Case Title: Andrew Fahrner vs. SW Manufacturing, Inc.

Citation: 

Docket Number: M1999-00021-SC-R11-CV

State: tennessee

Court: Tennessee Supreme Court

Date: 2001-05-14T00:00:00Z

Document:
-6- Having held that the discovery rule and equitable estoppel are different, we must now decide how long the statute of limitations is tolled when a plaintiff successfully invokes the latter. The answer is clear: the tolling period equals the amount of time the defendant misled the plaintiff. See Lusk, 655 S.W.2d at 920-921. Equitable estoppel is premised on the defendant’s wrongdoing, and, consequently, the plaintiff must be given the time during which the defendant misled the plaintiff so that plaintiff’s entitlement to the full statutory time period is preserved. This is similar to the result in discovery rule cases, where the defendant’s fraudulent concealment prevents the plaintiff from discovering his cause of action. See Vance, 547 S.W.2d at 930 (“[The statute] begins to run as of the time of the discovery of the fraud by the plaintiff.”). Any other result would reward the defendant for his deception. As discussed above, Fahrner claims that he missed the time deadline because SW Manufacturing misled him until May 1998. If true – as will be determined on remand – Fahrner would be entitled to a full year from that time, assuming he is entitled to equitable estoppel relief. Since Fahrner filed suit in December 1998, he will have met the deadline. Finally, we must respond to Fahrner’s argument that equitable estoppel applies because SW Manufacturing’s separation notice was misleading in that it stated that his termination was the result of a “reduction in work force due to decrease in sales,” whereas Fahrner asserts that it was the result of retaliation and employment discrimination. SW Manufacturing, of course, maintains that its separation notice truthfully stated its reason for firing Fahrner. The problem with Fahrner’s argument is that it simply restates the central issue of his underlying claims. Fahrner cannot argue that the statute of limitations should be tolled because his version of events is correct and SW Manufacturing’s version is a lie. Were we to accept this argument, we would, in effect, be holding that he should win on the merits of his retaliatory discharge and discrimination claims. As one court put it, in the age discrimination context, “This [argument] merges the substantive wrong with the tolling doctrine . . . . It implies that a defendant is guilty of [concealment or other misconduct justifying equitable estoppel] unless it tells the plaintiff, ‘We’re firing you because of your age.’ It would eliminate the statute of limitations in age discrimination cases.” Cada, 920 F.2d at 451. Not surprisingly, many courts have rejected Fahrner’s argument. See, e.g., Santa Maria v. Pacific Bell, 202 F.3d 1170, 1177 (9th Cir. 2000) (“[Equitable estoppel] necessarily requires active conduct by a defendant, above and beyond the wrongdoing upon which the plaintiff’s claim is filed, to prevent the plaintiff from suing in time.”); American Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d 111, 124 (1st Cir. 1998) (“[The employees] have simply parroted the same events that gave rise to their underlying claim.”); Hill v. United States Dep’t of Labor, 65 F.3d 1331, 1335-38 (6th Cir. 1995); Thelen, 64 F.3d at 267-68; Dring v. McDonnell Douglas Corp., 58 F.3d 1323, 1329 (8th Cir. 1995) (“Whether or not an employer tells its employee the true reason for the adverse employment decision is not the standard.”) (quoting Heideman v. PFL, Inc., 904 F.2d 1262, 1266 (8th Cir. 1990)); Olson v. Mobil Oil Corp., 904 F.2d 198, 203 (4th Cir. 1990) (“If equitable tolling applied every time an employer advanced a non-discriminatory reason for its employment decisions, it would be ‘tantamount to asserting that an employer is equitably estopped whenever it does not disclose a violation of the statute.’”) (quoting Blumberg v. HCA Mgmt. Co., 848 F.2d 642, 645 (5th Cir. -7- 1988)). But see Bennett v. Coors Brewing Co., 189 F.3d 1221, 1235-36 (10th Cir. 1999); Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1391-92 (3rd Cir. 1994). As a matter of logic and public policy, see Weber, 938 S.W.2d at 393 (discussing the important purposes statutes of limitations serve), we also reject it. In the retaliatory discharge context, acceptance of this argument would essentially eliminate the statute of limitations unless an employer tells an employee, “you are bing fired because you filed a workers’ compensation claim.” Accordingly, Fahrner’s assertion that the separation notice is misleading because it failed to cite an illegal basis for his termination is not sufficient to invoke the doctrine of equitable estoppel. To summarize, we hold that the discovery rule and equitable estoppel have independent significance, meaning that Fahrner is entitled to have the trial court consider his equitable estoppel claim, despite the fact that he cannot succeed by virtue of the discovery rule. On remand, Fahrner’s claim must fail if he relies solely on the separation notice to meet his burden of showing that SW Manufacturing misled him into missing the limitations deadline. CONCLUSION On the separate grounds stated, we affirm the decision of the Court of Appeals holding that the statute of limitations cannot be tolled because of the discovery rule. We reverse and remand to the trial court for consideration of whether equitable estoppel requires tolling of the statute of limitations. FRANK F. DROWOTA, III, JUSTICE