Opinion ID: 573935
Heading Depth: 2
Heading Rank: 2

Heading: Equitable Tolling and Equitable Estoppel

Text: 11 Alternatively, Mr. Smith contends that, because the defendants actively concealed their identities, the doctrines of equitable tolling and equitable estoppel should bar the defendants from pleading the statute of limitations or suspend the running of the limitations period from the time of the injury until the day he was reasonably sure that it was the defendants, rather than the Indiana police officers, who were responsible for his injuries.
12 Defendants argue that Mr. Smith waived the issues of equitable tolling and equitable estoppel because he failed to raise them in the district court. We note that Mr. Smith's complaint alleges not only the facts of the alleged assault, but also that the defendants conspired and intentionally withheld information of the actions of the Defendant, CHARLES EWERS, which prevented the Plaintiff, KING SMITH, JR., from seeking recovery. R.1 at 5. In their memorandum of law in support of their motion to dismiss, defendants specifically addressed the allegation that they had intentionally withheld information. R.18 at 2. In his response to the motion to dismiss, Mr. Smith discussed the defendant's misconduct at length and argued that the Defendants should not be in a position to use the Statute of Limitations to protect the fraudulent concealment of a cause of action. R.25 at 7. In their reply brief to Mr. Smith's response, defendants argued: 13 In federal causes of action, the Seventh Circuit has applied the federal doctrine of equitable tolling rather than the Illinois fraudulent concealment statute. Suslick v. Rothschild Sec. Corp., 741 F.2d 1000 (7th Cir.1984). See also Sperry v. Barggren, 523 F.2d 708, 710 (7th Cir.1975) (equitable tolling doctrine is read into every federal statute of limitations including state statutes adopted by federal law).... 14 R.27 at 3-4. Defendants went on to analyze Suslick in light of the facts of this case and the doctrine of equitable tolling. R.27 at 5. On this record, we cannot hold that these issues were waived. Although the district court and the parties focused on Illinois' fraudulent concealment statute rather than the equitable doctrines, those doctrines were brought to the attention of the court. 15
16 Under both Illinois and federal law, neither equitable tolling nor equitable estoppel applies to statutes of limitations that are jurisdictional rather than procedural. Cada v. Baxter Healthcare Corp., 920 F.2d 446, 451 (7th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2916, 115 L.Ed.2d 1079 (1991); Hardin v. City Title & Escrow Co., 797 F.2d 1037, 1040-41 (D.C.Cir.1986); Fredman Bros. Furniture Co. v. Department of Revenue, 109 Ill.2d 202, 93 Ill.Dec. 360, 362-63, 486 N.E.2d 893, 895-96 (1985); Charleston Community Unit School Dist. No. 1 v. Illinois Educ. Labor Rel. Bd., 203 Ill.App.3d 619, 149 Ill.Dec. 53, 55, 561 N.E.2d 331, 333 (1990), appeal denied, 136 Ill.2d 542, 153 Ill.Dec. 371, 567 N.E.2d 329 (1991). Some statutes of limitations are jurisdictional and cannot be equitably extended: [I]f the right being asserted is one unknown to the common law, the time limitation is an inherent element of the right and of the power of the tribunal to hear the matter. Charleston Community, 149 Ill.Dec. at 55, 561 N.E.2d at 333. Other statutes of limitations are merely procedural: [I]f the right upon which the request for relief is based is a common law right, the time limitation is merely a procedural matter not affecting the jurisdiction of the tribunal. Id. Thus, a second issue antecedent to the potential application of equitable tolling or equitable estoppel is whether the statute of limitations at issue in this case is jurisdictional or procedural. 17 As noted, 4 the applicable limitations period for actions brought under 42 U.S.C. sections 1981 and 1983 in federal court in Illinois is Illinois' two-year statute of limitations for personal injury actions. Ill.Ann.Stat. ch. 110, p 13-202 (Smith-Hurd 1984). Because personal injury actions were recognized at common law, this statute of limitations is procedural rather than jurisdictional. Therefore, the limitations period at issue in this case is potentially subject to equitable tolling and equitable estoppel.
