494 F.3d 458 (4th Cir. 2007), 06-1009, Goodman v. Praxair, Inc.
|Citation:||494 F.3d 458|
|Party Name:||Marc B. GOODMAN, Plaintiff-Appellant, v. PRAXAIR, INC.; Praxair Services, Inc., Defendants-Appellees.|
|Case Date:||July 25, 2007|
|Court:||United States Courts of Appeals, Court of Appeals for the Fourth Circuit|
Argued: May 23, 2007.
Appeal from the United States District Court for the District of Maryland, at Baltimore. Marvin J. Garbis, Senior District Judge. (CA-04-391-MJG)
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Thomas McCarthy, Jr., Thomas McCarthy, Sr. & Associates, P.C., Annapolis, Maryland, for Appellant.
Howard Robert Rubin, Sonnenschein, Nath & Rosenthal, L.L.P., Washington, D.C., for Appellees.
Amy L. Bess, William E. Copley, Sonnenschein, Nath & Rosenthal, L.L.P., Washington, D.C., for Appellees.
Before WILLIAMS, Chief Judge, WILKINSON, NIEMEYER, MICHAEL, TRAXLER, KING, GREGORY, SHEDD, and DUNCAN, Circuit Judges, and WIDENER and WILKINS, Senior Circuit Judges.
Reversed and remanded by published opinion. Judge Niemeyer wrote the opinion, in which Judges Wilkinson, Michael, Traxler, King, Dun-can, and Senior Judges Widener and Wilkins joined. Chief Judge Williams wrote a separate opinion concurring in part, in which Judge Shedd joined. Judge Gregory wrote a separate opinion concurring in part.
Judge Motz, being disqualified, did not participate in this case.
NIEMEYER, Circuit Judge:
The district court dismissed plaintiff Marc Goodman's amended complaint for breach of contract against Praxair, Inc., and its wholly-owned subsidiary, Praxair Services, Inc., under Federal Rule of Civil Procedure 12(b)(6) because (1) the face of the amended complaint, which added Praxair Services, Inc., as a defendant, showed that the claim was barred by Maryland's three-year statute of limitations, and (2) Federal Rule of Civil Procedure 15(c) (providing when an amended pleading relates back to the date of the original pleading) did not save the complaint. In concluding that Rule 15(c) did not apply, the district court held (1) that the amended complaint added Praxair Services, Inc., as a party, rather than "changing the party, " as required by Rule 15(c); (2) that Goodman's mistake in suing the parent, rather than its subsidiary, was not the type of mistake that justified the relation back of an amendment under Rule 15(c); and (3) that Praxair Services, Inc., might not have had notice that it would have been sued but for Goodman's mistake, as required by Rule 15(c)(3)(B).
Because we conclude that the district court erred both in applying the statute of limitations and in refusing to apply the relation back afforded by Rule 15(c), we reverse the judgment of dismissal and remand for further proceedings.
On December 18, 2003, Goodman commenced an action in Maryland state court, naming Praxair, Inc., as defendant and alleging, in two counts, that Praxair, Inc., breached a contract with Goodman and in doing so also violated the Maryland Wage Payment and Collection Act.
Goodman alleged in his complaint that he entered into a written contract, dated April 16, 1998, with Tracer Research Corporation, a manufacturer of tracing chemicals ("tracers") that detect fuel leaks in fuel tanks. Goodman alleged that the contract was for him to lobby on Tracer Research's behalf for exemptions of its
tracers from regulation by the Clean Air Act and the EPA regulatory scheme under it. The hoped-for exemptions would be based on the conclusion that tracers were not fuel additives, which were subject to expensive testing regulations. The contract provided for payments to Goodman based on the number of tracers that he was able to exempt from the EPA regulations. On December 19, 2000, allegedly as a result of Goodman's efforts, the EPA sent a letter to Tracer Research notifying it that 20 of its tracers "[were] not fuel additives" and therefore were exempt from environmental testing requirements. Goodman alleges that under the contract, Tracer Research then became obligated to pay him $650, 000 in fees. Because Tracer Research paid Goodman $30, 000 during the course of his efforts, Goodman alleged that Tracer Research still owed him $620, 000.
