In its September 8, 2016, decision, the Indiana Court of Appeals made clear that timing is everything when filing a claim.
In V. Ganz Builders & Development Company (VGB) v. Pioneer Lumber, Inc., the court considered whether a statute of limitations defense remained valid even if the defense was not raised in the party’s first answer to a complaint.
The case’s facts were relatively straightforward. VGB opened a line of credit with Pioneer Lumber in 1996 and made charges and payments to its credit account up until February 2006. By the time the last charge to the account was made, VGB owed more than $40,000 to Pioneer Lumber. In this case, the line of credit extended to VGB was considered an account that was not in writing, and as such, was subject to a six-year statute of limitations. In November 2012, Pioneer Lumber filed suit against VGB for the unpaid charges. VGB responded to the initial complaint, but it did not raise a statute of limitations defense until it filed a counter motion for summary judgment.
The lower court denied VGB’s statute of limitations defense and said that the defense was waived when VGB did not raise it in its answer. The Court of Appeals disagreed. It held that the statute of limitations defense could be raised even during the summary judgment phase of proceedings. The Court of Appeals said the availability of the defense did not rely upon whether the party claiming it should have known that it applied when it filed its answer. Instead, whether or not the party could still claim the defense depended upon whether the delay in asserting the defense caused the opposing party to suffer prejudice. The Court of Appeals found that Pioneer Lumber did not suffer any prejudice from VGB’s delay in asserting the statute of limitations defense.
Ultimately, VGB’s statute of limitations defense prevailed, sending a strong message that for a claim to be successful, it must be filed before the statutory time period runs out.
About the Author
Shannon S. Frank, a Partner at Kahn, Dees, Donovan & Kahn, LLP (KDDK), in Evansville, Indiana, has more than 25 years’ experience in the practice of business law, construction law, estate planning and probate administration, health care law, and real estate law. Shannon takes prides in giving exceptional service to her clients, recognizing that relationships with clients play a significant and essential role in providing tailored and comprehensive legal advice.