Opinion
No. 12–P–736. 12–P–736
2013-04-18
John J. DALEY, Third v. Frank J. AVELLINO & another (and a companion case ).
By the Court (KATZMANN, MEADE & SULLIVAN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendants, Frank J. Avellino and Kenn Jordan Associates (KJA), appeal from judgments entered for the plaintiffs, John J. Daley, III, and Nancie B. Taylor, after a jury found the defendants liable to the plaintiffs on multiple counts of breach of contract and tortious injury. On appeal, the defendants assert the judge improperly refused to give a proposed jury instruction on the statute of limitations defense, which prevented the jury, in their role as the finder of fact, from appropriately weighing whether the plaintiffs' claims should be time-barred. We reverse and remand for proceedings consistent with this memorandum and order.
“We review objections to jury instructions to determine if there was any error, and, if so, whether the error affected the substantial rights of the objecting party.” Hopkins v. Medeiros, 48 Mass.App.Ct. 600, 611, 724 N.E.2d 336 (2000). “Although a judge enjoys significant latitude in framing the language of his jury instructions, and is not required to use the specific language requested by a party, an objection does lie if a significant matter is not dealt with at all.” Grant v. Lewis/Boyle, Inc., 408 Mass. 269, 275–276, 557 N.E.2d 1136 (1990) (citations omitted). The defendants claim the judge erred in refusing to instruct the jury on the statute of limitations defense, and that such error substantially affected the defendants' right to have the fact finder appropriately determine when the plaintiffs' cause of action accrued. We agree.
The judge's error precluded the jury from even considering whether the plaintiffs' claims were time-barred, which was the key component of the defendants' defense at trial. See Riley v. Presnell, 409 Mass. 239, 248, 565 N.E.2d 780 (1991) (“[A]ny disputed issues relative to the statute of limitations ought to be decided by the jury”). Courts of the Commonwealth have long entrusted the fact finder at trial to hear evidence regarding factual disputes relative to the statute of limitations and rule accordingly on whether a plaintiff's claim is timely. See id. at 247–248, 565 N.E.2d 780, and cases cited. “In most instances, the question of when a plaintiff knew or should have known of [his] cause of action is one of fact that will be decided by the trier of fact[;] ... the appropriate standard to be applied when assessing knowledge or notice is that of a ‘reasonable person in the plaintiff's position.’ “ Taygeta Corp. v. Varian Assocs., Inc., 436 Mass. 217, 229, 763 N.E.2d 1053 (2002), quoting from Riley, supra at 245, 565 N.E.2d 780. See Protective Life Ins. Co. v. Sullivan, 425 Mass. 615, 631–632, 682 N.E.2d 624 (1997).
Because we find error with the judge's instructions regarding the statute of limitations, and reverse on those grounds alone, we do not address the defendants' other claims.
Here, Daley made his initial investment with the defendants on June 25, 2001, making him a limited partner in KJA at that time. Taylor made her initial investment with the defendants on November 23, 2001. The plaintiffs filed their complaints in February, 2009. At trial, the testimony of Avellino, as well as cross-examination of other witnesses, including the plaintiffs, provided the jury with evidence that the plaintiffs knew both prior to and shortly after investing with Avellino in 2001 that the defendants were not personally managing the plaintiffs' investments, but instead an investment broker, ultimately revealed to be Bernard L. Madoff Investment Securities (BLMIS), was managing KJA's investments. The defendants also argued that other evidence indicated the plaintiffs possibly knew as early as 2002 that the defendants had breached their investment contract, such as the fact that the plaintiffs were not receiving the expected twelve to fifteen percent return on their investments the defendants allegedly promised.
The plaintiffs assert they had no knowledge that the defendants had broken their alleged promises and contract and caused the plaintiffs' injury until December, 2008, when Madoff was arrested and the defendants made it known that the plaintiffs' investments were indeed with BLMIS. The plaintiffs asserted claims in both tort and contract; those claims could be barred had a jury found the claims accrued in 2001 or 2002, not 2008. See G.L. c. 260, § 2 (six years for contract claims); G.L. c. 260, § 2A (three years for tort and fraud claims).
Even though the plaintiffs did not mention the promise of expected returns in their closing statement, the promise remained at issue in the case as the basis of the breach of contract claim within the complaint and through the evidence introduced at trial.
The defendants claim the above evidence shows the plaintiffs should have been on notice of a possible breach and should have pursued an explanation at that time, thereby accruing the plaintiffs' claims as early as 2001. Whether, based on the lack of control over the investments and the lower returns, the plaintiffs should have pursued an explanation, and thus perhaps learned they had a cause of action against the defendants, is ultimately a question for the jury. See Clough v. Brown, 59 Mass.App.Ct. 405, 408, 796 N.E.2d 415 (2003). “[T]he triggering event cannot be pinpointed as matter of law, but poses a question of fact as to when a reasonable” investor should have realized from the available information that he should inquire about the status of his investment. Szymanski v. Boston Mut. Life Ins. Co., 56 Mass.App.Ct. 367, 370, 778 N.E.2d 16 (2002). Because the parties assert differing events as the trigger for when the plaintiffs' claims accrued, the factual inquiry of what was the first event reasonably likely to put the plaintiffs on notice that the defendants' conduct had caused them injury is one best left for resolution by the jury, not the judge. See id. at 371, 778 N.E.2d 16. See also Patsos v. First Albany Corp., 433 Mass. 323, 329, 741 N.E.2d 841 (2001), quoting from Riley, 409 Mass. at 247, 565 N.E.2d 780 (“[F]actual disputes concerning when a plaintiff knew or should have known of his cause[s] of action are to be resolved by the jury”). The plaintiffs claim they had no notice of their cause of action until December, 2008, while the defendants similarly point to 2001 and 2002; these competing assertions, both supported by evidence in the record, create the very definition of a factual question whose resolution is within the purview of the jury, not the judge. It was error for the judge to refuse to allow the jury to consider the defendants' statute of limitations defense. The judgments are reversed, and the matter is remanded for further proceedings consistent with this memorandum and order.
So ordered.