Opinion
Civil Action No. 3:02-CV-0834-N
November 18, 2003
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant G.P.D.A.'s ("GPDA") motion for summary judgment and Plaintiffs Geary L. Paul Sr. and Gail Paul's (collectively, "the Pauls") motion to add Charles Sonnoh ("Sonnoh") as a defendant. GPDA claims that because the Pauls failed to bring their claims against GPDA within the applicable statute of limitations, summary judgment should be granted. The Pauls argue that because GPDA and King Cab manager Paul Kyereh ("Kyereh") failed to reveal the independent contractor relationship between Sonnoh and GPDA, the Pauls should be granted leave to amend their complaint to add Sonnoh as a defendant. Because the Pauls' claims are subject to the "relation back" doctrine of Rule 15(c)(3), summary judgment is not appropriate. Since the statute of limitations has clearly run on any claims against Sonnoh and no exception applies, leave to amend is denied. Accordingly, GPDA and the Pauls' motions are both denied.
I. BACKGROUND
Plaintiff Geary L. Paul, Sr. was in a rollover accident on August 19, 1999, while riding in a King Cab taxi driven by Charles Sonnoh. The Pauls allege that on January 16, 2001, their attorney searched the Texas Secretary of State database and was unable to locate an entity named King Cab Company. (Affidavit of Stephen T. Arnold dated Nov. 30, 2001 ("Arnold Aff.")). Upon a subsequent telephone call to the Secretary of State, attorney Stephen T. Arnold was informed that there were no records on file concerning the entity. Id. The Pauls claim that attorney Arnold then contacted King Cab Company and was informed that Sam Kyereh ("Kyereh") was the sole owner of the company and that it was unincorporated. Id. It is undisputed that King Cab had filed an assumed named certificate in the Dallas County Clerk's office.On or about January 19, 2001, Mr. Paul and his wife filed this suit in the Eastern District of Texas against "Sam Kyerah d/b/a King Cab Company." A summons was issued on April 16, 2001, and finally served on Kyereh on April 27, 2001. Kyereh claims that he forwarded the complaint to his insurance company, but no answer was timely filed on his behalf. On October 18, 2001, a default judgment was entered against Kyereh in the sum of $144,080.19 by Judge David Folsom of the Eastern District of Texas. On or about October 31, 2001, Kyereh filed a Motion for Relief from Default Judgment, which indicated that GPDA, not Kyereh, was the owner of King Cab. On April 11, 2002, Judge Folsom granted Kyereh's motion, the default was lifted, and the case was transferred to the Northern District of Texas. The Pauls subsequently filed their first amended complaint against "Sam Kyerah d/b/a King Cab Company" and added as a defendant "G.A.P.D., Inc. d/b/a King Cab Company." The Court accepted the Amended Complaint for filing on July 5, 2002. On October 1, 2002, GPDA filed its answer in this action, specifically denying that Sonnoh was an employee. On March 12, 2003, the Court granted summary judgment to Kyereh, holding that Mr. Kyereh did not owe any liability to Plaintiffs in this case either individually or as "King Cab Company." Order of March 13, 2003 ("March 2003 Order") at 2-3. The Pauls moved on or about March 18, 2003 for leave to amend their pleadings to add Charles Sonnoh as a defendant. GPDA moves for summary judgment on the basis that the statute of limitations has run on claims against GPDA.
The correct spelling of defendant's last name is "Kyereh." The correct name of the corporate defendant is G.P.D.A., Inc. Plaintiffs' pleadings were amended to reflect the correct spelling by order of August 29, 2002.
On November 7, 2002, GPDA provided Paul a copy of the King Cab Independent Contractors Agreement.
II. ANALYSIS A. The Standard For "Relation Back"
GPDA moves for summary judgment, alleging that the statute of limitations has expired for the Pauls' amended claims. In Texas, the statute of limitations for an action in personal injury is two years. TEX. Civ. PRAC. REM. CODE § 16.003(a). Accordingly, unless an exception applies, the Pauls' actions against both GPDA and Sonnoh would be barred after August 19, 2001, two years after the date of injury. The Pauls' sought leave to file their Amended Complaint on or about June 3, 2002, and their Amended Complaint was filed on July 5, 2002. In March of 2003, the Pauls sought further leave to amend to include Sonnoh as a defendant.
