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Goot v. Metropolitan Government of Nashville and Davidson County11/9/2005
statute of limitations applicable to the claim and then we must balance the policies supporting the discovery rule against the policies supporting the strict application of the statute of limitations.
2.
The six-year statute of limitations in Tenn. Code Ann. § 28-3- 109(a)(3) applies to this case. That statute simply provides that contractual causes of action not otherwise expressly provided for "shall be commenced within six(6) years after the cause of action accrued. . . ." This language is quite similar to the other statutes of limitations to which the Tennessee Supreme Court has applied the discovery rule, and the statute contains no other language that would otherwise be inconsistent with the invocation of the discovery rule in proper circumstances.
As a general matter, there will be little need for the discovery rule in most breach of contract cases. A buyer is immediately aware of a breach upon the delivery of nonconforming goods, and a seller knows of the breach when payment is delinquent. However, it is not difficult to envision circumstances in which a party to a contract would not be aware that the other party has breached the contract. In those circumstances, just as in tort claims involving personal injuries, it would be unjust to hold that a plaintiff's claim for breach of contract accrues before the plaintiff knew or should have known that the contract had been breached.
Many courts now apply the discovery rule to breach of contract claims and hold that a cause of action for breach of contract begins to run when a party either discovers the breach or could have or should have discovered the breach through the exercise of reasonable judgment. 31 Samuel Williston, A Treatise on the Law of Contracts § 79:14, at 304 (Richard A. Lord ed., 4th ed. 2004) [hereinafter Williston on Contracts]. These courts have invoked the discovery rule in cases where (1) the breach of contract was difficult for the plaintiff to detect, (2) the defendant was in a far superior position to comprehend the breach and the resulting damage, or (3) the defendant had reason to believe that the plaintiff remained ignorant that it had been wronged. El Pollo Loco, Inc. v. Hashim, 316 F.3d 1032, 1039 (9th Cir. 2003). Stated another way, the discovery rule applies in cases where the breach of contract is inherently undiscovervable. April Enters., Inc. v. KTTV, 195 Cal. Rptr. at 437; J.M. Krupar Constr. Co. v. Rosenberg, 95 S.W.3d 322, 329 (Tex. App. 2002).
There are, however, at least two circumstances in which the invocation of the discovery rule would be improper, even when the breach of contract is inherently undiscoverable. First, as the Tennessee Supreme Court has pointed out, the discovery rule cannot be invoked when it is inconsistent with the terms of the applicable statute of limitations. In these circumstances, the Tennessee General Assembly has already weighed the competing policies involving the accrual of the cause of action and the tolling of the statute. Second, the discovery rule cannot supercede a contractually agreed upon limitations period as along as the agreed upon period affords a reasonable time within which to file suit. See New Welton Homes v. Eckman, 830 N.E.2d 32, 35 (Ind. 2005); 3 Eric Mills Holmes, Corbin on Contracts § 9.9, at 278 (Joseph M. Perillo ed., rev. ed. 1996). In these circumstances, the parties themselves have weighed the competing considerations, and their bargain should be enforced as long as it is consistent with public policy.
3.
According to Ms. Jackson, neither she nor her husband were aware of the waiver of premium benefit in 1987 when her husband qualified for disability retirement. Accordingly, the Ja
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