On appeal from the Appellate Division, Superior Court.
For reversal and remandment -- Justices Sullivan, Pashman and Handler. For affirmance -- Justices Clifford and Pollock. The opinion of the Court was delivered by Pashman, J. Pollock, J., dissenting. Justice Clifford joins in this dissenting opinion.
We granted plaintiff leave to appeal, 81 N.J. 334, 407 A.2d 1208 (1979), to consider whether the two-year statute of limitations for personal injury actions, N.J.S.A. 2A:14-2, may be tolled by the filing of a complaint in federal court which lacked subject matter jurisdiction. We hold that it may.
On April 14, 1977, plaintiff filed a complaint in the United States District Court for the District of New Jersey on behalf of the estate of Mary F. Galligan. The complaint asserted wrongful death and survival claims against Westfield Centre Service, Inc. and Chrysler Corporation arising from an automobile accident on April 17, 1975. Ms. Galligan died on May 19, 1975, allegedly as a result of injuries suffered in that accident.
Although plaintiff claimed diversity of citizenship as the basis for invoking federal court jurisdiction, see 28 U.S.C.A. § 1332(a), both he and defendant Westfield Centre Service, Inc., a New Jersey corporation, were citizens of New Jersey for jurisdictional purposes, see 28 U.S.C.A. § 1332(c). Because of this patent lack of diversity, see, e.g., Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L. Ed. 435 (1806); 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3605 at 616-618 (1975), the federal court dismissed the complaint for want of jurisdiction on May 11, 1977.
Two days earlier, while the motion to dismiss was still pending in the federal court, plaintiff filed a substantively identical complaint in the Superior Court, Law Division. Since this latter filing occurred two years and 22 days after the accrual of plaintiff's survival claim -- the date of the accident, see Rosenau v. New Brunswick, 51 N.J. 130 (1968) -- defendants moved to
dismiss that cause of action as barred by the two-year statute of limitations, N.J.S.A. 2A:14-2.*fn1 The trial court granted the motion.*fn2 166 N.J. Super. 392 (Law Div.1979). It found that none of several existing exceptions to strict imposition of the statutory time limitation was applicable. Id. at 398-399. Noting that "the federal court lacked both jurisdiction and the power to transfer the case to [State] court," the court viewed as irrelevant the timely filing of a federal complaint. Id. at 397; see Nix v. Spector Freight System, Inc., 62 N.J. Super. 213 (App.Div.1960).*fn3 Plaintiff sought leave to appeal to the Appellate Division, but that court denied his motion without addressing the merits of the trial court's dismissal. We now reverse the trial court.
Although statutes of limitations are of legislative origin, their harshness and lack of definitional clarity have led courts to develop a common law of limitations. Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111, 121 (1973); Fernandi v. Strully, 35 N.J. 434, 439 (1961); see, e.g., Kaczmarek v. New Jersey Turnpike Auth., 77 N.J. 329 (1978); White v. Violent Crimes Compensation Bd., 76 N.J. 368 (1978); Lopez v. Swyer, 62 N.J. 267 (1973); Kyle v. Green Acres at Verona, Inc., 44 N.J. 100 (1965). The doctrines so fashioned attempt to implement fully the underlying legislative purposes to avoid the injustice which would result from a literal reading of the general statutory language.
The most important of these purposes recognizes that eventual repose creates desirable security and stability in human
affairs. Thus statutes of limitations compel the exercise of a right of action within a specific, reasonable period of time. See Tevis v. Tevis, 79 N.J. 422, 430 (1979); Farrell, 62 N.J. at 115; State v. United States Steel Corp., 22 N.J. 341, 358 (1956); see also Wood v. Carpenter, 101 U.S. 135, 139, 25 L. Ed. 807, 808 (1879); Holmes, "The Path of the Law," 10 Harv.L.Rev. 457, 477 (1897).
Separate from the opposing parties' interest in repose is their ability to answer the allegations against them. Statutes of limitations reflect the importance of both. By penalizing unreasonable delay, such statutes induce litigants to pursue their claims diligently so that answering parties will have a fair opportunity to defend. See Kaczmarek, 77 N.J. at 337; Union City Housing Auth. v. Commonwealth Trust Co., 25 N.J. 330, 335 (1957). Another purpose of limitation periods is "to spare the courts from litigation of stale claims." State v. Standard Oil Co., 5 N.J. 281, 295 (1950), aff'd sub nom. Standard Oil Co. v. New Jersey, 341 U.S. 428, 71 S. Ct. 239, 95 L. Ed. 1078 (1951) (quoting Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S. Ct. 1137, 1142, 89 L. Ed. 1628, 1635 (1945)); see Kaczmarek, 77 N.J. at 337; Farrell, 62 N.J. at 115. Once memories fade, witnesses become unavailable, and evidence is lost, courts no longer possess the capacity to distinguish valid claims from those which are frivolous or vexatious. See Kaczmarek, 77 N.J. at 338; Lopez, 62 N.J. at 274; Union City Housing Auth., 25 N.J. at 335. Scarce judicial resources are therefore best conserved for litigation timely commenced.
Unswerving, "mechanistic" application of statutes of limitations would at times inflict obvious and unnecessary harm upon individual plaintiffs without advancing these legislative purposes. See White, 76 N.J. at 378-379. On numerous occasions we have found "such particular circumstances as to dictate not the harsh approach of literally applying the statute of limitations but the application of the more equitable and countervailing ...