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<1 ' ' <* !>$ ' ^ ^ <*' 'S*viV ,,;* L^ :I. 1j v',*!{*;:* r ty <v O ! ;*' j ^ s f >*** *.<,*(;*>j FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT N ev a d a P o w er C o ., a Nevada corporation, Plaintiff-Appellant, v. M o n s a n t o C o m p a n y , a foreign corporation; G e n e r a i, E ij x t h ic C o r p o r a t io n , a foreign corporation; W e st in g h o u se E l ec t r ic C o r po r a t io n , a foreign corporation; and D o es I through XXV, inclusive, Defendan ts-Appellees. No. 90-16179 D.C. No. CV-89-00555-LDG ORDER AMENDING OPINION, DENYING PETITION FOR REHEARING, AND REJECTING SUGGESTION FOR REHEARING EN BANC Appeal from the United States District Court for the District of Nevada Lloyd D. George, District Judge, Presiding Argued and Submitted October 10, 1991-- San Francisco, California Filed February 5, 1992 Amended April 14, 1992 Before: Otto R. Skopil, Jr., Harry Pregerson, and Diarmuid F. O 'Scannlain, Circuit Judges. Opinion by Judge O'Scannlain; Concurrence by Judge Skopil 401)6 Nl ;V AI >A I 'l W I H t ' i l . V. M l l S S A M O ( 'l l . SUMMARY Statutes of Lim itations/Courts and Procedure Affirming m pan and icversing in part a district court grant of summary judgment. the court of appeals held that when ever the facts id a negligence claim were discovered from the sale hy a manufaeturei ol electrical generating equipment containing PCH, Nevada's three-year statute of limitations does not begin to turn on fraud actions regardless of whether the facts of such fraud could be discovered through proper dil igence. Appellant Nevada Power Co. sought to recover the costs of replacing electrical generating equipment sold to it hy a man ufacturer and containing toxic PCI!, Nevada Power argued that although 11 realized by 1979 that the manufacturers' rep resentations in the I960*s and early 1970`s about the safety of PC'B's had been false. 1 was only m I9KK that Nevada Power discovered (hat such false statements had been made inten tionally hy the manufacturers, not out of ignorance. Hence, between 1979 and 198K. Nevada power apparently did not investigate the possibility of fraud by the manufacturers. The manufacturers urged that stalling in 197*7 Nevada Power had enough knowledge that, with the exercise of proper diligence, Nevada power could have discovered the remaining facts nec essary to make out a fraud claim and that, therefore, Nevada Power's claims were barred by Nevada's three-year statute of limitations. The district court granted summary judgment for the manufacturers, holding that Nevada Power's claims were time-barred and that Nevada Power had failed to state a claim for equitable indemnity. Ml The court acknowledged that the Nevada Supreme Court has interpreted the applicable (hree-year statute of limi tations for fraud actions to begin to nin from the date of the discovery of facts that in the exercise of proper diligence N i:vm>a Powi:h ( 'm. v. Miinsanui Co ._________4IH17 would have enabled the plaint If to leant of the fraud. [2] Sim ilarly. the Nevada Supreme Court has expressly held that, as with the fraud claim, the failure to warn action teenies when the plaintiff knew or should have known of the facts constitut ing the elements of his cause of action. [3| l:or determining when an action has accrued under a discovery-based statute of limitations, the i|uestinn of when the alleged wrongdoing was or should have been discovered is a question of fact. [4| Because Ninth Circuit precedent dictates that the question ol notice of fraud is for the trier of fact, the party seeking sum mary judgment has an extremely difficult burden to show that there exists no issue of material fact regarding notice. |5] The conn disagreed that once a plaintiff has a suspicion of some wrongdoing, the statute of limitations begins to run on all claims relating to that wrongdoing, including fraud regardless of whether the plaintiff has knowledge of the facts Mipponing 1 particular theory of action. |b | The court saw- rn> indication that the Nevada Supreme Court would go further and. as the manufacturers urged, adopt a per se rule that whenever the facts of negligence claims are present, the stat me begins u> run on fraud actions regardless of whether the outs ol such fraud could be discovered through proper dili pence. Consequently, the court reversed and remanded d i gram ol summary judgment for the manufacturers mi ih IsstIC. 