Equity – Establishing the Elements of Equitable Tolling and Equitable Estoppel

by Low, Ball & Lynch
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Linda Hopkins v. Jurek Kedzierski as Trustee, etc., et al.

Court of Appeal, Fourth Appellate District (April 16, 2014)

Under the principle of equitable tolling, a statute of limitations will not bar a claim in cases where the plaintiff, despite use of due diligence, could not or did not discover material facts about the injury or the identity of the defendant until after the expiration of the limitations period, and the defendant already had notice of the claim. Equitable estoppel, on the other hand, may preclude a defendant from raising the statute of limitations defense when the defendant’s promises, threats or representations actually induced the plaintiff to forbear filing a lawsuit. This case considered the interplay of the two principles in a case where plaintiff was injured and had a workers’ compensation claim pending against her employer, who was also the owner of the property where her injury occurred.

In May, 2008, Linda Hopkins fell from an outdoor balcony at the offices of her employer, Perfect Smile Dental Ceramics, Inc.  Due to her injuries, she was unable to work.  Jurek Kedzierski and Margo Kedzierski own Perfect Smile and also own the office building in which Perfect Smile is located.  Shortly after the accident, Hopkins began receiving workers’ compensation benefits.  In April, 2009, she filed a claim with the Workers’ Compensation Appeals Board because of disagreements regarding Perfect Smile’s liability for various types of benefits, e.g., temporary disability indemnity, reimbursement for medical expense.  In October of 2009, Hopkins’ counsel sent a demand letter to defendants.  Golden Eagle Insurance, the insurer for defendants, informed Hopkins’ counsel that it was investigating the claim.  In March of 2010, Golden Eagle notified Hopkins’ counsel it was denying the claim.

In September, 2010, Hopkins filed an action for negligence/premises liability.  She asserted that the two-year statute of limitations (Code of Civ. Proc. § 335.1) on her personal injury claim had been tolled while she pursued her April, 2009 workers’ compensation claim.  She also alleged that the defendants were equitably estopped from asserting a statute of limitations defense based on settlement negotiations that she claimed had taken place prior to her filing of the civil complaint.  The trial court denied Hopkins’ request for a jury trial with respect to whether equitable tolling and/or equitable estoppel applied, held a bifurcated bench trial on these issues, and determined that neither doctrine applied.  The trial court concluded the complaint was not timely filed, and entered judgment in favor of the defendants.  On appeal, Hopkins claimed the trial court erred in denying her request for a jury trial on the issues of whether the equitable doctrines applied.  She also asserted that the trial court erred in determining neither doctrine applied.

The Court of Appeal affirmed that if an action is one in equity and the relief sought depends on the application of equitable doctrines, the parties are not entitled to a jury trial.  The issues of whether equitable tolling or equitable estoppel applied were equitable issues for the court to decide.  The Court noted that the equitable tolling of statutes of limitations was designed to prevent unjust and technical forfeitures of the right to trial on the merits when the purpose of the statute of limitations – timely notice to the defendant of plaintiff’s claim – had been satisfied.  Citing the California Supreme Court decision of Elkins v. Derby, the Court stated that in order to prove the applicability of the equitable tolling doctrine, a party must establish “timely notice, and lack of prejudice, to the defendant, and reasonable and good faith conduct on the part of the plaintiff.”  Tolling rules are to be liberally applied to situations in which the plaintiff has satisfied the notification purpose of a limitation statute.  In the instant case, it was undisputed that defendants received notice of the need to begin to investigate the facts that formed the basis of Hopkins’ claims well within the applicable statute of limitations period.  The Court disagreed with the trial court’s ruling that in order for equitable tolling to apply, Hopkins was required to have been unsuccessful in seeking workers’ compensation benefits.  The matter was remanded to the trial court to make factual findings as to whether Hopkins demonstrated the three required elements of equitable tolling.

In regard to equitable estoppel, four elements must ordinarily be proven:  (1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had the right to believe that it was so intended; (3) the party asserting the estoppel must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.  The Court rejected Hopkins’ contention that there had been a misrepresentation as to who owned the building.  They also rejected Hopkins’ contention that the defendants told her “they would take care of [her] until [she] came back to work.”  The defendants each testified that they did not make such representations.  The Court concluded there was substantial evidence in the record to support the trial court’s determination that the doctrine of equitable estoppel did not apply.

COMMENT

The decision highlights the need to place potential tortfeasors and their insurance carriers on notice of any potential claims.  Failure to provide timely notice may prevent the applicability of the equitable tolling doctrine.

For a copy of the complete decision, see:
http://www.courts.ca.gov/opinions/documents/D063392.PDF

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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