United States Court of Appeals

For the First Circuit

No. 10-1160

MARK ERLICH, as Chairman of the Board of Trustees of

The New England Carpenters Pension Fund,

Plaintiff, Appellant,

v.

OUELLETTE, LABONTE, ROBERGE AND ALLEN, P.A.;

S.R. THOMAS ACTUARIAL ASSOCIATES, INC.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Lynch, Chief Judge,

Boudin and Howard, Circuit Judges.

James Francis Grosso, with whom O'Reilly Grosso & Gross P.C.

was on brief, for appellant.

James M. Bowie, with whom Thompson & Bowie, LLP was on brief,

for appellee Ouellette, Labonte, Roberge and Allen, P.A.

John D. Gleason, with whom Curtis Thaxter was on brief, for

appellee S.R. Thomas Actuarial Associates, Inc.

February 28, 2011
We accept the Fund's well-pleaded facts as true, drawing all 1

reasonable inferences in its favor. Local 791, United Food &

Commercial Workers Union v. Shaw's Supermarkets, Inc., 507 F.3d 43,

46 (1st Cir. 2007). 

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HOWARD, Circuit Judge. In this diversity action, we

decide when a pension fund's state-law causes of action against an

auditor and an actuary accrued, thus triggering Maine's six-year

statute of limitations. Me. Rev. Stat. tit. 14, § 752 (2003). The

district court determined that they accrued at the time of injury

and on that basis dismissed the complaints in this case as

untimely. Plaintiff New England Carpenters Pension Fund (the

"Fund"), invoking Maine’s so-called discovery rule, contends that

they did not accrue until its injury was or should have been

discovered. Defendants Ouellette, Labonte, Roberge and Allen, P.A.

("Ouellette") and S.R. Thomas Actuarial Associates, Inc.

("Thomas"), however, say that a discovery rule is unavailable.

After review, we affirm based on Maine law.

I. BACKGROUND1

The Fund is the surviving entity of a 2006 merger between

two predecessor pension funds. Shortly after the merger, the

Fund's auditor tested a random sample of pension calculations and

discovered that certain pensions paid by one of its predecessors

had been calculated incorrectly. The Fund then checked all of its

predecessor's pension calculations between 1973 and 2005. That

exercise revealed overpayments totaling more than $3.5 million. 
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In 2009, the Fund brought two separate but identical

suits against Ouellette and Thomas -- the auditor and actuary,

respectively, for the Fund's predecessor -- in federal district

court in Maine. Invoking the court's diversity jurisdiction, the

Fund asserted common-law claims for breach of contract, negligence,

and professional malpractice stemming from Thomas's miscalculation

of pension payments and Ouellette's failure to test those

calculations in accordance with Generally Accepted Accounting

Principles. After filing an answer, Ouellette moved to dismiss on

several grounds, including timeliness. In a bench ruling following

oral argument on Ouellette's motion, the court dismissed the Fund's

complaint as time-barred to the extent that it sought damages

before 2003 (six years before suit was filed in 2009). 

Two months later the court convened a conference call

that included counsel for parties in both cases. The parties

agreed that the court's bench ruling in the Ouellette case applied

equally to the Fund's case against Thomas. Further, the Fund's

counsel informed the court that alleged damages for the two-year

period that was not time-barred (between 2003 and 2005), even if

aggregated in both cases, did not satisfy the diversity statute's

amount-in-controversy requirement. See 28 U.S.C. 1332(a) (2006).

At the court's suggestion, the parties filed a stipulation

concerning the points addressed in conference. The court
The Fund's brief indicates in passing that one of its 2

trustees resides in the State of Maine. That could present a

problem because, for diversity purposes, Ouellette is a citizen of

Maine, and a trust -- which we presume the Fund to be –- is in some

cases a citizen of whatever states its trustees are citizens of. 

Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 464 (1980); Appleyard v.