17) The court noted that the Nevada Supreme Conn ru spoken recently and clearly that under Nevada law. the rigiu ol indemnity rests upon a difference between the liability oi two persons, each of whom is made responsible by the law io an injured party. [8] However. Nevada Power, in an effort to support its position, cited no authority stating that the indem nitee and the indemnitor need not be joint tortfeasors. [9] The court concluded no common liability existed here, because although Nevada Power had a legal obligation to the Environ mental Protection Agency concerning the electrical equipment sold by the manufacturers, the manufacturers had no obliga tions nor liabilities to the EPA connected with equipment they 4008 NhVAOA POWCK C o . v. M o n s a n t o C o . sold in the I960*s and 1970's. Therefore, ihe district court's grant of summitry judgment for the manufacturers on this issue was affirmed. Although concurring in part with the majority's ruling that summary judgment was properly entered on Nevada Power's implied equitable indemnity claim. Judge Sknpil dissented from the majority's holding that Nevada Power's fraud and failure to warn claims were not subject to summary judgment on statute of limitations grounds. COUNSEL Paul Merrell and Charles II. McCrea, Bloomington, Indiana, for the plaintiff-appellant. Bruce A. Featherstone, Kirkland & Ellis, Denver, Colorado, for Monsanto; Jeffrey Klein, Weil, Gotshal & Manges, New York, New York, for Westinghouse; John Thomdal, Thomdal, Backus, Maupin & Armstrong, Las Vegas, Nevada, for Monsanto 2nd Westinghouse. ORDER The majority opinion in this matter, filed February 5, 1992, is amended as follows: The caption is revised to reflect the addition of Westinghouse Electric Corporation. slip op. at 1181. first paragraph, first line, after "fraud" insert the following: and failure to warn slip op. at 1181, first paragraph, third line, replace "such claims." with the following: the fraud claim. N iivaija Powilr C o. v. Monsanto Co. 4009 slip op. at 1181, before paragraph beginning "Nevada Power filed suit .. insert the following: The parties also agree that section 11.220 of the Nevada Revised Statutes applies to the failure to warn claim. The Supreme Court of Nevada has expressly held that "the term `accrued,' as used in NRS 11.220, incorporates the same 'diligent discov ery' rule that is present in NRS 11.190(3)." Oak Grove Investors v. Bell & Gossett Co., 668 P.2d 1075, 1079 (Nev. 1983); accord Tahoe Village Homeowners Ass'n v. Douglas Cty., 799 P.2d 556, 558 (Nev. 1990). Thus, as with the fraud claim, the failure to wam action accrues **[w]hen the plaintiff knew or in the exercise of proper diligence should have known of the facts constituting the elements of his cause of action." Oak Grove, 668 P.2d at 1079. slip op. at 1182, replace paragraph starting "The Manufac turers do not dispute .. with the following: The Manufacturers argue that Nevada Power's action accrued no later than 1979, when it concededly knew of the dangers of PCB's. The falsity of a * representation is only one of the facts that make up a fraud or failure to wam claim, however. One of the facts constituting a fraud or failure to wam claim is the defendant's state of mind. Only if the defen dant's misrepresentation is intentional has the defen dant acted fraudulently. See Lubbe v. Barba, 540 P.2d 115, 117 (Nev. 1975). Similarly, liability for failure to wam cannot arise where the defendant did not reasonably know of the hazard. See Oak Grove, 668 P.2d at 1080. slip op. at 1182, second full paragraph, fourth line, follow ing "constitute a fraud'' insert the following: or failure to wam 1011) Ni \AIM PlIUlK (,'n. v, MONSANTO Cl). slip up. ; i 118-1. immediately before [ho sentence beginning " 'Uecause our precedent . . as pan of the same paragraph, insert the billowing: Very recently, [his court has reaffirmed that under federal law, "when the plaintiff discovered or could have discovered the fraud with the exercise of rea sonable diligence . . . is usually a question for the met of fact." GYnciu/ ({aiding Corp. v. Ec/ievumu. 