Tennessee Changes Statute of Limitations Law for Individuals Who Are Incapacitated or Incompetent.

Tennessee law has long provided that individuals who are adjudicated incompetent at the time the cause of action accrued, may commence the action after their legal rights are restored within the normal time period for the statute of limitations for that cause of action.  The statute did not provide for the statute of limitations time period to run if they never gained competency.  As a result, essentially, an individual who was incompetent who was permanently incompetent, would not have any statute of limitations for any cause of action until the time they die.

In 2016, the Tennessee legislator fixed this problem by amending the applicable statute, T.C.A. § 28-1-106 in Public Chapter 932.  They added subsection (c)(2) of this statute now provides that any individual who has a court-ordered fiduciary (such as a guardian or conservator) or someone who possesses the legal right to bring suit on behalf of a person who lacks capacity, must commence the action on behalf of that person within the applicable statute of limitations.  The statute provides that the fiduciary may not rely upon any tolling of the statute of limitations unless the individual can establish by “clear and convincing evidence that the individual did not and could not reasonably have known of the accrued cause of action.”

The new statute (T.C.A. § 28-1-106) now provides the following:

(a) If the person entitled to commence an action is, at the time the cause of action accrued, either under eighteen (18) years of age, or adjudicated incompetent, such person, or such person's representatives and privies, as the case may be, may commence the action, after legal rights are restored, within the time of limitation for the particular cause of action, unless it exceeds three (3) years, and in that case within three (3) years from restoration of legal rights.

(b) Persons over the age of eighteen (18) years of age are presumed competent.

(c)(1) If the person entitled to commence an action, at the time the cause of action accrued, lacks capacity, such person or such person's representatives and privies, as the case may be, may commence the action, after removal of such incapacity, within the time of limitation for the particular cause of action, unless it exceeds three (3) years, and in that case within three (3) years from removal of such incapacity, except as provided for in subdivision (c)(2).

(2) Any individual with court-ordered fiduciary responsibility towards a person who lacks capacity, or any individual who possesses the legal right to bring suit on behalf of a person who lacks capacity, shall commence the action on behalf of that person within the applicable statute of limitations and may not rely on any tolling of the statute of limitations, unless that individual can establish by clear and convincing evidence that the individual did not and could not reasonably have known of the accrued cause of action.

(3) Any person asserting lack of capacity and the lack of a fiduciary or other representative who knew or reasonably should have known of the accrued cause of action shall have the burden of proving the existence of such facts.

(4) Nothing in this subsection (c) shall affect or toll any statute of repose within this code.

(d) For purposes of this section, the term “person who lacks capacity” means and shall be interpreted consistently with the term “person of unsound mind” as found in this section prior to its amendment by Chapter 47 of the Public Acts of 2011.

As a result, this statute now provides that a statute of limitations can run even when an individual lacks capacity.  This would occur when their fiduciary (or person who possesses the legal right to bring an action on their behalf) knew or should have known of the accrual of the cause of action and failed to bring the cause of action within the statute of limitations.  This is a significant change that could have an impact many cases involving an incompetent person. 

This law is in effect and applies to all causes of action filed on or after April 27, 2016.  One major issue with this legislation is how this law could take effect for all causes of action filed on or after the date of the change.  This makes no sense from a practical perspective.  If an incompetent person had a lawsuit that accrued 5 years ago with a 1-year statute of limitations and they have a court appointed fiduciary, what happens to that cause of action due to this statute?  Under the old law, the statute of limitations did not begin to run until they gained competency or when the died.  Do they now need to file suit within 1 year from the date this statute went into effect (the plain language of the statute does not provide for this)?  Is their cause of action retroactively barred?  That cannot be the case – this would be the retroactive application of a law that effects a substantive right – that is unconstitutional.  Regardless, this is likely a mess that will need to be sorted out by the Tennessee appellate courts.  I am not sure why nobody considered this when this law was drafted and adopted.