Opinion ID: 480737
Heading Depth: 2
Heading Rank: 2

Heading: The Issue of Fraudulent Concealment

Text: 52 There is no question that Baskin's cause of action for the loss of his pension accrued in 1972 when the Fund denied his application. Thus, the statute of limitations, be it the six-year Connecticut statute provided by Conn.Stat.Gen. Sec. 52-576 (1985) for contract actions, or the six-month statute that has been applied to claims under 29 U.S.C. Sec. 185(a) (1982) arising out of violations of contracts between an employer and a labor union, see DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 169-72, 103 S.Ct. 2281, 2293-95, 76 L.Ed.2d 476 (1983), would have run prior to the commencement of this suit if its running was not tolled on account of fraudulent concealment. Local 449 makes a number of arguments in support of its contention that the fraudulent concealment argument was not available, including (1) that there was insufficient proof of fraudulent concealment on the part of the Union, (2) that the court erred in concluding that a plaintiff who claims fraudulent concealment has no duty to exercise diligence in learning the facts concealed, (3) that there was insufficient evidence of Baskin's diligence, and (4) that the court erred in instructing the jury that the Union had a duty to disclose. We reject each argument. 53 There was evidence of active concealment. Concealing the actionability of a known injury is sufficient to toll the statute of limitations. See, e.g., Bowen v. City of New York, --- U.S. ----, 106 S.Ct. 2022, 2030, 90 L.Ed.2d 462 (1986) (though plaintiffs knew of loss of benefits, statute of limitations was tolled by defendants' concealment of facts revealing that the loss constituted a violation of rights), aff'g, City of New York v. Heckler, 742 F.2d 729, 738 (2d Cir.1984); Hamilton v. Smith, 773 F.2d 461, 468 (2d Cir.1985) (applying Connecticut law) (plaintiff knew he had cancer but defendant allegedly concealed evidence of earlier misdiagnosis); Barrett v. United States, 689 F.2d 324, 327-28 (2d Cir.1982), cert. denied, 462 U.S. 1131, 103 S.Ct. 3111, 77 L.Ed.2d 1366 (1983); Moviecolor Ltd. v. Eastman Kodak Co., 288 F.2d 80, 87 (2d Cir.) (there is fraudulent concealment when defendant conceals either the transaction sued upon, the defendant's identity, or the facts rendering a known transaction actionable), cert. denied, 368 U.S. 821, 82 S.Ct. 39, 7 L.Ed.2d 26 (1961); Richards v. Mileski, 662 F.2d 65, 69, 70 (D.C.Cir.1981) (despite plaintiff's knowledge of sufficient facts relating to other causes of action, statute of limitations on defamation cause of action was tolled by defendant's fraudulent concealment of their knowledge of falsity of statements about plaintiff). 54 Indisputably, the Union actively concealed from Baskin any hint that Stright was bound to a collective bargaining agreement from 1963 through 1967. DeLuca represented to the Pension Fund that Stright was not so bound; the Fund informed Baskin that this was the reason his pension application was denied. Further, Baskin testified that DeLuca had told him that Stright had not made payments on his behalf to the Welfare Fund, further concealing the employer's contractual obligations. Though DeLuca in effect denied at trial that he had made such a statement, claiming that he had told Baskin that Stright's contributions were too small to benefit Baskin, the assessment of the credibility of the witnesses is a matter wholly within the province of the jury. The jury apparently credited Baskin's evidence, perhaps influenced by the fact that DeLuca had twice falsely stated in pretrial statements under oath that Stright had made no contributions to the Welfare Fund prior to 1968 and had falsely represented that the Union no longer had any records as to pre-1968 contributions. In the end, the jury found that Local 449 fraudulently conceal[ed] facts giving rise to plaintiff's cause of action, and there is no basis in this record for overturning this finding. 55 We see no merit in the Union's contentions regarding Baskin's diligence. Local 449 argues that the district court erred in relying on this Court's decision in Robertson v. Seidman & Seidman, 609 F.2d 583, 593 (2d Cir.1979), for the proposition that a plaintiff need not establish his diligence in attempting to discover his cause of action if the defendant has engaged in active concealment. Even if Robertson did not stand for this proposition, which we think it does, the Union has shown no basis for reversal, for in fact the jury was instructed that Baskin was required to exercise reasonable diligence, and was asked, Could Mr. Baskin or his attorneys have discovered the grounds for his cause of action through the exercise of reasonable diligence despite the Union's fraudulent concealment? The jury answered this question in the negative. 