Opinion ID: 2633287
Heading Depth: 3
Heading Rank: 4

Heading: Statutory Fraud Tolling Provision

Text: Christine also argues that her suit is timely under the statutory fraud tolling provision in AS 13.06.030. This statute provides that where fraud has been perpetrated in connection with a probate proceeding, any claim against the perpetrator of the fraud must be brought within two years after the discovery of the fraud. [17] Unlike the doctrine of equitable estoppel, AS 13.06.030 does not include a due diligence requirement. Christine argues that the inter vivos stock transfer was carried out illegally, pointing to the unusual circumstances surrounding the transfer: the transfer occurred just days before Pete's death and in the presence of Connie, one of the beneficiaries of the transfer; the back of the stock certificate that Pete signed did not include the names of the beneficiaries, which were later added by his attorneys; and Mike did not sign the annuity agreement until after Pete's death. She argues that not including the Totem Inn stock as part of the probated estate constituted fraud in connection with the probate proceeding. She contends that she did not learn of the alleged fraud until after she filed the complaint in this case, and that her complaint was therefore timely under AS 13.06.030. The superior court's order appears to have resolved the factual questions regarding whether the transfer was fraudulent in favor of the defendants. [18] The court found that Pete decided to transfer all his shares in the Totem Inn to Mike and Connie in return for a monthly annuity payment from them, which suggests that even though Pete signed blank forms he was not defrauded since they were later filled out according to his instructions. The superior court also found that Mike and Connie did not conceal the annuity agreement that transferred the Totem Inn to them and stated that it [found] no fraud, misrepresentation, or inadequate disclosure related to settlement of Pete's Florida estate by Mike. Christine did not provide evidence to challenge that finding as clearly erroneous. Furthermore, Pete transferred the stock legally before his death. Since the superior court found that the transfer was consistent with Pete's wishes and his prior instructions to his attorneys, Pete was not defrauded. And under Alaska law, endorsing a stock certificate in blank and delivering it to the transferee is sufficient to effect the transfer. Alaska Statute 45.01.201 defines a purchaser to include a person who takes through a sale, gift, or other voluntary transaction. Alaska Statute 45.08.304 provides that an endorsement may be made in blank, and that such an endorsement constitutes a transfer upon delivery. Under AS 45.08.301, delivery to a purchaser occurs when the purchaser acquires possession of the security certificate. Under AS 45.08.206, [if] a security certificate contains the signatures necessary to its issue or transfer but is incomplete in another respect ... a person may complete it by filling in the blanks as authorized. [19] Thus, by endorsing the certificate in blank and giving it to Connie, Pete effectively transferred the stock. [20] Christine points out that properly executed stock transfers made as a result of fraud or undue influence can be found invalid. But here the superior court found that the stock transfer was consistent with Pete's wishes; the potential fraud at issue here involves the manner in which the transfer was accomplished, not whether Pete was fraudulently induced to make the transfer. If Pete's endorsement on the stock certificate was sufficient to transfer the stock, that stock was properly excluded from the estate probated in Florida. For that reason, the Totem Inn was not part of Pete's estate at the time of his death, and no fraud was committed in connection with the estate as required for tolling under AS 13.06.030. We therefore hold that the tolling exception in AS 13.06.030 does not apply to Christine's claims.