# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 3- 33 63

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Pau l Art hu r Lev y

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

TD Am eri tra de , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Weste rn Dis tri ct of M is so ur i - Sp rin gf ie ld

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Su bm it te d: Apri l 3 0, 2 01 4 Fi le d: Ju ne 3, 2 01 4 [Un pu bl is he d]

__ __ __ __ __ __ Befo re BYE, GRUENDER, and SHEPHERD, Circ ui t J ud ge s.

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PER CURI AM.

Pau l Lev y ap pe al s t h e di st ric t co ur t’s ad ve rs e ru li ng s on hi s se cu rit ie s- la w cl ai m s aga in st TD Am eri tra de (TDA). Fi nd in g t ha t a gen ui ne is su e of m at eri al fact

ex is ts as to th e accr ua l da te of hi s st at e-l aw cl ai m un de r Mo

. Rev

. St at

. § 40 0.8 -5 08
,
we rev ers e in pa rt.Lev y

fil ed a pe ti ti on in Mi ss ou ri s ta te co ur t i n J an ua ry 20 13
, al le gi ng th at he ha d pu rch as ed sh ares of Ban co rp In te rn at io na l Gro up , In c. (BCI T) th ro ug h TDA, bu t th at TDA ha d no t pr ov id ed hi m a st oc k cert ifi cat e fo r h i s sh ares up on de m an d, in vi ol at io n of th e Secu rit ie s Exc ha ng e Act (SEA). TDA rem ov ed th e cas e to th e di st ric t

co ur t, as se rti ng fed eral qu es ti on juri sd ic ti on

.

The pa rti es ’ pl ead in gs an d ex hi b it s de m on st rat e th e fo ll owi ng fact s. On Aug us t 16
, 20 05
, th e Dep os it or y Trus t Co m pa ny (DTC) (a fin an ci al cl eari ng ho us e) in fo rm ed tra de rs th at , be gi nn in g on Aug us t 11
, 20 05
, it ha d s u sp en de d tra di ng

se rv ic es on BCIT st oc k be cau se un au th or iz ed sh are cert ifi cat es were on th e m ark et

. So m e tra ns act io ns c o n t i n ue d de sp it e DTC’s gl ob al lo ck
, an d on Aug us t 26
, Lev y
pu rch as ed BCIT st oc k th ro ug h TDA, an d he ld th e sh ares in di rect ly th ro ug h TDA. In 20 0 6
, Lev y as ke d TDA to pr ov id e hi m a st oc k cert ifi cat e fo r hi s BCIT sh ares , an d
TDA in fo rm ed hi m th at it was un ab le to do so at th at ti m e be cau se BCIT was no t th en
pr in ti ng cert ifi cat es

. In an Apr il 20 07 em ai l, Lev y to ld TDA th at BCIT ha d su ed hi m fo r al le ge dl y bu y in g co un te rfei t sh ares , as ke d TDA to co nt act BCIT to ve rif y th at he ha d pu rch as ed real
, no nc ou nt erfe it sh ares , an d rem in de d TDA th at it owe d hi m a fid uc ia ry du ty to pu rch as e rea l s ha res on hi s b eh al f. In a Jan ua ry 20 12 em ai l, TDA

res po nd ed to an ot he r req ue st fro m Lev y th at it pr ov id e hi m a BCIT cert ifi cat e, st at in g th at it co ul d no t do so “ du e to a Glo ba l Loc k on th e se cu rit y .” Late r in 20 12
, an ot he r TDA em pl oyee to ld Le v y t h a t it was un ab le to pr ov id e BCIT st oc k cert ifi cat es be cau se th e st oc k was de si gn at ed as g lo ba ll y lo ck ed

.

Lev y al le ge d th at he le arn ed in Nov em be r 20 11 th at TDA’ s as se rti on s th at it

co ul d no t pr ov id e hi m a cert ifi cat e du e to t h e g l o b a l lo ck were m is le ad in g. He le arn ed th ro ug h hi s own in ve st ig at io n th at BCIT c e rti fic at es act ua ll y co ul d be ob ta in ed an d de li ve red de sp it e th e gl ob al lo ck
, an d th at hi s sh ares were no t affe ct ed by DTC’s lo ck on tra di ng se rv ic es fo r BCIT st oc k be cau se hi s sh ares were pu rch as ed aft er th e lo ck wen t in to effe ct

. He al le ge d th at , de sp it e th e lo ck an d th e ris k of bu y in g fak e sh ares , TDA ha d trad ed BCIT sto ck aft er Augu st 11 , 20 05 wit ho ut us in g DTC

-2

-o r a n y o t he r cl eari ng ho us e; ha d bo ug ht sh ares on hi s be ha lf wit ho ut req ui rin g t h e

se ll er to de li ve r th e cert ifi cat e; an d fal se ly bl am ed i t s in ab il it y to pr ov id e hi m a
cert ifi cat e on DTC’s lo ck

. He al le ge d th at he m ad e twel ve se pa rat e req ue st s in 20 12

an d 20 13 fo r a BCIT cert ifi cat e, bu t TDA ha d no t co mp l i e d

. H e i nc lu de d as an

ex hi bi t a le tt er fro m BCIT’s Pres id en t st at in g th at BCIT ha d is su ed TDA a cert ifi cat e fo r 50 0 s ha res in Marc h 2 01 2.

