                  NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 11a0344n.06

                                           No. 10-5064
                                                                                          FILED
                              UNITED STATES COURT OF APPEALS
                                   FOR THE SIXTH CIRCUIT                             May 20, 2011
                                                                               LEONARD GREEN, Clerk

Rena Purintun Swanson,                                   )
                                                         )
       Plaintiff-Appellant,                              )         ON APPEAL FROM THE
                                                         )         UNITED STATES DISTRICT
v.                                                       )         COURT FOR THE EASTERN
                                                         )         DISTRICT OF KENTUCKY
Rhonda Renee Purintun Wilson; Kim Lane Wilson;           )
Capitol Indemnity Corporation;                           )                  OPINION
                                                         )
       Defendants-Appellees.                             )
                                                         )



BEFORE:        GUY, CLAY, and McKEAGUE, Circuit Judges.

       McKeague, Circuit Judge. Plaintiff Rena Swanson filed suit against her mother, Rhonda

Wilson; her step-father, Kim Wilson; and several corporate entities to recover her share of a lawsuit

settlement related to her father’s accidental death when she was young. Swanson alleges that her

mother was a fiduciary in several respects, and breached the duties she owed her daughter by

concealing the existence of settlement proceeds belonging to Swanson, and by using fraudulent

means to gain access to Swanson’s settlement funds for her own use and benefit.

       The district court concluded that this action was barred by the applicable statute of

limitations. Though we disagree with particular determinations made by the district court, we agree

with its ultimate conclusion and therefore AFFIRM the grant of summary judgment.

                                       I. BACKGROUND
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

       Plaintiff Rena Swanson (“Rena” or “Plaintiff”) was three years old when her father, Leroy

Purintun (“Leroy”), was killed in an oil tank explosion in Illinois. Following the accident, his wife,

Defendant Rhonda Renee Purintun Wilson (“Rhonda”) brought a wrongful death action in Illinois

state court as administratrix of Leroy’s estate, and as guardian of her two minor children, Rena and

her sister, Melissa. The case was settled in 1990—at that time, Rena was nine years old.

       Rena’s claims were settled for $234,375. The defendants in that settlement agreed to pay

$109,375 immediately, with approximately $95,000 going to litigation costs and attorney’s fees,

$1,193 to pay estate costs and fees, and the remaining $12,388.71 to be used to open a restricted

bank account in Rena’s name. The court and parties intended that this account is where Rena’s

portion of the immediate settlement proceeds, as well as future payments, would be deposited and

held until she attained majority (or the Circuit Court of Cook County ordered the funds released).

       The settlement also provided that Safeco Insurance Company of America (“Safeco”), the

liability insurer of the defendants in the wrongful death suit, would make periodic payments to Rena.

This payment schedule included $300 monthly payments until Rena reached the aged of 18, with an

interest rate of six percent compounded annually—these payments would be made to the secure bank

account. The settlement also included nine large lump-sum payments to be paid periodically to Rena

between the ages of 18 and 22—these payments would total $248,000.1


       1
         Safeco made a qualified assignment of its payment obligation to Symetra Assigned Benefits
Service Company. To fund the payments, Symetra entered into an annuity contract with Symetra
Life Insurance Company (“Symetra Life”). Safeco also issued a surety bond under which it promised
to make the settlement payments to Rena if Symetra failed to perform. Claims against the corporate
successors to these parties were settled and are not involved in this appeal. The only remaining
parties are Rena Swanson; her mother, Rhonda Wilson; her stepfather, Kim Wilson; and Capitol

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No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

       In order to facilitate the creation of the restricted account and the deposit of the first

settlement payment, the Probate Court appointed Rhonda as the guardian of Rena’s court estate.

Defendant Capitol Indemnity Corporation obligated itself as surety on Rhonda’s fiduciary bond.

Rhonda opened an account in Rena’s name at American National Bank and Trust Company of

Chicago (“American National Bank”) and deposited the original $ 12, 388.71 payment into that

account. That same day, following production of the necessary documents to the Probate Court, the

Court closed Rena’s estate, discharged Rhonda from further duty as guardian of that estate, and

released Capitol from further surety obligations. Rhonda, however, remained Rena’s sole legal

guardian.

       For the next nine years, Symetra Life deposited all of the scheduled monthly payments and

the first lump-sum payment directly into Rena’s restricted bank account at American National Bank.

Though Rhonda was the signatory on this account, the Probate Court had indicated that no

withdrawals could be made without court approval, and there is no indication that any funds were

removed from the account during that time.

       In early 1995, Rhonda and Rena moved to California. Later that year, Rhonda married

Defendant Kim Wilson (“Kim”), and the family moved to 8500 Todd Court, Riverside, California.

Three years later, Rena turned eighteen on September 28, 1998, at which time, she still resided with

Rhonda and Kim. Rena alleges that in the nine years between the settlement and her reaching the

age of majority, she was never informed of the existence of the settlement benefitting her. Rena’s



Indemnity Corporation, the surety on Rhonda’s fiduciary bond.

                                               -3-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

grandmother stated in her deposition that Rhonda told her not to mention the money to Rena,

because Rena was too immature to handle it. Rena alleges that her mother intentionally withheld

the existence of the settlement and money from her.

       Shortly after her eighteenth birthday, Rena had an argument with her mother and moved out

of the house. She flew to Guam to be with her boyfriend, Robert, who was in the U.S. Navy. Rena

and Robert were married in December 1998, and they remained in Guam until August 1999. At that

time, Robert was discharged from the U.S. Navy, and the family moved back in with Rhonda and

Kim. When Robert found another job, he and Rena made plans to move into their own apartment.

       However, before they moved, Rhonda induced Rena to sign a Durable Power of Attorney,

which empowered Rhonda to act on Rena’s behalf with respect to various matters, including banking

transactions. She told Rena this would allow her to “help” with various matters. The document

stated that Rhonda was granted a general power of attorney, appointed as Rena’s “attorney-in-fact,”

and authorized Rhonda to “act in my name, place, and stead in any way which I myself could do”

with respect to certain matters. Specifically, Rena initialed spaces on the document authorizing her

mother to act for her in “tangible personal property transactions,” “bond, share and commodity

transactions,” and importantly, “banking transactions” and “records, reports and statements.”