The Pauls allege that their claims against GPDA and Sonnoh are proper under the "relation back" provision of Rule 15(c) of the Federal Rules of Civil Procedure. That section states:
(c) Relation Back of Amendments. An amendment of a pleading relates back to the date of the original pleading when
(3) the amendment changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within the period provided by Rule 4(m) for service of the summons and complaint, the party to be brought in by amendment (A) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.
FED. R. Civ. P. 15(c)(3). Accordingly, to avoid the statute of limitations through relation back, a plaintiff must show that: (1) the basic claim has arisen out of the conduct set forth in the original proceeding; (2) the party to be brought in must have received such notice that it will not be prejudiced in maintaining its defense; (3) the party must or should have known that, but for a mistake concerning identity, the action would have been brought against it; and (4) the second and third requirements must have been fulfilled within the prescribed limitations period. Jacobsen v. Osborne, 133 F.3d 315, 319 (5th Cir. 1998) (quoting Schiavone v. Fortune, 477 U.S. 21, 29 (1986)). The amended Rule 15(c) is "meant to allow an amendment changing the name of a party to relate back to the original complaint only if the change is the result of an error, such as a misnomer or misidentification." Jacobsen, 133 F.3d at 320 (quoting Barrow v. Wethersfield Police Dep't, 66 F.3d 466, 469 (2d Cir. 1995)).
GPDA argues for summary judgment, alleging that the Pauls cannot meet all elements of Rule 15(c)(3) because the Amended Complaint would assert claims against new parties, rather than "chang[ing] the party or the naming of the party against whom a claim is asserted. . . ." FED. R. Civ. P. 15(c)(3). In sum, GPDA claims that the Pauls intended all along to sue Kyereh, and once summary judgment was granted, are improperly seeking another avenue of relief. Although the Fifth Circuit has not directly addressed the issue, a number of other circuit courts have concluded that the proper application of Rule 15(c) "involves a purely legal determination" by the district court. Slade v. United States Postal Serv., 875 F.2d 814, 815 (10th Cir. 1989); See also Young v. Lepone, 305 F.3d 1, 14 (1st Cir. 2002); Miller v. American Heavy Lifting Shipping, 231 F.3d 242, 247 (6th Cir. 2000); In re Rivinius, 977 F.2d 1171, 1175 (7th Cir. 1992). The Court holds that the Pauls satisfy Rule 15(c)(3)'s requirements for relation back. Since the Pauls were mistaken in their belief that they were suing King Cab by naming Kyereh as a d/b/a, relation back applies, and the statute of limitations does not bar relief. Therefore, summary judgment is not appropriate as to GPDA.
Because GPDA does not argue that the Pauls fail to satisfy the other elements of the Jacobsen test, the Court will not address those elements.
B. Misnomer or Mistake
GPDA urges the Court to grant summary judgment because the Pauls' failure to name GPDA as a defendant was a result of a lack of knowledge, rather than a mistake concerning the identity of the proper party. GPDA alleges that "Plaintiffs made no mistake at all and sued the party they intended to sue, Mr. Kyereh, and then decided after the statute of limitations had expired and their default judgment had been set aside that they also wanted to sue GPDA." Defendant G.P.D.A., Inc.'s Brief in Support of Motion for Summary Judgment, at 10. GPDA points to the Fifth Circuit's Jacobsen decision, which relied in large part upon Wilson v. United States Gov't, 23 F.3d 559, 562-63 (1st Cir. 1994), to support the conclusion that Rule 15(c) relation back should not apply. In Wilson, the First Circuit considered plaintiff Wilson's attempt to invoke Rule 15(c)(3) relation back to correctly name as defendant the United States, rather than General Electric Government Services, Inc. ("GEGS"), Wilson's employer. In that case, Wilson failed to properly identify the owner of a ship upon which he was stranded during a hurricane, and asked the court to apply relation back to avoid the applicable statute of limitations. Id. at 560. The First Circuit affirmed the denial of plaintiff's motion to amend his lawsuit and dismissal of his claims, holding that, as a matter of law,
[T]here was no "mistake concerning the identity of the proper party," as required by Rule 15(c)(3). Rather, Wilson merely lacked knowledge of the proper party. In other words, Wilson fully intended to sue GEGS, he did so, and GEGS turned out to be the wrong party. We have no doubt that Rule 15(c) is not designed to remedy such mistakes.Id. at 563. In so holding, the court noted that no record evidence existed showing that Wilson made any attempt to ascertain the true owner of the ship, and there was no allegation of wrongdoing by plaintiff which led to defendant's error. Id. at 561-62. In fact, Wilson was alerted to the actual ownership of the ship five months before the statute of limitations expired; however, he failed to amend his complaint until after the prescribed period. Id. at 562.