947 K2d 1.195, 1197 n.2 19th Cir. 1991). The dissent opinion is amended as follows: slip op. at I IKK, second paragraph, line one and line seven: replace "statute with "siaiines" I he panel has voted to deny the petition for rehearing. Judges IVegerson and O'Scannlain have voted to reject the suggestion lor reheating en banc and Judge Skopil has so rec ommended The full court has been advised ot the en banc suggestion, and no judge of the court has requested a vote on it. The petition for rehearing is OHNIliD and the suggestion lor rehearing en banc is RIiJECTLD. Appellees' motion to file a transcript of oral argument is DllNUU). OPINION O'SCANNLAIN, Circuit Judge; Nevada Power seeks to recover the costs of replacing elec trical generating equipment that contained polychlorinated N rv aha I'iiwlk Co. v. M iissanih Co ._________4 0 11 biphenyls rPOH's"). We must determine whether Nevada Power s claims for (rand and failure to warn against Is ven dors arc lime-barred, and whether Nevada Power has stated a claim for implied eLghlable indemnification. I During the I9ft<)'s and 1070's Nevada Power purchased electrical equipment from General lilcctrie and Westinghouse. Much of that equipment contained PCFi's as a cooling agent. Monsanto was the supplier of PCIi's to General lilectric and Wesiinghouse during this peritid. In the etirly I970*s. Congress hegan to investigate the dan gers in humans of exposure to PCIi's. In 197ft. Congress Ii.ivsed the Toxic .Substances Control Act. which, inter tdia. outlawed the inamitactuie. sale or distribution of PCH's unless used m a "totally enclosed" setting. .See 15 U.S.C. ^ 2fttl5te)<2). The linvinmmental Protection Agency ("P.PA") promulgated regulations pursuant to this ad. which permitted die use of PCIi's in most electrical equipment, because such o 1 was jfiiuui bv the liPA to be "totally enclosed." but the istrict ot Columbia Circuit struck down these regulations a*. uiMipporied by substantial evidence. .SVc .mnnnmetu, defense t 'mut. hir. i. 7M. ft.lft l;.2d I267, ]JXft il).C, t i. I'tXOi. In 19X2. the liPA issued new regulations allowing lecmeal equipment containing PCIi's to he used tutlv in restricted access areas, and in 19X5. the l:PA oidorod more lestnctmns on such equipment. .Vre 40 C.P.Ii. ij 7fl. s<t I'Win. As early as the early I970's. the then-chairman of Nevada Power became aware of the dangers of PCIi's. In 197ft. Nevada Power's safety director sent a memorandum to all company personnel discussing the hazards of PCI! exposure, and in 1979 he began giving lectures on this suhject. Also in that year, Nevada Power issued a company manual on the dangers of PCB's. During 197K and 1979, Nevada Power also 3 4012_______ N lvada Powtat Co. v. M onsanto Co.__________ began a program of removing equipment using PCB's from servile before its useful life had been completed. Nevada Power filed suit in Nevada state court on July 7, 1989, Nevada Power alleged, inter alia, that General Electric, Monsanto, and Westinghouse (the "Manufacturers") had knowledge of the dangers of PCB's in the 1960's and I970's when they sold Nevada Power equipment with PCB's, but represented to Nevada Power that such equipment was safe. Nevada Power sought damages from the Manufacturers under theories of fraud and misrepresentation, failure to want (col lectively the "fraud claims"), and implied equitable indemnity.1 Nevada Power alleged that although it was aware of the dan gers of PCB's by 1979, it only learned in 1988 that the Manu facturers had willfully misrepresented their knowledge about PCB's when they sold equipment to Nevada Power in the 1950's and 1970's. That is, Nevada Power contends that although it realized by 1979 that the Manufacturers' represen tations in the 1960's and early 1970's about the safety of PCB's had been false, it was only in 1988 that Nevada Power discovered that such false statements had been matte intentionally by the Manufacturers, and not out of ignorance. The Manufacturers removed the case to federal court based on'diversity of citizenship, and filed a motion for summary judgment, contending that Nevada Power's claims were barred by the applicable statutes of limitations. The district conn granted the Manufacturers' motion, concluding that all of Nevada Power's claims were time-barred, and further that Nevada Power had failed to state a claim for equitable indem nity. Nevada Power timely filed notice of appeal. 'Nevada Power also tiled claims under theories of implied warranty, strict products liability, Dcgligence and nuisance, but does not pursue such claims oo appeal. N evaim Power C o . v. Monsanto Co. II 4013 This matter was before the district court under its diversity jurisdiction, and hence state substantive law applies. See Erie Railroad v. Tompkins. 