Kelly on Malpractice

There are three theories for tolling the statute of limitations: the discovery rule, fraudulent concealment, and equitable estoppel. These theories are distinct but similar. I will discuss each separately. As will be seen, the essential inquiry under each theory boils down to this: through the exercise of reasonable diligence, would the plaintiff have learned that the defendant had knowledge of prior incidents of negligence? In some cases involving respondeat superior, this is sometimes referred to as “inquiry notice.”

1. Discovery Rule
The discovery rule was first applied by the Tennessee Supreme Court in Teeters v. Currey, 518 S.W.2d 512 (Tenn.1974). In Teeters, a medical malpractice action, the Court stated, “We find it difficult to embrace a rule of law … requiring that [a plaintiff] sue to vindicate a non-existent wrong, at a time when injury was unknown and unknowable.” Teeters, 518 S.W.2d at 515. The Court has applied the discovery rule to tort actions governed by the one-year statute of limitations, stating:

Under the “discovery rule” applicable in tort actions, including but not restricted to products liability actions predicated on negligence, strict liability or misrepresentation, the cause of action accrues and the statute of limitations begins to run when the injury occurs or is discovered, or when in the exercise of reasonable care and diligence, it should have been discovered. Potts v. Celotex Corp., 796 S.W.2d 678, 680 (Tenn.1990) (citing McCroskey v. Bryant Air Conditioning Co., 524 S.W.2d 487, 491 (Tenn.1975); Teeters, 518 S.W.2d at 512). It is important to note that “[t]he discovery rule applies only in cases where the plaintiff does not discover and reasonably could not be expected to discover that he had a right of action.” Id. If the plaintiff has information that would place a reasonable person on inquiry notice that he may have a cause of action, the statute of limitations will not be tolled. Levine v. March, 2007 WL 4181554, at *4 (Tenn.Ct.App.2007) (citing Potts, 796 S.W.2d at 680-81).

On occasion, an injury is discovered but its source remains hidden. In those circumstances, courts have tolled the statute of limitations until the plaintiff discovers the identity of the tortfeasor or the source of the injury. See, e.g., Foster v. Harris, 633 S.W.2d 304, 305 (Tenn.1982); Hathaway v. Middle Tenn. Anesthesiology, P.C., 724 S.W.2d 355, 359 (Tenn.Ct.App.1986). In Foster, the plaintiff unknowingly became infected with serum hepatitis during a dental procedure in October, 1975. Foster, 633 S.W.2d at 304. He discovered his illness in January 1976, but did not discover the source of the illness until July 1976, when the defendant dentist informed the plaintiff that he, the dentist, had serum hepatitis. Id. The plaintiff filed a lawsuit against the dentist in February 1977. Id. The trial court granted summary judgment in favor of the defendant dentist because the plaintiff discovered his injury in October 1975, but did not file his lawsuit until more than one year later. Id.

On appeal, the Supreme Court reversed the trial court’s grant of summary judgment. It noted that no cause of action in tort could exist “until a judicial remedy is available to the plaintiff.” Id. at 305 (citing McCroskey v. Bryant Air Conditioning Co., 542 S.W.2d 487, 489-90 (Tenn.1975)). It then stated, “It is axiomatic that no judicial remedy was available to this plaintiff until he discovered, or reasonably should have discovered, (1) the occasion, the manner and means by which a breach of duty occurred that produced his injury; and (2) the identity of the defendant who breached the duty.” Id. Thus, the Court held that the plaintiff’s lawsuit was timely filed because he could not have discovered the identity of the tortfeasor until the dentist’s admission. Id.

2. Fraudulent Concealment
“A close cousin of the discovery rule is the ‘well accepted principle … of fraudulent concealment.’ “ Mark K. v. Roman Catholic Archbishop of L.A., 79 Cal.Rptr.2d 73, 78 (Cal.Ct.App.1998) (quoting Bernson v. Brown, 873 P.2d 613 (Cal.1994)). The Tennessee Supreme Court has set forth the elements of fraudulent concealment:

