Gross v. Max

• Citation: 906 F.Supp.2d 802
• Decision Date: 30 October 2012
• Docket Number: No. 3:11–cv–463.,3:11–cv–463.
• Parties: Velma GROSS, Eugene Gross, and Sierra Gross, b/n/f Velma Gross, Plaintiffs, v. Richard L. MAX, Sr., and Delores C. Max, Defendants.
• Court: U.S. District Court — Northern District of Indiana

906 F.Supp.2d 802

Velma GROSS, Eugene Gross, and Sierra Gross, b/n/f Velma Gross, Plaintiffs,

v.Richard L. MAX, Sr., and Delores C. Max, Defendants.

No. 3:11–cv–463.

United States District Court,

N.D. Indiana,

South Bend Division.

Oct. 30, 2012.

Andrew J. Asma, Bradford R. Shively, Robert T. Sanders, III, Sanders Pianowski LLP, Elkhart, IN, for Plaintiff.

Robert J. Butler, Davis & Davis PC, Elkhart, IN, Thomas R. Hamilton, Hunt Suedhoff Kalamaros LLP, South Bend, IN, for Defendant.

OPINION and ORDER

PHILIP P. SIMON, Chief Judge.

Plaintiffs Velma and Eugene Gross purchased a home from Defendants Richard and Delores Max in 2006, and three years later they discovered their daughter (Plaintiff Sierra Gross) had lead poisoning. On November 9, 2011, the Grosses filed this suit seeking recovery from the Maxes under the Residential Lead–Based Paint Hazard Reduction Act (“RLPHRA”). In an Opinion and Order dated August 2, 2012, 2012 WL 3234168, I dismissed this case on the grounds that it was barred by the statute of limitations.

The Grosses have moved for reconsideration of that order [DE 21], and the arguments they raise are more cogent and persuasive than those found in the mine-run of motions for reconsideration, which tend to repeat arguments that were previously raised and rejected. Nevertheless, after considering the motion in depth, I have ultimately found its arguments unconvincing. Thus, for the reasons explained in detail below, I once again conclude that the Grosses' claims are time-barred and will deny their motion for reconsideration.

FACTUAL BACKGROUND

The August 2, 2012 Opinion details the factual backdrop of this case, so I refer the uninitiated reader there and will only provide a more cursory sketch here. Velma and Eugene Gross purchased a home from Richard and Delores Max on November 10, 2006, have lived their since then, had their daughter Sierra in 2008, and discovered she had lead poisoning in the summer of 2009. On November 9, 2011, the Grosses filed their Complaint against the Maxes. The Grosses alleged that the Maxes violated RLPHRA when they bought the house by failing to provide them with a lead paint hazard information pamphlet, disclose the presence of any known lead-based paint or lead-based paint hazards, or permit the Grosses a 10–day inspection period as required by 42 U.S.C. § 4852d. A new fact offered in the motion for reconsideration is that the Grosses first “consulted with an attorney concerning their rights with respect to the lead hazards in their home and the lead poisoning that was suffered by Sierra” on August 18, 2009.¹

My August 2, 2012 Opinion concluded that the Grosses' Complaint was time-barred. Here's the short version of how I arrived at that conclusion. First, the injury the Grosses suffered was the failure to receive the proper RLPHRA disclosures (rather than the lead poisoning itself). Second, the four-year, catch-all federal statute of limitations (28 U.S.C. § 1658(a)) applies to RLPHRA claims. Third, the Grosses' claim accrued on November 10, 2006 when they bought the house. Therefore, their four-year limitations clock started ticking at that point, meaning that they had until November 10, 2010 to file their lawsuit. Their November 9, 2011 Complaint was thus filed one-year too late, and I dismissed it on that ground.²

It is the third step in this analysis—that the Grosses' claim accrued on November 10, 2006—that is clearly the most legally complex and it is where the Grosses' motion for reconsideration rightly focuses most of its energy. The complexity of the issue derives from whether or not the “discovery rule” applies to this case. Under the discovery rule, “a claim accrues once the party performs the alleged unlawful act and once the party bringing a claim discovers an injury resulting from this unlawful act.” Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1139 (7th Cir.1992). In their original briefing, the parties argued vigorously over whether the discovery rule applied to Section 1658(a) and to RLPHRA claims.

My August 2, 2012 Opinion ultimately punted on that issue. I concluded that I didn't need to “wade into [the] legal morass” of the discovery rule “because in this case the Grosses' claims are time-barred no matter whether the discovery rule applies or not.” [DE 19 at 8.] First, if the discovery rule did not apply, then it's clear that the four-year limitations clock began running on November 10, 2006 when the Grosses took ownership of the house and were not provided the necessary disclosures.

