Riddell v. Riddell Washington Corp.
| Decision Date | 03 February 1989 |
| Docket Number | No. 88-7017,88-7017 |
| Citation | 866 F.2d 1480,275 U.S.App.D.C. 362 |
| Parties | , RICO Bus.Disp.Guide 7138, 8 UCC Rep.Serv.2d 575 Roland RIDDELL, Appellant, v. RIDDELL WASHINGTON CORPORATION, et al. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from the United States District Court for the District of Columbia (Civil Action No. 87-00928).
Laurance J. Ochs, Washington, D.C., for appellant.
Calvin H. Cobb, Jr., Washington, D.C., for appellees.
Before MIKVA and D.H. GINSBURG, Circuit Judges, and ROSENN *, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge D.H. GINSBURG.
This appeal involves an intra-familial dispute over the sale, in 1981, of substantial stock interests in two closely held corporations. The stock was sold for $106,936 pursuant to a foreclosure provision in a loan agreement between plaintiff Roland Riddell, as borrower, and his mother, defendant Jean Riddell, as lender. In 1987, the corporations sold their principal assets--two parcels of real estate--for approximately $13,000,000. Plaintiff now asserts that he was defrauded by other members of the family as to the value of his stock in 1981.
In his amended complaint against his mother, his sisters Sally Arthur, Joan Baer, and Marise Reynolds, his brother-in-law Robert Arthur, and the two corporations, plaintiff alleges: (1) that all defendants violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sec. 1961 et seq. (RICO); (2) that all but the corporate defendants engaged in common law fraud, deceit, and conspiracy to defraud and to deceive; (3) that Jean Riddell violated Rule 10b-5, promulgated under Sec. 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. Sec. 78j(b) (1982), (4) converted plaintiff's property, (5) violated the provision of the Uniform Commercial Code (UCC), D.C.Code Sec. 28:9-504, that prescribes the terms under which a secured party may dispose of collateral, and (6) breached her loan agreement with plaintiffs; (7) that Jean Riddell, Robert Arthur, and Sally Arthur, the corporate officers, breached their fiduciary duty to plaintiff as a shareholder; and (8) that the corporate defendants wrongfully transferred plaintiff's shares in their stockholder records and (9) were obliged to replevy the shares. The district court granted defendants' motion for summary judgment and partial judgment on the pleadings on the ground that plaintiff's claims were barred by relevant statutes of limitations. Riddell v. Riddell Washington Corp., 680 F.Supp. 4 (D.D.C.1987). The court found that plaintiff had sufficient knowledge of the underlying facts to put him on notice of his claims by 1983. The court did not address plaintiff's argument that defendants fraudulently concealed his causes of action from him. Id. at 8.
The district court apparently never ruled on the Securities Exchange Act and replevin claims; we are therefore required to remand the matter for the district court to pass upon those claims in the first instance. Otherwise, we affirm, except with regard to the RICO and common law fraud, deceit, conspiracy, and breach of fiduciary duty claims, where reversal is required because the entry of summary judgment was dependent upon an erroneous factual finding bearing on fraudulent concealment.
As an initial matter, plaintiff raises a question as to which of the claims were properly before the district court when it granted defendants' dispositive motion. Defendants filed their motion for summary judgment on August 19, 1987. Plaintiff's opposition to the motion was filed on September 18. On October 6, however, the district court granted plaintiff leave to file an amended complaint, which added two new counts--the federal securities law claim against Jean Riddell, and the replevin claim against the corporate defendants. The amended complaint also alleged, in great detail, new facts discovered under the original complaint and supportive of the counts that were merely carried over from the original to the amended complaint. Nonetheless, defendants did not supplement their motion for summary judgment in response to the amended complaint.
