Statute of Limitations – Cases on Equitable Tolling

Author: LegalEase Solutions

Research Findings

Cases – Equitable Tolling

Little v. State, 225 Ariz. 466, 240 P.3d 861 (Ariz. App., 2010)

The notice of claim statute is ‘subject to … estoppel and equitable tolling.’ ” Jones v. Cochise County, 218 Ariz. 372, ¶ 22, 187 P.3d 97, 104 (App.2008), quoting Pritchard v. State, 163 Ariz. 427, 432, 788 P.2d 1178, 1183 (1990). Because both are equitable doctrines, the trial court acts as the fact-finder and determines if they should apply. Little v. State, 225 Ariz. 466, 240 P.3d 861, 866 (Ariz. App., 2010).

Porter v. Spader, 225 Ariz. 424, 239 P.3d 743 (Ariz. App., 2010)

In instances involving equitable tolling, courts have recognized that, as a matter of equity, a defendant whose affirmative acts of fraud or concealment have misled a person from either recognizing a legal wrong or seeking timely legal redress may not be entitled to assert the protection of a statute of limitations.( Internal Citations Omitted) (stating that a defendant insurer will be estopped from asserting the defense of the statute of limitations if by its conduct the insurer induces its insured (the plaintiff) to forego litigation by leading the insured to believe a settlement will be effected without the necessity of commencing litigation). Porter v. Spader, 225 Ariz. 424, 239 P.3d 743, 747 (Ariz. App., 2010).

We have allowed equitable tolling in situations where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary’s misconduct into allowing the filing deadline to pass. We have generally been much less forgiving in receiving late filings where the claimant failed to exercise due diligence in preserving his legal rights. Baldwin County Welcome Center v. Brown, 466 U.S. 147, 151, 104 S.Ct. 1723, 1725, 80 L.Ed.2d 196 (1984)…. Porter v. Spader, 225 Ariz. 424, 239 P.3d 743, 748 (Ariz. App., 2010).

This court has previously recognized that other extraordinary circumstances, such as attorney illness in limited situations, could warrant equitable tolling of the statute of limitations. See McCloud v. State, 217 Ariz. 82, 87-89, ¶¶ 11-19, 170 P.3d 691, 696-98 (App.2007) (acknowledging that “[m]any courts have taken the position that equitable tolling is not appropriate in such situations,” but nonetheless concluding that equitable tolling based on an attorney’s illness could be applied “sparingly” to “certain rare cases,” such as when an attorney has “suffered a significant incapacitating disability”). Porter v. Spader, 225 Ariz. 424, 239 P.3d 743, 747, n.4 (Ariz. App., 2010).

Kosman v. State, 199 Ariz. 184, 16 P.3d 211 (Ariz. App., 2000)

Kosman may be entitled to tolling of the 180-day period under the common law doctrine of equitable tolling. See Jepson v. New, 164 Ariz. 265, 271, 792 P.2d 728, 734 (1990) (referring to criteria to be considered when determining if equitable tolling should apply). In Stulce v. Salt River Project Agric. Improvement & Power Dist., this court held equitable tolling not available because “[n]o request for equitable tolling or allegation of excusable neglect was made in plaintiffs’ trial court pleadings” and the plaintiffs were not “`lulled’ or `misled’ into an untimely filing by the actions of the defendant.” 197 Ariz. 87, 95, 3 P.3d 1007, 1015 (App.1999).

Here, although Kosman never mentioned “excusable neglect” or “equitable tolling” in any of his pleadings, he did allege sufficient facts to create a material issue of fact whether his notice of claim was untimely filed because he was “excusably ignorant of the limitations period and the defendant would not be prejudiced by the late filing.” Id. (quoting Kyles v. Contractors/Engineers Supply, Inc., 190 Ariz. 403, 405, 949 P.2d 63).

State Ex Rel. Thomas C. Horne v. Campos, 226 Ariz. 424, 250 P.3d 201, 206, 603 Ariz. Adv. Rep. 8 (Ariz. App., 2011)

Both Jones and Fields cited Pritchard v. State, which, while based on A.R.S. § 12–821, an earlier version of the current A.R.S. § 12–821.01, held compliance with the statute was a procedural, not jurisdictional, prerequisite to bringing suit and thus subject to waiver, estoppel, and equitable tolling. (Internal citations omitted)  (logic of Pritchard applies “equally to the current version of the statute”; jury question as to whether claimant complied with statute).

Schwartz v. City of Scottsdale at p.7, n.1(Ariz. App., 2012)

(“[W]aiver may be found when a governmental entity has taken substantial action to litigate the merits of the claim that would not have been necessary had the entity promptly raised the defense.”).

Jepson v. New, 772 P.2d 16, 23, 160 Ariz. 193, 200 (Ariz. App., 1989).

The Supreme court in Hosogai v. Kadota, 145 Ariz. 227, 700 P.2d 1327 (1985),

announced three criteria for equitable tolling, all of which it found satisfied in that case:

(1) timely notice to the defendant in filing the first claim;

(2) lack of prejudice to the defendant in gathering evidence to defend against the second claim;

(3) reasonable and good faith conduct by the plaintiff in prosecuting the first action and diligence in filing the second action. Jepson v. New, 772 P.2d 16, 23, 160 Ariz. 193, 200 (Ariz. App., 1989).

