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Equitable Tolling Does Not Apply to Claims Against Public Entities Under the Tort Claims Act’s Statute of Limitations

On Aug. 5, 2022, Timothy Scruggs boarded a New Jersey Transit (NJT) bus in Philadelphia. As he walked down the aisle, the bus began moving, causing Scruggs to lose his balance and fall against a broken seat, sustaining an injury. Two years later, on Aug. 5, 2024, Scruggs filed a lawsuit against NJT, a New Jersey public entity, in the Pennsylvania Court of Common Pleas in Philadelphia. Scruggs did not file a lawsuit in New Jersey for another 7 weeks. Defendant NJT filed a motion to dismiss Plaintiff Scruggs’ New Jersey complaint for violating New Jersey’s Tort Claims Act’s (TCA) statute of limitations of 2 years. Plaintiff opposed. The issue in Scruggs v. N.J. Transit Corp., 2026 N.J. Super. Unpub. LEXIS 1006 (App. Div. May 13, 2026), was whether equitable tolling applied to a lawsuit against a public entity under the TCA.

Equitable tolling is, as it name suggests, an equitable remedy where the “interests of justice, morality, and common fairness” will excuse the clear violation of a time-limitation period. While limitations periods are typically gray deadlines that are subject to equitable tolling, this is generally not the case against a public entity as it is to a private entity or when it would be in direct conflict with the relevant statute, such as the TCA.

The TCA’s guiding principle is that immunity from tort liability is the general rule, and liability the exception and supporting case law demands it be strictly construed. Section 59:9-8(a) of the TCA bars a claimant from recovering against a public entity if “two years have elapsed since the accrual of the claim.”

Nevertheless, in this case, the trial court denied NJT’s motion to dismiss and applied equitable tolling, finding that Shruggs’ suit filed in Philadelphia fell under the two year TCA statute of limitations in New Jersey. NJT asked the trial court to reconsider its opinion, stating it had misapplied the equitable remedy. The trial court reconsidered its opinion and reversed itself, agreeing that the TCA must be strictly construed. Scruggs appealed.

The Appellate Division agreed with the trial court on its reversal, confirming that there was no place for equitable tolling in the TCA’s statute of limitations. The appellate court pointed to the plain reading of the TCA’s limitation language and how it “expressly precludes” a claimant from asserting a cause of cation more than 2 years after the date of injury. The court expressly indicated that equitable tolling was not available to actions against public entities, such as NJT, under the TCA because the legislature made it clear that courts must strictly construe the TCA.

Appellate Division Refuses to Allow Plaintiff to Use the “John Doe” Rule to Avoid a Statute of Limitations Dismissal

New Jersey’s two-year statute of limitations is very strict, requiring a plaintiff to file their personal injury suit within two years of the date of the accident or injury or suffer a permanent bar to sue anyone for their injuries. New Jersey’s fictitious party rule (“John Doe” Rule), U. 4:26-4, provides a safe haven to a plaintiff “if the defendant’s true name is unknown to the plaintiff” after the statute of limitations has expired if they identify a John Doe as a placeholder for a to-be-identified defendant. This rule allows a plaintiff who timely files their complaint to amend their complaint to name the previously unknown, true defendant, after which the amended pleading will “relate back” to the original pleading and, thus, avoid the bar of the statute of limitations.

In Perez v. Rental Shop Holdings, LLC, 2025 N.J. Super. Unpub. LEXIS 1938 (App. Div. Oct. 15, 2025), plaintiff Leonidas Perez attempted this tactic. After falling down a flight of stairs in her apartment building in Newark, Ms. Perez went to an attorney with all of the critical information of her injury: the facts of her fall, the correct address of her apartment building, and the identity of her landlord, defendant Rental Shop Holdings. Three days before the two-year statute of limitations expired, her attorney filed a personal injury complaint identifying only the State of New Jersey and a fictitious “John Doe” as defendants. Two weeks later, realizing he entered an incorrect address for the building and the State as an incorrect defendant, her attorney filed an amended complaint under the “John Doe” Rule. He admitted that, despite having the correct information, he simply erred in naming the wrong defendant.

After service of the amended complaint, Rental Shop filed a motion to dismiss Ms. Perez’s complaint for violating the statute of limitations. The trial court denied the motion, ruling that because the attorney acted so quickly in filing the amended complaint, his conduct showed both due diligence and the lack of any prejudice to Rental Shop, two factors courts use to support the Rule’s application.

Upon appeal, the Appellate Division strongly disagreed, emphasizing the primary requirement in using the “John Doe” Rule is that that the plaintiff not know or have any reason to know the John Doe defendant’s identity. It discounted plaintiff’s due diligence claims because, despite quickly correcting the error, she and her attorney had two years to confirm the proper defendant, and her failure to do this “basic and easy investigation,” and name them in the timely filed initial complaint, was a simple lack of diligence.

This case sticks out from more traditional John Doe cases because courts will commonly grant, and affirm, the use of fictitious party practices, often opting to see cases resolve on their merits rather than more technical disqualifications. Yet, the starkness of the attorney’s error in failing to identify Rental Shop as the proper defendant in the complaint filed before the expiration of the statute of limitations, despite his client’s clear communication of that fact to him, and his candid admission of the mistake, likely made this determination by the Appellate Division quite simple.