304 U.S. 64 (1938). Specifically, fed eral courts exercising diversity jurisdiction are to use state statutes of limitation. IV/ v. Conrail, 481 U.S. 35, 39 n.4 (1987). The Nevada Supreme Court is controlling authority on questions of Nevada law. See Commissioner v. Bosch, 387 U.S. 456, 465 (1967). As in questions of federal law, a district court's interpreta tion of state law is reviewed de novo. See In re McLinn, 739 F.2d 1395, 1397 (9th Cir. 1984) (en banc) (abandoning prior rule of "a deferential standard of review to a district judge's construction of the law of the state in which he or she sits"). A grant of summary judgment presents an issue of law reviewed de novo. Kruso v. International Tel, & Tel., 872 F.2d 1416,1421 (9th Cir. 1989), cert, denied, 110 S. CL 3217 (1990). In determining whether any genuine issue.of material fact exists, this court must view the evidence in the light most favorable to the nonmoving party, here Nevada Power. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir. 1989). Ill A [1] Nevada Power contends that its fraud and failure to warn claims are not baired by the statute of limitations. There is no disagreement that a three-year statute of limitations applies to the fraud claims. See Nev. Rev. StaL 11.190.3(d) (1989) (actions for ``fraud or mistake" must commence within 3 years). Such actions are "deemed to accrue upon the discov ery by the aggrieved party of the facts constituting the fraud or mistake." Id. The Nevada Supreme Court, however, has interpreted this statute to mean not that an action in fraud 4014 N lvada Powiik Co. v. M onsanto Co. accrues only when the plaintiff has alt the facts needed to constitute a fraud claim, but rather that "the statute of limita tion commence[s] to run from the date of the discovery of facts which in the exercise of proper diligence would have enabled the plaintiff to learn of the baud." Howard v. How ard, 239 P.2d 584, 589 (Nev. 1952). Accord Sierra Pacific Power Co. v. Nye. 389 P.2d 387, 390 (Nev. 1964) (" mem ignorance of the existence o f . . . the facts which constitute the cr.usc will not postpone the operation of the statute of limita tions . . . if the facts may be ascertained by inquiry or diligence"). [2] The parties also agree that section 11.220 of the Nevada Revised Statutes applies to the failure to warn claim. The Supreme Court of Nevada has expressly held that "the term 'accrued,' as used in NRS 11.220, incorporates the same `dili gent discovery' rule that is present in NRS 11.190(3)." Oak Grove Investors v. Bell <6 Gossett Co., 668 P.2d 1075, 1079 (Nev. 1983); accord Tahoe Village Homeowners Ass'n v. Douglas Cry., 799 P.2d 556, 558 (Nev. 1990). Thus, as with the fraud claim, the failure to warn action accrues "[w]hen the plaintiff knew or in the exercise of proper diligence should have known of the facts constituting the elements of his cause of action." Oak Grove, 668 P.2d at 1079. Nevada Power filed suit on July 7, 1989. Hence if its cause of action accrued before July 7, 1986, its action is barred. The uncontested facts are that Nevada Power knew of the dangers o: PCB's no later than 1979, but that it only discovered in 1988 that the Manufacturers' misrepresentations to it were intentional. Between 1979 and 1988, Nevada Power appar ently did not investigate the possibility of fraud by the Manu facturers. Nevada Power contends that between 1979 and 1988, although it knew that the Manufacturers' representations had bien false, it had no reason to believe that such misrepresen tations were anything other than innocent mistakes caused by _____________ N lvada Powm Co. v. Monsanto Co._______ 4015 the general lack of scientific understanding during the 1960's and early 1970's of the effects on humans of PCB exposure. In 1988, Nevada Power discovered internal documents of the Manufacturers which Nevada Power contends show that the Manufacturers' understanding of the dangers of PCB's in the 1960's and early 1970's was much more advanced than the general state of knowledge in the scientific community. Hence, Nevada Power argues that only in 1988 did it discover the fact of the Manufacturers' willful state of mind in making misrepresentations about the safety of PCB's. The Manufacturers argue that Nevada Power's action accrued no later than 1979, when it concededly knew of the dangers of PCB's. The falsity of a representation is only one of the facts that make up a fraud or failure to warn claim, however. One of the facts constituting a fraud or failure to warn claim is the defendant's state of mind. Only if the defen dant's misrepresentation is intentional has the defendant