Imagine, if you will, that you are a shareholder in a company called Amalgamated Widgets, Inc. Over the last three quarters, you’ve seen a considerable drop in the company’s revenue stream; the kind of drop that raises red flags with investors, employees, and maybe even the federal government. You discover that, over the course of the last three years, AW, Inc.’s COO has been allowing managers to use the corporate jet to fly to dig sites around the world, and watch paleontologists search for dinosaur bones. You send a cease-and-desist letter, but to no avail. Now, you wish to file a lawsuit to put an end to all this nonsense.
The example might seem a little ridiculous, but the action behind it – a shareholder attempting to stop a company from hemorrhaging money – is more common than you might think. When you own and operate a business in Ohio, you need to ensure not only your clients but also your employees, your partners and (if applicable) your shareholders that your operations are above-board at all times. There may come a time, however, when one of those entities wishes to bring a claim or lawsuit against another – and if that happens, there are myriad laws and regulations each party must follow in order to reach a successful resolution.
One potential problem with filing any type of claim or lawsuit, however, is the statute of limitations: the amount of time a person has to bring a claim against another party. There are dozens of state and federal laws regulating how much time a party had to bring a claim, and the accrual time is usually based on:
- When the action, injury or breach occurred, or
- When the plaintiff became aware of the action, injury or breach.
Accrual dates vary depending on circumstances and certain exceptions may apply, so it is best to speak with a skilled business attorney before making any decisions about filing a lawsuit or bringing a claim.
Breach of contract:
- Contracts in writing – within eight (8) years of the date that the cause of action accrues, unless the action accrued before September 28, 2012, in which case you have 8 years from September 28, 2012 or the expiration of the period of limitations in previously in effect (up to 15 years), whichever occurs first.
- Contracts not in writing – within six (6) years after the cause of action accrues.
- Contracts for sale – within four (4) years of when the cause of action accrued, regardless of when the party discovered the breach; however, the parties may mutually agree to reduce this period to one (1) year within the contract.
- Promissory notes – within six (6) years after the cause of action accrues.
Breach of fiduciary duty:
- You have four (4) years from the date of the impairment or injury, as opposed to when the breach of duty is actually discovered.
Breach of warranty:
Breach of warranty follows the same rules as a breach of contract for sales: you have four (4) years to file a claim, though that could be reduced to one (1) year if both parties agree. According to the law, “A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered.” In cases where, after an action is terminated but another remedy remains, you have up to six months to file another claim, unless the termination was “voluntary discontinuance or… dismissal for failure or neglect to prosecute.” (Ohio Rev. Code Ann. § 1302.98).
Issues of employment:
- Back pay and wage violations – employees have two (2) years to file a claim if they believe they have been denied overtime, or to bring a claim for liquidated damages for violation of the Ohio minimum wage law. Employees may alternatively bring claims for actual damages for unpaid minimum wages “within three years of the violation (or of when the violation ceased, if it was of a continuing nature), or within one year after notification to the employee of final disposition by the state of a complaint for the same violation, whichever is later.” (Ohio Rev. Code Ann. § 4111.14(K)).
- Wage discrimination claims – employees have one (1) year to file a claim alleging wage discrimination.
- Wrongful termination – employees have up to four (4) years to file a wrongful termination claim.
- Unlawful discrimination – employees have six (6) years to file discrimination claims.
Shareholder derivative lawsuits:
The statute of limitations for shareholder derivative suits are determined by their underlying claims:
- Breach of fiduciary duty: four (4) years to file from the date of injury or impairment.
- Sale of securities: two (2) years after the plaintiff knew or should have known of the unlawful sale), or five (5) years from the date of the sale, whichever occurs first.
These are only a small handful of the statutes of limitation that Ohio business owners need to know, in order to conduct their business effectively and efficiently. If something goes wrong, you want to gather your evidence and documentation quickly, so that you do not lose out because of a time limit imposed by the state or federal government. Besides – business tort litigation is a complex process, and you want to get started quickly. Whether you wish to bring a claim against your employer, are fighting against dissension in your ranks, or have had a claim filed against you, you want a skilled litigator on your side.
At Gertsburg Law, we understand that an interruption to your business can set you back in innumerable ways. We offer a variety of services, from litigation to General Counsel compliance audits, to help Ohio business owners moving in the right direction. To work with a skilled business attorney in Cleveland or Chagrin Falls, please call 440-571-7777 or contact us to schedule an appointment.
