Datskow v. Teledyne, Inc., Continental Products Div.

Decision Date02 May 1990
Docket NumberD,No. 622,622
Citation899 F.2d 1298
Parties, 16 Fed.R.Serv.3d 181 Marjorie DATSKOW, Executrix of the Estates of Robert C. Gross and Susan C. Gross, deceased, and Administratrix of the Estates of Michael and David Gross, deceased, and Grossair, Inc., Plaintiffs-Appellants, v. TELEDYNE, INC., CONTINENTAL PRODUCTS DIVISION, Defendant-Appellee. ocket 89-7916.
CourtU.S. Court of Appeals — Second Circuit

Arthur Alan Wolk, Philadelphia, Pa. (Catherine B. Slavin, Wolk, Genter & Harrington, Philadelphia, Pa., Anthony J. Adams, Jr., Michael Townsend, Davidson, Fink, Cook & Gates, Rochester, N.Y., on the brief), for plaintiffs-appellants.

Stephen R. Stegich III, Rochester, N.Y. (George G. Mackey, Robert W. Ludwig, Jr., Mackey & DiMarco, Rochester, N.Y.; Condon & Forsyth, New York City, on the brief), for defendant-appellee.

Before MESKILL and NEWMAN, Circuit Judges, and POLLACK, Senior District Judge. *

JON O. NEWMAN, Circuit Judge:

This appeal of a diversity case raises a host of issues concerning personal jurisdiction, service of process, the statute of limitations, and the identification of a party defendant. The issues arise on an appeal by Marjorie Datskow, as executrix and administratrix, and Grossair, Inc. from the August 9, 1989, judgment of the District Court for the Western District of New York (David G. Larimer, Judge) dismissing for lack of personal jurisdiction and insufficiency of service of process their complaint against a defendant identified as "Teledyne, Inc., Continental Products Division." The suit sought damages for the manufacture of an aircraft engine that allegedly failed, causing the crash of a single-engine plane and the death of plaintiff Datskow's decedents. We conclude that the plaintiffs sufficiently made clear their intention to sue the manufacturer of the engine, Teledyne Industries, Inc., that this defendant is amenable to the jurisdiction of the Western District, that this defendant sufficiently participated in proceedings in the Western District to have waived lack of personal service of process, and that the action is timely as to this defendant. We therefore reverse and remand.

Background

The complaint alleges that on November 26, 1986, a Beechcraft Debonair single-engine plane crashed while approaching the airport at Winston-Salem, North Carolina, killing all persons aboard the plane. Among the dead were Robert C. Gross, his wife, and their two children. The plane was owned by Grossair, Inc., a New York corporation. Suit was brought by Marjorie Datskow, a Pennsylvania citizen, as executrix and administratrix of the decedents' estates, and by Grossair, Inc. The caption identified the defendant as "Teledyne, Inc. Continental Motors Division" located at "Box 90, Mobile, Alabama 36601." It is undisputed that there is located in Mobile, Alabama, an aircraft engine manufacturing plant operated under the name "Teledyne Continental Motors Aircraft Products, a Division of Teledyne Industries, Inc." This division will be referred to as "TCM." Teledyne Industries, Inc., a California corporation, is a wholly-owned subsidiary of Teledyne, Inc. The latter is a holding company with 39 subsidiaries, most of which use the name "Teledyne" in their corporate names. The mailing address of TCM is Box 90, Mobile, Alabama 36601. Appellee acknowledges that the engine on the ill-fated plane was rebuilt by TCM.

The complaint alleged causes of action for negligence, strict product liability, fraud, and breach of warranty. The executrix made claims under New York's survival and wrongful death statutes. See N.Y. Est. Powers & Trusts Law Secs. 5-4.1 to 5-4.6, 11-3.2 (McKinney 1981 & Supp.1989). In New York, the limitations period for a wrongful death action is two years, N.Y. Est. Powers & Trusts Law Sec. 5-4.1(1) (McKinney Supp.1989); for a survival action, it is three years, N.Y.Civ.Prac.L. & R. Sec. 214 (McKinney Supp.1989).

The complaint was filed in the District Court on November 22, 1988, just four days short of a two-year interval from the plane crash. On December 1, 1988, plaintiffs mailed a copy of the complaint and summons to the defendant, as identified in the caption, by certified mail, return receipt requested. A receipt was returned, acknowledging receipt on December 5, 1988. On December 23, 1988, Teledyne, Inc., filed an answer, alleging numerous affirmative defenses including lack of personal jurisdiction, lack of proper service, and expiration of applicable statutes of limitations. On January 17, 1989, counsel for plaintiffs and for Teledyne, Inc. attended a conference with a magistrate at which scheduling of discovery and motions was discussed. Plaintiffs contend that some settlement discussions also occurred. No mention was made at the conference that TCM was in fact a division of Teledyne Industries, Inc. rather than Teledyne, Inc. or that either corporation had not received proper service of the complaint.