Rhonda then signed the form, stating that she “accepts this appointment” and “agrees to act and

perform in said fiduciary capacity consistent with [Rena’s] best interests.” This Power of Attorney

was executed on October 25, 1999.

       In November 1999, Rena and Robert moved into their own apartment in California. Also

during that month, American National Bank in Illinois received a letter, purportedly signed by Rena,

                                               -4-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

which stated: “I, Rena S. Purintun, have reached the age of majority and would like all of my funds

released, including the CD deposit. I have enclosed all of the documents you require. Please send

the check promptly.” The letter included copies of Rena’s birth certificate, California identification

card, and Social Security card. The return address on the letter was “8500 Todd Court, Riverside,

California,” her mother’s address where Rena no longer resided. Although denied by Rhonda, Rena

alleges that she did not send or authorize this letter, and that her mother signed her name and

requested the money.

       On November 9, 1999, pursuant to the letter, American National Bank closed the restricted

account and issued two cashier’s checks, made payable to Rena, for a total of $67,957.05. Both

checks were sent to California and were apparently cashed on November 17, 1999. The defendants

contend that Rena cashed these checks, but Rena asserts that she did not; records do not exist to

demonstrate where or by whom the checks were cashed.

       On December 19, 2000, Symetra Life also received a notarized letter, purportedly signed by

Rena, requesting that Symetra Life “[p]lease forward all of the payments you are holding on my

Annuity Contract . . . to my above address.” The return address was again “8500 Todd Court,”

Rhonda and Kim’s home, where Rena had not lived for over a year. Symetra Life honored the

request and sent the remaining checks to Rena at Rhonda’s address. The first check was cashed at

a Bank of America branch. Rena denies that she was the one who requested this change, but states

that her mother had her sign several documents she did not understand, and had her sign a blank

sheet of paper, in order to help her with her finances.



                                                -5-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

         In early 2001, Robert lost his job and he and Rena planned to move with their two daughters

to Georgia, to be near Robert’s mother. Before this move, Rhonda and Rena opened a joint bank

account with Bank of America. Rhonda told Rena that having such an account would help her,

because she would put her own (Rhonda’s) money in it occasionally to help Rena pay living

expenses. Rhonda also promised that when Rena bought a house, she would help with the down

payment. Besides the first check, all remaining checks from Symetra Life were deposited into this

joint account. Each was purportedly endorsed by “Rena S. Purintun,” with a few additionally

bearing the endorsement of “Rhonda Renee Wilson.” Rhonda admits signing Rena’s name to checks,

but denies that these were unauthorized forgeries.

         After living in Georgia for about six months, Rena and Robert again moved in September

2001, to live with Robert’s father in Minnesota. In November of that year, Rhonda apparently asked

her mother for financial help. Her mother sent Rena an email, saying she would send a couple

hundred dollars that Rena requested, but that “we won’t be able to send you anymore for a long

time.” Rhonda continued that “I can’t continue to help you and Melissa with money because I will

end up with no home and no money. . . . After all I have given a lot already.” At this time, however,

the joint account contained at least $62,000 of Rena’s money; Rena claims she was unaware of these

funds.

         In April 2002, Rena visited her (estranged) sister, Melissa, in Wisconsin. Rena learned from

Melissa that she might be entitled to receive some money in connection with their father’s death.

Melissa told her that she had received a large amount of money, and that Rena had a right to receive

a similarly large sum from their mother, Rhonda. Following this discussion, Rena asked Rhonda

                                                 -6-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

about the money, but Rhonda told Rena that Melissa had lied about the money. As the district court

in this case stated, “Rena apparently believed Rhonda’s explanation, for she did not contact Melissa

again, nor did she speak to anyone else about the settlement money.” Rena claims that even at this

time, she “had no idea about the settlement and the significant funds that had been funneled” from

her Illinois account to Rhonda and Kim.

       In October 2002, Robert and Rena wanted to buy a house, but when Rena asked Rhonda to

assist them, she refused. Worried that her family might soon have nowhere to live, Rena

remembered the joint bank account opened in 2001. She called Bank of America to inquire about

the account’s balance, and was surprised to learn that the account contained $62,520.71. According

to Rena, she learned on November 29, 2002 that the source of the funds had been checks that bore

her name, coming from an annuity company in Washington.

       On December 3, 2002, Safeco Life received a notarized letter from Rena ,which read: “I have

not received, deposited, or cashed any checks from Safeco Insurance. I first became aware that

checks issued to my name from Safeco Insurance were being signed, deposited, and withdrawn on

11/29/2002.” In response, Safeco Life faxed two letters to Rena. The first, on December 3, 2002,

explained that its annuity contract was purchased “to fund payment obligations under a settlement

agreement for a personal injury or wrongful death claim.” It further detailed all of its payments made

to Rena’s restricted minor’s account at American National Bank (totaling approximately $29,000),

and check payments made out to Rena—beginning in 1998—totaling approximately $248,000. The

second fax, sent on December 6, 2002, included copies of the settlement agreement and the last three

settlement checks, all of which were deposited into the joint account (these totaled $173,000).

                                                -7-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

       When she received the first letter from Safeco, Rena promptly opened an individual bank

account at Bank of America and transferred the entire balance of the joint account into her personal

account. However, Rena testified that at this time, she did not understand what all of this meant, and

was trying to figure out what was going on. She states that transferring the funds “would protect this

part of the money while Rena continued her investigation.”

