But We Had a Tolling Agreement?!? Understanding the Important Distinctions between a Statute of Limitations, Statute of Repose, and a Jurisdictional Statute of Limitation

February 2, 2015

By: Sarah M. Wright

  • Statute of Limitations

A statute of limitations prescribes the time during which an action must be brought. The purposes of statutes of limitations are to promote justice, discourage unnecessary delay, and to preclude the prosecution of stale claims. Colorado State Bd. of Medical Examiners v. Jorgensen, 599 P.2d 869 (Colo. 1979).  The statute of limitations begins to run from the time when the plaintiff’s cause of action accrues.  Doyle v. Linn, 547 P.2d 257, 259 (Colo. App. 1975). When a particular cause of action accrues depends upon the subject matter of the action.  See § 13-80-108, C.R.S. 2014  (setting forth distinct accrual criteria depending on the cause of action; addressing, inter alia, wrongful death, cause of action on a debt, fraud, or misrepresentation).   A cause of action for injury to person, property, reputation, possession, relationship, or status shall be considered to accrue on the date both the injury and its cause are known or should have been known by the exercise of reasonable diligence. § 13-80-108(1), C.R.S. 2014. This is commonly referred to as the “discovery rule.”  Morrison v. Goff, 91 P.3d 1050, 1053 (Colo. 2004).

Statutes of limitations may be equitably tolled.  See Dean Witter Reynolds, Inc. v. Hartman, 911 P.2d 1094, 1095 (acknowledging general rule that statute of limitations may be equitably tolled to accomplish the goals of justice).  Furthermore, a statute of limitations may be tolled by an express agreement. See Onyx Properties, LLC v. Board of County Com’rs of Elbert, 868 F.Supp.2d 1171 (D. Colo. 2012) (discussing Hunter-Boykin v. George Washington Univ., 132 F.3d 77, 79 (D.C. Cir. 1998); accepting “usual rule” that “in the absence of a controlling statute to the contrary, the parties to a . . . potential lawsuit may, by agreement, modify a statutory period of limitation.”); see also Qwest Corp. v. City of Northglenn, 2014 COA 55 at ¶ 43 (acknowledging that Plaintiff was allowed to assert its claim against defendant outside of statute of limitations period due to tolling agreements); Jackson v. American Family Mut. Ins. Co., 258 P.3d 328, 333 n. 5 (Colo. App. 2011) (acknowledging tolling agreement suspended statute of limitations during relevant period on breach of contract claim).

  • Statute of Repose

Statutes of repose set a date after which a claim may be barred whether or not an injury has been discovered previously. Conforth v. Larsen, 49 P.3d 346, 348 (Colo. App. 2002). Statutes of repose begin to run on the date of the act or omission giving rise to the injury. Id.  In contrast to a statutes of limitation, which runs from the date the injury was discovered or should have been discovered, the purpose of a statute of repose is to prevent the assertion of stale claims and to reduce the so-called “long tail” of liability created by the discovery rule. See Comstock v. Collier, 737 P.2d 845, 848 (Colo. 1987). 

For example, an action for construction defect, brought pursuant to § 13-80-104(1)(a), C.R.S. 2014, shall be asserted within two years after the claim for relief arises, but in no case shall such an action be brought more than six years after substantial completion of the construction work.  Id.  The six year statute of repose serves to cut off liability for the architect, contractor, builder, etc., if the construction defect is found more than six years after work was finished.   Id.  This limitation applies even if the potential plaintiff files suit within the two-year limitations period after discovering the injury – thus cutting off the “long-tail” of liability.  Id.

Generally, statutes of repose include the language, "but in no case shall such an action be brought more than" a specified number of years after an event upon which the action is based. See §§ 13-80-102.5(1), 13-80-104(1)(a), 13-80-105(1), 5 C.R.S. (2014). As is the case in § 13-80-104(1)(a), periods of repose are often contained in the same provision as the period of limitation.  Mortgage Inv. Corp. v. Battle Mountain Corp., 70 P.3d 1176, 1183 (Colo. 2003). 

Generally, statutes of repose may be equitably tolled or tolled by express agreement.  See First Interstate Bank of Denver, N.A. v. Central Bank & Trust Co. of Denver, 937 P.2d 855, 860 (Colo. App. 1996) (statute of repose contained in Securities Act tolled by express agreement; noting that statutes of repose may be equitably tolled, collecting cases from various jurisdictions holding same); see also Lewis v. Taylor, 2014 COA 27, ¶ 11 (noting that both statutes of limitation and repose may be tolled in certain circumstances).

  • Non-Claim Statutes and Jurisdictional Time Limitations

“A non-claim statute is a self-contained statute, with terms that absolutely prohibit the initiation of litigation after a prescribed period.”  In re Estate of Kubby, 929 P.2d 55, 56 (Colo. App. 1996) (holding that C.R.S. § 15-12-108(1) is a non-claim statute, rather than a statute of limitations).  The intent is “to impose a time limitation for bringing a claim as a condition precedent to having a right of action.”  Id. (emphasis added).  Thus, a “non-claim statute deprives a court of jurisdiction if a claim is not timely filed.”  Id. 56-57.  A “jurisdictional time limitation is one that, if not met, destroys the right of action underlying the suit.”  Lewis v. Taylor, 2014 COA 27, ¶ 14.

To determine if a statutory time limitation is jurisdictional, one must examine the specific terms of the statute.  Id. at ¶ 13. For example, C.R.S. § 38-8-110, the Colorado Uniform Fraudulent Transfer Act (“CUFTA”), contains a jurisdictional time limitation because the statute provides that “a cause of action is ‘extinguished’ if brought outside the applicable statutory period.”  Id. at ¶ 16.  Furthermore, the official comments to the statute state that the “lapse of the statutory periods prescribed by the section bars the right and not merely the remedy.”  Id.  As such, the existence of a right pursuant to CUFTA depends on whether the cause of action is brought within the statutory time period.  Expiration of the statutory time period results in the defendant’s complete immunity from CUFTA liability.  Id. The weight of authority from other jurisdictions has reached the same conclusion when interpreting “extinguished” provisions, similar to that found in the CUFTA statute.  Id. at ¶ 17 (collecting cases from various jurisdictions).  However, a statute need not contain the word “extinguish” to be a jurisdictional bar.  See In re Estate of Kubby, 929 P.2d 55, 56 (Colo. App. 1996) (holding that C.R.S. § 15-12-108(1), which does not use the word “extinguish,” contains a jurisdictional time limitation).  Thus, a detailed analysis of the specific terms of the statute is required.

Where a non-jurisdictional time limitation has no effect on the underlying right, and merely defines the period during which an action based on that right may be brought, such limitations periods may be equitably tolled or tolled by express agreement.  Lewis v. Taylor, 2014 COA 27, ¶ 15.  In contrast, a jurisdictional time limitation destroys the right of action underlying the suit.  Id. at ¶ 14.  A jurisdictional time limitation cannot be equitably tolled, nor can it be waived by a tolling agreement between parties to an action.  Id.

This Article is published for general information, not to provide specific legal advice. The application of any matter discussed in this article to anyone's particular situation requires knowledge and analysis of the specific facts involved.

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