To establish fraudulent concealment, a plaintiff must prove (1) that the defendant took affirmative action to conceal the cause of action or remained silent and failed to disclose material facts despite a duty to do so and, (2) the plaintiff could not have discovered the cause of action despite exercising reasonable care and diligence. The third essential element of fraudulent concealment is knowledge on the part of the defendant of facts giving rise to the cause of action. In other words, the defendant must be aware of the wrong. The fourth and final essential element of fraudulent concealment is a concealment of material information from the plaintiff. Shadrick v. Coker, 963 S.W.2d 726, 735 (Tenn.1998). If a fiduciary relationship exists between the plaintiff and defendant, the party asserting fraudulent concealment need not show affirmative concealment of the cause of action, because “failure to speak where there is a duty to speak is the equivalent of some positive act or artifice planned to prevent inquiry or escape investigation.” Id. (quoting Hall v. De Saussure, 297 S.W.2d 81, 85 (Tenn.Ct.App.1956)).

3. Equitable Estoppel
In Tennessee, a party, by its conduct, may be equitably estopped from relying on the statute of limitations. Fairway Vill. Condo. Ass’n, Inc. v. Conn. Mut. Life Ins. Co., 934 S.W.2d 342, 346 (Tenn.Ct.App.1996). “Equitable estoppel and fraudulent concealment represent distinct (although kindred) defenses to limitations claims.” Doe v. Linam, 225 F.Supp.2d 731, 736 (S.D.Tex.2002) (quoting Neely v. Bankers Trust Co. of Tex., 757 F.2d 621, 632 (5th Cir.1985)). The doctrine of equitable estoppel “is premised on the defendant’s wrongdoing.” Accordingly, the doctrine can be invoked to toll the statute of limitations for the period during which the defendant misled the plaintiff. Fahrner v. SW Mfg., Inc., 48 S.W.3d 141, 146 (Tenn.2001); cf. Fairway Vill., 934 S.W.2d at 346 (explaining that equitable estoppel is less a tolling mechanism and more a doctrine used to prevent a party from relying on a statute of limitations defense).

In order to establish equitable estoppel in Tennessee, the party asserting estoppel must prove that the party to be estopped (1) engaged in a false representation or concealment of material facts, (2) with knowledge, actual or constructive, of the real facts, and (3) with the intent or at least the expectation that its representation or concealment would be acted on by the other party. The party asserting estoppel must also prove that he (1) relied on the false representation or concealment, (2) changed his position to his prejudice, and (3) lacked knowledge and the means of acquiring knowledge of the truth as to the facts in question. Consumer Credit Union v. Hite, 801 S.W.2d 822, 825 (Tenn.Ct.App.1990) (quoting Callahan v. Town of Middleton, 292 S.W.2d 501 (Tenn. T.App.1954)). Also, under appropriate circumstances, equitable estoppel may be based on a party’s “silence or negative omission to do anything.” Evans v. Belmont Land Co., 231 S.W. 670, 673 (Tenn.1893); but see DOBBS ON REMEDIES § 2.3 (“mere silence or nondisclosure is not enough to trigger estoppel”).

Inquiry Notice
Under all three tolling theories, the focus is on whether the plaintiff had “inquiry notice” of the alleged negligent act. Stated differently, had the plaintiff exercised reasonable diligence, would he have learned that the defendant had knowledge of negligent act, and that it chose not to disclose this information. “Actual notice” is that notice which a plaintiff actually possesses; “inquiry notice” is that notice which a plaintiff would have possessed after due investigation.” Cevenini v. Archbishop of Wash., 707 A.2d 768, 771 (D.C.1998) (quoting Diamond v. Davis, 680 A.2d 364, 372 (D.C.1996)).

Time-Barred as a Matter of Law
A majority of courts applying these doctrines have held that if the plaintiff, in the exercise of reasonable diligence, would have learned that defendant had knowledge of the negligent act, then as a matter of law the statute of limitations is not tolled. This means that the statute of limitations begins to run when the plaintiff suspects or should suspect that [his] injury was caused by wrongdoing … once the plaintiff has notice or information of circumstances to put a reasonable person on inquiry. “Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, he must decide whether to file suit or sit on his rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; he cannot wait for the facts to find him. Doe v. Catholic Bishop for Diocese of Memphis, 2008 WL 4253628 (Tenn.Ct.App.).

I hope this primer helps you when evaluating whether the statute of limitations or statute of repose bars your medical malpractice claim.

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