Similarly, the Fifth Circuit held in Jacobsen that a plaintiff who sued unnamed deputies identified only as "John Doe" under Section 1983 was not permitted to substitute the intended parties under Rule 15(c) after the statute of limitations had run. Jacobsen, 133 F.3d at 320-21. As the First Circuit did in Wilson, the Court suggested that the proper identities of the intended defendants could have been readily ascertained by greater diligence by the plaintiff, and the statute of limitations bar could have been avoided. Id. at 321. The Court explained that, because plaintiff could have identified the proper parties and amended his complaint within the prescribed limitations period, "the proposed amendment as to the deputies was not necessitated by the `mistake' or `misidentification' at which Rule 15(c)(3) is aimed. For such a situation, the Rule does not allow relation back to the filing of the original complaint." Jacobsen, 133 F.3d at 321-22; See also Hazelton v. City of Grand Prairie, 8 F. Supp.2d 570, 581 (N.D. Tex. 1998) (citation omitted) (plaintiff who could not identify police officer until after statute of limitations had run "has not shown that he simply misidentified Moreno due to a mistake; instead, Plaintiff did not know his identity at all. Plaintiff has therefore failed to satisfy the misidentification situation which Rule 15(c)(3) seeks to address.").
The instant matter, however, is readily distinguishable from cases such as Wilson and Jacobsen. In those cases, the plaintiff's were unable to satisfy Rule 15(c)(3) because they simply failed to take the necessary steps to ascertain the identity of the proposed defendants until after the statute of limitations barred suit. See Jacobsen, 133 F.3d at 320-21. Here, the Pauls claim that they diligently attempted to file suit against the party doing business as King Cab Company, and mistakenly sued the incorrect party because of GPDA's affirmative misdeeds.
Defendants do not dispute that they failed to register an assumed name certificate with the Secretary of State, as required under TEX. Bus. COM. CODE § 36.11. The Pauls provide evidence showing that the Texas Secretary of State database has no record of King Cab Company, and include phone records supporting their contention that attorney Arnold contacted King Cab Company by telephone prior to filing suit. As a result of this conversation, the Pauls claim that they learned of Kyereh's identity and were led to sue Kyereh as a d/b/a and discontinue their research. There is no indication that Kyereh was named as defendant for any reason other than the Pauls' mistaken belief that he was the correct d/b/a party for King Cab; indeed, Kyereh was not the driver of the taxicab involved in the 1999 rollover accident, he was not named as an individual, and the Pauls would have no reason to name him as defendant other than their belief that he was the party responsible for King Cab. Although greater diligence by attorney Arnold may well have revealed the identity of GPDA, the Court holds that by reviewing the Secretary of State database and contacting King Cab, Arnold exercised sufficient diligence in attempting to identify the correct defendant. Reviewing the factual record before the Court in this motion, the Pauls' failure to properly name GPDA constitutes a mistake for the purposes of Rule 15(c)(3), and the Jacobsen test is satisfied.
GPDA chides the Pauls for their failure to check the Dallas County records pursuant to TEX. Bus. COM. CODE § 36.10, which requires unincorporated businesses using an assumed name to file an assumed name certificate with the county in which it is located. But GPDA, as a Texas corporation, was required to file an assumed name certificate with the Secretary of State under TEX. Bus. COM. CODE § 36.11. GPDA cannot blame the Pauls for checking the records where GPDA should have filed, instead of where GPDA incorrectly filed.
