You Cannot Have Your Cake and Eat It, Too! (Estoppel) (law note)


We’ve talked previously about the statute of limitations here at Construction Law in North Carolina. A recent North Carolina Court of Appeals case gives a vivid example of one exception to a statute of limitations defense – estoppel.

Estoppel is the act of lulling a party into not filing a lawsuit through your actions. You are then deemed “estopped” from asserting the statute of limitations as a defense.

That is, a party cannot use the statute of limitations as a sword to benefit from his own conduct which induced a plaintiff to delay filing suit. Proof of actual fraud or bad faith is not required; however. The “basic question” is whether defendant’s actions “have lulled the plaintiff into a false sense of security and so induced [the plaintiff[ not to institute suit in the requisite time period.” Cleveland Const., Inc. v. Ellis-Don Const., Inc. et al., __ N.C. App. __, __ S.E.2d __ (5 April 2011).

In that case, the general contractor on a public hospital project, Ellis-Don, asked Cleveland Construction Inc. (CCI), one of its subcontractors, to delay making its own delay claim on the project. The general contractor sent a letter to CCI asking it not to sue it in order to present a “unified front” to the State during the State Construction Office’s administrative claims process.

Please see full article below for more information.

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