Randall Rider and Karen Keller Rider, Appellants-Plaintiffs v. First Federal Savings Bank, Appellee-Defendant (2026)

MEMORANDUM DECISION

Case Summary

[1] Randall Rider and Karen Keller Rider appeal the trial court's dismissal of their amended complaint against First Federal Savings Bank, arguing that the court erred in concluding that it was barred by the two-year statute of limitations. Although the Riders filed their complaint more than two years after their cause of action accrued, we find that for purposes of surviving a motion to dismiss under Indiana Trial Rule 12(B)(6), the facts alleged in the complaint sufficiently pled fraudulent concealment such that the statute of limitations might have been tolled. We therefore reverse and remand.

Facts and Procedural History

[2] The Riders have been customers of First Federal for decades. In 1989, Randall took out a loan with First Federal to purchase his father's company, Lime City Manufacturing Co., Inc. Thereafter, the Riders served as owners of Lime City Manufacturing, and they took out several more loans and lines of credit with First Federal over the years.

[3] In November 2017, the Riders sold Lime City Manufacturing to Mandy and Corey Reber through an asset-purchase agreement. At the time, the Rebers owned another company, 1501 West Realty, LLC, and they were also customers of First Federal. The Rebers executed a promissory note for the purchase price of Lime City Manufacturing, and the note was secured by a second real-estate mortgage taken out by 1501 West Realty, which gave the Riders a second priority interest in Lime City Manufacturing's real estate, building, and fixtures.

[4] Following the sale, the Rebers and 1501 West Realty began missing payments on the note. On November 19, 2021, the Riders sued the Rebers, alleging default on the note and fraudulent misrepresentation and seeking foreclosure of the mortgage. See Cause No. 35C01-2111-MF-702. Four months later, in March 2022, the Rebers filed for bankruptcy in federal court. In that case, the Riders sent discovery requests to the Rebers and their accountant, Drew Sells. They also served First Federal with a non-party discovery request. The Riders received responses from Sells in November 2022 and from the Rebers in December 2022. First Federal didn't respond to the discovery request until April 2023. The documents, emails, and files produced during discovery revealed, according to the Riders, that First Federal had been aware that the Rebers were failing to make payments on the note, advised the Rebers to file for bankruptcy, and provided them with a debt-consolidation plan that was contingent upon the Riders accepting “an early pay discount of 50%” on the note. Appellants’ App. Vol. 3 p. 36.

[5] While the bankruptcy case was ongoing, the Riders’ state-court suit against the Rebers was stayed. The Riders and the Rebers later entered into a settlement agreement in the bankruptcy case, which resulted in dismissal of the Riders’ state-court case.

[6] In light of the revelations from discovery in the bankruptcy case, the Riders filed a complaint against First Federal in October 2024 alleging negligence, breach of fiduciary duties, tortious interference with contract, and tortious interference with a business relationship. The Riders claimed that First Federal “induced the Rebers ․ to materially breach [their] contract(s) and Note with the Riders” and “advised and/or induced the Rebers to file for Bankruptcy in an effort to force the Riders to have no other choice but to settle for an amount less than the amount due [and] owing under the terms of the contract(s) and Note.” Appellants’ App. Vol. 2 pp. 20, 21. The complaint also alleged that First Federal “failed to deal fairly, honestly, and openly with the Riders regarding its involvement and business dealings with the Rebers.” Id. at 25.

[7] In February 2025, First Federal moved to dismiss the complaint under Indiana Trial Rule 12(B)(6) on statute-of-limitations grounds. First Federal argued that the Riders’ cause of action accrued no later than November 19, 2021, when they sued the Rebers, and thus their complaint was barred by the two-year statute of limitations for tort actions. In July 2025, the trial court granted First Federal's motion and dismissed the complaint. The court agreed with First Federal that the Riders’ cause of action accrued no later than November 19, 2021, concluding that as of that date, the Riders had discovered that they'd suffered an injury due to the Rebers’ default on the note and breach of the purchase agreement.

[8] Less than a week after the dismissal, the Riders filed an amended complaint against First Federal, this time including the following allegations:

20. Prior to the Rebers and 1501 filing for bankruptcy, the Riders spoke with [First Federal] in an attempt to determine whether [First Federal] was aware that the Rebers were failing to make payments on the Note and Mortgage and in default, and [First Federal] represented to the Riders that they were not a party to nor had any knowledge of anything concerning the Reber[s’] contractual obligations under the Note and Mortgage with the Riders.

21. The Riders reached out to [First Federal] at least five times seeking any help or assistance in resolving the Rebers[’] continued failure to make any payments under the Note and Mortgage, and each attempt was met with rejection from [First Federal].

Appellants’ App. Vol. 3 p. 94. The Riders asserted that until they received discovery responses in the Rebers’ bankruptcy case, they didn't know and, in the exercise of ordinary diligence, couldn't have known that First Federal “had committed torts against [them].” Id. at 99.

