state of Georgia. For these reasons, we hold that the

Georgia choice of law provision governs.

Alternatively, even if we did hold that the Georgia choice of

law provision is inapplicable, we would still hold that the

significant relationship test compels the application of Georgia

law. As stated earlier, Texas has adopted the significant

relationship test as set forth in §§ 6 and 145 of the Restatement

(Second) of Conflict of Laws. Air Disaster at Ramstein Air Force

Base, Germany v. Lockheed

, 81 F.3d 570, 576 (5th Cir. 1996).6 The limitation periods for Plaintiffs’ causes of action are

as follows: Claims based upon the Georgia Fair Business Practices

Act can not be brought “more than two years afte r the person

bringing the action knew or should have known of the occurrence of

the alleged viol ation.” O.C.G.A. § 10-1-401(a)(1). Claims for

breach of contract and breach of implied warranty must be brought

within four years. O.C.G.A. § 11-2-725(1),(2). Claims for

negligence must be brought within four years. O.C.G.A. § 9-3-31.

Claims for fraud must be brought within four years. H ahne v. Wyly

, 406 S.E.2d 94, 96 (Ga. Ct. App. 1991).

11 Considering all of the factors discussed in §§ 6 and 145, we hold

that the “justified expectations” of the parties, Re statement §

6(2)(d), as well as “the place where the relationship

... is

centered”, Restatement § 145(2)(d), point strongly to Georgia as

having the most significant relationship with the dispute at issue.

Statute of Limitations

Adopting the recommendation of the magistrate judge, the

district court held that the statute of limitations precludes the

Daltons’ claims and it granted summary judgment in favor of Paccar,

on this basis. 6 Because the order of the district court does not

substantively a ddress the issues raised in Paccar’s motion for

summary judgment, it is necessary to review the district court’s

order vis-a-vis the analysis in the repor t and recommendation of

the magistrate judge, upon which the district court relied.

The Daltons purchased the three truck tractors in 1985. In

1993, the Texas DPS stopped Mr. Dalton at a border check-point and12

seized the subject vehicle because it was reported stolen. The

Daltons filed their lawsuit against Paccar in 1994, approximately

nine years after the purchase of their trucks.

The Daltons argue that Paccar committed actual fraud, thus

tolling the statute of limitations which would otherwise preclude

the Daltons’ claims. Specifically, the Daltons allege that the

Defendant intentionally failed to check the identification numbers

on the vehicles prior to sale, and that such failure constituted

actual fraud. The Daltons argue that they did not discover the

alleged actual fraud until 1993, when the vehicle was seized.

Because the four year statute of limitations for actual fraud does

not begin to run until the date that the alleged fraud or deception

is discovered, the Daltons argue that their complaint w as timely

filed. The Daltons argue that their causes of action for breach of

contract, w arranty, and negligence, are subject to the statutory

fraudulent tolling exception under Georgia law.

In its motion for summary judgment, Paccar argues that it is

entitled to summary judgment because the statute of limitations had

expired for the Daltons’ claims. Paccar argues that, even if it

did sell Plaintiffs the wrong vehicle, the Plaintiffs either knew,

or should have known, within the statutory periods, that the

vehicle which they received was not vehicle 339. Paccar further

argues that the Daltons adduced no summary judgment evidence

showing that Paccar acted knowingly or with reckless disregard, or

that Paccar acted with an intent to deceive. Paccar argues that,13

because the Daltons failed to offer any evidence of scienter, the

Daltons failed to show fraud and were not entitled to Georgia’s

fraud-based statutory tolling exception.

Under Georgia law, a cause of action generally accrues on the

date when the claim can be successfully maintained. L imoli v.

First Ga. Bank

, 250 S.E.2d 155 (Ga. Ct. App. 1978). However, this

limitations period may be tolled “if the defendant committed an act

of actual fraud that had the effect of concealing from the

plaintiff the existence of the cause of action despite her exercise

of reasonable diligence.” Id

.

Actual fraud involves moral turpitude, Shipman

v. Horizon Corp. , 245 Ga. 808, 267 S.E.2d 244

(1980), and requires an intentional deception

by false representation or by concealment of a

fact. Lodge v. Popham , 156 Ga. App. 825, 275

S.E.2d 669 ( 1980). When actual fraud is the

gravamen of the underlying action, no

independent fraud is required for tolling of

the statute of limitation, and the limitation

period is tolled until the plaintiff discovers

or in the exercise of reasonable diligence

should have discovered the fraud.

Id . at 96. The Plaintiffs have the burden of proving facts that

would toll the statute of limitations. E dmonds v. Bates

, 342

S.E.2d 476 (Ga. Ct. App. 1986).

In its report and recommendation, the magist rate judge said

that the “critical que stion is whether the Plaintiffs have

adequately alleged or established, for purposes of summary

judgment, that the Defendant engaged in an activity in a manner

that would allow the Court to toll the statute of limitations....”14

The magis trate judge recognized that the element of fraud would

toll the statute of limitations, and he stated that “the Plaintiffs

must present sufficient summary judgment evidence to establish that

the Defendant acted with the intent to defraud the Plaintiffs.”

A fter conducting a summary judgment hearing, the magistrate

judge found that: there “is no allegation or evidence that a

confidential or fiduciary relationship existed between the

parties”; there “is no evidence that the Defendant committed any

act that had the effect of concealing from the Plaintiffs the

existence of the c ause of action”; “neither Plaintiff testified

that the Defendant made any oral misrepresentations to them at the

time of sale”; Plaintiffs submitted no evidence “that the Defendant

knew that the vehicle was stolen”; “there is no summary judgment

evid ence that the Defendant altered any documents or took any

action, such as altering or concealing the VIN numbers on the

truck”; and the Plaintiffs made no effort to “trace the legal

genealogy of th e vehicle.” Based upon these findings, the

magistrate judge found that the Daltons had not met their burden of

adducing evidence to show that Paccar had committed actual fraud.

Accordi ngly, the magistrate judge found that there was no legal

basis upon which the statute of limitations could be tolled.

Having found that the statute of limitations had expired, the

magistrate judge recommended that Paccar’s motion for summary

judgment be granted, and the district court adopted the magistrate

judge’s recommendation.15

In order to defeat the summary judgment, the Daltons must

offer evidence sufficient to create a genuine issue of material

fact that Paccar committed an ac t of actual fraud which had the

effect of concealing from the Daltons the existence of their causes

of action, despite an exer cise of reasonable diligence by the

Daltons.

Upon a de novo review of the record, we hold that the Daltons

have failed to offer any evidence showing that Paccar knowingly or

intentionally concealed information from the Plaintiffs. Furthermore, there is no evidence showin g that Paccar defrauded the

Daltons, or that the Daltons, for their part, exercised reasonable

diligence. To the extent that the Daltons argue that Paccar

recklessly or negligently failed to inspe ct the vehicle

identification prior to sale, the Dal tons offer no authority

imposing such a burden, nor any evidence showing that Paccar failed

to conduct such inspection. Having failed to show actual fraud on

the part of Paccar, the Daltons are not entitled to a tolling of

the statute of limitations on their claims. Accordingly, their

causes of action accrued in 1985 and expired no lat er than 1989.

Therefore, Georgia’s statutes of limitations bar the Daltons’

claims. The district court’s order granting summary judgment in

favor of Paccar is affirmed.

CONCLUSION16

For the foregoing reasons, the order of the district court is

AFFIRMED

.