Ms Comp Choice v. Clark, Scott & Streetman

• Decision Date: 08 May 2008
• Docket Number: No. 2007-CA-00117-SCT.,2007-CA-00117-SCT.
• Citation: 981 So.2d 955
• Parties: MS COMP CHOICE, SIF v. CLARK, SCOTT & STREETMAN.
• Court: Mississippi Supreme Court

981 So.2d 955

MS COMP CHOICE, SIF v. CLARK, SCOTT & STREETMAN.

No. 2007-CA-00117-SCT.

Supreme Court of Mississippi.

May 8, 2008.

Joel W. Howell, III, Jackson, attorney for appellant.

David W. Mockbee, David Brice Denison, Jackson, attorneys for appellee.

Before DIAZ, P.J., EASLEY and GRAVES, JJ.

DIAZ, Presiding Justice, for the Court.

STATEMENT OF THE CASE

¶ 1. This case arises from a legal malpractice suit filed by an insurance company's third-party administrator against a law firm that defended the insurance company in a workers' compensation case. The original complaint, in which the third-party administrator was named as the party plaintiff, was never served on the law firm. Instead, an amended complaint was filed and served on the law firm; the amended complaint substituted the insurance company as the party plaintiff. The insurance company claims that it was substituted as the party plaintiff because it was assigned the legal-malpractice claims of the third-party administrator. The trial court ruled that the amendments did not relate back to the date of the original complaint based on its determination that the claims asserted in the amended complaint were those of the insurance company, not the third-party administrator; consequently, it held that the claims asserted in the amended complaint were barred by the statute of limitations and dismissed the complaint with prejudice. The insurance company appeals the trial court's dismissal of its complaint.

FACTS AND PROCEEDINGS BELOW

¶ 2. On February 17, 2000, Elie Grinstead sustained injuries in a logging accident. He filed a petition to controvert with the Mississippi Workers' Compensation Commission against his employer, Monticello Forest Products Corp., and its insurance carrier, Mississippi Comp Choice, SIF¹ (self-insured fund) (Comp Choice). Safety Risk Services, Inc. (Safety Risk), Comp Choice's third-party administrator, retained the law firm of Clark, Scott & Streetman, P.A. (the Clark firm) to defend Grinstead's suit.

¶ 3. On August 20, 2001, the administrative law judge (ALJ) rendered a decision, finding that Grinstead was entitled to benefits. The Clark firm appealed the ALJ's decision to the full Commission. The Commission affirmed the decision of the ALJ on April 2, 2002. The Clark firm then appealed the decision of the Commission to the Circuit Court of Lawrence County. On September 18, 2002, the circuit court affirmed the decision of the Commission. An appeal of the circuit court's decision was never taken.

¶ 4. According to Comp Choice and Safety Risk, the Clark firm was directed to appeal the decision of the circuit court, but failed to do so. Subsequently, Grinstead filed suit against Comp Choice and his employer for bad faith denial of his workers' compensation claim.² On November 11, 2002, the Clark firm faxed a standard release form to Comp Choice for its review in connection with the Grinstead workers' compensation case. Comp Choice and Safety Risk also claim that the Clark firm failed to timely notify them about the amount of benefits owed to Grinstead. In September 2003, Comp Choice and Safety Risk discharged the Clark firm as counsel.

¶ 5. On September 14, 2005, Safety Risk filed suit against the Clark firm. The complaint asserted claims of legal malpractice, breach of contract and breach of fiduciary duty against the Clark firm for not appealing the decision of the circuit court in the Grinstead case. Safety Risk never served the complaint upon the Clark firm. Instead, Comp Choice filed an amended complaint on January 9, 2006, substituting itself as the party plaintiff in the place of Safety Risk. The amended complaint asserted the same claims against the Clark firm as the original complaint. In fact, the only amendments made were the substitution of Comp Choice's name for Safety Risk's in the complaint's caption and the addition of the following paragraph:

Plaintiff MS Comp Choice, SIF is a self insurer under the applicable laws of the State of Mississippi and an assignee of any and all interest of Elie W. Grinstead and Francine Grinstead against MS Comp Choice, SIF, Safety Risk Services, Inc., Monticello Forests Products, Inc., Evans Giordano, Inc., and those in privity with them and Safety Risk Services, Inc.

¶ 6. According to Comp Choice, it was assigned Safety Risk's claims against the Clark firm and replaced Safety Risk as the party plaintiff in the amended complaint because it had become the real party in interest as a result of the assignment, pursuant to Mississippi Rule of Civil Procedure 17(a).³

¶ 7. On January 10, 2006, Comp Choice served the amended complaint on the Clark firm.⁴ According to the Clark firm, until this point in time, it had not been put on notice of a claim arising out of its representation of Comp Choice in the Grinstead case. The Clark firm filed a motion to dismiss on February 9, 2006, arguing, among other things, that the amended complaint was a new and original complaint asserting claims that were barred by the three-year statute of limitations, Mississippi Code Section 15-1-49 (Rev.2003).