Douglass, 141 F.3d 1149, 1998 WL 104680, at *2 (1st Cir. 1998)

(unpublished table decision) (dicta); accord May Dept. Stores Co.

v. Fed. Ins. Co., 305 F.3d 597, 599 (7th Cir. 2002) (involving a

pension fund). But the Fund's complaints reveal that each trustee

was diverse as to each defendant at the time these suits commenced,

so our jurisdiction is secure. Cf. Freeport-McMoRan, Inc. v. K N

Energy, Inc., 498 U.S. 426, 428 (1991) (per curiam) ("Diversity

jurisdiction, once established, is not defeated by the addition of

a nondiverse party to the action.").

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thereafter entered judgment in favor of both Ouellette and Thomas.

This appeal followed.2

II. DISCUSSION

The Fund argues that its claims against Ouellette and

Thomas did not accrue until it discovered the overpayments in 2006.

According to the Fund, Maine courts apply a discovery rule -- as

opposed to a date-of-injury rule -- when ascertaining the accrual

of claims against fiduciaries and others in whom confidence, a

special term under Maine law, is reposed. Auditors and actuaries,

the Fund argues, fit that bill because their financial skill set

far exceeds that of their clientele: here, a board that consisted

largely of craftsmen. And it was that disparity, not a lack of

diligence, that prevented the Fund from discovering its injury
The Fund does not allege fraudulent concealment or proceed on 3

a theory of equitable estoppel in support of tolling the running of

section 752. See Me. Rev. Stat. tit. 14, § 859 (2003) (in cases of

fraudulent concealment, action "may be commenced at any time within

6 years after the person entitled thereto discovers that he has

just cause of action"); Nuccio v. Nuccio, 673 A.2d 1331, 1334 (Me.

1996) (equitable estoppel bars defendant from invoking the defense

of the statute of limitations).

As noted, Ouellette answered the complaint before moving for 4

dismissal. Although that sequence is not contemplated by the

rules, see Fed. R. Civ. P. 12(b), we have treated such motions as

though they were motions for judgment on the pleadings under Fed.

R. Civ. P. 12(c). Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54

(1st Cir. 2006); see generally 5B Charles Alan Wright, Arthur R.

Miller & Edward H. Cooper, Federal Practice & Procedure § 1357 (3d

ed. 2004) (collecting cases). Because the standards for evaluating

both motions are essentially the same, Remexcel Managerial

Consultants, Inc. v. Arlequin, 583 F.3d 45, 49 (1st Cir. 2009), it

has no impact on our review.

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until the limitations period had expired for almost the entire

period of alleged wrongdoing.3

Our standard of review is plenary. Local 791, 507 F.3d

at 46. “Where, as here, the dismissal is grounded on a statute of

limitations, we will affirm only if the record, construed in the

light most flattering to the pleader, leaves no plausible basis for

believing that the claim may be timely.” Gonzalez Figueroa v. J.C.

Penney Puerto Rico, Inc., 568 F.3d 313, 318 (1st Cir. 2009) (citing

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)).4

Civil actions in Maine, with exceptions not relevant

here, are subject to a six-year limitations period that begins to

run when "the cause of action accrues." Me. Rev. Stat. tit. 14, §

752 (2003). The statute does not define accrual; however, Maine
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courts generally consider an action accrued "when a plaintiff

received a judicially recognizable injury," McLaughlin v.

Superintending Sch. Comm. of Lincolnville, 832 A.2d 782, 788 (Me.

2003) (quoting Johnston v. Dow & Coulombe Inc., 686 A.2d 1064,

1065-66 (Me. 1996)), no matter when the injury was discovered.

See, e.g., Bozzuto v. Ouellette, 408 A.2d 697, 699 (Me. 1979) (the

plaintiff's "ignorance of defendant's misfeasance for about seven

years does nothing by itself to prevent the running of the statute

of limitations"). Thus, a contract claim "accrues at the time of

breach," Dunelawn Owners' Ass'n v. Gendreau, 750 A.2d 591, 595 (Me.