56 Nor was the proof of Baskin's diligence inadequate to support this finding. It is settled that reasonable diligence does not require a person to commence a lawsuit in order to procure court-ordered discovery of concealed facts. See, e.g., Barrett v. United States, 689 F.2d at 330. Given the evidence that Baskin was illiterate, had no access to the concealed records, and relied on DeLuca initially to assist him in applying for a pension, and given the proof of the array of false statements, half-truths, and omissions on the part of the Union, it was more than reasonable for the jury to infer that commencement of the lawsuit was the only step that could have uncovered the information concealed here. We conclude that the evidence was sufficient to support the jury's verdict. 57 Finally, we find no reversible error in the court's instruction to the jury that Local 449, because of the special relationship between a union and its members, had an obligation to disclose to Baskin information that it knew might give him a claim against the Union. The Union argues that reversal is required because a union has no duty of fair representation to its members who are retired. We reject this argument for several reasons. 58 First, though we note that a union's duty of fair representation does not include an obligation to take into account the interests of its retired members when it is negotiating contracts with an employer, see, e.g., Central States, Southeast And Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559, 105 S.Ct. 2833, 2843 n. 18, 86 L.Ed.2d 447 (1985); Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 172-75, 92 S.Ct. 383, 393-96, 30 L.Ed.2d 341 (1971), we are aware of no case holding that where a union has, as the jury found here, breached its duty of fair representation to a member while he was an employee and member of the bargaining unit, its duty of honest conduct expires upon the member's retirement and the union can thereupon with impunity engage in half-truths and outright falsehoods to conceal its prior breach. Nor need we reach the question of whether such misrepresentations by a union in these circumstances would give the member a cause of action for lack of fair representation, since the function of the challenged instruction was not to list the elements of any cause of action but solely to inform the jury's consideration of whether there was such fraudulent concealment of the prior breach of the fair-representation duty as to toll the statute of limitations. Thus, with regard to Baskin's claim of a breach of the duty of fair representation, the jury was asked only whether Local 449 breached the duty in failing to require Stright to pay pension benefits during the years from 1963 through 1967 when Stright was bound by a collective bargaining agreement[.] We doubt that rulings that a union has no duty of fair representation to retired members while it is negotiating contracts should preclude consideration of a union's concealment when the question is solely whether the union should thereby be equitably estopped from gaining the benefit of the statute of limitations. 59 Finally, even if the court should not have instructed the jury that the Union had a special relationship with Baskin at the time of his pension application, the Union's duty to disclose here did not depend on the assumed special relationship, for if the Union qua union had no duty to disclose anything, it is nonetheless fundamental that a person who speaks has a duty to disclose enough to prevent his words from being misleading. A statement disclosing favorable information but omitting all reference to material unfavorable facts breaches that duty. See Restatement (Second) of Torts Sec. 529 & comments a, b (1977); Prosser and Keeton on the Law of Torts Sec. 106, at 738 (5th ed. 1984). This principle is plainly applicable to the question of whether a defendant has engaged in fraudulent concealment. See United States v. Hardy, 299 F.2d 600, 609 (4th Cir.), cert. denied, 370 U.S. 912, 82 S.Ct. 1259, 8 L.Ed.2d 405 (1962); Hickok Producing & Development Co. v. Texas Co., 128 F.2d 183, 185 (5th Cir.1942). 60 In all the circumstances, given the ample evidence of falsehoods and half-truths by the Union preventing Baskin from perfecting his application for a pension and from learning of the Union's breach of its duty of fair representation, we cannot conclude that the instructions as to fraudulent concealment contained reversible error.