Appellate Division Upholds Shorter Statute of Limitations in Insurance Policy for UIM Claim

On January 10, 2018, plaintiff Amy Vanrell was driving a motor vehicle covered by an insurance policy with USAA and was in an accident.  She sued the other driver for her injuries but failed to make a claim against her insurance company, USAA, for underinsured motorist coverage until May 2, 2022.  The issue in Vanrell v. United Services Auto Assn., 2025 N.J. Super Unpub. LEXIS 1479 (App. Div. Aug. 6, 2025) was whether plaintiff failed to timely file an underinsured motorist claim under the terms of her insurance policy.

The other driver (the tortfeasor) involved in the accident had limited liability coverage of $50,000 per person/$100,000 per accident.  Plaintiff’s insurance policy with USAA provided underinsured motorist coverage (“UIM”) for bodily injuries of up to $300,000 per person/$500,000 per accident.

The day after the accident, on January 11, 2018, plaintiff notified USAA of her claim for property damages and personal injury protection benefits.  While she filed suit against the other driver on December 23, 2019 for her injuries, she failed to notify USAA of her suit at the time it was filed.

The first communication she had with USAA concerning an underinsured motorist claim was on May 2, 2022, when she sent USAA a letter seeking permission to settle her claims against the other driver for $43,000 (a “Longworth” letter).  In that letter, she identified the tortfeasor (the other driver) as an underinsured motorist and provided the name and docket number of plaintiff’s suit against the tortfeasor.

In her Longworth letter, she requested permission to settle her claims against the tortfeasor and asked whether USAA wished to waive subrogation of its claims against the tortfeasor.  USAA responded on May 4, 2022, approving the request to settle and waiving a potential subrogation claim but did not guarantee that the UIM coverage had been triggered by that loss.

On the day after, plaintiff’s counsel wrote to USAA demanding its $300,000 policy “to amicably resolve this matter.”  Thereafter, there were a number of correspondences back and forth in which USAA was asking for medical records to evaluate plaintiff’s settlement demand.  On February 24, 2023, USAA did offer to settle plaintiff’s UIM claim for $85,000.  However, plaintiff rejected that demand.  Eventually, USAA increased its offer to $100,000 to settle.

On May 17, 2023, plaintiff filed a lawsuit against USAA seeking UIM coverage.  USAA filed an Answer, which asserted as an affirmative defense that the complaint was barred by the statute of limitations and plaintiff failed to comply with the terms of the policy.  Discovery was thereafter exchanged.  Before the close of discovery, USAA moved to dismiss the complaint as untimely under the terms of the policy.  It argued that the policy required plaintiff to file her UIM claim within four years after the accident or one year of when she was aware or should have been aware of her UIM claim, whichever was later. 

Plaintiff opposed this motion, arguing that the six-year statute of limitations for breach of contract claims applied.

The trial court found that plaintiff did not timely file the complaint but did not specify which of the policy limitation periods applied, either the four year or one year, in reaching its decision.  It also did not address plaintiff’s conformity-to-law and equitable estoppel arguments.

This appeal ensued.  The plaintiff made the arguments that the six-year statute of limitations applied, that USAA was equitably estopped from raising the timeliness of plaintiff’s complaint, that it waived its timeliness argument by not raising it in its Answer and that the four year period in the policy, if applicable, was tolled until USAA denied UIM coverage.

The Appellate Division noted that the primary issue before the court was which of the two limitations period applied to plaintiff’s UIM claim – the six-year statute of limitations that applies to contract claims or the four-year statute of limitations in the policy.

The Court noted that New Jersey law holds that the six-year statute of limitations would ordinarily apply to insurance actions.  However, under New Jersey case law, the courts have found that period may be shortened by the terms of an insurance contract. 

The Appellate Division found that the USAA policy contained an unequivocal provision shortening the time period in which plaintiff must file her UIM claims to four years from the date of accident or one year from the date she was aware or should have been aware that she had a UIM claim, whichever was later.

It found that four years from the date of the January 10, 2018 accident would have been January 10, 2022.  While plaintiff did not identify the date on which she became aware or should have become aware that she had a UIM claim, she presumably became aware of the extent of her injuries and the limits of the tortfeasor’s insurance coverage while her lawsuit against the tortfeasor was pending in the Law Division.  At the very latest, she was aware of her UIM claim on May 2, 2022, when she requested USAA’s consent to settle her claims against a tortfeasor for less than what plaintiff alleged her damages from the accident.

Plaintiff did not file a lawsuit against USAA for the UIM claim until May 17, 2023, which was more than a year and four months after the January 10, 2022 date and fifteen days after May 2, 2023.  Therefore, the Appellate Division found that under either prong of the contractual limitations, (either the four-year period or the one-year period), plaintiff’s complaint was untimely.

The Court found that legal precedent has permitted parties to an insurance contract to agree to a shorter limitations period than is provided by the statute.  Further, the Court’s review of the record did not reveal any basis on which to apply equitable estoppel to bar USAA from raising the timeliness of plaintiff’s complaint. 

The Appellate Division also rejected Plaintiff’s other arguments.  Hence, the Court affirmed the trial court’s decision, barring the plaintiff’s uninsured motorist claim due to the failure to comply with the policy’s statute of limitations. 

Supreme Court Rules on Statute of Limitations for False Light Invasion of Privacy Claim

In January 2020, Plaintiff Salve Chipola attended a Clearview Regional High School’s basketball game, at which time he encountered an acquaintance, Defendant Sean Flannery speaking with a member of the school staff.  When attending a subsequent game at the school, a police officer prevented him from entering and handed him a letter from the school, informing him that he was banned from school grounds because of the belief that he was a drug dealer and was selling drugs to or purchasing alcohol for students.  He later learned that Defendant Flannery had made statements to the school official, alleging that Plaintiff was a drug dealer and had provided drugs and alcohol to the students.  Chipola sued Flannery, claiming that his alleged statements constituted a “false light invasion of privacy.”  The issue in Chipola v. Flannery, 2025 N.J. LEXIS 752 (Aug. 7, 2025) was what statute of limitations applied to this claim – one year or two years?