18 Equitable tolling permits a plaintiff to avoid the bar of the statute of limitations if despite all due diligence he is unable to obtain vital information bearing on the existence of his claim. Cada, 920 F.2d at 451 (citations omitted). This doctrine 19 does not assume a wrongful--or any--effort by the defendant to prevent the plaintiff from suing. It differs from [the discovery rule] in that the plaintiff is assumed to know that he has been injured, so that the statute of limitations has begun to run; but he cannot obtain information necessary to decide whether the injury is due to wrongdoing and, if so, wrongdoing by the defendant. 20 Id. In the context of an age discrimination claim, we have held that this doctrine tolls the administrative filing deadline until the time when 'facts that would support a charge of discrimination ... were apparent or should have been apparent to a person with a reasonably prudent regard for his rights similarly situated to the plaintiff.'  Aungst v. Westinghouse Elec. Corp., 937 F.2d 1216, 1225 (7th Cir.1991) (quoting Vaught v. R.R. Donnelley & Sons Co., 745 F.2d 407, 410-11 (7th Cir.1984)). In a nutshell, equitable tolling focuses on whether the plaintiff exercised due diligence but was nevertheless unable to determine information needed to bring a claim. 5 21 Prior to the Supreme Court's decisions in Board of Regents v. Tomanio, 446 U.S. 478, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980), and Johnson v. Railway Express Agency, 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975), this court traditionally applied federal tolling rules to determine the circumstances in which a borrowed state limitations period would be tolled. See Sperry v. Barggren, 523 F.2d 708, 710 (7th Cir.1975); Tomera v. Galt, 511 F.2d 504, 509 (7th Cir.1975); Parrent v. Midwest Rug Mills, Inc., 455 F.2d 123, 125-27 (7th Cir.1972). This approach was consistent with Holmberg v. Armbrecht, 327 U.S. 392, 397, 66 S.Ct. 582, 585, 90 L.Ed. 743 (1946), in which the Supreme Court held that federal equitable tolling is read into every federal statute of limitation. Without expressly overruling Holmberg or commenting on its continuing vitality, Johnson and subsequent cases have held that, when a federal court borrows a state statute of limitations, it should borrow any applicable state tolling provisions as well: 22 Any period of limitation ... is understood fully only in the context of the various circumstances that suspend it from running against a particular cause of action. Although any statute of limitations is necessarily arbitrary, the length of the period allowed for instituting suit inevitably reflects a value judgement....  In virtually all statutes of limitations the chronological length of the limitation period is interrelated with provisions regarding tolling, revival, and questions of application. In borrowing a state period of limitation for application to a federal cause of action, a federal court is relying on the State's wisdom in setting a limit, and exceptions thereto, on the prosecution of a closely analogous claim. 23 Johnson, 421 U.S. at 463-64, 95 S.Ct. at 1722; see also Hardin v. Straub, 490 U.S. 536, 539-40, 109 S.Ct. 1998, 2001, 104 L.Ed.2d 582 (1989); Wilson v. Garcia, 471 U.S. 261, 269, 105 S.Ct. 1938, 1943, 85 L.Ed.2d 254 (1985); Board of Regents v. Tomanio, 446 U.S. 478, 483-86, 100 S.Ct. 1790, 1794-96, 64 L.Ed.2d 440 (1980). Thus, when a federal court borrows a state's limitations period, it also borrows the state's tolling rules--including any equitable tolling doctrines. 24 But the Supreme Court has not specifically stated whether a federal court that borrows a state statute of limitations should use state tolling rules exclusive of, rather than in addition to, the federal doctrine of equitable tolling. In Suslick v. Rothschild Securities Corp., 741 F.2d 1000, 1004 (7th Cir.1984)--decided after Tomanio and Johnson--this court held that [t]he federal doctrine of equitable tolling is available, in addition to state tolling rules, when a federal court borrows a state statute of limitations. Because this case remains the law of this circuit, 6 it controls the resolution of this issue, and we conclude that the district court should apply the federal doctrine of equitable tolling in addition to the Illinois tolling provisions.
