Opinion ID: 1755276
Heading Depth: 1
Heading Rank: 8

Heading: effect of federal lawsuit

Text: Brodine next argues that the limitations period should have been tolled during the pendency of the federal lawsuit. The district court recognized that if Brodine was entitled to such tolling, she would have an extra 7 months 2 days to file this action and her action would have been timely. However, the court determined that the federal lawsuit did not toll the running of the applicable statute of limitations and that, therefore, the action was time barred. Blue Cross argues that Brodine was not prevented from bringing a timely action in state court while the federal lawsuit was pending and that Neb.Rev.Stat. § 25-201.01 (Cum.Supp.2004) did not apply. The question is whether the 3-year contractual limitations period was tolled by the pendency of the federal action between these same parties. Section 25-201.01 includes a savings clause for actions filed in federal court that are dismissed because of the loss of diversity jurisdiction. Section 25-201.01 reads, in relevant part, as follows: (1) If an action is commenced within the time prescribed by the applicable statute of limitations but the plaintiff fails in the action for a reason other than a reason specified in subsection (2) of this section and the applicable statute of limitations would prevent the plaintiff from commencing a new action, the plaintiff . . . may commence a new action within the period specified in subsection (3) of this section. (2) A new action may not be commenced in accordance with subsection (1) of this section when the original action failed . . . (b) as a result of voluntary dismissal by the plaintiff for a reason other than loss of diversity jurisdiction in a federal court. . . . (3) A new action may be commenced in accordance with subsection (1) of this section within a period equal to the lesser of (a) six months after the failure of the action or (b) a period after the failure of the action equal to the period of the applicable statute of limitations of the original action. Section 25-201.01 did not toll the statute of limitations. The statute does not apply because the limitations period did not prevent [Brodine] from commencing a new action after the federal case was dismissed, as required by subsection (1). The federal action was dismissed on November 25, 2002. Thus, assuming for purposes of our summary judgment review that the limitations period expired on November 7, 2003, Brodine still had more than 11 months in which to file her action in state court after the federal action had been dismissed. Section 25-201.01(2) also prevented tolling as a result of the federal action. Brodine did not file her claim in federal court based on diversity, but because she alleged a federal question existed under ERISA. The case was dismissed not as a result of the loss of diversity, but by a joint stipulation of the parties, who doubted whether a federal question actually existed and whether the federal court had subject matter jurisdiction. We next consider whether the federal action tolled the applicable statute of limitations based on equitable principles. We have previously considered whether the filing of another lawsuit served to toll the applicable statute of limitations. In National Bank of Commerce v. Ham, 256 Neb. 679, 592 N.W.2d 477 (1999), a bank filed an action against a defaulting borrower beyond the applicable statute of limitations. The bank argued that the statute of limitations had been tolled because the borrower had been subject to an automatic bankruptcy stay. This court held that the applicable statute of limitations was not tolled. We discussed our precedents on such issue based on equitable principles. We summarized the relevant cases in the following manner: In First Nat. Bank of Plattsmouth v. Gibson, 74 Neb. 232, 105 N.W. 1081 (1906), the creditor successfully litigated its right to set aside a conveyance as fraudulent, but because it was unable to recover from the resultant forced sale of the property, the creditor brought a later action in equity to reach the rents and profits from the land. We held that the latter action was not time barred, stating: In this action it was necessary to show that the land had been fraudulently transferred. No recovery could be had without the existence of that fact. While that question was being litigated in the courts, the statute of limitations as to any claim that depended upon the questions there in controversy would not run in favor of one party in that controversy and against the other. Id. at 242, 105 N.W. at 1083. In Macke v. Jungels, 102 Neb. 123, 166 N.W. 191 (1918), we held that it would be inequitable to allow the statute of limitations to run on a claim for damages during the pendency of an action enjoining the plaintiff from bringing suit on that claim. In Lincoln Joint Stock Land Bank v. Barnes, 143 Neb. 58, 8 N.W.2d 545 (1943), defendants in a mortgage foreclosure appealed a decree of foreclosure in favor of the plaintiff. The foreclosure was commenced June 7, 1928. On December 17, 1930, the case was removed from the docket but remained pending with leave to reinstate pursuant to a federal court order restraining the plaintiff from proceeding further. The action was subsequently reinstated, and the defendants contended that the plaintiff was barred by the applicable statute of limitations. We concluded that the plaintiff having been restrained from proceeding further by a paramount authority, the period thereof should not be considered in computing the time for the statute of limitations to run, and that the plaintiff was not so barred. Ham, 256 Neb. at 690, 592 N.W.2d at 484. We determined in Ham that equitable principles did not apply because the bankruptcy code provided an extra 30 days to file an action if the claim expired before the automatic stay was lifted or the bankruptcy was dismissed. We found no inequity in requiring the bank to commence its action within 30 days following the termination or dismissal of the bankruptcy. The equitable principles discussed in Ham do not apply in the case at bar. The filing of this action in state court was not dependent upon the resolution of any issues in Brodine's federal lawsuit, and the federal court did not enjoin or restrain Brodine from proceeding further against Blue Cross. Brodine initiated her claim against Blue Cross in federal court, but it was never decided whether the federal court had jurisdiction over her complaint. More important, the limitations period had not run by the time the federal action was dismissed. Rather, viewing the evidence in the light most favorable to Brodine, we conclude that once the federal action was dismissed on November 25, 2002, more than 11 months remained still to run on the limitations period. The district court did not err in finding that the applicable limitations period was not tolled during the pendency of the federal action.