AMI 211 Issues—Fraudulent Concealment to Suspend the Running of the Statute of Limitations

Do not use the last bracketed paragraph if the case is submitted on interrogatories.

Select one of the bracketed paragraphs for the first proposition depending on the nature of the alleged concealment, or submit them as alternatives if warranted by the evidence.

Complete the blank in the third proposition with the date that defines the applicable limitations period as determined in relation to the date of the complaint, e.g., if the underlying action is a fraud claim, the date would be that of the day three years prior to the date the complaint was filed.

This instruction is based on Martin v. Arthur, 339 Ark. 149, 3 S.W.3d 684 (1999); First Pyramid Life Ins. Co. of Am. v. Stoltz, 311 Ark. 313, 843 S.W.2d 842 (1992); Chalmers v. Toyota Motor Sales, USA, Inc., 326 Ark. 895, 935 S.W.2d 258 (1996); Curry v. Thornsberry, 81 Ark. App. 112, 98 S.W.3d 477 (2003); and Adams v. Wolf, 73 Ark. App. 347, 43 S.W.3d 757 (2001).

The doctrine of fraudulent concealment has been applied to a variety of different causes of action. See, e.g., Smothers v. Clouette, 326 Ark. 1017 1020–21, 934 S.W.2d 923, 925–26 (1996) (legal malpractice); Alexander v. Flake, 322 Ark. 239, 245–46, 910 S.W.2d 190, 193–94 (1995) (breach of fiduciary duty); Jones v. Cent. Ark. Radiation Therapy Inst., Inc., 270 Ark. 988, 989, 607 S.W.2d 334, 335 (1980) (medical malpractice).

A statutory tolling provision governs actions for medical injury involving a foreign object in the body, Ark. Code Ann. § 16-114-203(b), but the doctrine of fraudulent concealment may still apply in a case where the surgeon knew that the foreign object remained in the patient and failed to tell the patient. Howard v. Nw. Ark. Surgical Clinic, P.A., 324 Ark. 375, 383, 921 S.W.2d 596, 600 (1996).

In Meadors v. Still, the court defined the standard of review when considering whether the statute of limitations has been tolled due to fraudulent concealment. 344 Ark. 307, 312, 40 S.W.3d 294, 298 (2001). A defendant has the burden of affirmatively pleading the statute of limitations as a defense. However, once it is clear from the face of the complaint that the action is barred by the applicable limitations period, the burden shifts to the plaintiff to prove by a preponderance of the evidence that the statute of limitations was in fact tolled. While the question of fraudulent concealment is normally a question of fact that is not suited for summary judgment, when the evidence leaves no room for a reasonable difference of opinion, the trial court may resolve fact issues as a matter of law.

In Delanno, Inc. v. Peace, the court applied the foregoing standard to an attorney who stood in a fiduciary relationship to his client. 366 Ark. 542, 544–49, 237 S.W.3d 81, 83–87 (2006). The court stated that to hold otherwise would unduly restrict the applicability of the statute of limitations to legal malpractice actions based upon misstatements by attorneys and would operate to eliminate a client’s duty to exercise reasonable diligence in analyzing the accuracy of the attorney’s statements. Compare Smothers, 326 Ark. at 1012, 934 S.W.2d at 926 supra (fact questions existed as to whether statute of limitations was tolled in attorney malpractice action by affirmative acts of fraud or concealment and as to when the alleged negligent act occurred).

In Bomar v. Moser, the court applied the Meadors standard to another attorney malpractice case and distinguished Delanno. 369 Ark. 123, 130–33, 251 S.W.3d 234, 241–43 (2007). First, the client in Bomar produced evidence that the defendant attorneys committed positive acts of fraud and concealed their wrongdoing as opposed to merely making “an inadvertent misstatement of the facts,” as in Delanno. Second, unlike the circumstances in Delanno, there was a material question of fact on the issue of whether it was unlikely that the plaintiff client could have discovered concealment of the defendant’s wrongful acts through the exercise of reasonable diligence.

The Court of Appeals also distinguished Dellano in a case involving alleged fraudulent concealment of termite and other damage by a pest-control company. Russenberger v. Thomas Pest Control, Inc., 2012 Ark. App. 86, at 8–11. In reversing the trial court's grant of a motion to dismiss, the court noted that, unlike the inadvertence shown in Delanno, the plaintiff had alleged that the defendants actually knew of the damage and concealed it from her for years, and that she neither was put on notice as was the plaintiff in Delanno nor could have discovered the damage herself in the exercise of reasonable diligence. Id. at 10–11.

In Technology Partners, Inc. v. Regions Bank, the court applied the Meadors standard in the context of a bank’s failure to disclose information about one customer’s activity to another customer. 97 Ark. App. 229, 234, 245 S.W.3d 687, 691 (2006). The court held that fraudulent concealment requires more than the continuation of a prior nondisclosure and there must be evidence that the defendant’s actions were designed to conceal themselves or that the defendant engaged in cunning or artifice to conceal its conduct or to prevent the plaintiff from learning of the defendant’s actions. Id. at 235–36, 245 S.W.3d at 692–93.