25 Equitable estoppel comes into play if the defendant takes active steps to prevent the plaintiff from suing in time, as by promising not to plead the statute of limitations. Cada v. Baxter Healthcare Corp., 920 F.2d 446, 450-51 (7th Cir.1990) (citations omitted), cert. denied, --- U.S. ----, 111 S.Ct. 2916, 115 L.Ed.2d 1079 (1991). This doctrine 26 addresses itself to the circumstances in which a party will be estopped from asserting the statute of limitations as a defense to an admittedly untimely action because his conduct has induced another into forebearing suit within the applicable limitations period. Its application is wholly independent of the limitations period and takes its life, not from the language of the statute, but from the equitable principle that no man will be permitted to profit from his own wrongdoing in a court of justice. 27 Bomba v. W.L. Belvidere, Inc., 579 F.2d 1067, 1070 (7th Cir.1978). A current treatise describes the doctrine in these terms: 28 Estoppel against pleading the statute is limited to cases in which the defendant's conduct or representations were directed to the very point of obtaining the delay of which he seeks to take advantage. 29 51 Am.Jur.2d Limitation of Actions § 438, at 904 (1970) (footnote omitted). As we noted recently in Wheeldon v. Monon Corp., 946 F.2d 533 (7th Cir.1991): 30 The doctrine of equitable estoppel, where the plaintiff alleges improper conduct on the part of the defendant, is a more generous doctrine than the doctrine of equitable tolling--which adjusts the rights of two innocent parties. To prove estoppel successfully, the plaintiff must show that the defendant's conduct was improper, and that the plaintiff was harmed by such conduct. 31 Id. at 537 (citation omitted). We have held that equitable estoppel is available only under limited circumstances. Aungst v. Westinghouse Elec. Corp., 937 F.2d 1216, 1225 (7th Cir.1991). Among other factors, courts should look for  'a showing of the plaintiff's actual and reasonable reliance on the defendant's conduct or representations'  and  'evidence of improper purpose on the part of the defendant and the defendant's actual or constructive knowledge of the deceptive nature of its conduct.'  Id. (quoting Mull v. ARCO Durethene Plastics, Inc., 784 F.2d 284, 292 (7th Cir.1986)). But cf. Cange v. Stotler & Co., 826 F.2d 581, 587 (7th Cir.1987) ( '[I]t is not necessary that the defendant intentionally mislead or deceive the plaintiff, or even intend by its conduct to induce delay.' ) (quoting Bomba v. W.L. Belvidere, 579 F.2d 1067, 1071 (7th Cir.1978)). 32 The court's recent formulation in Cada is particularly helpful for present purposes because Mr. Smith suggests that the defendant affirmatively misled him and therefore delayed the commencement of the action. 7 In Cada, the plaintiff, Joseph Cada, alleged that his employer, Baxter, had discharged him in violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634. The court described the possible application of equitable estoppel in these terms: 33 Fraudulent concealment in the law of limitations presupposes that the plaintiff has discovered, or, as required by the discovery rule, should have discovered, that the defendant injured him, and denotes efforts by the defendant--above and beyond the wrongdoing upon which the plaintiff's claim is founded--to prevent the plaintiff from suing in time. 34 If Baxter had told Cada that it would not plead the statute of limitations as a defense to any suit for age discrimination that he might bring, this would be a case for equitable estoppel; so also if Baxter had presented Cada with forged documents purporting to negate any basis for supposing that Cada's termination was related to his age. Cada tries to bring himself within the doctrine by contending that the reorganization of the creative services department was a ruse to conceal the plan to fire him because of his age. This merges the substantive wrong with the tolling doctrine, ignoring our earlier distinction between the two types of fraud. It implies that a defendant is guilty of fraudulent concealment unless it tells the plaintiff, We're firing you because of your age. It would be eliminating the statute of limitations in age discrimination cases. 35 Cada, 920 F.2d at 451. 8 In essence, equitable estoppel focuses on whether the defendant acted affirmatively to stop or delay the plaintiff from bringing suit within the limitations period. 36 In contrast to equitable tolling, federal courts do not borrow state equitable estoppel doctrine when they borrow a state statute of limitations; federal courts apply the federal doctrine of equitable estoppel. As we have noted, neither Johnson nor any of its progeny were concerned with the federal doctrine of equitable estoppel. 37 [N]one of those decisions dealt with equitable estoppel; those decisions only held that courts should borrow state tolling rules when borrowing state statutes of limitations. None of them questioned the principle ... that equitable estoppel is not a creature of the particular statute of limitations relied upon and thus, unlike tolling rules, it is not a part of the legislative balancing of the conflicting interests of enforcement versus staleness of claims embodied in statutes of limitations.... This longstanding principle owes its existence to the nature of federal courts as tribunals of justice and not to a particular state or federal statute of limitations. 38 Cange v. Stotler & Co., 826 F.2d 581, 587 (7th Cir.1987) (citations omitted). Indeed, the Supreme Court has never suggested that a federal court should borrow a state's equitable estoppel doctrine when borrowing that state's statute of limitations and tolling rules.
39 We return this case to the district court so that it may consider in the first instance whether either the doctrine of equitable estoppel or the doctrine of equitable tolling is applicable to this case. The scant record before us makes it inappropriate for us to make any such determination. We emphasize, therefore, that we express no opinion on any factual issue. For instance, defendants contend that, even if the district court had applied these equitable doctrines, the two-year limitations period would have run between February 23, 1988--when officer Gannon testified that it was a Chicago Heights officer who assaulted Mr. Smith--and March 19, 1990--when Mr. Smith filed his suit. In response, Mr. Smith contends that he did not and could not know for certain that Gannon was accurate, Appellant's Reply Br. at 2, and that it was not until much later that he confirmed that the defendants were the proper party to sue. This is a factual issue that the district court is best suited to resolve. Similarly, with respect to the applicability of equitable estoppel, the district court will have to evaluate Mr. Smith's contention that Officer Ewers affirmatively misled him--rather than simply denied the underlying allegations--in his deposition. Appellant's Br. at 3-4; see Cada, 920 F.2d at 451.