Korkow v. General Cas. Co. of Wisconsin, 82-073

• Decision Date: 28 February 1984
• Docket Number: No. 82-073,82-073
• Citation: 344 N.W.2d 108,117 Wis.2d 187
• Parties: George A. KORKOW and Gerald A. Korkow, Plaintiffs-Respondents-Petitioners, v. GENERAL CASUALTY COMPANY OF WISCONSIN, Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 108

344 N.W.2d 108

117 Wis.2d 187

George A. KORKOW and Gerald A. Korkow Plaintiffs-Respondents-Petitioners, v. GENERAL CASUALTY COMPANY OF WISCONSIN, Defendant-Appellant.

No. 82-073.

Supreme Court of Wisconsin.

Argued Jan. 31, 1984.

Feb. 28, 1984.

Craig L. Parshall, argued and Law Offices of John J. McLario, Menomonee Falls, for plaintiffs-respondents-petitioners.

Wayne L. Maffei, argued, Clyde C. Cross, and Cross, Mercer & Maffei, Baraboo, for defendant-appellant.

DAY, Justice.

This is a review of a published decision ¹ of the court of appeals reversing a judgment and order of the circuit court for Sauk county, Hon. James W. Karch, Circuit Judge. The issue on review is: May an amended pleading adding a separate claim by a new plaintiff after the statute of limitations has run relate back to the date of filing of the original complaint?

We hold that an amended pleading adding a separate claim by a different plaintiff may relate back to the date of filing of the original complaint if the requirements of section 802.09(3), Stats. ² are satisfied and relation back will not cause unfairness or prejudice to the other party. We therefore reverse the decision of the court of appeals and reinstate the judgment of the trial court.

On November 5, 1979, the "Wildwood" tavern in Sauk County, Wisconsin was extensively damaged by fire. On April 7, 1980, George A. Korkow filed suit against General Casualty Company of Wisconsin (General Casualty) in the Sauk County Circuit Court claiming fire insurance proceeds. The claim was made under a fire insurance policy written by General Casualty in which George Korkow and his son, Gerald Korkow, were named as coinsureds. The complaint also sought damages for intentional breach of contract, libel and bad faith. On May 1, 1980, General Casualty answered denying liability under the policy and asserting the affirmative defenses of lack of insurable interest, misrepresentation and arson. On July 1, 1980, the trial court issued a scheduling order which set a December 12, 1980 deadline for the amendment of all pleadings and scheduled a pretrial conference for February 9, 1981. On December 10, 1980, George Korkow filed an amended complaint together with a motion for leave to amend and a notice of motion. The amended complaint contained three claims by Gerald Korkow and requested relief in the alternative for George Korkow or Gerald Korkow.

At the February 9 pretrial conference, the trial court granted the motion to amend. General Casualty subsequently filed an amended answer which alleged, in addition to the other affirmative defenses, that Gerald Korkow's claim was barred by the one year statute of limitations under section 631.83(1)(a), Stats. ³

The arson issue was tried to a jury which found in a special verdict that the plaintiffs did not deliberately set the fire. ⁴ The plaintiffs moved the court for judgment against General Casualty for the stipulated loss of $26,015.90 together with costs, disbursements and interest. General Casualty moved to dismiss the claim of George Korkow on the grounds that he lacked an insurable interest in the insured property and to dismiss the claim of Gerald Korkow on the grounds that he failed to commence the action within twelve months as required by section 631.83(1)(a), Stats., and the insurance contract.

By its decision and order of October 30, 1981, the court granted General Casualty's motion to dismiss the claim of George Korkow on the grounds that he lacked an insurable interest in the property at the time of the fire. ⁵ The court denied General Casualty's motion to dismiss the claim of Gerald Korkow. The trial court held that the amendment related back to the date of filing of the original complaint under section 803.01(1), Stats. ⁶ General Casualty appealed to the court of appeals. That court reversed the trial court's order denying the motion to dismiss on the grounds that section 803.01, as applied, enlarged the statute of limitations period in violation of this court's rule making authority under section 751.12. This court accepted review to decide if an amended pleading adding a separate claim by a different plaintiff may relate back to the date of filing of the original complaint.

