Opinion ID: 197798
Heading Depth: 2
Heading Rank: 3

Heading: Equitable Estoppel and Tolling

Text: 37 The plaintiff also argues that the defendants are equitably estopped from raising the time bar defense. The plaintiff's argument muddles the doctrines of equitable estoppel and equitable tolling. Because the plaintiff asserts elements of both doctrines, we will analyze the equitable arguments under both estoppel and tolling theories. 38 The first issue to be determined in analyzing equitable tolling is its applicability to the case at hand. In Torres Ramirez v. Bermudez Garcia, we noted without resolution that it was unclear whether the federal doctrine of fraudulent concealment (equitable tolling) continues to apply to § 1983 actions, or whether state law governs the issue of equitable tolling. See Torres Ramirez v. Bermudez Garcia, 898 F.2d 224, 229 & n. 2 (1st Cir.1990). We need not decide the issue here, as we find that under either the federal or the state doctrine, the plaintiff has failed to establish that the statute of limitations should be equitably tolled. 39 We have previously addressed equitable tolling under Puerto Rico law in § 1983 cases. Puerto Rico law provides for equitable tolling in a case of 'damage willfully and wrongfully (dolosamente ) concealed by the author of the same.'  Ramirez Morales v. Rosa Viera, 815 F.2d 2, 4 (1st Cir.1987) (quoting Rivera Encarnacion v. Estado Libre Asociado De Puerto Rico, 113 D.P.R. 383, 386, 1982 WL 210553 (1982)). Similarly, under federal law, the plaintiff must show excusable ignorance of the statute of limitations caused by some misconduct of the defendant. Torres, 893 F.2d at 407 (quotations and citations omitted). Equitable tolling is unavailable where a party fails to exercise reasonable diligence. Moreover, [i]t is axiomatic that 'the grounds for tolling statutes of limitations are more limited in suits against the government....'  Kelley v. NLRB, 79 F.3d 1238, 1248 (1st Cir.1996) (quoting Swietlik v. United States, 779 F.2d 1306, 1311 (7th Cir.1985)). Courts weigh five factors in assessing claims of equitable tolling: (1) the lack of actual notice of the filing requirement; (2) the lack of constructive notice of the filing requirement; (3) the diligence in pursuing one's rights; (4) the absence of prejudice to the defendant; and (5) the plaintiff's reasonableness in remaining ignorant of the filing requirement. See Kale v. Combined Ins. Co. of America, 861 F.2d 746, 752 (1st Cir.1988). 40 Here, the plaintiff does not allege that the defendants concealed material facts regarding the plaintiff's cause of action or the damages incurred. See Ramirez Morales, 815 F.2d at 4 (finding equitable tolling inappropriate in § 1983 case under either federal or Puerto Rico doctrines where defendants did not prevent or discourage plaintiff from viewing agency records regarding unlawful police shooting, and there was no concealment of material facts) overruled on other grounds by Carreras-Rosa v. Alves-Cruz, 127 F.3d 172 (1st Cir.1997). Instead, the plaintiff argues that equitable tolling is appropriate because OCFI misled him regarding the tolling of the statute of limitations under the Puerto Rico Uniform Administrative Procedure Act. 41 The facts and arguments in this case are similar to those presented by Kelley. See 79 F.3d at 1242-43, 1247-50. In Kelley, the plaintiff failed to serve process on the defendant within the time period mandated by a federal statute. The plaintiff relied on a National Labor Relations Board (NLRB) employee who informed the plaintiff's attorney that the NLRB would serve the defendant and that the plaintiff should not do so. The employee neglected to inform the plaintiff, however, of an NLRB regulation stating that the ultimate responsibility for serving notice was on the charging party. The service by the NLRB was one day late. In rejecting the plaintiff's equitable tolling argument, we held that although the employee's information was incomplete and perhaps misleading, the delay in service could not be wholly attributed to an error on the part of the [NLRB]. See Kelley, 79 F.3d at 1249. We found that the plaintiff had constructive notice of the regulation and its requirements because the plaintiff was represented by counsel for a long duration, and counsel had access to the regulations. See id. at 1249 (Courts generally impute constructive knowledge to plaintiffs who, like appellant, consult with an attorney.). We also determined that it was plain that the attorney's reliance on the employee's representations was unreasonable. See id. at 1249. The information almost by definition, is not nearly as reliable as simply looking up the text of a regulation. Id. at 1250. 