       In February 2003, Rena and Robert purchased a house in Minnesota. In June 2003, Rhonda

and Kim moved to Kentucky. Shortly after the move, Rena called Rhonda and Kim, confronting

them about the money and demanding an explanation regarding the existence and location of her

settlement money. Rhonda and Kim denied the existence of any settlement money belonging to

Rena or any wrongdoing. Instead, Rhonda told Rena that she (Rhonda) had committed tax fraud:

she insinuated that the money was really hers (Rhonda’s), the tax fraud scheme was why the money

was in Rena’s name, and that she had done nothing wrong to Rena.

       In July 2003, Rena sent affidavits to Safeco which stated that the signatures on the lump-sum

checks issued in her name were “forgeries.” She also sent a letter dated July 21, 2003, requesting

that Safeco send her all information regarding her annuity account, including the account number

for the American National Bank account. She stated, “I need these numbers to inquire about this

account as it may have been taken by my mother in the same fashion as the checks made payable to

me from Safeco.” Rena contacted American National Bank on July 22, 2003, and was informed that

her restricted account had been emptied in 1999. Rena denied sending the notarized letter

authorizing the closing of the account, and requested that the bank send her all bank statements for



                                                -8-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

the account. Rena received those records—showing all deposits and the withdrawal—on August 25,

2003.

        On October 29, 2003, Rena filed a Motion for Accounting before the Circuit Court of Cook

County Probate Division, in Illinois. Rena alleged in that motion that Rhonda had not only

concealed the existence of the settlement funds, but had forged her signature on various letters and

checks in order to gain control and use of the money intended for Rena. The record does not reflect

whether or how the Probate Court ruled on this motion. Then on January 26, 2004, Rena formally

filed a Complaint against Rhonda in the Chancery Division of Cook County. She alleged that her

mother was in a fiduciary relationship with her, and that she had hidden the existence of the funds,

used her Power of Attorney to withdraw the American National Bank funds, and directed the annuity

payments to her own California address. The complaint demanded a complete accounting of all

funds received; but also asked that (1) Rhonda pay the costs of the accounting, (2) Rhonda pay

Rena’s attorney’s fees, (3) Rhonda be “ordered to cease and desist dissipating funds intended for the

Plaintiff, and (4) “any further relief the court deems just and proper.” The record does not indicate

how the Probate Court ruled on this motion.

        Rena filed the instant action on March 9, 2007. In the Complaint, Rena repeated these

allegations against Rhonda, and added claims against Kim and the various corporate entities.

Shortly, the claims against JPMorgan Chase, Safeco, Symetra, and Symetra Life were all settled.

The only remaining claims were against Rhonda for (1) an accounting, (2) breach of fiduciary duty

and/or constructive fraud, (3) conversion, and (4) fraud; against Kim Wilson for (1) conversion, and



                                                -9-
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

(2) aiding and abetting fraud; and against Capital Indemnity Corporation for indemnification of

Rhonda.

       Defendants filed a Motion for Summary Judgment, and Rena filed a Motion for Partial

Summary Judgment. On December 22, 2009, the district court concluded that all of Rena’s claims

were time-barred by the applicable statute of limitations, and thus granted Defendants’ motion for

summary judgment. Rena timely appealed.

                                     II. Standard of Review

       This Court reviews a district court’s grant of summary judgment de novo. Parsons v. City

of Pontiac, 533 F.3d 492, 499 (6th Cir. 2008). Summary judgment is appropriate where “the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” FED . R. CIV . P. 56(a). Where, as here, the defendant moves for summary

judgment based on statute-of-limitation grounds, summary judgment is appropriate if the statute of

limitations has run and there is no genuine issue of material fact as to when the plaintiff’s cause of

action accrued. Campbell v. Grand Trunk W. R.R. Co., 238 F.3d 772, 775 (6th Cir. 2001). The

burden is on a defendant to show that the statute of limitations has run. Id. However, once the

defendant carries that burden, the plaintiff has the burden to establish an exception to the statute,

such as tolling or late discovery of the injury. Id. Here, the injury clearly began in 1999, which is

beyond the applicable statute of limitations in any relevant jurisdiction. Therefore, the burden falls

on the Plaintiff to demonstrate that an exception to the statute makes her suit timely.

                                 III. The Applicable State Law



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No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

       A district court, sitting in diversity, must apply the law of the forum state in determining

statute of limitations questions. See, e.g., Atl. Richfield Co. v. Monarch Leasing Co., 84 F.3d 204,

205 (6th Cir. 1996). Here, that is Kentucky. See Combs v. Int’l Ins. Co., 354 F.3d 568, 577 (6th Cir.

2004). The district court correctly determined that the statute of limitations is governed by

Kentucky’s borrowing statute, Kentucky Revised Statutes § 413.320, which states:

       When a cause of action has arisen in another state or country, and by the laws of this
       state or country where the cause of action accrued the time for the commencement
       of an action thereon is limited to a shorter period of time than the period of limitation
       prescribed by the laws of this state for a like cause of action, then said action shall
       be barred in this state at the expiration of said shorter period.

KY . REV . STAT . ANN . § 413.320. A three-step analysis is therefore necessary to determine the

applicability of this statute: (1) did the cause of action accrue in another state? (2) If so, is that

state’s statute of limitations for the particular cause of action shorter than the corresponding

Kentucky statute of limitations? (3) If so, application of the accrual state is applied; if not,

Kentucky’s statute of limitations is applied. See Willits v. Peabody Coal Co., Nos. 98-5458, 98-

5527, 1999 WL 701916, at *12 (6th Cir. Sept. 1, 1999).

       Here, the relevant Kentucky statute of limitations is five years. See KY . REV . STAT . ANN .

§ 413.120. The Illinois provision applicable to these causes of action is also five years. See 735 ILL.

COMP . STAT . 5/13-205. California, however, provides for either a three- or four- year limitation

period. See CAL. CIV . PROC. CODE §§ 338(d), 343. Therefore, if the cause of action accrued in

California, that state’s statute of limitation would apply in place of Kentucky’s.

