BURDICK, Justice.
This case comes to the Idaho Supreme Court as a certified question from the United States District Court for the District of Idaho.
The underlying case arose out of the claims of several men who joined Boy Scout troops when they were children and were allegedly sexually abused by their scout leaders. The Church of Jesus Christ of Latter Day Saints (LDS Church) sponsored some of the troops at issue in this case. On June 24, 2013, Does I-IV
Respondents subsequently moved to certify questions to the Idaho Supreme Court, challenging the constructive fraud claims on several grounds. The United States District Court certified two narrow questions to this Court, which accepted certification on July 25, 2014, and designated the Does as Appellants and the Boy Scouts and the LDS Church as Respondents.
Courts of the United States may certify a controlling question of law in a pending action to the Idaho Supreme Court where there is no controlling precedent in Idaho Supreme Court decisions and the determination would materially advance the orderly resolution of the litigation in the United States court. St. Luke's Magic Valley Reg'l Med. Ctr. v. Luciani, 154 Idaho 37, 39-40, 293 P.3d 661, 663-64 (2013) (citing I.A.R. 12.3(a)). The Court's role "is limited to answering the certified question" when the question presented is narrow. Peone v. Regulus Stud Mills, Inc., 113 Idaho 374, 375, 744 P.2d 102, 103 (1987) (noting that "to now decide [extraneous matters] would result in an advisory opinion on a question not certified"). This Court exercises free review over questions of law. Harrigfeld v. Hancock, 140 Idaho 134, 136, 90 P.3d 884, 886 (2004).
The United States District Court for the District of Idaho certified the following questions:
We rephrase the questions as: (1) which statute of limitations applies to constructive fraud causes of action; and (2) when does a constructive fraud cause of action accrue. This is because the facts underlying the constructive fraud claim only bear on whether the substance of the plaintiff's cause of action is constructive fraud, or something else.
Under Idaho law, in determining which statute of limitations applies to a cause of action, courts must focus on the substance, rather than the form of a plaintiff's allegations.
Thus, the Appellants' constructive fraud claim may very well have had characteristics of a personal injury claim, or may have been insufficiently pled, but that issue is not before this Court. Rather, from the Certification Order, the narrow issue before this Court is which statute of limitations applies to a constructive fraud claim. Thus, this opinion will not address whether Appellants' claims are more appropriately characterized as constructive fraud, personal injury, or any other claim. That is for the Federal District Court to decide. If this Court were to decide the true nature of Appellants' claim, it would result in an advisory opinion on a question not certified. Thus, for purposes of this opinion, it will be assumed, without deciding, that the Appellants in the underlying action asserted a constructive fraud claim.
In its order certifying questions to this Court, the Federal District Court noted that the question of which statute of limitations applies in constructive fraud cases is still up in the air in Idaho. The District Court identified three potential candidates: Idaho Code section 5-218(4), which governs fraud claims; Idaho Code section 5-219(4), which governs personal injury claims; and Idaho Code section 5-224, which is a catch-all statute of limitations. Appellants argue that Idaho's fraud statute of limitations applies, while Respondents assert that either Idaho's personal injury statute of limitations or Idaho's catch-all statute of limitations should apply.
Because the Federal District Court rejected the argument that the underlying claim was a personal injury claim, Idaho's personal injury statute of limitations is not applicable here. It certainly should not apply to constructive fraud claims as a class because constructive fraud generally results in an economic harm rather than personal injury. Idaho's personal injury statute of limitations does not contemplate the type of harm that results from constructive fraud. Indeed, Idaho Code section 5-219(4) only applies to personal injury claims and requires filing within two years:
Thus, although this statute of limitations may have applied had the Federal District Court concluded that the underlying action was actually a personal injury claim, the statute is wholly inapplicable to constructive fraud claims generally. The question then is whether the catch-all statute of limitations or the fraud statute of limitations should apply.
Under Idaho Code section 5-218(4), actions for relief on the ground of fraud or mistake must be brought within three years. Idaho's catch-all statute of limitations applies to causes of action that do not otherwise fall under another statute of limitations. Indeed, Idaho Code section 5-224 provides that "[a]n action for relief not hereinbefore provided for must be commenced within four (4) years after the cause of action shall have accrued." Thus, if Idaho's fraud statute of limitations does not apply to constructive fraud claims, the catch-all statute of limitations will apply.
