Discovering the Discovery Rule

By Ron Tracy

One of the first things to determine in any kind of tort litigation is whether the plaintiff has or will be filing suit within the applicable statute of limitations. Generally speaking, the statute of limitations is the time within which a lawsuit can be brought after the cause of action has “accrued,” i.e., the date the plaintiff’s injury was suffered. Notably, there were no statutes of limitations at common law. Rather, they are purely creatures of statute. Lake v. Lietch, 1976 OK 45, ¶13, 550 P.2d 935. If the plaintiff’s lawsuit is filed after the statute of limitations has run, and the defendant raises the statute of limitations as an affirmative defense, the case will be subject to dismissal.

But, as with so many things in life, there are exceptions to the statute of limitations, one being the so-called “Discovery Rule.” Although not available in all types of actions, it has been broadly applied in Oklahoma. Under the Discovery Rule the statute of limitations is tolled, or stopped, “… until an injured party knows of, or in the exercise of reasonable diligence, should have known of or discovered the injury, and resulting cause of action.” Lovelace v. Keohane, 1992 OK 24, ¶25, 831 P.2d 624. Although this definition would seem simple enough, the meaning of “reasonable” and “should have known” lend themselves to an almost infinite set of fact patterns in real life.

One such example is the recent Oklahoma Supreme Court case of Calvert v. Swinford, 2016 OK 100, 382 P.3d 1028. There, the plaintiffs/grantors sold their real property in 2002 intending to retain the mineral interests. Approximately twelve years later, after realizing the deed contained no mineral reservation, the grantors filed suit against the attorney and abstract company for professional negligence in preparing the deed. The Court recognized that the statute of limitations for professional negligence was two (2) years pursuant to 12 O.S. §95(a)(3) and that the same statute provides a five (5) year limitation to reform deeds. The grantors, however, argued their suit was timely under the Discovery Rule because they did not become aware of the defect in the deed until 2013, which was within two years of the filing of their lawsuit. The Oklahoma Supreme Court, however, disagreed, noting that: 1) the grantors personally signed the deed; 2) the grantors had both the opportunity and obligation to read the deed and know its contents; and 3) the deed had been filed in the public records and had been readily available to the grantors at any time. Accordingly, the Court held the Discovery Rule inapplicable to the particular facts and found that the statute of limitations on the grantors’ cause of action had run.

Determining whether or not a claim is potentially barred by the applicable statute of limitations is an important preliminary matter in any litigation. Perhaps equally important is knowing that there are exceptions, one of which is the Discovery Rule. As the Calvert case illustrates, whether the Discovery Rule applies in any particular case is always highly dependent on the particular facts involved.

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