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DEBRA B ADLER*1 THOMAS L ALBERT*t# THOMAS P, A M Q D IQ J . GEOFFREY BENTLEY* RONALD G. BIRCH** WILLIAM H, aiT T N E R ** KATHRYN A, SLACK PH ILIP BLUM5TEIN CORY R. BORGESON WILLIAM M( B U M PE R S * JOHN J. BURNS G E R A L D IN E M> C ARR* SUZANNE CHEROT** J O S E P H M* CHOM SKI** JOHN J. CONNORS KIM OUNN ERJC A EISEN **4 RALPH V ERT2 J O S E P H W. E V A N S *1 S T E P H E N K, G A R D N ER * WILLIAM W. G A R N ER " JO H N WYETH G R JG G S *' WILLIAM P* HORN* HAL R* H ORTON ** STEPH EN H, HUTCHINGS DEBRA J, JEZOULT* MARC W. J U N E STANLEY T* LEW IS LESLIE LONGENBAUGH RONALO W, L O R E N S E N L. MERRILL LOWDEN MICHAEL J PA R ISE TIMOTHY J . PETU M EN O S ELIZABETH A* PH IL L IPS STEVEN PRADELL M ICHAEL V. R E U S IN G ELISABETH H. RO SS** JONA THAN B . RUBINl E. BUDD SIM PSON STEPHEN F. SORENSEN SHERIDAN STRICKLAND* JO N A T H A N Kf TILLlN G H A ST MOLLY WARD* D. KEVIN WILLIAMS T. HENRY WILSON OF COUNSEL PETER A. GALBRAITH PATR IC K H* OW EN** RONALO SAXTON' OF COUNSEL BIRCH, OE JO N G & H IN 0EL5 ST* T H O M A S, U.S.V.I. *D .C . BA R *D .C , A N D A LASK A BAR |U lD T L iH C BAR 'O R E G O N BAR V IR G IN IA BAR ALL O TH ER S ALASKA BAR April 17, 1992 11 2 7 W E S T S E V E N T H A V E N U E A N C H O RA G E. ALASKA 99B O I (9071 2 7 6 -IS S O T E L E C O P IE R (9 0 7 ) 2 7 6 -2 0 2 2 O N E SE A L A S K A PLA ZA , SU IT E 301 JU N E A U . ALASKA 9 8 8 0 1 19071 5 S 6 -2 S 9 0 T E L E C O P IE R (9 0 7 ) 5 B S - 9 8 H II S S C O N N E C T I C U T A V E ., N.W . S U IT E 1 2 0 0 W A S H IN G T O N , D .C . 2 0 0 3 9 (2 0 2 ) 6 S 9 -5 S O O T E L E C O P IE R (2 0 2 ) 6 5 9 -1 0 2 7 Charles H. McCrea, Sr., Esquire Jones, Jones, Close & Brown Valley Bank Plaza 7th Floor 300 South Fourth Street Las Vegas, Nevada 89101 RE: City of Fairbanks v, Amoco, et a l . Our File No.: 502,621.1 Dear M r . McCrea: Thank you for talking to me about the Nevada Power v. Monsanto case. As I mentioned to you on the phone, the result in your case greatly influenced a favorable decision that we received in our case here in Fairbanks, Alaska. For your benefit, I have also enclosed a copy of a decision here in Alaska that was very crucial to our case. That decision is the case of Carter v. Hoblit. 755 P.2d 1084 (Alaska 1988). As you can see from reading Carter. the law here in Alaska is different than that in other jurisdictions. Namely, a fraud victim need not act reasonably in attempting to discover the fraud. Therefore, the reasonably inquiry/due diligence standard is not applicable to fraud cases in this jurisdiction. If a petition for cert is filed in your case, I would certainly appreciate being informed of that fact. I doubt the United States Supreme Court would accept such a petition, but I would not be surprised if the manufacturers attempted such a procedure in order to further delay your case. Best of luck to you in your endeavors. If there is anything we can ever do for you here in Alaska (or in my Washington, D.C. office), please do not hesitate to contact me. Birch, Horton, Bittner and Cherot A PR O FE S SIO N A L CORPORATION Page -2Charles H. HcCrea, Sr., Esquire April 17, 1992 k One interesting bit of trivia -- my oldest daughter is a first year engineering student at Purdue University in West Lafayette, Indiana. Hence, I, too, have an "Indiana" connection. Very truly yours, BIRCH, HORTON, BITTNER & CHEROT Joseph W. Evans JUE:mcb Enclosure(s): Copy of Carter v. Hoblit 4455o -1084 Alaska 755 PACIFIC REPORTER, 2d SERIES &> . h between plaintiff purchasers and defendant James E. CARTER, Sr. and Eleanor B. purchaser and whether failure of defendant Smalley, widow and successor in inter purchaser to disclose that he recorded prop est to Edward B. Smalley, deceased, Ap erty in his name only was fraud which pellants, tolled running of statute of limitations on v. D.P. HOBLIT, Appellee. plaintiff purchasers' action for decree re quiring defendant to convey plaintiffs in terests to them, precluding summary judg No. S-1801. ment. AS 09.10.230. Supreme Court of Alaska. May 13, 1988. Rehearing Denied June 28, 1988. Plaintiff purchasers brought action against defendant purchaser, who recorded title to property in his name only, seeking decree requiring defendant to convey undi vided one-third interest to each plaintiff. Defendant purchaser moved for summary judgment. The Superior Court, Third Judi cial District, Peter A. Michalski, J., granted summary judgment in favor of defendant purchaser. Plaintiff purchasers appealed. The Supreme Court, Matthews, J., held that: (1) genuine issue of material fact existed as to whether statute of limitations barred action, and (2) issue of fact existed as to whether action was barred by laches. Reversed and remanded. Rabinowitz, C J., filed a concurring opinion.1 1. Fraud =16 Fraud can be established by silence or nondisclosure when fiduciary relationship exists between parties. AS 09.10.230. 