Court Opinion

ID: 9475010
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:14:46.089065+00
Date Added: 2024-06-11T17:44:27.401305
License: Public Domain

BRIGHT, Senior Circuit Judge,
dissenting.
I respectfully dissent.
The majority today concludes that the district court “correctly entered summary judgment on the ground that the fraud claim was time barred.” Notwithstanding the majority’s holding, however, the district court in this case did not grant a motion for summary judgment based on the running of the applicable statute of limitations. This suit had been in trial for three days when the district court declared a mistrial. At that time, the district court took under submission several motions of defendant, including a motion for summary judgment on plaintiffs’ action for fraud based on the statute of limitations.
Two weeks after it declared the mistrial, the district court denied the defendant’s motion for summary judgment on the fraud claim, concluding that it “cannot say as a matter of law the plaintiffs knew or should have known of the inadequacies” of the Burroughs’ computer system. The district court also stated that the plaintiffs’ fraud claim had not been adequately pleaded and ordered plaintiffs to file an amended complaint in compliance with Federal Rule of Civil Procedure 9(b).
Following this ruling and the plaintiffs’ filing of its first amended complaint, Burroughs brought a motion to dismiss on the ground that the complaint still failed to adequately plead the circumstances surrounding the alleged fraud. The district court concluded that the complaint did not aver fraud with the particularity required by Rule 9(b), and did not state the specific circumstances that would toll the running of the applicable statute of limitations. On this basis, and on this basis alone, the court granted Burroughs’ motion to dismiss the complaint with prejudice.
On appeal from this order, therefore, we do not review the entry of a summary judgment based on the running of the statute of limitations. Although the district court referred to the prior motion for summary judgment brought by Burroughs, the court did not have such a motion before it, and did not state that it was considering such a motion. Any discussion by the district court of the merits of the statute of limitations issue remains purely extraneous and outside our review. The district court *957granted only a motion to dismiss on Rule 9(b), and not a motion for summary judgment on the statute of limitations.
Moreover, even if I were to accept the proposition that the district court granted a summary judgment motion on the statute of limitations issue, I would still be forced to conclude that the district court erred in granting such a motion. In order to grant summary judgment on the basis of the statute of limitations, the passing of the limitations period must be established as a matter of law. In its memorandum and order dismissing plaintiffs’ fraud claim, the court stated that the facts do not “permit a finding that plaintiffs either did not nor could not by the exercise of due diligence discover (prior to June 20, 1978) the facts demonstrating the falsity of the alleged representations.” The court supported this conclusion by observing that plaintiffs “are sophisticated business men” who “knew that all attempts to modify the inventory programs and correct the problems had dismally failed.” These conclusory statements cannot be sustained as determinations made as a matter of law on undisputed facts.
Thus, I do not believe that we should affirm the district court on an “alternative” holding that the statute of limitations barred the plaintiffs’ claim of fraud. Moreover, I believe that the district court erred in dismissing the plaintiffs’ complaint on the ground that it failed to plead fraud and the tolling of the statute of limitations with sufficient particularity. I would therefore reverse the judgment of the district court dismissing plaintiffs’ complaint with prejudice, and remand for further proceedings.