Our interpretation of the rules governing the relation back of amended pleadings must be made in light of the underlying aims and philosophy of Wisconsin's liberal civil procedure rules. Wisconsin long ago abandoned the highly formal concepts of common law form pleading in favor of more functional concepts defined in terms of the underlying transaction, occurrence or event that forms the basis of the claim. Wussow v. Commercial Mechanisms, Inc., 97 Wis.2d 136, 145, 293 N.W.2d 897 (1980); Drehmel v. Radandt, 75 Wis.2d 223, 227, 249 N.W.2d 274 (1977). Wisconsin's current civil procedure code, which is patterned after the federal rules of civil procedure, became effective on January 1, 1976. The new code continues the trend of simplifying the rules of procedure in order "to secure the just, speedy and inexpensive determination of every action and proceeding." Section 801.01(2), Stats. This functional approach to pleading reflects a determination that the resolution of legal disputes should be made on the merits of the case rather than on the technical niceties of pleading. The "notice" pleading rules of the current civil procedure code are intended to facilitate the orderly adjudication of disputes; pleading is not to become a "game of skill in which one misstep by counsel may be decisive of the outcome." Canadian Pacific Ltd. v. Omark-Prentice Hydraulics, 86 Wis.2d 369, 373, 272 N.W.2d 407 (Ct.App.1978) (quoting Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957)).

Amendment of pleadings in civil actions in the circuit courts is governed by section 802.09, Stats. That section, which took effect on January 1, 1976, permits a party to amend its pleadings "once as a matter of course at any time within six months after the summons and complaint are filed or within the time set in a scheduling order...." Other amendments are by leave of the court or consent of the adverse party. Leave to amend "shall be freely given at any stage of the action where justice so requires."

Subsection (3) of section 802.09, Stats., provides that under certain circumstances an amended pleading will be deemed to relate back to the date of filing of the original pleading. The language of that subsection does not expressly authorize the relation back of amended pleadings adding additional plaintiffs. The first sentence provides generally for the relation back of amendments if the claim asserted therein arose out of the "transaction, occurrence or event" set forth in the original pleading. The second sentence provides for the relation back of amended pleadings changing the party against whom a claim is asserted if additional conditions guaranteeing adequate notice and absence of prejudice have been met.

The federal counterpart to section 802.09(3), Stats., is found in Rule 15(c) of the Federal Rules of Civil Procedure. That rule in its current form is quite similar to the Wisconsin relation back statute. ⁷ Prior to 1966, the federal rule did not include the second sentence dealing with relation back of amended pleadings changing defendants. When that sentence was added in 1966, the Advisory Committee's Note stated that the relation back of amendments changing plaintiffs is not expressly treated in revised Rule 15(c) "since the problem [of the relation back of amendments changing plaintiffs] is generally easier." The note further states that the general attitude of the rule toward change of defendants extends by analogy to amendments changing plaintiffs. 39 F.R.D. 69, 83 (1966). Consistent with the advisory committee's analysis, the United States District Court for the Northern District of Illinois permitted relation back of an amendment adding a separate claim by a new plaintiff for loss of consortium. ⁸ Hockett v. American Airlines, Inc., 357 F.Supp. 1343 (N.D.Ill.1973).

A similar view of the applicability of Wisconsin's relation back statute to amendments changing plaintiffs is stated in Harvey, Rules of Civil Procedure, section 2166, (1975) wherein it is stated:

"Subsection (3) deals expressly only with amendments changing a defendant. Amendments changing a plaintiff should be dealt with liberally under the subsection's general provisions regarding relation back and in light of the provision of Rule 803.01(1) for substitution of the real party in interest within a reasonable time after objection on the ground that the action was not brought in his name."

The evident purpose behind section 802.09(3), Stats., like the purpose behind Federal Rule 15(c), is to ameliorate the effect of the statute of limitations in situations where the original pleadings provided fair notice to the opposing party of the claim or defense raised. 6 C. Wright and A. Miller, Federal Practice and Procedure, section 1496 (1971). There is nothing in either the language or the purpose of the rule evidencing its inapplicability to amendments changing plaintiffs. Provided a defendant is fully apprised of a claim arising from specified conduct by the original pleading, his ability to protect himself will not be prejudicially affected if a new plaintiff is added and he should not be permitted to make a statute of limitations defense.

The basic test for whether an amendment should be deemed to relate back is the identity of transaction test, i.e., did the claim or defense asserted in the amended pleading arise out of the same transaction occurrence or event set forth in the original pleading. If this test is satisfied, relation back is presumptively appropriate.

Although section 802.09(3), Stats. states the general rule for relation back of amendments, there may be situations where simple compliance with the letter of the relation back statute does not adequately...