Shakur v. Schriro (Ariz. App., 2011)

A person having a claim against a public entity or a public employee must file a notice of claim “with the person or persons authorized to accept service for the public entity or public employee as set forth in the Arizona rules of civil procedure within one hundred eighty days after the cause of action accrues.” A.R.S. § 12-821.01(A). A person asserting a claim for damages against a public employee for conduct committed in the course and scope of employment must serve a notice of claim on both the employee individually and the employer. (Citation Omitted). If the notice of claim is not properly filed within 180 days, the claim is barred. (Citation Omitted). Neither actual notice nor substantial compliance is sufficient under the statute, id., although the 180-day time period may be subject to equitable tolling. See Pritchard v. State, 163 Ariz. 427, 430, 788 P.2d 1178, 1181(1990) (holding that filing a timely notice of claim is not a jurisdictional prerequisite to bringing suit); Kosman v. State, 199 Ariz. 184, 186-87, ¶¶ 10-11, 16 P.3d 211, 213-14 (App. 2000) (finding the 180-day period could be subject to equitable tolling or excusable neglect). Shakur v. Schriro at p. 6-7(Ariz. App., 2011).

Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 217 Ariz. 82 (Ariz. App., 2007).

Whether to apply equitable tolling is a question the trial court, not the jury, should determine.  (“[E]quitable tolling and estoppel, which ask whether equity requires extending a limitations period, are for the judge to apply, using her discretion, regardless of the presence of a factual dispute.”). Indeed, although we find no Arizona authority squarely addressing this issue, there is some precedent from which we can draw to sanction this procedure. See Kosman v. State, 199 Ariz. 184, ¶ 12, 16 P.3d 211, 214 (App.2000). Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 695, 217 Ariz. 82 (Ariz. App., 2007).

[B]oth equitable estoppel and equitable tolling by definition sound in equity, the trial court is the fact-finder.  “[I]n equity matters, the court may disregard the jury’s verdict or answers to interrogatories. In such event, the court becomes the trier of all issues of fact and law.”). Moreover, the facts related to the reasons for equitable tolling are frequently unrelated to the central facts relevant to the merits of the plaintiff’s claim. See Pauling v. Sec’y of Dep’t of Interior, 71 F.Supp.2d 231, 233 (S.D.N.Y.1999) (trial court should determine whether to apply doctrine of equitable tolling because there is no overlap of factual issues).Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 695, 217 Ariz. 82 (Ariz. App., 2007).

No Arizona case discusses the standard of review an appellate court should employ in addressing a trial court’s refusal to apply the doctrine of equitable tolling. There is much disagreement among courts in other jurisdictions on this question. See, e.g., Belot v. Burge, 490 F.3d 201, 205-06 (2d Cir.2007) (discussing conflicting standards used by federal courts); Dunlap v. United States, 250 F.3d 1001, 1007 n. 2 (6th Cir.2001) (same). We find the reasoning of the Second Circuit in Belot instructive. Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 695, 217 Ariz. 82 (Ariz. App., 2007).

[T]he appropriate standard of review depends on the aspect of the decision which is under review. A rule of law that gives the court discretion to grant an equitable exception in extraordinary circumstances seems almost inherently to invite the court’s discretion in applying these standards. The balancing of factors involved in determining what result is equitable and the appraisal of whether the circumstances are sufficiently extraordinary seem to contemplate that in the same set of facts, different results could be acceptable. In such circumstances, courts often say that appellate review is for “abuse of discretion.” But that label in a way obscures more than it reveals. The operative review standard in the end will depend on what aspect of the lower court’s decision is challenged. If a district court denies equitable tolling on the belief that the decision was compelled by law, that the governing legal standards would not permit equitable tolling in the circumstances — that aspect of the decision should be reviewed de novo. If the decision to deny tolling was premised on an incorrect or inaccurate view of what the law requires, the decision should not stand. Courts generally in such circumstances state that application of an incorrect standard of law is an “abuse of discretion.” Considering a second aspect, if the decision to deny tolling was premised on a factual finding, the factual finding should be reviewed for clear error. Finally, if the court has understood the governing law correctly, and has based its decision on findings of fact which were supported by the evidence, but the challenge is addressed to whether the court’s decision is one of those within the range of possible permissible decisions, then appellate review will be, not only in name, but also in operation, for abuse of discretion. The reviewing court will recognize that in theory the lower court has numerous options open to it and its decision must be sustained unless the particular facts and circumstances are such as to make the particular decision an abuse of discretion. These three distinct potential aspects of a decision and the concomitant types of review are collected under the label “abuse of discretion.” Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 695-96, 217 Ariz. 82 (Ariz. App., 2007).

