Marian I. Erdelyi v. Bradley T. Lott
326 P.3d 165
Wyo.2014Background
- Marian Erdelyi and her elderly mother, S. Isabel Sprankle, were joint tenants on investment accounts; Sprankle funded the accounts. Broker Bradley Lott managed the accounts and cultivated a close relationship with Sprankle by phone, eventually facilitating trust documents that named Lott (not Erdelyi) as primary beneficiary.
- Lott omitted disclosure to Erdelyi about Sprankle’s estate plans, encouraged transfer of joint accounts into a trust, and assisted Sprankle in moving and other personal matters; he also sought and received assurances that trust details would not be disclosed to Erdelyi.
- Erdelyi received no trust documentation during Sprankle’s life despite repeated inquiries; Sprankle was declared incompetent in 2009 and died the same year, and Erdelyi then learned she was disinherited and Lott received substantial assets.
- Erdelyi sued Lott in 2011 for fraud and constructive fraud. At trial the jury found constructive fraud but also found Erdelyi knew or should have known of the fraud before February 10, 2007, triggering the statute of limitations; the district court entered judgment dismissing the case.
- On appeal the Wyoming Supreme Court held the evidence did not support a finding that Erdelyi could have discovered the fraud earlier because relevant information was concealed and she lacked legal entitlement or access to trust information; the court reversed and remanded for new trial.
- The Court also held it was error to instruct the jury on negligence and comparative fault (and to include Erdelyi on the verdict form for apportionment) in a constructive-fraud case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether jury instruction and verdict form allowed comparative fault/negligence to be applied to fraud (including putting plaintiff on verdict form) | Erdelyi: comparative-fault/negligence instructions were improper in a fraud case and confused standards | Lott: comparative fault statute applies broadly; plaintiff’s negligence should be compared/apportioned | Court: Reversed — comparative fault and negligence instructions (and including plaintiff on verdict form) were improper in a fraud action; jury should not apportion fault between fraudster and victim |
| Whether instruction requiring jury to decide if Erdelyi “knew or should have known” of fraud (for statute of limitations) was supported by evidence | Erdelyi: no evidence showed she could have discovered the fraud earlier; concealment prevented access | Lott: Erdelyi was suspicious and could have asked her mother or hired a lawyer and thus should have discovered earlier | Court: Reversed — evidence did not support that with due diligence Erdelyi could have discovered the fraud before the limitations date; dismissal on statute-of-limitations grounds was error |
| Whether jury should have been asked to determine discovery date when no evidence of actual discovery existed | Erdelyi: no evidence of actual discovery and instruction improperly shifted burden | Lott: jury could infer discovery from surrounding facts and plaintiff’s conduct | Court: Reversed — no competent evidence justified finding plaintiff knew or should have known earlier; instruction/application was improper |
Key Cases Cited
- Retz v. Siebrandt, 181 P.3d 84 (Wyo. 2008) (fraud accrual tied to when fraud was known or could be discovered with reasonable diligence)
- Mason v. Laramie Rivers Co., 490 P.2d 1062 (Wyo. 1971) (plaintiff’s access to records made discovery of fraudulent transfer reasonably possible and statute of limitations barred later suit)
- Board of County Comm’rs of Teton County v. Bassett, 8 P.3d 1079 (Wyo. 2000) (comparative-fault statute requires including nonparty willful actors in apportionment in negligence context)
- Cathcart v. State Farm Mut. Auto Ins. Co., 123 P.3d 579 (Wyo. 2005) (court declined to decide comparative fault’s application in bad-faith context; Bassett not all‑encompassing)
- Strong Construction, Inc. v. City of Torrington, 255 P.3d 903 (Wyo. 2011) (comparative-fault statute does not apply to breach-of-contract claims)