                    United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                               ________________

                                  No. 04-3154
                               ________________

T. Mark Kraft,                          *
                                        *
            Appellant,                  *
                                        *      Appeal from the United States
      v.                                *      District Court for the
                                        *      District of Nebraska.
St. John Lutheran Church of             *
Seward, Nebraska, doing business        *
as St. John Lutheran School, Arlen      *             [PUBLISHED]
L. Meyer, The Estate of David           *
Mannigel, and Does 1-1000.              *
                                        *
            Appellees.                  *

                               ________________

                               Submitted: March 16, 2005
                                   Filed: July 18, 2005
                               ________________

Before WOLLMAN, HANSEN, and COLLOTON, Circuit Judges.
                      ________________

HANSEN, Circuit Judge.

      T. Mark Kraft alleges that he was repeatedly sexually abused by his teacher,
Arlen L. Meyer, while Kraft was a junior-high student at St. John Lutheran School
in Seward, Nebraska, in the late 1970s. Kraft filed this lawsuit in 2002, seeking
damages in tort for the injuries caused by the abuse. The district court1 granted the
defendants' motions for summary judgment, concluding that Kraft's lawsuit was
barred by Nebraska's statute of limitation. We affirm.

                                         I.

        In this summary judgment context, we view the facts and the inferences to be
drawn from them in the light most favorable to Kraft, the nonmoving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The
district court found the following facts to be undisputed for purposes of summary
judgment. Arlen Meyer, a teacher at the St. John Lutheran School, sexually abused
Mark Kraft on numerous occasions from 1976 through 1978, when Kraft was
between the ages of 12 and 15 years old. The last act of abuse may have occurred as
late as 1980. As a result of the abuse, Kraft suffers from emotional and psychological
injury including posttraumatic distress disorder, dysthymic reaction, somataform
disorder, complex trauma reaction, and dissociative disorder NOS, all resulting in
symptoms of depression as well as problems with interpersonal relationships and
maintaining monogamous relationships.

      In 1990, Kraft disclosed the abuse to his wife and parents, after grappling with
marital problems stemming largely from his homosexual behavior. In 1991, Kraft
made an anonymous report of Meyer's wrongful conduct to the St. John Lutheran
School principal, David Mannigel,2 warning that any special young friends of Meyer
might be suffering sexual abuse. Also in 1991, Kraft told two family friends of his


      1
       The Honorable Laurie Smith Camp, United States District Judge for the
District of Nebraska.
      2
       Mannigel committed suicide in July 2001. His estate is a named defendant,
and the record, when viewed in the light most favorable to Kraft, supports an
inference that Mannigel, too, was sexually abusing children.
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abuse at the hands of Meyer out of concern for their grandchildren who then attended
the school.

       In 1995, Kraft discussed the abuse with a licensed professional counselor,
Donna Stains. Her treatment notes indicate that Kraft told her he had sought
counseling about the sexual abuse in 1991. Stains advised Kraft that there was a
strong possibility that the sexual abuse he had suffered as a child was contributing to
his current problems.

       Kraft hired an attorney who wrote a letter to the school on October 29, 2001,
in an attempt to have Meyer removed from his position at the school. The letter states
that Kraft "is emotionally now able to publicly reveal the nature and circumstances
of these acts and to pursue the appropriate redress for the conduct, if necessary." (R.
at 52.) In January 2002, Kraft's attorney wrote to the principal again, stating in part
that "Kraft is seeking compensation for injuries suffered by him as a result of acts
committed by [Meyer]." (R. at 57.)

        On May 16, 2002, Kraft's attorney referred Kraft for an evaluation with Dr.
Fisch, a clinical psychologist. Dr. Fisch diagnosed Kraft with moderate to severe
posttraumatic distress disorder, moderate to severe dysthymic reaction, moderate to
severe fulminating somataform disorder, complex trauma reaction, and chronic
fulminating dissociative disorder. Dr. Fisch's affidavit states that Kraft did not make
a connection between the abuse and his mental disorders until after he had started his
treatment with Dr. Fisch. Kraft's primary care physician, Dr. Cohen, also stated in a
letter that Kraft did not understand the causal relationship between the abuse and his
problems until he began his treatment with Dr. Fisch.

