Martz v. Miller Brothers Company, Civ. A. No. 2647.

• Decision Date: 30 July 1965
• Docket Number: Civ. A. No. 2647.
• Citation: 244 F. Supp. 246
• Parties: James W. MARTZ, Jr., Plaintiff, v. MILLER BROTHERS COMPANY, a corporation of the State of Delaware, Defendant.
• Court: U.S. District Court — District of Delaware

244 F. Supp. 246

James W. MARTZ, Jr., Plaintiff, v. MILLER BROTHERS COMPANY, a corporation of the State of Delaware, Defendant.

Civ. A. No. 2647.

United States District Court D. Delaware.

July 30, 1965.

John M. Bader, of Bader & Biggs, Wilmington, Del., for plaintiff.

Albert L. Simon, Wilmington, Del., for defendant.

CALEB M. WRIGHT, Chief Judge.

There are two motions before the court: one is plaintiff's motion seeking leave to amend his complaint and the other is defendant's motion for summary judgment. The facts which give rise to these two motions will be set out at some length because, although one single determination is the key to both motions, courts have arrived at conflicting answers based upon slight variations in facts.

On April 7, 1961, James W. Martz, Jr., suffered injuries when some cement and ceiling material fell while he was passing on a sidewalk adjacent to Miller Brothers' furniture store in Newark, Delaware. Almost two years later, on April 5, 1963, Martz filed a complaint in this court in which he sought damages against Miller Brothers Company. This complaint alleged that on the day of the accident the named defendant was in possession and control of store premises located on Main Street in Newark.¹ The complaint was filed just two days before the statute of limitations ran on plaintiff's claim,² and service of process was not effected until April 10, 1963, several days after the tolling of the statute. Indeed, plaintiff's attorney apparently had to act with some haste in order to commence this action in time because he was not apprised of the claim until a few days before the filing of the complaint.³

On April 29, 1963 defendant moved for summary judgment on the ground that it did not own or operate the Newark store. Subsequently, an affidavit was filed in which Bruno E. dePolo, secretary of the defendant, stated on information and belief that the premises upon which plaintiff was injured were owned by Miller Brothers Company of Newark, a corporation separate and distinct from Miller Brothers Company.

There followed a period in which plaintiff's attorney sought through interrogatories and depositions to establish the true ownership of the Newark store. He found that the Newark store was, indeed, operated by Miller Brothers Company of Newark which was a separate corporation from Miller Brothers Company which operated a furniture store in Wilmington. He also discovered that the two stores had the same officers with the exception of the secretary. The secretary of Miller Brothers Company was dePolo and the secretary of Miller Brothers Company of Newark was Richard Miller. It was dePolo who was served with the summons and complaint in this action.⁴

The result of the discovery was a motion by plaintiff seeking leave to amend his complaint to name Miller Brothers Company of Newark as defendant. This motion was filed December 1, 1964.

The two motions before the court — the motion for summary judgment and the motion for leave to amend — turn on one central question: whether the court will permit an amendment to the name of the defendant which relates back to the time of the original complaint. If the court were to find that the wrong corporation had indeed been named and refuse to permit an amendment, the statute of limitations will have run on plaintiff's claim. Thus, by determining whether or not plaintiff is entitled to an amendment which relates back to the time he filed his original complaint, the court will effectively protect or foreclose plaintiff's claim.⁵

The federal rules provide for amendments to the complaint which relate back to the time of filing:

"Rule 15. (a) Amendments. A party may amend his pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, he may so amend it at any time within 20 days after it is served. Otherwise a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders.

* * * * * *

"(c) Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading." 15(a), (c), F.R.Civ.P.

