Monday, March 5, 2012

If Fraudulent Concealment Trumps Limitations, What Trumps Fraudulent Concealment?

Fraudulent concealment of a cause of action can toll the running of limitations, but the tolling can end upon proof that the plaintiff has learned of facts, conditions, or circumstances which would cause a reasonably prudent person to make inquiry which, if pursued, would lead to the discovery of the concealed cause of action.     This is the holding of the recent Supreme Court of Texas opinion in Etan Industries, Inc. v. Lehmann, No. 10-0318 (Tex. 12/16/2011).

This case continues the trend in the supreme court of increasing the potency of statute of limitations defenses.  

In Etan, the plaintiff had secured a judgment based on trespass by a cable and internet provider who did not have a proper easement.    The provider had misled the plaintiff by claiming it had a proper easement.    The jury found damages for the plaintiff and also found that the defendant had fraudulently concealed the existence of the cause of action.     Additionally, the jury also found that the plaintiffs could not have reasonably learned of facts and circumstances that would lead them to the conclusion that a cause of action was being concealed until a time that was within the limitations period.    So, the judgment was well supported by the jury verdict.  

But the supreme court pointed to earlier evidence that might have led the plaintiff to learn of the concealed cause of action at a time outside of the two year limitations period.    The court concluded that this evidence "conclusively established" facts necessary to overcome the fraudulent concealment and thus reversed and rendered the judgment.

In reaching this conclusion, the court also cited its previous precedent of Borderlon v. Peck, 661 S.W. 2d  907, 909 (Tex. 1983).