      Kraft filed this lawsuit on October 30, 2002, seeking damages against the
church, the congregation, the school, the principal, and Meyer. The district court



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granted summary judgment in favor of the defendants, concluding that Kraft's
complaint was not timely filed. Kraft appeals.

                                          II.

       We review de novo the district court’s grant of summary judgment, applying
the same standards as the district court. Mayard v. Hopwood, 105 F.3d 1226, 1227
(8th Cir. 1997). Summary judgment is appropriate if the record “show[s] that there
is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c). We review the district court's
determination of state law de novo. See Salve Regina Coll. v. Russell, 499 U.S. 225,
231 (1991). Nebraska law applies to this diversity suit. Nebraska's four-year statute
of limitations for tort actions, see Neb. Rev. Stat. § 25-207(3), is tolled for minors
until they reach the age of 21, see Neb. Rev. Stat. § 25-213; Brown v. Kindred, 608
N.W.2d 577, 580 (Neb. 2000).

       Kraft reached the age of 21 on August 13, 1985, but he did not file this lawsuit
until October 2002, some seventeen years later. The district court dismissed his suit
as untimely, finding no basis for tolling the limitations period. On appeal, Kraft
asserts that factual disputes preclude entry of summary judgment. Namely, he
contends that the limitations period should be equitably tolled on the ground that he
did not discover a connection between the abuse and his problems until sometime
within four years of the filing of the complaint, and that his mental disorders
prevented him from pursuing legal action.

      While an action in tort generally accrues as soon as the act occurs, Nebraska
applies an equitable tolling doctrine referred to as the discovery rule in certain
categories of cases where "the injury is not obvious and the individual is wholly
unaware that he or she has suffered an injury or damage." See Schlien v. Bd. of
Regents of the Univ. of Neb., 640 N.W.2d 643, 650 (Neb. 2002) (emphasis removed).

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When this discovery rule is applicable, "the statute of limitations does not begin to
run until the potential plaintiff discovers, or with reasonable diligence should have
discovered, the injury." Id.; Condon v. A.H. Robins, Co., 349 N.W.2d 622, 627 (Neb.
1984). The Nebraska Supreme Court has explained that "[i]n the context of statutes
of limitations, discovery refers to the fact that one knows of the existence of an injury
or damage, regardless of whether there is awareness of a legal right to seek redress
in court." Reinke Mfg. Co. v. Hayes, 590 N.W.2d 380, 390 (Neb. 1999) (internal
quotation marks omitted, alteration in the original). Stated yet another way,
"[d]iscovery of the act or omission occurs when the party knows of facts sufficient
to put a person of ordinary intelligence and prudence on inquiry which, if pursued,
would lead to the discovery of facts constituting the basis of the cause of action." Id.
Nebraska has not yet applied this discovery rule in the context of a child sexual abuse
case.

      The district court applied the Schlien analysis, concluding that "no later than
1990, Kraft himself drew a direct link between the alleged abuse and a variety of
behaviors and negative consequences in his life." (Appellant's Add. at 12-13.) Kraft
argues that there was disputed evidence concerning when he actually discovered that
the abuse caused his injuries.3 The district court noted that the only evidence
supporting Kraft's assertion were the statements of Dr. Fisch and Dr. Cohen, who
both concluded that Kraft did not make the causal connection until his treatment with
Dr. Fisch in 2002. We agree with the district court's conclusion that any assertion
that Kraft was unaware of the connection between the abuse and his injuries until his
treatment with Dr. Fisch in 2002 is disingenuous, for the reasons that follow.

      Kraft only began treatment with Dr. Fisch after his settlement negotiations with
the church had failed. The undisputed evidence concerning the settlement


      3
      This case does not involve the discovery of a repressed memory. Kraft has
always retained an awareness of the facts of the claimed abuse.
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negotiations indicated that beginning in 2001, Kraft had been negotiating with the
church for damages resulting from the sexual abuse. He cannot attempt to contradict
his own behavior in 2001, seeking damages for injuries resulting from the sexual
abuse, with expert testimony that he did not understand the same causal connection
until 2002. Kraft asserts that the district court abused its discretion by considering
these settlement negotiations because an offer to compromise "is not admissible to
prove liability for or invalidity of the claim or its amount," and neither is "[e]vidence
of conduct or statements made in compromise negotiations." Fed. R. Evid. 408. This
evidence is admissible for other purposes, however, "such as proving bias or
prejudice of a witness [or] negativing a contention of undue delay." Id. The district
court did not abuse its discretion by considering Kraft's settlement negotiations with
the church for the purpose of proving Kraft's knowledge of a causal connection
between his injuries and the abuse.

