2002 Lawrence R. Buchalter Alaska Trust, Alaska Trust Co. v. Phila. Fin. Life Assurance Co.
| Decision Date | 21 December 2017 |
| Docket Number | 17-0671-cv |
| Parties | 2002 LAWRENCE R. BUCHALTER ALASKA TRUST, ALASKA TRUST COMPANY, STEPHEN C. HARRIS, TRUSTEES, LAWRENCE R. BUCHALTER, Plaintiffs-Appellants, v. PHILADELPHIA FINANCIAL LIFE ASSURANCE COMPANY, AKA AGL LIFE ASSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Second Circuit |
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 21st day of December two thousand seventeen.
JONATHAN T. SHEPARD (Eric D. Dowell, on the brief), Pryor Cashman LLP, New York, New York.
FOR DEFENDANT-APPELLEE:
THOMAS F.A. HETHERINGTON (Hutson B. Smelley, on the brief), Edison, McDowell & Hetherington, LLP, Houston, Texas.
Appeal from the United States District Court for the Southern District of New York (Karas, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiffs-appellants 2002 Lawrence R. Buchalter Alaska Trust (the "Trust"), Alaska Trust Company ("ATC") and Stephen C. Harris, Trustees, and Lawrence R. Buchalter appeal from the district court's judgment entered February 6, 2017, in favor of defendant-appellee Philadelphia Financial Life Assurance Company ("PFLAC"), formerly known as AGL Life Assurance Company. The district court granted PFLAC's motion for summary judgment by opinion and order filed the same date. We assume the parties' familiarity with the underlying facts, procedural history, and issues on appeal.
Construed in the light most favorable to the Trust, the facts are summarized as follows: The Trust is an irrevocable, Alaska-based trust created byBuchalter on November 1, 2002. ATC was the sole trustee until 2012, when Stephen C. Harris was added as a trustee.
In 2002, Buchalter approached PFLAC about buying life insurance through the Trust. The chosen policy allowed the allocation of premium payments to a variable account that let the policyholder invest in various funds offered by PFLAC.
In 2005, the Strategic Stable Return ("SSR") Fund (ID), L.P. (the "ID Fund") was added to PFLAC's list of available funds. The platform noted that policyholders should be careful before investing in the ID Fund as it involved a high degree of risk. After adding the ID Fund to its personal schedule of investment accounts, the Trust invested over $3.1 million in it.
By 2007, Buchalter was concerned about the Trust's investment in the ID Fund. As his concern grew, Buchalter decided to redeem his investment from the ID Fund in the summer of 2008. The ID Fund, however, suspended all investor redemptions in October 2008, and refused the Trust's request to redeem approximately $3.9 million. Over the next several years, the value of the Trust's investment in the ID Fund dwindled; by November 30, 2012 approximately $350,000 of the Trust's $3 million investment remained. No capital has been returned from the ID Fund to the Trust.
Plaintiffs filed their complaint on September 7, 2012 alleging various theories of recovery in negligence, breach of contract, and unjust enrichment. Following an initial motion to dismiss, the only claims that remained were for negligence, negligent misrepresentation, and professional malpractice related to defendant's failure to vet the ID Fund before making it available on its investment platform. On February 6, 2017, the district court granted summary judgment for PFLAC on those remaining claims, finding them time-barred. Plaintiffs appeal.
We review de novo a district court's grant of summary judgment, "construing the evidence in the light most favorable to the non-moving party and drawing all reasonable inferences in its favor." Alibrandi v. Fin. Outsourcing Servs., Inc., 333 F.3d 82, 85 (2d Cir. 2003). "Summary judgment is appropriate only if it can be established that 'there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Id. (quoting Fed. R. Civ. P. 56(c)) (citation omitted).
On appeal, plaintiffs argue that the district court improperly found their claims time-barred and erred in finding that their claims accrued in May 2009. We conclude that plaintiffs' appeal is without merit substantially for the reasons set forth by the district court in its thorough and well-reasoned order.
The parties agree that Alaska law applies.1 The statute of limitations for negligence and negligent representation is two years. Alaska Stat. § 09.10.070(a). The statute of limitations for professional malpractice arising out of economic injury is three years. Alaska Stat. § 09.10.053. Therefore, as the complaint was filed on September 7, 2012, the claims are untimely if the statute of limitations began to run before September 7, 2010 for the negligence claims and before September 7, 2009 for the malpractice claims.
In Alaska, "a cause of action accrues when the plaintiff has 'information sufficient to alert a reasonable person to the fact that he [or she] has a potential cause of action.''' Christianson v. Conrad-Houston Ins., 318 P.3d 390, 396-97 (Alaska 2014) (quoting Preblich v. Zorea, 996 P.2d 730, 734 (Alaska 2000)). The court looks to the date when a reasonable person under like circumstances "should begin an inquiry to protect his or her rights." Id. (citation and internal quotation marks omitted). As the date of accrual is a fact intensive inquiry, summary judgment is ordinarily inappropriate for statute oflimitations defenses. John's Heating Serv. v. Lamb, 46 P.3d 1024, 1031 (Alaska 2002). Summary judgment may be granted, however, when the "court has before it uncontroverted facts regarding when the statute of limitations began running." Egner v. Talbot's, Inc., 214 P.3d 272, 278 (Alaska 2009).
The district court held that the Trust's claims accrued before September 2009 because the record established, as a matter of law, that the Trust was on inquiry notice before then -- the Trust had sufficient information of its potential claims to warrant an inquiry. We agree. The uncontroverted facts include the following:
To continue reading
Request your trial