Gildon v. Simon Property Group, Inc.

• Decision Date: 26 October 2006
• Docket Number: No. 76292-9.,76292-9.
• Citation: 158 Wn.2d 483,145 P.3d 1196
• Court: Washington Supreme Court
• Parties: Valerie GILDON and Samuel Gildon, husband and wife and the marital community composed thereof, Respondents, v. SIMON PROPERTY GROUP, INC., d/b/a Northgate Mall, Petitioner, and "XYZ Corporations 1-5" and "John Does" and "Jane Does Nos. 1-5," and the marital communities composed thereof, Defendants.

145 P.3d 1196

158 Wn.2d 483

Valerie GILDON and Samuel Gildon, husband and wife and the marital community composed thereof, Respondents, v. SIMON PROPERTY GROUP, INC., d/b/a Northgate Mall, Petitioner, and "XYZ Corporations 1-5" and "John Does" and "Jane Does Nos. 1-5," and the marital communities composed thereof, Defendants.

No. 76292-9.

Supreme Court of Washington, En Banc.

Argued September 27, 2006.

Decided October 26, 2006.

COPYRIGHT MATERIAL OMITTED

James H. Jordan, Jr., Brian William Esler, Miller Nash LLP, Seattle, WA, for Petitioner.

Linda Lidie Brain, Attorney at Law, Bellevue, WA, for Respondents.

MADSEN, J.

¶ 1 Valerie Gildon filed suit against Simon Property Group, Inc. (Simon Property) and several fictitious defendants for personal injuries based on negligence and premises liability theories. She did not expressly name the premises owner, Northgate Mall Partnership (Northgate Mall Partnership or Partnership), as a defendant. Based on this failure, Simon Property moved to dismiss Gildon's suit under CR 12(b)(7). Gildon moved to amend her complaint to add the Partnership and Simon Property Group, L.P., but the trial court denied the motion, ruling that the amendment would not relate back due to Gildon's inexcusable neglect. The court also found the Partnership was a necessary and indispensable party under CR 19 and, since the statute of limitations had run, the court dismissed all of Gildon's claims. The Court of Appeals reversed, holding that Northgate Mall Partnership was not an indispensable party.

¶ 2 Two issues are presented in this case: (1) whether in a premises liability action a duty of care is owed only by a title owner of property, and (2) whether a partnership is a necessary and indispensable party under CR 19 in an action against a general partner for acts committed within the scope of partnership business under chapter 25.05 RCW, Washington's Revised Uniform Partnership Act (RUPA). We hold that a duty of care is owed by a "possessor" of property, consistent with long-standing law, and that joinder of Northgate Mall Partnership is not required by the RUPA and affirm the Court of Appeals.

FACTS

¶ 3 On August 6, 2000, Valerie Gildon received a head injury when she slipped and fell while walking on wet tile in the common walkway inside Northgate Mall. Both the Seattle Fire Department and paramedics were called, and she was transported to Northwest Hospital for treatment. She asserts that she has suffered severe personal injuries as the result of her fall, in an amount to be proven at trial.

¶ 4 Gildon is the owner and manager of Valerie's Cleaning Services. She was retained to perform cleaning services for Auntie Anne's Pretzels, a food service tenant in Northgate Mall. Gildon alleges she fell while performing her cleaning services.

¶ 5 In June 2003, Gildon and her husband brought suit against Simon Property. Prior to bringing the law suit, the record reflects that Gildon's attorney had corresponded with Simon Property's insurance carrier, providing Gildon's medical records, and with Simon Property's attorneys. Simon Property, headquartered in Indiana, is engaged in "the ownership and management of income-producing properties, primarily regional malls and community centers." Clerk's Papers (CP) at 53.¹

¶ 6 Simon Property is the "largest publicly traded retail real estate company" in the United States, with a total market capitalization of approximately $22 billion, with at least 240 income producing properties, including Northgate Mall. Id. Simon Property is a corporation that is treated as a "real estate investment trust" (REIT), which allows it to not pay United States federal income tax on its profits, assuming it meets certain requirements. Id. For example, at least 75 percent of its assets must consist of real estate assets, cash, and government securities. 26 U.S.C. § 856(c)(4)(A).² Simon Property is registered to do business in Washington.

¶ 7 In her complaint, Gildon alleged, among other things, that Simon Property was negligent in maintaining the physical premises that it "owned, occupied, leased, subleased, constructed, repaired, designed, controlled, possessed, maintained, managed and/or operated" and as a direct and proximate result of its negligence, caused severe injury and damage to Gildon. CP at 5. Gildon contended that Simon Property, as the "owner and/or manager" of Northgate Mall, has a duty to use ordinary care and diligence to design, build, keep, and maintain the common walkways in a condition reasonably safe for their intended use. Id. at 6. By breaching its duties and causing Gildon's accident, she contended that Simon Property is liable for the injuries and damages sustained by Gildon, an invitee on the property.