Chipola did not sue Flannery for false light invasion of privacy until about two years after the alleged incident.  In the lawsuit, he claimed that Flannery made false statements about him, creating a false impression of him as a drug dealer, harming his reputation and causing him emotional distress.  He further alleged that Flannery made these statements knowing they were false or in reckless disregard of the comments’ falsity and, as a result, his “reputation as a drug dealer was publicized throughout Gloucester County.”

Defendant Flannery filed a motion to dismiss, arguing that Chipola had filed his complaint outside the applicable one-year statute of limitations for defamation, which he argued applied to a false light invasion of privacy claim.  The limitations period began to run on the date of the alleged comments, January 9, 2020.  The trial court granted the motion to dismiss, agreeing with the plaintiff’s argument that the one-year statute of limitations applied to this type of claim and barred the claims in the lawsuit.

Chipola appealed this decision to the Appellate Division which affirmed the dismissal of the lawsuit in an unpublished opinion.  Thereafter, the matter was further appealed to the New Jersey Supreme Court.

Plaintiff argued that the two-year personal injury statute of limitations should apply, rather than the one-year statute of limitations governing defamation claims.  On the other hand, Defendant argued that false light claims were essentially the same in nature as one of defamation and, therefore, should be governed by the defamation’s one-year statute of limitations. 

The Supreme Court agreed with the trial court and Appellate Division decisions that a one-year statute of limitations should be applied to a false light claim.  It noted that “the conduct at the heart of both defamation and false light invasion of privacy claims is essentially the same; in holding otherwise would cause false light to engulf the tort of defamation and eradicate the narrowed one-year limitations that is intended to balance potentially tortious behavior with free speech rights.”  It noted the overlap between the causes of action for false light and defamation, in conjunction with the practical considerations and free speech protections.  Further, the Court noted that a significant number of other jurisdictions throughout the country had applied the same statute of limitations to false light and defamation claims.

Hence, the Supreme Court ruled that false light claims would be subject to the same one-year statute of limitations as defamation claims.  Therefore, the lower courts’ decisions were affirmed, dismissing the lawsuit due to the failure to file the claim within the statute of limitations.

Plaintiff Fails to Meet the Requirements of Fictitious Pleading Rule to Be Able to Add New Parties in Amended Complaint

Plaintiff Jorge Jimenez-Peguero was working for defendant Royal Packaging, LLC at its Totowa warehouse when he was severely and permanently injured by a large industrial machine.  Plaintiff claimed that the machine malfunctioned and struck him in the back and then dropped a 100 pound bag of “flower” onto him.  Approximately six months after the accident, OSHA issued a citation and notification of penalty to the employer for a violation of the OSHA Act.  OSHA’s report identified other parties responsible for the accident including EWMT Consulting, LLC (“EWMT”) and Magnum Systems (“Magnum”).  The issue in Jimenez-Peguero v. Royal Packaging, LLC, 2025 N.J. Super. Unpub. LEXIS 940 (App. Div. June 4, 2025) was whether plaintiff’s First Amended Complaint, naming EWMT and Magnum as two new defendants, was untimely.

EWMT was the entity who installed the machine, conducted training on the machine and prepared maintenance reports for the machine.  Magnum was the entity that manufactured the machine. 

The accident occurred on November 27, 2017.  Plaintiff received the OSHA report in response to a Freedom of Information Act request on October 24, 2019, approximately one month before the expiration of the two-year statute of limitations and filed a lawsuit against Royal Packaging, LLC, Royal Group, and Royal Distribution, LLC and several fictitious parties.  However, he did not sue EWMT or Magnum.

In its answer filed on January 23, 2020, Royal Packaging, however, did include third-party claims against EWMT for contractual indemnification and contribution.  Thereafter, about one month later, EWMT answered the third-party complaint and included a fourth-party complaint against Magnum.

Discovery ensued and, on February 17, 2021, plaintiff filed a motion seeking leave to file a first amended complaint against Magnum and EWMT, identifying them as the fictitious parties named in his initial complaint filed fourteen months earlier.  The motion was unopposed, and it was granted.  However, in their answers, both Magnum and EWMT asserted defenses that plaintiff’s claims against them were untimely.

After further discovery for another year, Magnum and EWMT moved for summary judgment. They argued that plaintiff’s claims against them in his first amended complaint were filed after the two-year statute of limitations expired and, hence, were untimely. The trial court granted both motions, dismissing the claims against both of them.

The trial judge found that based on the fictitious pleading rule, pursuant to Rule 4:26-4, plaintiff’s claims against both of these entities were time-barred.  The trial judge noted that it was undisputed that the OSHA report identified both Magnum and EWMT as potential defendants.  However, plaintiff failed to name either of them in his initial complaint, which entitled them to a dismissal of the first amended complaint.

This appeal ensued.  Plaintiff contended that he should have been allowed to proceed with his negligence claims against EWMT and Magnum.  Plaintiff argued that he was unaware of their respective involvement with the machine when he filed his initial complaint.  He further argued that, despite the expiration of the statute of limitations, naming them in the first amended complaint was proper under Rule 4:26-4, given his due diligence to identify their liability for his injuries. 

