Agreements to toll the statute of limitations only apply to the claims of the parties to the agreement. That was the decision reached by the Michigan Court of Appeals in Wilson v. Kelsey Hayes Co. in January 2014.
The Plaintiff in the case was a former employee of Kelsey-Hayes who alleged that she had been wrongfully discharged. Due to an employment policy at Kelsey-Hayes, current and former employees like the Plaintiff were required to use an internal dispute resolution process that required employees to submit their claims to arbitration before filing those claims in court. Plaintiff, therefore, had to attempt to arbitrate her claim for wrongful discharge before filing it with the court.
Presumably because Plaintiff was concerned that the statute of limitations would run during the arbitration (in part because she had waited two years to start the internal dispute resolution process from the time of her alleged wrongful discharge), she and Kelsey-Hayes entered a tolling agreement. This tolling agreement prevented the statute of limitations from running while the arbitration was in progress.
The arbitrator ultimately denied the Plaintiff’s claims and the Plaintiff filed the claims in circuit court after the statute of limitations would have otherwise expired. However, Plaintiff did not limit the claims as being against Kelsey-Hayes, but also included Mitchell, the individual whom Plaintiff worked as an administrative assistant for at Kelsey Hayes, and the Chief Financial Officer at Kelsey-Hayes as defendants.
The defendants moved to dismiss the two additional parties because they were not parties to the tolling agreement and therefore the statute of limitations had expired with regards to the Plaintiff’s claims against them. The trial court, however, denied the defendant’s motion, finding that the pertinent part of the tolling agreement did not reference any particular party, but instead cited the purpose of the tolling agreement in “preserving her claims from the further running of any applicable statutes of limitations”.
The Michigan Court of Appeals rejected the trial court’s conclusion and reversed the decision. The Court of Appeals held that the “trial court’s determination that Mitchell was bound by the tolling agreement because plaintiff and Kelsey-Hayes intended to toll the limitations period for all of plaintiff’s claims, regardless of who the claims were asserted against, ignores the fact that plaintiff and Kelsey-Hayes were powerless to toll claims against Mitchell without Mitchell’s consent”.
The court’s opinion can be accessed at the link below:
http://publicdocs.courts.mi.gov:81/opinions/final/coa/20140114_c315757_62_315757.opn.pdf
Lisa Okasinski is a licensed attorney in the State of California. If you have any questions about the information above, please contact the attorneys at Demorest Law, PLLC.
