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Nevada Statutes of Limitation and the Discovery Rule

Statutes of limitation are designed to assure fairness to parties and prevent surprise lawsuits by determining the maximum time allowed after an event within which legal proceedings may be initiated.  As a practical matter, statutes of limitation avoid fraud on the court by disallowing claims to linger “until evidence has been lost, memories have faded, and witnesses have disappeared.”  In re Jim L. Shetakis Distrib. Co., 415 B.R. 791, 799 (D. Nev. 2009) aff’d, 401 F. App’x 249 (9th Cir. 2010) (quoting Burnett v. N.Y. Cent. R.R. Co., 380 U.S. 424, 428, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965) (as quoted in Oltman v. Holland America Line, Inc., 538 F.3d 1271, 1278 (9th Cir. 2008))).  The appropriate accrual date after which a claim may not be filed is a question of law if the facts are uncontroverted.  Winn v. Sunrise Hosp. & Med. Ctr., 277 P.3d 458, 463 (2012).

The time allowed to file a claim may be extended pursuant to the “discovery rule”, which is also known as the inquiry notice doctrine.  The discovery rule is available when fairness dictates that the plaintiff should be allowed more time to file her claim because the nature of the claim was hidden from her somehow.  Claimants must demonstrate the reasons or excuses why the statute should be tolled.  Siragusa v. Brown, 971 P.2d 801, 807 (Nev. 1998).  “This rule requires a plaintiff to use due diligence in determining the existence of a cause of action and delays the accrual of the cause of action until the plaintiff obtains inquiry notice. Bemis v. Estate of Bemis, 114 Nev. 1021, 1025, 967 P.2d 437, 440 (1998) (applying the inquiry notice standard to determine when the applicable statute of limitations ran).”

 “Mere ignorance of the existence of a cause of action or of the facts which constitute the cause will not postpone the operation of the statute of limitations; the statute runs from the time the cause of action or of the facts which constitute the cause of action first accrues notwithstanding such ignorance, if the facts may be ascertained by inquiry or diligence, or if the ignorance is not willful and does not result from negligence or lack of diligence.”

Sierra Pacific Power Co. v. Nye, 389 P.2d 387, 390 (Nev. 1964).

In order for a Plaintiff to avail herself of the inquiry notice doctrine, she must demonstrate that she used due diligence in determining the existence of an action.  Bemis v. Estate of Bemis, 114 Nev. 1021, 1025, 967 P.2d 437, 440 (1998) (citing Sierra Pacific Power Co. v. Nye, 80 Nev. 88, 389 P.2d 387 (1964)).  The law requires that once suspicion of wrongdoing has been raised, one is placed on inquiry notice and has a duty to investigate whether the suspicion is well-founded.  Davidson v. Wilson, 973 F.2d 1391 (8th Cir. 1992).

The statute runs from the time the facts which constitute the cause of action first accrues, notwithstanding a plaintiff’s ignorance of the same, if the facts may be ascertained by inquiry or diligence, or if the ignorance is not willful and does not result from negligence or lack of diligence.  Fed. Deposit Ins. Corp. v. Jones, No. 2:13-CV-168-JAD-GWF, 2014 WL 4699511, at *7 (D. Nev. Sept. 19, 2014) (citing Sierra Pacific Power Co. v. Nye, 80 Nev. 88, 389 P.2d 387, 390 (Nev. 1964)).

In Gregory v. Union Pacific R. Co., 673 F.Supp. 1544 (D. Nev. 1987), the federal court dismissed a claim after determining that the complainant knew enough about an initial injury to place him on notice, but did not file a claim until four years after the incident, when he finally discovered that he had in fact received a more serious injury. Id. at 1547.

The Winn matter is similarly instructive.  There, the Nevada Supreme Court held that the reception of medical records suggesting negligence began the statute of limitations period.  The court provided guidance, suggesting that factual knowledge “need not pertain to precise legal theories the Claimant may ultimately pursue, but merely to the Claimant’s general belief that someone’s negligence may have caused his or her injury.”  Winn¸128 Nev. at ___, 277 P.3d at 462.

Further, the Dreyer-Lefevre court noted that:

“while the Legislature has seen fit to expressly apply the discovery rule to other of causes of action, see NRS 11.190(2)(a) (applying to a cause of action for deceptive trade practice); NRS 11.190(3)(a) (applying to a cause of action to recover a stolen animal), it is notably absent from NRS 11.190(4)(e). Therefore, we conclude that the discovery rule does not apply to a cause of action that NRS 11.190(4)(e) [negligence] controls. See State, Dep’t of Taxation v. DaimlerChrysler, 121 Nev. 541, 548, 119 P.3d 135, 139 (2005) (stating that subject matter omitted from a statute is deemed intentional).”

Dreyer-Lefevre v. Morissette, 373 P.3d 910 (Nev. 2011).

 

 

About the Author

Jay Young is a Las Vegas, Nevada attorney. His practice focuses on business law, business litigation, and acting as an Arbitrator and Mediator.

Mr. Young can be reached at 702.667.4868 or at jay@h2law.com.