¶ 8 Gildon claimed that Simon Property's negligence includes, but is not limited to, failure to properly maintain the premises, failure to provide safe premises, failure to comply with the recognized standards for common walkway design and/or safety, and failure to warn of a dangerous condition. Additionally, Gildon contended that Simon Property was negligent in failing to adequately instruct and train its agents, employees, and/or servants in cleaning standards and proper use of equipment, failure to properly maintain the janitorial/maintenance equipment, and failure to warn others of unsafe conditions.³

¶ 9 Simon Property moved to dismiss the case on two grounds: (1) a judgment against Simon Property would be uncollectible because Gildon named the wrong party, Simon Property, who was not the owner of Northgate Mall and was only a general partner in a partnership that had title to the mall, and (2) there was no basis for liability against Simon Property or Northgate Mall Partnership because plaintiff was a trespasser at the time of the accident.

¶ 10 According to Simon Property, Gildon's negligence claim was "really against the owner of the Northgate Mall, which is `Northgate Mall Partnership.'" CP at 105. Simon Property submitted evidence illustrating that Northgate Mall Partnership, a Delaware general partnership, is the title owner of Northgate Mall. Additionally, Simon Property stated that Simon Property Group, L.P., owns 99.99 percent of the Northgate Mall Partnership and that Simon Property is "merely a 0.01% general partner." CP at 25; Simon Prop. Group, Inc.'s Pet. for Sup.Ct. Review at 3.⁴ Despite Gildon's claim that Simon Property's agents and other sources told her that Simon Property was the owner of Northgate Mall, Simon Property claimed that it was inexcusable neglect to fail to identity the title owner of property in a premises liability negligence case. As the statute of limitations had run, Gildon could add the Partnership as a party under CR 15(c) only if the amendment related back to the date of the original pleading.⁵ Accordingly, Simon Property claimed that Gildon's motion to amend the complaint to add the partnership could not relate back to the date of the original pleading under CR 15(c).⁶

¶ 11 Simon Property also claimed that if Gildon were able to prevail in her negligence claim against Simon Property, the claim would be "futile" because according to its interpretation of RCW 25.05.130(4), all claims against general partners must be brought first against the partnership in order to obtain relief.⁷ Under its interpretation of the statute, Gildon would not be able to collect a judgment obtained against Simon Property, a general partner in the Partnership, because the Partnership was not a party in the suit. Accordingly, since Simon Property asserted that the Partnership could not be added to the suit under CR 15(c), the suit had to be dismissed under CR 12(b)(7) for failure to join an indispensable party.⁸

¶ 12 As to its second basis for dismissal, Simon Property argued the case should be dismissed because Gildon was a trespasser in the common walkway area of Northgate Mall, resulting in neither Simon Property nor Northgate Mall Partnership having liability for Gildon's alleged injuries. Gildon and her husband disagreed, submitting evidence that she was an invitee.

¶ 13 The trial court denied Gildon's motion to amend her complaint to add Northgate Mall Partnership and Simon Property Group, L.P.⁹ It also granted Simon Property's motion to dismiss under CR 12(b)(7) based upon "the failure to join [Northgate Mall Partnership], a necessary and indispensable party under CR 19(b)." CP at 441, 452.

¶ 14 On review, the Court of Appeals concluded that the trial court did not abuse its discretion when it denied Gildon's motion to amend because, it held, "due diligence is irrelevant to the issue of inexcusable neglect in cases involving real property." Gildon v. Simon Prop. Group, Inc., noted at 123 Wash. App. 1004, 2004 WL 1875484 at *2, 2004 Wash.App. LEXIS 1927 at *7 (citing Iwai v. State, 76 Wash.App. 308, 884 P.2d 936 (1994), aff'd, 129 Wash.2d 84, 915 P.2d 1089 (1996)).¹⁰ However, the court pointed out that Gildon alleged a number of negligence claims against Simon Property in capacities other than "owner" of Northgate Mall, including as operator, manager, occupier, possessor, and lessor. See id. at *3, 2004 Wash.App. LEXIS at *11. Since these claims do not depend at all on Northgate Mall Partnership's presence in the litigation, the Court of Appeals concluded that Northgate Mall Partnership was not an indispensable party under CR 19(b). Accordingly, it held that the trial court had abused its discretion when it dismissed Gildon's suit under CR 12(b)(7).

¶ 15 When the factors in CR 19(b) were properly applied, the Court of Appeals found, the trial court should have concluded: (1) Northgate Mall Partnership would not be prejudiced by its absence in the lawsuit, (2) a judgment against Simon Property would likely compensate Gildon adequately, and (3) Gildon would have no other remedy to pursue if her suit against Simon Property was dismissed. As a result, the Court of Appeals reversed the dismissal of the claim...