### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 13

‐ 3678

KDC F OODS

, I NC

., Plaintiff

‐ Appellant

,

v.

G RAY

, P LANT

, M OOTY

, M OOTY & B ENNETT

, P.A., et al.,

Defendants

‐ Appellees

.

____________________

Appeal from the United States District Court for the

Western District of Wisconsin.

No. 3:12

‐ cv

‐ 00636

‐ bbc

— Barbara B. Crabb

, Judge

.

____________________

A RGUED A PRIL 1, 2014

— D ECIDED A UGUST 15, 2014

____________________

Before T INDER and H AMILTON

, Circuit Judges, and

K APALA

, District Judge

. *

T INDER

, Circuit Judge

. This case is brought by the estate of

a bankrupt corporation, KDC Foods, Inc., against former

outside counsel Gray, Plant, Mooty, Mooty & Bennett P.A.

* The Honorable Frederick J. Kapala of the United States District Court

for the Northern District of Illinois, sitting by designation.2 No. 13

‐ 3678

(“GPM” or “Gray Plant”) and three current or former GPM

attorneys, Daniel Tenenbaum, Phillip Bohl, and Jennifer Da

‐

sari. Plaintiff

‐ Appellant KDC alleges that the law firm and

its attorneys were complicit in an insider conspiracy to bank

‐

rupt the company. The district court granted summary

judgment against KDC on the grounds that its claims were

barred by the statute of limitations. KDC appeals that judg

‐

ment to our court.

I

In reviewing a grant of summary judgment, we construe

all facts and draw all reasonable inferences in favor of the

non

‐ moving party. Phillips v. Cont’l Tire The Americas, LLC

,

743 F.3d 475, 477 (7th Cir. 2014). The facts here are thus re

‐

counted in the light most favorable to KDC. “We do not

vouch for their truth in any other sense.” Good v. Univ. of Chi.

Med. Ctr.

, 673 F.3d 670, 673 (7th Cir. 2012).

A. Engagement and Resignation of GPM

Plaintiff

‐ Appellant KDC Foods, Inc. was founded in 1996

in Eau Claire, Wisconsin to create and sell baking products

and related manufacturing techniques. By 2004, KDC had

developed various shelf

‐ stable dough products and licensed

its technologies. But despite the royalties it was receiving,

KDC had cash flow problems. On March 1, 2004, KDC hired

Don Johnson as its Chief Financial Officer with the expecta

‐

tion that he would raise capital and pursue corporate re

‐ structuring opportunities. Soon after his appointment, John

‐

son contacted an acquaintance, lawyer and individual De

‐

fendant

‐ Appellee Daniel Tenenbaum, to ask whether

Tenenbaum’s firm, Gray Plant, would represent KDC. The

law firm sent KDC an engagement letter on June 22, 2004,No. 13

‐ 3678 3

which included conflict

‐ waiver language regarding Johnson

and Consolidated Interest Corporation, a company affiliated

with Johnson for which GPM had done prior work. Gray

Plant was ultimately retained by KDC for services relating to

restructuring, intellectual property, and recapitalization mat

‐

ters. Unfortunately, KDC’s fortunes did not improve with

Johnson at the helm. On September 14, 2004, Johnson sent

KDC a resignation letter, though he actually left his post on

November 5, 2004. Johnson then joined another corporation,

First Products, Inc., in Minnesota—but more on that later.

KDC’s cash flow problems meant GPM also had difficul

‐

ty getting paid, as evidenced by an October 1, 2004 letter

from the firm demanding payment. More than $20,000 in

fees went unpaid, and by letter on November 9, 2004, Gray

Plant resigned as KDC’s counsel, citing the company’s “sig

‐

nificant overdue account” with the law firm.

