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Pate v. Central Flying Service

November 21, 2006

JEROME "JERRY" PATE, A FLORIDA RESIDENT; AND ONE JP, INC., A FOREIGN CORPORATION PLAINTIFFS
v.
CENTRAL FLYING SERVICE, INC. AN ARKANSAS CORPORATION; AND BILL WOODS, AN ARKANSAS RESIDENT DEFENDANTS



The opinion of the court was delivered by: James M. Moody United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Pending is the Defendants' Motion for Summary Judgment of all of Plaintiffs Jerome "Jerry" Pate and One JP, Inc.'s (hereinafter referred to as Plaintiff) claims. Plaintiff has responded. The parties have presented their arguments at a hearing before the Court on November 20, 2006. For the reasons set forth below, the Motion is GRANTED in part and DENIED in part.

Standard for Summary Judgment

Summary judgment is appropriate only when there is no genuine issue of material fact, so that the dispute may be decided solely on legal grounds. Holloway v. Lockhart, 813 F.2d 874 (8th Cir. 1987); Fed. R. Civ. P. 56. The Supreme Court has established guidelines to assist trial courts in determining whether this standard has been met:

The inquiry is the threshold inquiry of determining whether there is a need for trial -- whether, in other words, there are genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).

The Eighth Circuit Court of Appeals has cautioned that summary judgment should be invoked carefully so that no person will be improperly deprived of a trial of disputed factual issues. Inland Oil & Transport Co. v. United States, 600 F.2d 725 (8th Cir. 1979), cert. denied, 444 U.S. 991 (1979). The Eighth Circuit set out the burden of the parties in connection with a summary judgment motion in Counts v. M.K. Ferguson Co., 862 F.2d 1338 (8th Cir. 1988):

[T]he burden on the moving party for summary judgment is only to demonstrate, i.e., '[to] point out to the District Court,' that the record does not disclose a genuine dispute on a material fact. It is enough for the movant to bring up the fact that the record does not contain such an issue and to identify that part of the record which bears out his assertion. Once this is done, his burden is discharged, and, if the record in fact bears out the claim that no genuine dispute exists on any material fact, it is then the respondent's burden to set forth affirmative evidence, specific facts, showing that there is a genuine dispute on that issue. If the respondent fails to carry that burden, summary judgment should be granted.

Id. at 1339. (quoting City of Mt. Pleasant v. Associated Elec. Coop., 838 F.2d 268, 273-274 (8th Cir. 1988) (citations omitted)(brackets in original)). Only disputes over facts that may affect the outcome of the suit under governing law will properly preclude the entry of summary judgment. Anderson, 477 U.S. at 248.

Discussion of the Law

In the Complaint, Plaintiff seeks damages for fraudulent concealment, breach of an agency contract, and common law fraud. For the reasons set forth during the hearing, the Court finds that the only viable claim against the Defendants is fraud.*fn1 Defendants argue, however, that the statute of limitations bars Plaintiff's fraud claim. Plaintiff contends that the statute of limitations was tolled by the Defendants' fraudulent concealment of the facts and that Plaintiff actually discovered the fraud on April 29, 2003 when Pate was contacted by the actual purchaser of his airplane.

It is undisputed that a three year statute of limitations applies to Plaintiff's fraud allegation. See Ark. Code Ann. § 16-56-105. Under Arkansas law, the statute of limitations begins to run, in the absence of fraudulent concealment, when the fraud occurs, not when the fraud is discovered. Varner v. Peterson Farms, 371 F.3d 1011, 1016 (8th Cir. 2004). The Eighth Circuit has explained:

In order to toll the statute of limitations, there must be a fact question of some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff's cause of action concealed, or perpetrated in a way that it conceals itself. Where affirmative acts of concealment by the person charged with fraud prevent the discovery of that person's misrepresentations, the statute of limitations will be tolled until the fraud is discovered or should have been discovered with the exercise of reasonable diligence. . . . Concealment of facts, no matter how fraudulent or otherwise wrongful, has no effect on the running of a statute ...


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