Stop The Presses! New Laches Case In North Carolina!

Our longtime readers know that we here at Abnormal Use have a favorite affirmative defense: laches. In fact, we love laches, so much so that in March of this year we authored the post “Laches – The Saddest of All Affirmative Defenses.” In that fateful post, we observed:

Just as D minor is the saddest of all keys, laches is the most forlorn of affirmative defenses.  Nevertheless, it has always been our favorite, and our dream is to one day win summary judgment based solely on our invocation of laches. But even after all of these years, we are still waiting for such a victory. Why does laches get no respect in dispositive motions?  As an affirmative defense, it’s something slightly less than the statute of limitations defense, which bars claims based on the passage of a set number of years.  Laches, as we all know, means that a party should be prevented from recovery because he or she has sat on their rights for too long, even though that period of time that they waited, may still be within the statute of limitations.

Well, guess what? Earlier this week, our own North Carolina Court of Appeals released a significant laches opinions.  See John Wm. Brown Co., Inc. v. State Employees’ Credit Union, No. 11-CVS-16809 (N.C. Ct. App. Dec. 3, 2013).but of course, the proponents of laches did not prevail.  The court did not mince words:

On appeal, [Plaintiff] contends the trial court erred in granting [Defendant’s] motion to approve and enforce the Agreement because the doctrines of laches and equitable estoppel bar the enforcement of the Agreement over its objection. We disagree.

Oh, well. Here’s a very, very distilled version of the facts: Plaintiff , a general contractor, appealed the trial court’s order granting the defendant credit union’s motion to enforce a settlement agreement. As per custom and case law, the reviewing court analyzed the motion as if it were a motion for summary judgment. In invoking laches to oppose enforcement of the agreement, the plaintiff argued that an insurance company handling the bonds, with the credit union’s knowledge, “sat on its right of assignment under the Agreement of Indemnity for over a year while litigation commenced” and claimed “it was prejudiced as a result of [the insurance company’s delay because it spent substantial amounts of time and money pursuing the litigation.” After describing the doctrine of laches in some level of detail, the court concluded as follows:

We have been unable to find any case where the doctrine of laches has been applied in a scenario similar to the one now before this Court. Given the unique posture in which the doctrine of laches arises and the fact that [Defendant] was not the cause of the delay, we hold the doctrine of laches has no applicability in the present case and does not bar enforcement of the Agreement by [Defendant]. Nevertheless, assuming arguendo the doctrine of laches may be applied to preclude the exercise of a right of assignment by a third party in order to bar the enforcement of a settlement, the result in the present case would not be different. The language in the Agreement of Indemnity is clear, “[n]o failure or delay by [the insurance company] to exercise any right, power or remedy provided pursuant to this Agreement shall impair or be construed to be a waiver of [the insurance company’s] ability or entitlement to exercise any other right, power, or remedy.”

There you have it. Another defeat for laches. Alas.

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