Plaintiff disputed the trial judge’s finding that he had ample notice through the OSHA report, which was received only about five weeks before the statute of limitations ran, to timely name these two entities as defendants in his initial complaint.  He argued that the OSHA report in no way tied these two entities to any acts that would have given rise to the plaintiff’s injuries.  Finally, plaintiff argued that he was aware of their potential liability for the accident only through EWMT’s third-party defendant interrogatory answers.

The issue upon appeal was whether plaintiff should have been allowed to amend his negligence claims against these two new parties after the statute of limitations expired.  The Appellate Division rejected plaintiff’s arguments and agreed with the trial court judge’s decision, dismissing the claims against them.

The Court noted that a lawsuit to recover damages for personal injury must be brought within two years after the date of the injury.  The fictitious pleading rule, Rule 4:26-4, permits a plaintiff to use a placeholder name for the defendant by asserting the name is “fictitious” and “adding an appropriate description sufficient for identification.”  However, once the fictitious party’s name is ascertained, the plaintiff must file a motion to amend the complaint to name the defendant.

The Appellate Division pointed out that the fictitious pleading rule will not shield a plaintiff who had adequate time to discover and obtain the identity of the defendant.  Under prior case law, there was an established 2-pronged analysis to discern whether a plaintiff may rely on a fictitious pleading:  1)  “A plaintiff must exercise due diligence endeavoring to identify the responsible defendants before filing the original complaint naming John Doe parties; and 2)  “A plaintiff must act with due diligence in taking prompt steps to substitute the defendant’s true name, after becoming aware of that defendant’s identity.”

In applying this test, the Appellate Division found that the plaintiff did not exercise due diligence naming these two defendants.  Plaintiff was aware of their involvement with the machine through the OSHA report that was received about five weeks before this statute of limitations expired.  Although the plaintiff contended that the report was insufficient to indicate a viable claim against Magnum and EWMT, the report did delineate the names of both entities, their connection to the machine, and disclosed EWMT’s address and Magnum’s telephone number. 

Moreover, in applying this 2-prong rule, the Appellate Division found that plaintiff had failed both prongs.  He failed to exercise due diligence in identifying these defendants before the original complaint was filed.  The OSHA report was sufficient to inform plaintiff that a potential claim existed against both of these entities.  The Appellate Division noted that plaintiff had timely notice of EWMT and Magnum’s identity and involvement with the machine but “neglected to take additional steps to investigate viable claims against them.”

Additionally, the Court found that plaintiff failed the second prong “as he did not act with due diligence in substituting EWMT and Magnum after becoming aware of their involvement.”  Although plaintiff contends that he became aware of these claims upon receipt of EWMT’s interrogatory answers, he did not move to amend the complaint until nine months later. 

In conclusion, the Appellate Division found that plaintiff had not shown he exercised due diligence to identify EWMT and Magnum as the defendants prior to the expiration of the statute of limitations, especially when he had received the OSHA report detailing their respective involvement with the machine.  Under these circumstances, regardless of whether EWMT and Magnum were not prejudiced in defending the matter, the Court found that was not a basis to circumvent the frivolous pleading rule.  Hence, the Appellate Division affirmed the trial court’s decision, dismissing the amended complaint against EWMT and Magnum.

The Enforcement and Application of Shortened Limitations Period Clauses in Insurance Policies

In the State of New Jersey, breach of contract claims are subject to a 6-year statute of limitations.  However, this often changes in the context of homeowners’ insurance policies.  Often, those policies contain provisions which provide that any suit against the insurer must be initiated within one year of the date of loss.  Other policies provide that any suit against the insurer must be initiated within one year of the insurer’s denial of the claim.  

The enforceability of shortened limitations clauses contained in insurance policies was first addressed in Weinroth v. N.J. Mfrs. Ass’n Fire Ins. Co., 117 N.J.L. 436 (E. & A. 1937).  In Weinroth, the Court upheld a provision in an automobile insurance policy which required that any suit against the insurer be brought within 90 days of the insurer’s denial of coverage.  Because the insured did not file suit until 106 days after the insurer denied coverage, his claim was dismissed. 

Thirty-one years later, the Appellate Division applied Weinroth’s holding in the context of a homeowners’ insurance policy.  In Staehle v. American Employers’ Ins. Co., 103 N.J. Super. 152 (App. Div. 1968), the homeowners’ insurance policy at issue provided that any suit against the insurer must be commenced within twelve months of the inception of the loss.  Because the insured did not initiate suit until 1 year and 6 days after the loss, the Court affirmed the grant of summary judgment in favor of the insurer.  In doing so, the Court noted that “the New Jersey rule [enforcing shortened limitations clauses] seems to be the one followed in the majority of the states.” 

Since Weinroth and Staehle, the courts of New Jersey have continued to enforce 1-year limitations provisions contained in insurance policies and other contracts.  See, e.g., Azze v. Hanover Ins. Co., 336 N.J. Super. 630, 636 (App. Div. 2001) (noting that the 6-year statute of limitations for contract actions “may be shortened by the terms of an insurance contract”); Peloso v. Hartford Fire Insurance Co., 56 N.J. 514 (1970) (enforcing a 1-year limitations period contained in a fire insurance policy); PPG Indus., Inc. v. American Home Assur. Co., 2007 N.J. Super. Unpub. LEXIS 1494 *27 (App. Div. 2007) (quoting Weinroth and noting “the validity of suit-limitation clauses in insurance policies has long been recognized in this state”).

