Opinion ID: 2718915
Heading Depth: 3
Heading Rank: 1

Heading: Susan and David’s Claims are Time-Barred

Text: Susan and David claimed unjust enrichment based on J.D.’s alleged fraud in causing Willa and Vincil to sign the 1990 deeds and to prepare the 1990 wills to replace the 1981 will under which Susan and David were to receive remainder interests in the 200-acre tract of land subject to a life estate in Arthur. They assert that J.D. fraudulently concealed the existence of both the 1981 and 1990 wills executed by Willa and Vincil 6 Plaintiffs do not appeal Mary’s $0 verdict for unjust enrichment against Linda individually or Susan and David’s $0 verdicts for undue influence against Linda as trustee, despite the fact that Susan and David repeatedly refer to conduct that they believe 8 and the fact that no consideration was given for the 1990 deeds. Defendants argue that the trial court should have granted their motion for JNOV on Susan and David’s unjust enrichment claims because these claims were barred by the statute of limitations. Susan and David counter that, because they allege fraud, the controlling statute of limitations is section 516.120(5), and that their claim is not barred under the latter statute. Section 516.120(5) sets out the statute of limitations for fraud claims as follows: Within five years: … (5) an action for relief on the ground of fraud, the cause of action in such case to be deemed not to have accrued until the discovery by the aggrieved party, at any time within ten years, of the facts constituting the fraud. § 516.120(5). Under this statute, all fraud claims must be brought within five years from when the cause of action accrues, which is either when the fraud is discovered or at the end of 10 years after the fraud takes place, whichever occurs first. Klemme v. Best, 941 S.W.2d 493, 497 (Mo. banc 1997); State ex rel. Stifel, Nicolaus & Co., Inc. v. Clymer, 522 S.W.2d 793, 798 (Mo. banc 1975). Consequently, the latest a fraud claim can accrue and the statute of limitations begin to run is 10 years after it is committed, regardless of whether the fraud actually is discovered. Clymer, 522 S.W.2d at 798. As Clymer explains: [T]he cause of action does not accrue from discovery of the fraud. If ten years elapse without discovery of the fraudulent acts, the statute of limitations begins to run and after five years the cause of action is barred, even if the fraud has not yet been discovered. constituted undue influence. This Court therefore does not discuss further either of these matters. 9 Id. at 798. This means that the latest a fraud claim may be brought is 15 years after the fraud occurred. Id. Susan and David argue that this 15-year maximum period is extended further because of J.D.’s alleged fraud in concealing the transfer of property and the existence of the 1990 wills. Although they do not identify a specific statutory basis for this extension, Susan and David implicitly are referring to section 516.280, the general tolling statute, 7 which sets out a “discovery rule” for cases in which a defendant conceals the wrong. Susan and David’s arguments are not well-taken. It is well settled that the general tolling statute does not apply to fraud claims under 516.120(5) because it contains its own, more specific, 10-year discovery rule. As explained in Anderson v. Dyer: The imposition of Sec. 516.280 onto Sec. 516.120(5) would make the latter ineffective insofar as it undertakes to establish a particular period within which the fraud is deemed to have been discovered and the action to have accrued. Therefore, “(i)f the action is founded upon fraud, as provided in (Sec. 516.120(5)),  it does not matter whether the party who has defrauded him does anything to prevent his discovery or not.” 456 S.W.2d 808, 813 (Mo. App. 1970), quoting Maynard v. Doe Run Lead Co., 265 S.W. 94, 99 (Mo. 1924). Anderson noted that section 516.120(5) is the only provision that specifically controls the statute of limitations for fraud and, so, is narrower in scope than the general tolling statute. This Court implicitly approved Anderson’s analysis in Clymer. 522 S.W.2d at 7 Section 516.280 provides: If any person, by absconding or concealing himself, or by any other improper act, prevent the commencement of an action, such action may be commenced within the time herein limited, after the commencement of such action shall have ceased to be so prevented. 