In ruling on the motion, the district court stated:
Obviously, the defendants' motion for summary judgment addressed the claims as they appeared in the original complaint. In fact, plaintiff ... filed his opposition on September 18, 1987 addressing the issues as drawn in the original complaint. The amended complaint elaborates on the nature of the claims, includes other defendants into [sic] claims stated in the original complaint and adds two counts ... alleging fraud in the sale of securities in violation of the Securities Exchange Act [and] replevin.... The Court did grant leave to file an amended complaint; yet the Court is concerned that the summary judgment memoranda addressed the issues as drawn in the original complaint. The Court determines that the outcome of the statute of limitations issues would be the same under the original complaint, as well as the amended complaint. Because the summary judgment motion was drawn in keeping with the original complaint, the Court 680 F.Supp. at 5 n. 1 (emphasis added).
shall address the issues in accordance with the original complaint.
The district court's opinion separately addresses each of the seven counts of the original complaint. Apparently because the district court thus approached the issues as framed in the original complaint, its opinion does not specifically address the two counts added by the amended complaint. As emphasized above, however, it does conclude generally that "the outcome of the statute of limitations issues would be the same under the original complaint, as well as the amended complaint." Id. At oral argument, defendants' counsel suggested that this conclusion be read to encompass the additional counts.
The quoted passage is ambiguous. On the one hand, as defendants' counsel urged, it could be read as saying that the statute of limitations issues implicated by the two new counts are the same as those raised by the counts in the original complaint. Under this reading, the court ruled not only on the carryover counts, but also on the counts added in the amended complaint. This reading would not necessarily render the ruling improper, notwithstanding that the added counts were not the subject of defendants' motion; for, as we have previously suggested, where a district court concludes that no reasonable jury could find for the plaintiff it may, on its own initiative and after proper notice, grant summary judgment in favor of the defendant. Liberty Lobby, Inc. v. Dow Jones & Co., Inc., 838 F.2d 1287, 1292 (D.C.Cir.1988).
An equally plausible and we think preferable reading, however, would be simply that the statute of limitations issues under the counts that were carried forward from the original complaint were not materially altered by the new facts alleged in the amended complaint. This reading is both fairer to the plaintiff and more in keeping with the assumption that the district court proceeded methodically. First, the district court's opinion discusses the seven original counts one by one, yet it contains no specific discussion of either of the two new counts. Second, the opinion was expressly addressed to the original complaint. In these circumstances, it is more reasonable to infer that the district court's ruling on the motion for summary judgment does not encompass the counts added in the amended complaint. Rather, it appears that the district court, having put the amended complaint to one side in order to address the motion for summary judgment, then simply failed to return to it with an eye to disposing of the added counts.
Because we hold that both new counts survived the district court's disposition of defendants' motion, we do not address those counts here, but rather remand in order that the district court may address them in the first instance.
The basic issues on this appeal are whether the defendants committed acts of concealment that tolled the statutes of limitations on plaintiff's claims, and whether, even if such acts of concealment did take place, plaintiff was nonetheless aware of facts sufficient to put him on notice of his claims. In general, the determination of whether a defendant has committed an act of concealment, where it turns on questions of fact, is a matter for the jury. Hobson v. Wilson, 556 F.Supp. 1157, 1174 (D.D.C.1982), aff'd in relevant part, 737 F.2d 1, 37 (D.C.Cir.1984). Similarly, what a plaintiff knew and when he knew it, in the context of a statute of limitations defense, are questions of fact for the jury. See, e.g., Timmel v. Moss, 803 F.2d 519, 521-22 (9th Cir.1986); Dawson v. Eli Lilly & Co., 543 F.Supp. 1330, 1339 (D.D.C.1982).
The Supreme Court recently stated the standard for granting summary judgment, and thus taking such issues away from the jury, as follows:
If the defendant in a run-of-the-mill civil case moves for summary judgment ... based on the lack of proof of a material fact, the judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other but whether a fairminded jury could return a verdict for the plaintiff on the evidence presented. The mere existence of a scintilla Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). On appeal from an order granting summary judgment, this court reviews the record de novo to determine whether, under the standard just quoted, it supports that order. Liberty Lobby, Inc. v. Rees, 852 F.2d 595, 598 (D.C.Cir.1988). Thus we must determine, based on the record...
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