Sometimes, a plaintiff is slow to bring a civil lawsuit against a defendant. If the claim is brought years after the underlying events, it could harm a defendant's ability to defend the case. Can the defendant dismiss the case due to the delay? Maybe.
Minnesota recognizes a “laches” defense to civil claims. Laches involves a plaintiff whose unreasonable delay in starting the lawsuit has resulted in prejudice to the defendant. If proven, laches can result in dismissal of the plaintiff's case.
This article looks at the laches defense to civil lawsuits in Minnesota.
The Basics of Laches
“Laches” is a legal word meaning delay. Laches is a defense that a civil defendant may raise in response to an untimely claim by the plaintiff.
Laches is considered an “affirmative defense” under Minn. R. Civ. P. 8.03, meaning that the defendant has the burden of proof on the defense. So even if the plaintiff can prove the elements of his or her claim (i.e., breach of contract or negligence), a successful laches claim can result in dismissal of the case.
Judges are generally hesitant to uphold a laches defense unless there are unique circumstances. But there are other similar defenses that are often used with laches, including the statute of limitations, waiver, estoppel, spoliation, abandonment, and other defenses.
Laches might apply where the following things happen during a plaintiff's unreasonable delay in starting a lawsuit:
- Key witnesses died, lost their memories, or cannot be found;
- Key evidence has been destroyed, lost, degraded, or may not be admissible at a trial;
- The defendant made significant economic decisions in reliance on the plaintiff's failure to bring a timely claim and is now harmed; or
- Other unique circumstances where the defendant will be prejudiced in having to defend the case.
Laches could be a defense to most types of civil claims. If the plaintiff's claim is for breach of contract, the parties may try to include a clause in the contract to limit the use of a future laches defense. A judge may not necessarily be required to apply the clause, but there may be little harm in trying to limit the defense if the parties want to do so.
Here is a basic clause that showing how the laches issue might be addressed (note: do not use this without tailoring to your situation):
No delay or omission by the parties in exercising their rights upon a breach by the other party shall be constitute laches, waiver, or a similar defense to a breach-of-contract claim.
Legal Standards for a Laches Defense
While laches is a simple concept in theory, courts have set forth various guidelines that limit the application of this defense.
Laches is an equitable doctrine that “prevent[s] one who has not been diligent in asserting a known right from recovering at the expense of one who has been prejudiced by the delay.” Aronovitch v. Levy, 238 Minn. 237, 242, 56 N.W.2d 570, 574 (1953)). “[W]hen one sits on one's rights for too long a time, that person's claim should be estopped from continuing because it would be inequitable to require the defendant to fight the suit.” Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999).
Laches Depends on Facts
The application of the doctrine of laches usually depends on the facts of the case. Id. The decision to apply the doctrine of laches is left to a court's discretion and will only be reversed for an abuse of discretion. In re Marriage of Opp, 516 N.W.2d 193, 196 (Minn. Ct. App. 1994), review denied (Minn. Aug. 24, 1994).
In deciding whether to apply laches, a court must determine “whether there has been such an unreasonable delay in asserting a known right, resulting in prejudice to others, as would make it inequitable to grant the relief prayed for.” Carlson v. Ritchie, 830 N.W.2d 887, 891 (Minn. 2013). A party possesses a known right “when he or she has actual notice of the claim or, in the exercise of proper diligence, ought to have discovered it.” Jackel v. Brower, 668 N.W.2d 685, 691 (Minn. Ct. App. 2003).
“Prejudice to the other party resulting from delay is an essential element of laches.” Anderson v. First Nat. Bank of Pine City, 303 Minn. 408, 413, 228 N.W.2d 257, 260 (1975). Length of delay is measured from when a party knew or should have known of the relevant facts. Clark v. Reddick, 791 N.W.2d 292, 294 (Minn. 2010); Lindquist v. Gibbs, 122 Minn. 205, 208, 142 N.W. 156, 158 (1913). However, “lapse of time is only one of the elements to be considered[;] [m]ere delay does not constitute laches, unless the circumstances were such as to make the delay blamable.” Elsen v. State Farmers Mut. Ins. Co., 219 Minn. 315, 321, 17 N.W.2d 652, 656 (1945).
Since laches is an “equitable” defense, it is generally used for situations where there is some unfairness to the defendant in the case. “Where both parties are at fault, laches should not be strictly applied.” Indus. Loan & Thrift Corp. v. Benson, 221 Minn. 70, 21 N.W.2d 99 (1945). What is fair under the circumstances depends a lot on the facts and the discretion of the judge.
