Every civil lawsuit or cause of action that can be filed in North Carolina has a time limit beyond which the lawsuit can no longer be filed. This is referred to as a Statute of Limitations.
The Statute of Limitations is said to “run” from when the cause of action “accrues.” That generally means that the Statute of Limitations time period begins when the thing that gave rise to the lawsuit happens. If the lawsuit is not filed within the applicable Statute of Limitations, then it is forever “time barred.” In other words, the lawsuit is subject to being dismissed without being heard.
There are a lot of different reasons why people and companies wait to file lawsuits but there are very few exceptions to the rule that, once the clock starts to run on the Statute of Limitations, nothing stops it. If the person is under certain disabilities at the time their cause of action accrues, then the Statute of Limitations does not begin to run until the disability ends.
Note, two things. First, the disability must be present when the cause of action accrues, rather than being a condition that begins after that time. Second, the disability here has a very narrow definition. The person must be insane, legally incompetent, or under the age of 18 to qualify. Another set of exceptions applies to defendants who flee the state and remain away for more than a year and who otherwise are not subject to personal jurisdiction.
But an interesting situation arises when the defendant dies before the Statute of Limitations runs out. Under certain circumstances, North Carolina Law allows someone to file suit against the estate of a defendant if that person passes away before the Statute of Limitations runs out and if the estate is properly noticed.
After a personal representative of an estate is appointed by the Clerk of Court, one of their duties is to notify creditors that they have been appointed to receive notice of their claims. Such notice is required to be mailed to known creditors and published in a newspaper for unknown creditors and gives 90 days for those creditors to present their claims in writing to the personal representative of the estate. Creditors can also file these claims with the clerk of court in the county in which the estate was opened. Any creditor of the estate that fails to give proper notice to the personal representative of the estate is barred from suing to recover from the estate.
This process is used by the personal representative of the estate to discharge all debts, known and unknown, prior to distributing assets to heirs and closing the estate. N.C.G.S. § 1-22 allows the plaintiff to toll the statute by giving notice of the lawsuit to the personal representative of an estate during the statutorily prescribed notice to creditors period, even if the Statute of Limitations has already run its course.
There are two ways for the creditor to use N.C.G.S. § 1-22 to file suit after the Statute of Limitations. The statute allows the Plaintiff to file and maintain a lawsuit after the expiration of the Statute of Limitations if the action is brought during the notice to creditor’s period or presented to the personal representative. If the personal representative rejects notice of such a claim, then the Plaintiff has three months after written notice of the rejection to file their lawsuit. The more cautious approach would be to file suit and serve the estate with the lawsuit and the creditor’s notice within the proper time frame.
One lawyer once said that working as a trial attorney is like riding a motorcycle at high speed – any little bump or rock in the road can cause the rider to crash and burn. Failing to file a lawsuit during the applicable Statute of Limitations can definitely cause a case or a career to crash and burn, but a little knowledge of estate law can go a long way to fixing such a situation under the right circumstances.
Russell is a native of Wilmington, N.C. and has been practicing law in Eastern N.C. since 2004. Prior to that, he worked in Chapel Hill and Durham as a research technician on teams exploring RNA-based gene therapies, viral fusion inhibitors, and the role Galactocerebroside plays in protein localization near nodes of Ranvier. After passing the patent bar in 2003 and becoming a registered patent agent, Russell received his law degree from Georgetown in 2004. He began his legal career representing clients in personal injury matters but later left personal injury to provide patent prosecution services to law firms in China and Taiwan prior to joining The Humphries Law Firm in 2014. Russell helps individuals and businesses protect their innovations, creations and business information using strategies based in patent, trademark, copyright and trade secret law. His work includes both strategic planning and dispute resolution. He assists clients who want to buy and sell businesses, and license or transfer their intellectual property assets. Russell also assists with the firm’s litigation practice, particularly in insurance and employment disputes.
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