10 797-98. Although Clymer specifically involved the separate issue of the time at which a cause of action for fraud accrues, it quoted approvingly Anderson’s analysis that section 516.280 does not toll the time for bringing a fraud claim under section 516.120(5) as support for the rule that the time allowed for discovery does not affect the accrual of the cause of action. Id. at 796-98. This Court’s approval of Anderson’s analysis on this point is persuasive. See also Gilmore v. Chicago Title Ins. Co., 926 S.W.2d 695, 699 (Mo. App. 1996) (holding “fraudulent concealment does not toll the statute of limitations for fraud beyond what is provided for in § 516.120(5)”); Graf v. Michaels, 900 S.W.2d 659, 662 (Mo. App. 1995) (quoting Anderson and stating that fraud actions must be brought within 15 years). Despite this seemingly settled rule, Plaintiffs note that a separate line of cases does suggest that the statute of limitations for fraud may be tolled indefinitely by a defendant’s active concealment of the fraud. This separate line of authority had its genesis in Obermeyer v. Kirshner, 38 S.W.2d 510, 514 (Mo. App. 1931). Obermeyer recognized a common law exception to the predecessor to section 516.120(5), under which fraudulent concealment of defendant’s fraud could toll the statute of limitations for fraud. Kansas City v. W.R. Grace & Co., 778 S.W.2d 264, 273 (Mo. App. 1989), which Plaintiffs cite, relied on Obermeyer to state: “If a party takes affirmative action to conceal the fraud, the statute is tolled until the fraud is discovered.” Occasionally, the court of appeals has reiterated this same alternative line of analysis, although in none of these cases did the court of appeals actually find tolling. See, e.g., Misischia v. St. John’s Mercy Med. Ctr., 30 S.W.3d 848, 867 (Mo. App. 2000) (quoting W.R. Grace for this 11 rule); Cullom v. Crittenton, 959 S.W.2d 915, 918-19 (Mo. App. 1998) (to same effect); and Tilley v. Franklin Life Ins. Co., 957 S.W.2d 349, 351 (Mo. App. 1997) (same). To the extent that these cases state that the statute of limitations for fraud under section 516.120(5) is tolled if the fraud is concealed, they conflict with section 516.120, Clymer, Anderson, and similar cases properly applying section 516.120, and they no longer should be followed. This Court reaffirms its holdings in Klemme and Clymer that all claims for fraud must be brought within a maximum of 15 years, as provided by section 516.120(5). Neither section 516.280 nor the common law tolls the accrual of a cause of action for fraud. Applying this analysis here, 8 the alleged fraud in the transfer of the deeds and the preparation of the new will occurred in 1990, and the right to contest this conduct accrued in Willa and Vincil at that time. Assuming, without deciding, that fraudulent concealment were involved here, the statute of limitations would have run 15 years later, in June 2005, and so would have expired prior to Willa’s death in November 2005. 9 David and Susan did not sue until 2008. That was too late. In fact, by the time David and Susan obtained an interest in these claims, the claims already were time-barred. 8 On appeal, Plaintiffs’ tolling argument is based only on their claim that the statute of limitations was tolled under section 516.120(5) due to J.D.’s fraud. They do not argue that a different statute of limitations applied to specific torts that J.D. is alleged to have committed or that the general tolling statute might apply to one of those other claims. Consequently, this Court does not address those issues. 9 Defendants note that the transfer of property properly was recorded and published in the newspaper, and they argue that neither they nor Willa or Vincil were under any obligation to alert the Plaintiffs about the terms of the transfer or about the 1990 or 1981 wills. 12 Willa had no cause of action under either claim to pass on to Susan and David. 10 The trial court, therefore, erred in not granting Defendants’ motion for JNOV on the ground that Susan and David’s claims based on the 1990 wills and deeds are barred by the statute of limitations. ii. The Trial Court Erred in Substituting the Trustee of J.D.’s Trust for J.D. After J.D.’s Death Defendants assert that the trial court erred in not granting their motion for JNOV on Plaintiffs’ claims against Linda, in her capacity as trustee, as substitute for J.D. The trial court permitted Plaintiffs to proceed on their claims against J.D. through the trustee and later instructed the jury: “if you find against defendant J.D. Fry, your verdict must be against Linda Fry, Trustee of John Delbert Fry Revocable Inter Vivos Trust.” The jury returned a verdict for Mary against the trustee for $35,000 “under the theory of breach of fiduciary duty, fraudulent concealment, conversion, and/or unjust enrichment.” 