Relationship to Statute of Limitations
Often, cases involving laches issues also have issues with the statute of limitations (the legal deadline for bringing a claim). Courts have said that when an action is governed by a statute of limitations, laches generally does not apply. All Finish Concrete, Inc. v. Erickson, 899 N.W.2d 557 (Minn. Ct. App. 2017). “An exception exists in equitable actions when a party can show that delay would result in substantial injury to innocent parties.” In re: Appeal from Final Order of the Bd. of Managers, 889 N.W.2d 575, 580 (Minn. Ct. App. 2016), review denied (Minn. Mar. 28, 2017). This rule does not appear to have been applied uniformly, so this should be considered when assessing a laches defense.
The takeaway is that laches can be an important defense for a defendant who has been prejudiced, but it may require some unique circumstances to be successful.
Legal Theories Related to Laches
Laches is a defense that involves a plaintiff's delay and the resulting prejudice to a defendant. However, there are other legal theories that may also be raised in laches-type situations.
Statute of Limitations
If the plaintiff waited years before bringing a claim, the defendant might have a statute of limitations defense. The statute of limitations is the deadline (i.e., 2 years, 4 years, 6 years) for bringing a legal claim against a defendant. There are different deadlines for different types of cases. If the plaintiff waits too long and the statutory deadline passes, the claim must generally be dismissed.
“The purpose of a statute of limitations is to prescribe a period within which a right may be enforced and after which a remedy is unavailable for reasons of private justice and public policy.” Entzion v. Ill. Farmers Ins. Co., 675 N.W.2d 925, 928 (Minn. Ct. App. 2004). A person raising a statute of limitations defense has the burden of proving all the elements of that affirmative defense. Thiele v. Stich, 425 NW 2d 580, 583 (Minn. 1988).
The “clock” usually starts ticking for purposes of the statute of limitations when the defendant has been harmed and could bring a lawsuit. There are some varying methods of calculating the starting date, but it sometimes starts when a plaintiff should have discovered the harm. That means that a plaintiff must be diligent in considering legal harm that he or she may suffer.
Generally, once the deadline passes the claim is time-barred. But in limited circumstances, a plaintiff might be able to show “tolling” of the statute of limitations.
If the plaintiff waits too long and acts like he or she does not intend to enforce any right, the plaintiff may have given up the right to sue. This would be known as a “waiver” defense.
“Waiver is the voluntary and intentional relinquishment of a known right.” Ill. Farmers Ins. Co. v. Glass Serv. Co., 683 N.W.2d 792, 798 (Minn. 2004). “Knowledge and intent are essential elements of waiver . . . [b]ut the requisite knowledge may be actual or constructive and the intent to waive may be inferred from conduct.” Id. (quotation and citation omitted).
If the plaintiff gives a clear indication that he or she is giving up a right (such as by waiting too long), the defendant may have a valid waiver defense. Note that while the passage of time may help a waiver argument, it is not generally required.
While laches involves delay and prejudice, “estoppel” relates more to a plaintiff's promises that contribute to the defendant's inability to defend the case or the unfairness. Estoppel involves detrimental reliance by a person in response to another person's promises or representations.
In such a circumstance, it would be unfair to the person relying on the promise. While estoppel typically is made by the plaintiff in a civil case, there may also be circumstances where a defendant could raise it as a defense.
“Unclean hands” is a defense to an “equitable” claim. Equitable claims, as opposed to legal or statutory claims, include claims such as unjust enrichment, reformation, rescission, specific performance made by a plaintiff. If the plaintiff brings those types of claims, the defendant could try to use laches and the defense of unclean hands.
An unclean-hands defense bars a party who has acted inequitably from obtaining equitable relief. Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999). The defense prevents relief to a plaintiff guilty of illegal or unconscionable conduct. Fred O. Watson Co. v. U.S. Life Ins. Co., 258 N.W.2d 776, 778 (Minn. 1977). “Unclean hands” requires more than “improper purpose” or recklessness; it requires illegal or unconscionable conduct or a showing of bad faith by the plaintiff. Medtronic, Inc. v. Advanced Bionics Corp., 630 N.W.2d 438, 450 (Minn. Ct. App. 2001).
So if the plaintiff did something against the defendant in bad faith, regardless of whether it caused a delay, the defendant would have a potential unclean-hands defense to raise in the case.
Spoliation of Evidence
Sometimes, the prejudice or unfairness to a defendant is directly caused by the plaintiff's failure to preserve evidence. If so, the defendant can seek sanctions that could include, for serious misconduct, a dismissal of the plaintiff's claim.
A party, including a plaintiff, has a duty to preserve evidence when litigation is “reasonably foreseeable.” Miller v. Lankow, 801 N.W.2d 120, 127-28 (Minn. 2011). Spoliation of evidence occurs when that party fails to preserve evidence for another party's use in pending or future litigation. Id. at 127. Spoliation includes the destruction of evidence when done purposely or in good faith. Id. One of the factors is the extent of prejudice to the party seeking the evidence. Id. at 132.
A judge can issue a range of sanctions to a party that “spoliates” evidence, including a dismissal of that party's claim or defense in severe cases of intentional destruction.
