We are all familiar with the notion of statutes of limitations, with the legal terms having found its way into the average law person’s lexicon. However, what appears to be a relatively simple legal theory can actually give rise to a multitude of considerations. This article is intended as a survey of the commonly encountered ones, as well as a guide to evaluating a potential violations of an applicable statute of limitations.
The purposes of statutes of limitations are to promote justice, discourage unnecessary delay, and preclude the prosecution of stale claims.[i] In Colorado, most civil actions and their respective statutes of limitation can be found in the Colorado Revised Statutes § 13-80-101 et seq. However, other statutes of limitation may be found expressly stated within the statutory provisions by which it is governed (e.g. Colorado’s Dram Shop Act).[ii] Where there is a substantial question as to which of two or more statutes of limitations should apply, the doubt should be resolved in favor of the statute containing the longer limitations period (e.g. the three-year breach of contract statute of limitations or the six-year statute of limitation to recover a liquidated debt or an unliquidated, determinable amount of money).[iii] [iv]
When Does the Applicable Statute of Limitations Accrue?
The interpretation of when a claim accrues under a statute of limitations is an issue of law,[v] while the actual date of accrual of a claim is usually a question of fact. However, the issue may be decided as a matter of law if the undisputed facts clearly establish the date in question.[vi]
Based upon this overriding general principle, it is important to distinguish between Colorado’s two types of statutes of limitations. The first accrue at a specific time, pursuant to the Colorado Revised Statute § 13-80-108, regardless of when or whether plaintiff knows of the claim.[vii] An easy example is a claim for relief under Colorado’s Wrongful Death Statute, which accrues on the date of death. The second accrue, pursuant to Colorado Revised Statutes § 13-80-108, when plaintiff knew, or in the exercise of due diligence, should have known, the injury and cause. The latter is commonly referred to as the “discovery rule.”
According to the discovery rule, a claim for relief does not accrue until (1) the plaintiff knows, or should know, in the exercise of reasonable diligence, (2) all material facts essential to show the elements of that cause of action would put a reasonable person on notice of the general nature of damage, and (3) that the damage was caused by the wrongful conduct of a defendant.[viii] However, suspicion of a possible connection does not necessarily put a reasonable person on notice of the nature, extent, and cause of an injury. The focus is on plaintiff’s knowledge of facts rather than the discovery of applicable legal theories.[ix] The point of accrual requires knowledge of the facts essential to the cause of action, not knowledge of the legal theory supporting the cause of action.[x] “Actual knowledge” is knowledge of such information as would lead a reasonable person to inquire further.[xi] As a consequence, plaintiffs are required to exercise reasonable diligence in discovering the relevant circumstances of their claims and are judged on an objective standard that does not reward denial or self-induced ignorance.[xii]
Tolling is a principle independent of accrual. The tolling of a statute of limitations will either delay the start of the limitations period or suspend the running of the limitations period if the accrual date has passed.[xiii] An applicable statute of limitations can be tolled for a host of reasons in Colorado. For instance, fraudulent concealment tolls the statute of limitations for a breach of fiduciary duty claim. [xiv] Claims are tolled against a defendant if he/she is either outside of the state and not subject to service of process or has actively concealed himself/herself,[xv] if a defendant is a person under disability,[xvi] or where the parties have entered into a tolling agreement.