While an amendment may be made to correct a mistake in the name of a party, a new party may not be brought into an action once the statute of limitations has run because such an amendment amounts to a new and independent cause of action. Messelt v. Security Storage Co., 14 F. R.D. 507 (D.Del.1953); Slater v. Keleket X-Ray Corp., 172 F.Supp. 715 (D.D.C. 1959); Godfrey v. Eastern Gas & Fuel Associates, 71 F.Supp. 175 (D.Mass. 1947); 1A Barron & Holtzoff, Federal Practice and Procedure § 448 (Wright Ed. 1960). Because of this rule courts have come to analyze cases in which it is sought to substitute a party defendant in terms of "misnomer". If the amendment merely corrects a misdescription of the party intended to be sued for the purpose of proper identification, a misnomer is set to right. If, on the other hand, the amendment in effect brings in a new party, a new cause of action results and the amendment cannot relate back to the original complaint.⁶

Unfortunately, the fruits of analysis in these terms have not been entirely satisfactory. "Even in theory the distinction between an amendment changing or correcting such mistakes in the names of the parties and an amendment aiming at the substitution of parties plaintiff or defendant is not free from difficulty, but in actual practice the line between the two types of amendments can hardly be drawn accurately. Hence, it is not surprising to find that some courts have described as the correction of a clerical mistake or misnomer that which is regarded by other courts as a substitution of parties." Annot., "Change in Party After Statute of Limitations Has Run", 8 A.L.R.2d 6, 16 (1949).⁷

With an eye to the facts in this case, fully aware that leave to amend "shall be freely given where justice so requires",⁸ this court has extensively examined cases from this jurisdiction and others. At the threshold a vexing question is met, i. e., is this matter one of substance or procedure? If the matter be one of substance, the court must, of course, follow the Delaware decisions. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). These decisions have followed a strict line refusing to permit amendments to relate back to the original pleading.⁹ Hackett v. Bethlehem Steel Co., 5 W.W. Harr. 317, 165 A. 332 (1933); Food Fair Stores Corporation v. Vari, 191 A.2d 257 (Sup.Ct.Del.1963); Matthews v. Food Fair Stores Corporation, (Sup.Ct.Del. 1965).

In the Hackett case, the Superior Court refused to permit a change from "Bethlehem Steel Company, a corporation of the State of Pennsylvania" to "Bethlehem Steel Company, a corporation of the State of Delaware." The court said, "Without further discussing the authorities we feel warranted in saying that under the law as heretofore declared by this Court, the State of incorporation cannot be regarded as descriptive only, and that a substitution of the words in the title, of `State of Delaware' for `State of Pennsylvania,' would make a change in the party defendant." Hackett v. Bethlehem Steel Co., 5 W.W.Harr. 317, 322, 165 A. 332, 334 (1933).

In the first Food Fair case, the Delaware Supreme Court affirmed a decision of the Superior Court, refusing to allow a change of name from "Food Fair Stores Corporation" to "Food Fair Stores, New Castle, Inc.", despite the fact that it appeared that both corporations had the same resident agent in Delaware, offices located at the same address in Philadelphia, and at least two officers of each corporation who were also officers of the other.

It is important to note, however, that the Food Fair court found that plaintiff's counsel was informed prior to the expiration of the period of limitations that the wrong defendant had been named. The court said: "We think, however, that the present Civil Rules are not intended to permit a party and his counsel to proceed with laxity and excuse that laxity by an appeal to the court's sense of fair play." Food Fair Stores Corporation v. Vari, 191 A.2d 257, 259 (Sup.Ct.Del.1963).

If, on the other hand, the question is one of procedure, the court may depart from the strict Delaware rule, should it see fit to do so.

It is far from clear whether, in a diversity action, a federal court is bound by the state rule on the question of relation back of amendments to pleadings. The cases are in conflict. The majority hold that the state law need not be followed. See Wright, Federal Courts, p. 240 (citing cases at note 25).¹⁰

This court is in agreement with the majority point of view. As Professor Wright has pointed out: "Application of Rule 15(c) maintains the uniformity of practice in federal courts and fosters the federal policy of deciding cases on their merits, regardless of procedural errors, while the objective of state statutes of limitation, to protect persons from the necessity of defending stale claims, is served since the amendment will not relate back unless the original pleading has given fair notice to the adverse party that a claim is being asserted against him from some particular transaction or occurrence."¹¹

With the facts thus rehearsed and the question of procedure versus substance determined, we turn to the merits of this litigation.

In the past, courts which have permitted relation back...