¶ 8. The Hinds County Circuit Court treated the Clark firm's motion to dismiss as a motion for summary judgment because it required the court to consider evidence outside the pleadings. The court ruled that the amended complaint asserted new causes of action, and thus the amendments did not relate back to the date of the original pleading. Miss. R. Civ. P. 15(c). In addition to holding that the amended complaint filed by Comp Choice "was in effect a new complaint[,]" the court also held, in the alternative, that because the amended complaint was "filed without the original complaint having been served ..., [it][was] not effective as an amendment to the original complaint." The court then ruled that the new claims asserted by Comp Choice in the amended complaint were barred by the statute of limitations. Accordingly, the court granted the Clark firm's motion for summary judgment and dismissed Comp Choice's complaint with prejudice. The court requested that the Clark firm's counsel "submit 1) a proposed opinion/order and 2) a separate Summary Judgment dismissing with prejudice the subject action." The Clark firm's counsel complied with this request, and the court adopted the memorandum opinion and order as well as the separate summary judgment order dismissing the case with prejudice prepared by the Clark firm's counsel.

¶ 9. Aggrieved by the trial court's decision, Comp Choice appealed, raising four assignments of error: (1) the trial court erred in ruling that an amended complaint is invalid unless the original complaint has been served on the defendant; (2) the trial court erred in ruling that the amended complaint asserted new causes of action that were barred by the statute of limitations; (3) the trial court erred in determining that Comp Choice's claim against the Clark firm for failing to inform it about Grinstead's benefits was barred by the statute of limitations; and (4) the trial court erred in converting the Clark firm's motion to dismiss to a motion for summary judgment without allowing Comp Choice to conduct discovery.

DISCUSSION

Standard of Review

¶ 10. Under Rule 56(c) of the Mississippi Rules of Civil Procedure, summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Miss. R. Civ. P. 56(c). This Court reviews a trial court's grant of summary judgment de novo.⁵ O'Neal Steel, Inc. v. Millette, 797 So.2d 869, 872(¶ 8) (Miss.2001) (citations omitted). This Court must view the evidence in the light most favorable to the non-movant. Noxubee County Sch. Dist. v. United Nat'l Ins. Co., 883 So.2d 1159, 1163 (¶ 6) (Miss.2004) (citations omitted). "If reasonable minds can differ on a material fact, summary judgment is improper." Presswood v. Cook, 658 So.2d 859, 862 (Miss.1995) (citation omitted).

I. Did the trial court err in ruling that a plaintiff cannot amend his complaint unless it has been served on the defendant?

¶ 11. The Clark firm contends that the amended complaint cannot relate back to the date of the original complaint under Rule 15(c) of the Mississippi Rules of Civil Procedure because the original complaint was never served. The Clark firm argues that, under Rule 15(a), service of the original complaint is a prerequisite for the filing of an amended complaint. In other words, Rule 15 is inapplicable when an initial complaint has not been served. In response, Comp Choice claims that Rule 15(a) does not require that the original complaint be served before it can be amended.

¶ 12. Mississippi Rule of Civil Procedure 15(a) provides that "[a] party may amend a pleading as a matter of course at any time before a responsive pleading is served[.]" Miss. R. Civ. P. 15(a). Rule 15(a) does not require that a pleading be served before it may be amended; rather, it allows a plaintiff to amend his complaint "at any time before a responsive pleading is served." Id.

¶ 13. This Court routinely looks to federal case law for guidance in construing the Mississippi Rules of Civil Procedure because they were patterned after the Federal Rules of Civil Procedure. E.g., Penn. Nat'l Gaming, Inc. v. Ratliff, 954 So.2d 427, 432 (¶ 11) (Miss.2007); White v. Stewman, 932 So.2d 27, 39 (¶ 34) (Miss. 2006). The two federal courts that have confronted this issue have held that a plaintiff is allowed to amend the original complaint before it has been served. See Wright v. Newsome, 795 F.2d 964, 967 (11th Cir.1986); Ahmad v. Indep. Order of Foresters, 81 F.R.D. 722, 726 (E.D.Pa. 1979), aff'd, 707 F.2d 1399 (3rd Cir.1983). In Ahmad, the district court held that Federal Rule of Civil Procedure 15(a) "contains no requirement that the original pleading have been served before an...