42 Here, the interlocutory order issued by OCFI indicated that the statute of limitations was tolled until a copy of OCFI's resolution addressing the motion for reconsideration was filed and notified. In this regard it was incomplete and therefore inaccurate. However, the order expressly stated that it was issued pursuant to section 3.15 of the Puerto Rico Uniform Administrative Procedure Act, which clarifies the ambiguity of the interlocutory order. Pursuant to section 3.15, [i]f the agency fails to take action on the motion for reconsideration within the ninety (90) days of the filing of the motion it shall lose jurisdiction over the same and the term in which to petition for judicial review shall commence upon the expiration of said ninety (90) day term unless the court, for good cause shown, grants the agency an extension of time. P.R. Laws Ann. tit. 3, § 2165 (1994). In short, the statute was tolled either until the OCFI's resolution of the motion was issued or until the time period in which to issue the resolution expired. 43 The plaintiff had notice of the statute governing the time limitations but relied on the agency's summation of the law. The general rule is that 'those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law.'  Kelley, 79 F.3d at 1249 (quoting Heckler v. Community Health Servs., 467 U.S. 51, 63, 104 S.Ct. 2218, 2225, 81 L.Ed.2d 42 (1984)). Moreover, the plaintiff had constructive notice of the filing requirement; he was represented by counsel throughout his dealings with OCFI; and he had access to the Puerto Rico Uniform Administrative Procedure Act. See Kelley, 79 F.3d at 1249. Nor can we say that the plaintiff was diligent in pursuing his rights. Between June 21, 1993, and March 1995, the only action the plaintiff took to pursue his rights was when he approached the Commissioner at an unidentified meeting and the Commissioner indicated he would follow up on the plaintiff's petition. The plaintiff's counsel acknowledged in oral argument that even this meeting was entirely accidental. The plaintiff initiated no other contact with the agency to resolve his dispute throughout this period. Given the fact that the plaintiff was a sophisticated businessman represented by counsel, and that the plaintiff was directed to the specific section of the Puerto Rico Uniform Administrative Procedure Act that governed the time limitations for his motion, we cannot say that the plaintiff's failure to ascertain the timeliness of his cause of action was reasonable. 44 The plaintiff has referred to the OCFI Regulation Rule 19, see Commonwealth of Puerto Rico, Office of the Commissioner of Financial Institutions, Regulation # 3920, Rule 19 (1989), and Rule 3.16 of the Puerto Rico Uniform Administrative Procedure Act, see P.R. Laws Ann. tit. 3, § 2166 (1994), both of which require that notice be sent when an adjudicative procedure is terminated. However, the plaintiff has also cited the OCFI Regulation Rule 18.1, see Commonwealth of Puerto Rico, Office of the Commissioner of Financial Institutions, Regulation # 3920, Rule 18.1 (1989), and Rule 3.15 of the Puerto Rico Uniform Administrative Procedure Act, see P.R. Laws Ann. tit. 3, § 2165 (1994), which provide that OCFI's failure to decide a motion for reconsideration within a designated time period either renders the motion and case dismissed by the agency, or strips the agency of its jurisdiction over the case. In such a situation, we cannot agree that the plaintiff's reliance on selected portions of the regulations (i.e. OCFI's failure to notify the plaintiff as to the termination of his case) and his disregard for other portions of the regulations that indicated his case was dismissed, was reasonable. The regulations must be read as a whole, and cannot be read selectively. See O'Connell v. Shalala, 79 F.3d 170, 176 (1st Cir.1996) ([A] court engaged in the task of statutory interpretation must examine the statute as a whole, giving due weight to design, structure, and purpose as well as to aggregate language.). Furthermore, the plaintiff's ignorance of the time limitations was unreasonable particularly in light of the fact that these tolling provisions are uniform for all of the Puerto Rico agencies. Because lack of prejudice alone is not an adequate basis for invoking equitable tolling, and the plaintiff has not met the other requirements of the doctrine, we find the equitable tolling doctrine to be inapplicable on these facts. See Kelley, 79 F.3d at 1250. The plaintiff fails in his attempt to distinguish this case from Kelley on the grounds that the Commissioner issued the interlocutory order. Reliance was unreasonable in light of the order's clear reference to the statute under which it was authorized, the uniformity of the provisions for all Puerto Rico agencies, and the notice in the regulations and statute indicating the pending time limitations, among other factors. 45 Equitable estoppel has a similar origin and effect as equitable tolling, although it is a distinct doctrine. See Kale, 861 F.2d at 752. Equitable estoppel is available in § 1983 actions. See Smith v. City of Chicago Heights, 951 F.2d 834, 839 (7th Cir.1992). Even when a federal court borrows a state's statute of limitations, the court applies federal equitable estoppel principles. See id. at 841. (1) The party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) the latter must be ignorant of the true facts; and (4) he must rely on the former's conduct to his injury. Clauson v. Smith, 823 F.2d 660, 661 (1st Cir.1987). The reliance must have been reasonable in that the party claiming the estoppel did not know nor should it have known that its adversary's conduct was misleading. Heckler, 467 U.S. at 59, 104 S.Ct. at 2223.  