Affirmative Defenses: Statutes of Limitations

Statutes of Limitations

Statutes of limitations are familiar defenses to many. This article will provide a basic explanation of statutes of limitations and the Discovery Rule exception. It will not cover statutes of limitations regarding claims against a personal representative of an estate, minors, or other exceptions. To appreciate the basics, it is important to start with the essential framework of a civil lawsuit in a Massachusetts trial court.

Civil Action Basics

Civil actions are lawsuits between two or more individuals, or entities (e.g., corporations).  Usually, one or more parties seek monetary compensation (i.e., damages) from the other for wrongs they allege to have suffered. Where money is inadequate as a remedy, a party may seek equitable relief. A common example of equitable relief is specific performance, where a court issues an order requiring a party to perform a specific action, like the performance of a contract.

A civil lawsuit starts when a plaintiff files a complaint with a court. The plaintiff then has 90 days to serve the defendant with a copy of the complaint and summons (a court document containing information about the lawsuit pending against the defendant) and file proof of the same, typically called a return of service, with the court. The defendant must serve the plaintiff with an answer within 20 days of receiving the complaint and summons.  

The answer must respond to every paragraph of the complaint, assert all affirmative defenses available to the defendant, and include any counterclaims that the defendant has against the plaintiff regarding the same facts and occurrences stated in the complaint.  

Affirmative defenses are significant in that they eliminate or mitigate legal liability even if the allegations of unlawful conduct are true. Affirmative defenses must be raised at the outset or else they will be lost. The party asserting an affirmative defense bears the burden of proving its truth. Statutes of limitations are a type of affirmative defense.

Statutes of Limitations: Basics

Statutes of limitations are created by law to relieve people and entities from living or existing with legal liability for something that happened too many years ago. They impose on plaintiffs the burden of commencing their actions within a certain time. Generally, a statute of limitations begins to run when the cause of action “accrues.” A prospective plaintiff must commence his or her action before the applicable statute of limitations period is extinguished, as outlined in the applicable statute.

Statutes of Limitations: Accrual of the Action

A “cause of action” can generally be thought of as facts or conduct that gives a person or entity the right to judicial relief for harm suffered. When exactly does a “cause of action accrue”? In most cases, the cause of action accrues when the event that caused the plaintiff’s injury or damage occurred (e.g., when the contract was breached or injury occurred). 

Statutes of Limitations: Breach of Contract

If the prospective plaintiff’s action is based in contract, generally the action must be commenced within six years of the cause of action accruing. A common example is a breach of contract action, where a prospective plaintiff was damaged by another party’s failure to fulfill its contractual obligation(s). In such a circumstance, a prospective plaintiff has six years from the breach of contract to timely bring his or her action. Failure to do so could result in the action being dismissed if the defendant raises the statute of limitations as an affirmative defense and a court concludes, as a matter of law, that it operates as a bar to the plaintiff’s requested relief.

Actions concerning but not limited to contracts under seal; bills, notes, or other evidences of indebtedness issued by a bank; and certain types of promissory notes must be brought within twenty years of the cause of action accruing.

Statutes of Limitations: Tort (e.g., Negligence, Malpractice)

“Tort” is a general term — commonly thought of as a civil wrong (as distinguished from a crime) other than a breach of contract — for which the law or equity provides a remedy. Civil actions for assault, battery, trespass, nuisance, defamation, negligence, and malpractice are some of the types of lawsuits subsumed under the broad label of tort.

If the prospective plaintiff’s action is based in tort, generally the action must commence within three years of the cause of action accruing. This is true for actions of tort for damages arising out of any deficiency or neglect in the design, planning, construction, or general administration of an improvement to real property.

Actions of contract or tort for malpractice, error, or mistake against attorneys, certified public accountants, physicians, surgeons, dentists, optometrists, hospitals, and sanatoria must be commenced within three years of the cause of action accruing.

To put it simply, a prospective plaintiff has three years from the date on which the accident or otherwise tortious conduct occurred to commence his or her action. Failure to act in a timely manner could result in the action being dismissed if the defendant raises the statute of limitations as an affirmative defense and a court concludes, as a matter of law, that it operates as a bar to the plaintiff’s requested relief.

Statutes of Limitations: Discovery Rule

What happens if the plaintiff’s damage or injury is inherently unknowable? When does the applicable statute of limitations clock begin?

By way of example, say Pat, a homeowner, hires a contractor to renovate part of Pat’s home. Some of the contractor’s structural work is covered behind drywall and paint. The contractor represents that the wall is structurally sound, despite knowing it was not built to code. Pat has no reason to believe that any of the contractor’s work was negligently performed. The contractor timely completes its work, for which Pat pays the contractor in full.

Then, some five years later, Pat mounts a television on a wall that the contractor built. Shortly after hanging it, the television and wall mount cause part of the wall to collapse. Pat hires a qualified professional to examine the wall and learns the contractor negligently constructed the wall five years ago. Repairs are estimated to be expensive. Has the applicable three-year statute of limitations run, despite the contractor’s negligent construction being hidden inherently unknowable?

In Massachusetts, the Discovery Rule has been adopted for certain circumstances when the plaintiff’s damage or injury is inherently unknowable. The Discovery Rule may arise [1] where a misrepresentation concerns a fact that was inherently unknowable to the injured party, [2] where a wrongdoer breached some duty of disclosure, or [3] where a wrongdoer concealed the existence of a cause of action through some affirmative act done with intent to deceive.

In Pat’s hypothetical situation, the cause of action would likely be deferred by the Discovery Rule. This is because the contractor misrepresented to Pat that the wall was sound, and the defective work concealed in the wall was inherently unknowable to Pat.  Pat’s cause of action does not accrue until Pat learns or should have learned that he has been damaged or injured by the contractor’s conduct.

In other words, the applicable statute of limitations clock for Pat does not start when the contractor misrepresents that the wall was built properly. It starts upon the walls collapse, when Pat has reason to believe the wall was not built properly. The statute of limitations clock may have started earlier if there are facts to suggest that Pat should have reasonably discovered the defective work before the wall’s collapse (e.g., if the wall was noticeably bowing outwards in an abnormal way six months prior to its collapse).  

Statutes of Limitations: Commencement of the Action

An action is commenced for purpose of a statute of limitations either by 1) mailing the complaint and appropriate entry fee to the clerk of the proper court by registered or certified mail, or 2) filing the complaint and entry fee with the clerk in person.

Conclusion

A prospective plaintiff must commence his or her civil action within the time prescribed by the applicable statute of limitations. Failure to do so could result in a defendant successfully raising the statute of limitations affirmative defense.

Whether a statute of limitations can be raised effectively requires an analysis of, but not limited to 1) the type of action — contract or tort, 2) when the cause of action accrued and whether the Discovery Rule applies, 3) whether the action was timely commenced, and 4) whether it can be timely raised as an affirmative defense.

If the party with a legal claim is a minor or incapacitated the applicable statutes of limitations may be tolled, which requires separate analysis not covered here.  Claims against a personal representative of an estate are subject to different analysis and a short statute of limitations.

No matter whether bringing a civil action or defending against one is being contemplated, the best course of action is to consult with an attorney.