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LITIGATION 7: The statute of limitations can be extended upon proper showing of insanity.

Plaintiff suffers from mental illnesses, the most significant of which are bipolar disorder and schizoaffective disorder, which have affected her throughout her life.  Plaintiff’s grandmother conveyed the farmland to plaintiff in 1974.  In August 1976, plaintiff suffered a mental breakdown and was hospitalized for a number of weeks.  In early September 1976, she was discharged.  Later that September, plaintiff conveyed the farmland to defendant at an attorney’s office.

Plaintiff brought the instant action in 2017, claiming that defendant unduly influenced her to convey the property.  Plaintiff noted that, at the time of the conveyance, she had only recently been discharged from the hospital for her mental breakdown, and claimed she had been under the influence of potent antipsychotic drugs at the time of the conveyance.  Plaintiff did not dispute that the statutory period of limitations for her action would have expired in September 1991. However, plaintiff asserted that MCL 600.5851 applied, tolling the statute of limitations until a year after the insanity that prevented her from bringing an action was removed.  Plaintiff contended that, since the conveyance in 1976, she had been continuously insane under MCL 600.5851 and, therefore, the statutory period of limitations did not expire.

After taking evidence and testimony from expert witnesses, the trial court agreed with plaintiff’s position.  It determined that plaintiff had been continuously insane since 1976 until sometime in 2017 and that, accordingly, she had until 2018 to file this lawsuit.  Given that plaintiff filed suit in November 2017, the trial court concluded that plaintiff’s action was timely filed.   The trial court also found that defendant had unduly influenced plaintiff to transfer the farmland in 1976. 

STANDARD OF REVIEW

The applicability of a statute of limitations is reviewed de novo.  We review a trial court’s findings of fact in a bench trial for clear error and its conclusions of law de novo.  A factual finding is clearly erroneous when “there is no evidentiary support for [it] or where there is supporting evidence but the reviewing court is nevertheless left with a definite and firm conviction that the trial court made a mistake.”

 INSANITY

First, defendant argues that the trial court clearly erred in its findings regarding plaintiff’s insanity.  We disagree.  There was ample evidence supporting the trial court’s determination that plaintiff was continuously insane, for purposes of MCL 600.5851, from 1976 until 2017. Typically, the burden rests on the party asserting a statute of limitations defense to prove that the statute of limitations applies.  “However, where it appears that the cause of action is prima facie  barred, the burden of proof is upon the party seeking to enforce the cause of action to show facts taking the case out of the operation of the statute of limitations.”  It is undisputed that the statutory period of limitations in this case had expired; accordingly, it was prima facie barred.  The burden thus rested on plaintiff to show that the statute of limitations was tolled.

In relevant part, MCL 600.5851(1) provides an exception to a statutory period of limitations for a person who is disabled due to insanity:

 . . . [I]f the person first entitled to make an entry or bring an action under this act is . . . insane at the time the claim accrues, the person or those claiming under the person shall have 1 year after the disability is removed through death or otherwise, to make the entry or bring the action although the period of limitations has run.

The term “insane” is defined as “a condition of mental derangement such as to prevent the sufferer from comprehending rights . . . she is otherwise bound to know and is not dependent on whether or not the person has been judicially declared to be insane.”  MCL 600.5851(2).  The “insanity must exist at the time the claim accrues.  If the disability comes into existence after the claim has accrued, a court shall not recognize the disability under this section for the purpose of modifying the period of limitations.”  MCL 600.5851(3).  Furthermore, a party may “not tack successive disabilities.  A court shall recognize only those disabilities that exist at the time the claim first accrues and that disable the person to whom the claim first accrues for the purpose of modifying the period of limitations.”  MCL 600.5851(4).

Defendant argues that, because plaintiff’s diagnoses differed and were not exactly the same since 1976, this demonstrates that plaintiff attempted to “tack” successive disabilities in violation of MCL 600.5851(4).  Defendant is correct that plaintiff’s diagnoses did change over this period of time.  However, two medical experts testified that it took time for a patient’s illness to become completely clear.  The experts explained that bipolar disorder and schizoaffective disorder were similar and often difficult to distinguish from each other, which would explain why some diagnoses since 1976 included only one or the other.  Thus, there was evidence that plaintiff had an ongoing mental illness, and the trial court did not clearly err.

We also reject defendant’s contentions that plaintiff was not continuously insane and thus there were periods in which plaintiff could have brought this lawsuit.  The medical doctors, both of whom had treated plaintiff, testified extensively regarding plaintiff’s inability to think long-term, think logically, establish goals, function effectively in everyday life, and understand her legal rights or bring this lawsuit.  Both experts believed that plaintiff’s conditions were chronic, severe, and persistent.

We also reject defendant’s contentions that the trial court and expert witnesses erroneously focused on whether plaintiff could understand her legal rights.  Given that plaintiff was insane until sometime in 2017, she had one year from that time to file her complaint; in other words, plaintiff had until sometime in 2018 to timely file her suit.  The exact time is not needed because plaintiff filed her complaint in November 2017, before 2018, within the statutory one-year window.  Accordingly, the trial court did not clearly err by applying MCL 600.5851 to this case and allowing plaintiff’s action to proceed.

UNDUE INFLUENCE

Next, defendant argues that the trial court clearly erred in concluding that plaintiff had been unduly influenced as to the 1976 conveyance.  We disagree.

Undue influence occurs when:

[T]he grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency, and impel the grantor to act against the grantor’s inclination and free will.  Motive, opportunity, or even ability to control, in the absence of affirmative evidence that it was exercised, is not sufficient. 

A party may establish a presumption of undue influence:

[U]pon the introduction of evidence that would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary, or an interest represented by the fiduciary, benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor’s decision in that transaction.  

In this case, plaintiff established a presumption of undue influence at the time of the conveyance in 1976.  It is undisputed that plaintiff is defendant’s daughter, and testimony showed that plaintiff was entirely dependent on her parents during that period in her life.  Plaintiff had recently been hospitalized and she was in a vulnerable state of mind.  It is also undisputed that defendant benefited from the conveyance.  Plaintiff testified that she was under the effects of potent antipsychotic drugs, and she did not remember how she arrived at or left the attorney’s office.  She further testified that she had not known ahead of time the reason for visiting the attorney’s office.  Therefore, defendant had opportunity to influence plaintiff’s decision.

Defendant failed to offer sufficient evidence to rebut this presumption.  In fact, defendant herself testified that plaintiff had been in a “zombie-like” state since being discharged from the hospital. 

PUBLIC POLICY

Finally, defendant argues that public policy should invalidate the trial court’s decision.  We decline defendant’s invitation to ignore MCL 600.5851’s plain statutory language. Initially, we note that this argument was not raised in the trial court, and we therefore review it for plain error affecting substantial rights. 

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