In calculating the limitations period under an insurance policy, it is important to note that the shortened limitations period does not necessarily run uninterrupted from the date of loss.  This is particularly so where the insurer spends some time investigating the claim before issuing a denial.  This situation was addressed in Azze, citing the Supreme Court of New Jersey’s prior decision in Peloso.  There, the Azze court noted as follows:

In Peloso…the Court determined that contractual limitation provisions should not be read literally, with the one-year period running uninterrupted from the date of the loss.  According to the Court, such a reading of these provisions would be unfair, because it would allow, in effect, a ticking away of the limitations period while the insurance company investigated the loss.  Peloso stated that:

The fair resolution…is to allow the period of limitation to run from the date of the casualty but to toll it from the time an insured gives notice until liability is formally declined.  In this manner, the literal language of the limitation is given effect; the insured is not penalized for the time consumed by the company while it [investigates the loss]; and the central idea of the limitation provision is preserved since an insured will have only 12 months to institute suit.

The Azze court noted that “from the passage above, it becomes evident that between the time the insured gives notice of loss and the time that the insurance company formally denies coverage, the statutory period is tolled,” or paused.

A case I recently handled provides a good example of how this is applied in practice.  As in the above-referenced cases, the homeowners’ policy at issue required any lawsuit to be initiated within one year of the date of loss.  The loss at issue occurred on May 20, 2022.  However, the homeowners did not report the loss until March 22, 2023 (306 days later).  Our client, the insurer, investigated the loss and issued a partial denial letter on May 1, 2023 (40 days after the loss was reported).  Thereafter, the homeowners did not file a lawsuit until July 26, 2023 (432 days after the date of loss).

Utilizing the above-referenced timeline, we argued that even after accounting for the tolling of the limitations period during the 40 days the insurer investigated the claim, it still took the homeowners 392 days to file suit (432 total days – 40 days to investigate and issue a denial = 392 days).  Because that 392-day period exceeded the 1-year limitations period set forth in the policy, we argued that the homeowners’ lawsuit was barred.  The Court agreed and granted our Motion for Summary Judgment, dismissing the case. 

The above example demonstrates that the proper calculation of a limitations period requires strict identification of the date of loss; the date the loss is reported; the date a clear, formal denial is issued; and the date a lawsuit is ultimately filed.  Under appropriate circumstances, a policy’s shortened limitations period can be used to defeat an untimely filed lawsuit at the outset, saving time and resources.

Court Finds That Lawsuit Filed Against Insurance Company Was Timely Filed

Plaintiffs Marlene Romhen and Ibrahim Mirkhan filed a lawsuit against the defendant insurance company Franklin Mutual Insurance Inc. based upon a theft loss that occurred at their insured residence.  The claim was denied by Franklin Mutual by letter dated September 17, 2021.  According to the denial letter, the insured needed to file suit against them within twelve (12) months of the date of the letter.  The issue in Romhen v. Franklin Mutual Insurance, Inc., 2024 N.J. Super. Unpub. LEXIS 708 (App. Div. Apr. 25, 2024) was whether the lawsuit was timely filed because it was filed on the Monday after the one year time period expired the prior Saturday.

The theft occurred at the insured residence on March 30, 2021.  Plaintiffs reported the loss to Franklin Mutual on April 1, 2021.  The insurance policy contained a provision that any lawsuit filed against Franklin Mutual must be filed within twelve (12) months of the date of the denial letter.  The denial letter was issued on September 17, 2021.

However, the plaintiffs did not file their complaint against Franklin Mutual until Monday, September 19, 2022.  Franklin Mutual argued before the trial court that the complaint needed to be filed on or before Saturday, September 17, 2022 to meet the 12 month shortened suit requirement, and, therefore, the complaint was filed two days late.

The trial court accepted that argument and dismissed the complaint.  This appeal ensued.

The Appellate Division noted the well settled law that “because insurance policies are contracts of adhesion, if any ambiguity exists, the ambiguity must be construed so as to effect the ‘reasonable expectations of the insured.’”  Further, the Court noted that if the policy language supported two meanings, one that favored the insurer and the other one that favored the insured, the policy should be construed so as to sustain coverage in favor of the insured.

Under New Jersey court rules, in computing any period of time fixed by rule or court order, if the last day of the time period falls on a Saturday, Sunday, or legal holiday, the time period would not run until the end of the next day which is neither a Saturday, Sunday, nor legal holiday.  The trial court, however, found that this court rule did not apply because it was applying the terms of the insurance policy, which is a contract between the parties.  The Appellate Division agreed with that rationale. 

However, the Court noted that it was not disputed that the parties agree to an abbreviated deadline, commonly referred to as a “shortened suit clause,” which shortens the time period from the normal six (6) year statute of limitations that would generally apply to a breach of contract in a civil case.

But, the Appellate Division found that there was an ambiguity in the insurance contract.  It noted that if Franklin Mutual “wanted to ensure strict adherence to a one-year deadline with no exceptions or extensions for weekends, it could have said so explicitly in the endorsement it drafted.”  Further, when it sent out its denial of coverage letter, it could have specified the exact date when the deadline for filing a lawsuit would expire.  By specifying the exact date, that would have left no doubt as to its interpretation of the policy clause and would have provided clear notice of the last day in which a lawsuit could be filed.  However, the denial letter left it up for the policy holders to determine the one year deadline because the letter made no reference to the fact that, in this instance, the expiration of the one year time period fell on a Saturday.