Indeed, the instant case appears to be more properly comparable to Bechtel v. Robinson, 886 F.2d 644 (3d Cir. 1989), Roberts v. Michaels, 219 F.3d 775 (8th Cir. 2000), and Triangle Distrib., Inc. v. Shafer, Inc., 943 F.2d 52 (mem.), 1991 WL 164333 (6th Cir. Aug. 23, 1991) (unpublished opinion). In those cases, the courts held that a defendant's failure to properly register the true name of a corporation and the assumed name under which it conducted business, as required by state law, led to the plaintiff's mistake in naming the correct defendant, and required the application of Rule 15(c).
In Bechtel, executors of a diner's estate brought an action against the alleged former and current owners of the restaurant for back injuries sustained by the diner when his chair collapsed. 886 F.2d at 646. Like attorney Arnold in the instant matter, the plaintiff's attorney in Bechtel searched state records, which reflected that the restaurant was a sole proprietorship owned by defendant Robinson. Id. In fact, the restaurant had been sold to Creative Dining Inc., whose principal stockholder, James Gray, failed to register with the county prothonotary's office, as required by Delaware law. Id. at 647-48. The Third Circuit applied equitable estoppel to bar the defendant from raising a defense of the statute of limitations, holding that because defendant failed to file the proper documentation and post a business license, "the appellants were misled by Gray into thinking that Robinson was the owner, and their reliance proved detrimental since they did not discover that they had sued the wrong party until after the statute of limitations had expired." Id. at 650. The Bechtel court further held that Rule 15(c) "relation back" should apply. Id. at 651-52.
In Roberts v. Michaels, the Eighth Circuit applied Rule 15(c)(3) to allow relation back where a plaintiff named the incorrect defendant after being informed by the Arkansas Secretary of State's office that no corporation named "Midsouth Vending, Inc." existed within the state. Roberts, 219 F.3d at 777. Lacking independent evidence of the proper party to be sued, Roberts inferred by the actions of defendant Michaels that they had sued the correct party. Id. at 777, 779. However, a summary judgment motion by defendant indicated that Roberts had sued the wrong party. Id. The court there explained that,
Roberts's attorney prudently checked [Midsouth Vending] with the Arkansas Secretary of State, learned that no such corporation existed, and concluded that Midsouth Vending was a d/b/a. A more thorough inquiry might have uncovered the corporate owner of that d/b/a, but Roberts was not illogical in inferring that Midsouth Vending was a proprietorship owned by Ron Michaels. Finally, after the initial complaint was served, Michaels and his attorney, who was the corporation's attorney in the earlier administrative proceedings, prolonged Roberts's confusion by filing an answer that, read literally, admitted that Midsouth Vending was a d/b/a of Michaels.Id. at 779. Although the actions of Michaels were arguably more misleading than those alleged of Kyereh and GPDA in the instant matter, the Eighth Circuit analysis is instructive in applying Rule 15(c)(3) in a case where both independent research and the actions of the defendant led to the conclusion that no further research was necessary and the correct party had been sued. As in Roberts, a more thorough search may well have uncovered evidence that GPDA was the corporate owner of King Cab; however, having consulted with the Texas Secretary of State's office and spoken with Kyereh, it appears that the Pauls' failure to sue GPDA may be properly categorized as a mistake under Rule 15(c)(3).
