HORTON v. HAMILTON
2015 OK 6
| Okla. | 2015Background
- In 2007 Peggy Horton purchased a $100,000 Life Fund 5.1, L.L.C. capital appreciation bond after attending a seminar presented by defendants Hamilton and Peck. She later received a call from the Oklahoma Securities Commission that it was investigating the sellers for possible fraud.
- Horton received the bond in November 2007, began pressing the sellers for return of her money, worked with the Commission, and filed a proof of claim in the Life Fund bankruptcy in September 2009.
- Horton sued in Oklahoma state court on December 10, 2009 asserting claims under the Oklahoma Securities Act (misrepresentation), common-law fraud, breach of fiduciary duty, negligence, and gross negligence. Two Securities Act counts were dismissed earlier and are not before the Supreme Court.
- Defendants moved for summary judgment, arguing all remaining tort and Securities Act claims were time-barred by two-year statutes of limitation; they relied on six admitted facts (e.g., purchase dates, Commission call, proof of claim).
- The district court and Court of Civil Appeals granted/affirmed summary judgment. The Oklahoma Supreme Court granted certiorari to decide whether defendants submitted sufficient evidence to establish accrual/discovery dates and thus that the claims were time-barred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the 2-year limitations period for Securities Act misrepresentation (71 O.S. §1-509) begin? | Horton: limitations tolled until she actually discovered facts sufficient to plead misrepresentation; material factual disputes exist about what she learned after the Commission call. | Defendants: limitations began when Horton first sought return of her money (Sept. 2007) or when Commission called—more than two years before suit. | Held: Defendants failed to show as a matter of law when Horton discovered (or should have discovered) the misrepresentation; question of fact remains. Court applies discovery/inquiry-notice standard. |
| When did fraud (common-law) accrue? | Horton: did not have particularized facts to plead fraud in Sept. 2007; discovery occurred later; factual disputes preclude summary judgment. | Defendants: Horton was aware of wrongdoing within two years of filing; statute had run. | Held: Accrual depends on when plaintiff discovered facts sufficient to plead fraud; defendants did not prove discovery date and summary judgment was erroneous. |
| Whether defendants owed a per se fiduciary duty and when negligence/breach of fiduciary duty claims accrued | Horton: alleged meetings and reliance created a factual question on fiduciary duty and on when damages/causes were discovered. | Defendants: claims accrued early (Sept. 2007); statute run. | Held: No per se broker fiduciary rule applies; existence and scope of fiduciary duty are fact questions. Defendants failed to show when these tort claims accrued—summary judgment improper. |
| Did Life Fund 5.1, L.L.C.’s bankruptcy automatic stay toll the state claims against individual defendants? | Horton: bankruptcy proceedings and stay tolled the statutes because she was prevented from suing. | Defendants: no connection shown between debtor and individual defendants; stay does not bar suits against non-debtors. | Held: Horton produced no evidentiary basis tying defendants to debtor or showing the stay prevented her suit; bankruptcy tolling argument rejected on summary judgment record. |
Key Cases Cited
- Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350 (adopts inquiry-notice approach to discovery for securities claims)
- Digital Design Group, Inc. v. Information Builders, Inc., 24 P.3d 834 (Okla. 2001) (discovery rule delays limitations until plaintiff knew or should have known of injury)
- Consol. Grain & Barge Co. v. Structural Sys., Inc., 212 P.3d 1168 (Okla. 2009) (a cause of action accrues when each element has materialized)
- Redwine v. Baptist Medical Center of Oklahoma, Inc., 679 P.2d 1293 (Okla. 1983) (defendant must prove when plaintiff knew or should have discovered claim to sustain statute-of-limitations summary judgment)
- Mud Trans, Inc. v. Foster-Dickenson & Co., Inc., 856 P.2d 282 (Okla. 1993) (statute begins when plaintiff learned representations were false)
- Smith v. Baptist Foundation of Oklahoma, 50 P.3d 1132 (Okla. 2002) (statute of limitations for fiduciary claims begins when beneficiary learns of damage that may be trustee’s fault)