Moreover, even if the discovery rule did apply, I concluded that the four-year clock still started on November 10, 2006. This conclusion relied heavily on a First Circuit opinion from earlier this year, Randall v. Laconia, NH, 679 F.3d 1 (1st Cir.2012). The facts of Randall are remarkably similar to this case: the plaintiff purchased a house from the defendant in July of 2003, was not provided with the proper RLPHRA disclosures, discovered his son's lead poisoning in 2008, and filed his RLPHRA suit on February 9, 2010. The district court dismissed the case as time-barred, and the First Circuit affirmed. In affirming, the First Circuit concluded that the case was time-barred even if the discovery rule applied:

Because at the time of closing Randall had discovered (or at a minimum should have discovered) that the City had not completed the disclosure form or made any of the compulsory disclosures, the statute of limitations clock started ticking. It is not necessary that Randall knew the full extent of, or the particulars of, the City's wrongful conduct.... Even applying the discovery rule, Randall's cause of action still accrued when he closed on the property on July 22, 2003.

Id. at 7–8. Given this holding, I likewise concluded that, even if the discovery rule applied, the Grosses' four-year clock began running on November 10, 2006 when they took ownership of the house.

In their motion for reconsideration, however, the Grosses make a persuasive argument that my reliance on Randall was misplaced. Referring back to the district court's opinion in Randall, the Grosses point out that it was far easier to impute notice to the plaintiff under the facts of that case because at the time he purchased the house he had signed a form titled “Disclosure of Information on Lead—Based Paint and Lead—Based Paint Hazards FOR HOUSING SALES.” Randall v. City of Laconia, 2011 WL 1085679, at *1 (D.N.H.2011). The disclosures listed on that form were never actually provided to him—this is the reason he had a cognizable RLPHRA claim in the first place—but by signing the form it was easier to find that he was at least generally on notice about the existence of the RLPHRA disclosure requirements. This was a vitally important fact for the district court's analysis about when the plaintiff could reasonably have discovered his claim:

Given that Randall signed his portion of the disclosure form in May of 2003, and discussed it with his agent at that time, there was nothing to prevent Randall from discovering his injury, i.e., his lack of Title X disclosure when he took title, at the time he was injured. That is, there is no basis for determining that Randall's injury “could not reasonably have been discovered at the time of the act or omission.” So, too, with the causal relationship between Randall's injury (his lack of Title X disclosure) and the City's act or omission (its failure to provide Title X disclosure). There was nothing to prevent Randall from understanding, at the time of his injury, that his injury resulted directly from the City's failure to provide him with the disclosure form his agent had told him to expect from the City.

Id. at *2 (internal citations omitted).

As the Grosses point out, there is no similar fact in this case (at least at this point), and it thus is more difficult to conclude that they reasonably should have known about the disclosure requirements at the time they purchased their house. As they put it in their motion:

Quite simply, there is nothing within the Plaintiffs' Complaint that supports that, at the time of signing the Lease on November 10, 2006, the Plaintiffs were aware or should have been aware of the Defendants' failure to provide the statutorily required disclosures. By reason of this fundamental difference between the facts that supported the First Circuit's decision in Randall and the facts that exist in the present case, the First Circuit's decision in Randall is not “directly applicable to this case,” but rather is readily distinguishable from it.

[DE 21 at 11.]

This point is well taken, and I agree that Randall is not as controlling as I first concluded. So, without Randall as a guide, the statute-of-limitations analysis has to be restarted from square one. In the Grosses' three-step reboot of that analysis, they argue that their Complaint was timely filed and that dismissal was erroneous. First, they argue that district courts should be extra cautious about dismissing cases as time-barred at the motion to dismiss stage. Thus, a court must ask whether “there is any set of facts that if proven would establish a defense to the statute of limitations.” Clark v. City of Braidwood, 318 F.3d 764, 768 (7th Cir.2003). Second, the discovery rule applies to Section 1658(a) and to RLPHRA claims. Third, the Grosses did not “discover” that they had suffered the harm of not receiving the proper disclosures until August 18, 2009, when they first met with an “attorney concerning their rights with respect to the lead hazards in their home and the lead poisoning that was suffered by Sierra.” [DE 21 at 4.] Those three steps bring the Grosses to the following conclusion:

[T]he Plaintiffs' claims did not accrue until the Plaintiffs discovered an injury resulting from the Defendants' unlawful act. As explained above, this discovery did not occur until August 18, 2009. And, under the facts of this case, it is not reasonable to conclude that the...