B. KDC’s Bankruptcy and Filing of Initial Lawsuit

Shortly thereafter, in early December 2004, KDC’s board

of directors voted to file for Chapter 11 bankruptcy. KDC’s

assets were sold at auction, and purchased by First Products,

Inc. No other bids were received, and the bankruptcy court

approved the sale after a hearing. After the sale, the bank

‐

ruptcy was converted to a Chapter 7 liquidation proceeding.

The bankruptcy trustee, James McNeilly, hired Dennis Sulli

‐

van as special counsel for the estate. Sullivan had filed a

shareholder derivative action in November of 2004—just be

‐

fore KDC filed for bankruptcy—alleging that Harry Kraklow

and Cynthia Kandler, directors and officers of KDC, had

conspired to defraud the company of its intellectual property

by driving KDC out of business and purchasing its assets at

bargain prices. The derivative action was converted to a di

‐4 No. 13

‐ 3678

rect action, with Sullivan pursuing the suit on behalf of

KDC. We’ll refer to this proceeding as “the initial lawsuit.”

C. GPM Returns KDC’s Client File

As part of the initial lawsuit, on March 10, 2006, Sullivan

requested that Gray Plant return to him “the complete file

that you have concerning KDC Foods, Inc.” He clarified that

his request “includes, but is not limited to, correspondence,

emails, pleadings, notes, transcripts

... .” The file sent to Sul

‐

livan by GPM on April 7, 2006 contained emails, memoran

‐

da, and time records. In particular, the file contained a de

‐

tailed memorandum on corporate records deficiencies pre

‐ pared by Defendant

‐ Appellee Jennifer Dasari. The file also

included time records showing she had worked on the issu

‐

ance of 1099 forms and stock certificates. Defendant

‐ Appellee Phillip Bohl, a partner at GPM, had noted in his

time sheets that he had emails and discussions with KDC

employee Kim Myers about issuing 1099 forms for other

shareholders, and the file contained records of the transmis

‐

sion of stock certificates to reflect the sale of KDC stock to

Johnson, Kandler, and Myers at $0.01 per share. The file also

contained email exchanges between Tenenbaum and John

‐

son, in which capitalization, financing, and debt

‐ reduction

opportunities were discussed. Notably, in a June 7, 2004

email to Tenenbaum prior to GPM’s formal engagement,

Johnson identified four options for the future of KDC, two of

which were to “BK the company” or to “[f]orm as you sug

‐ gested a new acquisition company and buy the assets.” The

file also included a memorandum listing ways to “handle”

the shareholders with whom KDC was having trouble, in

‐ cluding bringing claims against them for violating the confi

‐ dentiality provisions of their contracts.No. 13

‐ 3678 5

Sullivan noticed several gaps in the file. About a month

after GPM had sent over the KDC file, he wrote to the firm

that the file included “no emails from Mr. Tenenbaum’s

mailbox or from the mailbox of Jennifer Dasari,” and re

‐ quested that GPM recheck its records and produce the corre

‐ spondence. On November 26, 2006, eight months after GPM

had sent over its file, Sullivan requested that Gray Plant re

‐

examine its files to locate an attachment referenced in an

email. The law firm produced documents after both re

‐

quests. Sullivan did not follow up with a request for hand

‐

written notes, but those were largely absent from the file as

well: only 4 pages of attorney notes were included. Gray

Plant apparently has a policy to not include any handwritten

attorney notes in client file transfers. (As part of the disclo

‐

sures in the present action, Gray Plant produced 77 addi

‐

tional pages of attorney notes, as well as 47 pages of addi

‐

tional documents, including more emails.)

After the initial file transfer on April 7, 2006, Richard

Wanke, a KDC shareholder, wrote Sullivan an email that

read, in relevant part:

Harry and Gibbs indicated that Gray Plant and

Mooty appraised the stock at $0.01. I believe it

was Tennenbaulm [sic]. Gee, I wonder what

his credentials are? Note also that Phil Bohls

[sic] denied that they appraised the stock. My

gut feeling is that Tennenbalm [sic], Don’s

(Consolidated Interests Corporation CIC) per

‐

sonal attorney, said he thought Don could get

away with $0.01 per share based on Don’s

trash talk about the company. Definitely a con

‐

flict of interest.6 No. 13

‐ 3678

Wanke later testified that he was referring to Johnson’s

conflict of interest with the company, not to any potential

conflict of interest between Tenenbaum and KDC, or GPM

and KDC.