       The district court determined that the place of accrual was California. First, it stated that

looking to “where the injury is sustained” is not helpful in a case—like this one—that involves

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No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

purely economic injury. It then rejected Plaintiff’s argument that Illinois is the “logical choice” for

where the action accrued, construing her argument as a contention that Illinois had the “most

significant relationship” to the case, which is a standard that has been rejected by this Court under

Kentucky’s borrowing statute. See Combs, 354 F.3d at 592. Lastly, the district court stated that

instead, this Court has looked to when a cause of action accrued to determine the place of accrual.

It then determined that the “when” in this case was when the defendant committed the first allegedly

wrongful conduct of requesting the funds—before any money was actually removed from the

Plaintiff’s accounts—and that therefore, the “where” was where the defendant acted—in California.

A. The Place of Accrual

        “Where” a cause of action accrues, for purposes of Kentucky’s borrowing statute, is unclear.

In cases, like this one, where the location of accrual is not readily apparent, this Court has looked

to when a cause of action accrued to determine the place of accrual. “[T]he elements of time and

place of accrual are inextricably intertwined: ‘The time when a cause of action arises and the place

where it arises are necessarily connected, since the same act is the critical event in each instance.

The final act which transforms the liability into a cause of action necessarily has both aspects of time

and place.’” CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp., 589 F.3d 235 (6th Cir. 2009) (quoting

Willits, 188 F.3d 510, at *12. Therefore, we must determine both when and where Rena’s cause of

action accrued.

        This Court has previously predicted how Kentucky would determine where an action accrues

for purposes of its borrowing statute. However, in Willits v. Peabody Coal Co., 188 F.3d 510, 1999



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Rena Swanson v. Rhonda Wilson, et al.

WL 701916 (6th Cir. 1999), we addressed a breach of contract claim, not a tort claim,2 but agreed

with the parties that “a cause of action accrues when and where the breach occurs and the injured

party holds the right to sue.” Id. at *12 (citation omitted). Willits went on to determine that the

contract action accrued in Missouri, where the defendant breached the contract, not where the

plaintiffs each received their royalty checks by mail. Id. at *13.

        However, we do not find Willits’ result to be controlling in this case. First, it relied upon

Kentucky’s Uniform Commercial Code statute of limitations, regarding contracts of sale, not on any

Kentucky law of torts. Furthermore, the reasoning that “a cause of action accrues where the breach

occurs and the injured party holds the right to sue” is not helpful here, for unlike in a contract-breach

action, the time of the defendant’s fraudulent conduct in this tort case is not also the time the plaintiff

held the right to sue—because it was not the time when injury actually occurred. To the extent that

Willits is instructive, it must be interpreted correctly in the tort context: “a cause of action accrues

when and where the breach occurs and the injured party holds the right to sue,” id. at 12, and

therefore, a cause of action does not accrue until both the wrong (breach) occurs and the injured

party holds the right to sue: in other words, injury must occur before the action accrues.

        Later, in a published case, Combs v. International Insurance Co., 354 F.3d 568 (6th Cir.

2004), this Court again dealt with Kentucky’s borrowing statute, although this time it was primarily

grappling with the plaintiff’s contention that the statute should incorporate a “most significant


        2
         There are indications that Kentucky treats such issues differently for torts and for contracts.
See, e.g., Combs, 354 F.3d at 592-93 (detailing different treatment of contract and tort cases, and
concluding “Kentucky began to depart from the lex loci approach to torts . . . . The Kentucky
Supreme Court, however, did not make the same change with respect to contract cases”).

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Rena Swanson v. Rhonda Wilson, et al.

relationship test,” which Combs declined to do. Combs acknowledged that “[t]his is a highly

uncertain area of state law, forcing us to make an educated ‘Erie Guess.’” Id. at 577.

       The Court noted problems in the application of borrowing statutes, and stated that the “most

significant relationship” test “has at least arguable policy advantages over lex fori because the state

with the most significant relationship with the parties and the dispute is probably the state with the

greatest interest in the action’s outcome.” Id. at 580. However, the Court also noted that the

“accrual approach” found in the text of Kentucky’s statute “produce[s] several meaningful policy

advantages” as well. Id. at 589. “If Kentucky fails to respect that a cause of action accrues in a

foreign jurisdiction, like New York, although the final event necessary for the cause of action

occurred in New York, Kentucky shows disrespect for New York’s territoriality in derogation of

comity principles that the Kentucky Supreme Court may value.” Id. at 591. Ultimately, the Court

determined that “Kentucky would not apply a ‘most significant relationship’ analysis when applying

Kentucky’s borrowing statute.”3 Id. at 592.




       3
         There is at least some indication that this prediction, too, was incorrect. Combs relied in
large part on its conclusion that while “Kentucky began to depart from the lex loci approach to torts,”
it “did not make the same change with respect to contract cases.” Combs, 354 F.3d at 592. But in
Schnuerle v. Insight Comm. Co., L.P., —S.W.3d—, 2010 WL 5129850 (Ky. 2010), the Kentucky
Supreme Court cited the Restatement for the rationale of discarding “lex loci contractus”: “[t]he
modern test is which state has the most significant relationship to the transaction and the parties.”
Id. at *4. In Saleba v. Schrand, 300 S.W.3d 177 (Ky. 2009), the Kentucky Supreme Court noted
that—at least in a choice of law dispute—“Kentucky has consistently applied § 188 of the
Restatement (Second) of Conflict of Laws to resolve choice of law issues that arise in contract
disputes. [That section] states in its entirety: ‘[t]he rights and duties of the parties with respect to
an issue in contract are determined by the local law of the state which, with respect to that issue, has
the most significant relationship to the transaction and the parties. . . .’” Id. at 181.

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       Therefore, this Court predicted that in Kentucky, when the “final event necessary for the

cause of action occurred” elsewhere, that state’s law should govern. In struggling with what test to

apply, however, the Court then stated:

       [T]he notion that the cause of action accrues where the injury is sustained is not
       particularly helpful in this case because it begs the question of where the plaintiff
       sustained the injury. Plaintiff’s action involves an abstract injury—by allegedly
       breaching its promise to pay in a letter Defendant mailed from New York to three
       jurisdictions, Decedent was not reimbursed for litigation expenses accumulated
       primarily in California but related to a Kentucky enterprise. Asking where Decedent
       “got hurt” does not help us.

