Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Friday, September 18, 2009

The Discovery Rule as a limitations tolling tool for breach of fiduciary duty claim in Texas

  
SOL FOR BREACH OF FIDUCIARY DUTY & DISCOVERY RULE

The statute of limitations for a claim for breach of fiduciary duty is four years from the day the cause of action accrued. Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(5) (Vernon 2002). The discovery rule defers the accrual of a cause of action until the plaintiff knows, or by exercising reasonable diligence, should know of the facts giving rise to the claim. Barker v. Eckman, 213 S.W.3d 306, 311-12 (Tex. 2006).
 
WHEN CAN THE DISCOVERY RULE BE INVOKED? 
 
For the discovery rule to apply, the injury must be inherently undiscoverable and objectively verifiable. Id. at 312; Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006). Injuries that arise from a breach of fiduciary duty are generally considered inherently undiscoverable. S.V. v. R.V., 933 S.W.2d 1, 8 (Tex. 1996); Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996). However, once the fiduciary's misconduct becomes apparent, the claimant cannot ignore it, regardless of the fiduciary nature of the relationship. S.V., 933 S.W.2d at 8; see also Computer Assocs., 918 S.W.2d at 456.
 
SOURCE: 09-08-00398-CV (7/16/09) (Beaumont Court of Appeals)
 


1 comment:

  1. Reasonable diligence can only be exercised by a reasonable person, without mental deficits. Therefore the discovery rule has to be invoked for someone with that case, knowing that breach of fiduciary duty would be inherently undiscoverable by an individual with mental defects.

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