Idaho Code section 5-218(4)'s plain language does not include constructive fraud as a claim governed by its statute of limitations. However, in Hillock v. Idaho Title & Trust Co., this Court was confronted with the issue of which statute of limitations applied where Hillock brought an "action for relief on the ground of mistake, or the constructive fraud resulting therefrom." 22 Idaho 440, 126 P. 612 (1912). In that case, Hillock hired Idaho
On appeal, Hillock asserted that the fraud statute of limitations applied because the action was "an action for relief on the ground of mistake, or the constructive fraud resulting therefrom." Id. at 444, 126 P. at 613. Idaho Title and Trust argued the trial court correctly determined that the statute of limitations for actions in contract governed and barred plaintiff's claims. Id. This Court reversed the trial court and held, without distinguishing between mistake and constructive fraud, that the fraud statute of limitations applied and that the cause of action did not accrue until the plaintiffs discovered the facts constituting the fraud or mistake. Id. at 446, 126 P. at 614. Specifically, this Court stated: "if those representations are untrue, whether they be caused by mistake or actual fraud, it amounts in law to a fraud upon the purchaser of the abstract ... [and] it seems to us he would have his action for false or fraudulent misrepresentation...." Id. The Court went on to note:
Id. at 450, 126 P. at 616. The Court went on to hold that the fraud statute of limitations applied. Id. Thus, although the Court did not explicitly hold that the fraud statute of limitations applies to constructive fraud claims, by not distinguishing between constructive fraud, fraud, and mistake, the Court implicitly held that actions arising out of fraud, mistake, and constructive fraud all fall under the purview of the fraud statute of limitations.
Furthermore, this Court has suggested in other cases that the fraud statute of limitations would apply to constructive fraud claims. For instance, in Nancy Lee Mines, Inc. v. Harrison, 95 Idaho 546, 547, 511 P.2d 828, 829 (1973), this Court alluded to the fact that it would apply the fraud statute of limitations to a constructive fraud claim. There, Nancy Lee Mines sued Harrison's estate to recover stock Harrison purchased at two separate stock assessment sales. Id. at 546, 511 P.2d at 828. Intervenors in the suit alleged that Harrison had committed fraud in connection with the stock assessment sales. Id. It is unclear whether the intervenors alleged actual fraud or constructive fraud or both; the background description only states that they alleged "fraud and illegal procedures" surrounding the stock sales. Id. However, in analyzing the issues, this Court stated that "the action" would be barred by the statute of limitations "[u]nless there was undiscovered fraud...." Id. at 547, 511 P.2d at 829. In discussing the undiscovered fraud, this Court assumed it could either be actual or constructive fraud:
Id. at 547, 511 P.2d at 829 (footnote omitted). Thus, in Nancy Lee, this Court suggested that the statute of limitations for fraud would apply to constructive fraud claims.
Similarly, in Witt v. Jones, 111 Idaho 165, 172-73, 722 P.2d 474, 481-82 (1986), Justice Bistline's dissent suggested that Idaho's fraud statute of limitations should apply to constructive fraud claims. In his dissent, Justice Bistline quoted the following language from a California Supreme Court case dealing with the appropriate statute of limitations for a constructive fraud claim:
Id. (internal citations omitted) (quoting Day v. Greene, 59 Cal.2d 404, 29 Cal.Rptr. 785, 380 P.2d 385 (1963)). Justice Bistline went on to note that Idaho's fraud statute was patterned after California's fraud statute, which implies that Idaho's fraud statute would apply to constructive fraud claims. Id. The foregoing cases illustrate this Court's inclination to apply the fraud statute of limitations to constructive fraud claims.