2. Principal and Agent =48 A fiduciary relationship will arise where one voluntarily acts as agent of an other as where one offers to purchase real estate for another. 3. Fraud =7 Fiduciary has duty to fully disclose information which might affect other p e r son's rights and influence his action. 5. Fraud =9, 16 Fraud can be committed in the absence of fiduciary duty where defendant's state ments are half truths, or true remarks which omit material information. 6. Limitation of Actions =100(11) Statute, providing that in action upon fraud, running of time within which action may be commenced starts from discovery of fraud, does not require that fraud victim have acted reasonably. AS 09.10.230. 7. Equity =87(2) Where statutes of limitations apply to suits in equity, delay for a shorter time than period of applicable statute, if unrea sonable and prejudicial to defendant, may be a bar to equitable relief. 8. Judgment c=181(6) Genuine issues of material fact existed as to whether jilaintiff purchasers' action against defendant purchaser alleging that all purchasers were tenants in common or partners and requesting decree requiring defendant purchaser, who recorded proper ty in his name only, to convey undivided one-third interest to each plaintiff was sub ject to defense of laches, precluding sum mary judgment. 9. Frauds, Statute of =139(4) Statute of frauds did not bar purchas ers' claim against defendant purchaser, who recorded title to property in his name only; plaintiff purchasers alleged that they fully performed their obligations under agreement with defendant purchaser by paying their share of purchase price. AS 09.25.020(1). 4. Judgm ent =181(7) 10. Vendor and Purchaser =*350 Genuine issues of material fact existed Testimony of plaintiff purchasers that as to whether fiduciary relationship existed they entered into agreement with defend- l.h. CARTER v. HOBLIT Alaska 1085 C ite as 755 P J d 1084 (A laska 1988) ant purchaser for all three parties to buy requiring emergency medical treatment. specified lot for specified price and to take This seemed to mark the end of their joint title in names of each party and that plain development plan and apparently nothing tiff purchasers paid their share of price to has been done with the property to this defendant purchaser, who recorded title to date. property in his name only, was sufficient to Since 1948, Hoblit has paid all taxes and support claim for breach of contract. assessments against the property. From time to time, Smalley or Carter offered Albert Maffei, Anchorage, for appellants. G. Kent Edwards, Hartig, Rhodes, Nor man, Mahoney & Edwards, Anchorage, for appellee. reimbursement, but Hoblit would state that there was no problem since the taxes were quite low--until 1959 the taxes were only $5 per year. Edward Smalley died on May 23,1966 and appellant Eleanor Smalley suc Before RABINOWITZ, C J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ. ceeded to his interest in the property. In the early 1970's Hoblit sought Carter's ad vice concerning the Greater Anchorage Area Borough's efforts to obtain a sewer OPINION MATTHEWS, Justice. The trial court granted summary judg ment in favor of D.P. Hoblit. We conclude that there are genuine issues of material fact and reverse. FACTS1 James E. Carter, Sr., Edward B. Smalley, and D.P. Hoblit agreed in 1948 to purchase land owned by D.D. and Myrtle Clover. The purchase price was $750 which Hoblit agreed to pay with the understanding that he would be promptly reimbursed by Car ter and Smalley. Title was to be taken in the names of the three purchasers. Hoblit bought the property from the Clovers on March 23, 1948, but took the deed in his name alone. Carter and Smalley each paid Hoblit $250 as their share of the purchase price in a timely fashion. They did not know that the deed was solely in Hoblit's right-of-way on the property. It was sug gested