acted fraudulently. See Lubbe v. Barba, 540 P.2d 115, 117 (Nev. 1975). Similarly, liability for failure to warn cannot arise where the defendant did not reasonably know of the hazard. See Oak Grove, 668 P.2d at 1080. [3] Thus whether Nevada Power's suit was timely turns on -- | whether its knowledge of the dangers of PCB's in 1979 was ( j- ^ sufficient that, with proper diligence, it could have uncovered --'' t the rest of the facts necessary tojr^or failure to warn claim. Under federal law, this kind of determination is generally inappropriate for resolution on summary judgment.1 In deter- " in diversity cases, whether an issue is one of law for die court to decide or one of fact for the jury to determine is governed by federal law." Deland v. Old Republic Life ha. Co., 758 F.2d 1331, 1335 (9th Cir. 1985) (citing Gillespie v. Travelers Ins. Co.. 486 F.2d 281, 283 n.l (9th Cir. 1973)). And "lallthough (state) law coatrols the substantive issues in this case, the standards for determining whether summary judgment [is) appro priate call for application of federal law." Sullivan v. Massachuseiis Mutual Life Ins. Co., 611 F.2d 261, 263-64 (9th Cir. 1979). In any event, 4016 N f.vada PowiiR C o. v. Monsanto Co . mining when an action has accrued under a discovery-based statute of limitations, *`[t]he question of when [the alleged wrongdoing] was or should have been discovered is a ques tion of fact. It may be decided as a matter of law only-when uncontroverled evidence irrefutably demonstrates plaintiff discovered or should have discovered the fraudulent conduct." Mosesian v. Peat, Manvick, Mitchell & Co., 727 F.2d 873, 877'(9th Cir.), cert, denied, 469 U.S. 932 (1984) (internal citations and quotations omitted). "Where the cause of action was belatedly discovered, the issue whether the plaintiff exer cised reasonable diligence is a question of fact." Timmei v. Moss, 803 F.2d 519, 521 (9th Cir. 1986). In a case quite similar to the one before us, the defendant instilled an inadequate computer system in the plaintiffs office. See Sierra Diesel Injection Serv. v. Burroughs Corp. (Sierra Diesel I), 648 F. Supp. 1148, 1149 (D. Nev. 1986). As in tlie instant case, the plaintiff knew early on that the defen dant's representations about the equipment made at the time of sale had been inaccurate. Id. at 1151. The question faced by the court was whether, under the Nevada limitations rule, such knowledge was sufficient that, with proper diligence, the plaintiff should have discovered that such misrepresentations were not innocent mistakes but willful fraud. The court stated that "the question of what constitutes sufficient knowledge to place a party under an affirmative duty to discover the fraud or mistake is normally a jury question." Sierra Diesel Injec tion Serv. v. Burroughs Corp. (Sierra Diesel II), 651 F. Supp. 1371, 1373 (D. Nev. 1987) (denying motion to reconsider Sierra Diesel I). although we apply federal taw here, Nevada law is in accord. See Oak Grove Investors v. Bell & Gossett Co., 668 P,2d 1075, 1079 (Nev. 1983) ("When the plainUff knew or in the exercise of proper diligence should have known of the facts constituting the elements of his cause of action is at question of fact for the trier of fact"). _____________ N i;vai>a Powiiit Co, v. Monsanix) Co._______ 4017 The nonmovant, here Nevada Power, is entitled to have inferences drawn from the evidence in the light most favor able to it on a motion for summary judgment. Tzung, 873 F.2d at 1339-40. One reasonable inference from the facts is that, although Nevada Power knew of the dangers of PCB's by 1979, it had no reason to think that the Manufacturers were any less in the dark about such dangers than the government and scientific community generally were in the 1960's. Between the )960's and lute 1970's the level of knowledge of scientists and the government regarding PCB's increased dra matically. Before its 1988 discoveries, Nevada Power may have plausibly believed that the Manufacturers' knowledge had similarly increased during the 1960's and 1970's, and that their earlier representations, while clearly false given the knowledge base today, were innocent mistakes rather than part of the willful cover-up that Nevada Power now alleges. [4] Very recently, this court has reaffirmed that under fed eral law, "when the plaintiff discovered or could have discov ered the fraud with the exercise of reasonable diligence . . . is usually a question for the trier of fact." General Bedding