Opinion ID: 764897
Heading Depth: 2
Heading Rank: 2

Heading: The Plaintiffs' Arguments

Text: 78 The plaintiffs argue that the District Court failed to draw all reasonable inferences in their favor, as is required when there is a 12(b)(6) motion to dismiss, and that it wrongly assumed the existence of certain facts not evident on the face of the complaint. In this procedural posture, we must take all properly pleaded facts as true. See Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). When the applicability of the statute of limitations is in dispute, there are usually factual questions as to when a plaintiff discovered or should have discovered the elements of its cause of action, and thus defendants bear a heavy burden in seeking to establish as a matter of law that the challenged claims are barred. Van Buskirk v. Carey Canadian Mines, Ltd., 760 F.2d 481, 498 (3d Cir. 1985). If the complaint's allegations, taken as true, allege facts sufficient to toll the statute of limitations, it must survive a motion to dismiss. See Leone v. Aetna Cas. & Sur. Co., 599 F.2d 566, 569 (3d Cir. 1979). 79 The plaintiffs allege that, though they were aware of Wah Kwong's position that it was a creditor and not a partner of KKL, they did not have notice that this position was false until they obtained documentary evidence in 1992 after obtaining discovery documents from the GLO litigation. As they point out, as late as 1996, the Australian courts refused to allow the Australian creditors (including Vansgnes and TIP) access to KKL corporate information and Wah Kwong's dealings with the liquidator. They maintain that the statute of limitations did not begin to run until they had some notice that Wah Kwong's misrepresentation was false. 80 We agree that the mere representation that one is a creditor and not a partner, without more, is not suspicious. While the District Court characterized Wah Kwong's alleged misrepresentation as open and notorious, it was not openly and notoriously a misrepresentation. One would have to know other facts, not necessarily within the reasonable ken of an unrelated creditor, to know that a party that held itself out as a creditor was in fact a partner. Thus, the limitations period did not start to run when the plaintiffs knew or should have known that Wah Kwong represented itself as a creditor. Rather, the period would begin to run only when they knew or should have known information that would have led a reasonable person to question that representation. See Hauptmann v. Wilentz, 570 F. Supp. 351, 397-98 (D.N.J. 1983), aff 'd without opinion, 770 F.2d 1070 (3d Cir. 1985). 81 In addition, the District Court should not have imputed Vansgnes's knowledge to Southern Cross and TIP. First, there is nothing in the pleadings or in the published decisions of any court that suggests that TIP is in any way related to Vansgnes. Second, while Vansgnes's ownership of a large amount of Southern Cross stock could potentially justify imputing his knowledge to Southern Cross, such an imputation could not be made in the context of a 12(b)(6) motion. Wah Kwong cites cases concerning shareholder derivative suits for the proposition that Vansgnes and Southern Cross are in privity, but privity means different things in different contexts. 82 In this case, imputing Vansgnes's knowledge to Southern Cross would require resolving issues of fact. Southern Cross argues that Vansgnes was not authorized to act for it (though he signed the Heads of Agreement on its behalf, allegedly as the result of an error) and that he never communicated any of the relevant facts to it. It submitted an affidavit that Vangsnes was never an officer, employee, agent, director, or shareholder of Southern Cross. Another sticking point is that the complaint and the published judgments do not reveal that Vansgnes participated in the 1986 proceedings, which were kept confidential from nonparticipants. The parties have not directed our attention to the relevant Australian procedures. The Australian liquidator took over the management of KKL, and we cannot find any suggestion that Vansgnes was involved in the Wah Kwong-liquidator settlement negotiations. Possibly he was, and if this were a summary judgment motion we might have the evidence to prove it, but the District Court could not so assume within the 12(b)(6) framework. 83 If Vansgnes's knowledge in 1986 were dispositive, we would be obliged to reverse, as these are issues not appropriate for judgment on the pleadings. However, Vansgnes was not the only possible source of the plaintiffs' knowledge. We turn, therefore, to the 1988 Interpool decision.