that the three owners share the expenses of dealing with the Borough equally but Hoblit declined, saying it was no financial hardship to him and that the expenses could be evened out when the property was sold. In May of 1977, Hoblit invited Carter and Eleanor Smalley to his house. There Hob lit explained that he wanted to purchase the property from them for a daughter who was getting married. He offered to buy each share for $10,000. Carter and Smal ley had the property appraised and discov ered that it was worth between $96,500 and $104,000. They declined the offer. Carter first learned that the title was only in Hoblit's name in February, 1981 when, during the process of a divorce, a title search was conducted. Eleanor Smal ley was advised of this soon thereafter. name. The deed was not recorded until June 21, 1973. PROCEEDINGS Hoblit, Carter, and Smalley were friends After negotiations between the parties and intended to subdivide the property into failed to settle their differences, this action three lots on which each would build a was filed on December 15, 1983. The com home. To this end the parties started to plaint alleges that Carter, Eleanor Smalley, survey the property but the survey was and Hoblit are tenants in common, or, a lte r-' aborted when they were doing clearing natively, partners, and requests a decree work and Hoblit cut his leg with an ax, requiring Hoblit to convey an undivided 1. In reviewing judgments based on orders grant ing summary judgment, we take that view of the facts which is most favorable to the non-moving party. B-E-C-K Constructors v. State, Dep*t of Highways, 604 P.2d 578, 581 n. 4 (Alaska 1979). The statement of facts is made from that per spective. 1086 Alaska K* A ,u5 PACIFIC REPORTER, 2d SERIES one-third interest to each plaintiff and for related relief. Hoblit moved for summary judgment on four grounds: the statute of limitations, laches, the statute of frauds, and on the merits. The motion was granted without specifying reasons. We therefore assume that each ground presented was found to be valid. Carter, who has taken an assign ment from Eleanor Smalley, appeals. I. STATUTE OF LIMITATIONS Alaska Statute 09.10.2302 provides that an action for the determination of a claim to real property m ust be commenced within ten years. This suit was not brought until some thirty-five years after Hoblit breach ed the alleged agreement and assumed sole title to the property in question. In the absence of circumstances th at would toll the ten year limitations period, this action would be barred. Carter contends that the period of limita tions should be tolled until February of 1981, when Carter discovered the deed re corded in Hoblit's name. He argues that Hoblit concealed his sole ownership through a "thirty-five year course of mis representation, false statements, and fraudulent acts." [1-3] Alaska Statute 09.10.230 express ly provides that in an action for fraud the running of the time within which an action may be commenced starts from the dis covery of the fraud. Fraud can be estab lished by silence or non-disclosure when a fiduciary relationship exists between the parties. W. Keeton, D. Dobbs, R. Keeton .& D. Owen, Prosser and Keeton on the Law o f Torts 106, at 738 (5th ed. 1984). A fiduciary relationship will arise where one voluntarily acts as the agent of anoth er, as where one offers to purchase real estate for another. Ray v. Winter, 67 111. 2d 296, 10 Ill.Dec. 225, 367 N.E.2d 678, 682 (111.1977); Restatement (Second) of Agency 1, 13 (1958). The fiduciary has a duty to fully disclose information which might affect the other person's rights and influ ence his action. E.g., Wilkinson v. Smith, 31 Wash.App. 1, 639 P.2d 768, 771 (1982). [4] Carter has produced evidence which demonstrates a factual question as to the existence of a fiduciary relationship, and the duties that it entailed. As a fiduciary for Carter and Smalley, Hoblit was obliged to disclose all facts which might affect their interests. One such fact would be the placing of title in Hoblit's name alone. The failure to disclose this information could be viewed as a fraud. [5] Fraud can also be committed in the absence of a fiduciary duty where the de fendant's statem ents. are half truths, or true remarks which omit material informa tion. The Restatement (Second) of Torts 529 (1977) provides that a literally true statement may be fraudulent if it omits