The Appellate Division applied a liberal interpretation of the shortened suit clause in the insured’s favor, “coupled with the general preference to hear cases on their merits rather than dismiss them based on strict enforcement of procedure rules.”  Hence, the Court determined that the lawsuit challenging Franklin Mutual’s denial of coverage as to the lawsuit which was filed on Monday, September 19, 2022 was deemed timely under the shortened suit clause endorsement.  Thus, the Appellate Division reversed the trial court decision and remanded the case back to the trial court for further proceedings.

Plaintiff’s Personal Injury Claim Found Barred by Statute of Limitations

Plaintiff, the Estate of Irene Avagnano appealed the trial court’s order granting summary judgment, dismissing the personal injury action filed against defendants, Atrium Post Acute Care at Wayneview (“Atrium”) and Pulse Medical Transportation (“Pulse”).  Plaintiff had alleged claims of negligence, gross negligence and violation of the New Jersey Nursing Home Responsibilities and Rights of Residents Act in connection with a fall that occurred in May 2018.  An earlier complaint had been dismissed because it was filed in Avagnano’s name after her death, which rendered it a nullity.  Avagnano’s Estate then filed this second action.  The trial court determined that the Estate’s complaint was time-barred under the two-year statute of limitations.  The issue in Estate of Irene Avagnano v. Atrium Post Acute Care at Wayneview, 2023 N.J. Super. Unpub. LEXIS 740 (App. Div. May 15, 2023), was whether the trial court correctly ruled that the complaint was barred and that no equitable doctrines applied to extend the statute of limitations.

The lawsuit arose from a fall on May 11, 2018 of Irene Avagnano, a resident of Atrium’s nursing home.  She fell out of a wheelchair while being transported to a doctor appointment by Pulse.  Due to the fall, she suffered cervical vertebrae fractures.  On August 2, 2018, she died at the age of 91 from causes unrelated to the accident.  Her counsel, who had been retained prior to her death, filed a lawsuit on January 17, 2019, not knowing she had died four months earlier.

On April 29, 2020, Ms. Avagnano’s son, Frank Avagnano, was appointed administrator ad prosequendum.  He did not advise the attorney who filed the lawsuit of his ad prosequendum appointment until August 18, 2020.  The next day, the second complaint was filed, making the same claims as in the first complaint but in the name of the Estate.

Prior to the filing of the second complaint, Pulse had filed a motion to dismiss the first complaint on the grounds that a complaint cannot be brought by a deceased person.  That motion was granted and the first complaint was dismissed.  Pulse later filed a motion to dismiss the first complaint with prejudice, which was granted.  The dismissal of the initial complaint was not appealed.

Thereafter, Pulse filed a second motion in lieu of an Answer to dismiss the second amended complaint as to the two-year statute of limitations.  Atrium filed an Answer and moved for a summary judgment on the same grounds.

The Estate opposed defendants’ motion.  It argued that the statute of limitations was tolled until the date of Avagnano’s death because she lacked capacity to understand her legal rights.  Plaintiff’s counsel produced medical records indicating that Avagnano suffered from auditory hallucinations and impaired cognition.  However, plaintiff failed to submit an expert report regarding her mental competency at the relevant times.  Plaintiff also raised the theories of substantial compliance and equitable tolling to excuse the failure to comply with the statute of limitations.

Nevertheless, the trial court judge granted defendants’ motion and dismissed the second complaint with prejudice.  He ruled that the second complaint could not relate back to the initial complaint to meet the statute of limitations because the initial complaint was a legal nullity.  He rejected plaintiff’s mental incapacity tolling argument because of the plaintiff’s failure to establish that a condition of mental derangement actually prevented her from understanding her legal rights or initiating legal actions.  The trial court also rejected plaintiff’s substantial compliance theory.  The court reasoned that the initial complaint provided insufficient notice because it contained only broad generalities.  Last, the trial court judge rejected plaintiff’s equitable tolling argument.  He concluded that there was no wrongdoing on the part of the defendants that would have induced plaintiff into missing the deadline. 

Upon appeal, the Appellate Division reviewed the plaintiff’s argument that the complaint should not have been barred by the statute of limitations.  The Court rejected all of the plaintiff’s arguments and affirmed the trial court’s dismissal of the second complaint.   The Appellate Division agreed with the trial court that the first lawsuit was a nullity because it was brought in the name of a dead person.  Hence, an amended complaint could not relate back to something that never existed, nor can a non-existent complaint be corrected.

The Appellate Division also rejected plaintiff’s argument that the second complaint was timely filed based upon tolling attributable to decedent’s incompetence.  The Court found the tolling argument unavailing because the second complaint was still filed after the statute of limitations expired.

The Court also considered the applicability of the doctrine of substantial compliance.  The Appellate Division found that doctrine inapplicable as well. 

Finally, the Court considered the doctrine of equitable tolling.  The Court noted that absent a showing of intentional inducement or trickery by a defendant, equitable tolling should be applied sparingly and “only in the rare situation where it is demanded by sound legal principles and in the interest of justice.”  It would require the plaintiff to diligently pursue their claim and does not excuse claimants from exercising reasonable insight and diligence required to pursue their claim.

The Appellate Division agreed with the trial court that equitable tolling did not apply.  Just because a mistake was made in the filing of the initial complaint and there was a lack of communication between the power of attorney and the law firm, that mistake did not merit the application of equitable tolling so as to extend the statute of limitations.

Hence, the Appellate Division agreed with the trial court on all rulings and determined that the second complaint should be dismissed with prejudice. 