11 The jury also returned a verdict for Susan and David against the trustee for $5,500 each for unjust enrichment related to the 1990 deeds and wills. But, as discussed above, Susan and David’s claims were time-barred. To the extent that Mary’s claims for Counts II through V allege conduct that occurred between 1998 and 2006, including that J.D. abused his powers of attorney and 10 Because Mary ultimately did not submit a claim regarding the 1990 deeds or wills, this analysis is not applied to her. But, because she did sue over these documents initially when she filed her first petition in 2006, Susan and David assert that their claims relate back to Mary’s original petition. This Court need not reach this issue because, for the reasons discussed above, the claims are time-barred regardless whether measured by the 2006 or the 2008 filing dates. 11 See note 5 above regarding the propriety of this joint submission of multiple theories. 13 that J.D. and Linda improperly used J.D.’s powers of attorney to purchase multiple CDs in his own name with Vincil and Willa’s funds and to cash other CDs owned by Willa and Vincil that had listed Mary and Arthur as payable-on-death beneficiaries, Defendants do not claim that they are time-barred. 12 Mary’s claims against Linda as trustee are barred, nonetheless, because the trial court erred in substituting Linda, as trustee, for J.D. Section 537.010 allows tort actions for wrongs done to property interests to survive when the alleged wrongdoer is deceased. It provides in relevant part: Actions for wrongs done to property or interests therein may be brought against the wrongdoer by the person whose property or interest therein is injured … If the wrongdoer is dead, the action also survives and may be brought and maintained in the manner set forth in section 537.021. § 537.010.13 Section 537.021.1(2) requires that if a defendant dies while a property action is pending, the action, if it continues, must proceed against a personal 12 To the extent that these counts assert misconduct constituting fraud that occurred more than 15 years prior to suit, however, they would be time-barred for the reasons noted in the preceding section. 13 The term “property or interests therein” has been interpreted broadly to include injuries in tort or injuries to economic interests such as in cases of fraudulent disbursing or taking of money. See, e.g., Breeden v. Hueser, 273 S.W.3d 1 (Mo. App. 2008) (action for monetary loss due to payment for medical services that were not provided due to fraud constituted damage to monetary or economic interest in property and survived); Foster v. Hesse, 43 S.W.2d 891 (Mo. App. 1931) (action against defendant for fraudulent disbursement of funds to contractor survived defendant’s death); State ex rel Smith v. Greene, 494 S.W.2d 55 (Mo. banc 1973) (claim for damage to car in accident would survive death of owner). See also Gray v. Wallace, 319 S.W.2d 582 (Mo. 1959) (survival of actions for personal injury is intended to change common law that personal injury claims abate upon death and will be broadly interpreted to include all claims for personal injury not barred by section 537.030, which provides that “sections 537.010 and 537.020 shall not extend to actions for slander, libel, assault and battery and false imprisonment”). 14 representative of the estate appointed by the probate division, 14 stating in relevant part: 1. The existence of a cause of action for an injury to property … which action survives the death of the wrongdoer … shall authorize and require the appointment by a probate division of the circuit court of: …. (2) A personal representative of the estate of a wrongdoer upon the death of such wrongdoer; … Should the plaintiff in such cause of action desire to satisfy any portion of a judgment rendered thereon out of the assets of the estate of such deceased wrongdoer, such action shall be maintained against a personal representative appointed by the probate division of the circuit court and the plaintiff shall comply with the provisions of the probate code with respect to claims against decedents’ estates …. As a number of court of appeals cases explain, this means that the probate division appoints a personal representative in cases in which the assets of the estate potentially are involved. In re Estate of Hayden, 837 S.W.2d 31, 32 (Mo. App. 1992); Am. Home Assur. Co. v. Pope, 487 F.3d 590, 605 (8th Cir. 2007), citing Hayden, 837 S.W.2d at 32. 15 Compliance with sections 537.010 and 537.021.1(2) is necessary for a plaintiff to maintain a cause of action against a deceased defendant after her death. § 537.010; § 537.021.1. Rule 52.13 requires a plaintiff to serve a motion to substitute a party for the deceased within 90 days after a suggestion of death is filed. If a party is not properly and timely substituted for the deceased in the manner required by section 537.021.1, Rule 52.13(a)(1) requires that “the action shall be dismissed as to the deceased party without 14 A different procedure applies when the only damages sought are those of the deceased defendant’s insurer. See § 537.021.1(2). That situation does not exist here and is not discussed further. 