additional qualifying information likely to affect the listener's conduct. "A represen tation stating the truth so far as it goes but which the maker knows or believes to be materially misleading because of his failure to state additional or qualifying 2. Alaska Statute 09.10.230 provides; No person may bring an action for thp deter mination of a right or claim to or interest in real property unless commenced within the limitations provided for actions for the recov ery of the possession of real property. But no person may bring an action to set aside, can cel, annul, or otherwise affect a patent to land issued by this state or the United States, or to compel a person claiming or holding under a patent to convey the |land described in the patent or a portion of the land to the plaintiff in the action, or to hold the land in trust for or to the use and benefit of the plaintiff, or on account of any matter, thing, or transaction which was had, done, suffered, or transpired before the date of the patent unless com menced within 10 years from the date of the patent. In an action upon a new promise, fraud, or mistake, the running of the time within which an action may be commenced starts from the making of the new promise or the discovery of the fraud or mistake. This section does not bar an equitable owner in possession of real property from defending possession by means of the equitable title. The right of an equitable owner to defend possession in an action or by complaint for injunction is not barred by lapse of time while an action for the possession of the real prop erty is not barred by the provisions of this chapter. Actions for the recovery of the possession of real property must be brought within ten years of loss of possession or seizen. AS 09.10.030. * f I V$* ti (, ri # ';V i 'SS ( i. i.h f CARTER v. H O BU T Alaska 1087 C ite as 755 P-2d 1084 (A laska 1988) m atter is a fraudulent representation." statutory discovery rule of AS 09.10.230.3 Id.; see also Prosser on Torts 106, at In actions for fraud not involving real prop 738 ("[I]f the defendant does speak, he erty, and thus not involving the statutory must disclose enough to prevent his words discovery rule, we have held that the stat from being misleading---- ") ute of limitations is tolled only so long as According to the appellants, Carter and reliance remains reasonable. Sharrow v. Smalley, believing that they held an owner Archer, 658 P.2d 1331, 1334 (Alaska 1983). ship interest in the property, inquired as to Section 230, however, speaks of dis their obligation for property taxes. On covery of the fraud as a fact rather than as occasion in the 50's, 60's, and 70's Hoblit to when the fraud might have been discov allegedly told them that they need not con tribute because he would pay them and the m atter would be taken care of later. Hoblit's responses, if the facts are as averred, ered had the victim acted reasonably. We have suggested in the context of a real estate fraud case on the merits that lack of are deceptive because they imply that Car ter and Smalley own the property. The due care by the victim is not a defense. Cousineau v. Walker, 613 P.2d 608, 614 !) same may be said for Hoblit's refusal to (Alaska 1980): allow Carter and Smalley to pay for the The growing trend and tendency of the expenses of negotiating with the Borough courts will continue to move toward the concerning the sewer right of way. doctrine that negligence in trusting in a Further evidence of fraudulent conceal ment is found in the 1977 discussion which Hoblit had with Carter and Eleanor Smal misrepresentation will not excuse posi tive willful fraud or deprive the defraud ed person of his remedy. ley where Hoblit is said to have offered to Id. (quoting W. Jaeger, Williston on Con purchase their shares of the property. tracts 1515B, a t 487 (3d ed. 1970)). Again, such an offer would imply an own Among the reasons for this trend is a per ership interest, thus concealing from the ception that fraud victims are often cred offerees the fact that title to the property ulous or trusting to an unreasonable ex was not in their names. tent, and that a due care defense tends to [6] Having concluded that there is reward the defrauder.4 These reasons ap enough evidence of fraud to raise an issue ply with equal force to the statutory dis I- for trial, a legal question must be resolved. covery rule for fraud. Because of them we The question is whether there is a require decline to read a requirement that a fraud ment that a fraud victim act reasonably in victim have acted reasonably into section order to be entitled to the benefit of the 230.5 3. The language of AS 09.10.230 which expresses a discovery rule is: "In an action upon a ... fraud, or mistake, the running of the time which an action may be commenced starts from ... the discovery of the fraud or mistake." 