Published on:

Using the Doctrine of Equitable Estoppel to Defeat a Statute of Limitations Defense

In Tennessee breach of contract cases, the defense of the statute of limitations is raised with some frequency. Most of the time that it is asserted as an affirmative defense, it will not defeat the plaintiff’s claim. It is one of the affirmative defenses which lawyers insert reflexively into their answer to cover their client just in case the facts, as they develop, might support such a defense.

In some cases, however, a defendant can prove fairly easily that the plaintiff filed his or her breach of contract case outside of the statute of limitations. In such cases, all may not be lost if the plaintiff can prove that the defendant should be equitably estopped from relying upon the statute of limitations. So, what does it take under Tennessee law to prove that the defendant should be equitably estopped from asserting the statute of limitations as a defense?

Once the defendant makes out a prima facie statute of limitations defense, the plaintiff has the burden to prove “the defendant induced him or her to put off filing suit by identifying specific promises, inducements, suggestions, representations, assurances or other similar conduct by the defendant that the defendant knew, or reasonably should have known would induce the plaintiff to delay filing suit.” Redwing v. Catholic Bishop for Diocese of Memphis (Tenn. 2012) A defendant makes out a prima facie case by presenting facts which show that the plaintiff’s claim was filed after the statute of limitations had expired.

Under Tennessee law, a plaintiff cannot bar the defendant from relying upon the statute of limitations defense by introducing vague statements made by the defendant or statements that are ambiguous. The plaintiff, however, does not have to prove that the defendant was so specific that he or she expressly stated that he or she would not assert the statute of limitations as a defense. Likewise, the plaintiff does not have to prove that the defendant specifically said that he or she would delay filing a lawsuit.

The plaintiff must prove that the defendant misled him or her, but does not have to prove that the defendant intended to mislead, or acted with fraud or bad faith. This is a distinction to which Tennessee breach of contract lawyers should pay particular attention since the difficulty in proving fraud or an intentional misrepresentation versus proving what would essentially amount to a negligent misrepresentation, in many cases, will be substantial.

Two cases where defendants were equitably estopped from relying on the statute of limitations as a defense are:

Ingram v. Earthman (Tenn. Ct. App. 1999):  In this case, a defendant who, on numerous occasions, acknowledged his debt to plaintiff and either stated or indicated a willingness to repay the debt or to enter into an arrangement which would make the plaintiff willing to forgive the debt, was estopped to assert the statute of limitations defense.

Hardcastle v Harris (Tenn. Ct. App. 2004): In this case, a defendant who had repeatedly assured the plaintiffs, who had invested money with him, that he was prosecuting a lawsuit against a third party to recover their money was estopped to assert the statute of limitations defense.