15 “A personal representative of an estate is appointed by the probate division of the circuit court in the applicable jurisdiction upon the filing of letters of administration with the court.” Johnson v. Akers, 9 S.W.3d 608, 609 (Mo. banc 2000). 15 prejudice.” Rule 52.13(a)(1). After J.D.’s death on December 9, 2008, Mary filed suggestions of death on December 15, 2008 and timely moved for substitution on March 9, 2008. But she moved to substitute J.D.’s daughter as a defendant. Defendants objected and directed the court to section 537.021.1(2), which, Defendants noted, controlled the substitution of a deceased defendant and required the substitution of a personal representative. Although Missouri law provides one year in which to open an estate after the decedent’s death, § 473.020.2, the record shows, and the parties do not dispute, that no estate was opened for J.D. before or after the filing of these pleadings and, consequently, no personal representative was appointed. After a hearing, the trial court sua sponte substituted J.D.’s widow, Linda, as trustee of the trust, in J.D.’s place. No party argues on appeal, nor could one, that section 537.021.1(2) permitted the substitution of the trustee rather than the personal representative. Instead, Plaintiffs maintain that “it would have been an exercise in futility to open an estate for J.D. Fry since the information available to Plaintiffs was that any theoretical estate would have held no assets.” Further, they say, it was the trial court’s idea to substitute J.D.’s widow as trustee. Therefore, they argue, it should not be found to be reversible error. These arguments must fail. Section 537.021 requires the appointment of a personal representative as substitute if a claim for damages to property or property interests against the deceased defendant is to survive. § 537.010; Hayden, 837 S.W.2d at 32. That the deceased party’s estate contains little or no property does not change this requirement. This Court’s decisions applying section 537.020, which governs the 16 substitution of a personal representative for a deceased party in cases involving personal injury (rather than property) claims, are instructive. In Darrah v. Foster, for example, this Court stated that even claims for wrongful death or personal injury when the deceased left no property require the appointment of a personal representative: Causes of action for wrongful death and for personal injury which survive the death of the alleged tortfeasor are sufficient to require the appointment of an administrator even though the deceased left no property and the sole purpose of the administration is to prosecute actions for death and for personal injury. 355 S.W.2d 24, 30 (Mo. 1962); see also Clarke v. Organ, 329 S.W.2d 670, 673 (Mo. banc 1959). That neither Linda nor Delbert opened an estate for J.D. did not prevent Plaintiffs from opening one. As section 473.020.1 states, “If no application for letters testamentary or of administration is filed by a person entitled to such letters pursuant to section 473.110 within twenty days after the death of a decedent, then any interested person may petition the probate division of the circuit court … for the issuance of letters testamentary or of administration.” Plaintiffs, however, did not do so. Due to Plaintiffs’ failure to open an estate and have a personal representative appointed, the trial court was unable to appoint a proper substitute for J.D. Its attempt to substitute instead the trustee of J.D.’s trust is not permitted by Missouri statute as to these claims alleging misconduct by J.D. personally. In the absence of the substitution of a proper party defendant within 90 days after the suggestion of death was filed, Rule 52.13 required the trial court to dismiss the claims against J.D. without prejudice. Rule 52.13; Rule 44.01(b); Gillespie v. Rice, 224 S.W.3d 608, 612 (Mo. App. 2006). 17 Because the trial court improperly substituted Linda, as trustee, for J.D., Plaintiffs’ causes of action against J.D. did not survive. § 537.021.1(2). The trial court was required to dismiss Plaintiffs’ claims against Linda, as trustee, and erred in submitting them to the jury. This Court’s resolution of this issue requires reversal of the $35,000 judgment in favor of Mary and provides an alternate ground for requiring reversal of the $5,500 judgments in favor of David and Susan.