Donald Masters v. Boston Scientific Corporation

FILED
NOT FOR PUBLICATION NOV 19 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
DONALD MASTERS, No. 09-17428
Plaintiff - Appellee, D.C. No. 5:07-cv-03792-JW
v.
MEMORANDUM *
BOSTON SCIENTIFIC CORPORATION,
Defendant - Appellant.
Appeal from the United States District Court
for the Northern District of California
James Ware, District Judge, Presiding
Argued and Submitted November 2, 2010
San Francisco, California
Before: THOMAS and IKUTA, Circuit Judges, and RESTANI, Judge.**
Boston Scientific Corporation (“Boston Scientific”) appeals a district court
judgment awarding $279,500 in damages to Donald Masters. We reverse because
Masters’ action is barred by Massachusetts’s six-year statute of limitations for
breach of contract actions. See Mass. Gen. Laws ch. 260 § 2.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Jane A. Restani, Judge of the United States Court of
International Trade, sitting by designation.
The district court properly concluded that Masters’ injury occurred on
January 12, 2001, when he left employment with Boston Scientific and, pursuant to
the relevant options agreements between the parties (the “2000 Agreements”), his
options lapsed immediately. In Massachusetts, “[t]he general rule is that a contract
action accrues at the time the contract is breached.” Berkshire Mut. Ins. Co. v.
Burbank, 422 Mass. 659, 661 (1996). Masters filed the present action in California
state court on May 2, 2007, more than six years later. Thus, his action is time-
barred unless the statute of limitations was tolled. Under Massachusetts law, there
are three tolling doctrines potentially relevant here: the discovery rule, the
fraudulent concealment doctrine, and equitable estoppel. None of the doctrines
applies here.
First, the discovery rule provides that if an action “is based on an ‘inherently
unknowable’ wrong, it does not accrue until the injured party knows or in the
exercise of reasonable diligence should know the factual basis for the cause of
action.” Puritan Med. Ctr., Inc. v. Cashman, 413 Mass. 167, 175 (1992).
However, “[u]nder Massachusetts law, a fact is not inherently unknowable when it
is a matter discoverable by examination of public records.” Wise v. Hubbard, 769
F.2d 1, 2-3 (1st Cir. 1985) (citing, inter alia, White v. Peabody Const. Co., Inc.,
386 Mass. 121, 130-31 (1982)). Boston Scientific’s 2000 Long-Term Incentive
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Plan (the “2000 Plan”), which contained the “rule of 62” definition that Masters
claims deems his 2001 termination a “retirement,” was filed with the Securities and
Exchange Commission and was available on the SEC’s website. Because the 2000
Plan was “discoverable by examination of public records,” under Massachusetts
law, the discovery rule does not apply to extend the statute of limitations to
encompass Masters’ suit. Wise, 769 F.2d at 2-3.
Second, the fraudulent concealment doctrine, see Mass. Gen. Laws ch. 260
§ 12, also does not toll the statute. Masters signed the 2000 Agreements, which
incorporated the 2000 Plan by reference. He is therefore charged with constructive
knowledge of the 2000 Plan. See Kuwaiti Danish Computer Co. v. Digital Equip.
Corp., 438 Mass. 459, 465 (2003). Because a “‘cause of action is not concealed
from one who has knowledge of the facts that create it,’” White, 386 Mass. at 133(quoting Stetson v. French, 321 Mass. 195, 198 (1947)), the fraudulent
concealment doctrine does not apply.
Finally, equitable estoppel is also inapplicable. “Under equitable estoppel, a
plaintiff can escape the consequences of his lack of diligence in bringing his action
. . . by way of proof that the defendants lulled the plaintiff into the delay.”
Kozikowski v. Toll Bros., Inc., 354 F.3d 16, 24 (1st Cir. 2003) (quotation omitted).
“For the doctrine to apply, [Masters] must satisfy a three-part test, showing: (1)
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that [Boston Scientific] made representations that it knew or should have known
would induce [Masters] to postpone bringing a suit; (2) that [Masters] did in fact
delay bringing a suit in reliance on those representations; and (3) that reliance on
those representations was reasonable.” Id. (citing O'Blenes v. Zoning Bd. of
Appeals of Lynn, 397 Mass. 555, 558 (1986)). “[T]he party asserting the estoppel
theory ‘has a heavy burden to prove that all [three] elements are present.’”
Clickner v. City of Lowell, 422 Mass. 539, 544 (1996) (quoting Harrington v. Fall
River Hous. Auth., 27 Mass. App. Ct. 301, 309 (1989)).
There is no evidence in the record that Masters delayed bringing suit in
reliance on any representation by Boston Scientific. Thus, equitable estoppel does
not toll the statute of limitations.
In sum, Masters’ suit is time-barred, and no exceptions apply to toll the
running of the limitations period. The district court was incorrect in concluding
otherwise.
REVERSED.
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