Opinion ID: 1739926
Heading Depth: 5
Heading Rank: 3

Heading: Accrual of fraud claims[14]

Text: ¶ 50 Since we conclude that claims for fraud against the Archdiocese based on intentional misrepresentations are sufficiently pled, we now determine whether such claims are barred by the statute of limitations. The claims for fraud based on intentional misrepresentations are distinguishable from negligent supervision claims. As we explained above, fraud claims are not derivative claims, but rather, intentional torts where the wrongful act is the Archdiocese's fraudulent representation that it did not know of the priests' histories of sexually molesting children and that it did not know the priests were dangerous to children. Fraud claims, if proven, provide a separate cause of the plaintiffs' injuries. [15] ¶ 51 The statute of limitations for fraud codifies the discovery rule and states: The cause of action in such case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud. Wis. Stat. § 893.93(1)(b). We explained the discovery rule as it pertains to fraud as follows: Actual and complete knowledge of the fraud on the part of the plaintiff is not necessary in order to set the limitation period running. When the information brought home to the aggrieved party is such as to indicate where the facts constituting the fraud can be effectually discovered upon diligent inquiry, it is the duty of such party to make the inquiry, and if he fails to do so within a reasonable time he is, nevertheless, chargeable with notice of all facts to which such inquiry might have led. . . . Under the rule quoted above, it is not necessary that a defrauded party have knowledge of the ultimate fact of fraud. What is required is that it be in possession of such essential facts as will, if diligently investigated, disclose the fraud. The burden of diligent inquiry is upon the defrauded party as soon as he has such information as indicates where the facts constituting the fraud can be discovered. Koehler v. Haechler, 27 Wis.2d 275, 278, 133 N.W.2d 730 (1965) (internal quotations and citations omitted). ¶ 52 In Koehler, we concluded that a stock purchaser was not barred by the statute of limitations from claiming fraud in the sale of corporate stock allegedly in excess of the number of shares authorized because no fact was presented that should have alerted the purchaser to look to the probate proceeding for information regarding ownership of shares prior to when he did so. Id. at 278-79, 133 N.W.2d 730. Here, the complaints set out no fact that should have alerted the plaintiffs to attempt to discover whether the Archdiocese knew that the priests had prior histories of sexual abuse of children. [16] ¶ 53 The court of appeals applied the discovery rule to a fraud claim in Stroh Die Casting Co. v. Monsanto Co., 177 Wis.2d 91, 502 N.W.2d 132 (Ct.App.1993). The plaintiff in Stroh was a hydraulic fluid user that brought a products liability action against the manufacturer, Monsanto, alleging the fluid was defective due to high polychlorinated biphenyl compounds (PCBs). [17] Id. at 98, 502 N.W.2d 132. Monsanto moved for summary judgment, claiming that the cause of action was time barred. Id. at 99, 502 N.W.2d 132. The court of appeals noted that the date of discovery is generally a question of fact for the jury and is a question of law only where the facts are undisputed. Id. at 104, 502 N.W.2d 132. The parties in Stroh agreed that for purposes of claim accrual, it is not necessary that a defrauded party have knowledge of the ultimate fact of fraud. What is required is that it be in possession of such essential facts as will, if diligently investigated, disclose the fraud. Id. at 117-18, 502 N.W.2d 132 (quoting Milwaukee Western Bank v. Lienemann, 15 Wis.2d 61, 65, 112 N.W.2d 190 (1961)). ¶ 54 The court of appeals in Stroh concluded that the action was time barred under Wis. Stat. § 893.93(1)(b). With the enactment of Chapter NR 157 of the Wisconsin Administrative Code in September 1977, entitled Management of PCBs and Products Containing PCBs, Stroh had to incur substantial expenses for PCB testing and incineration due to its continued use of PCBs in its hydraulic fluids. Id. at 118-19, 502 N.W.2d 132. The regulation also alerted the user to the pervasiveness and persistence of PCB-containing products in the environment. Id. Furthermore, the user noted that the problems associated with PCB-containing products created tremendous public outcry throughout the mid-1970s. Id. Therefore, the court of appeals concluded that [a]s of September 1977, a conscientious enterprise in the position of Stroh should have become suspicious of Monsanto's [representation] that its Pydraul fluids could continue to be used in Stroh's die casting operation. Id. at 119, 502 N.W.2d 132. Since the court of appeals concluded that had Stroh diligently investigated the facts known to it [in] September 1977, the alleged fraud on the part of Monsanto would have been discovered. Id. Accordingly, Stroh's intentional misrepresentation claim was time barred. Id. ¶ 55 Stroh does not provide sufficient support to cause us to dismiss the fraud claims for at least three reasons. First, Stroh was decided after motions for summary judgment and a full trial for factual development. Id. at 99, 502 N.W.2d 132. In contrast, the case now before us presents as a motion to dismiss where the only facts developed are those stated in the complaints or the reasonable inferences that flow from facts pled. BBB Doe, 211 Wis.2d at 331, 565 N.W.2d 94. Second, Stroh's failure to comply with federal regulations in regard to PCB disposal was a cause of its injuries. Stroh, 177 Wis.2d at 112, 502 N.W.2d 132. By contrast, none of the children who was assaulted by