D. Resolution of the Initial Suit

After the initial transfer of KDC’s client file, Sullivan filed

an amended complaint in the initial suit on June 27, 2006,

adding Johnson and First Products, Inc. as defendants, and

adding charges for fraud and conspiracy. The complaint al

‐ leged that Johnson and others had conspired to issue addi

‐

tional voting shares to seize control of KDC, and steal its as

‐

sets and corporate opportunities and redirect them to First

Products, Inc. An element of this conspiracy, the complaint

alleged, was the pressuring of Stanley Popko, a stockholder

“unfriendly” to the conspiracy, to return his KDC stock by

threatening to have the company issue a Form 1099 to Popko

based on a valuation of one dollar per share. This valuation

was much higher than Popko’s basis in the stock, and would

have resulted in significant tax liability to him.

In September 2008, KDC deposed Bohl and Tenenbaum

as part of the initial lawsuit. During their depositions, Bohl

and Tenenbaum testified that in March 2007, Gray Plant had

been engaged by First Products, Inc. in matters unrelated to

the pending suit. The firm had not contacted either company

to obtain a waiver of conflict for this representation. GPM

received more than $80,000 in legal fees for its representation

of First Products, Inc. These payments were pursuant to the

law firm’s typical rates, for services rendered.

In January 2010, a Wisconsin state judge entered judg

‐

ment in the initial lawsuit, finding some of the defendants,No. 13

‐ 3678 7

including Johnson, had engaged in a civil conspiracy to de

‐

fraud KDC and steal its assets.

E. Commencement of Suit against GPM

In July 2011, KDC’s bankruptcy trustee, McNeilly, was

contacted by attorney Michael Erhard, who had been re

‐

tained by KDC to review the plausibility of pursuing claims

against Gray Plant. In an email exchange discussing the po

‐

tential suit, Erhard wrote that “[a]s it pertains to the applica

‐

ble statute of limitations, we calculate that if at all possible

the suit against Gray, Plant, Mooty should be filed by no lat

‐

er than the end of August [2011].” Six months later, on

March 26, 2012, Erhard wrote to Gray Plant enclosing a draft

complaint and offering to settle the case for the payment of

$6,000,000. The demand letter noted that “[KDC] only

learned of Gray Plant Mooty’s role in the conspiracy in 2007

[sic—the depositions were in 2008], when Attorneys Tenen

‐

baum and Bohl were deposed.” The demand letter did not

lead to settlement, and KDC commenced the present action

on July 31, 2012.

F. Disposition Below

KDC brought seven claims against GPM, alleging that

GPM was involved in the scheme to defraud KDC of its as

‐

sets orchestrated by Johnson. KDC eventually abandoned

four of its seven original claims. The three claims the com

‐

pany still pursues are for (1) common

‐ law fraud, (2) conspir

‐

acy to commit theft by fraud, and (3) civil conspiracy. In

support of these claims, KDC alleges that GPM falsely repre

‐

sented that it would act in KDC’s best interests as its corpo

‐

rate counsel, but instead assisted Johnson in driving KDC8 No. 13

‐ 3678

out of business so that its assets could be acquired by First

Products, Inc.

During discovery, GPM produced an additional 77 pages

of handwritten notes relating to its representation of KDC. In

addition, when Tenenbaum was deposed in relation to the

present case on May 21, 2013, GPM produced additional

documents, including emails between Johnson and Tenen

‐

baum that it had not previously provided to KDC. In one

newly revealed email exchange, which occurred on Novem

‐

ber 5, 2004, Tenenbaum told Johnson that GPM was going to

withdraw “for all of the reasons we discussed,” and Johnson

responded that if something were to go wrong with the KDC

dissolution, “it will be hard to come to your firm later.”