Additionally, the proof required for fraud and constructive fraud claims lends further strength to the conclusion that the fraud statute of limitations applies to constructive fraud claims. Under Idaho law, actual fraud consists of nine elements that a plaintiff must prove by clear and convincing evidence. Specifically, to prove actual fraud, a plaintiff must show: (1) a statement or a representation of fact; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity; (5) the speaker's intent that there be reliance; (6) the hearer's ignorance of the falsity of the statement; (7) reliance by the hearer; (8) justifiable reliance; and (9) resultant injury. Glaze v. Deffenbaugh, 144 Idaho 829, 833, 172 P.3d 1104, 1108 (2007) (quoting Mannos v. Moss, 143 Idaho 927, 931, 155 P.3d 1166, 1170 (2007)) (internal quotation marks omitted).
Similarly, a constructive fraud claim requires a plaintiff to prove seven of the nine elements of fraud, as well as a relationship of trust and confidence. Indeed, as the Court stated in McGhee v. McGhee, 82 Idaho 367, 371, 353 P.2d 760, 762 (1960):
(quoting 37 C.J.S. Fraud § 2, p. 211). This Court went on to state that "[i]n its generic
"The gist of a constructive fraud finding is to avoid the need to prove intent (i.e., knowledge of falsity or intent to induce reliance) [under the elements required to prove actual fraud], since it is inferred directly from the relationship and the breach." Country Cove Dev., Inc. v. May, 143 Idaho 595, 601, 150 P.3d 288, 294 (2006). In sum, if a plaintiff establishes that there has been a breach of duty arising from a relationship of trust and confidence, the plaintiff is not required to prove (1) the speaker's knowledge of the falsity regarding the statement or representation of fact, or (2) the speaker's intent that the hearer rely on the statement or representation of fact, to sustain a claim of constructive fraud. See Country Cove, 143 Idaho at 601, 150 P.3d at 294. However, the party is still required to prove the remaining seven elements of actual fraud. Gray, 147 Idaho at 386, 210 P.3d at 71. Because the elements of a constructive fraud claim are essentially the same as the elements of fraud claims, it follows that the same statute of limitations should apply to both claims.
However, Respondents argue that because this Court has compared constructive fraud claims to breach of fiduciary duty claims, Idaho's catch-all statute of limitations should apply to constructive fraud claims. Specifically, Respondents point out that this Court has applied Idaho Code section 5-224 to cases involving a breach of fiduciary duty, and that because this Court has reasoned that a constructive fraud claim is essentially a breach of fiduciary duty claim, Idaho Code section 5-224 should apply. We disagree.
Although this Court has held that Idaho's catch-all statute of limitations applies to breach of fiduciary duty claims, Jones v. Runft, Leroy, Coffin & Matthews, Chartered, 125 Idaho 607, 614, 873 P.2d 861, 868 (1994), we have never explicitly held that a breach of fiduciary duty is required to establish a constructive fraud claim. Rather, the law out-lined above illustrates that constructive fraud contemplates relationships outside of a fiduciary relationship. Indeed, in Hines v. Hines, 129 Idaho 847, 853, 934 P.2d 20, 26 (1997), this Court noted that "an action in constructive fraud exists when there has been a breach of a duty arising from a relationship of trust and confidence, as in a fiduciary duty." See also McGhee, 82 Idaho at 371, 353 P.2d at 762 ("Constructive fraud usually arises from a breach of duty where a relation of trust and confidence exists; such relationship may be said to exist whenever trust or confidence is reposed by one person in the integrity and fidelity of another."). Thus, a fiduciary relationship is only one example of the kind of relationship of trust and confidence that can give rise to a constructive fraud claim.
What is more, showing a breach of a legal or equitable duty, trust, or confidence is only a part of proving a constructive fraud claim: a plaintiff is still required to prove the other seven elements of fraud as outlined above. In other words, despite being similar in several respects, a breach of fiduciary duty claim and constructive fraud claim are two distinct causes of action. See Country Cove Dev., Inc. v. May, 143 Idaho 595, 601, 150 P.3d 288, 294 (2006) (addressing constructive fraud claims and breach of fiduciary duty claims separately, which suggests they are in fact distinct causes of action). Indeed, "`[t]o establish a claim for breach of fiduciary duty, [a] plaintiff must establish that defendants owed plaintiff a fiduciary duty and that the fiduciary duty was breached.'"
