A five-year statute of limitations, not a 10-year statute of limitations, applies to a lawsuit alleging Nestlé Holdings Inc. made late payments to shareholders after merging with Ralston Purina Co in 2001, the Missouri Supreme Court ruled.
When the merger became effective, Ralston stock was converted into a right for shareholders to receive $33.50 per share. Plaintiff John Rolwing alleges that the stockholders were paid four days late after the stock was converted.
Rolwing further alleges that the 10-year statute of limitations in Missouri for actions “upon any writing … for the payment of money” applied to his case. Nestlé argued that the five-year statute of limitations for “actions upon contracts” except for those involving writings for the payment of money applied to the case.
Judge Richard Teitelman, writing for the court, said Rolwing is not suing to enforce the payment of money promised in the contract, but rather interest not promised in the merger agreement but paid as matter of custom and practice.
“Adopting Rolwing’s position would require this court to hold that the 10-year statute applies to every breach of contract action involving a contract that includes a promise to pay money even when the plaintiffs is not seeking recovery of the money that was promised to be paid,” Teitelman said.
Rolwing also argued that the five-year statute of limitations applies to his case because a state court class action pending against Nestlé in Ohio tolled his case.
This case involves two independent state class actions, Teitelman said, and “Rolwing has identified no authority holding that a pending class action in one state tolls the statute of limitations in another state.”
Amaris Elliott-Engel contributes to law.com.