Corp. v. Echevarria, 947 F.2d 1395, 1397 nJZ (9th Cir. 1991). "Because our precedent dictates that the question of notice of fraud is for the trier of fact, the party seeking summary dispo sition has an extremely difficult burden to show that there exists no issue of material fact regarding notice."'5'C v. Sea board Corp., 677 F.2d 1301, 1309-10 (9th Cir. 1982). We conclude that such burden has not been met here. B In the alternative, the Manufacturers contend that even if the facts of a fraud claim could not have been uncovered through proper diligence by Nevada Power, a per se rule should apply barring fraud claims whenever a negligence claim based on the same incident would be barred. Since Nevada Power has conceded that its strict liability and negli gence claims connected with the sale of the PCB equipment 4018 N evada P ower C o . v. M onsanto Co. ate barred by the statute of limitations, if the per se rule urged by the Manufacturers were adopted, Nevada Power's fraud claims would be barred as a matter of law, despite the exis tence of a genuine issue of material fact regarding the "proper diligence" rule. ' [5] The Manufacturers argue that "once a plaintiff has a suspicion of some wrongdoing, the statute of limitations begins to run on all claims relating to that wrongdoing, including fraud' -- regardless of whether the plaintiff has knowledge of the facts supporting a particular theory of action." They provide no Nevada authority for this proposi tion, but cite an Iowa case that does apparently hold that the statute of limitations begins to run on a fraud claim as soon as a party has facts sufficient to make out a strict liability or regligence claim regarding the same transaction. See Sparks v. Metalcrafi, Inc., 408 N.W.2d 347, 352 (Iowa 1987). But that court added that "[o]ne exception to this holding might be i) fraudulent concealment by the defendant resulting in a claimant's failure to discover facts supporting a legal theory 6f action." Id. at 352-53. Since Nevada Power indeed alleges just such concealment here, the persuasiveness of this case, even as noncontrolling authority, is weak. It would appear that Nevada case law has carved out an exception to the statutory limitations rule where, although the party does not know all the facts constituting his cause of action, he could discover such facts through the exercise of proper diligence. See Howard, 239 P.2d at 589. Such rule might apply where the party knows facts sufficient to make out a negligence claim. That is, the facts constituting the neg ligence claim might be enough that, with proper diligence, the facts showing willfulness, and hence a fraud claim, would come out. In that situation, of course, the Nevada courts would apply their well settled rule that at the time the plaintiff "in the exercise of proper diligence should have known of the facts constituting die elements of his cause of action," the statute begins to run. See Oak Grove, 668 P.2d at 1079. NliVADA PoWIiR CO. V, MONSANTO Co. 4019 [6] We see no indication that the Nevada Supreme Court would go further and, as the Manufacturers urge, adopt a per se rule that whenever the facts of a negligence claim are pres ent, the statute begins to run on fraud actions regardless of whether the facts of such fraud could be discovered through proper diligence. It may be that in most cases where the facts of a negligence claim are known, the "proper diligence" rule would start the limitations period running. But in those cases where, even with knowledge of the facts of a negligence claim, proper diligence could not uncover the facts regarding state of mind needed for a fraud claim, it would be unduly harsh and inequitable to hold that the fraud action always accrues at the time of the negligence action. We are not per suaded that the Nevada Supreme Coun would adopt such a rule. IV The district court rejected Nevada Power's claim for implied equitable indemnity against the Manufacturers because under Nevada law, the indemnitee and the indemnitor must have "common liability." The court noted that the EPA regulations impose no liability on the Manufacturers for their acts of supplying equipment to Nevada Power twenty or more years ago. Only current use or manufacture of PCB equip ment runs afoul of the EPA regulations, and hecce no liability common to both Nevada Power and the Manufacturers exists here. [7] The Nevada Supreme Coun has spoken recently and clearly that under Nevada law, "[tlhe right of indemnity