On summary judgment, the district court determined

that the three remaining claims were barred by the six

‐ year

statute of limitations found in Wis. Stat. § 893.93(1)(b), be

‐

cause KDC was on notice of GPM’s alleged fraud by April

2006, when Sullivan received KDC’s client file. On appeal,

KDC argues that the documents it received in April 2006

were insufficient to alert it to GPM’s fraud and that it did not

have reason to suspect that fraud until the attorney deposi

‐

tions in September 2008, when it learned that GPM had been

engaged by First Products, Inc. and therefore had a motive

to help Johnson with his scheme. KDC further argues that

GPM should be estopped from asserting the statute of limi

‐

tations defense because it wrongly withheld information

from KDC that would have led to earlier discovery of the

fraud.No. 13

‐ 3678 9

II

In reviewing a grant of summary judgment, we review

legal questions de novo. See Phillips

, 743 F.3d at 477. Deter

‐ mining which statute of limitations applies to a particular

claim is a question of law, Estate of Hegarty ex rel. Hegarty v.

Beuchaine

, 638 N.W.2d 355, 361 (Wis. 2001), so we review de

novo the district court’s determination that the statute of lim

‐

itations had run on KDC’s three remaining claims: (1) com

‐

mon

‐ law fraud, (2) conspiracy to commit theft by fraud, and

(3) civil conspiracy.

The parties agree that the fraud and civil conspiracy

claims are governed by the six

‐ year statute of limitations in

Wis. Stat. § 893.93(1)(b), which applies to any “action for re

‐

lief on the ground of fraud.” GPM contends that the claim of

conspiracy to commit theft by fraud should be governed by

the two

‐ year statute of limitations in Wis. Stat. § 893.57,

which applies to any “action to recover damages for libel,

slander, assault, battery, invasion of privacy, false impris

‐

onment or other intentional tort to the person.” 1 Theft by

fraud is a crime under Wis. Stat. § 943.20(1)(d). However,

under Wis. Stat. § 895.446(1), a “person who suffers damage

or loss by reason of intentional conduct” prohibited by §

943.20 may bring a civil action for damages. GPM contends

such a claim is based on an intentional tort and should there

‐

1 Effective February 26, 2010, the limitations period in § 893.57 was

changed from two to three years. However, the amendment explicitly

stated that it was to apply only to injuries occurring after its effective

date. Because the parties agree that KDC’s injuries occurred prior to Feb

‐

ruary 26, 2010, if § 893.57 applies to KDC’s theft

‐ by

‐ fraud claim, the limi

‐

tations period is two years.10 No. 13

‐ 3678

fore be governed by the two

‐ year statute of limitations in

§ 893.57. The Wisconsin courts have not addressed this issue,

and the district court declined to reach it because it found

that KDC’s claim was untimely even assuming a more for

‐ giving six

‐ year statute of limitations applied. We agree with

the district court that this question is irrelevant if we find

that KDC’s claims are untimely even with a six

‐ year statute

of limitations. We thus proceed to the main question in this

appeal: when a six

‐ year statute of limitations would have

begun to run. KDC contends that its claims are not barred by

the statute of limitations for two reasons: first, it claims that

under the discovery rule, its claims did not accrue until the

Bohl and Tenenbaum depositions in 2008, when it first

learned that Gray Plant had been retained by First Products,

Inc. and thus had a financial incentive to assist in the con

‐ spiracy. Second, it argues that the doctrine of equitable es

‐ toppel bars defendants from asserting the statute of limita

‐

tions defense. We consider these arguments in turn.