Widera and Becker did anything to cause their own injuries. Third, reasoning about the investigation that reasonably may be required in a business context is not directly transferable to a relationship that is based on trust, particularly when the trust relationship arises in a religious context such as that of priest and parishioner. Therefore, it does not follow from the fact of being sexually molested that any plaintiff would suspect that the Archdiocese knew that the priests had prior histories of sexual molestation of children and yet placed them in the position where they would molest more children. ¶ 56 It also has been argued that we should follow the reasoning of the Utah Court of Appeals in Colosimo v. Roman Catholic Bishop of Salt Lake City, 104 P.3d 646 (2004) and dismiss the fraud claims because the plaintiffs should have discovered the Archdiocese's fraud long before the statute of limitations on fraud had run. We decline the invitation to do so. ¶ 57 In Colosimo, the plaintiffs brought suit against the Bishop of Salt Lake City, d/b/a the Catholic Diocese of Salt Lake City, and other archdioceses (the Bishop) grounded in their sexual assaults by a parish priest. Id. at 649. Fraud was one of the claims alleged against the Bishop. Id. The trial court dismissed all claims on summary judgment. Id. at 650. The court of appeals affirmed the dismissal based on its conclusion that the trial court had correctly interpreted the Utah statute of limitations as barring all claims. Id. at 652. It concluded that because the plaintiffs knew at the time of the sexual assault that they were injured by the priest and because they knew of the priest's relationship to the other defendants, they were required after turning 18 years of age to exercise reasonable diligence in discovering whether they had claims against the Bishop. Id. at 653. ¶ 58 Colosimo is not persuasive. Initially, we note that Colosimo is a summary judgment decision where facts outside of the pleadings were considered by the court in coming to its conclusions. Id. at 650. We have not considered facts outside of the pleadings and the reasonable inferences therefrom, when deciding the case now before us. BBB Doe, 211 Wis.2d at 331, 565 N.W.2d 94. Furthermore, Colosimo does not give any reason for its conclusion that the assaulted children on reaching majority should have investigated whether the Bishop knew of the priest's history of sexually assaulting children before the Bishop placed the priest in the parishes where he assaulted Colosimo. Accordingly, as we review the complaints before us, we conclude they do not provide a basis from which we can conclude, as a matter of law, that a reasonable person in the position of the plaintiffs should have investigated whether the Archdiocese knew of Widera's and Becker's prior sexual molestations of children and yet placed them in positions where they could sexually molest more children. ¶ 59 The Archdiocese also contends that the statute of limitations for sexual abuse of a child, Wis. Stat. § 893.587, demonstrates that the legislature's public policy is to toll the statute of limitations for the plaintiffs' claims no later than their 35th birthday. [18] Wisconsin Stat. § 893.587 states: An action to recover damages for injury caused by an act that would constitute a violation of §§ 948.02, 948.025, 948.06, 948.085, or 948.095 or would create a cause of action under § 895.442 shall be commenced before the injured party reaches the age of 35 years or be barred. ¶ 60 The statutes listed in Wis. Stat. 893.587 refer to acts of sexual assault, incest, or sexual exploitation. [19] The act that the complaints allege caused injury is the Archdiocese's fraudulent misrepresentation, i.e., the representation that the Archdiocese did not know the priests had histories of sexually abusing children and did not know the priests were dangerous to children. None of the statutes listed in § 893.587 refers to fraudulent misrepresentations. Therefore, the statute does not apply to these claims of fraud. ¶ 61 We do recognize the important policy consideration of protecting defendants from defending stale claims, when witnesses and relevant evidence may be unavailable. BBB Doe, 211 Wis.2d at 334, 565 N.W.2d 94. However, we also recognize that tort victims should be given a fair opportunity to enforce legitimate claims against wrongdoers. Id. ¶ 62 Keeping these policy considerations in mind, we deny the motion to dismiss the fraud claims because we conclude that, based solely on the complaints, we cannot determine when the plaintiffs knew or should have known of the Archdiocese's alleged knowledge of the priests' past histories of sexual molestation of children. Therefore, their claims may or may not be time-barred by Wis. Stat. 893.93(1)(b), depending on when the claims for fraud accrued. The date of discovery is usually a question of fact. See Borello, 130 Wis.2d at 404, 388 N.W.2d 140. However, if the facts are not in dispute or if there is only one reasonable inference to be drawn from them, determination of the date of discovery is a question of law that we will review independently. See Vocational, Technical Adult Educ., Dist. 13 v. DILHR, 76 Wis.2d 230, 240, 251 N.W.2d 41 (1977). ¶ 63 Since a motion to dismiss does not present the opportunity to fully develop the facts surrounding the Archdiocese's argument that plaintiffs' fraud claims accrued more than six years before the date on which they were filed, we conclude that the claims for fraud survive the motion to dismiss. However, we want to clarify that we are not precluding summary judgment if undisputed facts demonstrate that the claims for fraud accrued more than six years prior to the dates on which the claims were filed.