Genesco, Inc. v. Cone Mills Corp.

• Decision Date: 27 July 1979
• Docket Number: No. 78-1730,78-1730
• Citation: 604 F.2d 281
• Parties: GENESCO, INC., a corporation, G. C. Murphy Company, a corporation, and Continental Casualty Company, a corporation, Plaintiffs, and Susan K. Williams, by her next best friend, Emma L. Williams, Appellant, v. CONE MILLS CORPORATION, a corporation, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 281

604 F.2d 281

GENESCO, INC., a corporation, G. C. Murphy Company, a corporation, and Continental Casualty Company, a corporation, Plaintiffs and Susan K. Williams, by her next best friend, Emma L Williams, Appellant, v. CONE MILLS CORPORATION, a corporation, Appellee.

No. 78-1730.

United States Court of Appeals Fourth Circuit.

Argued May 8, 1979.

Decided July 27, 1979.

James C. West, Jr., Clarksburg, W. Va. (Jones, Williams, West & Jones, Dean C. Ramsey, Jones, Williams, West & Jones, Clarksburg, W. Va., on brief), for appellant.

J. Donald Cowan, Jr., Greensboro, N. C. (William L. Young, Smith, Moore, Smith, Schell & Hunter, Greensboro, N. C., on brief), for appellee.

Before WINTER, BUTZNER and PHILLIPS, Circuit Judges.

WINTER, Circuit Judge:

Unlike most jurisdictions, North Carolina does not suspend the running of the statute of limitations on an infant's cause of action during the period of infancy when the infant has a guardian charged with the duty of bringing the action on his behalf. In this diversity case, the District Court for the Middle District of North Carolina ruled that the statute of limitations on the claim of Susan K. Williams (Susan), a minor, against Cone Mills Corporation (Cone Mills), for injuries sustained when her nightgown made from material woven by Cone Mills caught fire, began to run when Emma L. Williams (Emma), her mother, brought suit on her behalf as her next friend in the District Court for the Northern District of West Virginia against G. C. Murphy Company (Murphy) for the same injuries.

We disagree. We hold that, for purposes of the North Carolina law of limitations, the filing of the complaint by Emma as Susan's next friend in West Virginia did not constitute the appointment of Emma as a guardian Ad litem, charged with the duty of bringing the instant suit against Cone Mills, and therefore did not start the running of the statute of limitations. We further hold that Susan's claim against Cone Mills is not barred by her court-approved settlement with Murphy and Greensboro Manufacturing Company (Greensboro) for the same injuries. We therefore reverse the judgment of the district court and remand the case for further proceedings.

I.

On February 15, 1972, Emma filed a complaint against Murphy in the Northern District of West Virginia. The caption of the complaint listed the plaintiffs as "SUSAN K. WILLIAMS, who sues by Emma L. Williams, her mother and next friend, and EMMA L. WILLIAMS." The complaint alleged that on March 8, 1971, shortly before Susan's twelfth birthday, Susan was injured when her nightgown, recently purchased by Emma from Murphy, caught fire. The complaint, seeking damages for Susan in the amount of $1,124,400, included claims of negligence, strict product liability, and breach of express and implied warranty. Murphy filed a third-party complaint against Greensboro, alleging that Greensboro had manufactured the nightgown and sold it to Murphy, and demanding judgment against Greensboro for any sums that Emma and Susan might recover from Murphy. On February 22, 1974, the district court in West Virginia appointed Union National Bank of Clarksburg (Union) as legal guardian of Susan's estate.

The parties subsequently agreed to a settlement, under the terms of which Murphy and Greensboro would pay Susan $170,000 in exchange for a release from liability, and the settlement was submitted to the district court for its approval. On March 4, 1974, the district court appointed Francis L. Warder (Warder), an attorney, as guardian Ad litem for Susan, and upon Warder's representation that the settlement was fair and in Susan's best interests, the court entered an order authorizing and approving the settlement. ¹

On February 14, 1975, Murphy, Genesco, Inc. (Genesco), which had acquired Greensboro, and their insurer, Continental Casualty Company (Continental), sued Cone Mills in the Western District of North Carolina. The complaint alleged that Cone Mills had manufactured and sold to Greensboro the fabric which Greensboro used to make Susan's nightgown, and indemnification was demanded from Cone Mills for the $170,000 settlement paid to Susan. On January 21, 1976, Susan, by Emma as her next friend, filed a motion to be added as a plaintiff, and the district court granted this motion on February 6, 1976. Also on February 6, the court granted Cone Mills' motion to transfer the case to the Middle District of North Carolina.

