When Does Equitable Estoppel Apply In Cases Involving Statute of Limitations ?
In Vaughn v. Speaker, 126 Ill. 2d 150, 533 N.E.2d 885, 127 Ill. Dec. 803 (1988), the Illinois Supreme Court listed six elements of equitable estoppel and gave guidance to Illinois courts on when estoppel can be applied in cases involving the statute of limitations.
The six elements include:
(1) a misrepresentation or concealment of material facts through the words or conduct of the party to be estopped;
(2) knowledge by the party against whom the estoppel is alleged that the representations were untrue;
(3) no knowledge of the truth respecting the representations on the part of the party asserting equitable estoppel;
(4) a reasonable expectation of the party estopped that his representations will be acted upon;
(5) a good faith reliance to its detriment by the party asserting estoppels;
(6) prejudice to the party asserting estoppel if the other party is permitted to deny the truth of its representations. See Vaughn, 126 Ill. 2d at 162-63, 533 N.E.2d at 890.
In Vaughn, the facts related to the basis for estoppel included allegations that the insurer conceded liability, paid the property damage claim, offered $ 15,000 to settle the personal injury claim (which offer was apparently never withdrawn), and engaged in extensive negotiations regarding the extent of personal injuries.
In Vaughn, the trial court dismissed the plaintiffs complaint as untimely.
The supreme court, while agreeing that the complaint was untimely filed, found that an issue of fact existed as to whether the defendants were estopped to assert the statute of limitations.
The cause was thus remanded so that the circuit court, as the trier of fact, could determine whether the insurer's conduct lulled the plaintiffs into delaying the filing of their complaint and whether, if the defendant's conduct was unintentional, the plaintiffs' reliance in delaying suit was reasonable. Vaughn, 126 Ill. 2d at 164, 533 N.E.2d at 892.