A. Discovery Rule

KDC filed the present action on July 31, 2012; its suit

would be barred by a six

‐ year statute of limitations if its

fraud

‐ based claims accrued before July 31, 2006. While for

some types of injuries a claim accrues at the time of injury,

the so

‐ called discovery rule tolls the statute of limitations by

requiring that a claim accrue when a plaintiff “discovers”

the injury. In Wisconsin, the discovery rule for claims based

on fraud is created by statute. Wis. Stat. § 893.93(1)(b) pro

‐

vides that claims based on fraud do not accrue “until the

discovery, by the aggrieved party, of the facts constituting

the fraud.” This statutory provision “codifies the discovery

rule,” which is judicially explained as follows:No. 13

‐ 3678 11

Actual and complete knowledge of the fraud

on the part of the plaintiff is not necessary in

order to set the limitation period running.

When the information brought home to the ag

‐ grieved party is such as to indicate where the

facts constituting the fraud can be effectually

discovered upon diligent inquiry, it is the duty

of such party to make the inquiry, and if he

fails to do so within a reasonable time he is,

nevertheless, chargeable with notice of all facts

to which such inquiry might have led.

...

[I]t is not necessary that a defrauded party

have knowledge of the ultimate fact of fraud.

What is required is that it be in possession of

such essential facts as will, if diligently investi

‐ gated, disclose the fraud. The burden of dili

‐

gent inquiry is upon the defrauded party as

soon as he has such information as indicates

where the facts constituting the fraud can be

discovered.

John Doe 1 v. Archdiocese of Milwaukee

, 734 N.W.2d 827, 843

(Wis. 2007) (quoting Koehler v. Haechler

, 133 N.W.2d 730, 731–

32 (Wis. 1965), to explain the discovery rule as codified in

§ 893.93(1)(b)).

“Discovery occurs when the plaintiff has information

that would constitute the basis for an objective belief as to

his or her injury and its cause.” Schmidt v. N. States Power

Co.

, 742 N.W.2d 294, 304 (Wis. 2007). As soon as the de

‐

frauded party has “sufficient knowledge to make a reasona

‐

ble person aware of the need for diligent investigation,” the12 No. 13

‐ 3678

clock begins to run. Stockman v. LaCroix

, 790 F.2d 584, 588

(7th Cir. 1986) (quoting Gygi v. Guest

, 344 N.W.2d 214, 215

(Wis. App. 1984)) (internal quotation marks omitted). This,

as we will see, is the critical point of law on which the case

turns: regardless of how Sullivan and KDC decided to struc

‐

ture their investigation into the alleged conspiracy, the stat

‐

ute of limitations began to run as soon as KDC had in its

possession knowledge that would cause a reasonable person to

think that a diligent investigation into Gray Plant was neces

‐

sary. If KDC had in its possession knowledge that would

have caused a reasonable person to undertake a deeper in

‐ quiry, but it chose not to act upon that information, that in

‐

action does not push back the time of discovery: a plaintiff’s

“decision not to pursue a legal avenue that might have pro

‐

duced useful information is not evidence of reasonable dili

‐ gence.” Dakin v. Marciniak

, 695 N.W.2d 867, 874 (Wis. App.

2005).

To be sure, the degree of certainty that constitutes suffi

‐

cient knowledge is variable, depending on the particular

facts and circumstances of the plaintiff. See Goff v. Seldera

,

550 N.W.2d 144, 149 (Wis. App. 1996). “[I]n an appropriate

case, an initial suspicion may trigger the discovery or the ob

‐ ligation to exercise reasonable diligence to discover the inju

‐

ry. However, in another case, a greater degree of certainty

may be required. The point is that every case must be judged

on its own facts from the standpoint of the reasonable per

‐

son.” Id. In Goff

, for example, the plaintiff was a patient who

sued a doctor for medical malpractice. The injury in question

was an unnecessary hysterectomy for ovarian cancer that

did not exist; the defendant was the doctor who performed

the surgery and treated the plaintiff’s “cancer” for many

years. The discovery rule in this case was complicated by theNo. 13

‐ 3678 13

question of when a lay patient can be expected to discover

that contrary to her physician’s representations, she does not

actually have cancer. Likewise, in the context of a parishion

‐

er suing a diocese after being sexually molested by a priest,

the Wisconsin Supreme Court reasoned that “it does not fol

‐

low from the fact of being sexually molested that any plain

‐

tiff would suspect that the Archdiocese knew that the priests

had prior histories of sexual molestation of children and yet

placed them in the position where they would molest more

children.” Doe

, 734 N.W.2d at 844. As Doe observes, it is par

‐ ticularly necessary for the discovery rule to be flexible in de

‐

partures from the “business context.” Id. at 844.

