Opinion ID: 551885
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Heading: The Law of Fraud in Kansas

Text: 108 The law of fraud is well-established in Kansas: 109 Where one party to a contract or transaction has superior knowledge, or knowledge which is not within the fair and reasonable reach of the other party and which he could not discover by the exercise of reasonable diligence, or means of knowledge which are not open to both parties alike, he is under a legal obligation to speak, and his silence constitutes fraud, especially where the other party relies upon him to communicate to him the true state of facts to enable him to judge of the expedience of the bargain. 110 Wolf v. Brungardt, 215 Kan. 272, 282, 524 P.2d 726, 734 (1974). 111 actionable fraud includes an untrue statement of fact, known to be untrue by the party making it, made with the intent to deceive or recklessly made with a disregard for the truth, where another party justifiably relies on the statement and acts to his injury. 112 K-B Trucking Co. v. Riss Int'l Corp., 763 F.2d 1148, 1156 (10th Cir.1985) (quoting Lentz Plumbing Co. v. Fee, 235 Kan. 266, 270, 679 P.2d 736, 742 (1984)). 113 An action for fraud must be brought within two years of when it accrues, but the cause of action shall not be deemed to have accrued until the fraud is discovered. Kan.Stat.Ann. Sec. 60-513(a)(3) (1983). The Supreme Court of Kansas has interpreted discovery of the fraud under the statute of limitations to mean 114 the discovery by the person defrauded of such facts indicating he had been defrauded as would cause a reasonably prudent person to investigate, and which, if investigated with reasonable diligence, would lead to knowledge of the fraud. 115 Wolf, 215 Kan. at 281, 524 P.2d at 734. Because the modern tendency is to restrict rather than to expand the immunity of one who gains an advantage over another by purposely misleading him, id., [s]ome Kansas cases have rejected statute of limitations contentions when the plaintiff could have discovered the fraud, but the defendant lulled the plaintiff into confidence that nothing was amiss. Wolf v. Preferred Risk Life Ins. Co., 728 F.2d 1304, 1306 (10th Cir.1984); see, e.g., Augusta Bank & Trust v. Broomfield, 231 Kan. 52, 61-62, 643 P.2d 100, 108 (1982).