'If, at the time when he acted, such party had knowledge of the truth, or ... with reasonable diligence he could acquire the knowledge ... he cannot claim to have been misled by relying upon the misrepresentation or concealment.'  Id. (quoting 3 J. Pomeroy, Equity Jurisprudence § 810, at 219 (S. Symons ed.1941)). Indeed, the conduct of the defendant must be so misleading as to cause the plaintiff's failure to file suit. Sanchez v. Loffland Bros., 626 F.2d 1228, 1231 (5th Cir.1980) (footnote omitted). 46 The flaw in the plaintiff's argument, as discussed above, is that the plaintiff's reliance was not reasonable. The interlocutory order explicitly cited the statute pursuant to which it was issued. The statute in turn indicated the time period after which OCFI lost jurisdiction. The OCFI regulations also indicated that the motion for reconsideration would be considered WITHOUT CAUSE/CASE DISMISSED without an OCFI resolution in 30 days. See Commonwealth of Puerto Rico, Office of the Commissioner of Financial Institutions, Regulation # 3920, Rule 18.1 (1989). In the face of a conflict between the interlocutory order and the statute it expressly referred to, and another conflict between regulations that indicated the case was dismissed but that also indicated notice would be given in the event of termination, it was unreasonable for the plaintiff to choose to rely upon the interlocutory order. In this case, OCFI's conduct was not so misleading as to cause the plaintiff's failure to file on time without the plaintiff's lack of diligence. Nor are the plaintiff's negotiations with OCFI adequate to equitably toll the statute of limitations. See Bomba v. W.L. Belvidere, Inc., 579 F.2d 1067, 1071 (7th Cir.1978) ([I]t is widely held that mere negotiations concerning a disputed claim, without more, is [sic] insufficient to warrant the application of equitable estoppel....). The plaintiff's equitable estoppel argument must therefore fail. 47 The plaintiff also argues that the Commissioner had the authority to waive the time periods at issue, and because he did in fact waive them, the statute of limitations was tolled by OCFI. At the time of this case, the Commissioner had no authority to waive the time periods of section 2165. 48 The plaintiff's reference to language in sections 2163 and 2164 is without merit. 9 Section 2163 provides that an adjudicatory procedure before an agency shall be resolved in six months, absent exceptional circumstances. See P.R. Laws Ann. tit. 3, § 2163 (1994). Section 2164 provides that a final order or resolution shall be issued within ninety days after the conclusion of a hearing, unless waived in writing by the parties, or for just cause. See P.R. Laws Ann. tit. 3, § 2164 (1994). 49 The Uniform Administrative Procedure Act is, for the most part, arranged chronologically. Section 2163 deals in its entirety with the procedure of the actual hearing. Section 2164 addresses only issues pertaining to final orders or resolutions, including their timing, content, or notice. It is not relevant to motions for reconsideration. In contrast, section 2165 governs reconsideration and the applicable timing issues in this case. Section 2165 provides that an agency shall lose jurisdiction if it fails to take action within ninety days unless the court, for good cause shown, grants the agency an extension of time. The agency therefore lacks the authority to waive this requirement. The requirement is not affected by the discretion afforded the agency in other sections, nor by reliance on OCFI's representations or conduct by the plaintiff. We find the statute to be unambiguous and decline to read into it a meaning that directly conflicts with the intent of the legislature. 10 See Pagan Ramos v. State Ins. Fund, 92 JTS 13 (1992) (stating in dicta [o]nly through judicial authorization and 'for just cause can that term be extended for a reasonable period of time.' ) (quoting P.R. Laws Ann. tit. 3, § 2165 (1994)); Rivera Rivera v. Municipality of Carolina, 96 JTS 28 (1996) (stating in dicta that there is no ambiguity in the statute). OCFI's administrative order is therefore final, and as timely review was not sought, unappealable. 50 The plaintiff finally argues that summary judgment is inappropriate in this case because it involves equitable estoppel or equitable tolling issues, and because there were genuine issues of material fact unresolved. The mere fact that a party asserts such equitable claims does not foreclose granting a motion for summary judgment. See, e.g., Bell v. Fowler, 99 F.3d 262 (8th Cir.1996) (equitable estoppel); Cada v. Baxter Healthcare Corp., 920 F.2d 446 (7th Cir.1990) (equitable tolling); Jensen v. Frank, 912 F.2d 517 (1st Cir.1990) (equitable tolling); Dillman v. Combustion Eng'g, Inc., 784 F.2d 57 (2d Cir.1986) (equitable estoppel and equitable tolling). Moreover, we find that the facts alleged by the plaintiff, as they are discussed throughout this opinion, fail to raise a genuine issue of material fact requiring a trial. The district court's grant of summary judgment is therefore appropriate. 51 Affirmed. Parties shall bear their own costs.