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Recoupment, Counterclaims

If a claim is not timely filed within the applicable statute of limitations in Missouri, then it is usually barred. This is not always a simple analysis. There are different time periods for different claims and there are certain things which can toll or extend the time for filing. Although it is usually the concern of a plaintiff (i.e., the person initiating the lawsuit) as to whether the claim is timely, the defendant also has some concerns if it pursued its own relief through a counterclaim (or the like). 

Generally, when a defendant responds to a lawsuit they will try to include any request for a set-off in damages, counterclaim against the plaintiff, or cross-claim against a third-party or recoupment. Whether these requests for the defendant are timely depends on which of these things the defendant files. For instance, “recoupment  is a purely defensive matter growing out of the transaction constituting plaintiff’s cause of action, and is available only to reduce or satisfy a plaintiff’s claim and permits of no affirmative judgment.” Schroeder v. Prince Charles, Inc., 427 S.W.2d 414, 419 (Mo. 1968); see also Carlund Corp. v. Crown Center Redev, 849 S.W.2d 647, 651 (Mo. Ct. App. 1993) (“[u]nder the defense of recoupment a party was entitled to deduct any amounts properly paid to discharge the other party’s indebtedness to its subcontractors and suppliers”). For statute of limitation purposes, a defendant’s recoupment argument relates back to the time the plaintiff filed the claim — not when the defendant formally makes the argument in a filing, even though it can be months/years later and past the deadline. 

A counterclaim against the plaintiff does not necessarily receive the same treatment. Where a counterclaim seeks affirmative relief by asserting what is essentially a new claim, the statute of limitation may bar the counterclaim. The reasoning is that a when a counterclaim is new and independent, it does not receive relation back treatment like recoupment. Accordingly, if a defendant is intending on filing a counterclaim, it should do so immediately, rather than rely on the date the plaintiff filed the case.