4. James and Gray, Misrepresentation--Part II, 37 MdX.Rev. 488, 511-528 (1978); Restatement (Second) of Contracts 172 reporter's note (1981). 5. The concurring opinion disagrees with this conclusion. It cites Carver v. Gilbert, 387 P.2d 928 (Alaska 1963) for the proposition that when a statute is adopted from another state, and that state's highest court has construed the statute, it is presumed that the statute has been adopted with that construction. However, in Zerbe v. State, 583 P.2d 845, 847 (Alaska 1978), overruled on other grounds, Stephens v. State, Dep't of Revenue, 746 P.2d 908 (Alaska 1987), we held that, the presumption is, in any event, not conclu sive but merely a rule based on convenience and principles of stare decisis, whereby things once decided need not constantly be redeter mined. ... if a precedent underlying an adopted statute were no longer vital or were poorly reasoned, we would decline to follow it. (Footnote omitted). The law of fraud has changed in the last one hundred years. Today, under Alaska law, a victim's negligence in trusting a misrepresenta tion will not deprive the victim of his remedy. We do not feel compelled to adopt an interpre tation espoused in an 1887 Oregon case decided when such negligence was a defense. The concurring opinion also draws a distinc tion between the statute of limitations pertain ing to fraud and other fraud defenses. Under the concurring opinion's approach, a victim who was duped because he was unreasonably t 1088 Alaska 7i*. PACIFIC REPORTER, 2d SERIES II. LACHES settlement negotiations, this suit was filed. In Kodiak Elec. Ass% Inc. v. DeLaval Hoblit did not establish conclusively that Turbine, Inc., 694 P.2d 150, 157 (Alaska prior to 1981 Carter or Mr. or Mrs. Smalley 1984) , reh'g denied, 696 P.2d 665 (Alaska had notice that he did not regard them as 1985) , we held that the appellant's claim for one-third owners. Thus, issues of material property damage was not barred by the fact exist as to laches. See Straight v. statute of limitations and that the defense Hill, 622 P.2d at 427-28. of laches was inapplicable to it because "laches is inapplicable to an action a t law___ When a party is seeking to en force a legal right, as opposed to invoking the discretionary equitable relief of the courts, the applicable statute of limitations should serve as the sole line of demarcation for the assertion of the right" [7] Carter's complaint requests only eq uitable relief, though the transaction de scribed would support a claim for damages. Therefore, laches is an available defense under the rule of Kodiak Electric.6 We have held that to successfully assert the defense of laches, the defendant must show (1) that the delay by the plain tiff was unreasonable and inexcusable, and (2) that undue prejudice to the de fendant resulted from the delay. Moore III. STATUTE OF FRAUDS [9] The statute of frauds in effect when the agreement was made provided in rele vant part In the following cases an agreement is void unless the same, or some note or memorandum thereof expressing the con sideration, be in writing and subscribed by the party to be charged___ Fifth. An agreement . . . for the sale of property or any interest therein___ 4315(5) CLA (1933). There is a writing initialed by Hoblit dated April 3, 1948 in the form of a receipt issued to Edward Smalley for $250. It states: "Cash on lot a t Spenard Heights." Carter, however, does not contend that this v. State, 553 P.2d 8, 15 (Alaska 1978). writing satisfies the statute of frauds. In The unreasonable delay necessary to sat stead, he argues that this case falls within isfy the first of these requirements only the full performance exception to the stat occurs after the plaintiff discovers or by ute. the exercise of reasonable diligence The full performance exception to the should have discovered the wrong of statute of frauds is now part of our stat which he complains. Wolff v. Arctic ute. Alaska Statute 09.25.020(1) provides