Arkansas Fraudulent Concealment to Extend the Limitations Period Only Applies When Reasonable Diligence Would not Have Discovered the Fraud.
The Arkansas Court of Appeals affirmed a dismissal based on statute of limitations in Pambianchi v. Howell, No. 06-1239 (10/24/07).
The dispute arises over an unremarkable automobile accident that occurred on June 9, 2000. Claims for negligence and most torts would expire on June 9, 2003. In 2002, Pambianchi settled her claim against Howell and received payment of $46,763.88 from Howell's insurer, Southern Farm Bureau.
In 2004, Pambianchi sued Howell for negligence and Southern Farm Bureau for fraud in procuring the settlement. She claimed that Howell's insurance agent misled her into the settlement by telling her she could recover additional money from other parties. The trial court dismissed both claims on grounds that the statute of limitations had run.
In affirming the dismissal, the court of appeals set out the rule of fraudulent concealment. Fraudulent concealment will suspend the statute of limitations, but only until the plaintiff discover the fraud or should have discovered the fraud through reasonable diligence. If reasonable diligence might have detected the fraud, the plaintiff is presumed to have knowledge of it. Curry v. Thornsberry, 354 Ark. 631 (2003). The reasonable diligence aspect of the rule is the most crucial and proved fatal to Pambianchi's claims.
This rule is important because of the growing trend in consumer fraud cases for plaintiffs to plead fraudulent concealment. To survive a dispositive motion, plaintiffs must establish they acted with reasonable diligence and that reasonable diligence would not have detected the fraud.
