Tuesday, April 22, 2014

Workers' Comp Appeal Tolls the Statute in a Negligence Case Arising from the Same Facts

Hopkins v. Kedzierski, No. D063392 (D4d1 Apr. 16, 2014)

I’ve previously discussed the confusing set of doctrines that fall under the rubric of “equitable estoppel” in California. This case deals with the different—although similarly named—doctrine of equitable tolling. Like some kinds of equitable estoppel, equitable tolling can affect the running of the statute of limitations, but it comes up under different circumstances and has less to do with the acts of the defendant than the lack of prejudice to it. 

Equitable tolling is a judicially created doctrine. When a plaintiff is afforded several procedural avenues of relief, her pursuit of one avenue can equitably toll her time to seek the others. Here, plaintiff—who fell from a balcony at her employer’s offices—first sought workers’ compensation. She was given partial coverage immediately, but filed a claim for additional benefits, and when that was denied, an appeal. After her workers’ comp appeal sat in administrative purgatory for more than a year with no outcome, plaintiff filed a negligence case in superior court against the building’s owner—an entity that shared common ownership with her employer. 

There is no dispute that without tolling, plaintiff’s complaint was filed four months too late under the applicable two-year statute of limitations. The trial court held a bench trial on tolling, ultimately deciding that plaintiff’s claim was untimely. The court rejected equitable tolling, holding that the rule does not apply when the first proceeding does not result on a full denial of relief or when the two proceedings are against different defendants.

On appeal, the court first holds that that plaintiff was not entitled to a jury trial on equitable tolling, since the issue is, well, equitable. 

But it reverses on the merits. Forty years ago, the California Supreme Court held that the statute of limitations can be equitably tolled when an injured person who has several potential legal remedies reasonably and in good faith elects to pursue one of them, so long as the defendant is not prejudiced by the election.  Elkins v. Derby, 12 Cal. 3d 410, 414 (1974).  A plaintiff is entitled to invoke the tolling when: (1) the defendant has timely notice of the claim, (2) the defendant has not been prejudiced, and (3) the plaintiff has acted in good faith. 

Defendants did not really dispute that all three elements were present. Instead, they argued, as they successfully did to the trial court, that the doctrine applies only when the initial matter is entirely unsuccessful. They also reiterated their argument that tolling could not be applied because the defendants in this case were different entities than those in the worker’s comp action. But neither of those were a reason to decline to apply the rule. So long as there is actual notice, lack of prejudice, and good faith by the plaintiff, settled precedent holds that equitable tolling applies even if the prior case is resolved partially in favor of the plaintiff. Tolling also applies when the parties are somewhat different, so long as the party to the case being tolled has actual notice of the potential claims, which it did here.

The court also declines to affirm based on various alternative arguments advanced by defendants. It holds that to obtain tolling, there is no requirement that the first case have the potential to provide full relief to the plaintiff, or that the remedies in the proceedings be mutually exclusive. The case law makes clear that so long as the first action can potentially redress some of the harm to the plaintiff that is the subject of the second action, tolling can apply. Nor does the law require evidence that the plaintiff specifically made a “rational decision” to elect one remedy over the other. Nor does the law require a plaintiff to show that she was unable to file the second action while the first was pending. Each of these arguments a
ppear to have been grounded in somewhat selective snippetization of language in earlier cases.

Finally, defendants argued that the rule embraced by the court would potentially lead to limitless, open-ended tolling when, like here, the initial matter stretches on for a lengthy period of time. But the court is unmoved under the facts of this case. Plaintiff only needs 128 of tolling for her claim to be timely, a tolling period almost identical to that blessed by the Supreme Court in Elkins. Given that, the court does not find it necessary to address the outer limits of how long the limit can be tolled should the original proceedings approach a Jarndycian duration.

Reversed and remanded for the trial court to conduct a new trial, applying the three-element test addressed in the opinion.

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