Full House Resorts, Inc. v. Boggs & Poole Contracting Group, Inc. ( 2017 )

Case: 15-60785 Document: 00513825081 Page: 1 Date Filed: 01/06/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 6, 2017
No. 15-60785
Lyle W. Cayce
Clerk
FULL HOUSE RESORTS, INC. and SILVER SLIPPER CASINO VENTURE,
LLC,
Plaintiff – Appellants,
v.
BOGGS & POOLE CONTRACTING GROUP, INC.,
Defendant – Appellee.
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 2:14-CV-223
Before DAVIS, ELROD, and HIGGINSON, Circuit Judges.
PER CURIAM:*
This case arises out of a dispute concerning the construction of a parking
garage adjacent to a casino. The district court granted summary judgment for
the construction company under Mississippi’s statute of limitations. Because
we determine there is a fact issue as to the timeliness of the casino’s claims,
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 15-60785 Document: 00513825081 Page: 2 Date Filed: 01/06/2017
No. 15-60785
we reverse the judgment of the district court and remand for further
proceedings.
I.
In 2006, plaintiff Silver Slipper Casino Venture 1 contracted with
defendant Boggs Contracting Group, Inc. to build a parking garage, which was
completed in February 2007. The parking garage was built without placing
rebar in the “pour strips,” which eventually led to concern about the structural
soundness of the garage. One complete set of plans (“TO BOGGS plans”)
showed rebar in the pour strips but another set of plans (“shop drawings”) did
not. The parties dispute whether concrete was poured as an act of concealment
to cover up the missing rebar, or merely as a step in completing the concrete
pour strips necessary for the garage.
After a 2008 arbitration between Silver Slipper and the contractor, Full
House’s purchase of the casino, and Full House’s discovery of the missing
rebar, Full House brought seven claims against Boggs related to the rebar. All
of these claims were barred, however, because the three- and six-year statutes
of limitations and of repose had run. Full House argued in the district court
that the statutes were tolled because Boggs fraudulently concealed the claims.
The district court granted summary judgment for Boggs on this issue. Full
House Resorts, Inc. v. Boggs & Poole Contracting Group, Inc., No. 1:14-CV-223,
slip op. 6 (S.D. Miss. Oct. 5, 2015).
In reaching its decision, the district court reasoned that Mississippi law
required an affirmative act of fraudulent concealment to occur after the
underlying act in order to toll the limitations. Finding no evidence of a
separate and affirmative act to conceal the alleged wrongful action, the district
1Silver Slipper contracted for the garage. Plaintiff Full House Resorts, Inc. purchased
the land and improvements from Silver Slipper in 2012.
2
Case: 15-60785 Document: 00513825081 Page: 3 Date Filed: 01/06/2017
No. 15-60785
court granted Boggs’s motion for summary judgment, which effectively barred
all of Full House’s other claims as being untimely. Id. at 6.
II.
Summary judgment may only be granted when the facts are settled and
the law dictates the result. Under Rule 56, “[t]he court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56. A court “must determine whether a genuine issue of material
fact exists, rather than how that issue should be resolved.” Cole v. Chevron
Chem. Co., Oronite Div., 427 F.2d 390, 393 (5th Cir. 1970). This court reviews
a grant of summary judgment de novo. Kinsale Ins. Co. v. Georgia-Pacific,
L.L.C., 795 F.3d 452, 454 (5th Cir. 2015).
The Mississippi Code contains a general three-year statute of limitations
(Miss. Code Ann. § 15-1-49(1) (West 2016)) and a six-year statute of repose for
construction claims (Miss. Code Ann. § 15-1-41 (West 2016)). The tolling
provision states that if “a person liable to any personal action shall
fraudulently conceal the cause of action” from the person entitled to know
about it, the cause of action shall functionally accrue when “such fraud shall
be, or with reasonable diligence might have been, first known or discovered.”
Miss. Code Ann. § 15-1-67 (West 2016). Fraudulent concealment requires both
an “affirmative act or conduct [performed by the defendant that] prevented
discovery of a claim,” and that the plaintiff performed due diligence to discover
it. Stephens v. Equitable Life Assurance Soc’y, 850 So.2d 78, 84 (Miss. 2003).
There is no dispute that the casino’s lawsuit, without the tolling exception, was
untimely under both of the applicable statutes.
III.
We address the legal and factual issues in turn. Full House argues here
that the district court erred when it required acts of concealment that occurred
3
Case: 15-60785 Document: 00513825081 Page: 4 Date Filed: 01/06/2017
No. 15-60785
after the underlying act, rather than merely separate from the underlying act.
Alternatively, Full House points out that there is evidence in the record of a
separate act of concealment. We agree on both points.
