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Tolling Agreements in Mississippi

Dec 19, 2016
Mississippi tolling agreements

Tolling Agreements in Mississippi

Parties use a tolling agreement when a statute of limitation is about to expire.

For example, assume two parties are negotiating a settlement over a car wreck. The negotiations are going well. The parties think that in another 10 days, they will probably reach agreement. But, the claimant must file suit in five days or be barred by the statute of limitation.

In this situation, parties have traditionally entered into an agreement. The agreement stops or “tolls” the running of the statute of limitation. This allows the negotiations to continue past the statute of limitation. If they cannot settle, then the claimant can still file suit.

The Mississippi Supreme Court strikes down most tolling agreements.

For many years, lawyers and parties have used tolling agreements in Mississippi. They had a beneficial effect of making a lawsuit unnecessary if the parties settle after a statute of limitation had run. In the absence of tolling agreement, a plaintiff would have to go ahead and file suit to protect his rights.

Notwithstanding this practice, in 2012 the Mississippi Supreme Court made its decision in Townes v. Rusty Ellis Builder, Inc. , 98 So.3d 1046 (Miss. 2012).

In Townes , the plaintiffs and defendant entered into a tolling agreement in the “hope to avoid the immediate need of the filing of a lawsuit.” But, the negotiations fell through after the statute of limitations had passed. When that happened, the defendant ignored the contract and asserted the defense of statute of limitation.

The Mississippi Supreme Court agreed that the tolling agreement was void. The Court noted that Title 15, Chapter 3, Section 5 of the Mississippi Code states that “the limitations prescribed in this chapter shall not be changed in any way whatsoever by contract between parties.”

As a result, the plaintiffs could not pursue all of their claims.

Tolling agreements are still used in limited circumstances.

Mississippi law provides many different statutes of limitation depending upon the nature of the claim. Title 15, Chapter 3 of the Code contains most of them.

But, many others are scattered throughout the Code. As the Supreme Court noted in Townes , the prohibition about changing statute of limitation by contract only applies to statute of limitations found in Title 15, Chapter 3.

If you are considering entering into a tolling agreement with another party, contact the Panter Law Firm for a consultation at 601-607-3156.

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