rests upon a difference between the . . . liability of two persons, each o f whom is made responsible by the law to an injured party." Black & Decker, Inc. v. Essex Group, 775 P.2d 698, 699 (Nev. 1989) (emphasis added). As Judge Learned Hand has stated, it is an essential prerequisite for the existence of indemnification liability that, regarding the indemnitor and the indemnitee, "both parties are liable to the same person for 4020 Nevada Power Co. v. Monsanto Co. the joint wrong." Santisteven v. Daw Chemical Co., 506 F.2d 1216, 1219 n.10 (9th Cir. 1974) (quoting Slattery v. Marra. Bros., 186 F.2d 134, 139 (2d Cir.), cert, denied, 341 U.S. 915 (1951)). [8] Nevada Power, in an effort to support its position, cites to authority stating that the indemnitee and the indemnitor need not be joint tortfeasors. See H ydro-Air Equip. v. H yatt Corp., 852 F.2d 403,405 (9th Cir. 1988) (interpreting Nevada law). But this misses the point Nobody has claimed that Nevada Power and the Manufacturers must be joint tortfea sors. Rather, the Nevada Supreme Court has stated that for an indemnity action to arise, there must be a "legal obligation owed by each f the wrongdoers to the injured person." Black & Decker. 775 P.2d at 699. [9] Even accepting, arguendo, Nevada Power's contention that the EPA is an "injured person," only Nevada Power has a legal obligation to the EPA with respect to the electrical equipment the Manufacturers sold it. The Manufacturers have no obligations or liabilities to the EPA connected with equip ment they sold in the 1960's and early 1970's. No common liability exists here. V We affirm the district court's grant of summary judgment for the Manufacturers on Nevada Power's implied equitable indemnity claim. As Nevada Power has expressly abandoned its claims in implied warranty, strict products liability, negli gence, and nuisance, summary judgment for the Manufactur ers is affirmed as to those claims. We reverse and remand to the district court for further proceedings on the question of whether Nevada Power's fraud and failure to warn claims are barred by the Nevada statute of limitations. The Darties will bear their own costs on this anneal. N evada Power Co, v. Monsanto Co. 4021 AFFIRMED IN PART, REVERSED IN PART AND REMANDED. SKOPIL, Circuit Judge, concurring in part, dissenting in part: I agree that summary judgment was 'properly entered on Nevada Power's implied equitable indemnity claim. I also agree that the implied warranty, strict products liability, negli gence and nuisance claims have been abandoned. Accord ingly, I concur in the decision to affirm the district court regarding those issues. I disagree, however, that Nevada Power's fraud and failure to warn claims are not subject to summary judgment on statute of limitations grounds. There fore, I dissent from the majority's decision to reverse and remand. In my view, the statutes of limitations began to run in the I970's when Nevada Power admittedly knew that PCB's were hazardous. At that time, Nevada Power knew that Monsanto's representations that PCB's are safe had been false and that it was harmed by those representations. Because those facts are undisputed, no genuine issue of material fact exists to pre clude summary judgment. The statutes of limitation expired long before Nevada filed its complaint in 1989, and the dis trict court properly granted Monsanto summary judgment. Under Nevada law, " the statute of limitation commencefs] to run from the date of the discovery of facts which in the exercise o f proper diligence would have enabled the plaintiff to leant of the fraud." Howard v. Howard, 69 Nev. 12, 239 P.2d 584, 589 (1952) (emphasis added). A plaintiff must establish "facts showing that she was not negligent in failing to make the discovery sooner and that she had no actual nor presumptive knowledge of facts sufficient to put her on inquiry." Id. at 588-89. In Howard, the plaintiff sought to set aside a divorce decree, alleging it was based on her former 4022 N evada Power Co. v. M onsanto Co. husband's fraudulent affidavit for publication of summons. The Nevada Supreme Court held that the limitation period began to run when she discovered that the court had dissolved her marriage without notifying her even though her husband had known her address. Id. at 589. Howard is analogous to this case. 