Court Opinion

ID: 9451950
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:27:39.286062+00
Date Added: 2024-06-11T17:32:59.282368
License: Public Domain

FAHY, Circuit Judge
(dissenting):
Congress has enacted a statute of limitations applicable to actions based on fraud. As stated in the court’s opinion it is three years, and the period begins to run “upon discovery of facts out of which the claim of fraud arises, or from the time such facts should reasonably have been ascertained in the exercise of due diligence.” Wiren v. Paramount Pictures, 92 U.S.App.D.C. 347, 349, 206 F.2d 465, 467, and cases there cited. I would remand the case for trial because in my opinion a genuine issue of material fact was presented as to when the insurance company discovered the fraud or, exercising due diligence, should have discovered it. In my view this precludes summary judgment being granted in favor of appellee as if no such issue existed. It is of course no judicial approval of fraud to have a proper determination made whether the statute of limitations bars an action based on fraud.
The genuine issue of fact left undecided by the District Court emerged from prior testimony of the insurance broker that sometime between May 13, 1959, and November 13, 1959, more than four years before the action was filed, he advised appellee, the insurance company, that appellant’s claim was faked. This raised an issue as to whether the insurance company had actual notice of the fraud or, “in the exercise of due diligence,” could reasonably have ascertained the fraud. Wiren v. Paramount Pictures, supra,. How the issue should be decided would depend upon the trial of the issue.
If the fraud were found to have been discovered, or by due diligence should have been discovered, more than three years before the action was filed, the bar of the statute of limitations would *301not be avoided by estoppel; the insurance company would no longer have been misled by the fraud, since it had knowledge of it, or could not assert lack of knowledge. Accordingly, the principle stated in Glus v. Brooklyn Eastern Terminal, 359 U.S. 231, 79 S.Ct. 760, would not apply.