Friday, July 6, 2012

It’s Too Late, Baby

Beebe v. Eisemann., 2012 VT 40 (mem.).

Attorneys are notorious for missing deadlines.  Discovery responses that are due at the end of the month get extended through the summer.  That appellate brief due on the Ides of March is eventually filed by Cinco de Mayo.  A motion for summary judgment promised for the client is knocked back in lieu of more discovery.

But there is one deadline that is inflexible, unbending, and causes litigators to wake up in the middle of the night in a cold, cold sweat. 

We are talking, of course, about the statute of limitations.  This statute (appropriately abbreviated as SOL) is a statute—actually series of statutes—that governs when a claim must be filed.  It is a policy decision that every state has adopted.  You shall have a generous amount of time to file your claim, but if you do not within a certain number of years, then you lose the right completely and absolutely—no matter how meritorious your claims might be. 

The reasons for this are sensible. 

There should be finality.  No one should walk around in fear of a lawsuit because of something that happened ten years ago.  

Witnesses and evidence degrade overtime.  As years pass, trying to prove that something did or did not happen gets more difficult.  In such situations where witnesses are trying to recall details from years ago and parties search for long-lost evidence, the case becomes more and more speculative.  Juries are forced to fill in gaps where they should not, and guesswork starts to creep in where objective evidence should dominate.

Finally, there is a time and place for everything, civil actions included.  If claims had infinite lives, then the court system would likely be bogged down in ancient cases while newer claims sat and stewed.  Justice delayed is justice denied.

What does this mean for the average palooka on the street?  It means the clock is running. 

Buy a lemon from a used car dealer—you have six years to file a claim. 

Trying to reclaim a section of your property that your neighbor is occupying—file within fifteen years or you will face the SOL. 

The time for personal injuries is even shorter.  Break a leg on a ski slope—you better file a claim within the year or it is dead. 

Lose a finger in a car accident—three years starting from the moment of dissociation to file a claim.

As you might imagine, the SOL plays a big role in litigation strategy.  If a client comes to you two years and eleven months after a doctor botched her surgery, then you better file first and ask questions later because if you wait to get the other side to review the file, make a deliberation, and offer settlement . . . well, Jack, You’re Dead—or at least your claim is. 

Today’s case illustrates the perils of the SOL in the context of pre-litigation strategy. 

Plaintiff claims that Defendant failed to properly warn him about the known side effects of an anti-cancer medication.  One of these side effects was triggered when Plaintiff had dental surgery and subsequently developed a severe and painful bone disease. 

Plaintiff contends that he and his dentist would have taken precautions if they had known that Plaintiff’s medication significantly raised the likelihood of osteonecrosis of the jaw.

Let us, like the SCOV, ignore the merits of this claim, and instead, focus on the filing of this case.  For simplicity, these should be laid out in a series of numbered steps.

1)      Everyone agrees that the three-year SOL on Plaintiff’s claim would have ran out on October 9, 2009.

2)      On September 16, 2009, Plaintiff’s counsel sent an agreement to Defendant to toll or freeze the SOL for 90 days while the parties pursued settlement.  While some of the Defendants signed the agreement, others did not.

3)      For lack of agreement, Plaintiff filed a complaint on October 7, 2009.

4)      On October 15, 2009, Plaintiff sent waivers of service to the various defense counsels to sign.  (Note: filing a complaint only tolls the SOL for 60 days.  Plaintiffs still have to serve the Defendants and file a return of service with the court to avoid the SOL.)

5)      On October 20, 2009, Defendant’s counsel signed the receipt of service but held it.

6)      On December 14, 2009, Plaintiff’s counsel, realizing that Defendant had not returned service e-mailed Defendant’s counsel and told him to hold onto the return of service as they were in negotiations.

7)      On January 13, 2010, Defendant’s counsel returned the receipt of service to Plaintiff’s counsel, who did not file it with the court.

8)      On April 15, 2011, the trial court, on its own motion, dismissed the case for lack of service and prosecution.

9)      On April 18, 2011, Plaintiff’s counsel filed the return of service and a motion to reopen.

10)  The trial court granted the motion to reopen.

11)  Defendant filed a motion to dismiss because the return of service was filed too late for the SOL.

For the trial court and the SCOV, this is a fairly easy case to resolve.  If you file a claim just under the SOL, then you have 60 days to effectuate service and file the returns.  If you do not, then the SOL terminates the claim.  There is no dispute that Plaintiff filed his return of services well past the 60 days and outside the SOL’s time period.

This leaves Plaintiff scrambling with two arguments that neither the trial court nor the SCOV find persuasive. 

The first is that there was an agreement to negotiate in place that tolled the SOL.  This argument will not hunt because Plaintiff cannot cite to a specific agreement beyond the September 2009 (step 2) where the parties agreed or appeared to agree to toll the SOL.  The SCOV has long held that merely agreeing to or participating in negotiations does not toll the SOL, and any action by Defendant on this front does not imply or constitute a waiver of the SOL.

The second is an argument in equity.  Essentially, Plaintiff says that it is unfair to enforce the SOL because Defendant made me think he was waiving it.  This is known as equitable estoppel.  For equitable estoppel to apply, Plaintiff has to show four things and the absence of a fifth. 

Plaintiff must show (a) that Defendant knew of the SOL issues; (b) that Defendant intended that Plaintiff rely on Defendant’s representations of waiver; (c) that Plaintiff was ignorant of the facts; and (d) that Plaintiff relied upon the actions or soothing words of Defendant to Plaintiff’s detriment.  Finally, Plaintiff must show that he did not contribute to the problem through his own mistakes or omissions. 

The SCOV agrees with the trial court that Defendants did nothing to induce reliance by Plaintiff.  Defendant held onto the return of service, but he was instructed to do so by Plaintiff’s counsel (step 6).  Defendant eventually sent the return to Plaintiff, but even then, Plaintiff waited another year and three months to file it. 

It appears that Plaintiff blithely assumed that the SOL waiver was in effect when it was not.  Defendant did not necessarily contradict Plaintiff’s illusions, but the facts are that Defendant was never called upon to do so. 

In other words, Plaintiff cannot use Defendant’s silence before Plaintiff’s errors as a basis for estoppel.  Defendant must affirmatively do something or hold back at a point when Defendant is obliged to respond.  Without more, Plaintiff fails to establish the second element of estoppel, and the argument fails.

The SCOV goes on to note that the real problem here traces back to Plaintiff, and even if there was some reliance, Plaintiff cannot show an absence of mistakes or omissions on his own part.  Plaintiff simply omitted or mistakenly withheld the return of service.  Therefore, the estoppel does not apply. 

This is consistent with the idea of equity, which is essentially a last chance cry of mercy.  Equity applies only where there is no law and the result, if allowed, would be entirely unfair.  Courts use equity and equitable principles sparingly and only in instances where the innocent party has been put in an unfair situation.  Any fault attributable to the party seeking equity is usual fatal—no matter how relatively minor or innocent it might be.

Unfortunately for Plaintiff, his situation is much of his own making, and as a result equity is unavailable.  The case is dismissed. 

Presumably, Plaintiff has another malpractice cause of action against his attorney, but it will do little to address the immediate pain and suffering. 

If Plaintiff does file such an action, he is best advised to start soon.  The clock is ticking

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