Indiana Law Review


A Limited Discovery Rule for Indiana:
Barnes v. A.H. Robins Company

Jordan H. Leibman*

I. Introduction

A. The Problem of Delay

There is nothing new about the "delay" problem in Indiana tort

law. In Barnes v. A.H. Robins Co.,^ the Indiana Supreme Court relied

heavily on a nineteenth century case involving a collapsing bridge^ to

explain its decision henceforth to run the Indiana personal injury statute

of limitations in delayed manifestations disease cases ''from the date

the plaintiff knew or should have discovered that she suffered an injury

or impingement, and that it was caused by the product or act of

another."^

The problem of delay arises when the defendant's wrongful act
results in harm to the plaintiff only after a considerable passage of
time. The question, then, is whether the claim should be permitted to

go forward."* In recent years courts have increasingly confronted this

issue in the context of delayed manifestation diseases contracted by

plaintiffs who have been exposed to deleterious substances or harmful
medical devices which only later produce symptoms of serious personal

physical harm.^ Yet Indiana courts have long wrestled with harmful

*Associate Professor of Business Law, Indiana University School of Business; Member

of the Indiana Bar. B.A., University of Chicago, 1950; M.B.A., 1955; J.D., Indiana University

School of Law—IndianapoUs, 1979.
'476 N.E.2d 84 (Ind. 1985). Following the Indiana Supreme Court's answering of

the certified question and remand of the case to the Seventh Circuit, the final disposition

of the case has been stayed pending bankruptcy proceedings. For an interpretation of the

Indiana Supreme Court's holding in Barnes, see Miller v. A.H. Robins Co., 766 F.2d

1102 (7th Cir. 1985) and infra notes 91 and 249.

'476 N.E.2d at 86 (discussing Board of Comm'rs of Wabash County v. Pearson,

120 Ind. 426, 22 N.E. 134 (1885)).

H76 N.E.2d at 87-88.

*See generally Prosser, Law of Torts 143-45 (4th ed. 1971) (discussing the delay
problem in the context of negligence cases and noting various devices employed by courts

to escape harsh consequences including the then (1971) emerging "discovery rule"); 54

C.J.S. Limitations of Actions § 168 (1948) (noting that the general rule at common law
for tort actions is to begin the limitation period when "the act causing the injury is

committed, which may or may not be the date on which actual damage is sustained");
McGovern, The Variety, Policy and Constitutionality of Product Liability Statutes of
Repose, 30 Am. U.L. Rev. 579, 588-600 (1981) (discussing the delay problem in the context

of a "Policy Analysis of Product Liability Statutes of Repose"); Developments in the Law—
Statutes of Limitations, 63 Harv. L. Rev. 1177, 1200-03 (1950) (discussing the choice of

when to begin the statutory period "where considerable time intervenes") [hereinafter cited

as Statutes of Limitations].

'See, e.g., Braswell v. Flinkote Mines, Ltd., 723 F.2d 527 (7th Cir. 1983) (asbestos);

341



342 INDIANA LAW REVIEW [Vol. 19:341

delayed effects in tort cases involving collapsing structures,^ professional

malpractice/ conversion of personal property,^ damage to personal prop-
erty,"^ damage to real property,'^ damage to crops," alienation of af-
fections,'^ eminent domain proceedings,'^ and other situations in which
the injury is either nonexistent or nonapparent'^ until long after the

wrongful act has taken place. It is in these cases, most of them having
nothing to do with products, that the precedents governing product-

related injuries are to be found.

Fixing the length and starting point for a timing limitations statute

is a legislative exercise in balancing conflicting interests. The injured
plaintiff's access to the courts to secure a remedy for harm caused by

Martinez-Ferrer v. Richardson-Merrell, Inc., 105 Cal. App. 3d 316, 164 Cal. Rptr. 591

(1980) (Mer/29); Barnes v. A.H. Robins Co., 476 N.E.2d 84 (Ind. 1985) (Dalkon Shield

intrauterine device); Wojcik v. Almase, 451 N.E.2d 336 (Ind. Ct. App. 1983) (catheter);

Fleishman v. EH Lilly & Co., 62 N.Y.2d 888, 467 N.E.2d 517 (1984) (DES).
'See, e.g.. Board of Comm'rs v. Pearson, 120 Ind. 426, 22 N.E. 134 (1885) (discussed

infra, notes 70-72 and accompanying text).

^See, e.g., Shideler v. Dwyer, 417 N.E. 2d 281 (Ind. 1981) (discussed infra, notes

115-35 and accompanying text); Guy v. Schuldt, 236 Ind. 101, 138 N.E.2d 891 (1956)
{see infra notes 204-13 and accompanying text); Wojcik v. Almase, 451 N.E.2d 336 (Ind.

Ct. App. 1983) (discussed infra, notes 136-40 and accompanying text); Cordial v. Grim,

169 Ind. App. 58, 346 N.E.2d 266 (1976) (discussed infra, notes 105-12 and accompanying

text); Toth v. Lenk, 164 Ind. App. 618, 330 N.E.2d 336 (1975) (discussed infra, notes

108-10 and accompanying text).

"See, e.g., French v. Hickman Moving & Storage, 400 N.E.2d 1384 (Ind. Ct. App.
1980) (discussed infra, notes 97-104 and accompanying text).

'See, e.g., Essex Wire v. M.H. Hilt Co., 263 F.2d 599 (7th Cir. 1959) (discussed

infra, notes 83-84 and accompanying text).

''See, e.g., Monsanto v. Miller, 455 N.E.2d 392 (Ind. Ct. App. 1983) (discussed

infra, notes 141-48 and accompanying text).

''See, e.g., Gahimer v. Virginia-Carolina Chem. Corp., 241 F.2d 836 (7th Cir. 1957)

(discussed infra, notes 77-82 and accompanying text).

'-See, e.g., Montgomery v. Crum, 191 Ind. 660, 161 N.E. 251 (1928) (discussed

infra, notes 73-76 and accompanying text).

''See, e.g., Scates v. State, 178 Ind. App. 624, 383 N.E.2d 491 (1978) (see infra

note 193 and accompanying text).

'^It is important to make the distinction between cases where — after the defendant
has acted — the injury itself is delayed, from cases where the manifestation of injury is
delayed. An example of the former type would be the case of a defectively designed
punch press which has a designed-in tendency to "double-trip." The defendant manufacturer

may have introduced the product into the stream of commerce many years ago, but no
injury to a user will occur until the press actually amputates a user's hand or finger.

Although it is well-settled that such an injured user will not be barred by an accrual-

based statute of limitations, the new product liability repose statutes that are occurence-

based could bar such claims. See infra notes 31-40 and accompanying text. The latter

type of case, that involving delayed manifestation, poses the problem addressed by this

Article. In these cases, harm has occurred, but the plaintiff is unaware of it. The question

is whether such claims should be barred by accrual-based statutes of limitations until the

plaintiff has had a reasonable opportunity to discover the harm, its nature, its causal

nexus to the defendant's product, and possibly, whether the defendant has in fact acted

wrongfully. This Article does not address the related question whether such claims should

be barred by the occurrence-based repose statutes.



1986] LIMITED DISCOVERY 343

alleged wrongful conduct must be balanced with the defendant's need

to have access to evidence fresh enough to mount an effective defense.''

In addition, the societal interest in bringing private disputes promptly

to rest must be served.'^

In general, relief for serious injury will be pursued promptly; delayed

claims are, therefore, properly suspect.'^ It is reasonable to presume that

excessive delay by the plaintiff in bringing a claim is tantamount to an

implied waiver of the claim. '^ Nonetheless, when delay in pressing a

claim results from no fault of the plaintiff, the waiver presumption is

properly rebutted.'*^ In any case, delay — for any reason — prejudices
the defendant's ability to marshall evidence.

^^

B. Economic Effects of Delay

There are also economic arguments against exposing business entities

— so called "enterprise" defendants^' — to liability for indefinite periods

''See 51 Am. Jur. 2d Limitations of Actions § 18 (1970); Statutes of Limitations,

supra note 4, at 1185-86.

""There are two primary societal interests to be served by prompt dispute resolution:

a general peacekeeping interest, 51 Am. Jur. 2d § IS, supra note 15, and the commercial

interest "in avoiding the disrupting effect that unsettled claims have on commercial

intercourse." Statutes of Limitations, supra note 4, at 1185.

"51 Am. Jur. 2d Limitations of Actions § 17 (1970); 53 C.J.S. Limitations of Actions

§ 1 (1948).

"The justification for upholding the repose presumption of limitation statutes is said

to be "based in part upon the proposition that persons who sleep upon their rights may
lose them." 51 Am. Jur. 2d Limitations of Actions § 16 (1970). The broad sweep of such

a proposition is probably better characterized by the concept of implied waiver rather

than simply the presumed negligence of the plaintiff as is suggested in 53 C.J.S. § 1,

supra note 17.

"5ee Statutes of Limitations, supra note 4, at 1203-05.

^"Statutes of limitation, like the equitable doctrine of laches, in their conclusive effects

are designed to promote justice by preventing surprises through the revival of

claims that have been allowed to slumber until evidence has been lost, memories

have faded, and witnessess have disappeared. The theory is that even if one

has a just claim it is unjust not to put the adversary on notice to defend within

the period of limitation and that the right to be free of stale claims in time

comes to prevail over the right to prosecute them.

Order of R.R. Telegraphers v. Ry. Express Agency, Inc., 321 U.S. 342, 348-49 (1943).

-'The term "enterprise liability" in the product context was popularized in a well-

known article by Fleming James, Jr.: James, General Products—Should Manufacturers
be Liable Without Negligence"} , 24 Tenn. L. Rev. 923 (1957). The term, which he attributes

to Ehrenzweig, refers to placing the burden for harm caused by defective products on

manufacturers as a cost of doing business. The object of such a risk distribution scheme

was to "cut down accidents" and administer the losses "in such a way as to minimize
the individual and social burden of them." Id. at 923. James' paper echoed the principles

stated by Justice Traynor several years before in Escola v. Coca Cola Bottling Co. of

Fresno, 24 Cal. 2d 453, 150 P. 2d 436 (1944) (Traynor, J., concurring). In 1973, a prominent

tort scholar authored a provocative article suggesting that no-fault enterprise liabihty

statutes should be enacted along the lines of no-fault auto insurance and workers' com-



344 INDIANA LA W REVIEW [Vol. 19:341

following their allegedly wrongful acts. These entities — product sellers,
for example — bear the risks of product-related injury, then spread the
costs to society at large through higher prices that can accommodate

the cost of liability insurance. Such **pure" risk costs, however, make
up only part of the seller's insurance premium dollar. A substantial
balance of the premium covers administrative costs, legal defense costs,
and contingency fees that the plantiff incurs in pursuing a successful

but contested claim. ^^ Additionally, there is an enhanced uncertainty cost

that the prudent insurer attaches to risks that actuarially are relatively

unpredictable.^^

pensation. These statutes would embrace a wide variety of tort claims (including product

liability) for personal injury. O'Connell, Expanding No-Fault Beyond Auto Insurance:

Some Proposals, 59 Va. L. Rev. 749 (1973).
"There have been a number of estimates of the cost effectiveness of tort litigation,

especially with respect to product liability claims. One study places product liability personal
injury defense costs at 35 cents per dollar of claim payment, or 26% of the total cost.
Insurance Services Office, Product Liability Closed Claim Survey: A Technical
Analysis of Survey Results 11 (1977). Using the Insurance Services Office defense cost

figures and typical contingency fee arrangements, it is reasonable to estimate that successful

plaintiffs recover a net amount of about 4097o of the total premium dollar. Another study

places the plaintiff's total legal costs at 54% of recovery (77 cents for every 66 cents of
recovery). Schwartz, "Historical Overview of Workplace Compensation & Evolution of
Possible Solutions," in Final Edited Proceedings of National Conference On Workers'
Compensation & Workplace Liability 39, 43 (1981) (citing American Insurance Association
study).

Still another figure was derived by dividing the $234 million in claims paid out in

1979 by the $1252 million taken in that year by the five top insurance companies. This

results in an 18 3/4% net return to claimants. Bendorf, "Broadening the No-Fault
Compensation Option," in Final Edited Proceedings Of National Conference On
Workers' Compensation & Workplace Liability 284, 287 (1981) (citing Product Liability
Supplements filed by insurance companies). Although revenue and disbursement figures

for the single year 1979 demonstrate very little, they do raise the important and controversial

question of investment income. Cost effectiveness calculations must include the time value

of the premium dollar. Today's premium dollar should yield more coverage than for a

dollar's worth of future claims. The interest earned on reserved funds represents a cost

that should be assigned to the litigation system.

Another statistic on asbestos-related disease is illustrative. A Rand Corporation study
shows that victims who litigated asbestos-related claims in the 1970's recovered an average

of $35,000, but incurred an average of $60,000 for legal expenses. Miller, "Drawing Limits

on Liability," Wall St. J., Apr. 4, 1984, at 26, col. 4.

In contrast, the workers' compensation system probably returns over 60% of the
premium dollar. See Comments by M. Markman, Minnesota Insurance Commissioners,

in Final Edited Proceedings of National Conference On Workers' Compensation &
Workplace Liability 112 (1981).

"See Interagency Task Force on Product Liability, Final Report V-10 (1977)
[hereinafter cited as Final Report]. The Task Force found that product liability rate

making was highly subjective, that the "result is that most premiums, in the final analysis,

amount to 'informed best guesses' of the individual underwriter." Id. When actual product
liability losses began moving upward after 1976, there were "abrupt upward revisions"

in premiums. Id. at V-27. The Task Force suggests that "it is reasonable to assume that

the insurers, in their own estimates of potential losses, are acting very conservatively in
order to avoid underestimating losses." Id.



1 986] LIMITED DISCO VER Y 345

It can be argued that the probabihty that a product will cause

physical harm because of a defective condition present in it at time of
sale will decrease the longer the product is used without causing injury. ^^

Thus, over time, the pure risk of physical harm from original defects

may decrease, but the administrative costs, defense costs, and enhanced
uncertainty components of the insurance premium are not as likely to

decrease as rapidly. ^^ This is especially so because the often multiple

causes of accidents and health impairments involving long-lived products

are difficult to distinguish. A good deal of expense, it is argued, is
involved in defending — successfully and unsuccessfully — nonmeri-
torious claims involving multiple causes and products used beyond their

useful lives. Eventually, the ratio of these latter components to the pure

risk (of original defects) component of the insurance premium may
increase to the point at which sellers can argue persuasively that liability

insurance for older products eventually becomes a highly inefficient risk

spreader and that consumers and users generally will benefit if the actual

costs of the rare instances of delayed harm that do occur are permitted
to rest where they fall, despite the occasional injustice that may result. ^^

With the explosion of delayed manifestation cases in recent years, ^^

the presumption has become less credible that product risks always

-^This argument rests on the proposition that an untested product poses safety and

health risks no matter how carefully the product is designed, manufactured, and introduced
with warnings. Testing prior to general release reduces the risks, and unrestricted use over

time in the field is the ultimate extension of testing. Naturally, unforeseeable misuse, later

modifications, poor maintenance, and normal wear and tear beyond the useful life of the

product, as well as the normal reasonable risks associated with the product can all lead

to personal injury, but these latter risks are independent of the risk of harm resulting

from "original defects." As original defects show up with normal use they are presumably

cured, or the product is withdrawn, or more effective warnings are issued. In any event,

the argument holds that "original defects" risk should decline dramatically over time.

