Court Opinion

ID: 9399066
Source: CourtListenerOpinion
Date Created: 2023-06-01 20:01:03.020632+00
Date Added: 2024-06-11T17:19:38.586282
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 23a0248n.06

                                          No. 22-1995

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                                                                     FILED
                                                                                Jun 01, 2023
                                                     )                      DEBORAH S. HUNT, Clerk
 RICHARD C. POE II, et al.,                          )
                                                     )
        Plaintiffs-Appellants,                              ON APPEAL FROM THE UNITED
                                                     )
                                                     )      STATES DISTRICT COURT FOR
        v.                                           )      THE EASTERN DISTRICT OF
                                                     )      MICHIGAN
 FCA US, LLC,                                        )
                                                     )                                OPINION
        Defendant-Appellee.                          )

Before: GRIFFIN, KETHLEDGE, and THAPAR, Circuit Judges.

       KETHLEDGE, Circuit Judge. Richard Poe sued FCA (the current owner of the Chrysler

brand of cars), alleging it had been involved in a 2015 conspiracy to take control of two of Poe’s

car dealerships. The district court dismissed Poe’s claims as time-barred. We agree as to five of

Poe’s claims, but reverse and remand for further consideration of the other two.

                                                I.

       Father and son Dick and Richard Poe together ran three car dealerships in Texas: one

Toyota franchise and two Chrysler franchises. The Chrysler dealerships were limited partnerships,

in which a family corporation—Poe Management—served as general partner. Dick directed Poe

Management and managed the Chrysler franchises; Richard was Poe Management’s sole

shareholder.

       In May 2015, Dick became seriously ill. Unbeknownst to Richard, Dick’s accountant

(Anthony Bock), assistant (Karen Castro), and attorney (Paul Sergent) visited Dick in the hospital
No. 22-1995, Poe, et al. v. FCA US, LLC

and convinced him to issue 1,100 new shares in Poe Management to himself. That issuance

reduced Richard’s stake in Poe Management from 100% to 47.6%. Days after issuing the new

shares, Dick died—leaving Bock and Castro the co-executors of his estate.

       Bock and Castro thereafter appointed themselves directors of Poe Management and

elevated Sergent to officer. Together, the three removed Richard from all his positions in Poe

Management and in the Chrysler dealerships. Meanwhile, Chrysler reached out to arrange a new

manager for the dealerships, and Castro proposed her colleague Gery Reckelbus. Chrysler’s

franchise agreement with Dick required it to offer Richard that managerial position (“principal

dealer”) in the event of Dick’s death. Yet, Richard says, Chrysler refused even to meet with him

and appointed Reckelbus in his place. By the summer, Bock, Castro, and Sergent had completely

ousted Richard from both dealerships.

       In probate court, Richard argued that Dick had lacked capacity to issue shares, and, in the

alternative, that Dick had issued the shares in violation of his fiduciary duty to Richard and Poe

Management. That case went to trial in May 2017; a jury determined that the share issuance was

invalid; and Bock, Castro, and Sergent appealed. In July 2017, while the state court’s judgment

was stayed pending appeal, Poe filed a civil racketeering suit against the alleged conspirators in

federal court. In September 2018, the district court dismissed that case for failure to state a claim.

Poe v. Bock, 2018 WL 4275839 (W.D. Texas, Sept. 7, 2018). In the state litigation, meanwhile,

the Texas Court of Appeals affirmed the jury’s verdict. Matter of Est. of Poe, 591 S.W.3d 607

(Tex. App. 2019). But the Texas Supreme Court granted review of that decision—and in 2022, it

remanded the matter for retrial based on a mistake in the trial court’s jury instructions. Matter of

Est. of Poe, 648 S.W.3d 277 (Tex. 2022). The case remains pending.

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No. 22-1995, Poe, et al. v. FCA US, LLC

         On July 19, 2022, Poe brought this suit against Chrysler, asserting a statutory breach of fair

dealing claim, a contract claim, two tortious-interference claims, a fraud claim, a conversion claim,

and a civil-conspiracy claim. Chrysler moved to dismiss on statute-of-limitations grounds. Poe

argued that several state-law exceptions to the statute of limitations applied to each of his claims.

The district court dismissed the suit, and this appeal followed.

                                                  II.

