There are definite deadlines for filing a lawsuit. Statutes of limitation are laws that set forth time limits for filing a lawsuit. These laws differ state to state and depend on the type of claim asserted in the lawsuit. Courts have said the purpose of statutes of limitations are to 1) promote stability in personal and business relationships, 2) give notice to defendants of potential lawsuits, 3) prevent undue delay in filing lawsuits, 4) avoid the uncertainties and burdens inherent in pursuing and defending stale claims, and 5) ensure that evidence is preserved and facts are not obscured by the lapse of time or the defective memory or death of a witness. See, Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 456 (Tenn. 2012).
Knowing the time limit for filing suit is important whether you intend to pursue a claim or are faced with defending a lawsuit. In Tennessee, the statutes of limitation are as short as 90 days for some claims as long as 15 years for others. The following are some of the more common statutes of limitation in Tennessee:
- Slander (spoken defamation) – 6 months
- Libel (written defamation) – 1 year
- Personal injury and wrongful death – 1 year
- Professional (medical, legal, etc.) malpractice – 1 year
- Breach of fiduciary duty – 1 year
- Tennessee Consumer Protection Act – 1 year
- Injury to personal or real property – 3 years
- Fraud/misrepresentation – 3 years
- Tennessee Uniform Trade Secret Act – 3 years
- Conversion – 3 years
- Actions on contracts for the sale of goods – 4 years
- Breach of contract – 6 years
- Actions to set aside fraudulent conveyances – 7 years
- Actions on judgments (including foreign judgments) – 10 years
As you can see, many claims in Tennessee are subject to a 1-year statute of limitation; however, there is a good deal of variation depending on the type of claim. This list is not comprehensive and there are number of important nuances among the statutes and the appellate cases interpreting them, so you should consult an attorney if you have questions about a particular claim.
Which Statute of Limitation is Applicable?
While the statute of limitation for some claims, such as personal injury, is very clear, the statute for other claims, such as business torts and actions involving real property, is more difficult to determine. What is the statute of limitation when a plaintiff makes multiple claims for relief? It is not uncommon for a plaintiff to assert claims for breach of contract (6 years), fraud (3 years) along with breach of fiduciary duty (1 year). What statute applies when the lawsuit involves a breach of contract (6 years), but the damages concern real property (3 years)?
The Tennessee Supreme Court answered this question in recent case, Benz-Elliott v. Barrett Enterprises, LP, et al., No. M2013-00270-SC-R11-CV (Tenn. Sup. Ct., January 23, 2015), and clarified the analysis used to determine the applicable statute of limitation. The Barrett case involved damages to real property stemming from a contract for the sale of the real property. The plaintiff’s claims included breach of contract, intentional misrepresentation and negligent misrepresentation. Because the plaintiff filed suit approximately 4 years after the alleged damages occurred, the defendants raised the statute of limitation as defense arguing that the plaintiff’s claims were for injuries to real property barred by the 3-year statute of limitation. The trial court rejected the defendants’ argument that the breach of contract claim was barred by the statute of limitation and awarded the plaintiff a judgment of $650,000. On appeal, the Tennessee Court of Appeals reversed and found that the plaintiff’s claims were for injuries to her real property barred by the 3-year statute of limitation. The Tennessee Supreme Court then took the case on appeal, and reversed the Court of Appeals, finding that the intermediate appellate court incorrectly determined the “gravamen” of the action.
Traditionally, the “gravamen” of the complaint determines the applicable statute of limitation. The gravamen is often defined as the “real purpose” of an action or the “substantial point” of the lawsuit. Identifying the gravamen of a claim requires a court to consider both the legal basis of the claim and the injury for which damages are sought. However, in practice, trial and appellate courts have inconsistently applied this principle with varying results. Some courts would consider exclusively the type of damages while others solely would look to the legal basis for the claim. In Barrett, the Tennessee Supreme Court said that trial courts must do both. The Court held that when determining the gravamen, “a court must first consider the legal basis of the claim and then consider the type of injuries for which damages are sought. This analysis is necessarily fact-intensive and requires a careful examination of the allegations of the complaint as to each claim for the types of injuries asserted and damages sought.” Barrett, at p. 15. While this two-step approach may not prove perfect in practice, it is the framework that the Tennessee Supreme Court instructs trial courts to utilize.
The Barrett case is also important because it clarifies that when a complaint contains multiple causes of action, a court must determine the gravamen of each claim, not simply the gravamen of the complaint in its entirety. This is consistent with Tennessee Rules of Civil Procedure, which allow a plaintiff to plead multiple, alternative, and even inconsistent, causes of action.
There are certain laws that toll the statute of limitation under certain circumstances. For example, a statute of limitation is generally tolled 1) for minors, 2) for adults who lack the capacity to sue and 3) during times of disaster. The statute also will be tolled for fraudulent concealment — when the defendant has taken steps to prevent the plaintiff from discovering she was injured. However, it is important to note that the mere ignorance about the time period for filing suit will not toll the statute of limitation.
The Litigation & Dispute Resolution attorneys at Thompson Burton PLLC are regularly retained to represent business and individuals in a variety of lawsuits. Should you have questions regarding any business litigation matter or a statute of limitation for a particular case, please contact the Thompson Burton PLLC business litigation and dispute resolution team. For the latest updates on the Litigation & Dispute Resolution Blog, be sure to follow me on Twitter and on LinkedIn.