2000), and a tort claim "accrues when 'the plaintiff sustains harm

to a protected interest.'" McLaughlin, 832 A.2d at 788 (quoting

Johnston, 686 A.2d at 1066); see also Williams v. Ford Motor Co.,

342 A.2d 712, 714 (Me. 1975) (tort claim accrues at "the point at

which a wrongful act produces an injury for which a potential

plaintiff is entitled to seek judicial vindication").

Sometimes Maine courts consider that an action has

accrued "when the injury is discovered rather than when the injury

was incurred." McLaughlin, 832 A.2d at 788. But such cases are

few and are limited to discrete areas. For example, in Anderson v.

Neal, the Maine high court applied a discovery rule in an attorney

malpractice action "based on an allegedly negligent title search."

428 A.2d 1189, 1192 (Me. 1981). The court reached the same

conclusion in an action against a medical doctor for "foreign-
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object surgical malpractice," Myrick v. James, 444 A.2d 987, 996

(Me. 1982), and later extended that logic in an action for

"diagnostic malpractice," Bolton v. Caine, 541 A.2d 924, 926 (Me.

1988). It established a similar rule in actions seeking redress

for asbestos-related injuries. Cf. Bernier v. Raymark Indus.,

Inc., 516 A.2d 534, 544 (Me. 1986) (stating, in answer to a

certified question, that asbestos actions may proceed under Maine

law even though "diseases did not manifest themselves"

immediately). See generally Johnston, 686 A.2d at 1066

(identifying the "discrete areas" subject to a discovery rule).

More recently, in Nevin v. Union Trust Company, the court

applied a discovery rule to claims against a fiduciary providing

financial management services. 726 A.2d 694, 699 (Me. 1999).

There, a bank with significant management responsibilities over a

client's assets improperly executed a series of transactions

designed to reduce potential estate taxes. Id. at 696-97.

Following the client's death years later, the Internal Revenue

Service disallowed benefits and imposed costly penalties on the

client's estate. Id. at 697. Beneficiaries of the estate sued the

bank; the trial court dismissed the case as untimely, and the

beneficiaries appealed. Id. at 698. Referencing Anderson and

Myrick, the court stated that it has departed from the date-ofinjury rule in favor of a discovery rule only when a fiduciary's

acts or omissions prevented a party from discovering its cause of
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action. Nevin, 726 A.2d at 699. The facts in Nevin met that

standard because the bank -- beyond merely managing its client's

accounts -- had assumed a fiduciary role. Id. at 699-70.

Here, the Fund cites no Maine decision, nor are we aware

of any, that applies a discovery rule to claims against an auditor

or an actuary. Its argument relies instead on an analogy to Nevin.

Of course, in Nevin the bank was a fiduciary; here, the Fund

concedes that Ouellette and Thomas were not. Because the Maine

high court has refused to extend Nevin to non-fiduciary

relationships, Gendreau, 750 A.2d at 596 ("Although the facts of

this case present a difficult to discover breach, the absence of a

fiduciary relationship in these facts prevents the application of

the discovery rule.") (citing Nevin, 726 A.2d at 699), the Fund's

argument is foreclosed.

The Fund responds that its predecessor had a

"confidential relationship" with both Ouellette and Thomas, and

that Maine law recognizes fiduciary and confidential relationships

as "legal equivalents." Ruebsamen v. Maddocks, 340 A.2d 31, 36

(Me. 1975). But a confidential relationship requires "the actual

placing of trust and confidence in fact by one party in another and

a great disparity of position and influence between the parties to

the relation." Id. at 35 (citing George T. Bogert, Trust and

Trustees § 482, at 136-38 (2d ed. 1960)). We discern no

allegations of the kind of diminished capacity or of the "letting
See, e.g., Geo. Knight & Co. v. Watson Wyatt & Co., 170 F.3d 5

210, 215-16 (1st Cir. 1999) (holding, under Massachusetts law, that

an actuary did not occupy a position of trust and confidence with

its client retirement plan in part because there was "nothing in

the record to suggest that [the plan's] trust in [the actuary]

resulted in its ceding control of [the plan's] management or assets

to [the actuary]"); Fleet Nat'l Bank v. H & D Entm't, Inc., 926 F.

