Helium v. Kidder Peabody & Co.

• Court: District Court, D. New Hampshire
• Decided: June 28, 1993
• Docket: CV-92-259-B
• Status: Published

Opinion

Helium v. Kidder Peabody & Co. CV-92-259-B 06/28/93

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

James Helium

v. Civil No. 92-259

Kidder Peabody & Co., Inc.

O R D E R

The plaintiff, James Helium, ("Helium") brought this action

against the defendant, Kidder Peabody & Co., Inc., ("Kidder

Peabody") claiming that Kidder Peabody, acting as Helium's

broker, breached certain contractual obligations and duties of

due diligence by failing to advise Helium as to the income tax

ramifications of his investments. Kidder Peabody has moved for

summary judgment claiming that the action is barred by the

statute of limitations. Helium responds that the statute of

limitations was tolled when he became incompetent after his cause

of action accrued. Since this action is governed by New

Hampshire law, and since the New Hampshire Supreme Court has held

that a disability will only toll a statute of limitations when

that disability existed at the time the cause of action accrued. I will grant Kidder Peabody's Motion for Summary Judgment

(document no. 15).

FACTS

Helium retired from Eastern Airlines on February 1, 1985.

Shortly thereafter, he received a lump sum distribution of

$448,249.89 from the Eastern Airlines' Variable Retirement Plan

for Pilots. When he received his distribution. Helium was

notified that $379,658.34 of his retirement distribution was

taxable, but could be "rolled over" into a tax-deferred

individual retirement account within 60 days to avoid current

taxation.

On June 17, 1985, Kidder Peabody, acting as a broker,

invested a substantial portion of Helium's retirement

distribution, purchasing 375 shares of a tax-exempt securities

trust for a combined price of $400,612.50. At some point prior

to April 5, 1986, Helium learned from his accountant that his

investment in the securities did not constitute a proper "roll

over" of his retirement distribution and thus did not defer his

tax liability. Accordingly, on April 13, 1986, Helium executed

and filed his tax return for the 1985 tax year, with the

2 additional tax liability of $96,630 on the taxable portion of the

retirement distribution.

On December 20, 1989, Helium was placed under the

guardianship of Dwayne and Bonnie Breckbill by the Belknap County

Probate Court. This guardianship was not removed until April 13,

1993. On April 28, 1992, the Breckbills, acting as guardians for

Helium, commenced this action against Kidder Peabody, alleging

breach of contract and negligence for failing to properly roll

over Helium's retirement distribution.

DISCUSSION

Summary judgment is appropriate when material facts are

undisputed and the moving party is entitled to judgment as a

matter of law. Rodriguiez-Garcia v. Davila, 904 F.2d 90, 94 (1st

Cir. 1990)(citing Fed. R. Civ. P. 56 (c)). In the present case,

there are no material facts in dispute. The parties agree for

the purposes of this motion that Helium's action accrued no later

than April 13, 1986, the day on which he prepared and filed his

1985 tax return. Further, the parties agree that Helium did not

become disabled until December 20, 1989, after he learned of the

existence of his cause of action. The parties also agree that

3 RSA 508:4 is the applicable statute of limitations and that this

action was not commenced until April 28, 1992, more than six

years after the accrual of Helium's original cause of action.

Thus, the parties agree that this claim will be barred by the

statute of limitations as a matter of law unless the general

statute of limitations was tolled, pursuant to RSA 508:8, because

of Helium's mental disability.

RSA 508:8 provides that "an infant or mentally incompetent

person may bring a personal action within two years after such

disability is removed." The statute does not explicitly reguire

that the disability exist at the time the cause of action

accrues. However, viewing the statute in its historical and

common law context, I find that RSA 508:8 does so reguire.

Although the New Hampshire Supreme Court has not yet

determined whether RSA 508:8 tolls the statute of limitations

where a disability arises after the cause of action accrued, the

court has answered this guestion when construing a predecessor

statute. In Nutter v. DeRochemont, 46 N.H. 80, 81 (1865), the

Court determined that a woman's marriage after her cause of

action accrued did not toll the statute of limitations pursuant

to Revised Statutes of 1842, Chapter 181, which provided that

4 "any infant, married woman, or insane person, may commence either

of the personal actions aforesaid within two years after such

disability is removed." The statute construed in Nutter was

amended several times and recodified as RSA 508:8. Since the

current statute is identical to its predecessor in all respects

material to the issues presented here, I see no reason to read

into RSA 508:8 an interpretation which the Legislature chose not

to give it. Therefore, I determine that Nutter is controlling

and that summary judgment should be awarded to the defendant

because the statute of limitations has run.1

SO ORDERED.

Paul Barbadoro United States District Judge June 28, 1993

cc: Donald J. Williamson, Esg. Philip T. McLaughlin, Esg.

1I further note that the interpretation given to the statute in Nutter is consistent with the general rule followed in American and English courts dating back to the time of King Henry VII. See Barnard v. Edwards, 4 N.H. 321, 328 (1828); McDonald v. Hovev, 110 U.S. 619, 629 (1884) (noting general rule that "no disability will postpone the operation of the statute unless it exists when the cause of action accrues; and that when the statute begins to run no subseguent disability will interrupt it") .