Id. at 582. Combs ultimately predicted that under Kentucky law, the cause of action “accrued” in

the place of breach for a contract suit. It did not, however, reach the issue here—whether, in a torts

case, the place of breach or place of injury is “where” the claim accrued.

       Here, the unpublished Willits and, arguably, Combs would suggest that “where” a claim

accrues for purposes of Kentucky’s statute must be determined by where the defendant’s wrongful

conduct occurred. This is what the district court concluded. A panel cannot reconsider a prior

published case that interpreted state law, “absent an indication by the [state] courts that they would

have decided [the prior case] differently.” Blaine Constr. Corp. v. Ins. Co. of N. Am., 171 F.3d 343,

350 (6th Cir. 1999). However, it seems just such a decision has come down in Kentucky.

       In Queensway Financial Holdings Ltd. v. Cotton & Allen, P.S.C., 237 S.W.3d 141 (Ky.

2007), the Kentucky Supreme Court, considering a claim of professional negligence, dealt with its

own statute of limitations, and directly answered the question of when a cause of action accrues.

       The accrual rule is relatively simple: “‘[A] cause of action is deemed to accrue in
       Kentucky where negligence and damages have both occurred.” [Michels v. Sklavos,
       869 S.W.2d 728 (Ky. 1994)] at 730 [internal citations omitted] . . . . Basically, “a

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       ‘wrong’ requires both a negligent act and resulting injury. Damnum absque injuria,
       harm without injury, does not give rise to an action for damages against the person
       causing it.” Id. at 731. The difficult question when applying the rule is usually not
       whether negligence has occurred but whether an “‘irrevocable non-speculative
       injury’” has arisen. Id. at 730 (quoting Northwestern Nat. Ins. Co. v. Osborne, 610
       F. Supp. 126, 128 (E.D. Ky. 1985)).

Queensway, 237 S.W.3d at 147. The Court further stated that “mere knowledge of some elements

of a tort claim, such as negligence without harm, is insufficient to begin running the limitations

period where the cause of action does not yet exist.” Queensway, 237 S.W.3d at 148 (citing Michels,

869 S.W.2d at 721-32). This is because wrongful conduct, without injury, “does not give rise to an

action,” and therefore the action accrues once all of the elements supporting liability have actually

occurred. See id.

       Here, an action for fraud requires not only the allegedly wrongful conduct by the defendant,

but also a loss to the plaintiff. Thus, the “when” for accrual purposes in Kentucky—and in this

case—is not judged by when the defendant breached, as the district court found. Instead, it is

determined by when the injury occurred. Here, that is the time that the fraudulent communications

from the defendant actually resulted in the funds being wrongly taken from the Plaintiff.

       The When in this Case

       The time at which Plaintiff actually suffered injury is also not clear in this case. On one hand,

during the relevant time period, Rhonda held a Power of Attorney over Rena’s banking transactions.

Arguably, then, Rhonda’s removal of the funds from the Illinois bank account was not itself a loss

to Plaintiff. For example, if Rhonda—as a fiduciary—had removed the funds from the Illinois

account, but handled them faithfully on Rena’s behalf, no injury would actually have resulted to


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Rena Swanson v. Rhonda Wilson, et al.

Rena. Instead, it was when the fiduciary acquired the funds and misappropriated them for herself

that injury actually resulted. Since Rena focuses on her mother’s position as a fiduciary, this is a

logical approach to determining the injury.

       On the other hand, it is unclear whether Rhonda’s alleged acts to remove the funds

constituted fiduciary acts, because she did not sign the forms under her Power of Attorney status,

clearly acting on Rena’s behalf. Instead, the documentation sent to the bank could be viewed as

strictly fraudulent, because Rhonda pretended to be Rena herself. If the act is viewed as one of mere

fraud, not an act within Rhonda’s fiduciary power, then the injury occurred when the funds were

wrongly removed from Plaintiff’s Illinois annuity account. In that scenario, the funds were removed

under false pretenses, and as soon as the funds were emptied, the Plaintiff suffered the loss. If that

is true, then the claim accrued when the bank emptied the account.

       However, we need not decide which approach to take, for both ultimately lead to the same

conclusion as to where the claim accrued.

       The Where in this Case

       Under this Court’s precedent, the “when” also tells us the “where.” If Rhonda was a

fiduciary and thus no loss occurred until the funds were actually misappropriated, then the loss

occurred when Rhonda actually took the funds, and where the loss occurred—California. The

monies from the Illinois account were sent to California, and it was there that Rhonda received them,

signed Rena’s name to them, and took the funds for herself. Therefore, California is both the place

where the loss actually occurred, and where Rena “felt” it—because she was living in California at

that time.

                                                - 17 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

        If, in the alternative, Rhonda simply committed fraud, then the injury occurred when the

funds were removed from the Illinois account. However, this does not mean that the injury occurred

in Illinois. While Kentucky has not spoken on this issue, several jurisdictions have recognized that

economic loss cases present a special situation. In these cases, the injury is said to happen where the

plaintiff resides and thus “feels” the loss, not where the account happens to be. In Caproni v.

Prudential Sec., Inc., 15 F.3d 614 (6th Cir. 1994), this Court interpreted Michigan’s similar

borrowing statute in a securities fraud action. Caproni “adopted the Second Circuit’s ‘sensible rule’

that the place where the economic impact is felt, normally the plaintiff’s residence, is the place of

accrual.” Freeman v. Laventhol & Horwath, 34 F.3d 333, 340 (6th Cir. 1994) (quoting Caproni, 15

F.3d at 618). The Court held that “to the extent these four plaintiffs resided in states other than

Kentucky and felt the economic impact of the bond default in their respective states of residence,

those states represent the place where the economic injury was suffered.” Id. at 341. In doing so,

the Court cited to Arneil v. Ramsey, 550 F.2d 774 (2d Cir. 1977), which reasoned that, “to the extent

[the plaintiffs] suffered a financial loss from their transaction with [the defendant], they suffered it

in Washington [where they resided], [t]o the extent they became poorer men, they became poorer

Washingtonians.” Caproni, 15 F.3d at 619 (quoting Arneil, 550 F.3d at 780).

