A Good Offense Can Be the Best Defense
In Donaldson v. West Bend Mut. Ins. Co. (August 4, 2009), the court of appeals addressed the statute of limitations relating to personal injury counterclaims. After Berg hit her with his bicycle on October 3, 2004, Donaldson filed a September 27, 2007 lawsuit against Berg and his insurance company. Insurance defense counsel filed an answer and affirmative defenses, but Berg hired separate counsel to pursue a counterclaim against Donaldson for causing injury to Berg. Berg’s counsel filed a counteclaim on December 14, 2007, outside Wis. Stat. s. 893.54’s three year statute of limitations for personal injury claims.
The court concluded that the statute of limitations applied to personal injury actions, whether or not brought as counterclaims. However,
While it is true that Wis. Stat. § 893.54 references only “actions” and not counterclaims, Wis. Stat. § 893.14 provides the link between §§ 893.14 and 893.54. Section 893.14 provides:
Limitation on use of a right of action as a defense or counterclaim. Unless otherwise specifically prescribed by law, the period within which a cause of action may be used as a defense or counterclaim is computed from the time of the accrual of the cause of action until the time that the plaintiff commences the action in which the defense or counterclaim is made. A law limiting the time for commencement of an action is tolled by the assertion of the defense or the commencement of the counterclaim until final disposition of the defense or counterclaim. If a period of limitation is tolled under this section and the time remaining after final disposition in which an action may be commenced is less than 30 days, the period within which the action may be commenced is extended to 30 days from the date of final disposition.
Because the statute of limitations was tolled from the date of the plaintiff’s filing, the counterclaim was timely.
The reason this became an issue at all is because most insurance companies refuse to pay for anything more than pure defense, even if a colorable counterclaim will provide great leverage. The position can be shortsighted, often leading to later problems when settlement is being seriously discussed, and the plaintiff wants a package deal including the counterclaim that now belongs to the insured defendant.
Ideally, talk with your insurer early and in detail about the usefulness of potential counterclaims and the role they’ll play (if any) in defense. It may prevent your case from being the next reported statute of limitations case out there.
