Court Opinion

ID: 9706620
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:47:48.436744+00
Date Added: 2024-06-11T18:22:24.018186
License: Public Domain

LANSING, Judge
(dissenting).
The majority opinion analyzes the issues too narrowly. DLH appealed from a judgment that both granted summary judgment on the existing claims and denied DLH’s motion to amend the complaint to add a claim of fraudulent concealment. The district court concluded that DLH’s fraudulent concealment claim was limited by the bankruptcy trustee’s failure to exercise reasonable diligence. But whether a party used reasonable diligence to investigate a fraudulent concealment is a question of fact. Wittmer v. Ruegemer, 419 N.W.2d 493, 498 (Minn.1988). *332When filing for bankruptcy, Russ had an affirmative duty to disclose all his assets. 11 U.S.C. § 521(1) (1994) (debtor must file “a schedule of assets and liabilities ⅜ * *.”). The bankruptcy trustee’s reasonable diligence must be assessed in the context of Russ’ required disclosure. See In re Pomaville, 190 B.R. 632 (Bankr.D.Minn.1995) (reasoning that trustee must rely on bankruptcy debtor’s disclosures).
The evidence supporting the fraudulent concealment claim creates a material fact question, which would also toll the statute of limitations. See Butter v. A.O. Smith Harvestore Prods., 518 N.W.2d 537, 542 (Minn.1994) (fraudulent concealment tolls statute of limitations). The magnitude of Damark’s increased sales, the various transfers of stock, and the timing of Russ’ bankruptcy filing demonstrate sufficient evidence of fraudulent concealment of assets to withstand summary judgment. In 1986 Damark reported sales of $1,330,777. In 1987, the year Russ filed for personal bankruptcy, Damark’s sales were $4,852,000. At the very least, the unascer-tained value of the Damark stock at the time Russ filed for bankruptcy presents a question of material fact. If any doubt exists whether a genuine issue of material fact remains, the doubt must be resolved by denying summary judgment. Rathbun v. W.T. Grant Co., 300 Minn. 223, 230, 219 N.W.2d 641, 646 (1974). Other obstacles besides the statute of limitations may impede or limit DLH’s ultimate recovery, but DLH should have the opportunity to develop its claim. See In re Sinder, 102 B.R. 978, 982-83 (Bankr.S.D.Ohio 1989) (dismissing single creditor’s fraudulent transfer claim when bankruptcy trustee had already fully investigated and declined to bring such an action). Because the majority opinion prematurely narrows full consideration of material fact issues, I would reverse the summary judgment.