Down But Not Out: The Potential for Tolling of a Statute of Limitations
Workers’ compensation claims necessarily involve a personal injury to an individual. As we see time and again, the person who suffered injury is not always limited to workers’ compensation remedies and may have grounds for a personal injury action against a third party. Personal injury actions have a two year statute of limitations which requires a claim for personal injuries be filed within two years of the date of injury. So what happens if a plaintiff files their claim after the statute has run? Their case gets dismissed unless the court applies the judicially created doctrine of equitable tolling or equitable estoppel. In a recent case, Hopkins v. Kedzierski (2014) 225 Cal.App.4th 736 (“Hopkins”), the court tackled a case involving a claim for equitable tolling of the statute of limitations for a personal injury action.
In Hopkins, Linda Hopkins was injured in May 2008 when she fell from a balcony at the office of her employer, Perfect Smile. The owners of Perfect Smile were Jurek Kedzierski (“Jurek”) and Margo Kedzierski (“Margo”). Jurek and Margo also owned the office building where Perfect Smile was located. Hopkins had a claim for workers’ compensation benefits against her employer, Perfect Smile, as well as a potential claim against the building owners for premises liability and/or negligence.
Linda Hopkins began receiving workers’ compensation benefits shortly after the incident, but filed an Application for Adjudication in April 2009 due to some disputes that had arisen in her claim. In September 2010, approximately four months after the running of the two year statute of limitations on the premises liability and negligence claims, Linda Hopkins filed a personal injury action against Jurek as the trustee of the Jerzy Jurek Kedzierski and Margo Kedzierski Revocable Living Trust as well as Margo individually. In her complaint, Linda Hopkins argued that the two year statute of limitations was equitably tolled while she pursued her workers’ compensation claim against her employer, Perfect Smile.
Equitable tolling is a judicially created doctrine created to prevent an unjust forfeiture of the right to a trial on the merits when the defendants have received a timely notice of the plaintiff’s claims. Equitable tolling operates to extend a statute of limitations, as necessary, to ensure fundamental practicality and fairness. Often, when it is applied, it will be because the plaintiff has several legal remedies for their injuries and reasonably, and in good faith, pursues just one.
Three elements must exist in order for the court to consider equitable tolling of a statute of limitations. Those elements include timely notice to the defendant, a lack of prejudice to the defendant and reasonable and good faith conduct on the part of the plaintiff.
First, there must be timely notice to the defendant, within the statutory period, of the need to begin investigating the facts which form the basis for the second claim. The general purpose of a statute of limitations is to “prevent surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared” (Elkins v. Derby (1974) 12 Cal.3rd 410). Notice of the workers’ compensation claim, within the statutory period of the personal injury case, is likely to satisfy this element.
Second, the tolling cannot prejudice the defendant in the second claim. This has generally been interpreted to mean that the two claims need to be identical or at least so similar that the defendant’s investigation of the first claim will put him/her/it in a position to fairly defend the second. In Hopkins, the facts that gave rise to the plaintiff’s injury were the exact same facts as those that would give rise to a personal injury case.
The third and final element is that there is reasonable and good faith conduct on the part of the plaintiff. This element has been less defined by courts but one decision stressed that the plaintiff filed the second claim a short time after the tolling ended.
In Linda Hopkins’ case, the trial court refused to apply the doctrine of editable tolling stating that the filing of her workers’ compensation claim did not toll the statute. The trial court appeared to create a fourth element by suggesting Linda Hopkins’ workers’ compensation claim would have needed to be rejected or it would have needed to be determined that she was ineligible for benefits, “thereby necessitating the pursuit of another remedy against the same defendant.” The court further stated that the defendants in the personal injury case were different than those in the workers’ compensation claim which further precluded an argument of tolling.
On appeal, the court found that the conclusion that Hopkins was required to be unsuccessful in her workers’ compensation claim was not legally or logically supported. Instead, the potential for tolling arose when she filed her workers’ compensation claim, thus pursuing one of two potential remedies. Additionally, the outcome of her workers’ compensation claim was irrelevant with regard to the applicability of the tolling doctrine.
Additionally, the appeals court rejected the trial court’s reasoning that equitable tolling could not apply because the defendant in the workers’ compensation claim was different than the defendants in the personal injury action. As I am sure you already noticed, Hopkins’ employer also owned the building, in a Revocable Trust, and therefore they were proper parties to the second case. It seems impossible that the defendants in the second case were not put on notice of the action, so as to satisfy the first element when they were defendants to the first action, just under the name of Perfect Smile. The appeals court agrees. The court ultimately remanded the case to the trial court for a factual finding on whether Linda Hopkins has met the three elements of equitable tolling.
So what is the point? California courts do not like individuals to lose their right to pursue damages and they also do not want courts to be backed up with cases filed simply to preserve a statute of limitations while other legal avenues are pursued. The Doctrine of Equitable Tolling gives plaintiffs an opportunity to pursue one remedy, without losing their right to another, as long as the three elements are met. However, a statute of limitations is unforgiving, and should a court determine that the elements for equitable tolling are not met, the right to prosecute a claim after the running of the statute will be lost and, therefore, it is always best practice to file a claim within the applicable statute of limitations.