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New Guidance on Statute of Limitations in PA

July 23, 2021

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<p style="text-align: justify;">On July 21, 2021, the Pennsylvania Supreme Court in <a href="https://www.wcmlaw.com/wp-content/uploads/2021/07/RIce.pdf"><em>Rice</em> </a><em> v. Altoona-Johnston</em> issued a pivotal decision concerning the applicable statute of limitations in Pennsylvania for claims stemming from alleged sexual abuse.</p>
<p style="text-align: justify;">By way of background, in 2016, Rice, after reviewing a PA Grand Jury Investigative report, which detailed findings that hundreds of children were victimized by over fifty individual priests or religious leaders in Pennsylvania, commenced a lawsuit based on alleged abuse she sustained during the 1970s and 1980s. After the trial court dismissed her lawsuit based on the applicable statute of limitations, Rice appealed, claiming the trial court misapplied the law. Rice’s ability to appeal the trial court’s decision was aided by a subsequent Supreme Court of Pennsylvania decision, <em>Nicolaou v. Martin</em>, which held that a plaintiff’s efforts to investigate a defendant for alleged abuse was sufficiently reasonable to toll the applicable statute of limitations. With the <em>Nicolaou</em> decision serving as the foundation, the Superior Court reversed the trial court’s decision, thereby allowed Rice to continue with her claims even though her claims were filed some 35 years after the traditional statute of limitations.</p>
<p style="text-align: justify;">On appeal, the Pennsylvania Supreme Court analyzed, inter alia, whether the Superior Court erred by overruling precedent and holding a plaintiff may bring a secondary cause of action for civil conspiracy where the primary cause of the harm is time-barred. To analyze this question, the Court recognized a cause of action accrues when an injury is inflicted and the clock “begins to run as soon as the right to institute and maintain a suit arises; lack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations”. While a plaintiff may be time-barred if he or she fails to commence a lawsuit before the clock expires, the Court analyzed whether the discovery rule or fraudulent concealment doctrine applied to save Rice from failing to file the lawsuit before the applicable statute of limitations expired.</p>
<p style="text-align: justify;">First, the Court held the discovery rule tolls the statute of limitations, which delays the point at which the plaintiff is charged with a duty to file suit. With respect to Rice, the Court reasoned the statute of limitations began to run, at the latest, when Rice was last assaulted; therefore, Rice had two years from that date to discover other actors potentially liable for her injury. Although Rice argued there was no reason for her to know of the Diocese’s involvement, the Court determined the<em> Nicolaou</em> decision was distinguishable from the Rice matter. Specifically, the Court held that because Rice’s claims against the Diocese are based on the alleged abuse, Rice was on inquiry notice as a matter of law regarding the Diocese’s potential involvement.</p>
<p style="text-align: justify;">Next, the Court held the fraudulent concealment doctrine is based upon estoppel and has its basis in equity. Essentially, the fraudulent concealment doctrine applies where fraud prevents a plaintiff from knowing he or she was defrauded; as such, the cause of action does not exist until the plaintiff becomes aware of the fraud. However, the Court determined the superior Court failed to consider Rice’s due diligence obligations. Assuming the truth of the Diocese’s misrepresentations as alleged in the complaint, the Court held none of the alleged misrepresentations misdirected Rice from her knowledge that she was assaulted. As such, she was obligated to inquire into other potential claims. While the Diocese was obligated to disclose, the Diocese’s failure to disclose does not excuse Rice’s failure to conduct any investigation into the Diocese as an additional cause of her injuries.</p>
<p style="text-align: justify;">Ultimately, the Court ruled the discovery and fraudulent concealment doctrines were inapplicable and reversed the Superior Court decision. While the Superior Court’s decision in Rice opened the door for otherwise time-barred claims, the PA Supreme Court’s decision clearly provides such claims are time-barred. This decision will have a ripple effect on other pending lawsuits in Pennsylvania as some state and federal Pennsylvania courts stayed matters alleging civil conspiracy and fraud stemming from alleged sexual abuse pending the outcome of the Rice decision. For example, in S<em>uminski v. The Diocese of Erie,</em> which is pending before the U.S. District Court for the Western District of Pennsylvania, the plaintiff brought claims against the Diocese of Erie alleging the Diocese of Erie participated in a systematic cover up, as the Diocese of Erie was made aware of the alleged abuse. Citing the PA Grand Jury Report, the plaintiff asserts the following claims: negligence for failure to supervise, negligence for breach of fiduciary duty, negligence for failure to provide a secure environment, negligence for failure to control conduct of the servant, negligence for failure to warn, fraud, fraudulent concealment and civil conspiracy. On October 15, 2020, the case was stayed pending the outcome in <em>Rice.</em> It will be interesting to see how these lawsuits develop.</p>
<p style="text-align: justify;">Thanks to Lauren Berenbaum for her contribution to this post. Please contact <a href="mailto:Haquino@wcmlaw.com">Heather Aquino</a> with any questions.</p>

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