A case recently came before the 10th Circuit regarding whether or not payments made after the statute of limitations on child support arrearages constituted an extension of the statute of limitations.
Every claim, or lawsuit, has an expiration date – this carries over into bankruptcy and those who are looking to get paid out of the bankruptcy estate can only collect if their claims are within the statute of limitations, which varies depending on the claim. For instance, a breach of contract claim must be brought within four years, and a personal injury case must be brought within 2 years. Failure to do so will get your case dismissed, even if all the facts are on your side. The logic behind this is obvious – they want to encourage punctual litigants. Evidence gets old, or lost, and no one remembers what happened ten years after a car crash.
However, the judge in In Re: Kimball dodged the issue of statute of limitations, and addressed the choice of law provisions, something that is adopted in Federal courts but has not been done so in bankruptcy. The general idea is that even though a case is brought in federal court, the substantive law of the state will still be applied. Here, the law of Utah would be applied since that is where most of the marriage occurred, even though Oklahoma was also an option. Because of this, the statute of limitations was not based on whether payments were made beyond the applicable time period (which both husband and wife agreed on) but whether or not Oklahoma or Utah law applied, something neither spouse brought up.
The wife ended up winning and is probably oblivious to the reasons why – however, for lawyers, this is an example of kicking the can down the road. Making a decision about payments resetting the clock on a statute of limitations may have seemed fraught with unintended consequences (since it would bind lower courts) so the Honorable Judge Loyd most likely decided to exercise judicial discretion and based his decision on something much less controversial.