Russell Packard Development, Inc., a California Corporation; and Lawrence M. Russell, an Individual, Plaintiffs And… (Utah 2005)

Summary

The Utah Supreme Court, on certiorari, clarified the law of tolling under the concealment version of the discovery rule. It held that equitable discovery-rule exceptions apply only to statutes of limitations lacking an internal ("statutory") discovery rule, and that a plaintiff may invoke concealment tolling either by showing no knowledge or reasonable means of knowledge before the fixed period expired, or by showing that a reasonably diligent plaintiff may have delayed filing past expiration despite earlier knowledge. Although the court of appeals applied the wrong legal standard, the Supreme Court agreed that the district court improperly dismissed plaintiffs' four-year claims because whether plaintiffs should be charged with constructive notice during the final five months of the period, and whether they reasonably delayed, are questions for the fact-finder. The court affirmed the court of appeals and remanded, while dismissing plaintiffs' conceded commercial bribery claim.

Holding

Does the discovery rule operate differently for statutes of limitations that contain an internal discovery rule versus those that do not, and may the equitable concealment exception apply to a statute lacking a statutory discovery rule?. Yes. The court renamed the "internal discovery rule" the "statutory discovery rule" and labeled the judicial gloss on fixed limitation periods the "equitable discovery rule," clarifying and emphasizing that the equitable exceptions (concealment and exceptional circumstances) apply ONLY where a statute of limitations does not, by its own terms, already account for such circumstances. The concealment version therefore governs the four-year catch-all statute at issue but would be inappropriate for the three-year fraud statute, which contains its own discovery rule.

What must a plaintiff show to toll a fixed limitations period under the concealment version of the equitable discovery rule, particularly where the plaintiff knew or should have known of the claim before the period expired?. Once the defendant establishes that the plaintiff filed outside the limitations period, the plaintiff may toll under the concealment version by showing either (1) that, given the defendant's concealment, the plaintiff neither discovered nor reasonably should have discovered the facts underlying the cause of action before the period expired—in which case the period runs from actual or constructive discovery—or (2) that, notwithstanding actual or constructive knowledge within the period, the plaintiff acted reasonably in failing to file, i.e., that a reasonably diligent plaintiff would not necessarily have filed within the period and may have delayed until after expiration. Walker Drug cannot be read to bar tolling whenever a plaintiff had any pre-expiration knowledge, however brief the remaining time.

Did the district court err in dismissing plaintiffs' four-year claims where plaintiffs were placed on inquiry notice only about five months before the limitations period expired?. Yes. Accepting the complaint's allegations as true, plaintiffs made a prima facie showing of fraudulent concealment, and the facts did not fall on either end of Berenda's factual continuum; consequently, when plaintiffs should be charged with constructive notice during the five-month window and, if charged, whether they acted reasonably in not filing sooner are factual questions appropriately reserved for the fact-finder. The complaint raised a legitimate factual question, so dismissal was improper.

Did the court of appeals err in failing to dismiss plaintiffs' commercial bribery claim?. Yes. Because plaintiffs' counsel conceded during oral argument before the court of appeals that the commercial bribery claim was properly dismissed, and the parties agree the court of appeals erred in failing to dismiss it, the Supreme Court dismissed that claim.

Russell Packard Development, Inc., a California Corporation; and Lawrence M. Russell, an Individual, Plaintiffs And…

Summary

Holding

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