Plaintiff’s Personal Injury Claim Barred by the Statute of Limitations Due to Late Filing of Complaint

Plaintiff Simon King claimed to have suffered personal injuries from a motor vehicle accident that happened on August 12, 2019.  He filed a complaint against the driver of the other vehicle, Renay Tripp, and Stonewood Tavern as a result of his alleged injuries.  The issue in King v. Tripp, 2023 N.J. Super. Unpub. LEXIS 1072 (App. Div. June 28, 2023) was whether the complaint was barred by the two-year statute of limitations due to the complaint being filed one day after the expiration of the two-year statute.

Plaintiff did not file his lawsuit until August 13, 2021, which would be one day after the expiration of the two-year statute of limitations.  Plaintiff argued that his complaint was timely filed or, in the alternative, the doctrine of substantial compliance should allow his complaint to proceed.  Specifically, he argued that he took reasonable steps to comply with the statute of limitations and contended that any delay in filing was due solely to his counsel’s legal secretary incorrectly recording the statute of limitations expiration date as August 15, 2021 in the firm’s calendaring system.

Also, plaintiff relied on an October 5, 2020 e-mail from defendant’s insurance company to a legal secretary at plaintiff’s counsel’s law firm, in which an adjuster confirmed speaking with her and requested plaintiff’s social security number, as well as plaintiff’s medical records.  Plaintiff argued that, based upon this e-mail, the defendant was on notice of his potential claims because the defendant’s insurance adjuster was in touch with plaintiff’s counsel at least as early as October 5, 2020.

At the trial court level, the defendants filed a motion for summary judgment based upon the statute of limitations.  The trial court initially found that the doctrine of substantial compliance was applicable and the defendants could not claim prejudice because the complaint was quickly and timely served.  Hence, the trial court initially found that plaintiff had substantially complied with the statute of limitations.

However, defendant filed a motion for reconsideration and, ultimately, the trial court determined that plaintiff had failed to satisfy the elements needed to establish substantial compliance or establish any equitable exceptions to the statute of limitations recognized by our case law.  Hence, the trial court did dismiss plaintiff’s complaint with prejudice.  This appeal ensued. 

Upon appeal, the plaintiff continued to argue that the doctrine of substantial compliance should be invoked to avoid the dismissal of his complaint.  He argued that human error prevented him from timely filing his complaint and that defendant could not establish undue prejudice in the late filing because it did have prior notice of his pending claim for personal injuries.  In the alternative, plaintiff maintained that he did timely file his complaint based upon the calculation of the statute of limitations, which should not include the day of the event in the time period. 

The Appellate Division noted that statute of limitations are created by the legislature with the purpose to “eliminate stale claims and to appeal the exercise of a right of action so that an opposing party has a fair opportunity to defend.”  The substantial compliance doctrine is invoked “to avoid technical defects of valid claims.”  Under the Supreme Court case of Negron v. Llarena, 156 N.J. 296 (1998), the following five elements must be established to invoke this doctrine:

  • The lack of prejudice to the defending party;
  • A series of steps taken to comply with the statute involved;
  • A general compliance with a purpose of the statute;
  • A reasonable notice of petitioner’s claim; and
  • A reasonable explanation why there was not a strict compliance with the statute.

The Court noted that the doctrine of substantial compliance has been utilized where litigants have mistakenly filed a pleading in the wrong forum.  It had also been used in a situation which the plaintiff’s attorney learned the identity of a fictitious defendant before the statute of limitations expiration date and forwarded a summons and complaint to the substituted defendant to advise that it was being sued before the expiration of the statute of limitations, even though the amendment to the complaint to add the new defendant was not filed until after the statute of limitations expired. 

In this case, however, the Appellate Division agreed with the trial court that the plaintiff had not satisfied all five elements of the substantial compliance doctrine.  Plaintiff had failed to prove general compliance with the purpose of the statute because the record lacked any evidence that plaintiff initiated legal proceedings within the statutory time frame.  Further, the only evidence of communications between the parties during the statutory time period was the October 5, 2020 e-mail between defendant’s insurance company and plaintiff’s counsel.  Although this e-mail would be indicative of a notice of a potential claim, it could not reasonably be interpreted as a formal notice of pending litigation, nor could it serve to toll the statute of limitations.

Further, the Appellate Division rejected plaintiff’s contention that the complaint was timely filed on August 13, 2021.  The Court agreed that in computing time under the statute of limitations, the day on which the cause of action accrued is not to be counted.  However, applying this methodology to plaintiff’s case, and excluding the date of the accident, August 12, 2019, from the computation of the two-year statute of limitations, under that measurement, a complaint filed on August 13, 2021 would be outside the applicable statute of limitations window by one day.  Hence, even excluding the date of the accident, the Court found that plaintiff failed to file his complaint within the two-year statutory period.

Although the Court noted that this result may be viewed as “harsh,” as plaintiff was time barred from asserting his claims against defendants through no fault of his own, the Appellate Division found that it could not “ignore a clear, statutorily imposed limitations period, or apply equitable principles absent support in the record.”  Hence, the trial court’s decision was upheld, and the complaint dismissed. 

Third Circuit Finds That Statute Of Limitations Period On Civil Rights Claim Arising From Wrongful Conviction Did Not Begin Until Conviction Was Vacated

The plaintiff Yasmine Coello was convicted of harassment in 2007.  Over a decade later, she was successful in having her conviction vacated.  Within two years later, she filed a civil rights action to recover for various abuses she alleged to have suffered during her criminal proceedings.  The issue in Coello v. DiLeo, 43 F.4th 346 (3d Cir. 2022) was whether the plaintiff timely filed her civil rights lawsuit.