"-See Final Report, supra note 23, at VII-23. "IS]ome underwriters have said that

even if old products represent a relative 'handful of losses,' they have had an impact on

underwriting judgments far out of proportion to their statistical significance." Id.

^"•The principal justifications for an insured enterprise liability regime are efficient

risk distribution, protection of individuals from catastrophic costs which they are unable

to bear, and the development of pressures on manufacturers to improve product safety

and health performance. See supra note 21. In the case of products that behave as

postulated in text — generally capital equipment — the argument for cutting off "long-
tail" tort claims by repose statutes is persuasive. The argument would be even stronger

if workers' compensation systems universally provided adequate benefits for the injured

workers whose workplace product tort claims are barred by these repose statutes. This

argument in favor of repose statutes is developed more fully in McGovern, supra note

4, at 592-600.

^^Delayed manifestation injuries from asbestos are expected to number several million.

Estimates vary from eight million. National Cancer Institute and National Institute of
Environmental Health Sciences, Estimates of the Fraction of Cancer Incidence in the

United States Attributable to Occupational Factors 1-2 (draft summary, Sept. 11, 1978),
to around 20 million. The number of persons developing asbestos-related diseases each

year is not expected to level off until the 1990's. Special Project, An Analysis of the
Legal, Social, and Political Issues Raised by Asbestos Litigation, 36 Vand. L. Rev. 573,



346 INDIANA LAW REVIEW [Vol. 19:341

diminish in time after initial introduction of the products into the stream

of commerce. -^^ Only now are severe illnesses caused by products intro-
duced decades ago becoming manifest. ^^ Yet this unexpected delayed-

effects phenomenon leads to a perverse economic corollary to the earlier
argument: because the magnitude and frequency of these delayed losses

580 n.l3 (1983).

Some other workplace substances which are having an increasing impact because of
delayed manifestation of injuries are formaldehyde, polyvinylchloride (PVC), radiation,

and microwaves. The impact of injuries from these substances on the compensation systems

could be as great or greater than that from asbestos. Suits arising from exposure to

microwaves, which has occurred almost exclusively in the workplace, have been predicted

to become the broadest-based product liability litigation ever. Nat'l L.J., Sept. 14, 1981,

at 24, col. 1. Formaldehyde, which has been described as ubiquitous, Nat'l L.J., May
10, 1982, at 1, col. 1, is used in a wide variety of ways in the workplace. Use has been

especially heavy in the forest-products industry, which uses one-half of the formaldehyde

produced, and the textile industry, which uses one-quarter. In all, about 1.4 million people

come into contact with formaldehyde solutions in the workplace. Wall St. J., May 21,
1982, at 23, col. 1. The U.A.W., which along with 14 other unions sued OSHA to set
stricter exposure standards in factories, claims that as many as one percent of workers
exposed at current levels may die of formaldehyde-related cancers. Wall St. J., Mar. 15,
1983, at 1, col. 5. The AFL-CIO cited formaldehyde as a health hazard to workers in
beauty salons and barber shops where it is used in sterilizing solutions and in some beauty

products. Wall St. J., Feb. 8, 1983, at 1, col 5.

Almost monthly, new workplace carcinogens and suspected carcinogens are being

identified. These include newspaper ink, see, e.g., Hanna v. Sun Chem. Corp., No. C-

81-1967 (N.D. Ohio 1981); Grady v. Sun Chem. Corp., No. C-81-1696 (N.D. Ohio 1981),

asphalt fumes, Wall St. J., Apr. 27, 1983, at 1, col. 5, and fluorescent lights, Wall St.

J., Apr. 12, 1983, at 26, col. 4. Recently it was disclosed that wood-model makers in

the auto industry are 50% more likely to develop cancer, although the specific carcinogen
has not been identified. Simison, "Cancer Peril Disturbs Wood-Model Makers in the Auto

Industry," Wall St. J., Jan. 3, 1983, at 1, col. 6. Even VDT's (video display terminals)

have become suspect, and at least nine states are considering legislation to regulate their

use. Wall St. J., Mar. 6, 1984, at 1, col. 5.

-•^It would be disingenuous to claim that the toxicity of substances found in the

workplace and the general environment comes as a complete surprise, yet it is fair to

state that the toxicity of very low concentrations of many common substances, the
harmfulness of relatively brief exposures, the number of substances that have turned out

to be carcinogenic, and the great length of undetectable gestation periods have been both

surprising and overwhelming.

''See Bunker v. National Gypsum Co., 426 N.E.2d 422 (Ind. Ct. App. 1981), rev'd,
441 N.E.2d 8 (Ind. 1982), appeal dismissed, 460 U.S. 1076 (1983). In Bunker, the Indiana

Court of Appeals held that a three-year-from-date-of-last-exposure statute of limitations

denied occupational disease (asbestosis) claimant Richard Bunker due process of law. The

court was persuaded by medical evidence published by Dr. Irving Selikoff demonstrating

the delayed manifestation characteristics of asbestosis and mesothelioma. The court noted

that a study of "asbestosis insulation workers revealed chest x-ray abnormality in only

10*^0 of those whose exposure began less than ten (10) years before the study . . . ." Id.

at 424-25. Thus, in the case of asbestos-related disease, not only would symptoms of

disease not manifest themselves for many years following exposure to asbestos, the onset
of disease was in most cases totally undetectable. For an account of the Bunker case,

see Leibman & Dworkin, A Failure of Both Workers' Compensation and Tort: Bunker
V. National Gypsum Co., 18 Val. U.L. Rev. 941 (1984).



1986] LIMITED DISCOVERY 347

are proving to be both huge and unpredictable, the insurance system

may not be up to the task of efficiently shifting these costs from users
to sellers. That is, no reasonable premium may be sufficient to fund
protection for the full range of uncertainties inherent in these toxic tort

situations. Thus, it can again be argued that the insured tort system

may be an inadequate vehicle for distributing these delayed-effect risks. ^^^

C. Repose Provisions; "Occurrence-Based" versus

"Accrual-Based" Limitation Legislation

The foregoing arguments provide the economic rationale for enacting

repose statutes such as that embedded in the Indiana Product Liability

Act of 1978.^' A repose statute cuts off a defendant's exposure to liability
a statutory number of years following the defendant's act.^^ If that act

'"Not only are manufacturers of hazardous materials facing insolvency because of

product liability claims, the viability of their insurers is at risk as well. Legal Times,

March 30, 1981, at 1, col. 3. It has been estimated that the insurance industry may be
liable for $38.2 to $90 billion over the next 35 years because of asbestos-related diseases.

Wall St. J., June 18, 1982, at 26, col. 3. A few experts have stated that some insurers
may collapse because of the number of asbestos suits. Wall St. J., June 14, 1982, at 1,
col. 6. The effects on the casualty insurance industry from the delayed manifestation

aspects of the Bhopal disaster and related chemical leak incidents is still to be estimated.

The newly discovered toxicities mentioned at supra note 27 add an additional dimension

to the risk distribution problem.

Finally, there is a "snowball effect" at work in the delayed-effects, mass-tort context.

A slowly developing situation permits a thorough dissemination of information. Victims
are given the opportunity to appreciate and understand their injuries, while the plaintiffs'

bar has time to develop expertise, specialization, and cooperative attorney/expert witness

networks. The result is that a financial disaster which at first appears contained from the

product seller's and defense bar's perspectives may move "out of control." Such a situation
was the reason given by an A.H. Robins' spokesperson (Nat'l Public Radio, Aug. 22,

1985) for Robins' filing for Chapter 11 protection on Aug. 21, 1985.

As of June 30, 1985, about 5,100 Dalkon Shield claims were pending; Robins said

it expected " 'a substantial number' of new cases to be filed." Wall St. J., Aug. 22,

1985, at 3, col. 1. As of June 30th, 9,230 claims had been settled, Aetna Insurance Co.

had paid $378.3 million to settle them, and legal fees and other costs for the defendants

had totaled $107.3 million. Sales of the Dalkon Shield were discontinued in the United

States in 1974. Id.

^'Ind. Code §§ 33-1-1.5-1 to -8 (1982 & Supp. 1985). Section 5 provides in part:
[A]ny product liability action in which the theory of liability is negligence or

strict liability in tort must be commenced writhin two (2) years after the cause
of action accrues or within ten (10) years after the delivery of the product to

the initial user or consumer; except that, if the cause of action accrues more

than eight (8) years but not more than ten (10) years after that initial delivery,

the action may be commenced at any time within two (2) years after the cause
of action accrues.

'-The 10-year period in Ind. Code § 3-1-1.5-5 was held to be such a repose provision

(or outer-cutoff of liabihty) in Dague v. Piper Aircraft Corp., 418 N.E.2d 207 (Ind. 1981)

(questions certified to the Indiana Supreme Court by the Seventh Circuit Court of Appeals

pursuant to Ind. R. App. P. 15(0)).



348 INDIANA LAW REVIEW [Vol. 19:341

causes injury occurring after the statutory period has run, no hability

can attach to the defendant. Thus, the effect of the statute may be to
leave a plaintiff, injured by the wrongful act of another, without a

remedy. Such repose provisions covering product sales, medical mal-

practice, and architect and builder's liability have found favor in a

substantial number of jurisdictions."
Repose statutes represent a type of "occurrence-based" limitation

legislation. Occurrence-based laws cut off liability a statutory number

of years following the occurrence of a specific event. The specific event

could, for example, be the coronation of a king^"^ or a workers' com-

pensation claimant's last exposure to asbestos dust.^^ Or, in the case of

an occurrence-based repose provision, the limitation period would run

from the completion of the defendant's act, an act such as the delivery

of a defective product, ^^ the negligent performance of a medical pro-

cedure,^^ or the erection of a negligently designed or constructed building. ^^

In contrast, a "true" statute of limitations is "accrual-based." It

is generally set by the legislature to begin running when the plaintiff's

cause of action accrues. ^^ Such a concept would appear to protect all

but slothful plaintiffs who fail to pursue their rights in a diligent and
timely manner.^° However, in tort law, determining the moment of accrual
is a matter that can require judicial interpretation. It is this problem

that provides the principal subject matter of this Article.

"For a discussion of these state statutes and their constitutionality, see McGovern,

supra note 4, at 600-20, 622-31; Leibman & Dworkin, Time Limitations Under State
Occupational Disease Acts, 36 Hastings L. J. 289, 349-58 (1985). See also Martin, A
Statute of Repose for Product Liability Claims, 50 Fordham L. Rev. 745 (1982) (discussing
the value of enacting such a statute in New York).

'"•As early as 1236, statutes were enacted barring real property claims based on seisin

prior to the coronation of Henry II. Statutes of Limitations, supra note 4, at 1177 (citing

2 Pollock & Maitland, The History of English Law 81 (2d ed. 1898)).
''See, e.g., Ind. Code § 22-3-7-9(0(4) (1982 & Supp. 1985). Section 9(0(4) provides

that no compensation shall be payable for disablement 20 years after the date of the last

exposure to asbestos dust. For a discussion of occupational disease limitation statutes,

see Leibman & Dworkin, supra note 33.
''See, e.g., Ind. Code § 33-1-1.5-5 (1982 & Supp. 1985) (quoted at supra note 31);

Or. Rev. Stat. § 30.905 (1981).

''See, e.g., Ind. Code § 16-9.5-3-1 (1982); Iowa Code § 614.1 (1950 & Supp. 1985).
''See, e.g., Ind. Code § 34-4-20-1 (1982 & Supp. 1985); Tenn. Code Ann. § 28-3-

202 (1980).

'""Statutes of Limitations, supra note 4, at 1200.

'"See Hansen v. A.H. Robins Co., 113 Wis. 2d 550, 335 N.W.2d 578 (1983). "There
are two conflicting public policies raised by the statute of limitations: '(1) That of

discouraging stale and fraudulent claims, and (2) that of allowing meritorious claimants,

who have been as diligent as possible, an opportunity to seek redress for injuries sus-
tained.' " Id. at 554, 335 N.W.2d at 580 (quoting Peterson v. Roloff, 57 Wis. 2d 1, 6,
203 N.W.2d 699, 705 (1973)).



1 986] LIMITED DISCO VER Y 349

D. Determining the Moment of Accrual

Arguably, an action in tort will lie as soon as a plaintiff's protected

interest has been invaded by the defendant's wrongful act/' Under this

interpretation, an initial exposure by a user to a deleterious substance

or defective device sold by the defendant might be sufficient to start

the tort statute of limitations running. This analysis would hold even

if no symptoms of harm were manifest or evidence of injury were

discoverable during the limitations period. Such an accrual rule, however,

produces harsh results when plaintiffs become aware that they have had

causes of action only after the statute of limitations has run on them.

For this reason, an increasing number of jurisdictions now hold that a
tort cause of action accrues only when injury is discoverable. ''^

Prior to the 1981 case of Shideler v. Dwyer,"^^ Indiana law was

undecided on this point. Shideler, however, appeared to reject firmly

the discovery rule in tort cases. Although Shideler was a legal malpractice

case, its accrual rule was applied under Indiana law to bar the claims

of plaintiffs in the delayed manifestation asbestosis case of Braswell v.

Flinkote Mines, Ltd.^^ Subsequently deciding that the factual contexts of

continuously developing personal injury and legal malpractice were suf-

ficiently dissimilar to merit identical treatment, the Indiana Supreme

Court adopted a liberal, but limited, discovery rule in Barnes v. A.H.
Robins Co.,'^^ to govern delayed manifestation personal injury cases.

This Article will first examine the Barnes case."^^ Next, the precedents

leading up to Shideler v. Dwyer will be reviewed. ^"^ The Shideler case
and the "impact rule" adopted in it will be discussed,"*^ and the effect

of Shideler on subsequent product liability cases prior to Barnes will be

analyzed. "^^ Several collateral developments relevant to Indiana tort stat-

"'This view is followed primarily in cases "where suit could be maintained regardless

of damage—as with breach of contract and most intentional torts .... But if harm is
deemed the gist of the action, the occurrence of harm marks the beginning of the period."

Statutes of Limitations, supra note 4, at 1200-01. To apply the rule to negligence or strict
liability cases where damages are an essential element of the plaintiff's case requires

equating the "invasion" or "impact" with "harm," "injury," or "damage." One way

to justify such a position is to suggest that plaintiffs are free to sue upon impact for

damages that they can prove mil occur. The problem with such a position is that it can

work only by hindsight. If harm never develops from the impact, no cause of action

matures, and, therefore, no accrual statute of limitations commences to run.

"^See cases cited in Barnes v. A.H. Robins Co., 476 N.E.2d at 87.
^^275 Ind. 270, 417 N.E.2d 281 (1981), vacating and remanding, 386 N.E.2d 1211

(Ind. Ct. App. 1979).
^723 F.2d 527 (7th Cir. 1983).

^'476 N.E.2d 84 (Ind. 1985).

'^See infra notes 51-68 and accompanying text.

*''See infra notes 69-114 and accompanying text.

*^See infra notes 115-35 and accompanying text.

"''See infra notes 136-84 and accompanying text.