Supp. 226, 242 (D. Mass.), aff'd, 96 F.3d 532 (1st Cir. 1996)

(stating that, in context of accountant-client relationship under

Massachusetts law, "the weight of legal precedent -- and common

sense -- stands for the proposition that an accountant takes on

fiduciary obligations only where he or she recommends transactions,

structures deals, and provides investment advice, such that he or

she exercises some managerial control over the assets in question,"

not merely when "tasks performed . . . were ministerial in nature"

and did not involve "management advice" or "discretionary control")

(internal quotation marks, citations, and brackets omitted). 

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down of all guards and bars" that is implied by the use of the term

"disparity of position" in this context. See id. Rather, the

complaints describe arms-length, contractual arrangements between

the board of a sizable pension fund and professionals providing

routine, even mechanical, financial services. As the Fund's

counsel correctly acknowledged at oral argument, these

relationships were neither special nor unique. Other states

require more before elevating actuaries and accountants to

fiduciary or other special status. Our survey leads us to 5

conclude that Maine would too. Cf. Stewart v. Machias Sav. Bank,

762 A.2d 44, 46 (Me. 2000) ("Standing alone, a creditor-debtor

relationship does not establish the existence of a confidential

relationship."); Reid v. Key Bank of S. Me., Inc., 821 F.2d 9, 17-

18 (1st Cir. 1987) (holding, under Maine law, that "the ordinary
Anderson, Myrick, and Bernier were decided by divided courts. 6

See Anderson, 428 A.2d at 1193 (Dufresne, J., dissenting); Myrick,

444 A.2d at 1002 (Dufresne, J., dissenting); Bernier, 516 A.2d at

544 (McKusick, J., dissenting).

See Me. Rev. Stat. tit. 14, § 753-B (2003) (actions against 7

attorneys accrue on "the date of the act or omission giving rise to

injury, not from the discovery of the malpractice, negligence or

breach of contract," except malpractice involving "the rendering of

a real title opinion"); Me. Rev. Stat. tit. 24, § 2902 (2003)

(actions against health care providers and health care

practitioners "accrue on the date of the act or omission giving

rise to the injury," except "where the cause of action is based

upon the leaving of a foreign object in the body, in which case the

cause of action shall accrue when the plaintiff discovers or

reasonably should have discovered them"). See generally Nevin, 726

A.2d at 699 nn. 6-7 (describing legislative responses to Anderson

and Myrick); Choroszy v. Tso, 647 A.2d 803, 806 & nn. 4-5 (Me.

1994) (describing legislative responses to Myrick and Bolton). 

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bank/customer situation" does not constitute a confidential relationship).

Applying a discovery rule in these circumstances would

represent a significant step in expanding Maine law that we decline

to take. Departures from Maine's date-of-injury rule are rare.

They have involved careful balancing between competing interests of

fairness and repose, and the opinions have not always been

unanimous. Moreover, the Maine legislature has cabined the 6

holdings in both Anderson and Myrick and abrogated Bolton. We 7

think further departures of this magnitude are best left to the

state. See Douglas v. York County, 433 F.3d 143, 149, 153 (1st

Cir. 2005); see also Gill v. Gulfstream Park Racing Ass'n, Inc.,

399 F.3d 391, 402 (1st Cir. 2005) ("A federal court sitting in

diversity cannot be expected to create new doctrines expanding

state law."); Kassel v. Gannett Co., 875 F.2d 935, 950 (1st Cir.
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1989) ("a diversity court must take state law as it finds it: 'not

as it might conceivably be, some day; nor even as it should be.'"

(quoting Plummer v. Abbott Labs., 568 F. Supp. 920, 927 (D.R.I.

1983))).

Affirmed.