Opinion ID: 1638115
Heading Depth: 2
Heading Rank: 3

Heading: Facts Applied to Law

Text: Plaintiff contends that the trial court erred in ruling that this action is barred by the statute of limitations because an issue of material fact exists about whether defendant concealed his fraud and breach of fiduciary duty. Plaintiff signed the general partnership agreement in November 1984, and signed the continuing guaranty, the document which is the basis for this suit, on April 27, 1987. It is undisputed that plaintiff received numerous memoranda reporting the financial condition of the partnership both before and after signing the continuing guaranty. Plaintiff made payments to the partnership and obtained financing to cover costs associated with the partnership throughout 1987, 1988, and 1989. Plaintiff admits that he signed the partnership agreement and continuing guaranty agreement, but averred that he did not read them. He also averred that he did not read the numerous memoranda which would have informed him of the financial condition of the partnership. Plaintiff's failure to read the partnership agreement, the continuing guaranty, and the memoranda show a lack of reasonable diligence. In First Pyramid Life Insurance Co. v. Stoltz , we wrote: Even if there was evidence of fraud on the part of First Pyramid, and there is none, the statute of limitations would still have run on this claim. Fraud does suspend the running of the statute of limitations, and the suspension remained in effect until the party having the cause of the action discovers the fraud or should have discovered it by the exercise of reasonable diligence. 311 Ark. at 318, 843 S.W.2d at 845 (emphasis in the original) (citations omitted). The opinion quotes the classic language on this point, as follows: No mere ignorance on the part of the plaintiff of his rights, nor the mere silence of one who is under no obligation to speak, will prevent the statute bar. There must be some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff's cause of action concealed or perpetrated in a way that it conceals itself. And if the plaintiff, by reasonable diligence, might have detected the fraud, he is presumed to have had reasonable knowledge of it. Id. at 319, 843 S.W.2d at 845 (citations omitted). In Wilson v. General Electric Capital Auto Lease, Inc., 311 Ark. 84, 841 S.W.2d 619 (1992), the plaintiffs leased a car for five years and alleged that they were told they could return the car in three years and owe nothing further on the lease agreement. The plaintiffs also alleged they were told they would not have to purchase excess mileage coverage since they would be returning the car early. After plaintiffs used the car for three years and the car reached the mileage limitation, they attempted to return it. The defendants would not accept return of the car. The plaintiffs learned that the contract, which they had not previously read, contained a clause that provided a formula for determining an early termination charge. The plaintiffs filed a complaint alleging intentional misrepresentation and usury three years and four months after signing the contract. The trial court granted summary judgment for the defendant based, in part, on the ruling that the claim was time-barred. The plaintiffs asserted that the statute of limitations was tolled by fraudulent concealment of the misrepresentation at the time they signed the lease agreement. We affirmed the ruling of the trial court, stating that the statute of limitations was suspended only until the fraud, if any, was or should have been discovered with the exercise of reasonable diligence. In so holding, we wrote: In sum, the Wilsons did not fulfill their duty to exercise reasonable diligence in examining the contract they executed to uncover what they alleged was a fraudulent misrepresentation by the leasing manager, so they cannot now complain that the statute of limitations should have been tolled. To the contrary, the evidence shows that they knew or should have known of the contract's actual provisions, so there was no genuine issue of material fact precluding summary judgment. Id. at 89, 841 S.W.2d at 621. Similarly, in the case at bar, appellant did not fulfill his duty to exercise reasonable diligence in examining the agreements or in reading the memoranda provided to him. Consequently, he cannot avail himself of the benefit of tolling based on fraudulent concealment. Plaintiff relies on the case of Hickson v. Saig, 309 Ark. 231, 828 S.W.2d 840 (1992), in which the plaintiff signed a lease for retail space after being assured by the defendant leasing agent that a Wal-Mart store would remain in the shopping center. Shortly after the lease was signed, an article appeared in the local newspaper stating that Wal-Mart was relocating elsewhere. The plaintiff was not aware of the article. The plaintiff later heard a rumor that Wal-Mart was relocating and asked the defendant listing agent if it were true. The agent told her that Wal-Mart would remain in the center. At a meeting of the shopping center merchants, the defendant listing agent told the merchants that Wal-Mart was remaining in the center. A month later Wal-Mart relocated. Plaintiff filed suit. The trial court granted the defendants' motion for summary judgment, finding that the statute of limitations was not tolled by fraudulent concealment because, following the publication of the newspaper article, the plaintiff knew or with reasonable diligence could have discovered that Wal-Mart was relocating. We reversed. The proof showed that plaintiff relied on the statements by the listing agent and did not see the article. Therefore, an issue of material fact existed as to whether the article should have put the plaintiff on notice and required her to investigate to determine whether Wal-Mart was moving. That case is clearly distinguished from the case at bar because, in that case, the defendant did not provide plaintiff with documents that contained the allegedly concealed information. The plaintiff might have read the newspaper article, and it might have put plaintiff on notice; that was a material issue of fact. Here, plaintiff signed the partnership agreement that made him a general partner and made him subject to liability. He signed the first guaranty and the continuing guaranty. He is bound to know the content of the documents he signed. Lee v. Lee, 35 Ark.App. 192, 816 S.W.2d 625 (1991); see also Stone v. Prescott Special Sch. Dist., 119 Ark. 553, 178 S.W. 399 (1915). Additionally, the memoranda outlining the condition of the project, advising the partners that they needed to obtain financing and informing them of their share of expenses due, were sent directly to plaintiff. The evidence conclusively proved that, even if plaintiff did not know of the fraud prior to June 11, 1990, he could have discovered it by exercising reasonable diligence. The trial court additionally ruled that summary judgment was granted because plaintiff failed to show one of the elements of fraud and failed to show a breach of fiduciary duty. Plaintiff assigns those rulings as error, but we do not reach the assignments since we affirm the trial court's ruling on the basis of the running of the statute of limitations.