United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                 No. 01-2377/2456
                                  ___________

Daniel Rademeyer;                        *
State of Missouri,                       *
                                         *
             Appellants,                 *
                                         *
      v.                                 * Appeal from the United States
                                         * District Court for the Eastern
Michael R. Farris,                       * District of Missouri.
                                         *
             Appellee.                   *
                                    ___________

                              Submitted: January 14, 2002

                                   Filed: March 13, 2002
                                    ___________

Before BOWMAN, FAGG, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
                          ___________

MORRIS SHEPPARD ARNOLD, Circuit Judge.

       Daniel Rademeyer was a shareholder in MRF, Inc., a medical technology
company in which Michael Farris owned a majority of the stock. After Mr. Farris
purchased all the shares of the minority shareholders and sold MRF, Mr. Rademeyer
sued him claiming fraud and breach of fiduciary duty. Mr. Rademeyer alleged that
Mr. Farris had concealed the true value of MRF and had failed to disclose that, at the
time of buy-back negotiations with the minority shareholders, he had received an
offer from LaserSight to sell MRF for a higher price per share than the price that he
offered (and ultimately paid) the minority shareholders for their shares. Shortly after
purchasing the minority shareholders' interests, Mr. Farris sold MRF to LaserSight
at a higher price per share than he had paid to the shareholders.

      The district court, noting that the Missouri statute of limitations on claims for
common-law fraud and breach of fiduciary duty is five years, held the claims time
barred and granted Mr. Farris’s motion for summary judgment. See Rademeyer v.
Farris, 

, 1102, 1106-07 (E.D. Mo. 2001). We reverse in part
and affirm in part.

                                             I.
      We review grants of summary judgment de novo, applying the same standards
as the district court. Dulany v. Carnahan, 

, 1237 (8th Cir. 1997).
"Summary judgment is appropriate when the evidence, viewed in a light most
favorable to the non-moving party, demonstrates that there is no genuine issue of
material fact, and that the moving party is entitled to judgment as a matter of law."
Clark v. Kellogg Co., 

, 1082 (8th Cir. 2000); see Fed. R. Civ. P. 56(c).
A federal district court sitting in diversity is required to apply the law of the state in
which it is located when ruling on matters of limitations. Nettles v. American
Telephone & Telegraph Co., 

, 1362 (8th Cir. 1995). Missouri is the
forum state for this diversity action.

                                         II.
      We consider the fraud claim first. In Missouri, the limitations period applied
to most common-law tort claims is found in the various subsections of Mo. Rev. Stat.
§ 516.120, which requires that a suit for fraud be brought within five years of the
accrual of the cause of action, see Mo. Rev. Stat. § 516.120(5). A fraud claim is
"deemed not to have accrued until the discovery by the aggrieved party," 

courts have held that "discovery" under this section ordinarily occurs when
the plaintiff actually discovers "or in the exercise of due diligence, should have
discovered the fraud," Burr v. Nat'l Life and Accident Ins. Co., 

, 7

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(Mo. Ct. App. 1984). Nevertheless, if a fiduciary relationship existed between the
plaintiff and the defendant, the cause of action does not accrue until the plaintiff’s
"actual discovery" of the fraud. Community Title Co. v. U.S. Title Guar. Co., 

, 252 (Mo. Ct. App. 1998) (emphasis in original). The district court held
that this latter standard did not apply here because Mr. Farris owed no fiduciary duty
to Mr. Rademeyer after the date that Mr. Farris bought out the minority shareholders.
The court held, moreover, that because Mr. Rademeyer did not exercise due diligence
to discover the alleged fraud, his claims were time barred. We disagree with the
district court.