        Furthermore, this Court later assessed a similar action in Kentucky. In Freeman, this Court

held that for the purpose of determining the applicability of Kentucky’s borrowing statute, the

residence of the plaintiffs controlled. Freeman, 34 F.3d at 341 (“We find that to the extent these four

plaintiffs resided in states other than Kentucky and felt the economic impact of the bond default in

their respective states of residence, those states represent the place where the economic injury was

                                                 - 18 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

suffered.”). The rationale in these cases is not limited to securities cases; instead, it is that

“economic” harm is felt where a plaintiff resides. Therefore, this Court has already predicted how

Kentucky would apply its borrowing statute in this case: it would find that Rena’s harm was felt

where she was living when first injured—California.

       Lastly, at least one Kentucky case suggests that Kentucky would elect to apply the California

statute of limitations in this case even if Rena was injured in Illinois. In Abel v. Austin, –S.W.3d –,

2010 WL 2132745 (Ky. App. 2010), the Kentucky Court of Appeals addressed a choice of law

question, and began with examination of the borrowing statute. The case involved claims of breach

of fiduciary duty, misrepresentation, and fraudulent conveyance, where the plaintiffs alleged that

their lawyers had mishandled or misappropriated class action settlement funds. Id. at *1. The

appellants relied on Queensway to argue that both negligence and damages must occur in order for

a cause of action to arise, and therefore that the causes of action accrued in Kentucky because

deprivation of funds occurred there, rather than in Alabama, where the breach occurred.        Id. at *8.

The court rejected the appellants’ argument: “[E]ven though the action may have accrued in

Kentucky [because the injury occurred there], nothing mitigates against a determination that the

action also accrued in Alabama.” Id. at *8 (emphasis added). The court noted that the defendants’

actions occurred only in Alabama, that the defendants never met with any of the appellants because

they simply sent the funds from Alabama to Kentucky, and that the events were “processed, settled,

reviewed, and confirmed by an Alabama court.” Id. Because the applicable Alabama statute of

limitations was shorter, the court applied the Alabama statute and dismissed the claims.



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No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

        Abel, then, indicates that a cause of action in this context can “accrue” in more than one state,

and that when that occurs, the shorter statute of limitations should govern. Under Abel, both parties

may be correct: the action accrued in California because the parties both resided there and the

defendant’s alleged misconduct occurred there, and it accrued in Illinois because that is where the

money was fraudulently taken. But in such a conflict, if a state’s statute of limitations is shorter than

Kentucky’s, it controls. Because California’s statute is shorter here, that law would still apply.

        Simply put, all roads lead to California. This Court need not decide whether Rena was

injured when Rhonda misappropriated the funds, Rena was injured by the Illinois loss but felt it

where she resided, or the action accrued in more than one place, for the California statute of

limitations inevitably applies.

                          IV. The Length of the Statute of Limitations

        In California, the limitations period for an action based on fraud or mistake is three years,

CAL. CIV . PROC. CODE § 338(d), but the limitations period for breach of fiduciary duty is usually four

years, id. § 343.4 Plaintiff argues that if California law applies, the four-year provision governs;

Defendants argue that the three-year provision controls. However, in California, “[t]he statute of

limitations to be applied is determined by the nature of the right sued upon, not by the form of the

action or the relief demanded.” Day v. Greene, 59 Cal. 2d 404, 411 (1963). Therefore, in deciding

what statute of limitations to apply to Rena’s claims, we must look to the gravamen of her complaint


        4
        No statute of limitations expressly applies to a cause of action for breach of fiduciary duty,
but a cause of action not specifically subject to another statute of limitations is governed by § 343,
including breach of fiduciary duty. Stalberg v. W. Title Ins. Co., 230 Cal. App.3d 1223, 1230 (Cal.
App. 6 Dist. 1991).

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No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

rather than the cause of action pled. City of Vista v. Robert Thomas Sec., Inc., 84 Cal. App. 4th 882,

889, 101 Cal. Rptr. 2d 237 (2000). Where the gravamen of the breach of fiduciary cause of action

is fraud, the applicable limitation period is the three year period found in § 338. Mullin v. Valley of

Cal., Inc., No. A124641, 2010 WL 3158617, at *4 n.2 (Cal. App. 1 Dist. Aug. 11, 2010).

        California courts have consistently applied the three-year period to cases like this one that

involve both fraud and fiduciary issues. For instance, in City of Vista, Vista brought a claim for

“breach of fiduciary duty” against its former securities dealers based on the dealers’ alleged conduct

in misrepresenting the nature of securities sold to the city and charging a markup rate for those

securities. See 84 Cal. App. 4th at 885. On appeal, the city contended that a four-year limitations

period applied to its claim. The Court of Appeals disagreed, holding that because “[t]he gravamen

of Vista's complaint is that [defendants'] acts constituted actual or constructive fraud,” the three-year

statute of limitations applicable to fraud claims governed the breach of fiduciary duty action. Id.

The state’s courts have reached the same result in a variety of cases. See, e.g., Wyatt v. Union Mortg.

Co., 24 Cal. 3d 773, 786 n.2 (1979) (holding that where the “gravamen of respondents’ cause of

action is that the appellants committed actual and constructive fraud by conspiring to breach their

fiduciary duties[,] . . . Code of Civil Procedure section 338, subdivision 4 states the applicable statute

of limitations”); Hatch v. Collins, 225 Cal. App. 3d 1104, 1110 (Cal. App. 1990) (applying the

three-year statute of limitations to a claim for breach of fiduciary duty where the action was “founded

upon a fraudulent conspiracy” by defendants to defraud plaintiff in a real estate transaction); Greene

Trio Music, LLC v. Jackson, No. B200087, 2008 WL 2719582 (Cal. App. 2 Dist. July 14, 2008)



                                                  - 21 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

(holding that the three-year provision, not the four-year “catch-all,” was applicable when the breach

of fiduciary duty claim essentially alleged constructive fraud on the part of the defendant fiduciary).