         We review de novo the district court’s dismissal under Rule 12(b)(6). Brent v. Wayne

County Dep’t. of Human Serv’s, 901 F.3d 656, 675 (6th Cir. 2018). The parties agree that Texas

law applies. See GBJ Corp. v. Eastern Ohio Paving Co., 139 F.3d 1080, 1085 (6th Cir. 1998).

                                                  A.

         As an initial matter, we consider whether we have jurisdiction over Poe’s statutory claim.

See Answers in Genesis of Ky., Inc., v. Creation Ministries Int’l, Ltd., 556 F.3d 459, 465 (6th Cir.

2009). Poe argues that Chrysler violated the good faith and fair dealing provision of the Texas

Occupational Code. See Tex. Occ. Code § 2301.478(b). But the Texas Motor Vehicle Board has

“exclusive original jurisdiction” over “claims and issues the Code governs.” Subaru of Am., Inc.

v. David McDavid Nissan, Inc., 84 S.W.3d 212, 223 (Tex. 2002); Tex. Occ. Code, § 2301.151.

Poe was therefore required to seek relief from the Board before filing suit. Subaru, 84 S.W.3d at

223. He concededly failed to do so here, so we lack jurisdiction over his statutory good-faith

claim.

                                                  B.

         As to the remaining claims, the only issue is whether Poe timely filed them. In Texas, a

two-year limitations period governs claims for conversion and tortious interference, and a four-

year limitations period governs claims for fraud and breach of contract. See Academy of Allergy

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No. 22-1995, Poe, et al. v. FCA US, LLC

& Asthma in Primary Care v. Quest Diagnostics, Inc., 998 F.3d 190, 201 (5th Cir. 2021) (tortious

interference); Pollard v. Hanschen, 315 S.W.3d 636, 641 (Tex. App. 2010) (conversion); Tex.

Stat. § 16.004(a)(4) (fraud); Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002) (contract). Poe’s

civil-conspiracy claim is a “derivative tort that depends on participation in some underlying tort”;

it takes the limitations period of the underlying tort. Agar Corp., Inc. v. Electro Circuits Int’l,

LLC, 580 S.W.3d 136, 138 (Tex. 2019).

                                                 1.

        As a general matter, “a claim accrues when injury occurs.” ExxonMobil Corp. v. Lazy R.

Ranch, LP, 511 S.W.3d 538, 542-43 (Tex. 2017). Here, Poe’s fraud, tortious interference, and

breach of contract claims each rely on the same injury: Reckelbus’s appointment as principal

dealer. Poe says that, between May and August 2015, Chrysler refused to speak with him, refused

to give him access to important documents, and fraudulently concealed Block, Castro, and

Sergent’s plot to take over the dealerships. Then, on August 21, 2015, Chrysler approved

Reckelbus’s appointment as new principal dealer of both dealerships—in spite of its alleged

contractual obligation to offer Poe that position first. Thus, Poe’s injury occurred no later than

August 21, 2015. As Poe acknowledges, that means these claims are untimely unless an exception

to the statute of limitations applies.

        Poe first argues that the discovery rule delayed accrual until July 27, 2017—the date he

filed his federal racketeering suit—because, he says, that is the first day he “displayed knowledge”

of Chrysler’s involvement. But the discovery rule tolls a statute of limitations until the date “a

claimant learns of a wrongful injury”—not the date he first displays knowledge of it. Exxon Corp,

348 S.W.3d at 207 (emphasis added). In Texas, moreover, the discovery rule applies only when

“the plaintiff’s injury is both inherently undiscoverable and objectively verifiable.” Wagner &

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No. 22-1995, Poe, et al. v. FCA US, LLC

Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001). Here, Chrysler’s failure to appoint Poe

obviously was not “inherently undiscoverable”—Poe knew that he did not manage the dealerships.

Id. Thus, the discovery rule does not apply.

       Poe also suggests these claims were timely because Chrysler fraudulently concealed its

involvement. But Chrysler could not have “concealed” its refusals to communicate with Poe or to

appoint him principal dealer. Besides, Poe undisputedly learned of his injury when Chrysler

appointed Reckelbus in August 2015. And “once a claimant learns of a wrongful injury, the statute

of limitations begins to run even if the claimant does not yet know the specific cause of the injury

[or] the party responsible for it.” Exxon Corp., 348 S.W.3d at 207.