However, with corporate players, a different quantum of

expertise and knowledge is in play. Wisconsin courts have

recognized that ignorance is a less compelling excuse for

corporate enterprises in the context of the discovery rule.

See, e.g.

, Stroh Die Casting Co. v. Monsanto Co.

, 502 N.W.2d

132, 141 (Wis. App. 1993) (“[P]laintiffs may not close their

eyes to information, which through the exercise of reasona

‐

ble business practice is accessible to them and which if un

‐

covered would alert them to injury.”). In the case at hand,

both parties are experienced corporate players. KDC does

not argue, nor do we observe, that it lacked sophistication

and knowledge in the context of the financial dealings in

question. To the contrary, the corporation has been im

‐

mersed in litigation of this conspiracy for many years, and in

the process has pursued several defendants who held posi

‐

tions of trust in relation to the company. Its eyes were open

to the possibility of fraud committed by its fiduciaries and

agents. Accordingly, we do not find that the circumstances

justified a more forgiving application of the discovery rule to

KDC. KDC did not require “a greater degree of certainty”14 No. 13

‐ 3678

than “initial suspicion” to trigger discovery of its alleged in

‐ jury, and it certainly was not required to be convinced that

actual fraud had occurred, as KDC argues in its briefs.

So the question is when a reasonable corporate actor

would have had enough knowledge to think an investiga

‐

tion was necessary. The district court concluded, and we

agree, that it is clear that KDC gained this knowledge when

Sullivan received the initial version of the KDC client file

from GPM in 2006. The file disclosed information that rooted

the allegations KDC decided to pursue against Gray Plant. It

highlighted that the law firm had a preexisting relationship

with Johnson, and unambiguously showed that Johnson and

Tenenbaum discussed the possibility of Johnson forming his

own company and purchasing KDC’s assets. There is even

an internal email, from Tenenbaum to Dasari, indicating that

Johnson discussed with Tenenbaum the potential of working

with Johnson in the future after someone else assumed

KDC’s note. The time records and work product disclosed in

the client file showed that GPM attorneys were intimately

involved in financing issues, and particularly in the transac

‐

tions that formed the central axis of the conspiracy: prepar

‐ ing 1099 forms for KDC employees, including Popko; evalu

‐ ating options to quell dissent from unfriendly shareholders;

and, critically, the insider penny stock sale. And as can be

seen from the Wanke email shortly after the production of

the file, there was at least some suspicion that Gray Plant—

which had a prior relationship with defendant Johnson as

his “personal attorney”—would be complicit in Johnson’s

activities of defrauding the company.

These data points would have been cognizable to KDC

by June 2006, when it filed its amended complaint in the ini

‐No. 13

‐ 3678 15

tial suit and alleged with specificity the activities undertaken

by the conspirators. The amended complaint details the

penny stock sale; the threat to issue Stan Popko a Form 1099;

and the plan to bankrupt the company and purchase its as

‐

sets at a discount price. So KDC, by June 2006 at the latest,

was aware that Gray Plant had done work for several central

components of the conspiracy. This was, unambiguously,

enough information to trigger KDC’s discovery that Gray

Plant may have defrauded KDC. While these documents

perhaps did not disclose the full extent of Gray Plant’s in

‐

volvement with Johnson—and while later

‐ produced docu

‐

ments may have helped KDC flesh out its theory against the

law firm—that does not toll the statute of limitations. The

file, viewed on its own, gave KDC enough information to

suspect that GPM was a central player in the events in ques

‐

tion.