'ITie plaintiff in Howard knew she had been harmed by her former husband when she learned of the divorce. Certainly, she did not have actual knowledge that her former husband had acted with a fraudu lent intent. Nevertheless, the court held that she had a duty to inquire why she had not been notified. The Nevada court rejected her contention that the period was tolled until she dis covered the false affidavit. Id. The holding in H<rward is consistent with decisions in other jurisdictions. In a case almost identical to the one before us, the Sixth Circuit held that the statute of limitations began to run as a matter of law when the plaintiffs became aware of the hazards of PCB's. Elec. Power Bd. v. Monsanto Co.. 879 F.2d 1368 (6th Cir. 1989), cert, denied. 493 U.S. 1022 (1990). The court them found it irrelevant that, unbeknownst to the plain tiffs. Mot santo allegedly had been fraudulently concealing the d a n g cs of PC B 's. Id. at 1378. The court disposed of that argument by reiterating that despite any fraud the plaintiffs "knew or should have known of the hazards of . . . PCBs . . . at least fcur years before their suit was filed," Id. The T eith Circuit also has held that the limitation period in a fraud action begins to run, as a matter of law, when the plaintiff xnows that the defendant's representations were false. Jones v. Ford Motor Co., 599 F.2d 394, 399 (l()th Cir. 1979). Moreover, the court later expressly rejected the notion that the limitation period is tolled until the plaintiff learns that the defendant's misrepresentations were intentional. Ohio v. Peterson. 651 F.2d CHI, 695 (10th Cir.), cert, denied. 454 II S 895 M98IV The court stated: N evada Power C o . v. Monsanto C o . 4023 "The probability o f [the defendant's) participation in the fraudulent transaction started the statute running as to him, even though Ohio had no proof of scienter. Although scienter is a necessary element of a 10(b) private action, in many cases scienter will emerge only as an inference from the facts before the jury. This circumstance cannot be used as a basis for emasculating the statute of limitations." Id. (internal citation omitted). The majority here concludes that the district court could not decide this issue on summary judgment because whether Nevada Power should have known of the fraud or was put on inquiry notice is a question of fact. The majority states the law too broadly. In most fraud cases, that is a question of fact because ordinarily the parties dispute when the plaintiff real ized the defendant's representations were false. See. e.g., Woods v. Label Inv. Corp., ___ Nev. ___ , 812 P.2d 1293, 1297 (1991); M illspaugh v. Millspaugh, 96 Nev. 446, 611 P.2d 201, 202 (1980). Where there is no genuine issue as to when the plaintiff learned that the defendant's representations were false, however, a defendant may be entitled to judgment as a matter o f law. See Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980) (upholding dismissal based on the statute of limitations when the plaintiff admittedly knew the defendant's representations were false more than three years before the action). Here, Nevada Power concedes that it knew in the 1970's that M onsanto's representations had been false, and Nevada law requires a plaintiff in that position to inquire whether the representations were fraudulent. See Howard, 239 P.2d at 589. No genuine issue of material fact exists. The m ajority's solution of permitting the jury to decide whether the claims are barred robs defendants of much of the protection limitation rules are intended to provide. The rules are grounded on twin policies of protecting defendants from defending stale claims and promoting repose. Nevada Stale i *^ h > tpi w , - *< -tff wv*V * * i r v * * w , 'sr*-j 4024 N evada Power Co. v. M onsanto Co. Bank v. Jamison Fam. P art.,___N ev .___ , 801 P.2d 1377, 1381 (1990); Ohio, 6S1 F.2d at 694. Both policies are eroded by a rule that necessarily makes the statute of limitations a jury question. See Ohio, 651 F.2d at 694. Unless the court bifurcates the trial, both the defendant and the court will be burdened by the trial of a stale claim, even if the defendant is vindicated. Id. Furthermore, any repose from the statute would be illusory if the defendant still faces "the cost and vexation of protracted litigation and the uncertainty of contin gent liability." Id. 1 would affirm the district court. PRINTED FOR ADMINISTRATIVE OFFICE--V S . COURTS BY BARCLAYS I ELECTROGRAPHIC-SAN FRANCISCO--(4IS) 588-1155 The *umm*rjpwhich don not eonrtiOite p v t of [he opinion of the court, b copyrighted C IM I by Ducliyi Law Publishers.