Donner v. Nicklaus

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT November 7, 2017
_________________________________
Elisabeth A. Shumaker
Clerk of Court
E. JEFFREY DONNER; JUDEE M.
DONNER,
Plaintiffs - Appellants,
v. No. 16-4149
(D.C. No. 2:11-CV-00489-CW)
JACK NICKLAUS; JACK NICKLAUS (D. Utah)
GOLF CLUB, LLC,
Defendants - Appellees.
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ORDER AND JUDGMENT*
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Before TYMKOVICH, Chief Judge, EBEL and LUCERO, Circuit Judges.
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E. Jeffrey Donner and Judee Donner appeal the district court’s dismissal of
their intentional misrepresentation claim against Jack Nicklaus and Jack Nicklaus
Golf Club, LLC (collectively “Nicklaus”). Exercising jurisdiction under 28 U.S.C.
§ 1291, we affirm.
I
We will not discuss in detail the background facts of this case, which are
covered in our prior opinion, Donner v. Nicklaus, 778 F.3d 857 (10th Cir. 2015). In
summary, the Donners invested in a planned golf course and development. After the
*
This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
development failed, they brought suit against Nicklaus, advancing several claims
related to Nicklaus’ alleged misrepresentations. After the district court dismissed, we
affirmed in all respects but one: We concluded that the Donners plausibly alleged a
claim for intentional misrepresentation based on Nicklaus’ statement that he was a
charter member of the Mt. Holly Club, which could falsely suggest he had invested
his own funds in the venture. Id. at 868-71, 877.
On remand and after discovery, Nicklaus moved for summary judgment on the
ground that the remaining claim was untimely. Holding that the claim was time-
barred, the district court granted summary judgment in favor of Nicklaus. The
Donners timely appealed.
II
We review a district court’s grant of summary judgment de novo. Wood v. Eli
Lilly & Co., 38 F.3d 510, 512 (10th Cir. 1994). Summary judgment is appropriate
only if the evidence, viewed in the light most favorable to the non-moving party,
presents no genuine issue of material fact and the moving party is entitled to
judgment as a matter of law. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).
We also review the district court’s interpretation of state law de novo, including its
interpretation of a statute of limitations. Fulghum v. Embarq Corp., 785 F.3d 395,
413 (10th Cir. 2015).
The parties have helpfully narrowed the scope of this dispute. All parties
agree that the Donners’ claim is governed by Utah’s three-year limitations period for
fraud or mistake, under which “the cause of action does not accrue until the
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discovery by the aggrieved party of the facts constituting the fraud or mistake.” Utah
Code § 78B-2-305(3). They further agree that the relevant question is whether the
Donners’ claim accrued prior to April 14, 2008. And the Donners conceded at oral
argument that they were on inquiry notice of their claim prior to that date.
Accordingly, the question is whether inquiry notice triggered the running of the
limitations period under Utah law.
Although the language of the statute appears to focus on the date a plaintiff
discovers facts constituting fraud, the Utah Supreme Court has stated “all that is
required to trigger the statute of limitations is sufficient information to put plaintiffs
on notice to make further inquiry if they harbor doubts or questions” and that
“inquiry notice triggers the accrual of the statute of limitations.” Macris v.
Sculptured Software, Inc., 24 P.3d 984, 990 (Utah 2001). It has explained that
“knowledge of facts which would have put an ordinarily prudent man upon inquiry
which, if followed up, would have resulted in a discovery of the fraud, [i]s equivalent
to actual discovery.” Baldwin v. Burton, 850 P.2d 1188, 1196 (Utah 1993)
(quotation omitted).1 And in Colosimo v. Roman Catholic Bishop of Salt Lake City,
156 P.3d 806 (Utah 2007), the Utah Supreme Court’s most recent discussion of the
issue, it concluded that the discovery rule did not rescue otherwise untimely claims
1
The Utah Supreme Court has clarified that the inquiry notice rule operates
somewhat differently when applying an equitable discovery rule, as opposed to a
statutory discovery rule. See Russell Packard Dev., Inc. v. Carson, 108 P.3d 741,
747, 750 n.7 (Utah 2005). The statutory version of Utah’s discovery rule is at issue
in this case, see id. at 747, as it was in Baldwin, 850 P.2d at 1195. And the two
versions are “mutually exclusive.” Nolan v. Hoopiiaina (In re Hoopiiaina Trust), 144
P.3d 1129, 1140 (Utah 2006).
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because plaintiffs’ knowledge “was sufficient to put them on inquiry notice of their
claims.” Id. at 810.
The Donners contend that this rule applies only in circumstances in which a
plaintiff does not conduct a reasonable investigation after being put on inquiry notice.
But the Utah Supreme Court has repeatedly stated the rule without expressing the
limitation proposed by the Donners. Colosimo, 156 P.3d at 810; Macris, 24 P.3d at
990; Baldwin, 850 P.2d at 1196. Because we are bound to “the most recent statement
of state law by the state’s highest court,” see Wood, 38 F.3d at 513, we must agree
with the district court that the Donners’ claim is untimely.
III
For the foregoing reasons, we AFFIRM. Nicklaus’ motion for leave to file a
surreply brief and the Donners’ motion to file a response are DENIED.
Entered for the Court
Carlos F. Lucero
Circuit Judge
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