KDC urges us to rely on language found in O’Dell v.

Burnham

, 21 N.W. 635 (Wis. 1884), which states that the stat

‐

ute of limitations begins to run only with “[t]he discovery, or

the information which, upon diligent inquiry, would lead to

the discovery, of facts

... as would impress a reasonable per

‐

son with the belief that the transaction was, in fact, fraudu

‐

lent.” Id. at 639. It argues that this language underscores that

the statute of limitations does not begin to run until a plain

‐

tiff has objective evidence of the defendant’s specific role in

the fraud. By KDC’s account, the statute of limitations did

not begin to run until KDC deposed the GPM attorneys in

2008, and thereby learned that Gray Plant was representing

First Products, Inc. in matters unrelated to the present litiga

‐

tion. They argue that only then did KDC have reason to sus

‐

pect that the law firm was not merely a passive player, or

even a creditor who lost out on representation fees from the16 No. 13

‐ 3678

company’s bankruptcy, but rather a potential conspirator

who stood to gain from Johnson’s cohort’s fraud and con

‐ spiracy.

There are two problems with this argument. First, O’Dell

does not stand for the proposition that a plaintiff must have

more knowledge than that which would prompt a reasona

‐

ble person to inquire further into the alleged fraud. The Wis

‐

consin courts—in over a hundred years of interpreting

O’Dell and the discovery rule—have been clear that “actual

and complete knowledge of the fraud on the part of the

plaintiff is not necessary in order to set the limitation period

running.” Doe

, 734 N.W.2d at 843 (quoting Koehler

, 133

N.W.2d at 731). It is well

‐ understood that Wisconsin courts

impute knowledge to a party when it “finds out enough to

cause a reasonable [party] to make sufficient inquiries to dis

‐

cover a fraud.” Owen v. Wangerin

, 985 F.2d 312, 315 (7th Cir.

1993) (interpreting Wisconsin law). No law supports KDC’s

assertion that financial motive was a required element to

trigger discovery. As we state above, the knowledge that

KDC had prior to the deposition was enough to cause a rea

‐

sonable party to make a further inquiry: KDC knew about

GPM’s preexisting relationship with Johnson (including the

fact that Johnson and the law firm had discussed the very

possibility of bankrupting the company and using another

company to purchase KDC assets), as well as the law firm’s

involvement in the key transactions that Johnson and the

other defendants used to defraud the company. Evidence of

Gray Plant’s financial incentive to assist Johnson, while per

‐ haps helpful to proving the ultimate fact of fraud, was not

required to trigger the discovery. The client file, standing

alone, should have been enough to cause KDC to make a

deeper investigation into any alleged fraud by GPM.No. 13

‐ 3678 17

Second, we are not convinced that the fact of GPM’s rep

‐

resentation of First Products raised any novel “objective evi

‐

dence” of fraud. KDC argues that we should draw from

Gray Plant’s representation the inference that the law firm

had a vested financial interest in the success of the conspira

‐

tors’ schemes. However, this does not seem to us a reasona

‐

ble inference: the record below shows, and KDC does not

dispute, that GPM received reasonable attorney fees in rela

‐

tion to its representation, nothing more. By arguing that the

representation of First Products was a smoking gun, KDC

would have us conclude that it is reasonably inferable that a

law firm would undertake a fraud and conspiracy of its for

‐

mer client in order to receive payment for services rendered

at its established rate. But “[a] motion for summary judg

‐

ment requires the court to consider only reasonable infer

‐

ences, not every conceivable inference.” Box v. A & P Tea Co.

