Wednesday, August 03, 2011, 3:46 PM

COA: Statute of limitations runs from date of alleged fraud or when fraud should have been discovered

Yesterday, in Stunzi v. Medlin Motors, Inc., a panel of the North Carolina Court of Appeals (Stroud, Calabria, Hunter Jr.) ruled that the statutes of limitations on a car buyer's claims against a dealership that sold him a lemon began to run on the date the buyer signed a disclosure stating that the car didn't conform to the manufacturer's warranty.

Plaintiff Stunzi purchased a car from defendant Medlin Motors, Inc. About a week after Stunzi picked up the car, a Medlin representative informed him that he had a paper for him to sign stating that some work had been done on the vehicle. Stunzi met with the representative and signed the one-page disclosure form, which clearly stated that the vehicle had not conformed to the manufacturer's warranty and that repairs had been made. Years later, when Stunzi made his last payment and received the title, he saw that the title said that the vehicle had been branded a "lemon." Stunzi sued Medlin, claiming Medlin willfully withheld the lemon classification in order to induce him to purchase the vehicle, and had misrepresented the nature of the document he signed after the sale.

The Court of Appeals held that Stunzi's claims were barred by the applicable statutes of limitations. The statutes of limitations began to run from the date of discovery of the fraud or when the fraud should have been discovered. For Stunzi, this meant that the clock started when he signed the disclosure form, which, had he read it, would have informed him that the vehicle was a lemon. Stunzi had a duty to read the form, and absent any showing that he was willfully misled or misinformed by Medlin as to the document's contents, Stunzi was held to have signed the document with full knowledge and assent.

Related links: Record on appeal; Stunzi's brief; Medlin's brief.

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