350 INDIANA LAW REVIEW [Vol. 19:341

utes of limitations will then be reviewed briefly. ^° Without taking a

position on the virtue of repose statutes, this Article will conclude that,

because the controlling case, Shideler v. Dwyer, is conceptually flawed

with respect to accrual-based statutes of Hmitations, the limited accrual

exception adopted in Barnes is likely to be expanded in Indiana to cover

the accrual of tort claims generally.

II. The Barnes Case

Barnes v. A.H. Robins CoJ^ was a consolidation of two cases that

reached the Supreme Court of Indiana by certification of a question of

state law from the United States Seventh Circuit Court of Appeals."

This was the procedure used when, in Dague v. Piper Aircraft Corp.,^^
the constitutionality of the repose section of the Indiana Product Liability

Act of 1978 was upheld. ^^

In Barnes, the federal courts were required to rule on the accrual

date of a personal injury tort case under Indiana law '*when the injury

to the plaintiff is caused by a disease which may have been contracted
as a result of protracted exposure to a foreign substance. "^^ The answer

to the question would establish when two Indiana statutes of limitations
would begin running in protracted exposure, delayed manifestation cases. ^^

At the trial level, the federal district court provided its answer to

the question at issue in both consolidated cases by granting summary
judgment to the defendant, A.H. Robins Co.^^ The trial court rejected

plaintiff's arguments that accrual of their actions did not occur until

they discovered the causal connection between their injuries and alleged

defects in the Dalkon Shield intrauterine device that was manufactured

by the defendant and used by the plaintiffs.

'"See infra notes 185-232 and accompanying text.

''476 N.E.2d 84 (Ind. 1985). For an explanation of the subsequent history of the

Barnes, case, see supra note 1.

'-See Ind. R. App. P. 15(0).
'^275 Ind. 520, 418 N.E.2d 207 (1981) (answering four questions certified to the

Indiana Supreme Court by the Seventh Circuit Court of Appeals under Ind. R. App. P.

15(0)). For discussions of the Dague case, see Leibman, Products Liability, 1980 Survey

of Recent Developments in Indiana Law, 14 Ind. L. Rev. 1, 22-23 n.l33; Vargo, Products

Liability, 1981 Survey of Recent Developments in Indiana Law, 15 Ind. L. Rev. 289,

290-93 (1982).

'^Ind. Code §§33-1-1.5-1 to -8 (1982).
''476 N.E.2d at 85.

"'A protracted disease tort case can be governed either by the Indiana Product

Liability Act limitations provision, Ind. Code § 33-1-1.5-5 (1982 8c Supp. 1985), or by
the general personal injury statute of limitations, id. § 34-1-2-2. The certified question

from the Seventh Circuit referred specifically to both of these statutes. 476 N.E.2d at

85.

'"476 N.E.2d at 85.



1986] LIMITED DISCOVER

Y

35

1

One of the plaintiffs, Lahna Barnes, had her Dalkon Shield inserted
on July 18, 1972.^^ She suffered pelvic inflammatory disease within two

weeks of insertion. The device was removed a few weeks later. Thereafter

she suffered a series of injuries, but it was not until 1981 that she

learned from the TV program, "60 Minutes," the "dangers and defective
nature of the Dalkon Shield." She filed her complaint against Robins

on August 21, 1981, over two years, but less than ten years, following

delivery of the product to her.

Sharon Neuhauser, the other plaintiff, had a Dalkon Shield inserted

on May 19, 1972. She became pregnant, suffered a miscarriage in June
of 1974, and learned she had cervical cancer in 1975. As a result of

the disease, Neuhauser was forcea to undergo a series of severe oper-

ations. She also learned of the toxic nature of the Dalkon Shield from

the "60 Minutes" program and filed suit August 6, 1981.

At the outset, it should be noted that the two cases present legally

distinguishable facts. Barnes clearly suffered noticeable physical injury

within two years of the insertion of her Dalkon Shield. Her theory for

tolling the statutes of Hmitations was that she was unaware of a causal

connection between the defectiveness of the shield and her inflammatory

disease until much later. On the other hand, if Neuhauser suffered injury
during the two-year period following the insertion of her shield, there

was probably no reasonable way for her to have discovered that fact
prior to the manifestation of her symptoms which occurred after the

limitations period had run.^^ While it is true that she became pregnant

before the two years were over, no contraceptive method currently can

be relied on to be one hundred percent effective. An atypical pregnancy
without complications would probably not have been considered action-

able. The cases of both plaintiffs apparently rested on the issue of safety,

rather than effectiveness.^^

''The facts of the two consoHdated cases, brought by plaintiffs, Lahna Barnes and

Sharon Neuhauser, are set out at 476 N.E.2d at 84-85.

-''Presumably, the first symptom of physical harm to Neuhauser attributable to the

Dalkon Shield occurred when she suffered a miscarriage in June, 1974, more than two

years after insertion. The harm itself, i.e., physical changes in her body, may possibly
have commenced, undetected, immediately following insertion of the shield.

"'Whether a patient has a "wrongful pregnancy" claim against a manufacturer of

a birth control device which fails to prevent pregnancy generally is a separate issue from

that of the device's safety. But if the plaintiff does bring a wrongful pregnancy claim,

a discovery-based statute of limitations would presumably run from actual or constructive

notice of the pregnancy. See discussion of the Tolen case, infra notes 149-60 and ac-

companying text. Health impairments, however, would presumably represent a separate

claim, and a discovery-based statute of limitations to govern it would presumably run

from notice of the physical injury and its causal nexus to the product defect. A plaintiff
bringing both claims in the same action should not be bound to a single statute of

limitations on the ground that to do otherwise is "action-splitting." See infra notes 89-

91 and accompanying text.



352 INDIANA LAW REVIEW [Vol. 19:341

Because of the liberality of the supreme court's discovery rule, both

plaintiffs were given the chance to recover, but the court's decision

might have been otherwise. The court could have precluded recovery

for plaintiff Barnes on the ground that she had suffered ascertainable

damages within the two-year statutory period while Neuhauser had not.

Instead, the court ruled that, in protracted exposure situations, damages

are not ascertainable until the plaintiff discovers, or through due diligence

should discover, the cause of the injury. In these situations, the plaintiff's

action does not accrue, and the statute of limitations does not begin to

run, until the causal nexus to the product is reasonably discoverable.^'

The court reaffirmed its deference to the legislature's power to set

a starting point and period of duration for any statute of limitations,

but it held that when the legislature provides that the starting point of
the limitation period is when the * 'cause of action accrues," it is within
the power of the courts to determine the time of accrual. ^^ Thus, when
the Indiana Supreme Court was specifically asked in Barnes to set the

time of accrual for protracted exposure cases, the majority — unlike
the Wisconsin Supreme Court which was presented with the identical

question by the Seventh Circuit Court of Appeals" — decided to limit
its discovery rule to claims "where the misconduct is of a continuing

nature and is concealed,"^"* rather than to "all tort claims. "^^

The Indiana court rationalized its restriction by stating that going

beyond the certified question would be "issuing an advisory opinion. "^^

The court also suggested that it was currently unwilling to overrule its

decision in Shideler v. Dwyer^^ where personal property rather than

personal injury was involved, the action complained of was unconcealed,

and the harmful act was a single rather than a continuing occurrence.

Also, in Shideler, the plaintiff was a beneficiary rather than the client

in privity with the defendant lawyer being charged with legal malpractice.^^

""476 N.E.2d at 87-88. The supreme court stated that it could make no determination

as to the merits of the two causes of action; that was left to the federal courts. Id. at

88. Yet, given the undisputed facts of the two cases, the court could easily have narrowed

its answer to the certified question so as to have effectively barred Barnes on the ground

that she failed to file her claim within two years of suffering "ascertainable damages."

^-M at 85.

^'See Hansen v. A.H. Robins Co., 113 Wis. 2d 550, 335 N.W.2d 578 (1983).
^^476 N.E.2d at 87 (quoting Shideler v. Dwyer, 275 Ind. 270, 417 N.E.2d 281 (1981)).

"^476 N.E.2d at 87.

"^Id.

'^'215 Ind. 270, 417 N.E.2d 281 (1981).

'•"It has been suggested that Shideler's heightened duty to her client, as compared

to that owed her client's beneficiary, rests on the fiduciary relationship between lawyer

and client. See Tolen v. A.H. Robins Co., 570 F. Supp. 1146, 1150 n.2 (N.D. Ind. 1983).

However, the existence, or lack, of privity between the parties would alone appear to

provide sufficient justification for disparate treatment. For a discussion of Shideler, see

infra notes 115-35 and accompanying text.



1 986] LIMITED DISCO VER Y 353

Although the reluctance of the court to provide relief to the remote

third party in the Shideler context is understandable, the broad holding

of the case rests on shaky ground and will continue to produce mis-

chievous results if allowed to stand as judicial interpretation. The "as-

certainable damages" rule from the line of cases relied upon in Barnes

for tort accruals is simple and reasonable. Deviations from it probably

should be left to the legislature.

III. Early Precedents

The Barnes court set forth the Indiana position on accrual as follows:

*'[T]he rule in Indiana has been generally understood to be that a cause

of action accrues when the resulting damage of a negligent act is as-

certainable or by due diligence could be ascertained," the court ac-

knowledging that it remained to be settled "how ascertainable a particular
injury was and what standard would be applied as to what is reasonably

ascertainable."^^ The "most notable case," the court stated, "is that of

the Board of Commissioners of Wabash County v. Pearson.
''^^

The Pearson opinion said nothing about damages being ascertainable,

but the Pearson court did hold that a cause of action does not accrue

until the plaintiff is injured.^' Pearson involved a bridge that was neg-

ligently built in 1871, but which did not collapse until 1884. The plaintiff

was physically injured in the collapse. The defendants argued that the

statute of limitations began to run when the bridge was completed, a
result which would have been true of a pure repose statute. The court

pointed out, however, that "[t]he two elements of the appellee's cause

of action are the legal injury and the resulting damages," and the

personal injury statute of limitations begins running only when "the

right of action accruels].""^^

A. Cases Supporting the ''Ascertainable Damages" Rule

The requirement that damages must be ascertainable first appeared
in an Indiana Supreme Court case in Montgomery v. Crum^^ as a
parenthetical dictum. This case involved the tortious alienation of a

daughter's affections by the plaintiff's divorced husband and the hus-

band's family. The defendants had spirited the child away and hidden
her for over nine years. They argued that the mother's action for damages
was barred by the two-year statute of limitations " 'for injuries to person

or character.' "^"^ The court held that the defendants' acts constituted

''416 N.E.2d at 86.

'"Id. (citing 120 Ind. 426, 22 N.E. 134 (1889)).
^'120 Ind. at 428, 22 N.E. at 135.

'-Id.

'M99 Ind. 660, 161 N.E. 251 (1928).

''Id. at 675, 161 N.E. at 257 (quoting the statute of limitations).



354 INDIANA LAW REVIEW [Vol. 19:341

a continuing wrong so that '*the statute of limitations will not begin to

run until there is a cessation of the overt acts constituting the wrong. "^^

The court also stated:

The two-year statute of limitations will not begin to run as a

shield against the consequences of wrongful acts until the wrong-

doer thereby accomplishes an injury to the person of another,

for which the law allows indemnity in the form of damages

(that is to say, damages susceptible of ascertainment), for not

until then would the cause of action accrue. ^^

In the Montgomery case, however, damages to the plaintiff were readily
ascertainable by the plaintiff from the very beginning of her attempts

to recover her daughter.

The interesting point made by this case is that mere notice of injury
is not enough to trigger the running of a statute of limitations that will

act to bar the plaintiff's cause of action. Even the plaintiff's knowledge

of the cause of injury may be insufficient. For the relevant statute to
run under the Montgomery holding, the wrongful acts of the defendant
must be completed, despite the obvious fact that the plaintiff could have

maintained a lawsuit as soon as initial injury was suffered. For that

reason, it is probably better to consider a series of wrongful acts as a

multiple, repeating tort rather than as a single, continuing one. Thus

each succeeding act will trigger the statute of limitations, but only the

final act in the series of wrongful acts will begin the limitations period

that might effectively bar the plaintiff's action.

The "ascertainable damages" rule was applied in the diversity case
of Gahimer v. Virginia-Carolina Chemical Corp.^^ Allegedly defective

fertilizer was delivered to the plaintiffs on April 5, 1952. Crops were

planted prior to May 24, 1952. Sometime after May 25th, the plaintiff
discovered that his crops were damaged. He filed suit May 24, 1954.
The defendants argued that the two-year statute of limitations had begun

running upon the delivery of the fertilizer on April 5, 1952; the plaintiff

countered that no cause of action accrued until his discovery of injury

after May 24, 1952. The defendants cited cases which acknowledged
that, while injury to the plaintiff was necessary for an action's accrual,

the plaintiff's discovery of the injury was not.^^ The plaintiff relied

primarily on the Montgomery v. Crum language requiring that damages
must be " 'susceptible of ascertainment.' "^^ The court held for the
plaintiff on this issue, stating that "[tjhis date can not and need not

'Id. at 679, 161 N.E. at 259.

'"'Id. (emphasis added).

"241 F.2d 836 (7th Cir. 1957).

Vf/. at 839 (citing Fidelity v. Jasper Furniture Co., 186 Ind. 566, 177 N.E. 258

(1917); Craven v. Craven, 181 Ind. 553, 103 N.E. 333 (1913)).

'-'Id. at 840 (quoting 199 Ind. 660, 161 N.E. 251).



1 986] LIMITED DISCO VER Y 355

be determined with certainty. It is sufficient for our purpose that it was

after the corn came up and was within the two-year Hmitation period. "*^^^

There is one additional fact of significance to be noted from the

Gahimer case. At one point, more than two years earHer than the fihng

of his claim, the plaintiff noticed that the corn in one of his fields

"was coming up but not 'naturally and normally.' ""' Presumably plain-

tiff was then on notice that injury had occurred. Yet "[t]here Iwas] no

proof that Gahimer had knowledge or any reason to think that the corn

in any of the fields had been damaged by use of defendant's fertilizer. "^^

The court of appeals evidently believed that "damages susceptible of

ascertainment" meant that plaintiff must have some reasonable oppor-

tunity to acquire knowledge of a causal nexus between his injury and

the defendants' product.

Gahimer and Montgomery were relied upon in Essex Wire Corp. v.

Hilt Co.^^ In that case, the defendant permitted a piece of canvas to

be drawn into a motor owned by the plaintiffs. The canvas was im-

mediately withdrawn, and no apparent harm to the motor was noted

at the time. Fifteen months later, the motor failed because some of the

canvas had in fact been left inside. The court held that the statute of

limitations ran from the date the motor failed, because only then were

the damages susceptible of ascertainment.^'* It was clear, however, that

undiscovered injury to the motor was occurring steadily during the entire

fifteen months following the defendant's negligent act.

In Withers v. Sterling Drug, Inc.,^^ the federal district court ac-

knowledged the ascertainable damages rule applied in the Gahimer case,^^

but held that once the plaintiff has ascertained that some damages exist,

the cause of action accrues and the statute of limitations begins to run,

even though the plaintiff is not aware, nor can reasonably be made
aware, that far greater damages will later be forthcoming from the

defendant's act.*^^ Withers involved the drug Aralen. The plaintiff suffered

what she thought was reversible eye damage and, therefore, filed no
claim. Several years later she learned that the damage was permanent.
The court held that she was barred by the two-year statute of limitations

""'Id. at 840.