       Therefore, under California law, the three-year statute of limitations applies.

                                    V. The Date of Discovery

       The district court found that the “discovery rule” was applicable to toll the statute of

limitations in this case. Therefore, the true date of injury—when the plaintiff was first allegedly

deprived of her funds—was not used as the start date for the limitations period. In applying the

discovery rule, the district court stated that the statute of limitations begins to run “when [the

plaintiff] has been put on notice that she may have been injured,” and that this is a “reasonable

person” standard, not a subjective one. Ultimately, the court relied on Rena’s letter to Symetra,

which explicitly stated, “I first became aware that checks issued to my name from Safeco Insurance

were being signed, deposited, and withdrawn on 11/29/2002.” The court concluded that this letter

established that “no later than November 29, 2002, Plaintiff had knowledge of sufficient facts to put

her on notice that funds had been stolen from her, thereby triggering her obligation to investigate

further in order to determine the extent and cause of her injury.”

       First, the court correctly concluded that the “discovery rule” tolls the statute of limitation in

a case such as this, where the plaintiff is unaware of the existence of his or her cause of action due

to concealment by another. See Jolly v. Eli Lilly & Co., 751 P.2d 923, 928 (Cal. 1988). “‘[U]nder

the delayed discovery rule, a cause of action accrues and the statute of limitations begins to run when

the plaintiff has reason to suspect an injury and some wrongful cause . . . .’” E-Fab, Inc. v.

Accountants, Inc. Serv’s, 153 Cal. App. 4th 1308, 1319 (emphasis added) (quoting Fox v. Ethicon

                                                - 22 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

Endo-Surgery, Inc., 35 Cal. 4th 797, 803 (2005)). Notice sufficient to trigger accrual of a cause of

action under the delayed discovery rule may be actual or constructive. E-Fab, 153 Cal. App. 4th at

1318.

        However, Rena argues that the district court erred in applying the ordinary discovery rule,

because her mother was her fiduciary and therefore “inquiry” or “constructive” notice does not apply.

Instead, she argues, the accrual is postponed “until the beneficiary has knowledge or notice of the

act constituting a breach of fidelity.” United States Liab. Ins. Co. v. Haidinger-Hayes, Inc., 1 Cal.

3d 586, 596 (Ca. 1970). Her argument is essentially that the plaintiff has placed trust in the

defendant fiduciary and thus, there is no duty to exercise due diligence in discovering the fraud.

Instead, she argues, the clock does not begin to run until the plaintiff has actual notice of the fraud.5



        5
          Defendants argue strenuously that Rhonda was no longer in a fiduciary capacity to her
daughter at all. This argument is unpersuasive, as Rhonda served in a fiduciary capacity both as the
administratrix of Rena’s father’s estate, and as Rena’s guardian when Rena was a minor. These roles
included the duty to protect the interest of beneficiaries, and the duty to manage property in the
minor’s name. See Morgan v. Asher, 49 Cal. App. 172 (Cal. App. 1920) (finding that where a
mother was both the trustee of her husband’s estate and the guardian of her daughter, “[i]t was her
duty . . . independent of and apart from such probate proceedings . . . to see to it that those several
persons entitled to their distribute share in said estate were fully informed as to their rights in the
premises, to the end that said rights might be fully protected in the distribution of said estate”); see
also Sohler v. Sohler, 135 Cal. 323 (1902) (holding that as a child’s mother and legal guardian, the
defendant “was under most solemn obligation to protect the legal rights of her infant and dependent
offspring”). “The duty of a fiduciary embraces the obligation to render a full and fair disclosure to
the beneficiary of all facts which materially affect his rights and interests. ‘Where there is a duty to
disclose, the disclosure must be full and complete, and any material concealment or
misrepresentation will amount to fraud. . . .’” Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6
Cal.3d 176, 188-89 (1971) (quoting Pashley v. Pac. Elec. Ry. Co., 25 Cal. 2d 226, 235 (1944)).
Therefore, at the very least, Rhonda’s wilful concealment of the settlement’s existence and location
was a breach of her fiduciary duty as Rena’s guardian, and such breach did not disappear simply
because Rena reached the age of majority.

                                                 - 23 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

        However, the very case relied upon by Plaintiff goes on to say that “[u]nder the fiduciary

rules above stated . . . the cause of action did not commence to run until plaintiff knew or should

have known of the breach.” Id. at 597 (emphasis added). Moreover, while Plaintiff does cite several

cases (mostly from Kentucky) that toll the statute beyond the “normal” inquiry notice period, these

cases focus on the fact that the plaintiff’s trust in the fiduciary actually prevented the plaintiff from

having notice of the defendant’s wrongdoing—their trust reasonably foreclosed suspicion.6

        The distinction between the usual “discovery rule” and the rule allowing late discovery in

fiduciary cases “is that in the latter situation the duty to investigate may arise later by reason of the

fact that the plaintiff is entitled to rely upon the assumption that his fiduciary is acting in his behalf.”

Eisenbaum v. W. Energy Res., Inc., 218 Cal. App. 3d 314, 325 (1990) (quoting Bedolla v. Logan

& Frazer, 52 Cal. App. 3d 118, 131 (1975) (emphasis omitted).                    Ultimately, as Plaintiff

acknowledges, the reason for the somewhat-different treatment of “discovery” in the fiduciary

context is that “[w]here a fiduciary relationship exists, facts which ordinarily require investigation

may not incite suspicion.” Eisenbaum, 218 Cal. App. 3d at 325 (internal citation omitted).