,

772 F.2d 1372, 1379 (7th Cir. 1985). In the absence of addi

‐

tional, specific facts making this inference plausible—either

an extraordinary financial boon to GPM, or some specific da

‐

tum showing that Johnson conscripted Gray Plant and its

attorneys as conspirators—we do not see the depositions as

a turning point in KDC’s knowledge. Long before the depo

‐

sitions, Plaintiff

‐ Appellant already had knowledge that GPM

assisted in the valuation of the stock and the penny

‐ stock

purchase, and had a preexisting relationship with Johnson.

From the contents of the client file, KDC even had notice that

GPM expected to receive additional work after KDC’s bank

‐

ruptcy, should KDC’s assets be purchased by another com

‐

pany. The representation of First Products, Inc. does not add

in a meaningful way to that reservoir of knowledge.18 No. 13

‐ 3678

Accordingly, the district court was correct in determining

that Plaintiff

‐ Appellant’s claims were barred by Wisconsin’s

statute of limitations.

B. Estoppel

In the alternative, KDC urges that Gray Plant should be

estopped from asserting a statute of limitations defense, be

‐

cause it withheld 77 pages of handwritten notes and several

other documents that were disclosed years after the initial

production of the client file, including several key emails.

Under Wisconsin law, “a defendant who fraudulently con

‐

ceals a conspiracy is estopped to assert the statute of limita

‐

tions as a defense.” City of Madison v. Hyland, Hall & Co

., 243

N.W.2d 422, 432 (Wis. 1976). “The aggrieved party must

have failed to commence an action within the statutory peri

‐

od because of his or her reliance on the defendant’s repre

‐

sentations or act.” Hester v. Williams

, 345 N.W.2d 426, 431

(Wis. 1984). However, “if the defendant’s behavior, whenev

‐

er begun and however ill intentioned, fails to prevent the

plaintiff from learning that he has a claim in time to sue

within the statutory period

... again the behavior has no

causal significance.” Jay E. Hayden Found. v. First Neighbor

Bank, N.A.

, 610 F.3d 382, 385 (7th Cir. 2010).

We do not condone Gray Plant’s errors in producing

documents from the client file. As a former client, KDC was

entitled to Gray Plant’s prompt and accurate delivery of

documents relating to the law firm’s representation. See Re

‐

statement (Third) of Law Governing Lawyers § 46(1), (3) (2000).

However, as the case comes to us, we need not reach the

question of whether GPM deliberately or fraudulently with

‐

held the documents in question: it is clear that KDC had

knowledge of its cause of action against Gray Plant withinNo. 13

‐ 3678 19

the statutory period. The law firm’s behavior thus has no

causal significance, and cannot estop the statute of limita

‐

tions defense.

There are several clear indications that KDC had the

knowledge to sue Gray Plant within the statutory period.

The clearest is KDC’s demand letter to GPM dated March 26,

2012, enclosing a draft complaint. It is obvious from the

complaint and the letter that the company had learned of its

potential cause of action by that date, which is within the

six

‐ year period calculated starting the day Sullivan received

the file from Gray Plant. But even before that date, the com

‐

pany and its employees had sufficient knowledge to file this

suit. Attorney Erhard’s internal emails show that he had rec

‐ ognized, and alerted KDC’s bankruptcy trustee, to the po

‐

tential lawsuit by July 14, 2011, and even flagged the statute

of limitations issue to KDC’s attention. He stated that “[a]s it

relates to the applicable statutes of limitations, we calculate

that if at all possible the suit against Gray, Plant, Mooty

should be filed by no later than the end of August [2011].”

And we cannot overlook the fact that in arguing to us about

the discovery rule, KDC adamantly claims that it discovered

the potential fraud at the Bohl and Tenenbaum depositions

in September 2008, more than three and a half years before

the statutory period would run.

These representations make clear that the belated disclo

‐

sures made by Gray Plant did not prevent KDC from learn

‐ ing of its cause of action against the law firm within the stat

‐

utory period. We decline to estop Gray Plant from asserting

the statute of limitations affirmative defense.20 No. 13

‐ 3678

III

For the foregoing reasons, we A FFIRM the district court’s

judgment.