''Id. at 839.

"-Id.

^763 F.2d 599 (7th Cir. 1959).

""'Id. at 602.

'<319 F. Supp. 878 (N.D. Ind. 1970).

''''Id. at 880.

"Vc^. at 881. Note that the defendant's conduct described here is a single act: the

delivery of the defective product. While the harm that resulted may be characterized as
continuing or repeating, the defendant's act is not. Thus, this situation is distinguishable

from the defendant's conduct in Montgomery v. Crum, 199 Ind. 660, 161 N.E. 251 (1928)
(discussed supra, notes 73-76 and accompanying text), which involved a series of acts.



356 INDIANA LAW REVIEW [Vol. 19:341

which began to run when she first learned that the drug had adversely

affected her/^^

The Withers holding, which is supported by substantial authority, ^^

can lead to anomolous results. Once a plaintiff suffers mild symptoms,

the claim must be filed within the limitations period or be barred. If

the claim is filed and the plaintiff recovers, any subsequent damages

flowing from the same act will not be actionable. ^^ Thus, a plaintiff

•<''319 F. Supp. at 881.

"''The prohibition against action-splitting derives from principles of res judicata. If

the plaintiff receives a judgment of damages resulting from the wrongful act of the

defendant, an attempt later to reassert the same cause of action for additional damages

will be said to have been merged in the prior judgment. Rush v. City of Maple Heights,

167 Ohio St. 221, 147 N.E.2d 599 (1958), cert, denied, 358 U.S. 814 (1958); Developments

in the Law—Res Judicata, 65 Harv. L. Rev. 818, 824 (1952). The plaintiff may argue
that the defendant's act gave rise to two distinct causes of action requiring different

evidence in each case. Such is the position of the plaintiff in cases like Withers, in which

a drug, substance, or device is found to produce temporary damage followed unexpectedly

some substantial time later by permanent damage. Upon occurrence of the temporary
injury — or in discovery rule states, upon discovery of the temporary injury — the
plaintiff must bring suit within the statutory limitation period or be thereafter barred.

While it is true that the plaintiff can theoretically recover for any prospective damages

that can be proved, those damages are likely to be at best "speculative." Or, as in

Withers, they may be unanticipated. Given this situation, the plaintiff may assert that
justice requires treating the action for permanent injury as distinct from the earlier one

for temporary damage.

In Martinez-Ferrer v. Richardson-Merrell, Inc., 105 Cal. App. 3d 316, 164 Cal.

Rptr. 591 (1980), the plaintiff suffered what he believed to be reversible eye damage in

1960. There was some reason to believe at the time that MER/29, a drug manufactured

by the defendant, was responsible. There was also some evidence that the plaintiff may
have known or should have suspected the link. Because plaintiff believed his injury was

temporary, he filed no action in 1960. In 1976, the plaintiff suffered severe permanent

eye damage. The defendant's motion for summary judgment on the ground that the

plaintiff's later suit was barred by the statute of limitations was granted. In reversing,

the California Court of Appeals recognized the authority of the rule against action-splitting,

id. Sit 323-24, 164 Cal. Rptr. at 595, but it held that advances in science and technology

required the fashioning of new remedies to meet changing needs. With defective products,

the court noted that the plaintiffs' needs in delay cases could be accommodated without

excessively prejudicing the defendants' opportunity to marshall evidence. The court pointed

out that "[t]he cataract-causing potential of MER/29 became known to defendants in
1960 or 1961. They obviously have had an opportunity to gather evidence on the subject

while the facts were as fresh as they could be. In addition, they have had two decades

to refine the result of their researches." Id. at 325, 164 Cal. Rptr. at 596. In addition,

the court observed, exceptions have been recognized to the rule of merger in nuisance

cases, progressive occupational disease cases, and in the Restatement (Second) of Judg-

ments 61.2 (Tent. Draft no. 5 (1982)), where an exception is permitted when "it is clearly

and convincingly shown that the policies favoring preclusion of a second action are overcome

for an extraordinary reason . . . ." Id. at 327, 164 Cal. Rptr. at 597 (quoting the

Restatement). See generally Developments in the Law—Res Judicata, 65 Harv. L. Rev.
818, 828-31 (1952) (for "Countervailing Policies" supporting exceptions to the principles

of merger).

''"See generally Developments in the Law — Res Judicata, 65 Harv. L. Rev. 818
(1952).



1986] LIMITED DISCOVERY 357

who remains completely ignorant of latent injury until it erupts into
severe symptoms is in a better position to recover complete compensation

than the party who receives notice of a slow-developing disease early
in its development. Yet, it is the cases in which the parties are completely

taken by surprise, long after severe undiscovered damage has taken place,

that are most troublesome for defendants and the courts.^'

B. Cases Denying the
*

'Ascertainable Damages" Rule

There is early Indiana authority rejecting the rule that damages must

be susceptible of ascertainment before a statute of limitations will begin

to run. In Craven v. Craven,^^ the Indiana Supreme Court stated that

"[t]he fact that a person entitled to an action has no knowledge of his

right to sue, or the facts out of which his right arises, does not prevent

the running of the statute or postpone the commencement of the period
of limitation until he discovers the facts or learns of his rights there-

"The Withers and Martinez-Ferrer cases illustrate the interworkings of limitation and

res judicata principles to bar meritorious cases. In situations where the defendant receives

reasonably prompt notice that its products may be causing harm, one or the other of
these principles should probably give way to accomodate the plaintiffs' legitimate right

to relief. Either the statute of limitations should be tolled until the extent of damages is

ascertainable, or additional causes of action should be permitted where justice requires.

Such an exception to the preclusion rules is permitted in cases involving "continuing or

recurrent wrong." Restatement (Second) of Judgments § 26(e) (1982). The same reasoning

would seem to apply when the wrong is a single act, but the harm is recurrent or
continuing. These options are of course irrelevant when the late manifestation of harm

takes both parties by surprise.

Following the Survey Period, Miller v. A.H. Robins Co., 766 F.2d 1102 (7th Cir.

1985), was decided. In Miller, the plaintiff suffered a pelvic inflammation which she was

told might have been caused (among other things) by her Dalkon Shield. Presumably,

because she expected the temporary inflammation to be the full extent of her damages,

and because the causation possibilites were presented to her as being highly uncertain,

she neither brought suit nor launched an investigation as to the definite source of her

inflammation. Six years later she discovered that she was infertile, and she was then

advised by her physician that her inflammation and infertility were caused by the shield.

In Miller's subsequent lawsuit against Robins, the district court granted the defendant's

summary judgment motion. The court of appeals affirmed, ruling that Miller was barred

two years after she was told of the possible link of her inflammation to the Dalkon

Shield. (It is not unlikely that Robins may also have been placed on notice during Miller's
earlier inflammation that their product was involved.) Yet, if there had been no early

warning, i.e., no pelvic inflammation. Miller, under the Barnes discovery rule, would not

have been barred. Such a policy encourages a plaintiff to avoid obtaining all knowledge

of the causal nexus of a product to the illness (or at least to claim such ignorance) until

a lawsuit is definitely contemplated. Rather than encouraging due diligence in obtaining

information while it is fresh, the practical effect of the rule against action-splitting in a

discovery jurisdiction could be either the encouragement of dissembling or the deliberate

avoidance of knowledge. See Martinez-Ferrer v. Richardson-Merrell, Inc., 105 Cal. App.

3d at 319 n.4, 164 Cal. Rptr. at 592 n.4.

'^181 Ind. 553, 103 N.E. 333 (1913).



358 INDIANA LAW REVIEW [Vol. 19:341

under. '"^^ In Fidelity & Casualty Co. v. Jasper Furniture Co.,'^'^ the court
ruled that "[a] cause of action accrues, so that Hmitations begin to run,

at the moment its owner has a legal right to sue on it ... .'"'^ In both
of these cases involving property loss, the limitation periods were sub-

stantial (twenty and ten years, respectively), and the failure of the

plaintiffs to acquire the requisite knowledge of their claims was due

either to their own lack of vigor or to the carelessness of third parties.
Because neither claim was in tort, poHcy issues and interests relevant

to property and contract law also had to be accommodated in both
actions. ^^

In French v. Hickman Moving & Storage,'^'' the plaintiff alleged the
defendants had converted her personal property that she had bailed to

them for storage. Plaintiff filed suit for conversion two and a half years

after the sale [conversion] of her goods by the defendants. The Indiana

Court of Appeals ruled '*that the statute [of limitations] commences to

run when the injurious action occurs though the plaintiff may not learn
of the act until later. "^^ In the case of conversion, "the injury to her

property occurred when the property was converted and the statute of
limitations started to run at that time. . . . Notice to the plaintiff was

therefore immaterial.
'"^'^

The intentional torts for the most part have their roots in trespass. '°°

Historically, trespass involved direct, forcible invasion of protected in-

terests, whether to the person or to property of the plaintiff. '°' Delayed

injurious effects resulting from a defendant's act were not actionable

until the later development of trespass on the case.'^^ It is not surprising,

therefore, that statutes of limitations applied to intentional conduct, even

today, should not provide for notice, discovery, or ascertainable damages

with the sole exception for overt acts of fraudulent concealment by the

defendant.'"^ The rationale is that a plaintiff generally will, or should,

be promptly aware of the kinds of harm to person or property that

"Id. at 559, 103 N.E. at 335 (quoting State v. Walters, 31 Ind. App. 77, 66 N.E.

182 (1903) (emphasis supplied by the Craven court).

^^86 Ind. 566, 117 N.E. 258 (1917).

'''Id. at 568, 117 N.E. at 258.

'*"If the defendant's conduct in itself invades the plaintiff's rights, so that suit could

be maintained regardless of damage—as with a breach of contract and most intentional
torts—the statute commences upon completion of the conduct." Statutes of Limitations,
supra note 4, at 1200-01. The same observation would apply to cases of adverse possession

and other invasions of property rights.
^^400 N.E. 2d 1384 (Ind. Ct. App. 1980).

"'Id. at 1388.

^Id.

'""Prosser & Keeton, The Law of Torts 30 (5th ed. 1984).
""Id. at 29.

"•'Id.

""See Statutes of Limitations, supra note 4, at 1217-19.



1986] LIMITED DISCOVERY 359

occur under the rubric of the intentional, generally trespass-based torts.
"^"^

In Cordial v. Grim,^^^^ the plaintiff alleged that he had lost his

workers' compensation claim as a result of his attorneys' malpractice.

His pro se complaint against his lawyers, however, was brought more

than two years after the workers' compensation claim was denied for

the first time and also more than two years after his relationship with

his attorneys had terminated. In opposing the attorneys' motion for

summary judgment which was based on the ground that the statute of
limitations had run, the plaintiff presented two closely related arguments.

First, he contended "that the statutes of limitation considered hereinabove

should commence to run only upon the actual discovery of a right of
action by the injured party. "'°^ Second, he contended "that his causes

of action did not accrue until he suffered both an injury to his property

and damages, and that he did not suffer damages until his second appeal

to the [Industrial] Board was denied . . . .'"^^

The court rejected the plaintiff's first argument which asked for

appHcation of a discovery rule. The court cited Toth v. Lenk,^^^ a
medical malpractice case governed by the Indiana malpractice statute

which requires the claim to be " 'filed within two [2] years from the

date of the act, omission or neglect complained of.' "'°^

The Toth court distinguished the malpractice limitation statute from

the general personal injury limitations statute as follows:

The statute thus differs from the general statute governing

personal injuries . . . which requires that such actions be com-

menced within two years "after the cause of action has accrued."

Clearly the choice of terminology in the malpractice statute is

more restrictive. It is intended to avoid, in medical malpractice
cases, the impact of that line of case law holding that "accrual

of the action" phraseology extends the time for commencing an
action where either the injury or damage (essential elements of

""See supra note 96. Historically, conversion evolved from the common law action
of trover which was originally an action on the case. Trover developed as a substitute

action for trespass to chattels. In trover, the plaintiff could refuse the tendering back of

the chattel, because the gist of the tort was the defendant's intentional assertion of

dominion and control over the goods. The modern tort of conversion requires a serious

interference with, and denial of, the rights of the true owner. Although conversion has

its origin in case, it is definitely an intentional tort clearly distinct from negligence. Prosser

& Keeton, supra note 100, at 88-93.
'"^69 Ind. App. 58, 346 N.E.2d 266 (1976).

'"^Id. at 69, 346 N.E.2d at 273.

""Id. at 70, 346 N.E.2d at 273.
""<164 Ind. App. 618, 330 N.E.2d 336 (1975).

"'^Id. at 620, 330 N.E.2d at 338 (quoting Ind. Code Ann. § 34-4-19-1 (Burns 1971)).



360 INDIANA LAW REVIEW [Vol. 19:341

the tort) do not occur until long after the act or omission which

gave rise to them.'"^

In any event, the general personal injury statute of limitations was

not at issue in Toth v. Lenk, nor was it in Cordial v. Grim. The Cordial

court decided that the occurrence-based malpractice statute of limitations,

heretofore applied only in medical malpractice cases, would be applicable

to legal malpractice cases as well.'"

With respect to Cordial's second argument — that he had suffered
no damages until the Industrial Board's denial of his claim — the court
ruled that Cordial had suffered damages sufficient to maintain an action

for malpractice when his original workers' compensation benefit *'was

terminated adversely to him with prejudice to his ability to maintain

any further proceedings thereon.""^

These, then, were the Indiana authorities when, in 1981, another

legal malpractice case, Shideler v. Dwyer,^^^ was presented to the Indiana

Supreme Court. Shideler required construction of the accrual-based,

general tort statute of limitations for injury to person or property.'"*

The cases to that point were uniform in requiring that there be damages

in order for a cause of action to accrue and for limitation statutes based

on accrual dates to commence running. While there were a few non-
physical injury cases to the contrary, the weight of Indiana authority

also held that damages suffered by a plaintiff must be "susceptible of

ascertainment."

IV. Shideler v. Dwyer

The plaintiff Dwyer was- a disappointed beneficiary under Moore's
will. "5 Shideler, Moore's lawyer, had drafted a will provision which

directed an officer of a corporation of which Moore was a major
stockholder, and Dwyer an employee, to pay Dwyer a monthly retirement
benefit of $500. After Moore died, Dwyer retired, but the corporation
denied her claim to the benefit promised her by the testator. After

Dwyer's petition for construction of the will was decided adversely to
her by the Marion County Probate Court, she filed suit against Shideler

and Shideler's law firm for malpractice. Shideler's motion for summary
judgment, on the ground that the relevant statute of limitations had

""M at 620-21, 330 N.E.2d at 338.
'"169 Ind. App. at 67, 346 N.E.2d at 272.

"Vc^. at 70, 346 N.E.2d at 273-
'"417 N.E.2d 281 (Ind. 1981).

"^IND. Code § 34-1-2-2 (Supp. 1985).
"HI 7 N.E.2d at 284. For an analysis of the Shideler case, see MacGill, Shideler v.

Dwyer: The Beginning of Protective Legal Malpractice Actions, 14 Ind. L. Rev. 927

(1981).



