Robert L. Kroenlein Trust By and Through Deborah Alden, Successor Trustee, and Chugwater Brewing Company, Inc., a Wyoming Corporation v. Gary Bruce Kirchhefer, Commodore Bar, Inc., Rick L. Bowen, Silver Dollar Bar of Lusk, Llc., and Larry H. Halligan
2015 WY 127
Wyo.2015Background
- J&B Package Liquor (originally owned by the Kroenlein Trust) experienced recurring unexplained beer shortfalls from ~2002–2007 after owners changed; Deborah and Eric Alden managed investigation after 2004–2006 transitions.
- Eric Alden discovered recurring accounting discrepancies beginning mid‑2005, investigated accounting causes, inventorying, videotape review, spot checks, and ultimately installed better surveillance in Oct 2007.
- Surveillance in late 2007 showed Orrison employee Gary Kirchhefer stealing beer; Kirchhefer later pleaded and identified Bowen and Halligan as purchasers in a 2010 statement.
- Plaintiffs filed in federal court (RICO + state conversion/fraud) in Aug 2011; the federal court granted summary judgment on RICO claims as time‑barred (Mar 31, 2013) and dismissed state claims without prejudice.
- Plaintiffs then sued in state court (Apr 2013) on conversion and fraud. Defendants moved for summary judgment arguing statutes of limitation barred the state claims and collateral estoppel applied; the state district court granted summary judgment.
- The Wyoming Supreme Court affirmed that the discovery rule applies to fraud and conversion accruals but reversed summary judgment because disputed factual issues about reasonable diligence existed and collateral estoppel was inapplicable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of discovery rule to accrual of fraud and conversion (Wyo. Stat. §1‑3‑106) | §1‑3‑106 requires actual discovery of fraud/wrongdoer before accrual (no due diligence inquiry) | Discovery rule (knowledge or reason to know) has been applied by Wyoming courts; due diligence should determine accrual | Court: discovery rule applies; “discovered” means actual discovery or could have been discovered with reasonable diligence (adheres to prior WY precedent) |
| Whether Plaintiffs exercised reasonable diligence (when statute began to run) | Alden conducted stepwise, reasonable investigation (accounting review, spot checks, surveillance, private investigators); delay was reasonable given complexity and law‑enforcement concerns | Plaintiffs were on notice earlier (accountant reports as early as 1997/2002); scheme was simple and discoverable sooner; summary judgment appropriate | Court: fact question exists about what diligence was reasonable; material disputes preclude summary judgment |
| Collateral estoppel based on federal court RICO ruling | Federal ruling addressed RICO (injury‑discovery rule) and dismissed state claims without prejudice; did not apply Wyoming discovery rule to fraud/conversion; thus non‑preclusive | Federal court found Plaintiffs knew or should have known of injury earlier and even suggested discoverability by 2005; state court may give preclusive effect | Court: collateral estoppel does not apply—issues were not identical; federal ruling used a different accrual standard (injury discovery for RICO) and did not resolve state law discovery/due diligence issues |
| Continuing torts doctrine (whether each act restarts limitations) | Conversion was a series of recurring acts so each act can give rise to a new accrual date (so later acts within 4 years are actionable) | Limitations ran from discoverability of the earlier losses; continuing tort may not apply as pleaded | Court: Whether the doctrine applies is a jury question dependent on findings about discovery and accrual; court provided guidance but did not decide application on summary judgment |
Key Cases Cited
- Mason v. Laramie Rivers Co., 490 P.2d 1062 (Wyo. 1971) (defines “discovery” to include what could have been found by reasonable diligence)
- Young v. Young, 709 P.2d 1254 (Wyo. 1985) (explains continuing‑tort doctrine for recurring torts and accrual for each discrete wrongful act)
- Moats v. Prof’l Assistance, LLC, 319 P.3d 892 (Wyo. 2014) (articulates standard for discovery rule and mixed fact‑law nature of accrual questions)
- Rotella v. Wood, 528 U.S. 549 (U.S. 2000) (federal RICO accrual focuses on discovery of injury, not discovery of pattern/elements)
- Lieberman v. Mossbrook, 208 P.3d 1296 (Wyo. 2009) (applies discovery rule to conversion claims)