Equitable Tolling Can Extend The Statute Of Limitations, But Be Careful
Last month, I discussed how the discovery rule can give a plaintiff extra time to file a claim within the applicable statute of limitations. In this blog post, I discuss a related topic known as “equitable tolling”.
Statutes of limitations bar plaintiffs from bringing claims after too much time has elapsed since the cause of action arose. Statutes of limitation reflect the importance of finality and settled expectations in our civil justice system. Those statutes protect defendants and courts from the burdens of litigating stale claims by requiring prospective plaintiffs to assert their claims before relevant evidence is lost. However, under Washington law, there exists a limited equitable exception where all of the following conditions are met: (1) the plaintiff has exercised diligence; (2) the defendant’s bad faith, false assurances, or deception has interfered with the plaintiff’s diligent efforts; (3) tolling is consistent with (a) the purpose of the underlying statute and (b) the purpose of the statute of limitations; and (4) justice requires tolling the statute of limitations. When the plaintiff establishes these elements, the claim is deemed timely notwithstanding the fact that the statute of limitations would otherwise have cause the claim to expire.
In a recent Washington State Supreme Court case, Fowler v. Guerin, the Supreme Court considered the requirements in the context of a class action lawsuit brought by over 25,000 Washington teachers. The teachers sued the state over the calculation of interest in their retirement plans, in multiple lawsuits filed over a ten year period. The latest lawsuit, filed in federal court, called into question how Washington law on equitable tolling compares with federal law. The teachers claimed that under relevant precedent, they did not have to establish the defendant’s bad faith, false assurances, or deception in order to invoke equitable tolling. The Supreme Court clarified Washington law, stating that such conduct on the part of the defendant was a requirement, alongside the requirements, even though federal cases do not always require such conduct. Said the Supreme Court: “Equitable tolling and other equitable doctrines grew naturally out of the humane desire to relieve parties under special circumstances from the harshness of strict legal rules. It is an extraordinary form of relief because the rules at issue generally reflect the public policy of the state as enacted by the legislature. . . . [T]his court has cautioned against broadly applying equitable tolling in a manner that would substitute for a positive rule established by the legislature a variable rule of decision based upon individual ideas of justice. Such a departure from the general rules governing our legal system must be rare in order for those general rules to have their intended effect. Therefore, we have consistently held that equitable tolling is a remedy to be used sparingly. . . . By allowing equitable tolling upon a showing that the defendant engaged in bad faith, false assurances, or deception, [our] stander properly recognizes that a defendant should lose the benefits of finality provided by statutes of limitation only when that defendant has engaged in conduct that justifies making an exception.”
The lesson from Fowler is that plaintiffs cannot expect equitable tolling to apply if they have not exercised diligence and where the defendant has done nothing to prevent the claim from being timely filed. However, in a proper case, equitable tolling can afford some relief from the harshness of a statute of limitations.
Whether you are a plaintiff or defendant, understanding statutes of limitation and the possible equitable tolling can be critical to your case. The lawyers at Beresford Booth have extensive experience with civil litigation and would be happy to assist you in evaluating your claims or defenses.