Bowl, Inc., 560 P.2d 758, 767 (Alaska that the exception applies if "there has 1977). been full performance on one side accepted Straight v. Hill, 622 P.2d 425, 427 (Alaska by the other in accordance with the con 1981). tra c t" In 1948 there was no codified ex [8] Accepting the appellants' version of the facts as true, neither Carter jior the Smalleys had any reason to believe th at they were not each one-third owners of the ception for full performance. Nonetheless such an exception was recognized as a mat ter of decisional law. Rassmus v. Cary, 11 Alaska 456, 462 (1947). property until 1981; nor had they any rea Accepting the view of the facts present son to take action to protect their rights ed by Carter, both he and Edward Smalley until then. I t appears that within two had fully performed their obligations under years thereafter, following considerable the agreement with Hoblit by paying their credulous could maintain a cause of action for fraud, but he would lose that right if his unrea sonable credulity prevented him from realizing that he had been defrauded for the period of limitations. This result, while possible, does not seem logically consistent 6. Where statutes of limitations apply to suits in equity, "a delay for a shorter time than the period of the applicable statute, if unreasonable and prejudicial to the defendant, may be a bar to equitable relief." E. Re, Cases and Materials on Equity and Equitable Remedies 765 (5th ed. 1975). CARTER v. HOBLIT Alaska 1089 Cite as 755 P.2d 1084 (A laska 1988) share of the purchase price. If so, the procedure, was adopted almost verbatim statute of frauds would not bar this claim. from Oregon's code on June 6, 1900. The text of AS 09.10.230 (then Part IV, 361 of IV. THE MERITS Carter's Annotated Alaska Codes), and in [10] Hoblit argued before the trial court that the deposition testimony of Car ter and Eleanor Smalley was so vague as to be insufficient to support a breach of con tract or fraud claim. This contention is particular its provision for the discovery of fraud or mistake as the starting point for the limitations period, has not been materi ally altered since it was adopted from Ore gon. without m erit The agreement as testified to, was for the three parties to buy a specified lot for a specified price and to take title in the names of each party. Further evidence was presented that Carter and Smalley In Alaska, a statute adopted from anoth er state which has been construed by that state's highest court is presumed to be adopted with that construction. Carver v. Gilbert, 387 P.2d 928 (Alaska 1962). "Dis covery" of fraud or mistake within the meaning of Hill's Annotated Laws of Ore I $f3I1 l..v each paid his share of the price to Hoblit. In Stenekjem v. Kyn Jin Cho, 631 P.2d 482, 485 (Alaska 1981) (quoting Restate ment (Second) of Contracts 32(2) (Tent gon 382, the section from which AS 09.10.230 was originally derived, was inter preted by the Oregon Supreme Court to mean the time a t which the mistake or D raft No. 107, 1973)), we stated that* "The fraud was actually discovered or should terms of a contract are reasonably certain have been discovered through the exercise if they provide a basis for determining the of reasonable diligence. Loomis v. Rosen existence of a breach and for giving an thal, 340 Or. 585, 57 P. 55, 60 (Or.1899); appropriate remedy." Here both the Sedlack v. Sedlack, 14 Or. 540, 13 P. 452 breach--failure to take title as tenants in (Or.1887). There is no indication in the common--and the range of appropriate legislative history of AS 09.10.230 that remedies are determinable from the testi Alaska lawmakers intended to disavow the mony that Carter and Eleanor Smalley pro Oregon Supreme Court's interpretation of vided. Hill's Annotated Laws of Oregon 382. With respect to fraud, the analysis set forth above establishes that there are gen uine issues of material fact as to whether fraud occurred. The judgment of the superior court is REVERSED and this case is REMANDED for further proceedings. Therefore, I am of the view that "dis covery" within AS 09.10.230 should be con strued to mean the time at which fraud or mistake was actually discovered or should have been discovered through the exercise of reasonable diligence. The court's opinion advances no compel ling reason to depart from this presumptive RABINOWITZ, Justice, concurring. I agree with the majority's conclusion that