In September 1977, plaintiffs filed an amended complaint. Count I repeated the claim of Genesco, Murphy, and Continental for indemnification from Cone Mills in the amount of $170,000. Count II set forth Susan's claim against Cone Mills for negligence and breach of warranty in the manufacture and sale of the fabric by Cone Mills and sought recovery of $1,124,400 for her injuries.

The District Court for the Middle District of North Carolina granted Cone Mills' motion for summary judgment against Susan. The court held that Emma's filing of a suit as Susan's next friend against Murphy in West Virginia constituted, for purposes of the North Carolina law of limitations, the appointment of Emma as a guardian Ad litem to pursue relief for Susan for her injuries sustained by the burning of the nightgown. Since that suit had been filed on February 15, 1972, and since the North Carolina period of limitations for personal injury and breach of warranty is three years, N.C.Gen.Stat. § 1-52(1), (5) (1969), the district court reasoned that Susan's claim against Cone Mills, asserted by her motion to be added as a plaintiff in the Western District of North Carolina on January 21, 1976, was barred. The district court certified the judgment against Susan as final under rule 54(b), F.R.Civ.P., and Susan appealed.

II.

Like most states, North Carolina has a statute providing that since an infant lacks capacity to bring suit, the statute of limitations does not begin to run against him until the incapacity is lifted by his reaching the age of majority. N.C.Gen.Stat. § 1-17(a)(1) (Supp.1977). The North Carolina courts, however, have developed an exception to this statute when the infant is represented by a guardian. The exception was stated most clearly by the North Carolina Supreme Court in Rowland v. Beauchamp, 253 N.C. 231, 116 S.E.2d 720 (1960):

In North Carolina, contrary it seems to the general rule in most jurisdictions, the rule . . . is that the statute of limitations runs against an infant as to all rights of action, "which the guardian might bring and which it was incumbent on him to bring, in so far as may be consistent with the limitations of his office."

116 S.E.2d at 722 (quoting Johnson v. Pilot Life Insurance Co., 217 N.C. 139, 7 S.E.2d 475, 477 (1940)). The rationale of the Rowland doctrine is that since an infant represented by a guardian has the capacity, despite his infancy, to bring suit through his guardian, there is no need to suspend the running of the statute of limitations.

It is agreed by all parties that the statute of limitations on Susan's claim against Cone Mills did not begin to run prior to the filing of suit against Murphy in the Northern District of West Virginia. Cone Mills contends, however, that when Emma filed that complaint as Susan's next friend, she thereby became Susan's guardian Ad litem, and at that moment the North Carolina statute of limitations on Susan's claim against Cone Mills began to run. In passing upon this contention, our task is to determine the effect which North Carolina, under the Rowland doctrine, would accord to the procedure which permitted Emma to represent Susan as her next friend in the Northern District of West Virginia. We begin by comparing the practice by which infant plaintiffs may be represented in federal courts under rule 17(c), F.R.Civ.P., ² with its counterpart under North Carolina law.

Federal Rule 17(c) provides:

Whenever an infant or incompetent person has a representative, such as a general guardian, committee, conservator, or other like fiduciary, the representative may sue or defend on behalf of the infant or incompetent person. If an infant or incompetent person does not have a duly appointed representative he may sue by his next friend or by a guardian ad litem. The court shall appoint a guardian ad litem for an infant or incompetent person not otherwise represented in an action or shall make such other order as it deems proper for the protection of the infant or incompetent person.

By its terms, the second sentence of Rule 17(c) permits an infant who lacks a general guardian to bring suit by his next friend, and no special appointment process for the next friend is required. Russick v. Hicks, 85 F.Supp. 281, 283 (W.D.Mich.1949); See Child v. Beame, 412 F.Supp. 593, 597-99 (S.D.N.Y.1976); Williams v. Wohlgemuth, 366 F.Supp. 541, 542 n. 1 (W.D.Pa.1973), Aff'd mem., 416 U.S. 901, 94 S.Ct. 1604, 40 L.Ed.2d 106 (1974). The federal district court may, of course, appoint a guardian Ad litem in its discretion, and it must do so (or take other equivalent protective action) when it appears that the next friend will not adequately protect the infant's interests.

This federal procedure was invoked by Emma when she brought suit on Susan's behalf in the Northern District of West Virginia. Without any prior appointment or other formal judicial procedure, Emma filed a complaint in Susan's name as her next friend. Emma maintained control over prosecution of the suit for two years, until the district court in West Virginia appointed Union as general legal guardian of Susan's estate on February 22, 1974, and Warder as her guardian Ad litem on March 4, 1974.

By contrast, in North Carolina a next friend or guardian Ad litem must be appointed in accordance with established procedures and standards. It has long been the law in North Carolina that a next friend or guardian Ad litem cannot step forward and assume on his own the authority to prosecute the infant plaintiff's suit; rather,...