Opinion ID: 1118476
Heading Depth: 2
Heading Rank: 2

Heading: may a defendant who has requested an indefinite extension, resulting in a dismissal for failure to prosecute, rely on the statute of limitations to dismiss the refiled claim?

Text: The Smiths rely on equity in their argument that it is fundamentally unfair for Stratton to assert the bar of statute of limitations after receiving an indefinite extension of time in which to answer the complaint. Stratton characterizes the Smiths' argument as essentially an equitable estoppel argument. Because the Smiths failed to show fraud or misrepresentation and reliance, Stratton asserts that this argument should fail. One commentator explains the term equitable estoppel as follows: Courts often employ what has been loosely termed equitable estoppel to remove the statutory bar in any situation in which the plaintiff's reasonable failure to sue appears to result from reliance on any sort of misleading conduct, such as assurances that the obligation would be discharged without suit, or a request that the plaintiff delay prosecution of the claim. Developments in the Law: Statutes of Limitations, 63 Harv.L.Rev. 1177, 1223 (1950). Stratton relies on Groseth v. Ness, 421 P.2d 624 (Alaska 1966), for the proposition that there must be reliance on misrepresentation or false statements for equitable estoppel. Stratton asserts that Groseth closely resembles the instant case. Groseth, however, can be distinguished because the plaintiff had not filed a suit when the statute of limitations expired and the failure to file suit was not a result of any agreement between the parties. In Gudenau & Co. v. Sweeney Ins. Co., we held that a plaintiff who fails to file suit within the statute of limitations may be protected by equitable estoppel if the plaintiff has been induced to postpone filing suit by the defendant's words or conduct. 736 P.2d 763, 768 (Alaska 1987). In order to estop an assertion of the statute of limitations defense, the plaintiff must satisfy three conditions: (1) the plaintiff's pursuit of the initial remedy must give the defendant notice of the claims against her; (2) the defendant must not be prejudiced in her ability to gather evidence; and (3) the plaintiff must have acted in good faith. Id. Here the Smiths were induced to postpone prosecution of the suit by Stratton's request for an indefinite extension of time to file an answer. Thus, we hold that all three conditions for application of equitable estoppel are satisfied: Stratton was aware of the claims against her and benefited from the delay because she was not required to retain an attorney to answer the complaint and the Smiths acted in good faith in granting Allstate extensions of the time to answer. [9] A similar situation to the instant case occurred in State v. Reefer King Co., 559 P.2d 56, 63 (Alaska 1976), where the state and New Nelco entered into a stipulation extending the state's time in which to answer the complaint until after this court decided a pending case. After our decision, the state filed its answer, asserting that New Nelco lacked capacity to sue and that the statute of limitations had run. We concluded that if the state had filed its answer at the time required, New Nelco would have had the opportunity to remedy its lack of capacity before the statute of limitations had run. Therefore, we held that equitable estoppel barred the assertion of the statute of limitations defense.