1 986] LIMITED DISCO VER Y 361

run, was denied."^ Shideler appealed the order which was affirmed by

the Indiana Court of Appeals. Subsequently, Shideler's petition for

transfer was granted by the Indiana Supreme Court. "^

The supreme court ruled that Dwyer's action was governed, not by

the malpractice statute of limitations found applicable in Cordial v.

Grim,^^^ but rather by the general tort statute of limitations"^ for injury

to person or personal property'^° which commences running when the

plaintiff's cause of action accrues.'^' The primary issue remaining for

the court was when Dwyer's action accrued.

The plaintiff contended that the statute commenced running when
the probate court decreed that the gift to her was void.'^^ The defendants

argued "that any injury caused by them must have occurred no later

than the date of Moore's death, after which time Moore's Will could

not be changed; or the date the Will was admitted to probate, at which

time the Will became an effective legal instrument. '"^^ Dwyer's argument

was that until the probate court's decision, "she sustained no damage

from the defendants' acts or omissions because the court conceivably

could have declared the clause to be valid. "'^'^ The gist of Dwyer's

position was that until her claim under the will was denied, any damages

she was later to suffer as a result of the malpractice were completely

unascertainable.

The supreme court held for Shideler. It ruled that Dwyer's malpractice

action accrued when the testator died.'^^ The court could have rested
this holding on the ground that Dwyer had sufficient facts at that time
to ascertain that the then operative will provision would be declared

void and, therefore, that Shideler could immediately be held culpable

for malpractice. In other words, when the will became operative, Shi-
deler's allegedly incompetent drafting of the gift provision could have

been perceived by Dwyer as an actionable invasion of her property
interest in the bequest.

Instead, the court adopted a much broader holding: "For a wrongful
act to give rise to a cause of action and thus to commence the running
of the statute of limitations, it is not necessary that the extent of the

"^417 N.E.2d at 283.

'"*169 Ind. App. 58, 346 N.E.2d 266 (1976). See supra notes 105-12 and accompanying

text.

'"Ind. Code Ann. § 34-4-19-1 (Burns 1971).
'^"IND. Code Ann. § 34-1-2-2 (Burns 1971).
'^'417 N.E.2d at 288.

'^^Id.

'^^Shideler v. Dwyer, 386 N.E.2d 1211, 1215 (Ind. Ct. App. 1979), rev'd, 417 N.E.2d
281 (Ind. 1981).

'^M17 N.E.2d at 288.

'"/d/. at 290.



362 INDIANA LA W REVIEW [Vol. 19:341

damage be known or ascertainable but only that damage has occurred. "'^^

This is a ruling that requires some scrutiny. The requirement for accrual

would appear to be merely that there be an occurrence of damage,

whether or not it is ascertained or is even ascertainable by the plaintiff.

The court is also suggesting that very slight damage is sufficient for
accrual. '^^ To determine exactly what the court had in mind, it is necessary
to consider the New York case of Schmidt v. Merchants Dispatch
Transport Co.y on which the majority relied and from which ii quoted

extensively.'^^

In Schmidt, the defendants caused the plaintiffs to breathe in a

deleterious dust from which the plaintiffs later developed respiratory

disease. The Schmidt court held that there had been an actionable tortious

invasion of the plaintiffs' persons the moment they inhaled the first
speck of dust. Despite the fact that New York courts still adhere in
ingestion cases to the '^impact rule" embodied in the Schmidt reasoning, '^^

that reasoning is conceptually flawed. Judge Fuchsberg, in his dissent

to Steinhardt v. Johns-Manville Corp.,^^^ in which the Schmidt rule was

upheld in 1981, ably pointed out the problem:

[WJhile the unwanted invasion of their lungs by environmental

air which had been contaminated by asbestos dust are the wrong-

ful acts to which they are subjected, the damages they sustained

were in the form of diseases which did not come about until
much later.

The plaintiffs go on to assert that the properties of particles

of asbestos are such that their inhalation will not necessarily

result in the contraction of the disease; . . . that those who are
exposed may never sustain any injury at all. . . .'^'

The Schmidt holding asserts that plaintiffs can obtain a remedy
upon exposure to a deleterious substance whether or not they ultimately

become diseased from the exposure. The Shideler court made the analogy
that Dwyer could have proven damages upon death of the testator even
if the will were later upheld by the probate court; she was entitled to

a remedy "when Moore died leaving a testamentary provision in favor
of the plaintiff of questionable validity. "'^^

'^Vf/. at 289.

'^The court refers not only to "damage" but also to "the extent of the damage."

The implication is that the occurrence of any damage, no matter how slight, will be

sufficient to begin the limitation period. Id.

'^H17 N.E.2d at 289-90 (quoting 270 N.Y. 287, 300-01, 200 N.E. 824, 827 (1936)).

''''See Fleishman v. Eli Lilly <& Co., 62 N.Y.2d 888, 467 N.E.2d 517 (1984).
""54 N.Y.2d 1008, 430 N.E.2d 1297 (1981).

"7^. at 1012-13, 430 N.E.2d at 1300 (Fuchsberg, J., dissenting).

'^'417 N.E. 2d at 291.



1 986] LIMITED DISCO VER Y 363

If Schmidt is even theoretically correct, then any entity which releases

virtually any substance into the environment is at once suable, because

anything is capable of causing harm to someone under some circumstance.

As the Shideler court pointed out, however, "the ultimate effect upon

the plaintiff of the defendant's alleged negligence was speculative at the

time the cause of action accrued, but it cannot be questioned that the

impact occurred at the time of Moore's death.'"" Even so, if the effect

of the negligence is "speculative," then the negligence is not actionable.

"Impact" without actual, provable damages is clearly insufficient under

negligence law to create a cause of action.

Although the Shideler court appeared to adopt the Schmidt impact

rule, the court recognized that

[t]here is authority supporting the proposition that statutes of

Hmitation attach when there has been notice of an invasion of

the legal right of the plaintiff or he has been put on notice of

his right to a cause of action. . . . There may be special merit
to that viewpoint where . . . the plaintiff was the client or the

patient. . . .'^^

The court noted that the discovery rule has been applied where "the

misconduct was of a continuing nature or concealed. '"^^ These obser-

vations might appear to limit the Indiana apphcation of the "impact

rule" to facts like those in Shideler in which the alleged misconduct

was open and was a single rather than a protracted occurrence. Yet the

court's substantial reliance on Schmidt, a protracted exposure case, and

its express rejection of the "ascertainable damages" rule clearly suggest

that a far wider scope to the "impact rule" was being mandated than

simply legal malpractice. That the signals emanating from the Shideler

opinion were mixed and confusing can be illustrated by a review of the

cases in the four-year period after Shideler and before Barnes.

V. Shideler 's Product Liability Progeny

Several product liability cases involving statutes of limitations based

on accrual dates were decided subsequent to Shideler. In Wojcik v.

Almase,^^^ doctors had inserted a catheter in the chest of the plaintiff.

While in place, part of the catheter broke off and remained lodged in

the chest. This fact went undetected for a year. Within two years of

discovery of the catheter fragment in situ, the plaintiff brought suit

'"/c?. (emphasis added).

'''Id.

'''Id.

'M51 N.E.2d 336 (Ind. Ct. App. 1983).



364 INDIANA LA W REVIEW [Vol. 19:341

against the doctors for malpractice and against the catheter manufacturer

for damages resulting from its having manufactured a defective product.

The malpractice statute of limitations governing the claim against
the doctors was held to be an **occurrence statute, not a discovery

statute. "'^^ It ran from the date '*of the alleged act, omission or ne-

glect. "'^^ Therefore, the plaintiff's malpractice claim was time-barred.

The product liability claim against the manufacturer was governed

by the Indiana Product Liability Act section which requires that a product

liablity action must be commenced within two years after the cause of
action accrues. '^^ The court ruled that product liability claims accrue
when the plaintiff is harmed, not when the harm is discovered. •'^'^ The
court made no reference to Shideler nor to the line of cases requiring
that damages be susceptible of ascertainment.

In Monsanto Co. v. Miller, ^'^^ the plaintiff dairy farmers sought

recovery for the loss of a silo. The silo had become unusable because

it was coated with a product manufactured by the defendants which

contained PCB's. It was necessary in the case to estabhsh when the
plaintiff's cause of action accrued in order to determine which statute

of limitations would govern the claim: the one dealing with injuries to

real estate '"^^ or the one governing product Hability claims.''*^ Both statutes

were accrual statutes so that the legal principles to be applied were the

same although the relevant facts as found by the factfinder would dictate

the choice of limitation periods.

The court cited many of the authorities already discussed in this
Article, concluding that Indiana does not have a discovery rule,'^ but

that for a cause to accrue there must be some ''ascertainable" damages.''*^

Even Shideler was cited (incorrectly) for that proposition.'^^ The court

ruled that the farmer's cause of action accrued only when the PCB level
in the herd's milk reached a statutorily impermissible level. '"^^ A Schmidt/
Shideler analysis, however, would appear to dictate that a cause of action

would accrue as soon as the silage the cows ate exposed them to PCB's,

'''Id. at 338.

'''Id. (quoting Ind. Code § 16-9.5-3-1 (1982)).
''''Id. at 341 (quoting Ind. Code §33-1-1.5-5 (1982)).
''''Id. at 342.

'^'455 N.E.2d 392 (Ind. Ct. App. 1983).

'^^IND. Code § 34-1-2-1 (1982).
•"^ND. Code §33-1-1.5-5 (1982).
"^See cases cited at 455 N.E.2d at 394.

'''Id.

""455 N.E.2d at 394. See supra text accompanying note 126. The Shideler court never
acknowledged that "ascertainable" damages were necessary for accrual. That court's reliance

on the New York "impact rule" cases leads to the conclusion that some slight damage,
even if totally undiscoverable, would be sufficient to start the statute of limitations running.

"'Id. at 396.



1986] LIMITED DISCOVERY 365

because, at that time, the PCB level (like the will provision drafted in
Shideler) was such that it would ultimately be ruled illegal.'''^

In Tolen v. A.H. Robins Co.,^"^^ the district court was confronted

with facts similar to those in the Barnes case. A Dalkon Shield was
inserted in the plaintiff's uterus in February, 1972; she became pregnant

in July, 1972, and learned in November, 1972, that an operation would

be required to locate the shield. The shield was found in May, 1975,

in her lower left stomach cavity. The plaintiff alleged that she discovered

the causal connection between the shield and the various health problems

she had suffered by reading a newspaper article on December 20, 1979.

She brought suit on November 13, 1981.
In granting Robins' motion for summary judgment, '^^ the district

court held that Tolen' s action was barred by the Indiana two-year statute

of limitations.'^' The court stated that **[i]t is the well-established rule

in Indiana that a cause of action accrues at the time injury is produced

by wrongful acts for which the law allows damages susceptible of as-

certainment."'" The court then stated that the ** Supreme Court of

Indiana has recently reaffirmed this rule of law in Shideler v. Dwyer."'"

As has been emphasized, however, Shideler appears to reject the re-

quirement that damages be ascertainable. '^"^ In any event, no Indiana

case until Barnes specifically required actual or constructive knowledge

of a causal nexus between injury and the defendant's product to start

the statute of limitations running.'"

Rejecting the Barnes-iyx)Q discovery rule urged by the plaintiff, '^^

which would have begun the Hmitation period in 1981, the Tolen court

'""Looking back through the facts, it is clear that the "impact" on the plaintiff

occurred no later than the time his cows first ingested feed containing PCB's. The PCB
level in the silage presumably did not change over time; only the governmental regulation

of what constituted a permissible level changed. Therefore, the harm (under Shideler)

occurred when the cows were first exposed to PCB's, but the manifestation of the harm

occurred when the PCB level was ruled illegal for sale. One could even argue that the
impact on the plaintiff's real property, based on hindsight analysis, occurred when the

silo was first coated with cumar. The court specifically rejected that date on the ground

that "no damages could [then] have been ascertained." Id. at 395. Under Shideler, however,

the lack of ascertainable damages would have been no obstacle to the running of the

statute of limitations.

'^^570 F. Supp. 1146 (N.D. Ind. 1983).

""M at 1148.
'^'IND. Code § 34-1-2-2 (1982).
'"570 F. Supp. at 1149.

'"/fi?. (citing 417 N.E.2d 281 (Ind. 1981)).

""See supra notes 126-33 and accompanying text.

'"The court rejected the plaintiff's argument that Withers v. Sterling Drug, Inc., 319

F. Supp 878 (S.D. Ind. 1970), stands for a Barnes-type discovery rule. 570 F. Supp. at

1150. The court's analysis is probably correct. See supra notes 85-91 and accompanying

text. There is, however, language in an earlier case that does foreshadow the Barnes rule.

See supra notes 77-82 and accompanying text.

'''510 F. Supp. 1150-51.



366 INDIANA LAW REVIEW [Vol. 19:341

considered several other key dates. The court observed that legal injury

first occurred when the shield was inserted; beginning the statutory period
on that date would comport with the Shideler rule.'" Actual knowledge

of the device's ineffectiveness occurred in July of 1972, which constituted

knowledge of legal damage, at least with respect to Tolen's wrongful

pregnancy claim. '^^ With respect to her other damages involving health

impairment, the plaintiff had knowledge of injury in November, 1972,

and May, 1975. The court ruled that there was sufficient evidence of

damages susceptible of ascertainment no later than May of 1975, and,
therefore, her claim filed in 1981 must be barred. '^^ The Tolen court's
accrual analysis illustrates the Hberality of the Barnes rule under which

a plaintiff like Tolen might recover. '^^

That the Shideler holding provided uncertain guidance for governing

the accrual of delayed manifestation disease cases was amply demon-

strated in Braswell v. Flinkote Mines, Ltd.^^^ The plaintiffs in Braswell

were asbestos workers who discovered that they had asbestos-related
diseases after more than two years had passed following their last exposure

to asbestos dust. The court of appeals felt bound to follow Shideler as
controlling precedent and affirmed the district court's grant of the

defendants' motion for summary judgment. '^^ The appellate court read
Shideler to require the setting of accrual dates in ingestion cases no

later than the date of the plaintiffs' most recent exposure to the deleterious

substance.'" The court stated that, in light of Shideler, the plaintiffs

would have been permitted to maintain their actions for damages prior

to the manifestations of any symptoms of disease. Although the federal

court conceded that neither the Shideler court nor any other Indiana

court had expHcitly adopted the "" 'wrongful act' or 'impact' rule of

accrual," the reliance in Shideler on New York cases based upon the
impact rule seemed to indicate that such would be the result if the last

exposure problem were ever presented directly to the Indiana Supreme

Court. '^^

Judge Swygert, in a strong dissent, vehemently disagreed. '^^ He
predicted that the Indiana Supreme Court would recognize that the

'''Id. at 1150.

''^Id.

''''Id. at 1151.

"^'For a discussion of other issues raised in the Tolen case, see Leibman, Products

Liability, 1984 Survey of Recent Developments in Indiana Law, 18 Ind. L. Rev. 299,

320-22 (1985).

'^'723 F.2d 527 (7th Cir. 1983).

"'-Id. at 531-33.

'"7^. at 532.

"^Id.

"'^Id. at 533 (Swygert, J., dissenting).



