Opinion ID: 1782452
Heading Depth: 2
Heading Rank: 3

Heading: Misrepresentation Claim Against All Defendants

Text: RaCON alleges that the County, BKI, and TTL all misrepresented to RaCON that it would have to construct rock buttresses as a last resort to remedy actual slope failures only after RaCON had attempted other, less costly, construction methods. Claims based on those alleged misrepresentations were first asserted in RaCON's January 16, 2002, complaint. A two-year statute of limitations applies to fraud actions. Ala.Code 1975, § 6-2-3. That limitations period begins to run when the claimant discovers the fraud. Id. In Alabama, fraud is discoverable as a matter of law when a claimant receives documents that put him or her on notice that the fraud reasonably should be discovered. Liberty Nat'l Life Ins. Co. v. Parker, 703 So.2d 307, 308 (Ala.1997). Before signing the contract on December 1, 1999, Andrews received and read a letter from BKI dated November 30, 1999, in which the project engineer stated that RaCON's obligation is to place riprap and construct rock buttresses where the possibility of slides exists or as directed by the engineer. Entering summary judgments on the misrepresentation claims against all defendants, the trial court ruled that BKI's letter was sufficient to put RaCON on notice under Alabama Code [1975, § 6-2-3,] of the fact constituting the alleged misrepresentation. Because RaCON's misrepresentation claims were asserted more than two years after BKI's letter, the trial court held that those claims were time-barred. RaCON argues that it did not discover the alleged fraud until its May 1, 2000, meeting with the defendants at which RaCON was directed to construct 14 rock buttresses. RaCON's misrepresentation claims would not be time-barred if its cause of action for fraud accrued on May 1, 2000. RaCON further argues that a material issue of fact exists as to whether the fraud cause of action accrued on its receipt of BKI's November 30, 1999, letter, because, it says, the terms in that letter were ambiguous. We reject RaCON's arguments. The plain meaning of BKI's November 30, 1999, letter was that RaCON would have an expansive obligation to construct rock buttresses where the possibility of slides existed or where the engineer directed. BKI's statements in that correspondence unquestionably are inconsistent with RaCON's alleged pre-bid understandings that rock buttresses were for remedial, not preventive, purposes, and would be constructed only as a last resort to remedy actual slope failures. RaCON further attempts to save its misrepresentation claims by relying on Potter v. First Real Estate Co., 844 So.2d 540 (Ala.2002). RaCON argues that Potter stands for the proposition that the statutory limitations period for a fraud action does not run if, following the discovery of a misrepresentation, a party thereafter renews the misrepresentations to the claimant. Specifically, RaCON argues that, before it signed the contact, Mack Roberts, director of ALDOT, made statements to Andrews on December 1, 1999, reaffirming alleged earlier representations to RaCON that it would have a limited obligation to construct rock buttresses. Because this alleged reaffirmation occurred after BKI's November 30, 1999, letter, RaCON contends that, under Potter, a fact question exists as to whether the cause of action for fraud accrued on May 1, 2000. We also reject this argument. The facts here concerning Roberts's alleged reaffirmation of fraud are distinguishable from those in Potter. The reaffirmation of the alleged fraud in Potter occurred when a real estate agent, a defendant in that case, reassured the plaintiffs that the house they were purchasing was not located in a flood plain. [22] Here, neither Roberts nor ALDOT were parties to the contract, neither made the alleged misrepresentations on which RaCON's fraud claims are based, and Roberts did not represent any of the defendants at the December 1, 1999, meeting at which the contract was executed. A statement from Roberts, a third party, allegedly reaffirming fraudulent statements by the defendants can hardly be binding on the defendants or toll the statute of limitations that began running for RaCON upon receipt of BKI's November 30, 1999, letter. RaCON received and read BKI's November 30, 1999, letter before it signed the contract the following day. We hold that no later than November 30, 1999, RaCON was in possession of facts that would put it on notice that the defendants had misrepresented RaCON's duties to construct rock buttresses. Because RaCON's misrepresentation claims were filed more than two years after November 30, 1999, the trial court's summary judgments are affirmed with respect to the fraud claims against all of the defendants.