United States Court of Appeals

For the Eighth Circuit

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No. 13-3363

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Paul Arthur Levy

lllllllllllllllllllll Plaintiff - Appellant

v.

TD Ameritrade, Inc.

lllllllllllllllllllll Defendant - Appellee

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 Appeal from United States District Court 

for the Western District of Missouri - Springfield

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 Submitted: April 30, 2014

Filed: June 3, 2014

[Unpublished]

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Before BYE, GRUENDER, and SHEPHERD, Circuit Judges. 

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PER CURIAM.

Paul Levy appeals the district court’s adverse rulings on his securities-law

claims against TD Ameritrade (TDA). Finding that a genuine issue of material fact

exists as to the accrual date of his state-law claim under Mo. Rev. Stat. § 400.8-508,

we reverse in part.
Levy filed a petition in Missouri state court in January 2013, alleging that he

had purchased shares of Bancorp International Group, Inc. (BCIT) through TDA, but

that TDA had not provided him a stock certificate for his shares upon demand, in

violation of the Securities Exchange Act (SEA). TDA removed the case to the district

court, asserting federal question jurisdiction.

The parties’ pleadings and exhibits demonstrate the following facts. On

August 16, 2005, the Depository Trust Company (DTC) (a financial clearing house)

informed traders that, beginning on August 11, 2005, it had suspended trading

services on BCIT stock because unauthorized share certificates were on the market. 

Some transactions continued despite DTC’s global lock, and on August 26, Levy

purchased BCIT stock through TDA, and held the sharesindirectly through TDA. In

2006, Levy asked TDA to provide him a stock certificate for his BCIT shares, and

TDA informed him that it was unable to do so at that time because BCIT was not then

printing certificates. In an April 2007 email, Levy told TDA that BCIT had sued him

for allegedly buying counterfeit shares, asked TDA to contact BCIT to verify that he

had purchased real, noncounterfeit shares, and reminded TDA that it owed him a

fiduciary duty to purchase real shares on his behalf. In a January 2012 email, TDA

responded to another request from Levy that it provide hima BCIT certificate, stating

that it could not do so “due to a Global Lock on the security.” Later in 2012, another

TDA employee told Levy that it was unable to provide BCIT stock certificates

because the stock was designated as globally locked.

Levy alleged that he learned in November 2011 that TDA’s assertions that it

could not provide him a certificate due to the global lock were misleading. He

learned through his own investigation that BCIT certificates actually could be

obtained and delivered despite the global lock, and that his shares were not affected

by DTC’s lock on trading servicesfor BCIT stock because his shares were purchased

after the lock went into effect. He alleged that, despite the lock and the risk of buying

fake shares, TDA had traded BCIT stock after August 11, 2005 without using DTC

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or any other clearing house; had bought shares on his behalf without requiring the

seller to deliver the certificate; and falsely blamed its inability to provide him a

certificate on DTC’s lock. He alleged that he made twelve separate requests in 2012

and 2013 for a BCIT certificate, but TDA had not complied. He included as an

exhibit a letter from BCIT’s President stating that BCIT had issued TDA a certificate

for 500 shares in March 2012.

The district court granted TDA’s motion for summary judgment on Levy’s SEA

§ 15(c)(3) and SEC Rule 15c3-3 claims, holding that the claims were time-barred, as

they had accrued in April 2007 and the 5-year limitation period of Mo. Rev. Stat.

§ 516.120 applied. However, the court allowed Levy to amend his complaint to assert

a state-law claim under Mo. Rev. Stat. § 400.8-508. In his amended complaint, Levy

claimed that TDA violated section 8-508 when it denied his 2012 and 2013 requests

for a certificate. The district court granted TDA’s motion to dismiss, finding the

state-law claim accrued in 2006 and thus was also time-barred.

After careful review, we conclude the district court erred in determining as a

matter of law that Levy’s state-law claim accrued in 2006. See Strawn v. Mo. State

Bd. of Educ., 210 F.3d 954, 957 (8th Cir. 2000) (de novo review of statute-oflimitations analysis); Dupps v. Travelers Ins. Co., 80 F.3d 312, 313 (8th Cir. 1996)

(de novo review of district court’s interpretation of state law). Under Missouri law,

a claim accrues, not when the wrong is done, but “when the evidence was such [as]

to place a reasonably prudent person on notice of a potentially actionable injury.” See

Powel v. Chaminade Coll. Preparatory, Inc., 197 S.W.3d 576, 582 (Mo. 2006)

(internal citation and quotation marks omitted); see also Mo. Rev. Stat. §§ 516.100

(cause of action accrues not when wrong is done, but when damage resulting

therefrom is sustained and is capable of ascertainment), 516.120(1), (2) (5-year

limitation period for action upon obligation, or liability created by statute). Levy’s

pleadings and exhibits suggest that he took reasonable steps to determine whether he

had sustained an actionable injury, and that his injury was not ascertainable until

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2011. TDA’s 2006 response to Levy’s request for a certificate implied that TDA’s

inability to act was temporary; and Levy maintained indirect holding of his BCIT

shares, and he stayed informed of the investigation into BCIT’s unauthorized stock

certificates and whether investors were able to obtain BCIT certificates. In 2011,

TDA still did not provide him a certificate, even though BCIT certificates actually

could be obtained and delivered at that time; and he learned that his BCIT shares may

not have actually been affected by the lock at all. His failure to file suit sooner was

even more reasonable in light of his reliance on TDA’s representations and their

fiduciary relationship. See Powel, 197 S.W.3d at 583 (if defendant is professional

expert, plaintiff has no duty to double check expert’s work; claim accrues when

layman knew or should have known of reason to question expert’s work); Vogel v.

A.G. Edwards & Sons, Inc., 801 S.W.2d 746, 751-52 (Mo. Ct. App. 1990)

(stockbroker owesfiduciaryduty to customer, even where account is nondiscretionary

and customer, rather than broker, makes decision which stocks to trade). We

conclude that a genuine issue of material fact exists as to when a reasonably prudent

person would have been placed on notice of an actionable injury. See Powel, 197

S.W.3d at 585 (when different conclusions may be drawn from evidence as to

whether statute of limitations has run, it is question of fact for jury to decide).

Accordingly, we reverse the dismissal of Levy’s state-law claim under Mo.

Rev. Stat. § 400.8-508, and we otherwise affirm. The case is remanded for further

proceedings consistent with this opinion.

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