T he dis tr ic t co ur t gr an te d TDA’ s m ot io n fo r su m m ary jud gm en t on L ev y ’ s SE A § 15 (c)( 3) an d SEC Ru le 15 c3 -3 cl ai m s, ho ld in g th at th e cl ai m s were ti m e-b arre d, as th ey ha d accr u e d i n A pr il 20 07 an d th e 5- y ear li m it at io n pe rio d of Mo

. Rev

. St at

. § 51 6.1 20 ap pl ie d. Howev er, th e co ur t al lo wed Lev y to am en d hi s co m pl ai nt to as se rt

a st at e-l aw cl ai m un de r Mo

. Rev

. St at

. § 40 0.8 -5 08

. In hi s am en de d co m pl ai nt , Lev y cl ai m ed th at TDA vi ol at ed se ct io n 8- 50 8 whe n it de ni ed hi s 20 12 an d 20 13 req ue st s fo r a cert ifi cat e. The di st ric t co ur t gr an te d TDA’ s m ot io n to di sm is s, fin di ng th e
st at e-l aw cl ai m

accr ue d i n 2 00 6 a nd th us was a ls o t im e-b arre d.

Afte r car efu l rev ie w, we co nc lu de th e di st ric t co ur t er red in de te rm in in g a s a

m at te r of la w th at Lev y ’s st at e-l aw cl ai m accr ue d in 20 06

. See Stra wn v. Mo

. St at e Bd

. of Edu c., 21 0 F. 3 d 95 4, 95 7 (8 th Ci r. 20 00 ) (d e no vo rev ie w of st at ut e-o fli m it at io ns an al y si s) ; Dup ps v. Trav el ers Ins . Co., 8 0 F .3d 31 2, 31 3 (8 th Ci r. 19 96 ) (d e no vo rev ie w of di st ric t co ur t’s in te rp ret at io n of st at e la w). Und er Mi ss ou ri la w, a cl ai m accr ue s, n ot when th e wro ng is do ne , bu t “ whe n th e ev id en ce was su ch [as ]

to pl ace a reas on ab ly pr ud en t pe rs on on no ti ce of a po te nt ia ll y act io na bl e in jury.” See
Po wel v. Ch am in ad e Co ll

. Prep arat or y , In c., 19 7 S.W .3d 57 6, 58 2 ( M o

. 20 06 ) (in te rn al cit at io n an d qu ot at io n m ark s om it te d) ; se e al so Mo . Rev . Sta t. § § 5 16 .10 0 (cau se of act io n accr ue s no t whe n w r o ng is do ne , bu t whe n da m ag e res ul ti ng th eref ro m is su st ai ne d an d is cap ab le of as cert ai nm en t), 51 6.1 20 (1 ), (2 ) (5

- ye ar li m it at io n pe rio d fo r act io n up on ob li ga ti on , or l ia bi li ty creat ed by stat ut e). Lev y ’s pl ead in gs an d ex hi bi ts su gg es t th at he to ok reas on ab le st ep s to de te rm in e whe th er he ha d su st ai ne d an act io na bl e in jury, an d th at h i s in

jury was no t as cert ai na bl e un ti l

-3

-20 11

. TDA’ s 2 0 06 res po ns e to Lev y ’s r eq ue st fo r a cert ifi cat e im pl ie d th at TDA’ s in ab il it y to act was te m

po rary; an d Lev y m ai nt ai ne d in di rect ho ld in g of hi s BCIT sh ares , and he st ay ed in fo rm ed of t he in ve st ig at io n i nt o B CIT’s un au th or iz ed st oc k

c e r ti fic at es an d whe th er in ve st or s were ab le to ob ta in BCIT cert ifi cat es

. In 20 1 1
, TDA st il l di d no t pr ov id e hi m a cert ifi cat e, ev en th ou gh BCIT cert ifi cat es act ua ll y

co ul d be ob ta in ed an d de li ve red at th at ti m e; an d he le arn ed th at hi s BCIT sh ares m ay

no t hav e act ua ll y be en affe ct ed by th e lo ck at al l. His fai lu re to fil e su it so on er was

ev en m or e reas on ab le in li g h t o f h i s rel ia nc e on TDA’ s rep res en ta ti on s an d th ei r fid uc ia ry rel at io ns hi p

. S e e P owe l, 19 7 S.W .3d at 58 3 (if de fen da nt is pr of es si on al

ex pe r t , p l ai nt iff ha s no du ty to do ub le ch eck ex pe rt’s wor k; cl ai m accr ue s whe n la y m an kn ew or sh ou ld ha ve kn own of reas on to qu es ti on ex pe rt’s wor k) ; Vog el v. A.G. Edwar ds & So n s , I n c., 80 1 S.W .2d 74 6, 75 1- 52 (Mo

. Ct

. App

. 19 90 ) (stoc kbr oke r ow es fi duc ia ry dut y to cu st om er, ev en whe re acco un t is no nd is cret io na ry

an d cu st om er, rat he r th an br ok er, m ak e s d e ci si on whi ch st oc ks to tra de ). W e

co nc lu de th at a ge nu in e is su e of m at eri al fact ex is ts as to whe n a reas on ab ly pr ud en t
pe rs on wou ld ha ve be en pl aced on no t i c e of an act io na bl e in jury. See Po wel, 19 7 S.W .3d at 58 5 (wh en di ffer en t co nc lu si on s m ay be d r a w n f r o m ev id en ce as to whe th er s ta tu te of l im it at io ns ha s ru n, i t i s q ue st io n o f fac t fo r jury to d eci de ).

Acco rd in gl y , we rev ers e th e di sm i s s a l of Lev y ’s st at e-l aw cl ai m un de r Mo

. Rev

. St at

. § 40 0.8 -5 08
, an d we ot he rwis e affi rm

. The ca s e is rem an de d fo r fu rth er
pr oc eed in gs co ns is te nt wit h t hi s o pi ni on

.

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