San Diego Business Law: What is the Doctrine of Laches?

In general, the doctrine of laches is a defense to various claims that might be asserted against your business — such as a breach of contract or a claim for reinstatement by a terminated employee. The doctrine of laches can be thought of as a form of statute of limitations. If laches is deemed applicable, the doctrine will bar claims made by those who unreasonably delay in filing their claim and where that delay works a hardship upon or operates to the detriment of others. A good corporate lawyer can help resolve issues related to laches and help your business avoid the doctrine so that you may fully vindicate your rights.

San Diego Business Law: The Doctrine of Laches

In general, on the civil side, the legal system can be divided into law-related claims and equity-related claims. At its most basic, law-related claims are about recovering money whereas equity-related claims and defenses are about court-compelled behavior.

As an example, if you have a contract and the other party fails to perform his/her/its obligations under the contract, you can sue. If you ask for money damages, you are making a law-related claim. However, if you ask the court to compel the other party to perform under the contract, then that is an equity-based claim. Specific performance is an example of an equity-based claim. See our discussions of specific performance here and here. As noted in those articles, the most common example of specific performance lawsuits are those involving houses and real property. You want to own THAT house; not just receive money damages. For San Diego businesses, another common example of specific performance requests are employment claims for reinstatement or restitution.

Just as CLAIMS can be law-based and equity-based, DEFENSES to those claims are law-based and equity based. For our breach of contract example, if you are making a law-based claim for money damages and you wait too long, then your claim will be barred by the statute of limitations — a law-based defense. Laches is the equity-based defense that is, essentially, the equivalent of the statute of limitations. So, if the claim is for specific performance of a business contract and equity-based claim, then the defendant would assert the defense of laches if the breach of contract occurred long ago.

Proving laches is more difficult than proving violation of the statute of limitations. To bar a claim based on the applicable statute of limitations, one must only prove that the time has passed — the deadline was missed. With laches however, two things must be shown:

• Passage of an “unreasonable amount of time” (also called an “unreasonable delay”) PLUS
• Either acquiescence in the delay or harm/prejudice to other party because of the delay.

See Johnson v. City of Loma Linda, 24 Cal.4th 61 (Cal. Supreme Court 2000).

San Diego Business Law: Employment Case Examples

With respect to San Diego business, if an employee is terminated and he or she sued for reinstatement, then that is an equity-based claim; the employee is asking the court to compel behavior by your business. Laches is one defense. Indeed, in Johnson v. City of Loma Linda, the California Supreme Court held that laches was a good defense. In that case, a city employee was fired. He waited three years before seeking review of his firing pursuant to the applicable review procedures. The court held that the doctrine of laches barred the claim.

More recently, in the case of Womack v. San Fran. Comm. College Dist, 54 Cal. Rptr. 3d 558 (Cal. app. 1st Dist. 2007), the court held that seven years was too much delay where a professor sought reversal of alleged adverse employment actions.

Contact San Diego Corporate Law

For further information, please contact Michael Leonard, Esq. of San Diego Corporate Law. Mr. Leonard has the experience to assist with any business-related matter.  Mr. Leonard’s law practice is focused on business, transactional, and corporate matters, and proudly serves business owners in San Diego and the surrounding communities. Contact Mr. Leonard by email or by calling (858) 483-9200.

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