On April 21, 1989, defendant moved to dismiss on grounds of lack of personal jurisdiction, lack of proper service, and statute of limitations. Plaintiffs cross-moved for leave to amend the complaint to change the identification of the defendant to "Teledyne Continental Motors Aircraft Products, a Division of Teledyne Industries, Inc." The District Court granted the defendant's motion and denied the cross-motion. The Court essentially accepted the defendant's contention that plaintiffs had sued the wrong corporation, the holding company, Teledyne, Inc., instead of the subsidiary, Teledyne Industries, Inc. Based on this premise, the Court first ruled that Teledyne, Inc. was not amenable to the personal jurisdiction of the Western District under New York's long-arm provisions because this corporation was not doing business within New York, N.Y.Civ.Prac.L. & R. Sec. 301 (McKinney 1972), and had not committed a tort outside New York causing injury to persons or property within the State, id. Sec. 302(a)(3). The Court then ruled that Teledyne, Inc. had not been properly served because mail service is ineffective beyond the territorial limits of the state in which the district court sits.

The Court also upheld the statute of limitations defense as to the wrongful death action. Judge Larimer acknowledged that applicable New York law extends the normal statute of limitations for 60 days under certain circumstances. See N.Y.Civ.Prac.L. & R. Sec. 203(b)(5) (McKinney Supp.1990). The literal terms of section 203(b)(5) require delivery of the summons to the sheriff of a county outside New York City in which the defendant resides or is doing business and service of the summons upon the defendant within 60 days after the expiration of the normal limitations period. The District Judge ruled that the statute was applicable to federal diversity suits and that filing with the appropriate district court clerk is equivalent to filing with the sheriff of the appropriate county. Nevertheless, he concluded, since Teledyne, Inc. was neither resident nor doing business in New York and since Teledyne, Inc. had not been properly served within the 60-day extension period, the two-year limitations period applicable to the wrongful death claim had not been tolled.

Judge Larimer rejected plaintiff's argument that defendant had waived its defenses. He noted that the defenses had been asserted in the answer and presented by motion within six months of the filing of the complaint. Finally, the Judge denied plaintiffs' motion to redesignate the defendant because neither Teledyne, Inc. nor Teledyne Industries, Inc. had been served within the limitations period. Judgment was entered dismissing the complaint.

Discussion

Judge Larimer was not insensitive to the predicament of the plaintiffs and the severity of the result that he reached. But he felt obliged to reach it as a court of limited jurisdiction, noting that the plaintiffs had waited until four days before the end of the limitations period to initiate the suit and then had not commenced it properly. We share the Judge's assessment of plaintiffs' deficiencies but reach a different result because we believe that plaintiffs did not select the wrong defendant but committed the lesser sin of mislabeling the right defendant and that the defendant's conduct, in the circumstances of this case, precludes it from complaining about the absence of personal service.

Plaintiffs identified the defendant in several ways. First, they made clear that the entity they wished to sue was the manufacturer of the engine in the plane that crashed. Appellee acknowledges that this engine was rebuilt by TCM, a division of Teledyne Industries, Inc. Second, they listed in the caption of the complaint the mailing address of the entity they wished to sue. There is no dispute that Box 90, Mobile, Alabama 36601, is the address of TCM, a division of Teledyne Industries, Inc. Third, they approximated the name of the entity they wished to sue in the caption of the complaint. The caption names "Teledyne, Inc. Continental Motors Division," and the correct name is "Teledyne Industries, Inc., Teledyne Continental Motors Aircraft Products Division." All of the words in plaintiffs' designation appear in the correct designation. The key difference, of course, is that plaintiffs identified the corporate entity as "Teledyne, Inc.," whereas the correct name of the corporate defendant is "Teledyne Industries, Inc."

Our first question is whether the plaintiffs named the wrong defendant or mislabeled the right defendant. In some circumstances, the identification of a defendant by the name of one corporation cannot fairly be regarded as a mislabeling of a different corporation intended to be sued. But the line between naming the wrong defendant and mislabeling the right one must be drawn in light of the context of the nomenclature created by the defendant and the labeling undertaken by the...

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