Minnesota Laborers Health & Welfare Fund v. Granite Re, Inc.

Summary

The Minnesota Supreme Court held that fraudulent concealment by a principal obligor can toll a contractual one-year limitations period against the surety on a payment bond, even when the surety did not participate in or know about the concealment. The court concluded that the bond’s general limitations provision did not specifically preclude equitable tolling. The court affirmed the court of appeals and remanded for further proceedings concerning the Funds’ claim against Granite Re.

Holdings

1. Fraudulent concealment by a principal obligor may toll the limitations period against a surety even when the surety did not participate in or know about the principal’s fraudulent concealment.
2. The doctrine of fraudulent concealment applies to a payment bond as well as to fidelity and fiduciary bonds when the principal conceals facts giving rise to the claimant’s cause of action.
3. The bond’s one-year provision did not preclude equitable tolling because it established only the period for bringing suit and did not specifically address fraudulent concealment or otherwise limit Granite Re’s substantive payment obligation.

Questions Presented

1. Whether fraudulent concealment by a principal obligor can toll a contractual limitations period against a surety that did not participate in or know about the concealment.
2. Whether the doctrine of fraudulent concealment applies to a payment bond, rather than only to fidelity or fiduciary bonds.
3. Whether the bond’s one-year contractual limitations provision specifically precluded equitable tolling based on fraudulent concealment.

Disposition

affirmed