Opinion ID: 880476
Heading Depth: 1
Heading Rank: 1

Heading: Holman's Appeal

Text: Holman's arguments on appeal center on the District Court's holding that his fraud-based claims are barred by the applicable statute of limitations. The statute of limitations for fraud is found at § 27-2-203, MCA: The period prescribed for the commencement of an action for relief on the ground of fraud or mistake is within 2 years, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake. According to Holman, he did not discover the facts constituting George Hansen's fraud until 1985, less than two years before the complaint was filed. The party asserting fraud is put on inquiry notice of the other party's misdeeds, and must exercise ordinary diligence to discover the facts constituting the fraud. Yellowstone Conference of United Methodist Church v. D.A. Davidson (Mont. 1987), 741 P.2d 794, 44 St.Rep. 1528; Gregory v. City of Forsyth (1980), 187 Mont. 132, 609 P.2d 248. Mere ignorance of the facts will not suffice to toll the statute of limitations. He must show that the acts of fraud were committed under such circumstances that he would not be presumed to have knowledge of them, it being the rule that if he has `notice or information of circumstances which would put him on inquiry which if followed would lead to knowledge, or that the facts were presumptively within his knowledge, he will be deemed to have actual knowledge of the facts.' Mobley v. Hall (1983), 202 Mont. 227, 232, 657 P.2d 604, 607 (quoting Kerrigan v. O'Meara (1924), 71 Mont. 1, 8, 227 P. 819, 822). As stated in Holman's brief to this Court, The gravamen of Mr. Holman's complaint is that Hansen engaged in a continuing fraudulent concealment of facts that disallowed Mr. Holman from truly ascertaining the extent of the fraud. Holman thus relies on the doctrine of fraudulent concealment to toll the statute until 1985. Holman cites our definition of fraudulent concealment from E.W. v. D.C.H. (Mont. 1988), 754 P.2d 817, 821, 45 St. Rep. 778, 783: Fraudulent concealment has been described as the employment of artifice, planned to prevent inquiry or escape investigation, and mislead or hinder acquisition of information disclosing a right of action. (quoting Monroe v. Harper (1974), 164 Mont. 23, 28, 518 P.2d 788, 790). We have previously held that in the context of nonmalpractice negligence actions, invoking fraudulent concealment requires a showing of affirmative conduct by the defendant calculated to obscure the existence of the cause of action. Yellowstone, 741 P.2d at 798. Given our previous discussions of fraud, this rule applies with equal force to the case at hand. Holman first contends that the District Court usurped his right to a jury trial by resolving questions of fact in order to grant summary judgment. According to Holman, numerous issues of material fact existed as to when he knew, or should have known, that Hansen defrauded him. He cites § 28-2-404, MCA; and Jenkins v. Hillard (1982), 199 Mont. 1, 647 P.2d 354, for the proposition that actual fraud is always a question of fact. While this is a correct statement of the law which would apply to the merits of this case, it sidesteps the threshold barrier of the statute of limitations. Under § 27-2-203, MCA, whether there has been a discovery of facts sufficient to start the running of the statute of limitations is a question of law. Mobley, 657 P.2d at 607. Holman's fraud claims were held to be barred under the statute of limitations because he discovered, or should have discovered by the use of his senses, the facts constituting the alleged fraud more than two years prior to the filing of this suit. This was a question of law. The court did not usurp Holman's right to a jury trial. Holman's second argument asserts that Hansens are estopped from raising the statute of limitations as a defense because of George Hansen's acts of fraudulent concealment. He relies on Keneco v. Cantrell (1977), 174 Mont. 130, 568 P.2d 1225, which he asserts is factually similar to this case. In Keneco, the plaintiff and the defendant were president and vice president, respectively, of a small corporation. The two men held all of the corporation's stock. The plaintiff had been responsible for labor management and day-to-day operations, while the defendant had been responsible for bookkeeping and business phases of the corporation. A disagreement arose as to the distribution of several issuances of corporate stock. The plaintiff confronted the defendant with his belief that he was not receiving his fair share of the stock. The defendant replied by assuring the plaintiff that it was a bookkeeping matter, the defendant knew what he was doing and things would be straightened out; i.e., the defendant would make things right. We concluded that the defendant's assurances had lulled the plaintiff into a false sense of security, which had led to his failure to initiate suit before the statute of limitations had run. We held that the plaintiff had established the necessary elements of estoppel to prevent the defendant from raising the statute of limitations as a defense. The plaintiff relied on the defendant's assurances (and presumably his superior bookkeeping knowledge) to his detriment. Holman argues that he was likewise assured by George Hansen that the problems he complained of would be made right. Holman argues that Hansen concealed defects in the premises through these assurances, and lulled Holman into an equally false sense of security. However, necessary elements of estoppel we found present in Keneco are not present in this case. In Keneco, we held that there had been conduct amounting to representation or concealment of material facts, and that the truth concerning these facts was unknown to the party claiming the benefit of the estoppel. In this case, Holman either knew or should have known the truth about the defects at issue here. In fact, the alleged assurances made by Hansen came in response to Holman's complaints about the defects. Holman's deposition testimony shows that by 1984, he had uncovered a whole barrelful of problems just about any place you looked. He had sufficient information about any alleged misrepresentations made by George Hansen during their negotiations to have stated to Hansen in 1984 that the ranch did not have 10 percent of the assets you claimed it had. Holman testified, and his counsel now argues, that George Hansen's fraud was not fully ascertainable until the spring of 1985. While this argument places Holman's fraud claims neatly within the statute of limitations, it does not mesh with the law set out above. Holman admitted that the alleged misrepresentations were in part ascertainable prior to 1985. His deposition indicates that some were apparent as early as 1983. Holman has been licensed in Montana as an outfitter since 1957, and has owned other property in the Big Timber area for a number of years. His testimony shows his skill and experience in matters such as discerning the presence of game, the growth of noxious weeds and the average price of local real estate. Under the rules from the Yellowstone and Mobley cases, Holman was on inquiry notice, and was required to exercise ordinary diligence to discover the facts constituting the fraud alleged here. Holman noticed problems before 1985 and did in fact investigate them. He is therefore deemed to have actual knowledge of the facts under Mobley, and is unable to establish the elements of estoppel. Furthermore, Holman has failed to establish fraudulent concealment. There has not been a showing of conduct by George Hansen calculated to obscure the existence of the cause of action as required under Yellowstone. The defects being complained of were apparent to Holman. George Hansen may have attempted to placate Holman with assurances that all would be made right, but he did not obscure Holman's cause of action. Holman's fraud-based claims are barred by the statute of limitations. Lastly, Holman argues that the District Court was in error when it determined that his claims of misrepresentation were barred by the independent investigation clause found in the contract. We need not address this argument, having held that these claims are barred by the statute of limitations. We affirm the decision of the District Court on Holman's appeal.