Arizona courts have recognized and applied the equitable tolling doctrine. See Hosogai v. Kadota, 145 Ariz. 227, 229, 700 P.2d 1327, 1329 (1985) (applying doctrine when second wrongful death claim untimely filed after successful verdict on first claim overturned on appeal due to defective service of process); Kosman, 199 Ariz. 184, ¶¶ 6, 10, 16 P.3d at 213 (applying doctrine where plaintiff prisoner failed to timely file notice of claim against state because he first pursued claim through prison’s administrative grievance procedure); Kyles v. Contractors/Eng’rs Supply, Inc., 190 Ariz. 403, 404, 406, 949 P.2d 63, 64, 66 (App.1997) (applying doctrine when right-to-sue letter from Arizona Attorney General’s office contained incorrect date by which plaintiff was required to sue on his claim). Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 696, 217 Ariz. 82 (Ariz. App., 2007).

Federal cases provide additional examples of situations in which a party might qualify for equitable tolling. See Seitzinger, 165 F.3d at 240 (“[E]quitable tolling may be appropriate when a claimant received inadequate notice of her right to file suit, where a motion for appointment of counsel is pending, or where the court has misled the plaintiff into believing that she had done everything required of her.”). Courts have applied equitable tolling when “extraordinary circumstances beyond plaintiffs’ control made it impossible to file the claims on time.” Alvarez-Machain v. United States, 107 F.3d 696, 701 (9th Cir.1996); see also Harris v. Hutchinson, 209 F.3d 325, 330 (4th Cir.2000) (same). For example, courts have found extraordinary circumstances when there is a lack of clarity in the law, Capital Tracing, Inc. v. United States, 63 F.3d 859, 862-63 (9th Cir. 1995), or when an attorney affirmatively lied to a diligent client, Seitzinger, 165 F.3d at 241-42. “To establish extraordinary circumstances, a petitioner must support his allegations with evidence; he cannot rely solely on personal conclusions or assessments.” Collins v. Artus, 496 F.Supp.2d 305, 313 (S.D.N.Y.2007).  Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 696, 217 Ariz. 82 (Ariz. App., 2007).

We are not aware of any Arizona cases that have considered whether the doctrine of equitable tolling excuses, based on an attorney’s illness, the untimely filing of a complaint. Many courts have taken the position that equitable tolling is not appropriate in such situations. See, e.g., Modrowski v. Mote, 322 F.3d 965, 968 (7th Cir.2003) (“attorney incapacity is equivalent to attorney negligence for equitable tolling purposes” and is not grounds for equitable tolling in a habeas corpus proceeding); Yarborough v. Burger King Corp., 406 F.Supp.2d 605, 609 (M.D.N.C.2005) (attorney’s illness and hospitalization “made it more difficult for Plaintiffs to file on time, but not impossible,” and there was “no evidence in the record to show that Plaintiffs made any independent effort to safeguard their right to file”) (internal quotations omitted); Gruber v. Unum Life Ins. Co. of Am., 195 F.Supp.2d 711, 716 (D.Md.2002) (attorney’s illness and hospitalization “`is at best a garden variety claim of excusable neglect’ and cannot justify excusing such a delay,” particularly when attorney worked with other lawyers). And, some courts have found that a death in the family of the attorney also is not grounds for equitable tolling…………the threshold necessary to trigger equitable tolling is very high, lest the exceptions swallow the rule. Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 697, 217 Ariz. 82 (Ariz. App., 2007).

Courts in other jurisdictions, however, have found that an attorney’s illness could support equitable tolling. See Cantrell v. Knoxville Cmty. Dev. Corp., 60 F.3d 1177, 1179-80 (6th Cir.1995) (if plaintiff “pursued his claim diligently, yet was abandoned by his attorney due to his attorney’s mental illness, equitable tolling may be appropriate”); Doherty v. Teamsters Pension Trust Fund of Phila. & Vicinity, 16 F.3d 1386, 1394 (3d Cir.1994) (“[S]ome mistakes in extraordinary circumstances merit forbearance, and this — a filing in the wrong forum by a lawyer and law firm under the extreme duress caused by the illness and death of the lawyer during the proceedings — may be such a mistake.”); Fogg v. Carroll, 465 F.Supp.2d 336, 344, 346 (D.Del.2006) (applying doctrine where attorney filing late habeas corpus petition had “suffered at least one stroke during the course of her representation,” “was undergoing medical treatment” during the relevant time period for filing, and passed away a few months after filing petition); Lewis v. Superior Court, 175 Cal.App.3d 366, 220 Cal. Rptr. 594, 595, 600 (1985) (applying doctrine where attorney struck by an automobile one week before he planned to file complaint, suffering severe injuries disabling him mentally and physically). Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 697, 217 Ariz. 82 (Ariz. App., 2007).

Although a typical attorney illness situation might qualify as “a garden variety claim of excusable neglect,” Irwin, 498 U.S. at 96, 111 S.Ct. at 458, we agree with both the parties and those courts that have found, in certain rare cases, attorney illness to be the extraordinary circumstances in which the doctrine of equitable tolling should apply. It is clear, however, that this is a doctrine that should be used only sparingly. Mccloud v. State, Dept. of Public Safety, 170 P.3d 691, 697, 217 Ariz. 82 (Ariz. App., 2007).