       Additionally, as noted by the district court, the undisputed evidence
demonstrates that Kraft drew a direct connection between the abuse and his negative
behaviors in 1990, when he disclosed the abuse to his wife and parents as an
explanation for his marital discord and homosexual activity. Even if this incident,
construed in the light most favorable to Kraft, does not disclose a true understanding
of the causal connection, as Kraft asserts, the remaining undisputed evidence
indicates that Kraft was aware of sufficient facts by 1995 at the latest, from which he
could have, with reasonable diligence, discovered the causal connection. By that
time, Kraft had told not only his family, but also friends, counselors, and the school
principal about the abuse he had suffered; he was aware of his emotional and
behavioral problems; and Stains had expressly suggested to him in counseling that
there was a strong possibility that the sexual abuse he had suffered contributed to his
current problems. These undisputed facts, all known to Kraft by 1995, were
sufficient to put a person of ordinary intelligence and prudence on an inquiry which,
if pursued, would have led to the discovery of the connection between the abuse and
the injuries. See Reinke Mfg. Co., 590 N.W.2d at 390. The fact that Kraft may not

                                           -6-
have actually drawn the connection at that point or may not have understood the
extent of his damages did not prevent the statute of limitations from running. See
Rosnick v. Marks, 357 N.W.2d 186, 189 (Neb. 1984) ("A cause of action accrues and
the statute of limitations begins to run when the aggrieved party has the right to
institute and maintain suit, although the nature and extent of the damages may not be
known."). Thus, the discovery rule of equitable tolling does not preserve Kraft's
cause of action.

       The four-year statute of limitation for tort actions is also subject to tolling
where a person is suffering from a mental disorder. See Neb. Rev. Stat. § 25-213.
Dr. Fisch diagnosed Kraft with moderate to severe posttraumatic distress disorder,
moderate to severe dysthymic reaction, moderate to severe fulminating somataform
disorder, complex trauma reaction, and chronic fulminating dissociative disorder.
Kraft argues that Dr. Fisch's uncontradicted expert testimony that these mental
disorders prevented him from pursuing his legal rights creates a question of fact on
the issue of whether the statute of limitation was tolled by Kraft's mental disorders.
We respectfully disagree.

       The district court determined as a matter of law that Kraft's disorders were not
the type of mental disorders that are contemplated by the statute, because they do not
render him incapable of understanding his legal rights or instituting legal action. See
Vergara v. Lopez-Vasquez, 510 N.W.2d 550, 554 (Neb. Ct. App. 1993) ("[A] person
with a mental disorder is one who suffers from a condition of mental derangement
which actually prevents the sufferer from understanding his or her legal rights or from
instituting legal action.") (holding that the change in the statutory language from
"insanity" to "mental disorder" did not change the legal standard involved). Persons
with a mental disorder sufficient to justify the tolling provision are not able to
evaluate and communicate information necessary to protect their rights. Id. at 553.




                                          -7-
       It is undisputed that Kraft was able to communicate the facts of his abuse and
evaluate at least some of its effects on his life since at least 1990, when he began
telling others of the abuse and seeking counseling. The record demonstrates that
Kraft is employed in banking as a manager of a staff of 13 or 14 mortgage loan
officers. He has never been unemployed or missed any work because of his mental
disorders. He handles his own business and financial affairs, makes his own health
care decisions, and has never had a guardian or conservator appointed for him.
Whether Kraft could adequately evaluate the entire extent of his psychological
injuries is not the relevant question. The district court correctly determined that the
mental disorders alleged by Kraft did not, in a legal sense, render him incapable of
understanding his legal rights and acting to protect them.

                                          III

      Accordingly, we affirm the district's court's grant of summary judgment
dismissing Kraft's lawsuit as barred by the statute of limitations.
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