the superior court erred by granting summary judgment in favor of Hoblit However, I disagree with the court's hold ing that the statute of limitations in actions to determine rights in real property begins to run only when the victim actually dis covers the fraud, regardless of whether the victim acted reasonably in discovering the fraud. interpretation of AS 09.10.230. The pas sage from Cousineau v. Walker, 613 P.2d 608 (Alaska 1980), cited by the majority to support its position, has little relevance to cases involving statutes of limitations. Statutes of limitations do not excuse un lawful conduct; such statutes merely pre clude stale claims. Furthermore, Cousi neau involved a contractual dispute rather than the application of a statute of limita tions. While there may indeed be a "grow ing trend" in contract law toward the doc The statute at issue in this case, AS trine that negligence in trusting in a mis 09.10.230, along with the remainder of the representation will not deprive the defraud Territory of Alaska's first code of civil ed person of his or her remedy, the over- / 1090 Alaska 75i> PACIFIC REPORTER, 2d SERIES whelming majority of other jurisdictions hold fraud victims to a standard of due diligence in discovering the fraud for pur poses of complying with statutes of limita tions, See, e.g., Sun `N Sand, Inc. v. Unit ed California Bank, 21 Cal.3d 671, 148 Cal.Rptr, 329, 350, 582 P.2d 920, 941 (Cal. 1978); Mathies v. Hoeck, 588 P.2d 1, 2-3 (Or.1978); Wolf v. Brungardt, 215 Kan. 272, 524 P.2d 726, 733 (1974); Greco v. Pullara, 166 Colo. 465, 444 P.2d 383, 384 (1968). I would hold that the limitations period set forth in AS 09.10.230 begins to run when a fraud victim discovers the fraud or should have discovered the fraud through exercise of reasonable diligence, of employee's preexisting impairment based on records in employer's possession. Affirmed. 1. W orkers' Compensation =1030.1(2) A union, even if it had a hiring ar rangement with an employer, was not that employer's agent for purposes of determin ing whether union's knowledge of an em ployee's qualifying disability, as evidenced by its written records, could be imputed to the employer for purposes of determining whether the employer met the statutory requirements for reimbursement of work ers' compensation claims from the second injury fund. AS 23.30.205(a, c). y /w \_________ ^ S \ v ^(O | KEY NUMBER SYSTEM^ ALASKA INTERNATIONAL CON STRUCTORS and Employers Casualty Company, Appellants, v. STATE of Alaska, SECOND INJURY FUND, Appellee. No. S-1873. Supreme Court of Alaska. May 13, 1988. The workers' compensation board de nied an employer's request for reimburse ment of benefits it paid to an injured em ployee. The Superior Court, Third Judicial District, Anchorage, Peter A. Michalski, J., held that employer failed to establish by written records that it had knowledge of employee's preexisting impairment, and employer appealed. The Supreme Court, Burke, J., held that: (1) union's records of employee's preexisting physical impairment could not be imputed to employer for pur poses of satisfying record requirements of second injury fund reimbursement; and (2) employer failed to establish its knowledge 2. Workers* Compensation =1030.1(2) Union records containing evidence of employee's preexisting injury could not be imputed to employer for purposes of satis fying employer's record requirements for obtaining reimbursement from second inju ry fund where employer did not have writ ten records establishing its knowledge of employee's qualifying disability. AS 23.30.205. 3. Workers* Compensation =1030.1(2) Injured employee's qualifying disabili ty could not fairly and reasonably be in ferred from employee's resume, which stat ed that employee's prior back injury had been corrected by surgery, and which de noted a period of unemployment not attrib uted to the injury or to any other cause for purposes of showing that the employer knew of the employee's arthritis, the preex isting permanent physical impairment upon which the employer based its claim for reimbursement from the second injury fund, particularity in light of additional comments in the resume that the employee had been released with no restrictions and that his injury had been corrected, and that he had no disabilities. AS 23.30.205(c). James F. Klasen, Gary W. Gantz, Hughes, Thorsness, Gantz, Powell & Brundin, Anchorage, for appellants.