Crayton v. Bank of America: Stringent Requirements for Pleading Fraudulent Concealment Tolling

Introduction

In Crayton v. Bank of America, 25-3058 (10th Cir. June 3, 2025), the United States Court of Appeals for the Tenth Circuit reviewed the dismissal of pro se plaintiff Larry Darnell Crayton’s claims against Bank of America, Inc. and Boeing Financial Benefits Services Center. Crayton alleged that in August 2015, Boeing Financial improperly disbursed nearly $96,000 from his account and that Bank of America created a fraudulent account in his name. He brought causes of action for fraud, breach of fiduciary duty (under Kansas law), and violation of the Fair Credit Reporting Act (FCRA).

The district court, after screening under 28 U.S.C. § 1915(e)(2)(B)(ii), found that Crayton’s complaint was time-barred and failed to allege facts establishing tolling of the applicable statutes of limitations. On appeal, the Tenth Circuit affirmed, emphasizing that the plaintiff bears the burden of alleging specific facts to support fraudulent concealment tolling, and that conclusory allegations cannot carry that burden.

Summary of the Judgment

1. Procedural Posture: Crayton, proceeding in forma pauperis and pro se, filed suit in the District of Kansas in November 2024. The magistrate judge recommended dismissal under 28 U.S.C. § 1915(e)(2)(B)(ii) for failure to state a claim, deeming the claims time-barred.
2. Claims and Limitations Periods:
   • Fraud and breach of fiduciary duty under Kansas law: two-year statute of limitations from discovery.
   • FCRA claim: five-year statute of limitations from discovery or occurrence, whichever is earlier.
3. Attempts at Amendment: Crayton’s amended complaint alleged that defendants “misrepresented the status of investigations” and intentionally delayed resolution from 2016 to 2023 to run out the limitations period. He also noted being stranded abroad, limiting his ability to pursue remedies.
4. District Court’s Decision: After de novo review, the district court agreed that Crayton knew or should have known of the fraud by 2016. His allegations of stalling and misrepresentation did not show that defendants concealed the actionable facts or prevented his discovery. The court dismissed the case with prejudice.
5. Appellate Holding: The Tenth Circuit affirmed, holding that:
   • Conclusive assertions of fraudulent concealment without factual support are insufficient.
   • Under Kansas law, tolling requires a duty to disclose and actual concealment of the facts constituting the fraud.
   • Crayton’s own allegations indicated he discovered or reasonably should have discovered the fraud in 2016.

Analysis

Precedents Cited

• Procedural and Pro Se Standards:
  • Howard v. U.S. Bureau of Prisons, 487 F.3d 808 (10th Cir. 2007) – liberal construction for pro se pleadings.
  • Walters v. Wal-Mart Stores, Inc., 703 F.3d 1167 (10th Cir. 2013) – courts do not assume the role of advocate for pro se litigants.
  • 28 U.S.C. § 1915(e)(2)(B)(ii) – screening standard for in forma pauperis actions.
  • Fed. R. Civ. P. 12(b)(6) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) – plausibility standard.
• Statutes of Limitations and Tolling:
  • Ives v. McGannon, 149 P.3d 880 (Kan. Ct. App. 2007) – two-year limitations for fraud under Kansas law.
  • Mynatt v. Collis, 57 P.3d 513 (Kan. 2002) – two-year limitations for breach of fiduciary duty.
  • 15 U.S.C. § 1681p – five-year limitations for FCRA claims.
  • Bonin v. Vannaman, 929 P.2d 754 (Kan. 1996) – application of the discovery rule and fraudulent concealment tolling.
  • Alires v. McGehee, 85 P.3d 1191 (Kan. 2004) – elements of fraudulent concealment under Kansas law.
• Standards of Review:
  • Davis v. TXO Prod. Corp., 929 F.2d 1515 (10th Cir. 1991) – amended complaint supersedes original.
  • Kay v. Bemis, 500 F.3d 1214 (10th Cir. 2007) – de novo review of dismissal under § 1915(e)(2)(B)(ii).
• Pleadings and Conclusory Allegations:
  • Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836 (10th Cir. 2005) – mere conclusory allegations without factual or legal support are insufficient.

Legal Reasoning

The Court’s reasoning rested on two pillars:

1. Statute of Limitations: Under Kansas law, both fraud and breach of fiduciary duty claims must be filed within two years of discovering the harm or facts giving rise to the claim. FCRA claims carry a five-year window from discovery or occurrence. Crayton admitted knowledge of the 2015 transaction and allegations show he was aware by 2016.
2. Fraudulent Concealment Tolling: Kansas law permits tolling where a defendant in equity or law has a duty to disclose and takes affirmative steps to conceal the fraud, thereby preventing discovery. Crayton’s filings alleged only that defendants misrepresented the status of investigations and delayed resolution—not that they concealed the underlying transaction. His generalized assertion of “stall tactics” failed to show a duty to disclose or active concealment of the core facts.

Applying these principles, the Court found it “patently clear” that the claims were untimely and that no plausible tolling allegations were made. It affirmed the district court’s dismissal under § 1915(e)(2)(B)(ii).

Impact

The decision in Crayton v. Bank of America reinforces several important points for future litigants and lower courts:

• Strict Tolling Requirements: Parties seeking fraudulent concealment tolling must plead specific facts showing a legal or equitable duty to disclose and active concealment of the actionable event or its circumstances.
• Pro Se Limitations: While pro se complaints receive liberal construction, courts will not excuse failures to meet fundamental pleading requirements or allow conclusory allegations to proceed.
• Early Case Screening: Under § 1915(e)(2)(B)(ii), courts will continue to dismiss in forma pauperis cases that clearly fail on statutes of limitation grounds, avoiding unnecessary discovery costs and docket congestion.
• Clarity for Financial Institutions: Banks and benefit centers can rely on the ruling to assert time-bar defenses and avoid indefinite exposure to stale claims based on allegations of “stalling.”

Complex Concepts Simplified

• In Forma Pauperis & § 1915 Screening: Allows a party to sue without prepayment of fees but obligates the court to dismiss frivolous or legally deficient claims before service.
• Statute of Limitations: A deadline by which a lawsuit must be filed after a claim accrues. If the plaintiff misses it, the claim is barred.
• Discovery Rule: The statute of limitations begins when the plaintiff knows or reasonably should know the facts giving rise to the claim.
• Fraudulent Concealment Tolling: An equitable doctrine that pauses (tolls) the limitations period when a defendant actively hides wrongdoing and has a duty to disclose it.
• Conclusive vs. Factual Allegations: Courts require concrete factual details—dates, communications, actions—rather than broad assertions that a defendant “concealed” or “stalled.”

Conclusion

Crayton v. Bank of America serves as a clear reminder that statutes of limitation and tolling doctrines are not mere technicalities but fundamental safeguards of fairness and finality. Plaintiffs, including those appearing pro se, must plead with sufficient specificity to establish entitlement to tolling. Conclusory allegations—no matter how persistent—cannot supplant the required factual showing of duty and concealment. This ruling will guide lower courts in rigorously applying time-bar defenses and screening in forma pauperis claims for legal sufficiency.