       It seems self-evident to us that, for purposes of determining what standard of
diligence to apply to plaintiffs asserting that a fiduciary has committed a fraud, the
fiduciary relationship need only have existed at the time of the alleged fraud, and that
the continued existence of the fiduciary relationship beyond that time is irrelevant.
In fact, the Missouri Court of Appeals has explicitly held that "the required discovery
depends upon and is determined by the relationship of the plaintiff and defendant
prior to the commission of the fraud." Vogel v. A.G. Edwards and Sons, Inc.,

, 754 (Mo. Ct. App. 1990). The principle seems inherent in the
purpose of the actual discovery standard: The law deems it reasonable for someone
to place trust in a fiduciary, and so a person is not expected to be as vigilant with
respect to fiduciaries as he or she might otherwise be. See 

.
Because a controlling shareholder owes a fiduciary duty to minority shareholders, see
Peterson v. Cont'l Boiler Works, Inc., 

, 904 (Mo. 1990), we hold that
Mr. Rademeyer's cause of action for fraud did not accrue until he obtained actual
notice of the facts constituting the alleged fraud. See Community 

.

      Mr. Farris suggests that there was evidence that Mr. Rademeyer did in fact
have actual notice of the facts that constitute the alleged fraud as early as 1994, but
we disagree. He points first to the fact that John Brandvein, another minority

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shareholder, told Mr. Rademeyer in 1994 that Mr. Farris had sold MRF, that "he
didn't think he [Mr. Brandvein] had been treated fairly," and that he thought that he
(Mr. Brandvein) had "a very good case." Mr. Farris also observes that Mr. Brandvein
even "tried to enlist [Mr. Rademeyer] into joining into the suit with him at that stage."
Mr. Farris maintains that, with a few additional questions, Mr. Rademeyer could have
learned about documents revealing the alleged fraud. In other words, Mr. Farris
asserts that Mr. Rademeyer was on inquiry notice that he had a cause of action.

       We agree that Mr. Brandvein's attempt to recruit Mr. Rademeyer as a co-
plaintiff, and Mr. Brandvein's statement that he thought that he had "a very good
case," would put a person in Mr. Rademeyer's circumstances on inquiry notice; but
inquiry notice is not relevant here. That is because, as we have already indicated,
Missouri courts have held that a person who relies on a fiduciary " 'is under no duty
to make inquiry,' " 

(quoting Foster v. Petree, 

, 853 (Mo. 1941)), and has actual notice only "if he [or she] has sufficient facts
to inform a reasonable person that a fraud has been committed," 

.

       Mr. Brandvein's statement that "he didn't think he had been treated fairly"
could represent nothing more than seller's remorse, and his unsupported statement of
opinion that he had "a very good case" was just that. Without something more, we
believe, these facts are insufficient as a matter of law to inform a reasonable person
that a fraud had actually been committed. As explained below, we believe that a
reasonable person in Mr. Rademeyer's position would have ascertained the facts
underlying Mr. Brandvein's opinions, but the law of Missouri imposes no such duty
of inquiry in the case of a fraud committed by a fiduciary. We conclude on this
record that Mr. Rademeyer's cause of action did not accrue until he learned that
Mr. Farris already had a higher offer in hand from LaserSight when he bought out the
minority shareholders. Since the present suit commenced within five years of that
actual discovery, the statute of limitations does not bar the claim for fraud.

                                          -4-
                                            III.
        We now pass to a consideration of Mr. Rademeyer's claim for breach of
fiduciary duty. One might expect, as an original matter, that a claim for breach of
fiduciary duty would be subject to the same standard of discovery, for limitations
purposes, as a claim for fraud committed by a fiduciary, because a breach of fiduciary
duty is a constructive fraud under Missouri law, see Klemme v. Best, 

,
495 (Mo. 1997). But the Missouri courts have given the relevant limitations statutes
a rather strict interpretation, and have held instead that a claim for breach of fiduciary
duty accrues " 'when damage is sustained and capable of ascertainment,' " Community

(quoting Mo. Rev. Stat. § 516.100). With respect to claims
like the one under consideration here, therefore,"[m]ere ignorance on the part of a
plaintiff does not toll the statute of limitations where reasonable diligence on his or
her part would have revealed the injury or wrongful conduct," O'Reilly v. Dock, 

, 301 (Mo. Ct. App. 1996) (interpreting § 516.100). As we indicated
above, Mr. Rademeyer's failure to inquire further, following his conversation with
Mr. Brandvein, demonstrated a lack of reasonable diligence on his part.