       Next, Poe argues that the “legal impediment rule” continues to toll the statute of limitations

on all of his claims until the state courts issue a final determination as to the validity of the share

issuance. This rule applies when pending legal proceedings prevent a plaintiff from “exercising

his legal remedy” as to a particular claim. Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 157

(Tex. 1991). Specifically, the rule prevents duplicative litigation in cases where the outcome of a

first suit would determine the viability of a second suit. Id.; see also Hunt Steed v. Steed, 908

S.W.2d 581, 585 (Tex. App. 1995). For example, the legal-impediment rule tolls the limitations

period on a suit for overdue rent during litigation over title to the relevant land. Hughes, 821

S.W.2d at 157 (discussing Fields v. Austin, 30 S.W. 386, 387 (Tex. Civ. App. 1895)). Title to land

is an element in the action for rent, so litigating the cases simultaneously would risk inconsistent

results and waste judicial resources. See Fields, 30 S.W. at 387; El Pistolon II, Ltd., v. Levinson

Alcoser Assoc’s, LP, 627 S.W.3d 494, 499 (Tex. App. 2021).

       According to Poe, this suit’s viability depends on the outcome of the share issuance

litigation. Hunt Steed, 908 S.W.2d at 585. That argument is meritless with respect to Poe’s tortious

                                                 -5-
No. 22-1995, Poe, et al. v. FCA US, LLC

interference, breach of contract, and fraud claims. The key issue in those claims is whether

Chrysler wrongfully failed to appoint Poe principal dealer. As Poe himself emphasizes, the

franchise agreements with Chrysler—not Poe Management’s shareholders—governed the

dealerships’ management after Dick Poe’s death. And the state litigation will determine only who

rightfully owns Poe Management. The two issues are therefore independent, and the legal

impediment rule does not apply. Hughes, 821 S.W.2d at 157. No exception to the statute of

limitations applies to these claims, so we agree with the district court that Poe filed them too late.

                                                  2.

       That leaves Poe’s claims for conversion and civil conspiracy, which rely on a different

injury. Poe argues that, because he is the sole owner of Poe Management’s stake in the Chrysler

dealerships, Chrysler engages in conversion each time it participates in the sale of a car or

insurance policy at those dealerships. Ordinarily, “the limitations period for a conversion claim

begins to run at the time of the unlawful taking.” Wells Fargo Bank Nw., N.A. v. RPK Cap. XVI,

LLC, 360 S.W.3d 691, 700 (Tex. App. 2012). But Poe cannot assert his claim for conversion

without establishing that he “was the owner of the property, had legal possession of it or was

entitled to possession.” Whitaker v. Bank of El Paso, 850 S.W.2d 757, 760 (Tex. App. 1994).

Thus, Poe’s ownership of the dealerships’ assets (the subject of the share-issuance litigation) is an

element of his conversion claims. Forcing Poe to litigate the ownership issue twice would risk

inconsistent results and waste judicial resources. The legal-impediment rule therefore tolls the

limitations period on his conversion claim until the state courts issue a final judgment in the

pending shares litigation. Hughes, 821 S.W.2d at 157; Fields, 30 S.W. at 387. Poe’s conversion

claim is timely.

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No. 22-1995, Poe, et al. v. FCA US, LLC

       Poe’s civil conspiracy claim is based in part on his conversion claim. According to Poe,

Chrysler conspired with Bock, Castro, and Sergent “to accomplish the unlawful purposes” alleged

in the complaint, including the alleged conversion of dealership property. And conspiracy takes

its limitations period from the underlying tort. Agar Corp., 580 S.W.3d at 148. Thus, Poe’s civil

conspiracy claim is timely, but only as to the tort of conversion.

       Chrysler objects that Poe forfeited any argument under the legal-impediment rule because

he referred to that rule as “Hughes tolling” before the district court. But “the equitable tolling

principle discussed in Hughes” is an application of the legal-impediment rule, so that argument is

meritless. El Pistolon II, 627 S.W.3d at 499. Chrysler also argues that the legal-impediment rule

applies only when “a person is barred by an injunction or similar operation of law” from filing the

second suit. As Hughes itself made clear, however, the rule also applies when the viability of the

second suit depends on the outcome of the first. Hughes, 821 S.W.2d at 156. That is the situation

here with respect to Poe’s conversion and civil conspiracy claims.

                                              ****

       We reverse the district court’s dismissal of Poe’s conversion and civil conspiracy claims

and remand for further proceedings consistent with this opinion.

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