        6
         For example, in a case involving a fraudulent land conveyance, Lemaster v. Caudill, 328
S.W.2d 276, 281-82 (Ky. 1959), the Kentucky Supreme Court did not apply normal “constructive
notice” rules to the defendant’s recording of a deed, because the fiduciary relationship and the
defendant’s actions “lulled [the plaintiff] into a false sense of security.” Id. at 281. Instead of
running the clock from when the deed was filed, the court found that the clock ran from the time that
one of the rightful heirs checked the county records and found a record of the deed in controversy.
See id. at 279. The Kentucky Supreme Court later explained that the actual notice requirement in the
land conveyance context is necessary because “persons in a confidential relationship do not have the
reason or occasion to check up on each other that would exist if they were dealing at arm’s length.”
McMurray v. McMurray, 410 S.W.2d 139, 142 (Ky. 1966).

                                                   - 24 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

       Plaintiff therefore contends that because her mother was a fiduciary, “inquiry notice” is

inapplicable because she had no duty to inquire. But this is not so. Eisenbaum states that “[t]he

existence of a trust relationship limits the duty of inquiry”—it does not completely eliminate it. Id.

at 324 (emphasis added). The duty is limited to the extent that a plaintiff is “entitled to rely on the

statements and advice provided by the fiduciary.” Id. The duty to inquire does not arise until the

facts—considering the fiduciary relationship—warrant suspicion. See id. (citing Hobbs v. Bateman

Eichler, Hill Richards, Inc., 164 Cal. App. 3d 174 (1985)). However, “once a plaintiff becomes

aware of facts which would make a reasonably prudent person suspicious, the duty to investigate

arises and the plaintiff may then be charged with knowledge of the facts which would have been

discovered by such an investigation.” Hobbs, 164 Cal. App. 3d at 202.

       Here, if Plaintiff had learned of the peculiar activity in the joint account and the existence of

checks with her name on them, but had asked her mother and relied upon her mother’s assurances

that everything was fine, this rule would be applicable. Rena would not be penalized for trusting her

fiduciary and failing to see through the lies in order to investigate. The district court correctly

applied this rule in its opinion: the court found that the first time Rena was told about the

settlement—by her sister in April 2002—that the clock did not begin to run because her mother

denied it and “Rena apparently believed Rhonda’s explanation.”

       Instead, the district court found that Rena had notice of wrongful conduct on November 29,

2002, when Rena admits she learned that checks, in her name, from an annuity company, “were

being signed, deposited, and withdrawn.” Rena testified at her deposition that at this time, she did

not understand what all of this meant, and was “trying to figure out what was going on.” We find

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No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

that, given the fiduciary relationship with her mother and our duty on summary judgment to view

all facts in the light most favorable to the non-moving party, the district court inappropriately

attributed knowledge to Rena as of November 29, 2002, when she had simply learned of the checks’

existence. At this time, arguably, Rena could have believed that the funds were not truly hers, that

her mother had simply banked on her behalf, or that a legitimate explanation was possible.

        But the district court’s determination was only off by a matter of days. Starting with the

discovery of the checks, it does not appear that Rena was still trusting and relying upon her fiduciary.

See Mills v. Forestex Co., 108 Cal. App. 4th 625, 648 (2003) (noting that the discovery rule is an

objective test, looking to what a reasonable inquiry would have revealed). The facts show that, upon

speaking with the bank, Rena immediately wrote a letter to Symetra, stating that she was not the one

who had deposited or withdrawn the funds, and she promptly received information in return that told

her the full details of the settlement and amounts of the funds involved. She promptly removed all

funds from the joint account and placed them in a private one. All of this occurred between

November 29, 2002 and December 6, 2002.

        By December 6, 2002, Rena knew (1) that checks with her name had been deposited and

withdrawn from an account that, besides herself, only her mother had access to; (2) the checks had

come from an annuity fund to satisfy “payment obligations under a settlement agreement for a

personal injury or wrongful death claim,” despite her mother’s prior statements that no settlement

existed; (3) the amounts and dates of each check made out to Rena, and the fact that she never

received these funds; (4) the exact details—including actual copies—of the settlement agreement

for her benefit; (5) that at least $173,000 of these funds had been deposited into the joint account,

                                                 - 26 -
No. 10-5064
Rena Swanson v. Rhonda Wilson, et al.

but less than $70,000 now remained. While she may not have understood the full details of the

alleged fraud, Rena had “[become] aware of facts which would make a reasonably prudent person

suspicious.” Hobbs, 164 Cal. App. 3d at 202. Moreover, Rena was subjectively suspicious, as she

responded by transferring the money and removing the funds from her mother’s reach. Rena Dep.

at 77, 170, 242. Therefore, no later than December 6, 2002, the duty to investigate did arise, and the

statute of limitations began to run.7

        Consequently, under the three-year statute of limitations, Rena’s claim was required to be

filed no later than December 6, 2005. Her claim was fifteen months too late. The district court

correctly determined that Rena Swanson’s claims were barred by the applicable statute of limitations.

Therefore, we AFFIRM the district court’s grant of summary judgment.




        7
         There are no hard and fast rules for determining what facts or circumstances will compel
inquiry by the injured party and render her chargeable with knowledge. See Dabney v. Philleo, 38
Cal. 2d 60, 60-65 (1951). Ordinarily, it is a question for the trier of fact. However, the district court
was addressing a motion for summary judgment, and thus, once Defendant demonstrated the absence
of genuine issues of material fact, Rena’s burden was to show more than “some metaphysical doubt,”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), and to produce
evidence showing that a genuine issue remained. See Plant v. Morton Int’l, Inc., 212 F.3d 929, 934
(6th Cir. 2000). Because Plaintiff’s own statements show that she was aware of the information
given to her by Safeco and acted upon it at an ascertainable date, no rational fact finder could find
for her, and it was appropriate for the district court to determine that Rena was on notice as a matter
of law. See Ercegovich v. Goodyear Tire & Rubber Co., 154 F.3d 344, 349 (6th Cir. 1998).

                                                 - 27 -
