Opinion
C.A. No. N10C-03-209 MMJ.
Submitted: August 26, 2010.
Decided: November 17, 2010.
On Plaintiffs' Motion to Amend Complaint and Caption.
GRANTED.
Michael A. Pedicone, Esquire, Joseph M. Jachetti, Esquire, Wilmington, Delaware, Attorneys for Plaintiffs, Richelle and John Walker.
William L. O'Day, Jr., Wilmington, Delaware, Attorney for the Defendants, Nino's Pizza and Diomede Enterprises of Middletown.
OPINION
Plaintiffs have moved to amend the complaint to substitute Diomede Enterprises of Middletown, Inc. in place of defendant Nino's Pizza. The issue is whether the amended pleading relates back to the original complaint, pursuant to Delaware Superior Court Civil Rule 15(c).
FACTUAL AND PROCEDURAL CONTEXT
This case arises from an auto accident on March 20, 2008. Defendant David H. Handler was driving his automobile while employed as a delivery driver for Nino's Pizza. Defendant's vehicle collided with the plaintiffs' vehicle. Plaintiffs allege injuries suffered from the crash and filed a complaint against defendants Handler and Nino's Pizza on March 19, 2010. The relevant statute of limitations ran the following day on March 20, 2010.
Nino's Pizza was served on April 20, 2010. Plaintiffs now seek to substitute Diomede Enterprises of Middletown, Inc. ("Diomede") as a defendant. Diomede is Nino's Pizza's corporate entity. Favian Ferreyra is the President of and registered agent for Diomede. Plaintiffs' original complaint alleges an agency relationship between defendant Handler and Nino's Pizza. Ferreyra executed an affidavit on May 25, 2010, denying agency between Handler and Nino's Pizza.
For purposes of this motion it is undisputed that Diomede did not have notice of this lawsuit within the 2-year statute of limitations. It is also undisputed that Diomede had actual notice of this action within 120 days after the complaint was filed.
DISCUSSION
The issue raised in this Motion is whether the statute of limitations prohibits amending the complaint to substitute Diomede as a defendant, in place of Nino's Pizza. Diomede received notice of the action after the limitations period, but within the period provided for by statute and Superior Court Civil Rule 4(j) for service of process. Diomede has acknowledged that the Court need not address any potential prejudice. The narrow issue is whether an amendment substituting a party may relate back to the date of the original pleading, when the new party received notice after the limitations period for filing the claim has expired, but within the 120 days permitted for service.
Amendment to Rule 15(c)(3)
Superior Court Civil Rule 4(j) provides a period of 120 days within which a complaint must be served on a defendant (unless the Court permits extension). Rule 15(c)(3) provides:
(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. . .and, within the period provided by statute or these Rules 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. [Emphasis supplied].
Effective December 1, 1993, Rule 15 was amended. Prior to amendment, Rule 15(c) stated:
(c) Relation back of amendments. . . . . An amendment changing the party against whom a claim is asserted relates back if . . . within the period provided by law for commencing the action against the party to be brought in by the amendment , that party (1) 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 (2) 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.
Interpreting Rule 15(c)(3) as Amended
Before Rule 15(c) was amended, the Delaware Supreme Court issued Mullen v. Alarmguard of Delmarva, Inc., on June 2, 1993. Just prior to the running of statute of limitations in Mullen, the plaintiff deposed Donald Williams, the president of Alarmguard, who himself was a named defendant. Williams specifically was asked about his wife's involvement in the company's decision-making process, which he downplayed under oath. A week later, the limitations period expired, and it was subsequently discovered that Williams' wife allegedly was more involved than previously indicated by her husband. The plaintiff sought to amend the complaint to add Mrs. Williams as a defendant on the basis that she was left off the original complaint by "mistake." The Superior Court denied the request.The Delaware Supreme Court reversed, holding that knowledge of the mistake must be imputed to Mrs. Williams from her presence during her husband's deposition, the purpose of which she knew was to determine if any other defendants should be added to the complaint. Thus informed, she was properly charged with notice that, but for the mistake as to her role, she would have been named as a co-defendant to the suit.
Id. at 266.
After Mullen, the Superior Court amended Rule 15(c) to effectively broaden the period for notice to affected parties. "The effect of the relation back segment of Rule 15 is to `enlarge' the statute of limitations period." Just as with its Federal counterpart, the genesis for the change in the Delaware was to resolve an anomaly created by the old rule.
Parker v. State, 2003 WL 24011961, at *7 (Del. Super.).
See G.F. Co. v. Pan Ocean Shipping Co., Ltd., 23 F.3d 1498, 1501 (9th Cir. 1994) (explaining that a hypothetical defendant served 10 days after the period of limitations would prevail if the original complaint contained a misnomer, while a defendant in the dark for 120 days could not plead the statute of limitations if the complaint identified him).