[9] First Federal filed another motion to dismiss under Rule 12(B)(6), again arguing that the complaint was barred by the statute of limitations. In response, the Riders contended that under Indiana's discovery rule, their cause of action didn't accrue until, at the earliest, November 2, 2022, the date they first received discovery responses in the bankruptcy case. Alternatively, they argued that under the fraudulent-concealment statute, Indiana Code section 34-11-5-1, the statute of limitations was tolled until November 2, 2022, because First Federal concealed its tortious acts from the Riders.

[10] After a hearing, the trial court granted First Federal's motion and dismissed the Riders’ amended complaint. The court found that the amended complaint “clearly indicates cause number 35C01-2111-MF-702 was filed in November, 2021,” thus making the amended complaint “well beyond the two year statute of limitations.” Appellants’ App. Vol. 4 p. 112. The court's order didn't address the Riders’ fraudulent-concealment argument.

[11] The Riders now appeal.

Discussion and Decision

[12] The Riders argue that the trial court erred in dismissing their amended complaint. Under Indiana Trial Rule 12(B)(6), a civil action may be dismissed for “failure to state a claim upon which relief can be granted.” A 12(B)(6) motion “tests the legal sufficiency of the plaintiff's claim, not the facts supporting it.” Residences at Ivy Quad Unit Owners Ass'n v. Ivy Quad Dev., LLC, 179 N.E.3d 977, 981 (Ind. 2022) (quotation omitted). To overcome a 12(B)(6) motion, the complaint must allege facts that show the “possibility of relief.” Id. at 980. We review a 12(B)(6) motion de novo, taking the facts alleged in the complaint as true, considering all allegations in the light most favorable to the nonmoving party, and drawing every reasonable inference in that party's favor. Id. at 981.

[13] Here, the trial court dismissed the Riders’ amended complaint on the ground that it was barred by the statute of limitations. An action for an injury to a person or personal property “must be commenced within two (2) years after the cause of action accrues.” Ind. Code § 34-11-2-4(a). Under Indiana's discovery rule, “[a] cause of action accrues, and thus the limitations period begins to run, when the claimant knew or, in the exercise of ordinary diligence, could have discovered that an injury had been sustained as a result of the tortious act of another.” Gittings v. Deal, 109 N.E.3d 963, 972 (Ind. 2018) (quotation omitted), reh'g denied. “Consistent with this rule, Indiana's [fraudulent-concealment] statute[, Indiana Code section 34-11-5-1,] provides that the limitations period does not run while a person liable to an action conceals the cause of action from the party entitled to bring it.” Id. “[W]hen a plaintiff can prove this statute applies, it effectively moves the date on which the statute of limitation begins to run forward from the date of the alleged tort to the discovery date.” Alldredge v. Good Samaritan Home, Inc., 9 N.E.3d 1257, 1262 (Ind. 2014).

[14] The trial court concluded that the Riders’ cause of action against First Federal accrued no later than November 19, 2021, the date they sued the Rebers, because the Riders were aware of their injury by that date. The Riders contend that their cause of action didn't accrue until, at the earliest, November 2, 2022, when they first received discovery responses in the Rebers’ bankruptcy case. Alternatively, they argue that under the fraudulent-concealment statute, the statute of limitations was tolled until November 2, 2022, because First Federal concealed the cause of action from them. We reject the Riders’ claim that their cause of action didn't accrue until November 2, 2022, but agree that the amended complaint's allegations of fraudulent concealment by First Federal, taken as true for purposes of our review, were sufficient to show that the statute of limitations might have been tolled until that date.

I. The trial court did not err in concluding that the Riders’ cause of action against First Federal accrued no later than November 19, 2021

[15] The Riders contend that the trial court erred in concluding that their cause of action had accrued by November 19, 2021, the date they sued the Rebers. They don't dispute that they were aware of their injuries by this date but argue that, under the discovery rule, their cause of action hadn't yet accrued because they “were not aware that [First Federal] was the actual proximate cause of their injuries.” Appellants’ Br. p. 28. But the discovery rule is not concerned with when a plaintiff becomes aware of “the actual proximate cause of their injuries.” The rule doesn't “mandate that plaintiffs know with precision the legal injury that has been suffered” or “require a smoking gun in order for the statute of limitations to commence.” Perryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683, 689 (Ind. Ct. App. 2006); see also Rieth-Riley Constr. Co. v. Gibson, 923 N.E.2d 472, 476 (Ind. Ct. App. 2010) (“[T]he claimant of an action bears the burden of bringing suit against the proper party within the statute of limitation. The discovery rule is not intended to toll the limitation period until optimal litigation conditions can be established.” (citation omitted)). Nor does the discovery rule “postpone[ ] the statute of limitations by ․ delayed discovery of legal theories.” Perryman, 846 N.E.2d at 689.

