Parties Cannot Always Extended Statutory Time Limits for Filing Lawsuits
- June 24, 2014
- crux6854
Statutory time limits for filing lawsuits (often called statutes of limitation) are regularly tolled by mutual agreement, and sometimes are extended based on a court’s equity powers. Yet, in certain circumstances, such statutory time limits cannot be extended. To determine whether an applicable statute of limitation can be tolled, a potential litigant must first determine whether the limitation is jurisdictional. If so, under Colorado law, exceeding the time limit destroys the right to bring the action.
Recently, the Colorado Court of Appeals considered whether the statutory time limit for filing a claim under the Colorado Uniform Fraudulent Transfer Act (CUFTA) could be tolled by agreement. Lewis v. Taylor concerned claims against Steve Taylor, who, in 2006, invested three million dollars with securities broker Sean Mueller. Lewis v. Taylor, No. 13CA0239, 2014 COA 27 (Colo. App. March 13, 2014). Taylor made a profit of $487,000 from his investment. In 2010, after Mueller was convicted of securities fraud, theft, and violating the Colorado Organized Crime Control Act, C. Randall Lewis was appointed receiver and sought to recover Taylor’s profit. Before the statutory time period for filing a CUFTA claim expired, Taylor and Lewis entered into a written agreement to toll the deadline. Lewis then filed a CUFTA claim against Taylor outside the statutory time limit, but within the time limit defined in the tolling agreement. Taylor moved for summary judgment with regard to the time limit, but the District Court ruled in Lewis’ favor, determining that the tolling agreement effectively extended the time in which to file. On appeal, Taylor argued that CUFTA claims are not subject to tolling, and the Colorado Court of Appeals, upholding Taylor’s argument, concluded that jurisdictional time limits cannot be extended, regardless of agreement.
To determine whether a statutory time limit is jurisdictional, the terms of the statute must be scrutinized. First Interstate Bank of Denver, N.A. v. Cent. Bank & Trust Co. of Denver, 973 P.2d 855, 861 (Colo. App. 1996). With respect to fraudulent transfer, C.R.S. § 38-8-110(1) provides that a cause of action is “extinguished” if filed outside the statutory period. When statutory language clearly indicates intent to bar the right to bring an action, and not merely the remedy, the time limitation is jurisdictional and cannot be tolled, regardless of agreement. So, potential litigants should not blindly rely on the ability to extend deadlines by agreement, because Colorado law prevents extension of some statutes of limitation.