Spoliation is generally seen as an evidentiary issue within a lawsuit and the need for the argument often becomes clear during the “discovery” phase of the civil case.
Exhaustion of Remedies
Sometimes, a civil dispute requires a person to pursue an administrative remedy or some other procedure before suing the defendant.
If there is a defined procedure that must be followed and the plaintiff fails to comply, then the defendant may make an argument that the plaintiff's legal action should be dismissed (with or without prejudice).
In the real estate context, such as a purchase agreement or real estate contract dispute, there may be an “abandonment” defense available to a defendant. While not often used, the logic may be similar to the reasoning for the doctrines of laches and waiver.
Abandonment is the “voluntary relinquishment of an interest by the owner with the intent of terminating his ownership.” Melco Inv. Co. v. Gapp, 259 Minn. 82, 85, 105 N.W.2d 907, 909 (1960). A “party seeking to prove abandonment of a contract must present clear and convincing evidence of an intention by the other party to abandon its rights.” Republic Nat'l Life Ins. Co. v. Marquette Bank , 295 N.W.2d 89, 93 (Minn. 1980). Abandonment “must be clearly expressed, and acts and conduct of the parties to be sufficient must be positive, unequivocal, and inconsistent with the existence of the contract.” Desnick v. Mast, 311 Minn. 356, 365, 249 N.W.2d 878, 884 (1976).
Abandonment may give a defendant in a real estate lawsuit an extra option to defend the case.
Laches in Various Contexts
There are many types of contracts and many situations where laches issues could arise.
Laches could be raised in the real estate context if there is, for example, a “lost deed” that a person attempts to record after a significant delay in time. The defense may also arise in land use actions against a municipality involving zoning or other acts. Also, it could potentially be applicable to a unique circumstance involving a purchase agreement or contract for deed.
Additionally, laches might be relevant to a legal action where a plaintiff tries to rescind or reform a real estate contract or lease that has already been performed in a different manner.
Laches might come up in a business contract dispute. For example, perhaps a party waited years to start a breach-of-contract lawsuit and by that time the witnesses or contract documents were gone.
Laches might come up in a construction dispute where an owner or participant in the project fails to raise an objection that could more easily be addressed before the building is completed. Once the project is done, it may be harder to fix and harder to assess to see if there are defects. There may not be available evidence to defend the case. Laches, along with other claims such as waiver or statute of limitations, may be useful defenses for a defendant in these circumstances (often a contractor).
Laches is not a common issue that comes up in disputes over wills or trusts. But potentially, laches might apply where a person's estate has been administered and a person later comes in to dispute the distributions. Likewise, laches might apply where a decedent executed amendments to an estate plan and there are is confusion about whether such documents or supporting witnesses still exist. If a person relied on other versions of the estate plan, there might be prejudice in having to defend claims related to a different estate plan alleged by another person.
The takeaway is that laches is a fact-dependent defense and applies in unique situations. While a defendant should raise it where it might apply, laches should be among a group of defenses that target a plaintiff's delayed lawsuit. For these reasons, the plaintiff needs to act promptly to avoid these types of defenses.
Practical Suggestions for Laches Issues
- If you think that you may have suffered legal harm, consider the legal options and possibly speak with an attorney. Also consider whether witnesses and evidence will be preserved for a future lawsuit, and whether it is important to start a lawsuit while the evidence is still “fresh.”
- Promptly pursue legal action once you know that you have a legal problem (i.e., the other party breached the contract).
- For a plaintiff and a defendant, it can be important to preserve potential evidence and get statements from potential favorable witnesses early in the dispute.
- If you are a plaintiff negotiating with the other party over a long period of time (months or years), remember to commence the lawsuit in a timely manner. Generally, nothing about commencing a lawsuit prevents the parties from continuing to discuss settlement.
- As a defendant, consider similar theories like waiver or the statute of limitations that may cover more broad situations.
- As a defendant, be certain to raise laches as an affirmative defense in your initial pleading and develop facts that allow you to prove the defense.
- As a plaintiff that has waited some time before starting a civil lawsuit, be prepared to address any time-based defenses that a defendant may bring in the case.
Note: These are practical suggestions that may help people, but they are not meant to be a substitute for legal advice.
A plaintiff that sits on his or her rights too long without pursuing a lawsuit is taking a significant risk. If the circumstances substantially change during the period of delay, a defendant may have a laches defense and other defenses to the claim.
Since the laches defense is reserved for limited circumstances, a defendant must identify the facts that support a laches defense. If the defense is successful, it can result in a full denial of relief sought by the plaintiff.
If you need legal advice or representation on an contract dispute, Contact Us for a free consultation. With offices in Shakopee (Scott County) and Litchfield (Meeker County), we serve clients throughout the Twin Cities and Greater Minnesota.