Although different principles, equitable tolling is somewhat related to the discovery rule accrual analysis described above, but focuses not on a plaintiff’s knowledge, but the specific actions of a defendant. Indeed, equitable tolling focuses on whether a defendant’s wrongful conduct prevented plaintiff from asserting the claim in a timely manner or “truly extraordinary circumstances” interfered with plaintiff filing the claim despite his/her diligent efforts.[xvii] The extraordinary circumstances basis requires plaintiff to make a good faith effort to pursue any claims.[xviii]
How to Assert a Violation of a Statute of Limitations and the Burden of Proof
Violation of a statute of limitations is a type of affirmative defense that must be plead and proved by the asserting defendant.[xix] As is the case with any affirmative defense, if violation of the statute of limitations is not plead, it may be waived.[xx] However, an exact timeline has not been established. Colorado case law has provided some guidance by finding a defendant can adequately raise the statute of limitation defense in a summary judgment response, but waiting to raise the defense in a motion for a new trial is too late.[xxi] Although generally the statute of limitations should be raised in the answer rather than in a motion to dismiss, the defense of limitations may be raised by a motion to dismiss when the time alleged in the complaint shows that the action was not brought within the statutory period.[xxii]
While the burden of proof is ordinarily on a defendant to prove an affirmative defenses, this is not always the case when a statute of limitations affirmative defense has been raised. The Colorado Supreme Court long-ago held “[a] consideration of public policy is embodied in the statute of limitations and the authorities generally regard this statute as a meritorious defense … and that the burden of proving removal of the bar of the statute rests on plaintiff.”[xxiii]
It has also long been held that once a defendant establishes a prima facie case the action was filed in violation of the applicable statute of limitations, the burden shifts to plaintiff to prove any tolling, equitable or otherwise.[xxiv]
Technically, the filing of a complaint tolls the statute of limitations.[xxv] In terms of satisfying a statute of limitations, an action must be “commenced” either by filing a complaint with the court or by service of a summons and complaint on defendant.[xxvi] The inquiry does not stop there, however. When an action is commenced simply by filing of the complaint, case law dictates subsequent service must be accomplished within a “reasonable” time to satisfy the statute of limitations.[xxvii] A delay between the filing and effectuated service of a complaint beyond the running of the applicable statute of limitations can only be considered reasonable to the extent it is the product of either wrongful conduct by defendant or some formal impediment to service. The inability of a plaintiff to locate a named defendant, no matter how extensive his/her efforts may be, alone is insufficient to constitute reasonable delay.[xxviii]
By way of example, assume plaintiff has filed a complaint in district court against a bar alleging violation of Colorado’s Dram Shop Act. Further assume the date of filing was the day the expressly stated one-year statute of limitations was set to run. Plaintiff, thereafter, fails to serve defendant bar in excess of forty-five days from the date of filing. Upon assignment, what should defense counsel do?
Since it would be readily apparent from the filing date on the complaint and the date of service found in the return of service, in lieu of filing an answer, defense counsel should recommend a motion to dismiss for violation of the one-year statute of limitations.
In response, plaintiff’s counsel may be expected to counter by citing the discovery rule. As discussed above, in determining the time at which an action accrues under the discovery rule, the focus is on a plaintiff’s knowledge of facts that would put a reasonable person on notice of the general nature of damage and that the damage was caused by the wrongful conduct of a defendant.[xxix] Plaintiff’s argument could be he/she was unaware defendant bar had served the primary tortfeasor and, therefore, the statute could not have accrued against plaintiff until the determination was made.
In reply, defendant bar would redirect the court to the fact the one-year statute of limitations in the Dram Shop Act does not fall under the discovery rule, because the Dram Shop Act accrues at a specific time, regardless of when or whether plaintiff knew of the claim. Indeed, the statute of limitations expressly stated in the Dram Shop Act is “…one year after the sale or service.”[xxx]
In the absence of any applicable tolling, including equitable tolling, the district court could nevertheless find plaintiff has violated the statute of limitations, despite having timely filed the complaint before the statute of limitations ran, on the ground that service efforts taken over forty-five days post-filing were unreasonable. Barring some exceptional set of circumstances, a bar is not capable of concealing itself or intentionally avoiding service, as the brick and mortar defendant would be available for service at any time during operating hours.
There is much more to a statute of limitations determination than examining the filing date on a complaint. Consideration must be given to the type of statute of limitations at issue; namely, whether it is date specific or falls under the discovery rule. Thereafter, an accrual analysis must be undertaken if the discovery rule is in play and any applicable tolling must be identified. Should a violation of the governing statute of limitations be readily apparent from the review of the facts in the complaint or arise from the date of commencement of the action and in conjunction with the date of service of process, then a motion to dismiss would be in order. Otherwise, defense counsel must be sure to plead the violation as an affirmative defense in the answer. The district court would ultimately determine as a matter of law whether the claim accrued under the applicable statute of limitations, while the trier of fact would be left to determine the actual date of accrual as a question of fact. Of course, the district court could decide both issues when presented with undisputed facts clearly establishing the date in question.
[i] See Colo. State Bd. of Med. Exam’rs v. Jorgensen, 198 Colo. 275, 599 P.2d 869 (1979).
[ii] Colorado’s Dram Shop Act, for example, states the action must be “… commenced within one year after the sale or service.” C.R.S. § 44-3-801(3)(a)(II).
[iii] Reg’l Transp. Dist. v. Voss, 890 P.2d 663 (Colo.1995) (citing Thiel v. Taurus Drilling Ltd., 218 Mont. 201, 212, 710 P.2d 33, 40 (1985)).
