Turner v. Lundquist
Decision Date | 07 April 1967 |
Docket Number | No. 21091.,21091. |
Citation | 377 F.2d 44 |
Parties | Joe TURNER, Appellant, v. Charles H. LUNDQUIST, Appellee. |
Court | U.S. Court of Appeals — Ninth Circuit |
Richard H. Levin, Los Angeles, Cal., for appellant.
Robert Driscoll, Hurley & Driscoll, San Marino, Cal., for appellee.
Before HAMLEY and DUNIWAY, Circuit Judges, and COPPLE, District Judge.
This action was brought for monetary relief based on alleged violations of Section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78j(b)); Rule X-10B-5 of the Rules and Regulations of Securities Exchange Commission (17 C.F.R. 240.10B-51); and Section 17 (a) of the Securities Act of 1933 (15 U.S. C. Sec. 77q); plaintiff-appellant Turner likewise contends that he is entitled to damages for fraud and deceit under California State Law. Jurisdiction is based on 15 U.S.C. Sec. 78aa and 15 U.S.C. Sec. 77v.
On January 3, 1961, Turner purchased a $125,000 convertible debenture of United States Chemical Milling Corporation (hereinafter U.S.C.M.) — $100,000.00 for himself and $25,000.00 for one Glen Roland, an officer and director of U.S. C.M. Defendant-appellee Lundquist was, at and before the date of purchase, president of U.S.C.M.
On April 19, 1963, Turner filed an action against Roland.
On May 12, 1964, Turner filed an amended complaint in substantially the same form but naming Lundquist as an additional defendant.
On June 9, 1965, following Lundquist's Motion to Dismiss and Motion for Summary Judgment, the trial court denied the same without prejudice to the making of similar motions after filing of a pretrial order.
After filing of a pretrial order, Lundquist renewed his Motion for Summary Judgment and Motion to Dismiss for failure to state a claim for which relief can be granted to another trial judge to whom the case had been assigned. The Motion to Dismiss was granted as to Lundquist and the Motion for Summary Judgment was granted as to Lundquist on grounds that the suit was barred by the applicable statute of limitations. Turner has appealed from both decisions.
We concur with the trial court's finding that the suit is barred by the statute of limitations and therefore affirm. We do not reach the question on the Motion to Dismiss.
Since there is no federal statute of limitations applicable to 15 U.S.C. § 78b and 15 U.S.C. § 77q, California's three-year statute California Code of Civil Procedure, Section 338(4) is applicable. Errion v. Connell (9th Cir. 1956), 236 F.2d 447. The lower court so found and counsel for both parties agree that this is the longest period applicable to each count in the complaint.
The amended complaint shows on its face that the purchase of the debenture was made January 3, 1961, and the suit against the Appellee was filed May 12, 1964, more than three years later. The gist of the complaint lies in alleged false statements and omissions of fact to induce Appellant to purchase the debenture. Motion for summary judgment is a proper method for testing whether the claim is barred by the statute of limitations. 3 Barron & Holtzoff, Fed.Practice & Proc., Rules Edition, Section 1245, p. 206.
The critical issue before the trial court and for review here is whether the undisputed facts in the record presented on the motion for summary judgment show, as a matter of law, that Appellant Turner cannot successfully refute Lundquist's plea of limitations. Barron & Holtzoff, supra, at page 207. We think they do.
Because the alleged fraud occurred in California, and the California statute of limitations applies in this case, we must look to California law to determine when the statute begins to run so as to bar this action. A recent summation of California law on this point is contained in Helfer v. Hubert, 208 Cal.App.2d 22, 26, 27, 24 Cal.Rptr. 900, where at page 902 the Court said:
Are there, then, sufficient undisputed facts in the record to uphold the lower court's finding that, as a matter of law, Turner's action is barred by the statute of limitations?
Turner alleged in his amended complaint the following misrepresentations of fact:
Turner also alleged in his amended complaint the following omissions of fact:
Lundquist, in support of his motion for summary judgment, filed an affidavit together with voluminous supporting exhibits tending to show that prior to May 12, 1961, Turner had adequate information and knowledge to put a reasonably prudent man on inquiry as to possible fraud so as to commence the running of the period of limitation. The affidavit was sufficient in form and substance to support his motion.
Turner filed no controverting affidavit on his own behalf. His second counsel filed, over counsel's signature, a document entitled "Declaration * * * and Memorandum in Opposition to Motion...
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