Opinion ID: 1125431
Heading Depth: 1
Heading Rank: 5

Heading: dbsi's fraud and misrepresentation claims are barred by the statute of limitations.

Text: Count IV of DBSI's First Amended Complaint alleges that Bender made numerous promises, representations and warranties regarding the management of the Projects for the period prior to execution of the Earnest Money Agreements which were untrue, false, and constituted misrepresentations. In Count VII, DBSI alleges that Bender and WSDC made fraudulent statements prior to the execution of the 1984 Agreements which induced DBSI to enter into the Agreements. Both Count IV (fraudulent misrepresentation) and Count VI (fraud in the inducement) assert that DBSI suffered no less than $2,973,133.00 in damages as a result of these alleged frauds. The district court determined that the statute of limitations for fraud is governed by I.C. § 5-218 and provides that a cause of action based on fraud must be brought within three years from the later occurrence of the fraud or the time of discovery of the facts sufficient to put the aggrieved party on notice of the fraud. I.C. § 5-218. The district court determined that DBSI's Complaint was filed on May 11, 1990, more than three years after the defendants had full knowledge of all of the parts of any claim for fraud, fraudulent misrepresentation or fraud in the inducement by December 30, 1986, when they finally and irrevocably accepted the assumption agreements with the FmHA. DBSI argues that, because an element of its cause of action for fraudulent misrepresentation requires it to prove the speaker's knowledge of falsity, the statute of limitations is tolled until such a time as it could demonstrate that element. DBSI maintains that the only information it had on December 30, 1986, was that the representations were false. It maintains that, at that time, it was still unable to show the speaker's knowledge of falsity of these representations until the acquisition of four pieces of evidence during the discovery process. This evidence included: (1) a letter dated June 20, 1984, from WSDC in which it falsely stated that no management agreement existed between it and Bender; (2) deposition testimony by the WSDC comptroller admitting that he knew that the representations made to the independent CPA auditors in 1984 were inaccurate and that the Projects were not incompliance with FmHA regulations; (3) deposition testimony by the WSDC Comptroller that Bender was aware that his books and records were not accurate and did not comply with the FmHA regulations; and (4) a letter from FmHA to WSDC regarding its non-compliance with FmHA regulations which DBSI claims should have been, but was not, disclosed to DBSI. Section 5-218 of the Idaho Code provides in relevant part: 5-218 Statutory liabilities, trespass, trover, replevin, and fraud.  Within three (3) years: . . . . 4. An action for relief on the ground of fraud or mistake. The cause of action in such case not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.