By: David M. Garten, Esq.
ARTICLE: Application Of The Delayed Discovery Doctrine To Undue Influence Claims
A cause of action accrues or begins to run when the last element of the cause of action occurs. An exception is made for certain causes of action in which the accrual of the cause of action is delayed until the plaintiff either knows or should know that the last element of the cause of action occurred. This is commonly referred to as the “Delayed Discovery Doctrine”.
The general statutory basis for the Delayed Discovery Doctrine is §95.031(2)(a), F.S. which reads: “An action founded upon fraud under s. 95.11(3), including constructive fraud, must be begun within the period prescribed in this chapter, with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, instead of running from any date prescribed elsewhere in s. 95.11(3), but in any event an action for fraud under s. 95.11(3) must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.”[Emphasis added]
With regard to non-disclosures in trust accountings and a trustee’s active concealment of facts supporting a cause of action for breach of trust, refer to §736.1008, F.S. Subsection 6(b) reads: “When a beneficiary shows by clear and convincing evidence that a trustee actively concealed facts supporting a cause of action, any existing applicable statute of repose shall be extended by 30 years.”
In Florida, the Delayed Discovery Doctrine has limited application:
Cause of Action Apply? Authority
|Fraud||Yes||Davis v. Monahan, 832 So. 2d 708 (Fla. 2002)|
|Professional & medical malpractice||Yes||Id.|
|Intentional torts based on abuse / childhood sexual abuse||Yes||Id.|
|Undue influence||Yes||●Flanzer v. Kaplan, 2017 Fla. App. LEXIS 17696; 42 Fla. L. Weekly D 2525; 2017 WL 5759041(Fla. 2nd DCA 11/29/17)|
●In re Guardianship of Rekasis, 545 So. 2d 471(Fla. 2nd DCA 1989)
|Breach of fiduciary duty (generally)||No||●Patten v. Winderman, 965 So. 2d 1222 (Fla. 4th DCA 2007)|
●Davis v. Monahan, 832 So. 2d 708 (Fla. 2002)
|Breach of trust||Yes||§736.1008, F.S.|
|Breach of contract||No||●Access Ins. Planners, Inc. v. Gee, 175 So. 3d 921(Fla. 4th DCA 2015)|
●Med. Jet, S.A. v. Signature Flight Support – Palm Beach, Inc., 941 So. 2d 576 (Fla. 4th DCA 2006)
|Negligence (generally)||No||D.H. v. Adept Cmty. Servs., 217 So. 3d 1072 (Fla. 2nd DCA 2017)|
|Tortious Interference with Business Relationships||No||Yusuf Mohamad Excavation, Inc. v. Ringhaver Equip., Co., 793 So. 2d 1127 (Fla. 5th DCA 2001)|
|Unfair and Deceptive Trade Practices||No||Id.|
Application of the Delayed Discovery Doctrine to undue influence claims is well documented in Florida. For example, in In re Guardianship of Rekasis, supra the guardian filed a complaint against the Hogans to set aside certain inter vivos transfers of the Ward’s assets over the past 10 years on the basis of undue influence. The Hogans raised the defense of statute of limitations. In response, the guardian argued that the statute of limitations did not begin to run until the Hogans’ alleged undue influence over the ward had terminated and the ward, or someone on her behalf, became aware of the existence of the Hogans’ alleged undue influence and the resulting misdeeds by the Hogans. The appellate court agreed. The court reasoned in part:
Undue influence is a species of fraud. It differs from fraud to the extent that it can exist even where all of the facts surrounding a transaction infected with undue influence have been truthfully and fully represented. 27 Fla. Jur. 2d 294 Fraud and Deceit § 10 (1981). Undue influence is treated as fraud in general [citations omitted].
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Courts in other jurisdictions have held that as a matter of law, facts giving rise to a cause of action based on undue influence do not become discoverable by the exercise of reasonable diligence until the termination of the influence [citations omitted].
In Flanzer v. Kaplan, supra Gloria and Louis Flanzer created an irrevocable trust in 2005. Louis died in 2013 and Gloria died in March of 2015. In November of 2015, the petitioner sued to revoke the irrevocable trust on the basis of undue influence. In response, the trustees raised the defense of statute of limitations. On appeal, the petitioner argued that since courts treat undue influence as a species of fraud, undue influence is therefore subject to the delayed discovery doctrine. The appellate court agreed. The court reasoned in part:
To be sure, undue influence claims and fraud claims are distinct causes of action. [citations omitted]. But the uses of the prepositions “founded upon fraud” and “founded on fraud” in sections 95.031(2)(a) and 95.11(3)(j), respectively, plainly countenance a broader class of claims than merely actions alleging fraud in general. As such, we see no reason why section 95.031(2)(a) would not apply to Flanzer’s claim—provided that Flanzer otherwise satisfies the requirements of that section.