[16] A cause of action accrues when the claimant knows or, in the exercise of ordinary diligence, could have discovered that they'd sustained an injury as a result of the tortious act of another. By the time the Riders sued the Rebers in November 2021, they knew they'd sustained injuries as a result of the Rebers missing payments on the mortgage and promissory note. The Riders argue that until they received discovery responses in the bankruptcy case, they didn't know and, in the exercise of ordinary diligence, couldn't have discovered that their injuries “were as a result of the tortious acts of [First Federal].” Appellants’ Br. p. 24. But this Court has repeatedly rejected materially similar arguments. See Rieth-Riley, 923 N.E.2d at 476-77 (declining to extend the discovery rule to apply “where the indeterminate fact is not the existence of an injury, but rather the identity of a tortfeasor” because doing so would “lead[ ] to the discovery rule tolling the statute of limitation in personal injury cases until a plaintiff discovers every defendant who might be legally liable for his or her injury”); Morgan v. Columbus McKinnon Corp., 837 N.E.2d 546, 550-51 (Ind. Ct. App. 2005) (rejecting appellants’ argument that “the statute of limitations should be tolled in their case because” “they could not have learned about [appellee's] role in the accident until after they commenced litigation ․ and began discovery”), trans. denied; Richards-Wilcox, Inc. v. Cummins, 700 N.E.2d 496, 498 (Ind. Ct. App. 1998) (“[T]he Cummins knew on April 25, 1994, that their injury was the result of the tortious act of another. That they did not determine until over two years later the actual identity of the party causing the injury did not suspend the running of the statute of limitations.” (quotation and citation omitted)).

[17] Because the Riders knew by November 19, 2021, that they'd sustained injuries as a result of the Rebers’ default, the trial court did not err in concluding that the Riders’ cause of action had accrued by then. The fact that they didn't discover until later that First Federal may have played a role in the default doesn't mean that their statute-of-limitations deadline was extended under the discovery rule.

II. The allegations of fraudulent concealment in the Riders’ amended complaint were sufficient to survive First Federal's 12(B)(6) motion to dismiss

[18] The Riders also argue that the statute of limitations was tolled until November 2, 2022, due to fraudulent concealment by First Federal. A party alleging fraudulent concealment bears the burden of proving that tolling applies. Gittings, 109 N.E.3d at 973. “This burden requires showing that the cause of action was concealed from the claimant until a certain time” and that “either (1) the alleged wrongdoer actively concealed the cause of action and the claimant exercised due diligence to discover the cause of action, or (2) the parties’ relationship—such as a fiduciary relationship—imposed on the alleged wrongdoer a duty to disclose the cause of action to the claimant.” Id. “The affirmative acts of concealment must be calculated to mislead and hinder a plaintiff from obtaining information by the use of ordinary diligence, or to prevent inquiry or elude investigation.” Alldredge, 9 N.E.3d at 1262.

[19] The Riders allege both active concealment and failure to disclose. First Federal argues that its “bank-customer relationship” with the Riders was not enough to impose a duty to disclose. Appellee's Br. p. 30. But whether the Riders and First Federal had a fiduciary relationship is immaterial to our analysis because the facts in the Riders’ amended complaint sufficiently pled active concealment by First Federal.

[20] The amended complaint alleged that (1) before the Rebers filed for bankruptcy, “the Riders spoke with [First Federal] in an attempt to determine whether [First Federal] was aware that the Rebers were failing to make payments on the Note and Mortgage and in default,” and First Federal said it didn't “ha[ve] any knowledge of anything concerning the Reber's contractual obligations under the Note and Mortgage with the Riders” and (2) “[t]he Riders reached out to [First Federal] at least five times seeking any help or assistance in resolving the Rebers[’] continued failure to make any payments under the Note and Mortgage, and each attempt was met with rejection from [First Federal].” These facts, which we take as true for purposes of our review, show that although the Riders exercised due diligence to investigate the circumstances of the Rebers’ default, First Federal misled the Riders, hindered them from obtaining information, and prevented further inquiry. First Federal contends that its conduct “does not constitute the kind of affirmative deception required to establish fraudulent concealment,” id. at 32, but it cites no authority to support this contention. And we find the opposite; the facts alleged in the amended complaint were sufficient to plead fraudulent concealment.¹

[21] To be clear, we offer no opinion on the merits of the Riders’ claims; we merely hold that their amended complaint, on its face, alleged sufficient facts to survive a 12(B)(6) motion to dismiss based on the fraudulent-concealment statute. See Butler Motors, Inc. v. Benosky, 181 N.E.3d 304, 322 (Ind. Ct. App. 2021) (“[W]e recall that this case is before us on a Trial Rule 12(B)(6) motion to dismiss․ [W]e conclude that the complaint sufficiently raises fraudulent concealment that may toll the statute of limitations to survive this motion to dismiss stage.”), trans. denied. Accordingly, the trial court erred in dismissing the Riders’ amended complaint on the ground that it was barred by the statute of limitations. We therefore reverse and remand for the trial court to continue the litigation.

[22] Reversed and remanded.

FOOTNOTES

1.   The Riders also argue that First Federal “conceal[ed] [the] torts it committed ․ against the Riders by filing a Motion to Quash the Riders’ served subpoena and nonparty discovery requests” in the bankruptcy case. Appellants’ Br. p. 36. Because we find that the Riders’ other allegations were sufficient to survive the motion to dismiss, we offer no opinion on whether filing a motion to quash amounts to fraudulent concealment.

Vaidik, Judge.

Bailey, J., and Scheele, J., concur.