Opinion ID: 2229827
Heading Depth: 1
Heading Rank: 12

Heading: Timeliness of Fraud Theory

Text: Nonetheless, Touche urges that the fraud theory of recovery was not seasonably pled because it was raised for the first time in the operative petition, which was filed more than 4 years after St. Paul's discovery of the alleged fraud. The question thus is whether St. Paul's fraud allegations relate back to the original petition. In arguing that they do not relate back, Touche in essence argues that fraud is a different cause of action from negligence. But a cause of action consists of the fact or facts which give one a right to judicial relief against another. Holding that a theory of recovery is not itself a cause of action, this court, in Kohler v. Ford Motor Co., 187 Neb. 428, 191 N.W.2d 601 (1971), determined that a claim for recovery under a theory of strict liability was not a cause of action different from claims of recovery under theories of res ipsa loquitur or breach of express or implied warranty. Therefore, the amendment adding the strict liability theory related back to the original pleading for limitations purposes. The Kohler court noted that the general facts upon which the right to recover was based are the same. Id. at 432, 191 N.W.2d at 605. See, also, West Omaha Inv. v. S.I.D. No. 48, 227 Neb. 785, 420 N.W.2d 291 (1988) (alternative theories of recovery on same general set of facts not ordinarily separate causes of action for purposes of running of statute of limitations); Knoell Constr. Co., Inc. v. Hanson, 210 Neb. 628, 316 N.W.2d 321 (1982). In Forker Solar, Inc. v. Knoblauch, 224 Neb. 143, 396 N.W.2d 273 (1986), we held that fraud alleged for the first time in an amended petition related back to the original petition where the alleged misrepresentations were nearly identical to those alleged in the original petition. Therein, the plaintiff in his initial petition alleged securities violations, breach of contract, and fraud violations against a company called SMC, asserting that the two defendants had made misrepresentations to him. In his amended petition the plaintiff omitted the securities and breach of contract violations and alleged solely that the misrepresentations made by the defendants who acted `in the guise of [SMC]' induced the plaintiff to rely on their representations. Id. at 147, 396 N.W.2d at 277. The Forker Solar, Inc. court ruled that although the plaintiff had modified its theory of recovery, it did not state a new and independent cause of action. The court pointed out the nearly identical misrepresentations alleged by the plaintiff and that both petitions alleged that these misrepresentations induced the plaintiff to enter into the first agreement. See, also, Abbott v. Abbott, 185 Neb. 177, 174 N.W.2d 335 (1970), appeal after remand 188 Neb. 61, 195 N.W.2d 204 (1972) (stepson's second amended petition filed more than 4 years after the distribution of father's estate alleging promissory fraud and undue influence related back to petition and first amended petition in which he alleged the will, family settlement, oral promises by member of the family, and subsequent nonperformance of those promises entitled him to distribution). Touche's reliance on two of our cases for its proposition that a cause of action for fraud does not relate back to one for negligence is misplaced. In League v. Vanice, 221 Neb. 34, 374 N.W.2d 849 (1985), and Streight v. First Trust Co., 133 Neb. 340, 275 N.W. 278 (1937), we wrote that facts incorporated into a petition by way of amendment constitute a cause of action separate and independent from that stated in the original petition, and the statute of limitations against the cause of action pled in the amendment runs until the filing of such amended petition. However, in both cases, the amended petition alleged new facts which, in and of themselves, constituted a separate cause of action. In League, the plaintiff had asserted that the corporate president-majority shareholder breached his fiduciary duty with respect to certain corporate transactions, including a claim that the corporation had paid excessive compensation to the corporate president during a period of 2 years. In his subsequent amended petition, the plaintiff added a third year, during which, he alleged, the corporation overpaid the corporate president. Obviously, the addition of the third year could not relate back to the earlier pleading, for to that extent the amended pleading relied on entirely different reasons for relief. Muenchau v. Swarts, 170 Neb. 209, 102 N.W.2d 129 (1960). Similarly in Streight, claims by a first mortgage bond purchaser against a trust company that the trust company took title to and preserved the mortgaged property for the benefit of its stockholders did not relate back to earlier claims of negligence and fraud asserted in the plaintiff's first two petitions against the trust company for permitting assessed taxes to become delinquent and permitting the mortgage to default on an interest payment. However, there existed enough continuity of the other claims made by the plaintiff in her prior petitions as to relate back to the earlier pleadings and thus to toll the statute of limitations raised by the trust company. Therefore, except as to the fiscal year 1981, which was not mentioned in the original petition, St. Paul's fraud allegations relate back to July 14, 1987, the date it filed its original petition.