CM 7th Cir Appl Applying Twombly Heightened Pleading Standard In Stat. Of Limitations Setting
January 29, 2010
Clausen Miller trial attorney Paige Neel and Appellate Practice Group partner Don Sampen recently achieved a defense victory in marchFIRST Inc. v. CIT Communications Finance Corp., 589 F.3d 901, 2009 WL 4894248 (7th Cir. Dec. 21, 2009).
Plaintiff, a bankruptcy creditor and lessor of equipment, brought suit against a trustee in bankruptcy, alleging the trustee breached his fiduciary duty by improperly handling estate property. The bankruptcy and district courts determined that the statute of limitations barred the creditor's claim, and the creditor appealed. The Seventh Circuit affirmed. It concluded that the creditor should have known of the injury it sustained before the expiration of the limitations period, and therefore the time for filing a complaint was not extended by the discovery rule. Notably, the Seventh Circuit found that the creditor failed to plead sufficient facts to raise an inference that it was unaware of its claimed injuries prior to the limitations period running. The court's ruling represents an application of the heightened pleading standards announced by the United States Supreme Court in Bell Atlantic v. Twombly, 550 U.S. 544 (2007), which requires a federal plaintiff to plead facts establishing its right to relief "beyond a speculative level."
The case was successfully litigated by Paige Neel before the District Court and defended on appeal by Don Sampen.
