Opinion ID: 755605
Heading Depth: 3
Heading Rank: 2

Heading: Dismissal of Defendants Wright and Knight

Text: 51 LeBlang does not directly challenge the district court's involuntary dismissal of LeBlang III. Instead, LeBlang argues that the district court erred in dismissing defendants Wright and Knight. The district court found that the statute of limitations had expired against them, and therefore dismissed them as fraudulently joined. LeBlang asserts that the finding that the statute of limitations had expired was in error. 52 Subaru moved for dismissal of Wright and Knight under Fed.R.Civ.P. 12(b)(6). We review the grant of a motion to dismiss de novo. See City Nat'l Bank v. Checkers, Simon & Rosner, 32 F.3d 277, 281 (7th Cir.1994). We accept all well-pleaded facts alleged in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Scott v. O'Grady, 975 F.2d 366, 368 (7th Cir.1992). However, we do not  'ignore any facts set forth in the complaint that undermine the plaintiff's claim [nor do we] assign any weight to unsupported conclusions of law.'  Id. (quoting R.J.R. Servs., Inc. v. Aetna Cas. and Sur. Co., 895 F.2d 279, 281 (7th Cir.1989)). 53 We must determine whether the statute of limitations had run against Wright and Knight as of November 26, 1996, the date LeBlang filed LeBlang III in state court. If the time to bring the cause of action had expired, then the district court was correct in dismissing Wright and Knight as fraudulently joined. See Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir.1993) (Fraudulent joinder occurs when there is no possibility that a plaintiff can state a cause of action against nondiverse defendants in state court.). 54 The statute of limitations for fraud in Illinois is five years. See 735 Ill. Comp. Stat. 5/13-205. Under Illinois law, a cause of action accrues, and the statute of limitations begins to run, when the party knows or reasonably should know both that an injury has occurred and that it was wrongfully caused. 6 Nolan v. Johns-Manville Asbestos, 85 Ill.2d 161, 52 Ill.Dec. 1, 421 N.E.2d 864, 868 (1981). Once a party becomes aware of the injury and that it was wrongfully caused, the party is under an obligation to inquire further to determine whether an actionable wrong was committed. Id. 55 Subaru argues that LeBlang's fraud action accrued in mid-April 1990, when LeBlang learned its planning volume had been reduced to 217 from 299. Subaru relies on Wayne LeBlang's statements in a deposition, wherein he stated that when he was advised of the reduced planning number, he felt he had been had, and that he had been lied to. LeBlang stated, I was so upset that I sought legal counsel.... I was advised that we probably had a lawsuit; and they wanted to commence immediately. Dep. of Wayne A. LeBlang at 193-95, Defs.' Reply Mem. in Supp. of Their Mot. to Dismiss and in Opp'n to Pl.'s Mot. to Remand, Exh. B, LeBlang Motors, Ltd., No. 97 C 1307 (N.D. Ill. filed March 25, 1997). Subaru alleges that LeBlang was fully aware that it had a fraud claim as of mid-April 1990 and that this conclusion is consistent with LeBlang's filing of LeBlang I on March 31, 1995, just days before the expiration of the five year statute of limitations. 56 LeBlang counters that even if its fraud action accrued against Subaru in mid-April 1990, it did not accrue against Wright and Knight until late 1995 or early 1996, when LeBlang learned that Wright and Knight were aware that the planning volume number supplied to LeBlang was overstated. In other words, LeBlang asserts that the cause of action against Wright and Knight did not accrue until LeBlang learned, through discovery in LeBlang I, that Wright and Knight were aware that the numbers they passed on were too high. 57 We hold that LeBlang's fraud action accrued against all potential defendants in mid-April 1990, when LeBlang learned that the planning volume number he was given was inflated. LeBlang's deposition testimony establishes that LeBlang believed at that time that he had been injured, and also believed that the injury was caused by a lie. 7 Therefore, LeBlang kn[ew] ... both that an injury ha[d] occurred and that it was wrongfully caused. Nolan, 52 Ill.Dec. 1, 421 N.E.2d at 868. This is all that is required for the statute to begin running in Illinois. 58 That LeBlang did not know of Wright and Knight's complicity at the time is irrelevant if not somewhat unbelievable; Wright and Knight were supplying the allegedly fraudulent information to LeBlang, but LeBlang would have us believe that it had no reason to know that it could have a cause of action against Wright and Knight. Regardless, once LeBlang was aware of the injury and that it had been wrongfully caused, he was under an obligation to inquire further to determine whether an actionable wrong was committed. Id. A thorough investigation mandates that LeBlang consider the potential liability of all parties involved in supplying the planning volume number, and Wright and Knight should have been included in this investigation. LeBlang did not have the right to wait until nearly seven years later, when pretrial discovery uncovered information that may have supported a cause of action against Wright and Knight. See Singletary v. Continental Ill. Nat'l Bank & Trust Co., 9 F.3d 1236, 1243 (7th Cir.1993) (assessing Illinois statute of limitations in a fraud action and holding [t]he significance of [plaintiff] having known ... that he had been wronged, even if he was not sure by whom, should thus be apparent: knowing that he had been wronged, he was obliged as a reasonable person to begin inquiring as to who might have wronged him). 59 LeBlang would have us eviscerate these principles by holding that its cause of action against Wright and Knight did not accrue until it knew of the injury and also learned that Wright and Knight knew their conduct was fraudulent. We decline to do so. It was sufficient that LeBlang believed that Subaru fraudulently misrepresented the planning volume number; this awareness triggered the duty to inquire about a cause of action against those parties involved. LeBlang cannot suggest that it did not know of Wright and Knight's involvement since they were the agents through which Subaru spoke. Thus LeBlang's cause of action accrued against Subaru, Wright and Knight in mid-April 1990. See City Nat'l Bank, 32 F.3d at 277 (holding that cause of action against accountants accrued when bank was aware of its injury and that it was wrongfully caused, not when bank learned that accounting firm knew the information supplied to it was false). We hold that the district court was correct in finding that the statute of limitations barred LeBlang's action against Wright and Knight. Because LeBlang could not state a cause of action against them, the district court properly dismissed Wright and Knight as fraudulently joined. 60 We therefore AFFIRM the foregoing orders and decisions of the district court.