Like Bechtel and Roberts, the Sixth Circuit's decision in Triangle Distrib., Inc. v. Shafer, Inc. applied Rule 15(c) where the failure of a corporation to register an assumed name certificate with the state led the plaintiff to sue the wrong party. Triangle Distrib., Inc., 1991 WL 164333, at *2. There, the plaintiff's contracted to sell video tapes to an entity referred to as "Front Row Video." When Triangle was not paid for the tapes, it attempted to file suit for breach of contract. Id. at *1. Triangle named as defendant the only corporation registered in Michigan as doing business under the name of "Front Row Video," a corporation named Shafer, Inc. Id. Attempting to execute a default judgment against Shafer, Triangle learned that it had sued the wrong party, and promptly tried to utilize Rule 15(c) to amend its complaint. Id. The Sixth Circuit reversed the trial court's grant of summary judgment and allowed amendment, holding that it was the failure of the correct defendants to follow state law that led to the mistake of plaintiffs. Id. at *2. The court explained,
In deciding whether to allow a party to amend the process and/or complaint to correct an asserted misnomer of the defendant, the general test should be whether, on the basis of an objective standard, it is reasonable to conclude that the plaintiff had in mind a particular entity or person, merely made a mistake as to the name, and actually served the entity or person intended; or whether plaintiff actually meant to serve and sue a different person.Id. at *2-3 (citations omitted). This test seems to best reflect the intent behind Rule 15(c), and appropriately recognizes the distinction between a plaintiff who intentionally sues an incorrect party and a plaintiff who sues the intended party using an incorrect name.
In the instant matter, the Pauls clearly intended to sue the party doing business as King Cab, and claim that they were led to believe that Paul Kyereh was the correct defendant. Despite GPDA's suggestion that the Pauls intended to sue Mr. Kyereh individually, he was named as a d/b/a, and the Pauls' allegations suggest that Kyereh was only named because of their mistaken belief that he was the sole proprietor doing business under the name King Cab. Therefore, the Pauls satisfy the requirement that their amendment, "is the result of an error, such as a misnomer or misidentification," Jacobsen, 133 F.3d at 320 (quoting Barrow v. Wethersfield Police Dep't, 66 F.3d 466, 469 (2d Cir. 1995)), and relation back applies. Accordingly, summary judgment is not appropriate.
C. Plaintiffs' Motion to Amend
It is too late now for the Pauls to add Sonnoh. It is undisputed that the Pauls knew the correct identity of Sonnoh well before the statute of limitations expired, and consciously chose not to name him as a defendant. Indeed, the Pauls' initial complaint reflected their knowledge of Sonnoh's identity, yet they only sought leave to name him as a defendant after all claims against Kyereh were dismissed in March of 2003. Taking the Pauls' allegations as true, their clear intent was to sue the corporate entity doing business as King Cab. They mistakenly identified Kyereh as that entity, but they were not mistaken as to Sonnoh's identity. Therefore, the Pauls cannot satisfy the "mistake or misnomer" element of the Jacobsen test, and the statute of limitations bars amendment. Jacobsen, 133 F.3d at 319. Plaintiffs have also failed to allege that Sonnoh received sufficient notice of the action to be subject to Rule 15(c) relation back. See FED. R. Civ. P. 15(c); Hernandez Jimenez v. Calero Toledo, 604 F.2d 99, 103 (1st Cir. 1979) (Rule 15(c) relation back notice requirement not met, because plaintiffs "could very well have believed that they were not named as parties in the original complaint for tactical reasons or because appellant lacked evidence of their alleged participation in the conspiracy when he filed the complaint.").
Equity further compels the Court to deny leave to amend the complaint to name Sonnoh as defendant. Sonnoh's identity as the driver of the taxicab was known well within the statute of limitations, and the independent contractor agreement was timely disclosed by GPDA in its answer and through discovery. However, the Pauls sought leave to amend only after all claims against Kyereh were dismissed, over five months after learning that Sonnoh was not an employee of GPDA/King Cab. It does not appear that GPDA failed to comply with any responsibility to disclose this information earlier, as Sonnoh had no financial interest in this matter unless and until sued. In sum, no exception applies that would exempt the Pauls' claims against Sonnoh from the statute of limitations.
CONCLUSION
Because the summary judgment evidence shows that the Pauls' failure to name GPDA was a result of a mistake, relation back is appropriate under Rule 15(c)(3) and summary judgment is not appropriate. However, any claims against Charles Sonnoh are clearly barred by the statute of limitations; therefore, leave to amend is denied. Accordingly, both GPDA's motion for summary judgment and the Pauls' motion for leave to amend are denied.