Court Opinion

ID: 8996875
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:46:19.243856+00
Date Added: 2024-06-11T17:11:05.557776
License: Public Domain

SKOPIL, Circuit Judge,
concurring in part, dissenting in part:
I agree that summary judgment was properly entered on Nevada Power’s implied equitable indemnity claim. I also agree that the implied warranty, strict products liability, negligence and nuisance claims have been abandoned. Accordingly, I concur in the decision to affirm the district court regarding those issues. I disagree, however, that Nevada Power’s fraud and failure to warn claims are not subject to summary judgment on statute of limitations grounds. Therefore, I dissent from the majority’s decision to reverse and remand.
In my view, the statutes of limitations began to run in the 1970’s when Nevada Power admittedly knew that PCB’s were hazardous. At that time, Nevada Power knew that Monsanto’s representations that PCB’s are safe had been false and that it was harmed by those representations. Because those facts are undisputed, no genuine issue of material fact exists to preclude summary judgment. The statutes of limitation expired long before Nevada filed its complaint in 1989, and the district court properly granted Monsanto summary judgment.
Under Nevada law, “the statute of limitation commence[s] to run from the date of the discovery of facts which in the exercise of proper diligence would have enabled the plaintiff to learn of the fraud.” Howard v. Howard, 69 Nev. 12, 239 P.2d 584, 589 (1952) (emphasis added). A plaintiff must establish “facts showing that she was not negligent in failing to make the discovery sooner and that she had no actual nor presumptive knowledge of facts sufficient to put her on inquiry.” Id. 239 P.2d at 588-89. In Howard, the plaintiff sought to set aside a divorce decree, alleging it was based on her former husband’s fraudulent affidavit for publication of summons. The Nevada Supreme Court held that the limitation period began to run when she discovered that the court had dissolved her marriage without notifying her even though her husband had known her address. Id. at 589.
Howard is analogous to this case. The plaintiff in Howard knew she had been harmed by her former husband when she learned of the divorce. Certainly, she did not have actual knowledge that her former husband had acted with a fraudulent intent. Nevertheless, the court held that she had a duty to inquire why she had not been notified. The Nevada court rejected her contention that the period was tolled until she discovered the false affidavit. Id.
The holding in Howard is consistent with decisions in other jurisdictions. In a case almost identical to the one before us, the Sixth Circuit held that the statute of limitations began to run as a matter of law when the plaintiffs became aware of the hazards of PCB’s. Elec. Power Bd. v. Monsanto Co., 879 F.2d 1368 (6th Cir.1989), cert. denied, 493 U.S. 1022, 110 S.Ct. 724, 107 L.Ed.2d 743 (1990). The court there found it irrelevant that, unbeknownst to the plaintiffs, Monsanto allegedly had been fraudulently concealing the dangers of PCB’s. Id. at 1378. The court disposed of that *1311argument by reiterating ■ that despite any fraud the plaintiffs “knew or should have known of the hazards of ... PCBs ... at least four years before their suit was filed.” Id.
The Tenth Circuit also has held that the limitation period in a fraud action begins to run, as a matter of law, when the plaintiff knows that the defendant’s representations were false. Jones v. Ford Motor Co., 599 F.2d 394, 399 (10th Cir.1979). Moreover, the court later expressly rejected the notion that the limitation period is tolled until the plaintiff learns that the defendant’s misrepresentations were intentional. Ohio v. Peterson, 651 F.2d 687, 695 (10th Cir.), cert. denied, 454 U.S. 895, 102 S.Ct. 392, 70 L.Ed.2d 209 (1981). The court stated:
“The probability of [the defendant’s] participation in the fraudulent transaction started the statute running as to him, even though Ohio had no proof of scienter. Although scienter is a necessary element of a § 10(b) private action, in many cases scienter will emerge only as an inference from the facts before the jury. This circumstance cannot be used as a basis for emasculating the statute of limitations.”
Id. (internal citation omitted).
The majority here concludes that the district court could not decide this issue on summary judgment because whether Nevada Power should have known of the fraud or was put on inquiry notice is a question of fact. The majority states the law too broadly. In most fraud cases, that is a question of fact because ordinarily the parties dispute when the plaintiff realized the defendant’s representations were false. See, e.g., Woods v. Label Inv. Corp., 107 Nev. 419, 812 P.2d 1293, 1297 (1991); Millspaugh v. Millspaugh, 96 Nev. 446, 611 P.2d 201, 202 (1980). Where there is no genuine issue as to when the plaintiff learned that the defendant’s representations were false, however, a defendant may be entitled to judgment as a matter of law. See Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980) (upholding dismissal based on the statute of limitations when the plaintiff admittedly knew the defendant’s representations were false more than three years before the action). Here, Nevada Power concedes that it knew in the 1970’s that Monsanto’s representations had been false, and Nevada law requires a plaintiff in that position to inquire whether the representations were fraudulent. See Howard, 239 P.2d at 589. No genuine issue of material fact exists.
The majority’s solution of permitting the jury to decide whether the claims are barred robs defendants of much of the protection limitation rules are intended to provide. The rules are grounded on twin policies of protecting defendants from defending stale claims and promoting repose. Nevada State Bank v. Jamison Fam. Part., 106 Nev. 792, 801 P.2d 1377, 1381 (1990); Ohio, 651 F.2d at 694. Both policies are eroded by a rule that necessarily makes the statute of limitations a jury question. See Ohio, 651 F.2d at 694. Unless the court bifurcates the trial, both the defendant and the court will be burdened by the trial of a stale claim, even if the defendant is vindicated. Id. Furthermore, any repose from the statute would be illusory if the defendant still faces “the cost and vexation of protracted litigation and the uncertainty of contingent liability.” Id.
I would affirm the district court.