Justice Ingrid Gustafson delivered the Opinion of the Court.
APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-16-755A Honorable Amy Eddy, Presiding Judge COUNSEL OF RECORD: For Appellants: Gary A. Gotto, Keller Rohrback LLP, Missoula, Montana Michael D. Woerner, John P. Freeman, Keller Rohrback LLP, Seattle, Washington For Appellee: Maxon R. Davis, Davis, Hatley, Haffeman & Tighe, PC, Great Falls, Montana James H. Goetz, Geotz, Baldwin & Geddes, PC, Bozeman, Montana Filed: /s/_________
Clerk Justice Ingrid Gustafson delivered the Opinion of the Court. ¶1 Energy consumer Plaintiffs appeal from various orders granting summary judgment to Flathead Electric Cooperative, Inc. (FEC) in the Eleventh Judicial District Court, Flathead County. We affirm. ¶2 While Plaintiffs assert multiple issues, the following issue is dispositive of the appeal:
Whether the District Court erred in determining Plaintiffs' claims are barred by the statute of limitations?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 FEC is a tax-exempt rural electrical cooperative owned by its members and organized under and governed by the Rural Electric and Telephone Cooperative Act (RETCA). Section 35-18-101, et seq., MCA. Plaintiffs are former members who received electrical services from FEC but have since moved out of FEC's service area. Plaintiffs were FEC members at different times: Zatorowski from 1981 to 1986, Zubko from 1998 to 1999, and Wortman in 2002 only. Plaintiff Wolfe was a member of FEC in 1998 and claims service again in 2007 though FEC could not find record of it. ¶4 The Plaintiffs' primary assertion is FEC's practice of allocating capital credits to each member's capital account but not actually retiring and refunding the capital credits until sometime in the future violates RECTA. Specifically, Plaintiffs assert FEC violates § 35-18-316, MCA, because the statute provides cooperative revenue for each fiscal year must be distributed to the members—which Plaintiffs construe to mean members should judgment to FEC, ruling in part that Plaintiffs' claims were barred by the statute of limitations. Plaintiffs appeal.
The Plaintiffs' 52-page complaint, filed September 1, 2016, contained 12 counts.
We do not reach the argument of whether there is a contract between these parties in the way Plaintiffs assert. We utilize Plaintiffs' posited breach of contract argument for statute of limitations purposes only.
STANDARD OF REVIEW
¶7 We review a district court's grant of summary judgment de novo, using the same M. R. Civ. P. 56 criteria applied by the district court. A moving party is entitled to summary judgment when the party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law. Winter v. State Farm Mut. Auto. Ins. Co., 2014 MT 168, ¶ 9, 375 Mont. 351, 328 P.3d 665.
DISCUSSION
¶8 The District Court found Plaintiffs' complaint filed September 1, 2016, was outside the statute of limitations. The parties focus on whether the breach of contract claim's statute of limitations is met as that claim underlies the remaining claims in the complaint. Written contracts have an eight-year statute of limitations. Section 27-2-202(1), MCA. "[T]he period of limitation begins when the claim or cause of action accrues." Section 27-2-102(2), MCA. Plaintiffs filed their complaint September 1, 2016, so any claim or cause of action accruing more than eight years earlier (before September 1, 2008) is barred. ¶9 In a breach of contract action accrual begins at breach unless there has been fraudulent concealment; then accrual runs from the time of discovery. Textana, Inc. v. Klabzuba Oil & Gas, 2009 MT 401, ¶ 35, 353 Mont. 442, 222 P.3d 580. Under Plaintiffs' theory of the case, FEC breached its contract with Plaintiffs when FEC failed at its February board meeting to authorize payout of retired capital credits. The latest date on which any planned to prevent inquiry or escape investigation, and to mislead or hinder information acquisition." Textana, ¶ 37. Plaintiffs argue FEC hid RETCA "patronage refunds" owed under § 35-18-316, MCA, by only referencing "capital credits" in its bylaws. This argument is not persuasive because FEC's bylaws clearly reference "patronage capital" as well as "capital credits":
Section 2: Allocating
Capital Credits: . . . D. The amounts accumulating in each member's or non-member patron's capital account is known as
Patronage Capital. The members, in their capacity of accumulating Patronage Capital may be referred to as Patrons. The Cooperative shall annually notify each
patron of the dollar amount of
capital credits allocated or credited to the patron's account.
. . .
Section 4: Retiring and Refunding Capital Credits: . . . B. The Board shall determine the manner, method and timing of retiring capital credits as well as the type of distribution.
FEC Bylaws, Article XI (2016) (emphasis added). Regardless of the term used—"patronage refunds," "capital credits," or "patronage capital"—the bylaws clearly define credit use and how FEC retires member credits. Plaintiff's purported confusion by the interchangeable use of the terms is overcome by a plain reading of the bylaws.
We agree with the District Court that FEC did not affirmatively hide "patronage refunds" by only referencing "capital credits." ¶13 Plaintiffs assert that while the general rule requires affirmative acts to prove fraudulent concealment, where there is a fiduciary or trust relationship between the parties, "Mere silence or failure to reveal information in the presence of a duty to disclose can
and does not cause the statute of limitations to run anew, so
§ 27-2-409(1), MCA is inapplicable. ¶17 Based on the foregoing, Plaintiffs' claims are barred by the statute of limitations. As resolution of this issue is dispositive of this appeal, it is not necessary to address any other matters asserted by the parties.
The latest year Plaintiff Wolfe asserts she was a member (although FEC could not find a record of her membership past 1998). No other Plaintiff was a member of or received services from FEC after 2002.
It is also a general legal understanding that the term "capital credits" is used interchangeably with "equity credits" or "patronage credits." 18 Am. Jur. 2d Cooperative Associations § 22 (2017).
The monies had "been available for payment at any time thereafter" but FEC had been unable to refund them because it did not have forwarding addresses for Plaintiffs until they filed suit. --------
CONCLUSION
¶18 The District Court correctly concluded Plaintiffs' contract claims were barred by the statute of limitations. ¶19 Affirmed.
/S/ INGRID GUSTAFSON We concur: /S/ MIKE McGRATH
/S/ JIM RICE
/S/ BETH BAKER
/S/ DIRK M. SANDEFUR