Count I of the complaint for breach of contract demanded "[j]udgment as against Praxair, Inc. as successor in interest of Tracer Research Corp." in the amount of $620,000 in damages plus pre-judgment interest. Count II alleged that the fees payable under the contract were also properly characterized as wages and therefore payable by reason of the Maryland Wage Payment and Collection Act. As Goodman alleged, "The Defendant has owed the claimed wages in an amount equal to $620,000.00, since December 19, 2000, the date the EPA excluded the Defendant's tracers from the two-step EPA registration process."
Subsequent to the formation of the contract and its alleged breach, Tracer Research was acquired by UCISCO, Inc., a wholly-owned subsidiary of Praxair, Inc., and UCISCO thereafter changed its name to Praxair Services, Inc.
Counsel for Goodman stated by affidavit that after hearing that "Tracer Research Corp. had been sold to Praxair, Inc.," he visited the website of Praxair, Inc., during the course of preparing the complaint that he filed in state court. At the website, he found a press release dated November 11, 2002, in which Praxair, Inc., announced that "Praxair Acquires Tracer Research" and which provided the details that "UCISCO, Inc., a wholly-owned subsidiary of Praxair, Inc., has acquired Tracer Research corporation" and that "UCISCO had changed its name to Praxair Services, Inc." Counsel also determined that Praxair Services, Inc., was not registered to do business in Maryland but that Praxair, Inc., had been so registered. 1
Purportedly based on the information learned, Goodman named Praxair, Inc., as the defendant and included the following allegations in the complaint:
Defendant Praxair, Inc. is a corporation, and successor in interest to Tracer Research Corp., which was acquired in November, 2002 by Praxair Service, Inc. a wholly-owned subsidiary of Praxair, Inc.
* * *
To date, Defendant Tracer Research Corp., and its successor in interest, Praxair Services, a wholly-owned subsidiary
of Praxair, Inc., . . . have failed and refused to pay the Plaintiff as agreed.
* * *
Wherefore, Plaintiff Marc B. Goodman demands the following relief:
a. Judgment as against Praxair, Inc. as successor in interest of Tracer Research Corp. in the amount of $620,000 plus pre-judgment interest at the legal rate.
Praxair removed the action to federal court based on diversity jurisdiction and then filed a motion to dismiss the complaint on the ground that Praxair Services, Inc., not Praxair, Inc., was the successor to Tracer Research's obligations under the contract with Goodman. In response, Goodman filed an amended complaint on April 5, 2004, in which he repeated the allegations contained in the original complaint but stated that Praxair Services, Inc., rather than Praxair, Inc., was liable under the contract. He also alleged that Praxair, Inc., should be liable on an alter ego theory, and amended the caption of the case to indicate that both Praxair, Inc., and Praxair Services, Inc., were defendants.
The defendants filed a motion to dismiss the amended complaint on various grounds, including the ground that the complaint on its face was time-barred and that Federal Rule of Civil Procedure 15(c) did not provide relation back of the amended complaint. The district court granted the motion to dismiss, finding that Goodman's claims "accrued" on December 19, 2000, the date of the EPA's letter to Tracer Research, and that therefore the amended complaint, which was filed on April 5, 2004, was outside of Maryland's three-year limitations period. The court also concluded that the relation-back provision of Rule 15(c) did not apply because the amended complaint did not "change" a party, as required by the Rule, but rather added a new party, and that adding a party when the plaintiff was fully aware of that party when he filed his original complaint was not the type of mistake envisioned by Rule 15(c) as suitable for relation back. The court gave as an additional reason that Goodman had not demonstrated that Praxair Services, Inc., "knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against it."
Goodman filed this appeal, arguing (1) that the running of Maryland's statute of limitations does not appear on the face of the complaint, and (2) that, in any case, Rule 15(c) causes the amended complaint to relate back to the date of the original complaint filed in state court, which concededly was filed within the limitations period.
In concluding that the amended complaint itself alleged facts showing that its claims were barred by Maryland's three-year statute of limitations, the district court said:
Plaintiff expressly stated in the First Amended Complaint that "the Defendant has owed the claimed wages in an amount equal to $620, 000 since December 19, 2000." Thus, Plaintiff has unambiguously set forth the date of accrual of the claim(s) that he was asserting. There is no doubt that there is a three-year period of limitations. Accordingly, limitations expired December 19, 2003 on the claim(s) that Plaintiff presented in the instant case.
Goodman argues that "the date that $620, 000 became owing is not the same as an allegation of the date a contract cause of action accrues." He adds that in Maryland
a cause of action accrues when a contract is breached and also when the...
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