Although Mississippi requires an affirmative act that prevented
discovery of a claim, Stephens, 850 So.2d at 84, the law does not require that
such an affirmative act occur “after” the wrongful act. Instead, it merely
requires that the underlying wrongful act be distinct from the “fraudulent
concealment.” While a distinct act of concealment may well come after an
underlying wrongful act, the law requires only an affirmative act, not a
subsequent affirmative act.
This is obscured by the fact patterns in two of our cases, both of which
concern financial fraud. In both Ross and Liddell, the plaintiffs alleged that
fraudulent misrepresentation occurred, which caused them to purchase
optional credit insurance in connection with loan agreements. Ross v.
Citifinancial, Inc., 344 F.3d 458, 460–61 (5th Cir. 2003); Liddell v. First Family
Fin. Servs. Inc., 146 F. App’x 748, 749–50 (5th Cir. 2005). The language used
in both cases reflects the type of wrongful action at issue. It would be very
difficult to affirmatively conceal a fraudulent inducement prior to the
completion of the sale of financial products. Thus, both Ross and Liddell
discuss “subsequent affirmative acts” as a requirement for fraudulent
concealment because the wrongful conduct at issue in both cases could only be
fraudulently concealed subsequently. See Ross, 344 F.3d at 464 (holding
plaintiffs needed “to prove an affirmative act of fraudulent concealment post-
completion of the insurance sales” to prevail); Liddell, 146 F. App’x at 750–51
(disagreeing that the fraud was “self-concealing” and noting reliance on Ross).
The Mississippi Supreme Court decisions support this analysis. As Full
House noted, the Mississippi Supreme Court referred to “subsequent
affirmative acts of concealment” in a case about credit insurance policies,
4
Case: 15-60785 Document: 00513825081 Page: 5 Date Filed: 01/06/2017
No. 15-60785
Andrus v. Ellis, 887 So.2d 175, 181 (Miss. 2004), which contained facts very
similar to Ross and Liddell. See id. at 176–78. This is distinct from the seminal
Mississippi fraudulent concealment case, Windham v. Latco of Miss., Inc., 972
So.2d 608, 609–10 (Miss. 2008), in which that court examined a claim for
fraudulent concealment concerning leaking roofs of chicken houses. In
concluding that fraudulent concealment could toll both a statute of limitation
and a statute of repose, the Mississippi Supreme Court noted “that a high
standard exists for proving fraudulent concealment,” but then went on to
describe the test as only requiring that “(1) some affirmative act or conduct was
done and prevented discovery of a claim,” which was “designed to prevent the
discovery of the claim,” and that due diligence was performed to discover the
fraudulent concealment. Id. at 614 n.8 (emphasis added). The Mississippi
Supreme Court determined that “some affirmative act . . . designed to prevent
the discovery of a claim” was a high standard to prove fraudulent concealment,
but it never specified that such an act must always be subsequent to the
underlying wrongful conduct. See id. at 614 n.8, 616 (remanding for factual
considerations on fraudulent concealment claim).
Additional Mississippi case law supports the conclusion that any
temporal requirement is fact-specific. See Channel v. Loyacono, 954 So.2d 415,
423–24 (Miss. 2007) (requiring showing of “some affirmative act” that
“prevented discovery of a claim” and determining the plaintiffs had not shown
that law firm fraudulently concealed their malpractice claims against the
firm); Townes v. Rusty Ellis Builder, Inc., 98 So.3d 1046, 1056 (Miss. 2012)
(requiring plaintiffs show “an affirmative act” prevented discovery of a claim
and remanding for factual findings on an equitable estoppel claim). Some fact
patterns may require a subsequent act to show an affirmative act of
concealment. This case, involving an alleged breach of a construction contract,
5
Case: 15-60785 Document: 00513825081 Page: 6 Date Filed: 01/06/2017
No. 15-60785
does not present such a situation. See Windham, 972 So.2d at 614 n.8
(requiring an affirmative, but not necessarily subsequent, act of concealment).
However, even assuming arguendo that the law did require a subsequent
act of concealment, there is a genuine issue of material fact that makes
summary judgment inappropriate. Full House argues that Boggs committed
two separate acts of concealment: first by pouring concrete into the pour-strips,
and second by certifying that it had completed construction “according to plan.”
Because Boggs issued this certification after construction was complete, Full
House argues there is a fact question whether the certification was a
subsequent affirmative act of concealment. Boggs argues that it truthfully
certified the job had been completed according to plan, because the shop
drawings did not show rebar, even though the TO BOGGS plans did. Because
there is a genuine issue of material fact whether Boggs committed a separate
act of fraudulent concealment when it certified completing the construction
“according to plan,” summary judgment was inappropriate here, even under
the district court’s more restrictive approach.
IV.
Accordingly, we REVERSE the district court’s grant of summary
judgment and REMAND for further proceedings consistent with this opinion.
6