Statutes of limitation are designed to avoid "the undue prejudice that could befall defendants, after the passage of an unreasonable amount of time, due to the loss of evidence, disappearance of witnesses, or fading memories." The underlying purpose of the relation-back doctrine is to "permit amendments to pleadings when the limitations period has expired, so long as the opposing party is not unduly surprised or prejudiced." The goal is to encourage the disposition of litigation on its merits, with the decision to permit or deny an amendment being left to the discretion of the trial judge. Absent prejudice, "the trial court is required to exercise its discretion in favor of granting leave to amend."
Chaplake Holdings, Ltd. v. Chrysler Corp., 766 A.2d 1, 6 (Del. 2001); see also Wilson v. King, 673 A.2d 1228, 1233 (Del. Super. 1996) ("Statutes of limitations are enacted to require plaintiffs to use diligence in bringing suits so that defendants are not prejudiced by undue delay.").
See Hill v. Shelander, 924 F.2d 1370, 1377 (7th Cir. 1991).
See Bellanca Corp. v. Bellanca, 169 A.2d 620, 622 (Del. 1961).
Mullen, 625 A.2d at 263 (citing Ikeda v. Molock, 603 A.2d 785 (Del. 1991)).
"Interpretation of Rule 15(c) should preserve the balance between the statute of limitations and the relation-back doctrine — encouraging the disposition of cases on their merits while ensuring defendants receive adequate notice of the claims so that they are not unduly prejudiced in defense of the action." The only reasonable interpretation of Rule 15(c)(3), as amended, is that the party subject to amendment may be added (or substituted) if that party received notice of the claim within the 120 days permitted for service of a complaint following termination of the relevant statute of limitations. Under this circumstance, the amendment relates back to the date of the original pleading. Rule 15(c) should not be used to bar a party from pursuing a cause of action because of technical infirmities if the claim can fairly be decided on the merits without prejudice to the defendant.
Chaplake, 766 A.2d at 7.
Id. at 8
Before the amendment, notice had to be given before the limitations period expired. Under the present Rule 15(c) notice may be given after termination of the limitations period, provided that service is made within the additional 120-day period required by Rule 4(j).
Rule 15(c) Permits Amendment and Relation Back
In the instant matter there is no dispute concerning the first element required to satisfy Rule 15(c). The claim against Diomede arises from the same occurrence alleged in the original complaint — the March 20, 2008 auto accident involving Handler and the Walkers. There is disagreement, however, as to whether notice was timely served on Diomede. Diomede argues that it received notice after the limitations period expired on March 20, 2010. Plaintiff does not dispute this, but argues instead that notice, as of at least May 25, 2010, can be imputed to Ferreyra (Diomede's President and registered agent) on the basis of his affidavit denying agency between Handler and Nino's Pizza. There also is disagreement about whether Diomede knew or should have known that but for the mistake in naming Nino's as the sole defendant on the complaint, Diomede also would have been named a party in the original complaint.
Diomede cites Taylor v. Champion to support the argument that notice must be given within the limitations period. In Taylor, however, the Supreme Court held that the third party served with notice "was not ipso facto either an agent or authorized to receive service of process" for the defendant. The Court's holding addressed to the sufficiency of notice to the party sought to be added, not the actual timing of the notice.
693 A.2d 1072 (Del. 1997)
Id. at 1075.
For purposes of Rule 15(c), notice is satisfied when "the parties are so closely related in their business operations or other activities that the institution of an action against one serves to provide notice of the litigation to the other." Favian Ferreyra held himself out as an agent for both Nino's Pizza and Diomede. Ferreyra is Diomede's President and registered agent. Ferreyra executed an affidavit on behalf of Nino's Pizza, denying agency between Handler and Nino's Pizza. Diomede concedes that Nino's Pizza does not exist as an entity separate from Diomede. Therefore, sufficient identity of interests exists between Nino's Pizza and Diomede for this Court to conclude that Diomede knew, or should have known, that but for plaintiffs' mistake, Diomede would have been named in the original complaint.
G.F. Co. v. Pan Ocean Shipping Co., Ltd.,, 23 F.3d 1498, 1503 (9th Cir. 1994) (citing 6A Charles Miller, et al., Federal Practice and Procedure § 1499 at 146 (2d ed. 1990)).
CONCLUSION
Diomede received timely notice of the institution of this action as required by Rule 15(c), and will suffer no prejudice in its ability to raise any applicable defenses to the claim. Diomede knew or should have known that but for a mistake concerning the proper party, the action would have been brought against Diomede. The Court finds that the interests of justice permit amendment to the complaint to substitute Diomede Enterprises of Middletown, Inc. as a defendant in place of Nino's Pizza. The amendment shall relate back to the original complaint. THEREFORE, Plaintiffs' Motion to Amend the Complaint and Caption is hereby GRANTED.
IT IS SO ORDERED.