Our sister courts are in line with this reasoning and in concluding that fraud statutes of limitations govern constructive fraud claims. For instance, the Montana Supreme Court, after noting that it previously defined constructive fraud as fraud, held that Montana's statute of limitations for actions on the ground of "fraud or mistake" applied to constructive fraud cases. Tynes v. Bankers Life Co., 224 Mont. 350, 730 P.2d 1115, 1120 (1986) ("[A] cause of action premised on constructive fraud is subject to a two-year [fraud] statute of limitations."). The Montana Supreme Court reached that conclusion even though it acknowledged that constructive fraud claims in Montana — like constructive fraud claims in Idaho — involve a "breach of duty" and do not require fraudulent intent. Id. at 1124-25 (Weber, J., dissent). Similarly, the Supreme Court of Virginia construed Virginia's fraud statute of limitations to contemplate both actual and constructive fraud even though that statute made no distinction between the two. Excalibur Ins. Co. v. Speller, 220 Va. 304, 257 S.E.2d 848, 850 (1979). Indiana courts have also held that Indiana's six-year statute of limitations for fraud applies to constructive as well as actual fraud. Wells v. Stone City Bank, 691 N.E.2d 1246, 1250 (Ind.Ct.App.1998). Finally, California courts have recognized that California's fraud statute, which is similar to Idaho's fraud statute,
Id. (internal citations omitted) (internal quotation marks omitted).
The foregoing case law illustrates that the fraud statute of limitations applies to constructive fraud claims even though those claims may also involve a breach of fiduciary duty. We are persuaded to follow the line of cases from our sister courts that hold that the fraud statute of limitations govern constructive fraud claims. We note again that it is left for the trial courts to determine whether a plaintiff's cause of action is, in substance, a true constructive fraud claim, or a breach of fiduciary duty claim or something else. The appropriate characterization of John Doe's cause of action in this case is not before this Court. We therefore hold that Idaho Code section 5-218(4) governs constructive fraud claims. Thus, the only issue left to decide is when a constructive fraud cause of action accrues.
Appellants argue that the discovery rule under Idaho's fraud statute of limitations should apply to constructive fraud
Idaho Code section 5-218(4) provides that fraud causes of action do not accrue "until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake." In McCoy v. Lyons, 120 Idaho 765, 820 P.2d 360 (1991), this Court addressed that aspect of Idaho Code section 5-218(4) and held that the statute does not begin to run until the plaintiff knew or reasonably should have known of the facts constituting the fraud. The Court explained that "discovery," as used in the statute, means the point in time when the plaintiff had actual or constructive knowledge of the facts constituting the fraud and that application of Idaho Code section 5-218(4) does not depend on when the plaintiff should have been aware that something was wrong. Id. at 773, 820 P.2d at 368. Because we conclude that Idaho Code section 5-218(4) applies to constructive fraud claims, it follows that the statute's discovery rule also applies to constructive fraud claims.
Based on the foregoing, we hold that Idaho's fraud statute of limitations, Idaho Code section 5-218(4), applies to constructive fraud claims and that the discovery rule under that statute applies in determining when a constructive fraud cause of action accrues.
Chief Justice J. JONES and Justices EISMANN, HORTON and WALTERS, J., Pro tem concur.
Although this opinion is limited to addressing which statute of limitations applies to constructive fraud claims, we offer guidance as to how to determine the "substance" of a claim under Idaho law for purposes of applying the appropriate statute of limitations. As this Court said in Barnett v. Aetna Life Ins. Co., 99 Idaho 246, 580 P.2d 849 (1978): "The substance, not the form, of the action controls and determines the applicable Statute of Limitations." This Court has elaborated that "[t]he test ... is not whether the fraud or mistake occurred in a contract or independently of contract, but the test rather is whether the action seeks relief from or on account of fraud or mistake." DBSI/TRI V v. Bender, 130 Idaho 796, 809, 948 P.2d 151, 164 (1997) (internal citations omitted). Thus, the focus in Idaho is not on the remedy sought or the type of damages, but on the source of the damages. Applying that legal principle to this case, the issue is whether John Doe's action seeks relief from or on account of constructive fraud.