1986] LIMITED DISCOVERY 367

impact rule produces a '^mockery of justice," '^^ and he urged that the

accrual question be certified to the Indiana high tribunal:

To state the obvious, if an asbestosis claimant brought an action
against manufacturers of asbestos before any manifestation of

the disease, the claimant would be *' 'laughed out of court* ". . . .

On the other hand, if the claimant waits for the disease to
manifest itself, the claimant, under the court's holding today,

may be barred from bringing a claim by Indiana's statute of
limitations.'^^

The dissent found three reasons to distinguish Shideler from Braswell.

First, in Shideler, the "negligence was capable of discovery any time

after the contents of the will were disclosed;" in Braswell, the injury

was "not even capable of discovery in many instances on the date of
last exposure. "'^^ Second, the relationship of a will-drafting lawyer to

a beneficiary calls for different policies than those between a product

manufacturer and user. Manufacturers are in most instances better able

to bear the costs related to defective products than are professionals

and "are more likely to anticipate long-delayed injuries. "'^^ Third, In-

diana has enacted a ten-year repose provision for product liability claims

that is not available in professional malpractice cases. Product manu-

facturers, therefore, do not require the same measure of protection from

a strict accrual rule that professionals do.'^'^ For these reasons, the Indiana

Supreme Court might be persuaded to adopt a discovery rule in the

delayed manifestation cases that only recently have become recognized

as a serious consequence of modern industrial development. "The Indiana
Supreme Court should be given an opportunity to follow the equitable

lead of other state courts and to construe its state statutes to meet the

changing needs of a modern, technologically advanced society."'^'

In addition, the dissent argued that the majority had been misled

by dicta in Shideler. While citing and quoting cases calling for accrual

on the date of the defendant's wrongful act, the actual holding in

Shideler stated that there must be an injury to the plaintiff for the

statute of Hmitations to commence running. Thus, in Shideler, the neg-
ligent drafting of the will provision was the defendant's wrongful act,

but the court found that no injury or impact occurred until the will

became operative following the testator's death. According to the Braswell

'"^Id.

'"-^Id. (quoting, in part, from Martinez-Ferrer v. Richardson-Merrell Inc., 105 Cal.

App. 3d 316, 323, 164 Cal. Rptr. 591, 595 (1980)).

'''Id. at 534.

''"Id. at 534-35.

'''Id. at 535.



368 INDIANA LAW REVIEW [Vol. 19:341

dissent, an accurate analogy of the Shideler rule applied to asbestos

cases would have the statute of limitations begin with the onset of

asbestos-related disease, rather than with the mere exposure to the as-

bestos dust.'^-

After a careful reading of Shideler, this writer beheves that the

Braswell majority interpreted the Shideler dicta correctly. '^^ Shideler

equates exposure with impact and impact with injury (or '^damage'*);

such injury, impact, or damage is sufficient for accrual. '^^ The dissent

is correct, however, that such reasoning is a mockery of justice — not
only in disease cases — but also in legal malpractice cases and tort
actions generally. Until damages are reasonably ascertainable there is

really no cause of action. This is certainly what the ordinary person

would contemplate to be a basic tenet of fundamental fairness. '^^

When the Indiana Supreme Court first introduced the requirement
of ascertainable damages in Montgomery v. Crum,^^^ it cited the case
of Jones V. Texas & P. Ry.^^'' In Jones, the plaintiff brought suit against
the defendant railroad for the value of two mules allegedly run over

and killed by a locomotive. One mule died immediately; the other lived
for a while. The serious nature of his injuries was not apparent until

he died. The Louisiana statute of limitations ran one year *' *from the

day the injuries were sustained.' "'"'^ The plaintiff brought suit more

than one year after the accident, but less than one year after the second

mule died. The court held that the suit to recover for the second mule

was timely because not until his death were damages susceptible of

ascertainment. "Until then, it was at best uncertain, contingent, spec-

ulative; and nothing is better settled in the law of damages than that

a damage of that character does not give rise to a cause of action. '"^^

''^Id. at 534.

'^Mt is true that the Shideler holding specifically covers only legal malpractice. However,

despite recognition that a discovery rule might have merit in other situations, 417 N.E.2d

at 291, the court did not caution that its reasoning was to be limited to the legal malpractice

area. Indeed, the analogies chosen by the court and the general thrust of its discussion

of statutes of limitations, while dicta, strongly suggest that the principles espoused were

to have general applicability.

""The Shideler court distinguishes the term "damage" from the term "damages."

417 N.E.2d at 289. The court states that damage is "a requisite element of any tort,"
and damages is "a measure of compensation." Under the theory of negligence (and

presumably strict liability as well), "[a]ctual loss or damage . . . is an essential part of

a plaintiff's case." Prosser, Lavv^ of Torts 143 (4th ed. 1971). "Actual damage," however,

is compensable and measurable. Where there is "actual damage," therefore, there are

"damages," even if they are difficult to calculate.

'"5ee supra notes 126-33 and accompanying text.

'^M99 Ind.' 660, 161 N.E. 251 (1928).

'''Id. at 679, 161 N.E. at 259 (citing 125 La. 542, 51 So. 582 (1910)).

'^M25 La. at 542, 51 So. at 582.

'"/d/. at 543, 51 So. at 583.



1986] LIMITED DISCOVERY 369

The Jones court made clear that *'[i]n law, things which are not
susceptible of ascertainment are considered as not existing."'^*' In Jones,

the defendant performed a single, unconcealed act. The possibility of

internal injuries that might lead to serious complications was almost

certainly an event within the contemplation of the plaintiff at the time

of the collision, yet the court did not charge him with damages susceptible

of ascertainment until the possibility was confirmed as a reality. It should

not be necessary to distinguish Shideler as a case in which an astute

beneficiary might have foreseen the coming injury by predicting how a
probate court would construe a will provision. That clairvoyance was

no more possible than Jones' ability to predict his mule would suffer

a relapse. In neither case were damages reasonably susceptible of as-

certainment. In addition, neither plaintiff should have been barred by

the statute of Hmitations.

That tort defendants are entitled to differing accrual dates based on

their relationship to the plaintiff is also a dubious proposition. The

liability of manufacturers to users for defective products may be held
to be independent of proof of negligence, yet such an adoption of strict

liability theory has no connection with the time at which a cause of

action accrues. The timing requirement for any tort action would appear

to call for a single rule based upon either a policy of realistic reason-

ableness or a policy of strict construction. There is no principled way
to apply a '^reasonable ascertainment" rule in delayed manifestation

product Uability cases, and a strict
*

'impact" or "slight injury" rule

in other tort cases. Moreover, it is questionable whether product man-

ufacturers are in fact better positioned to bear the costs of defective

products than professionals are to bear the cost of defective services.'^'

In both instances the costs are allocable to the respective enterprises, and

those costs will be spread to users in the form of higher prices. If there

is consensus that not all of these costs should be externalized, then there

are legislative devices to prevent externalization. Awards can be legis-

latively capped '^^ and "occurrence-based," rather than "accrual-based,"

statutes of limitations can be drafted. '^^

"*'The question is not whether the small practioner can "afford" malpractice insurance.

Rather, it is whether the small fellow has to pay substantially more than the big fellow.

If the malpractice insurance is priced roughly the same for all practioners (given some

adjustment for economies of scale), the question becomes whether the public that purchases

the professional services is prepared to externalize and redistribute the full cost of mal-

practice by paying generally higher fees, or whether the public would rather leave at least

some of the cost to rest with the injured client, patient, or customer.

'**^See, e.g., Ind. Code § 16-9.5-2-2(a) (1982) ("The total amount recoverable for any
injury or death of a patient may not exceed five hundred thousand dollars ($500, (XX)).").

''''See, e.g., Ind. Code § 34-4-19-1 (1982) (claim for medical malpractice must be
filed "within two (2) years from the date of the act . . . .").



370 INDIANA LA W REVIEW [Vol. 19:341

That professionals are less prepared than manufacturers to anticipate

long delayed effects may be true, but that propostion is, for the most
part, somewhat irrelevant to the Shideler facts. When Shideler drafted
Moore's will, she became exposed to eventual malpractice liability at

least for such time until Moore died, plus two years thereafter. In most
instances, the time period from the wrongful act (the drafting of the

will) to the point in time two years after the testator's death will only

be marginally shorter than if that period were extended to include the

time necessary for the beneficiary to discover the lawyer's negligence.

A discovery rule, in will-drafting cases at least, would not appreciably
increase the professional's temporal exposure to Hability.

What then of the legitimate repose interests of tort defendants? The
Braswell dissent observed that these are now protected in Indiana product
liability cases by a ten-year outer-cutoff of Hability (following initial

delivery of the product to a user).'^"^ There is, therefore, no reason to

tighten up and distort the meaning of cause of action accrual in order

to provide equity to product liability defendants. It is questionable,

however, whether the absence of such repose legislation justifies the

judicial retention of an impact rule of accrual simply for those classes

of tort defendants not protected by a repose statute. If repose protection

is called for, the Indiana General Assembly is better positioned than

the courts to provide that rehef. It is reasonable, therefore, that the

limited discovery rule adopted in Barnes should soon be extended to

tort claims generally and, ultimately perhaps, to all statutes of limitations

that are based on accrual.

VI. Collateral Attacks on the Statute of Limitations Defense

In addition to the argument that statutes of limitations should not

begin running until the plaintiffs discover their injuries (or suffer damages

susceptible of ascertainment), plaintiffs have advanced a number of other
grounds for postponing, or disqualifying entirely, the date their causes

of action accrue. One such ground discussed earlier that has met with
acceptance in Indiana is that the defendant's wrongful acts must be

completed for the plaintiff's cause of action to accrue and for the

limitations statute to begin to run.'^^ There are three other arguments

that have surfaced frequently in the Indiana cases that bear brief mention

because they relate to the concept of a discovery rule.

A. Arguing for a Longer Running Limitations Alternative

Plaintiffs faced with a short-running or early-starting statute of

limitations which threatens to bar their claims may plead additional or

"^^723 F.2d at 535 (discussing Ind. Code § 33-1-1.5-5 (1982)).
'"'See supra notes 73-76 and accompanying text (discussing Montgomery v. Crum,

199 Ind. 660, 161 N.E. 251 (1928)).



1 986] LIMITED DISCO VER Y 371

alternative legal theories which are governed by more favorable limitation

periods. For example, Indiana plaintiffs barred by the relatively short

two-year tort statute of limitations'**^ might plead that their cases sound

in contract rather than tort,'^^ or that their facts should be read as

raising both contract and tort claims. '^^ Similarly, a plaintiff might argue

that the cause of action is based upon injury to real property'^^ or is
an action for relief against fraud, '^° as opposed to basing his argument

upon a theory of product liabihty. The plaintiff may also take the
position that an accrual-based personal injury statute should be applied

rather than an occurrence-based malpractice statute'^' or an Occupational

Diseases Act Hmitation provision. '^^ Finally, plaintiffs might argue that

none of the specific statutes of limitations properly applies to their

actions; therefore, their claims should be governed by Indiana's fifteen-

year catch-all provision. '^^

'"'Ind. Code § 34-1-2-2 (1982) ("For injuries to person or character, for injuries to
personal property ... .").

'''See, e.g., Scott v. Union Tank Car Co., 402 N.E.2d 992, 993 (Ind. Ct. App. 1980)

(holding that plaintiffs claim for retaliatory discharge following plaintiff-employee's filing

of a workers' compensation claim sounds in tort); French v. Hickman Moving and Storage,

400 N.E.2d 1384, 1388 (Ind. Ct. App. 1980) (holding that claim was for conversion, not

breach of a contract of bailment); Cordial v. Grim, 169 Ind. App. 58, 61-62, 346 N.E.2d

266, 269 (1976) (holding that plaintiff's claim was for malpractice rather than breach of

an implied contract of employment).

^''See, e.g., Tolen v. A.H. Robins Inc., 570 F. Supp. 1146 (N.D. Ind. 1983) (plaintiff

brings, in addition to claims for negligence, strict liability, and fraud, claims under implied

and express warranty governed by four-year-from-tender-of-delivery Uniform Commercial

Code limitation statute found at Ind. Code § 26-1-2-725 (1982)).
'''See, e.g., Monsanto Co. v. Miller, 455 N.E.2d 392 (Ind. Ct. App. 1983) (plaintiff's

claim for property damage caused by silo coating containing PCB's held to be governed

by either the two-year product Hability limitation statute, Ind. Code. § 33-1-1.5-5 (1982),

or six-year statute for injury to property other than personal property, Ind. Code § 34-
1-2-1 (1982), depending upon a finding of whether the cause of action accrued before or

after the effective date of the Product Liability Act (June 1, 1978)).

"^See, e.g., Tolen v. A.H. Robins, 570 F. Supp. at 1155-66.

'"'See, e.g.. Cordial v. Grim, 169 Ind. App. 58, 346 N.E.2d 266 (1976) (applying

professional malpractice statute, Ind. Code § 34-4-19-1 (1982), which runs two years "from

the date of the act . . . complained of," rather than Ind. Code § 34-1-2-2 (1982) which
runs two years "after the cause of action has accrued").

'"'See, e.g., Bunker v. National Gypsum Co., 406 N.E.2d 1239 (Ind. Ct. App. 1980)
(statute of limitations in Indiana Occupational Diseases Act, Ind. Code § 22-3-7-9(f) (1982),
based on claimants' last exposure to asbestos dust, held applicable to claim rather than

tort personal injury statute).

"*'See, e.g., Shideler v. Dwyer, 417 N.E.2d 281, 287-88 (Ind. 1981) (discussing the

possible application to the case of Ind. Code § 34-1-2-3 (1976) ("All actions not limited
by any other statute shall be brought within fifteen (15) years.")); Scates v. State, 190

Ind. App. 624, 383 N.E.2d 491 (1978) (noting that the 15-year catchall, Ind. Code § 34-
1-2-3 (1976), has been held to apply to all eminent domain proceedings despite that, "on

its face, IC 1971, 34-1-2-1 reflects the pertinent time period").



372 INDIANA LAW REVIEW [Vol. 19:341

Faced with these conflicting legal theories, courts can take one of

four approaches. To advance plaintiffs' interests, the court can adopt
in each case the longest running statute reasonably applicable to the

claim. Alternatively, to accommodate the repose interests of defendants,

a court can consistently opt for the shortest applicable statute. Under

a third approach, the court may choose to follow the form of the
pleadings. If the plaintiff brought the claim ex contractu y the appropriate

contract statute of Umitations would be applied. The fourth approach,

which dominates the recent Indiana decisions, permits a court to select

the statute of limitations based upon the substance of the complaint. '^^

Thus, even if the defendant has breached a contract made with the
plaintiff, a court will apply a tort statute of limitations if the injury

suffered was the result of a breach of duty imposed by law. For example,

in Cordial v. Grim,^^^ the plaintiff who alleged a breach of contract by
his lawyer was held, for statute of limitations purposes, to have brought

a tort claim sounding in negligence (malpractice).'^^

The issue is compounded by the problem of changing laws. Generally,
the statute of limitations in force when the cause of action accrues is
applicable to the claim. Determining the accrual date may determine the
applicable statute, which, in turn, may either bar the claim or permit
it to go forward. In Monsanto Co. v. Miller, ^'^^ the plaintiff alleged that
his property had been injured by a defective silo coating manufactured

by the defendant. If the cause of action was found to have accrued

after June 1, 1978, the two-year accrual statute of limitations (and the

ten-year repose provision) of the Indiana Product Liability Act"* would

apply. If accrual was established prior to that date, **the six-year statute

of limitations governing injuries to real property would apply.'"'' Only

in the latter instance, however, could the plaintiff possibly have a

currently viable tort claim. The case was remanded for further fact-
finding to establish the moment of accrual.

