Rena Swanson v. Rhonda Wilson, 423 F. App'x 587

Rena Swanson was three when her father died in Illinois; settlement proceeds were allocated to a restricted account in her name for her benefit.
Rhonda Wilson acted as guardian and fiduciary, opening the restricted account and, later, a bank account in Rena’s name, with Rhonda as signatory.
Symetra/Safeco funded monthly payments and lump-sum payments to the restricted account; funds were to remain until Rena reached majority.
Rhonda later moved with Rena to California, married Kim Wilson, and obtained a durable power of attorney over Rena’s banking affairs.
A letter purportedly from Rena demanded release of funds in 1999; checks were cashed and later evidence suggested misappropriation.
Rena discovered in 2002 that funds were being signed, deposited, and withdrawn in her name, leading to allegations of fiduciary breach, conversion, and fraud.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Where accrual occurred under Kentucky’s borrowing statute	Accrual occurs where injury and wrong first occur or where harm is felt.	Accrual occurs where the wrongful conduct happened.	California law governs due to where injury was felt and final act occurred.
Which state's statute of limitations applies	Kentucky borrowing statute should apply if shorter.	California statute applies because accrual and injury occurred there	California’s three-year/ four-year limitations apply; California bars claims.
Applicable California limitations period for fiduciary fraud	Fiduciary breach tolls or extends limitations under fiduciary principles.	Fraud and fiduciary duties are governed by the three-year fraud statute.	Under California law, the three-year period applies where the gravamen is fraud with fiduciary duties.
Rule governing discovery in fiduciary-fraud context	Delays tolling due to fiduciary relationship should apply; discovery within burden.	Discovery rule runs from knowledge of loss; fiduciary status delays must end when suspicion arises.	Discovery rule tolling ends once plaintiff had facts making a reasonably prudent person suspicious; here, knowledge accrued by December 6, 2002.

Combs v. Int’l Ins. Co., 354 F.3d 568 (6th Cir. 2004) (borrowing statute limits; rejects most-significant-relationship approach for Kentucky's statute)
CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp., 589 F.3d 235 (6th Cir. 2009) (accrual rule linking time and place of the act and injury)
Queensway Fin. Holdings Ltd. v. Cotton & Allen, P.S.C., 237 S.W.3d 141 (Ky. 2007) (accrual determined by both negligent act and injury; focus on irrevocable injury)
Day v. Greene, 59 Cal.2d 404 (Cal. 1963) (gravamen-based classification of limitations by right sued upon)
City of Vista v. Robert Thomas Sec., Inc., 84 Cal. App. 4th 882 (Cal. App. 2000) (three-year statute governs breach of fiduciary claim when fraud is gravamen)
Hobbs v. Bateman Eichler, Hill Richards, Inc., 164 Cal. App. 3d 174 (Cal. App. 1985) (duty to inquire in fiduciary context; suspicion starts inquiry duty)
Jolly v. Eli Lilly & Co., 751 P.2d 923 (Cal. 1988) (delayed discovery applicable to concealment-based actions)
Willits v. Peabody Coal Co., 188 F.3d 510 (6th Cir. 1999) (accrual location for contract-based action; distinguish torts)