Tuesday, May 17, 2011
Exceptions to Enforcement of Applicable Limitations Period: SoL Tolling & The Discovery Rule in Texas
THE DISCOVERY RULE AND TOLLING OF LIMITATIONS BASED ON FRAUDULENT CONCEALMENT
We [Texas Supreme Court] have recognized two doctrines that may apply to extend the statute of limitations. Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455-56 (Tex. 1996). Under the first, the discovery rule, the cause of action does not accrue until the injury could reasonably have been discovered. See id.; S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996) (citing Trinity River Auth. v. URS Consultants, Inc., 889 S.W.2d 259, 262 (Tex. 1994)), for the proposition that deferring accrual and thus delaying the commencement of the limitations period differs from suspending or tolling the running of limitations once the period has begun). The discovery rule is applied categorically to instances in which “the nature of the injury incurred is inherently undiscoverable and the evidence of injury is objectively verifiable.”4 Altai, 918 S.W.2d at 456. An injury is not inherently undiscoverable when it is the type of injury that could be discovered through the exercise of reasonable diligence. Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734–35 (Tex. 2001). Recognizing the social benefit in granting repose after a reasonable time, we have described the rule as a “‘very limited exception to statutes of limitations.’” Id. at 734 (quoting Altai, 918 S.W.2d at 455–56).
FRAUDULENT CONCEALMENT BY DEFENDANT
The second doctrine that may extend the limitations period in this case is fraudulent concealment, an equitable doctrine that, unlike the discovery rule, is fact-specific. A defendant’s fraudulent concealment of wrongdoing may toll the statute of limitations after the cause of action accrues. See Kerlin v. Sauceda, 263 S.W.3d 920, 925 (Tex. 2008); HECI, 982 S.W.2d at 886. A party asserting fraudulent concealment must establish an underlying wrong, and that “the defendant actually knew the plaintiff was in fact wronged, and concealed that fact to deceive the plaintiff.” Earle v. Ratliff, 998 S.W.2d 882, 888 (Tex. 1999); Weaver v. Witt, 561 S.W.2d 792, 793 (Tex. 1977) (per curiam). Fraudulent concealment only tolls the running of limitations until the fraud is discovered or could have been discovered with reasonable diligence. Kerlin, S.W.3d at 925.
SOURCE: Texas Supreme Court, No. 09-0399, BP AMERICA PRODUCTION CO. v. MARSHALL 5/13/11