There is an artificial rigidity to the Indiana approach that operates

to cut off what otherwise might be meritorious claims. Frequently, the

issue whether a claim is substantively contractual or tortious in nature

is a close question. It seems unreasonable to rest the applicable statute

of limitations choice on what is generally an unrelated issue.^^ This

'-''See, e.g., Tolen v. A.H. Robins Co., 570 F. Supp. at 1155; Monsanto v. Miller,

455 N.E.2d at 394; French v. Hickman Moving and Storage, 400 N.E.2d at 1390-91;

Cordial v. Grim, 169 Ind. App. at 63, 346 N.E.2d at 269. But see Amermac, Inc. v.

Gordon, 394 N.E.2d 946, 948 n.4 (Ind. Ct. App. 1979).
""169 Ind. App. 58, 346 N.E.2d 266 (1976).

'^/c^. at 61-68, 346 N.E.2d at 268-72.

'"^455 N.E.2d 392 (Ind. Ct. App. 1983).

'^«lND. Code §33-1-1.5-5 (1982).
"^455 N.E.2d at 394.

^Presumably there should be some relationship between the equities presented by a



1 986] LIMITED DISCO VER Y 373

problem was highlighted in Scott v. Union Tank Car Co.,^'^^ in which

Judge Staton dissented to the majority's characterization of the plaintiff's

retaliatory discharge claim as sounding in tort.^"^ While arguing that

retaliatory discharge was substantively contractual, the dissent pointed

out that the policy followed in other jurisdictions "with apparent un-

animity" is 'Hhat when a question arises with respect to which of two

applicable statutes of limitations should govern a particular cause of

action, the doubt should be resolved in favor of the theory containing

the longer period of limitations. "^^^

The rationale for the policy articulated by Judge Staton is that

accrual-based statutes of limitations should not be viewed as primary

dispute-settling mechanisms or as means to effectuate economic policy.

They exist as incentives for plaintiffs to bring their claims promptly and

as devices to protect defendants from having to defend presumptively

nonmeritorious claims. When they operate to deny legitimate plaintiffs
their day in court, their application should be rethought.

B. Fraudulent Concealment

Plaintiffs who learn of their injuries too late to bring their claims
within the relevant limitation period frequently seek to have the statutes

tolled on the ground that the defendants wrongly withheld information

from them, which, if it had been communicated, would have enabled

them to file their claims timely. The issue, then, is whether the defendants

had a duty to disclose the relevant information to the plaintiffs.^^

particular fact situation and the length and starting time of the controlling limitations

period. The fact that a written contract in Indiana is governed by a ten-year statute and

an oral one by a six-year statute is supposedly related to the presumed freshness of the

evidence generally available in the two classes of cases. Similarly, a two-year tort personal

injury statute represents an appropriate average balancing point for plaintiff and defendant

interests in this type of case. But if a given set of facts could reasonably be characterized

as either a tort claim or a contract claim, it seems unreasonable that the final categorization

of the action, as either tort or contract, should be permitted to extend or diminish the

limitation period by several years. Where there is a choice of limitation periods, it would

seem more equitable to make the choice on the basis of policies that shape limitation
legislation: policies of repose consistent with providing plaintiffs broad access to the legal

process. Choosing the limitation period by following such a policy-based approach must

be recognized, however, as a fact sensitive exercise. See infra notes 201-03 and accompanying

text.

^^'402 N.E.2d 992 (Ind. Ct. App. 1980).

^""^Id. at 993 (Staton, J., dissenting).

^'^^Id. at 997. See also Leibman, Workers' Compensation, 1981 Survey of Recent

Developments in Indiana Law, 15 Ind. L. Rev. 453, 463-66, for a discussion of the Scott

case.

^See, e.g.. Miller v. A.H. Robins Co., 766 F.2d 1102, 1106-07 (7th Cir. 1985); Pitts
V. Unarco Indus., 712 F.2d 276, 278-79 (7th Cir. 1983); Tolen v. A.H. Robins Co., 570

F. Supp. 1146, 1151-52 (N.D. Ind. 1983); Withers v. Sterling Drugs Inc., 319 F. Supp.



374 INDIANA LAW REVIEW [Vol. 19:341

When there is a confidential or fiduciary relationship between plaintiff
and defendant the duty of full disclosure certainly exists. ^°^ But when
the relationship is that of product manufacturer and user, or bailor and

bailee, or the hke, Indiana requires some affirmative act amounting to
more than passive silence in order to remove the case from the operation
of the statute of limitations.^^ Even when there is a confidential rela-
tionship between the parties, the termination of that relationship ends

the duty to disclose, and the statute of limitations may commence to
run from the time of termination. ^^^ "In addition, Indiana law requires

a showing of reasonable care and due diligence on the part of the

plaintiff. ... He must have been ignorant of the fraud and have been
unable to have discovered it by reasonable diligence. "^^^

In the product Hability context, the passive concealment rule probably

operates too strictly in Indiana. In cases where product sellers would

be held liable to users under a failure-to-warn theojy,^^^ they should not

be able to take advantage of the users' ignorance of product dangers

that ought to have been disclosed to them. A rule holding that a failure
to warn tolls the statute of limitations would provide a powerful incentive

878, 881 (S.D. Ind. 1970) (citing Ind. Code Ann. § 2-609 (Burns Repl. 1967), which

called for tolling the statute until "after the discovery of the cause of action" when the

person liable conceals the facts "from the knowledge of the person entitled thereto");

Guy V. Schuldt, 236 Ind. 101, 106-12, 138 N.E.2d 891, 894-97 (1956); Wojcik v.Almase,
451 N.E.2d 336, 338-41 (Ind. Ct. App. 1983); French v. Hickman Moving & Storage,
400 N.E.2d 1384, 1389 (Ind. Ct. App. 1980); Cordial v. Grim, 169 Ind. App. 58, 68-

70, 346 N.E.2d 266, 272-73 (1976).
--'^Guy v. Schuldt, 236 Ind. at 109, 138 N.E.2d at 895; French v. Hickman Moving

& Storage, 400 N.E.2d at 1389.
''''See, e.g.. Miller, 766 F.2d at 1106-07 (manufacturer); Pitts, 712 F.2d at 279

(manufacturer); Tolen, 570 F. Supp. at 1151 (manufacturer); French, 400 N.E.2d at 1389

(bailor). See also Philpott v. A.H. Robins Co., 710 F.2d 1422, 1425-26 (9th Cir. 1983)

(reaching the same conclusion under Oregon law).

^'''See, e.g.. Cordial, 169 Ind. App. at 69, 346 N.E.2d at 272; Toth, 164 Ind. App.

at 623, 330 N.E.2d at 339 (citing Guy v. Schuldt, 236 Ind. 101, 109, 138 N.E.2d 891,
895 (1956)).

''''Tolen, 570 F. Supp. at 1152. See also Miller, 766 F. Supp. at 1106-07. Other

jurisdictions have taken a more liberal position on this issue. See Allen v. A.H. Robins

Co., 752 F.2d 1365, 1370-76 (9th Cir. 1985) (Idaho law).

^"^Under strict liability, generally three classes of defects are recognized: production

or manufacturing defects; design defects; and defective condition as a result of the seller's

failure to provide adequate warnings and directions. See Noel & Phillips, Products
Liability 359-524 (1976). Failure to warn of unreasonably dangerous defects is recognized

as a ground for imposing liability. Restatement (Second) of Torts § 402A, comments

h, j, & i (1965). Section 402A was adopted by the Indiana Supreme Court in Ayr-Way
Stores, Inc. v. Chitwood, 261 Ind. 86, 300 N.E.2d 335 (1973). The failure to warn has

been expressly recognized as a basis for imposing liability in a number of Indiana cases.

See, e.g., Nissen Trampoline Co. v. Terre Haute First Bank, 332 N.E.2d 820 (1975), rev'd

on other grounds, 265 Ind. 457, 358 N.E.2d 974 (1974); Dudley Sports Co., Inc. v.

Schmitt, 151 Ind. App. 217, 279 N.E.2d 266 (1972).



1986] LIMITED DISCOVERY 375

for product sellers to increase the dissemination of safety information.
^'^^

Although injured users should have to allege that they relied to their

detriment on the inadequate information provided by the sellers, the

sellers should be assigned the task of rebutting the allegations of reliance

in order to invoke a limitations shield.^" This tolling rule should apply

to repose provisions as well as ordinary statutes of limitations.^'^ On
the other hand, no duty to warn should attach prior to the defendant's

^'"It is generally acknowledged that market forces operate more efficiently in a regime

in which buyers and sellers can make free and fully informed choices, as opposed to one

that is highly regulated.

^"In Indiana, statutes of limitations are an affirmative defense. Ind. R. Tr. P. 8(C).

The suggestion in the text would preclude granting a defendant's summary judgment

motion on statute of limitation grounds if the plaintiff has alleged a failure to warn on

the defendant's part and has also alleged detrimental reliance on the inadequate information

provided by the defendant-seller. Normally a plaintiff's reliance is not an element of a

strict tort case, although reliance does play a major role in establishing causation where

failure to warn is the theory of recovery: "As a part of the plaintiff's prima facie case,

the plaintiff bears the burden of demonstrating that the absence of warnings was a

producing cause of the accident." Horak v. Pullman, Inc., Prod. Liab. Rep. (CCH)

1 10,585 (5th Cir. July 5, 1985) (Texas law); Technical Chem. Co. v. Jacobs, 480 S.W.2d

602, 605 (Tex. 1972) (applying Oklahoma law). Nonetheless, justifiable reliance is an

essential element that must be proved in a fraud case. For a failure to warn allegation

to trigger the fraudulent concealment doctrine, it seems reasonable that the elements of

reliance and due diligence should be coupled with the allegation of inadequate warning.

''-Where a discovery rule applies to accrual-based statutes of limitations, the fraudulent

concealment doctrine has little bite because, absent discovery, the statute does not begin

to run, whether or not the discovery was delayed by concealment. However, if a jurisdiction

takes the position that mere failure to discover an injury provides no basis for tolling

the state's product liability repose statute — as appears to be the case in Indiana, Pitts
V, Unarco Indus., 712 F.2d 276 (7th Cir. 1983); cf. Bunker v. National Gypsum Co.,
441 N.E.2d 8 (Ind. 1982) (lack of the claimant's discovery of his asbestosis held to be

insufficient to toll three-year-from-last-exposure-occurrence-based Occupational Diseases

Act statute of limitations) — the suggested extension of the fraudulent concealment doctrine
to failure-to-warn cases should provide a compromise between a total "discovery" regime

and one in which only the affirmative act of withholding information would suspend

operation of statutes of limitations and repose.

See also MacMillen v. A.H. Robins Co., 217 Neb. 338, 348 N.W.2d 869 (1984)
(holding that summary judgment was inappropriate for invoking Nebraska's ten-year repose

statute after the plaintiff's petition alleged that the defendant had intentionally withheld

information regarding dangers inherent in the use of the Dalkon Shield). The MacMillen

court held that if the plaintiff could prove due diligence in pursuing the cause of her

injury, the defendant would be equitably estopped from raising the repose statute as a

defense. The court followed Knaysi v. A.H. Robins Co., 679 F.2d 1366 (11th Cir. 1982),
in which similar reasoning was invoked to toll New York's accrual-based statute of
limitations. The proposal in the text would permit a similar result even if the withholding

of information were unintentional. In other words, a repose statute would continue to

be effective, but only in cases where warnings are found to be adequate, or where the

plaintiff failed to exercise due diligence or did not rely on the incomplete or inaccurate

information provided by the defendant.



376 INDIANA LA W REVIEW [Vol. 19:341

having a feasible opportunity to acquire the relevant knowledge of the

danger.-'^

C. Constitutionality of Statutes of Limitations and Repose

Absent discovery rules, statutes of limitations and repose provisions

which operate to bar plaintiffs who are unable to discover the existence
of their injuries, the nature of those injuries, or their causes are sometimes

subjected to attack on equal protection^'"* and due process grounds. ^'^

Equal protection arguments are generally based on the proposition that

the limitations provision has created classes of potential claimants with

varying privileges and immunities that have no rational basis for ex-

isting.
^'^ Due process arguments are grounded on the theory that claimants

who become time-barred because of ignorance resulting from no fault
of their own have been effectively and wrongfully denied access to the
legal process.

^'^

Equal protection attacks on statutes of limitations have made little
headway in Indiana. Where no fundamental right or suspect class has
been identified,^ '^ virtually any classification estabUshed by the Indiana

legislature is generally found to have a rational basis. ^'^ This approach

^''See Beshada v. Johns-Manville Prod. Corp., 90 N.J. 191, 447 A.2d 539 (1982)

(holding that the manufacturer had a duty to warn (or compensate) victims of exposure

to asbestos end-products, even though knowledge of the harmful nature of asbestos in

end-products may not have been within the state of the art scientifically available to the
manufacturer). This author criticizes the Beshada rule in Leibman, The Manufacturer's

Responsibility to Warn Product Users of Unknowable Dangers, 21 Am. Bus. L.J. 403

(1984). Other articles that discuss the Beshada case are listed in Leibman, Products Liability,

1984 Survey of Recent Developments in Indiana Law, 18 Ind. L. Rev. 299, 330 n.213

(1985), The Indiana Product Liability Act specifically provides for a state-of-the-art defense.

iND. Code § 33-1-1. 5-4(b)(4) (Supp. 1985).
^'*See U.S. Const, amend. XIV, § 1; Ind. Const art. 23. These two constitutional

712 F.2d 276, 280 (7th Cir. 1983); Huff v. White Motor Corp., 609 F.2d 286, 298 (7th

Cir. 1979).

^''See U.S. Const, amend. V & XIV, § 1; Ind. Const, art. 1, § 12. Article 1, § 12
provides in part: "All courts shall be open; and every person, for injury done to him

in his person, property, or reputation, shall have remedy by due course of law."

-'"See, e.g., Pitts, 712 F.2d at 280; Dague v. Piper Aircraft Corp., 513 F. Supp. 19,

25 (N.D. Ind. 1980); Scalf v. Berkel, 448 N.E.2d 1201, 1205-06 (Ind. Ct. App. 1983).

'''See, e.g., Pitts, 712 F.2d at 279; Bunker v. National Gypsum Co., 426 N.E.2d
422, 423-25 (Ind. Ct. App. 1980), rev'd, 426 N.E.2d 9 (Ind. 1982); Scalf, 448 N.E.2d at

1202-05.

'''See Scalf, 448 N.E.2d at 1205 (quoting Sidle v. Majors, 264 Ind. 206, 341 N.E.2d

763 (1976)).

'''*See Pitts, 712 F.2d at 281 (holding that the Indiana repose statute "must be

sustained as reflecting the legislative twin goals of (a) repose (b) reliance that stale claims

will not be tolerated in view of loss of memories, witnesses or evidence"); Dague, 513

F. Supp. at 25 ("The Supreme Court of Indiana . . . has already clearly recognized that

the protection of liability insurance companies is a legitimate legislative concern."); Bunker,



1986] LIMITED DISCOVERY 317

is generally a practical one, because most legislation can be found to

confer advantages to some and not to others. As long as the legislature

does not act corruptly, it should be free to experiment by taking one

remedial step at a time.

