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05/26/66 Ernest J. Fontana, v. Aetna Casualty & Surety Co

May 26, 1966

ERNEST J. FONTANA, APPELLANT

v.

AETNA CASUALTY & SURETY CO., APPELLEE 1966.CDC.110 DATE DECIDED: MAY 26, 1966



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petition for Rehearing En Banc and for Rehearing before the Division Denied August 4, 1966.

APPELLATE PANEL:

Wilbur K. Miller, Senior Circuit Judge, and Fahy and Tamm, Circuit Judges. Fahy, Circuit Judge (dissenting).

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MILLER

This case arises from a workmen's compensation claim filed by Ernest J. Fontana in August, 1958, against his employer, Clark-Fontana Paint Company, *fn1 and its insurance carrier, Aetna Casualty and Surety Company. Fontana represented that on May 13, 1958, he suffered an injury in the course of his employment which necessitated extensive hospitalization and medical treatment. Following the recommendations made by the claims examiners of the Bureau of Employees' Compensation of the Department of Labor, Aetna paid Fontana compensation of $54.00 per week for 156 weeks, beginning August 18, 1958, a total of $8,424.00. (It had previously paid him $740.57 for the period from May 14, 1958, to August 17, 1958). In addition to these compensation payments, Aetna paid $3,330.75 in medical benefits and incurred other expenses in the sum of $1,970.00.

On May 1, 1962, Fontana sought to reopen the proceeding by claiming compensation for continuing disability arising out of the alleged accident of May 13, 1958. The claim was denied by Aetna and a formal evidentiary hearing was had on December 13, 1962, and January 31, 1963. On April 1, 1963, the Deputy Commissioner made extensive findings of fact including the following:

"That the claimant did not sustain a personal injury on May 13, 1958, as alleged."

For this reason, the Deputy Commissioner rejected the claim for compensation.

On April 30, 1963, Fontana sued the Deputy Commissioner in the United States District Court, *fn2 attacking the finding that he had not suffered an injury May 13, 1958. He asked that the rejection of his claim be set aside, and that the Deputy Commissioner be directed to award compensation as claimed. Aetna was permitted to intervene as a party defendant. Following cross-motions for summary judgment, the District Judge filed a memorandum opinion which included the following:

". . . The Court is of the opinion that the record, considered as a whole, supports the deputy commissioner's findings that plaintiff did not sustain an injury on May 13, 1958, as alleged."

Accordingly, on December 17, 1963, summary judgment was granted to the Deputy Commissioner and Aetna, and Fontana's motion therefor was denied. Fontana did not appeal. Thus there has been a final judicial determination that he falsely stated the basis of his claim.

On May 25, 1964, Aetna filed the present suit against Fontana in which it alleged the events to which we have referred, and sought to recover the sums paid by it in reliance on Fontana's representations that he had sustained a compensable injury on May 13, 1958. Fontana controverted the allegations of the complaint and both parties moved for summary judgment. Aetna's motion therefor was granted and Fontana's was denied, whereupon the latter appealed.

In an action for fraud the three year limitation contained in ยง 12-201, D.C.Code (1961), applies. The period begins to run only upon discovery of facts out of which the claim arises, or at the time such facts should reasonably be ascertained in the exercise of due diligence. Wiren v. Paramount Pictures, 92 U.S.App.D.C. 347, 206 F.2d 465 (1953).

Fontana contends Aetna's cause of action was barred by the three-year statute of limitations because, he asserts, the appellee had actual notice of the fraud at least as early as November 13, 1959, more than three years before Aetna filed suit on May 25, 1964. If so, this action is clearly barred by the statute. Aetna says it did not discover the fraud until the fact that Fontana had falsely stated he was injured on May 13, 1958, was disclosed at the hearing ...


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