[iv] Cf. C.R.S. § 13-80-101(1)(a); C.R.S. § 13-80-103.5(1)(a).
[v] Shaw Const., LLC v. United Builder Services, Inc., 2012 COA 24, 2012 WL 311665 (Colo. App. 2012).
[vi] Williams v. Crop Production Services, Inc., 2015 COA 64, 2015 WL 2341938 (Colo. App. 2015).
[vii] C.R.S. § 13-80-108.
[viii] Morrison v. Goff, 74 P.3d 409 (Colo. App. 2003), judgment aff’d, 91 P.3d 1050 (Colo. 2004); Colburn v. Kopit, 59 P.3d 295 (Colo. App. 2002).
[ix] Salazar v. American Sterilizer Co., 5 P.3d 357 (Colo. App. 2000), as modified on denial of reh’g, (June 8, 2000) (citations omitted); Trinity Broadcasting of Denver, Inc. v. City of Westminster, 848 P.2d 916 (Colo. 1993); Miller v. Armstrong World Industries, Inc., 817 P.2d 111, Prod. Liab. Rep. (CCH) P 12946 (Colo. 1991).
[x] Crosby v. American Family Mut. Ins. Co., 251 P.3d 1279, 1285 (Colo. App. 2010); Murry v. GuideOne Specialty Mut. Ins. Co., 194 P.3d 489, 491 (Colo. App. 2008); Winkler v. Rocky Mtn. Conf. of United Methodist Church, 923 P.2d 152, 159 (Colo. App. 2007).
[xi] Crosby, 251 P.3d at 1285 (quoting Murry, 194 P.3d at 492).
[xiii] 51 Am.Jur.2d Limitation of Actions § 169 (2000); see also Thurman v. Tafoya, 895 P.2d 1050, 1054 n. 5 (Colo.1995).
[xiv] Grynberg v. Total S.A., 2008, 538 F.3d 1336, certiorari denied 129 S.Ct. 1585, 556 U.S. 1105, 173 L.Ed.2d 677.
[xv] C.R.S. § 13-80-118.
[xvi] C.R.S. § 13-81-103.
[xvii] Highline Village Associates v. Hersh Companies, Inc., 996 P.2d 250, 256 (Colo. App. 1999), as modified on denial of reh’g, (Dec. 23, 1999) and aff’d in part, rev’d on other grounds in part, 30 P.3d 221 (Colo. 2001).
[xviii] Dean Witter Reynolds, Inc. v. Hartman, 911 P.2d 1094 (Colo. 1996); Noel v. Hoover, 12 P.3d 328, 330 (Colo. App. 2000).
[xix] C.R.C.P. 8.
[xx] Drake v. Tyner, 914 P.2d 519 (Colo. App. 1996)
[xxi] Compare Drake v. Tyner, 914 P.2d 519; with Zertuche v. Montgomery Ward & Co., Inc., 706 P.2d 424 (Colo. App. 1985).
[xxii] Harrison v. Pinnacol Assur., 107 P.3d 969 (Colo. App. 2004).
[xxiii] Van Diest v. Towle, 116 Colo. 204, 211-212 (1947) (internal citations omitted).
[xxiv] Hansen v. Lederman, 759 P.2d 810 (Colo. App. 1988); Capek v. Monahan, 117 Colo. 131, 184 P.2d 501 (1947); Sandoval v. Archdiocese of Denver, 8 P.3d 598, 147 Ed. Law Rep. 328 (Colo. App. 2000); Sharp Bros. Contracting Co. and Sanders Co., Inc. v. Westvaco Corp., 878 P.2d 38 (Colo. App. 1994).
[xxv] W. R. Hall Transp. and Storage Co. v. King, 43 Colo. App. 202, 606 P.2d 75 (App. 1979), judgment rev’d on other grounds, 641 P.2d 916 (Colo. 1982).
[xxvi] C.R.C.P. 3(a).
[xxvii] Dillingham v. Greeley Pub. Co., 701 P.2d 27 (Colo. 1985); Nelson v. Blacker, 701 P.2d 135 (Colo. App. 1985).
[xxviii] Malm v. Villegas, 2015 CO 4, 342 P.3d 422 (Colo. 2015).
[xxix] Morrison v. Goff, 74 P.3d 409 (Colo. App. 2003), judgment aff’d, 91 P.3d 1050 (Colo. 2004); Colburn v. Kopit, 59 P.3d 295 (Colo. App. 2002).
[xxx] C.R.S. § 44-3-801(3)(a)(II).