The due process attacks in Indiana are more compelling. Despite

the presumption of constitutionality to which the legislature's acts are

entitled, ^^^ there is Indiana authority requiring the courts to act when

limitation periods are found to be too short to provide reasonable relief. 2^'

The Indiana Court of Appeals invoked this authority in Bunker v.

National Gypsum Co.,^^^ holding unconstitutional the three-year-from-
date-of-last-exposure statute governing asbestos claims under the Indiana

Occupational Diseases Act.^^^ The supreme court accepted transfer of

Bunker and reversed. ^^"^ The court took the position that determining

the length of limitation periods is strictly a legislative task.^^^

It seems clear that the supreme court shirked a duty in Bunker.

Although the court is not a drafter of legislation, it has a responsibility

to monitor the constitutionality of legislation challenged on due process

grounds. The accumulated evidence indicated that a three-year time period

was far too short for substantial numbers of asbestos claimants to detect

symptoms of disease. The court should have mandated new legislation
adequate to pass minimal constitutional muster. This is not to say that

a discovery rule is required by the due process clause, but some change
in the three-year-last-exposure rule was appropriate."^

The strict treatment of limitation statutes might have been viewed

by the court as conducive to preserving the viability of Indiana man-

ufacturers and their insurers. However, timing limitations should be used

with great care as instruments to effectuate economic policy. As noted
in the introduction to this Article, repose provisions perhaps can be

justified on the ground that risks are less efficiently shifted from users

441 N.E.2d at 13 (holding that the last exposure rule for asbestos must be sustained

because otherwise "the statutory scheme providing for the application of a 'discovery'

rule only in radiation exposure cases, would be subverted").

''"Bunker, 441 N.E.2d at 11; Sidle v. Majors, 264 Ind. 206, 208, 341 N.E.2d 763,

766 (1976).

^^•Wright-Bachman, Inc. v. Hoodlet, 235 Ind. 307, 133 N.E.2d 713 (1956). "[T]he

courts will not inquire into the wisdom of the legislative decision in establishing the period

of legal bar, unless the time allowed is so short that the statute amounts to a practical

denial of the right itself and becomes a denial of justice." Id. at 323, 133 N.E.2d at

720.

^"426 N.E.2d 422, 423 (Ind. Ct. App. 1981).

'''Id. Sit 425.

^^M41 N.E.2d 9 (Ind. 1982).

'"Id. at 12.

'"See Peterson v. Roloff, 57 Wis. 2d 1, 203 N.W.2d 699 (1973). In Roloff, the

Wisconsin Supreme Court decided that adoption of a discovery rule was "a matter peculiarly

for legislative determination." Id. at 5, 203 N.E.2d at 702. The court noted, however,



378 INDIANA LAW REVIEW [Vol. 19:341

to sellers as the end of the useful life of products approaches. ^^^ On the
other hand, repose provisions cannot be economically justified merely

on the ground that business requires relief from production costs. Sub-

sidizing an enterprise invariably leads to the inefficient allocation of

economic resources. ^^* Business enterprises, to the greatest extent possible,

should be assigned the task of bearing and distributing the full costs

of production, which would include the costs of defect-related accidents

and health impairments.

Subsequent to Bunker, the constitutionality of the ten-year repose

provision of the Indiana Product Liabihty Act was upheld on due process

grounds in Scalf v. Berkel,^^'^ Pitts v. Unarco Industries, ^^^ and Braswell

V. Flinkote Mines, Ltd.^^^ In Braswell, the two-year accrual statute of

limitations, held to run from date of last exposure to asbestos, was

similarly upheld as not being denial of due process. ^^^

VII. Summary and Conclusion

Almost a century ago, the Indiana Supreme Court held that causes

of action accrue, and statutes of Hmitations based on accrual begin to

run, only when the plaintiff suffers injury.^" Subsequently, the court
ruled in two non-tort cases that causes accrue upon the happening of

that "the present three-year requirement for commencing an action by a party who is
the victim of medical malpractice is too short ....'" Id. The court strongly recommended

that the three-year rule be amended by the legislature (which it did by enacting a discovery

rule a few years later). In Roloff, the court could have found the existing three-year

period from date of undiscoverable injury to be a denial of due process, and it could

have done so without adopting a discovery rule. Also, the court simply could have assumed

the existence of a discovery rule in the particular fact situation without discussion of the

issue, which it did several years later in Wisconsin Natural Gas v. Ford, Bacon & Davis
Const. Corp., 96 Wis. 2d 314, 291 N.W.2d 825 (1980). Later, the court decided that the

time was ripe for a general tort discovery rule, and this time, without deferring to, or

even urging the legislature, the court explicitly adopted a sweeping rule of discovery in

Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 335 N.W.2d 578 (1983).
--'See supra notes 21-30 and accompanying text.

"''If unhindered market forces lead to maximum economic efficiency, then intervention,
e.g., subsidization, will affect and distort the conduct of the economic actors. For example,

if the true cost of producing toxic substances and dangerous medical devices is subsidized

by shielding the manufacturers from liability, the price of those products will be reduced,

demand will be increased, and more of the products will be produced than if the producers

were required to absorb and/or pass on the costs as part of the product price. Without

subsidization, the efficient market would direct some of the resources expanded on subsidized

production to other activities. . '

"''448 N.E.2d 1201.
^"712 F.2d 276.

^''723 F.2d 527.

-'-Id. at 529-31.

-^'Board of Commr's of Wabash County v. Pearson, 120 Ind. 426, 22 N.E. 134

(1889). See supra notes 68-72 and accompanying text.



1986] LIMITED DISCOVERY 379

injury, whether or not the plaintiff is aware of the injury. ^^"^ But in

1928, the court in Montgomery v. Crum^^^ stated that, for an action

to accrue, damages must be susceptible of ascertainment. In addition,

the court held that the plaintiff's cause will not accrue until the defendant

has completed the wrongful act or acts. In support of its ascertainable

damages dictum, the court cited a case in which it was made clear that
accrual requires damages that are based on discoverable and observable

fact, not mere suspicion or possibility of future damages."^

In the several decades following Montgomery, a number of courts

either acknowledged the existence of the ascertainable damages rule as

a principle of Indiana law or actually rested their holdings on the rule.^^^

One court, in upholding the res judicata principle against "action-
splitting," held that the ascertainment of even slight damages would be

sufficient for a cause of action to accrue. ^^^ Even so, this case ac-

knowledged that some ascertainable injury sufficient to maintain a lawsuit

would be required to start an accrual-based statute of limitations run-

ning. ^^^ Only in one case involving an accrual statute during this period
— a personal property conversion case — did the court hold that "[njotice
to the plaintiff was . . . immaterial. "^'^^

In 1981, against the weight of Indiana authority, the supreme court,

in Shideler v. Dwyer,^"^^ held that "it is not necessary that the extent

of the damage be known or ascertainable but only that damage has
occurred. "^'^^ The court cited no Indiana cases in support of this prop-

osition. By embracing the New York "impact" rule in support of its
holding, it was clear that the words, "the extent of," in the previous

quotation could be omitted from the holding. A tort plaintiff's knowledge
of the extent of health impairment, or even the existence in fact of

health impairment, would be totally immaterial to the accrual of the

action. Under the New York rule, the exposure (or impact) is the injury.
The fallacy here is that a single exposure to most deleterious sub-
stances simply is not actionable. It is not that damages are speculative

at this point; they simply do not yet exist. Even a symbolic action caUing

-"See supra notes 92-96 and accompanying text.

-"199 Ind. 660, 161 N.E. 251 (1928). See supra notes 73-76 and accompanying text.

"''Jones V. Texas and P. Ry., 125 La. 542, 51 So. 582 (1910). See supra notes 176-

80 and accompanying text.

^"5ee supra notes 77-90 and accompanying text.

"'^Withers v. Sterling Drug, Inc., 319 F. Supp. 878, 881 (N.D. Ind. 1970).

^'•"Id. at 880-81.

^^'French v. Hickman Moving & Storage, 400 N.E.2d 1384, 1388 (1980). See supra
notes 97-104 and accompanying text.

^'417 N.E. 2d 281 (Ind. 1981). See supra notes 115-35 and accompanying text for

the discussion of Shideler.

''H\l N.E.2d at 289.



380 INDIANA LAW REVIEW [Vol. 19:341

for nominal damages could not be maintained without some evidence
of disease.

Despite recognition by the Shideler court of authority supporting a
discovery rule in cases where "the misconduct was of a continuing nature
or concealed, "^^^ the court's heavy reliance on the dust and ingestion
cases from New York made it inevitable that in subsequent delayed
manifestation cases, courts would be heavily influenced to follow the
impact rule. It is not surprising, therefore, that the majority in Braswell

V. Flinkote Mines, Ltd.^^"^ saw no reason to certify this issue to the
Indiana Supreme Court. ^"^^

Given a second chance in Barnes v. A.H. Robins Co.,^"^^ the Seventh
Circuit Court of Appeals — apparently persuaded after reflecting on
Judge Swygert's powerful dissent in Braswell — certified the statute of
limitations discovery rule question to the Indiana high court. Relying

on the "ascertainable damages" precedents, the supreme court adopted

for protracted exposure, concealed harm cases a discovery rule which

suspends operation of an accrual-based statute of Hmitations until the

plaintiff can reasonably ascertain that the injury or impingement was

caused by the defendant's product.

Although the court adopted a liberal rule by requiring the plaintiff's

actual or constructive knowledge of a causal connection to the product

for the action to accrue, the court did reiterate that the ten-year repose

provision of the Indiana Product Liability Act still exists as an outer-

cutoff of liability. ^"^^ Absent this provision, it is doubtful whether such

a liberal holding would have been forthcoming.

As noted earher, if the "ascertainable damages" rule is necessary

in order to be fair to some tort claimants, it would appear to be required

in tort cases generally. Accrual-based, as opposed to occurrence-based,

statutes of limitations implicitly seek to accommodate plaintiffs' interests.

These accrual statutes provide a "temporal window" within which the
plaintiff is privileged to sue. Undiscoverable privileges are illusions,

however. If the law grants a right and privilege, the grant should not

be illusory. If additional steps are necessary to accommodate defendants'

repose interests, it is probably better to enact repose statutes or other

occurrence-based limitation legislation.

Perhaps Indiana needs a legal malpractice statute of limitations. The

supreme court undoubtedly was correct in Shideler that the legislature

'^''Id. at 291.

^^723 F.2d 527 (7th Cir. 1984). See supra 161-84 and accompanying text for the

discussion of Braswell.

'''123 F.2d at 531-33.

2M76 N.E.2d 84 (Ind. 1985). See supra notes 51-68 and accompanying text for the

discussion of Barnes.

''Hie N.E.2d at 85.



1 986] LIMITED DISCO VER Y 381

was thinking only of health care providers when it enacted the [medical]

malpractice statute. ^"^^ Nevertheless, the Shideler court's attempt to ac-

commodate the legitimate interests of the legal profession by manipulating

the general rules governing accrual-based statutes of limitations led to

a confusing episode in Indiana law. It is hoped that the "ascertainable

damages" rule now fully recognized as a discovery rule in Barnes will
be applied generally as a fundamental tenet of Indiana tort law. In the

absence of repose provisions in many tort law areas, however, it may
be necessary to give plaintiffs in these cases somewhat less latitude in

discovering the nature of their injuries than seems to be promised delayed

manifestation plaintiffs by the Barnes case.^"*^

2484J7 N.E 2d at 283. ("[T]he doctrine of ejusdem generis limits the application to

the term 'or others' as used in said statute, to others of the medical care community.").

^^''As noted supra, notes 59-61 and accompanying text, the Barnes opinion appears

to leave a good deal of room for finding that injured "protracted-exposure" victims have

not had reasonable opportunities to discover the causal nexus between their diseases and

the defendant's products. Within the context of Lahna Barnes' case, the court could have

stressed far more forcefully the due diligence responsibility of victims who are aware that
they are physically injured to seek out the exact causes of the harm. The supreme court's

reticence to emphasize this point may prove to be an invitation for later courts to give
plaintiffs in delay cases a large measure of the benefit of the doubt with respect to the

accrual dates of their actions. See, e.g., Anthony v. Abbott Labs., 490 A.2d 43 (R.I.

1985). In Anthony, the Rhode Island Supreme Court was asked by the federal district

court, through certification, whether Rhode Island's discovery rule for delayed manifestation

cases begins the statute of limitations when the plaintiff knew or should have known of

a causal connection between product and injury, or whether it begins later when the

plaintiff also knew or should have known of the manufacturer's wrongful conduct. The
court ruled in favor of the later-starting limitation period, holding that knowledge of

some wrongdoing is necessary, because a victim of a drug-related health impairment might

very well believe that the injury suffered was unavoidable. The court noted that defendants

are unlikely, under this rule, to be prejudiced by having to defend stale claims, because

the relevant evidence is likely to be documentary in nature. Such evidence is unlikely to

become unreliable with the passage of time. Anthony, a DES case, was recently followed
in California v. Kensinger v. Abbot Laboratories, 217 Cal. Rptr. 313 (Cal. Ct. App. 1985).

The Barnes opinion, in this author's view, leaves the door open to similar holdings

in Indiana (even though the first post-Barnes decision under Indiana law suggests otherwise).

See Miller v. A.H. Robins, Co., 766 F.2d 1102 (7th Cir. 1985) (discussed supra note 91).

In Barnes, the court's holding states: "[T]he statute of limitations in such causes commences

to run from the date the plaintiff knew or should have discovered that she suffered an

injury or impingement, and that it was caused by the product or act of another.'' 476

N.E.2d at 87-88 (emphasis added). The emphasized language might suggest that discovery

of wrongful acts should play some part in determining the accrual date of statutes of

limitations. More importantly, both plaintiffs in the Barnes consolidation experienced early
medical problems in which the Dalkon Shield played a known part. Lahna Barnes' shield
was removed following the onset of her pelvic infection, and Sharon Neuhauser was

correctly advised that the shield was likely to create physical injury (a miscarriage) during

her unwanted pregnancy. Severe medical problems over the next several years followed

for both women, but it was not until nine years after ascertainable injury in Barnes' case,
and seven years in Neuhauser's that it was claimed that the women knew or could with



382 INDIANA LA W REVIEW [Vol. 19:341

due diligence have known of the relationship of the shield to their impingements. In

accepting the possibility of liability under such a scenario—without comment—the supreme
court lends indirect support to the Anthony view that, until victims have reasonable

opportunity to learn that their injuries are actionable, they have not truly "discovered

the harm" for statute of limitations purposes.

Athough such an extension of the Barnes rule might have relatively modest effects

upon the liability exposure of Indiana product sellers—given the ten-year outer-cutoff of
liability under the Product Liability Act—other tort defendants under a universal discovery
rule would have less protection. Whether a review of the kinds of tort claims that are

likely to arise under a universal tort discovery rule would reveal that this added exposure

for some classes of Indiana defendants (non-sellers) would present for them a significant

problem is a matter beyond the scope of this Article.