       Mr. Rademeyer argues that there was considerable evidence that Mr. Farris
tried to conceal his breach of fiduciary duty from him and that under Mo. Rev. Stat.
§ 516.280 the statute of limitations is therefore tolled. But attempts at fraudulent
concealment are of course irrelevant, for tolling purposes, when a plaintiff with a
claim for breach of fiduciary duty nonetheless should have known that he had
suffered damage. See M & D Enterprises, Inc. v. Wolff, 

, 400
(Mo. Ct. App. 1996); see also Miller v. Guze, 

, 578 (Mo. Ct. App.
1991) (medical malpractice claim).

     Applying an objective standard, we conclude that Mr. Rademeyer should have
known that he had suffered damage after his conversation with Mr. Brandvein. If
Mr. Rademeyer had exercised reasonable diligence in asking Mr. Brandvein why he

                                           -5-
thought that he had a "good case" against Mr. Farris, the record is clear that he would
have learned of the documents implicating Mr. Farris in a breach of fiduciary duty
that caused Mr. Rademeyer damage. Because Mr. Farris's efforts to conceal his
alleged breach of fiduciary duty did not prevent Mr. Rademeyer from discovering that
he was damaged, § 516.280 did not toll the statute of limitations.

       We must finally consider whether Mo. Rev. Stat. § 516.200, which tolls the
statute of limitations when a resident leaves the state, saves Mr. Rademeyer's claim
for breach of fiduciary duty, because Mr. Farris moved from Missouri to Florida after
buying out the minority shareholders and selling MRF. The district court, relying on
Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 

(1988), held that
§ 516.200 was unconstitutional because it was an impermissible burden on interstate
commerce. See 

. Both Mr. Rademeyer and
the state of Missouri challenge this holding.

       In 

, 894, the Supreme Court held that an Ohio statute
that tolled the statute of limitations indefinitely against non-resident defendants
unless those defendants appointed an agent for service of process in the state created
an unconstitutional burden on interstate commerce. Similarly, in Bottineau Farmers
Elevator v. Woodward-Clyde Consultants, 

, 1074 (8th Cir. 1992), we
held that a North Dakota tolling statute impermissibly burdened interstate commerce
"because it forces a non-resident defendant to choose between being physically
present in the state for the limitations period or forfeiting the statute of limitations
defense." We concluded that the state's interest in aiding its residents' efforts to
litigate against non-resident defendants did not justify denying non-residents the
protections of the statute of limitations, particularly when long-arm service of process
was available. See 

case, Mr. Rademeyer could have used Missouri's long-arm statute,
Mo. Rev. Stat. § 506.500, to bring a timely suit against Mr. Farris. The Missouri

                                          -6-
Supreme Court has construed the tolling provisions of § 516.200 very broadly,
applying the statute to all out-of-state defendants, even those subject to the state's
long-arm jurisdiction. Poling v. Moitra, 

, 522 (Mo. 1986). We are
bound by the Missouri Supreme Court's interpretation of Missouri laws, see Boner
v. Eminence R-1 Sch. Dist., 

, 1341 (8th Cir. 1995), and based on that
interpretation we hold that the district court correctly concluded that § 516.200
violates the commerce clause.

       Accordingly, the statute of limitations is not tolled on Mr. Rademeyer's claim
for breach of fiduciary duty, and the claim is time barred.

                                         III.
       For the foregoing reasons, we affirm the order of the district court dismissing
the claim for breach of fiduciary duty, but we reverse the order dismissing the fraud
claim and remand for further proceedings not inconsistent with this opinion.

      A true copy.

             Attest:

                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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