Opinion
Case No. 20080516-CA.
Filed April 30, 2009. Not For Official Publication
Appeal from the First District, Logan Department, 060102639 The Honorable Thomas Willmore.
Blake S. Atkin and John V. Mayer, Bountiful, for Appellant.
Kevin J. Fife and Jonathan R. Palmer, Logan, for Appellee.
Before Judges Greenwood, Bench, and McHugh.
MEMORANDUM DECISION
The Town of Cornish (Cornish) appeals the trial court's grant of summary judgment in favor of Cornish's former mayor, Floyd Veibell, arguing that the trial court erred in determining that Cornish failed to make a prima facie showing of fraudulent concealment by Veibell so as to toll the applicable statutes of limitation. We affirm.
Generally speaking, "`a statute of limitations begins to run upon the happening of the last event necessary to complete the cause of action.'"Colosimo v. Roman Catholic Bishop of Salt Lake City, 2007 UT 25, ¶ 14, 156 P.3d 806 (quoting Russell Packard Dev., Inc. v. Carson, 2005 UT 14, ¶ 20, 108 P.3d 741). However, "[t]he discovery rule tolls a statute of limitations until the discovery of facts forming the basis for the cause of action." Id. ¶ 15 (internal quotation marks omitted). The discovery rule operates in two separate and distinct contexts: (1) when provided for by statute or (2) when required by equity. See id. The equitable discovery rule is applicable only "when either [the presence of] exceptional circumstances or the defendant's fraudulent concealment prevents the plaintiff from timely filing suit." Id. Because Cornish has not argued that exceptional circumstances exist, only the fraudulent concealment version of the equitable discovery rule is at issue in this appeal.
Veibell correctly points out that the trial court disposed of Cornish's fraud claim according to the applicable statutory discovery rule provided for in the Utah Code, see Utah Code Ann. § 78B-2-305(3) (2008). Cornish does not appeal the trial court's decision regarding application of this statutory discovery rule and we thus do not review that determination on appeal. Regardless, we assume without deciding that Cornish's fraud claim, arising from the same predicate facts as Cornish's other three causes of action, is time-barred because Cornish likely discovered "the facts constituting the fraud" by 1997.See id.
We note at the outset that "a plaintiff must diligently investigate his claim to prevail under a theory of fraudulent concealment."Id. ¶ 37. The fraudulent concealment doctrine tolls the statute of limitations where a plaintiff shows that the defendant's concealment or misleading conduct prevented the plaintiff from discovering the facts necessary to complete the cause of action. See id. ¶ 38.
In order to qualify for application of the fraudulent concealment doctrine, "a plaintiff must demonstrate either (1) that the plaintiff neither knew nor reasonably should have known of the facts underlying his or her cause of action before the fixed limitations period expired; or (2) that notwithstanding the plaintiff's actual or constructive knowledge of the facts underlying his or her cause of action within the limitations period, a reasonably diligent plaintiff may have delayed in filing his or her complaint until after the statute of limitations expired."
Id. (quoting Russell Packard Dev., Inc., 2005 UT 14, ¶ 44). Further, because Cornish alleged that Veibell took affirmative steps to conceal Cornish's cause of action, Cornish must make a prima facie showing of affirmative concealment before the trial court will examine the reasonableness of Cornish's efforts to discover its causes of action.See Berenda v. Langford, 914 P.2d 45, 53 (Utah 1996).
The trial court determined that because Cornish "failed to raise a genuine issue of material fact as to affirmative concealment by Veibell," there was no need to make the subsidiary factual determination regarding "whether [Cornish] was reasonably diligent in investigating the [present] allegations." Cornish argues on appeal that the trial court erred because Veibell failed to disclose predicate information and further concealed payment history from his hourly work. Veibell, on the other hand, asserts that the trial court correctly concluded that all necessary information was either known or available to Cornish by 1997 at the latest. "The applicability of a statute of limitations and . . . the discovery rule are questions of law, which we review for correctness." Colosimo, 2007 UT 25, ¶ 11 (omission in original) (internal quotation marks omitted).
Like the trial court, we see nothing in the materials presented on summary judgment showing that Veibell took affirmative steps to conceal Cornish's causes of action. In 1993, the Cornish town council (the Council) appointed Veibell as head of Cornish's new culinary water project (the Water Project), for which he received a $10,000 increase in his 1993 annual salary. Just prior to this, Veibell had been asked by a contractor involved with the Water Project "to serve as the project inspector on the Water Project for $15.00 per hour." Although Cornish alleges that Veibell had failed to disclose his hourly work to the Council at the time it appointed him head of the Water Project, the record evidences and the trial court noted in its ruling that this hourly work was discussed, both formally and informally, before the Council in 1993, 1995, and 1997. Cornish further alleges that Veibell attempted to conceal this "double-dipping" by submitting vouchers for his hourly work directly to the contractor, without seeking approval from the Council, and maintaining the records associated therewith at his private residence. For several years, the Council discussed these and other complaints regarding Veibell and his involvement with the Water Project. As a result, in 1997, the Utah Attorney General's Office conducted a criminal investigation of Veibell relating to the Council's allegations of misappropriation of Cornish funds. Veibell was not prosecuted as a result of this investigation. Cornish took no further action against Veibell until the filing of the present complaint in 2006 — approximately nine years later.
Thus, we conclude that Cornish was on notice regarding Veibell's alleged "double-dipping" by 1997 at the latest. Additionally, reasonably diligent investigation by Cornish of the facts known in 1997 — facts which Cornish found sufficiently suspicious to warrant pursuit of a criminal complaint against Veibell — would readily have led to discovery of the payment vouchers maintained at Veibell's residence. Accordingly, we agree with the trial court that because Cornish failed to show that Veibell took affirmative steps to conceal Cornish's causes of action, Cornish failed to make a prima facie showing of fraudulent concealment. Therefore, the equitable discovery rule cannot be invoked to toll the applicable statutes of limitations, and Cornish's causes of action are barred as a matter of law. Affirmed.
WE CONCUR: Russell W. Bench, Judge, Carolyn B. McHugh, Judge.