This case had many twists and turns, stemming from a private citizen complaint filed by Shirley Messina in January 2007 in Municipal Court.  She accused plaintiff Coello, who at the time was dating Messina’s former boyfriend with whom Messina had a child, of harassment.  At that time, Coello appeared in court, pled not guilty and the charge was dismissed.

However, for some unknown reason, in February 2007, private attorney Kathleen Estabrooks submitted an affidavit to the municipal Judge Louis DiLeo requesting that she be appointed to prosecute Messina’s complaint against Coello.  Her application was granted, despite the fact that the prosecution did not involve a cross-complaint.  Her affidavit failed to mention that she was also representing Messina in custody and other civil actions against Coello’s boyfriend, circumstances that could clearly bear on Estabrooks ability to prosecute Coello’s case impartially.

Without recording any findings as to the need for a private prosecutor or the suitability of Estabrooks for the role, Judge DiLeo approved her to serve as acting prosecutor.  The matter proceeded to a bench trial.  There were other irregularities, including Judge DiLeo having Coello removed from the court room while the prosecution witnesses testified and then examining Coello himself when she took the stand in her own defense.  Ultimately, he found her guilty on the harassment charge and sentenced her to 30 days in jail but suspended that sentence on the condition that she attend 26 weeks of anger-management counseling.

In the next year, a post-trial hearing was held.  At the hearing, Judge DiLeo noted that he recently received a letter from Estabrooks stating that her client, Ms. Messina had been forced to file another complaint against Ms. Coello for assault.  She asked whether Ms. Coello had completed her anger management course as sentenced by the judge.  Coello attended that hearing without counsel.  Estabrooks also attended but entered her appearance as private counsel for Messina.  There was no municipal prosecutor present.  Instead, Judge DiLeo allegedly assumed that role without inquiring into Coello’s lack of representation.

Coello explained at that time that she had a few weeks of anger management remaining but was having trouble scheduling it due to her new job.  Estabrooks urged DiLeo to send Coello to jail and he agreed, reinstating her thirty day jail term.  He did not address any aggravating or mitigating factors.  Instead, she was immediately incarcerated.

While in jail, Coello hired an attorney who moved for reconsideration.  DiLeo did not schedule argument until 14 days into her jail sentence.  The facts were unclear whether that argument ever took place but Coello was released from jail after having been incarcerated for 18 days.

Nine years later, in November 2016, Coello filed a counseled application for post-conviction relief in New Jersey state court.  She asked for her harassment conviction to be vacated, arguing that the underlying proceedings were subject to a host of legal errors.  The State did not oppose Coello’s application having by that time being familiar with allegations of judicial misconduct lodged against Judge DiLeo.  With no objection from the State, the Court granted Coello’s application for post-conviction relief and vacated her conviction.

A little under two years later, Coello filed the within federal civil rights action in the District Court of New Jersey, naming multiple defendants including Estabrooks, her law firm, Judge DiLeo, Linden’s former mayor, its former prosecutor and the City of Linden.  She filed claims under §1983 and alleged a Sixth Amendment claim that certain Linden defendants violated her rights to counsel, to confront witnesses, and to a fair trial.  She also alleged a number of other constitutional violations.

The Estabrooks and Linden defendants each moved to dismiss the lawsuit, arguing that certain of the defendants were entitled to immunity, the claims were legally deficient and they were time barred.  The District Court considered only the timeliness argument against the Linden defendants. It found that Coello believed that she was wrongfully sentenced in January 2008 and that she had a complete and present cause of action for which she could have filed suit and obtained relief at that time.  Because she did not file suit until 2020, the District Court concluded that her claims against these defendants were untimely, dismissing all claims against the Linden defendants.

Upon appeal, the Third Circuit noted that a §1983 claim, like any other civil cause of action, must be filed within a certain time frame.  This time frame is called the statute of limitations and its purpose is to prevent plaintiffs from “reviving claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.”  The Court pointed out that a claim not filed within the applicable limitations, would generally be dismissed as untimely.  In this case, the plaintiff had two years to file this lawsuit.  The issue is when her two year deadline began to run.

The Court analyzed this time period under tort law.  The tort claim that most closely resembled this type of matter would be the common law tort of malicious prosecution.  A key element of a malicious prosecution claim is that the plaintiff “cannot recover unless and until the underlying criminal proceedings terminate in his or her favor.”  Similarly, when one is suing for an alleged unconstitutional conviction or imprisonment, the “plaintiff must prove that the conviction or sentence has been reversed on direct appeal, expunged by executive order, declared invalid by a state tribunal authorized to make such determination, are called into question by a federal court’s issuance of a writ of habeas corpus.”

Here, the Third Circuit pointed out that the favorable determination requirement was met on February 26, 2018 when the state court vacated Plaintiff’s criminal conviction.  She brought this lawsuit within two years of that date.  Hence, her §1983 claims were timely filed.  While Coello may have known she was wronged by the Linden defendants’ alleged misconduct at the time of her criminal prosecution, her current claims, all of which attack the validity of those state proceedings, did not exist until her harassment conviction was vacated.  Accordingly, the Third Circuit reversed the District Court decision, dismissing the claim as to the Linden defendants, and remanded it back for the District Court to consider the other arguments made by the Linden defendants in support of their motion to dismiss.

 

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