Nelson v. Glenwood Hills Hospitals

• Decision Date: 24 December 1953
• Docket Number: No. 36035,36035
• Citation: 240 Minn. 505,62 N.W.2d 73
• Parties: NELSON et al. v. GLENWOOD HILLS HOSPITALS, Inc., et al.
• Court: Minnesota Supreme Court

Page 73

62 N.W.2d 73

240 Minn. 505

NELSON et al. v. GLENWOOD HILLS HOSPITALS, Inc., et al.

No. 36035.

Supreme Court of Minnesota.

Dec. 24, 1953.

Syllabus by the Court.

1. An order denying a motion of a substituted defendant to vacate the order substituting it as defendant is an appealable order.

2. Summons is not process, but a mere notice to a defendant that an action has been commenced and that judgment will be taken against him if he fails to answer. If service of summons and complaint results in an intended defendant being fully informed as to the circumstances of the action, the court has acquired sufficient jurisdiction over that defendant, even though an amendment is necessary to correct a misnomer.

3. Where one corporation is named as defendant but the complaint states an actionable claim against another corporation and service is made upon persons who are officers of both the named and the intended defendants, the corporation not named as party defendant has actual notice of the claim and the mistake in naming the wrong party defendant is a misnomer which may be corrected by amendment.

4. Amendment of a complaint to change the name of the defendant relates back to the date of original complaint where the effect of the amendment is merely to correct a misnomer.

Richards, Janes, Hoke, Montgomery & Cobb and Elliott O. Boe, Minneapolis, for appellant.

Thomas Dougherty, Sr., Thomas Dougherty, Jr., Harry H. Peterson, Thomas H. McMeekin, Minneapolis, for respondents.

NELSON, Justice.

These actions were commenced in the district court for Hennepin county on March 16, 1950, one by Minnie C. Nelson for personal injuries suffered by her on June 11, 1948, and the other by her husband, Edwin G. Nelson, for consequential damages arising out of her injuries. Glenwood Hills Hospitals, Incorporated, and Veronica Davidson were named as defendants. The plaintiff Minnie C. Nelson was a mental patient at Homewood Hospital, 1254 Penn avenue north, Minneapolis, Minnesota, on the date of injury, the same being operated as a neuropsychiatric institution as was also the Glenwood Hills Hospitals in Golden Valley and Twin Lakes, Minnesota.

Articles of incorporation were filed with the secretary of state in November 1934 for Homewood Hospital, Incorporated, and operations began at 1254 Penn avenue north, Minneapolis, where Homewood Hospital is presently located and operated. In 1939 Homewood Hospital, Incorporated, set up another hospital near Twin Lakes and changed the corporate name to Glenwood Hills Hospitals, Incorporated. Both hospitals were then operated by the latter corporation until January 1942. In January 1942 a new Homewood Hospital, Incorporated, was organized, which took over the management of Homewood Hospital. Since the date, therefore, there have been two corporations operating two separate hospitals: Glenwood Hills Hospitals, Incorporated, which operated the institution at Golden Valley and Homewood Hospital, Incorporated, which operated the Homewood Hospital on Penn avenue. The two hospitals were staffed by some of the same doctors; there was an interchange of patients; and to some extent the public was led to believe that they had a working arrangement for operating together. For example, in 1948 and 1951 Homewood Hospital advertised

in the telephone directories of the city of Minneapolis as

follows: 'Homewood Hospital Operated in connection

with Glenwood Hills Hospital 1254 Penn

Ave. N ... Aldrich 4701'

Both hospitals carry liability insurance with the same insurance carrier, and both retain the same accountant-attorney.

Both corporations were operated by a board of trustees. One Raymond T. Rascop was secretary of the board of Glenwood Hills Hospitals, Incorporated, and also president of the board of Homewood Hospital, Incorporated, and Veronica Davidson was secretary of the board of Homewood Hospital, Incorporated.

In the actions commenced March 16, 1950, Glenwood Hills Hospitals, Incorporated, and Veronica Davidson were named defendants, and service of the summons and complaint in each action was made on Raymond T. Rascop and on Veronica Davidson, then serving as secretary of Homewood Hospital, Incorporated, and general administrator of the hospital operations.

Plaintiffs' attorney, who prepared the summons and complaint and directed that service be made on defendants, named the Glenwood Hills Hospitals, Incorporated, on the basis of information which he claims to have received from the secretary of state's office, corporation department, to the effect that Homewood Hospital, Incorporated, ceased to exist as a corporate entity September 14, 1939; that it had been merged with and became the property of Glenwood Hills Hospitals, Incorporated; and that there were no other records pertaining to Homewood Hospital, Incorporated. He learned of nothing to the contrary until the cases came up for trial in Hennepin county district court on the 10th and 11th of January, 1952, and the testimony taken disclosed otherwise.

Approximately two years elapsed between the time of commencement of suit and the day of trial. These actions being for malpractice, it was evident that the two-year statute of limitations, M.S.A. § 541.07, had run when the cases were called for trial.

Plaintiffs' complaints set forth a claim to the effect that defendant Glenwood Hills Hospitals, Incorporated, owned and operated Homewood Hospital; that said defendant and the hospital administrator, Veronica Davidson, were negligent in caring for Minnie C. Nelson while a patient; that as a consequence she sustained severe injuries; and that Glenwood Hills Hospitals, Incorporated, and Veronica Davidson were liable by reason of such negligence.

Paragraph II of complaint reads:

'That at all times herein mentioned, the defendant, Glenwood Hills Hospitals, Incorporated, was engaged in the business of furnishing for hire special hospital services in the City of Minneapolis, and did during all of said times own and operate, among other institutions, in the said City, the Homewood Hospital, which hospital is for the treatment, care and protection, among other things, of mentally sick persons, suffering from mental disorders and conditions, who desire and need such service and protection, for hire; that said hospital is held out to the public as a neuropsychiatric institution.'

The answers of Glenwood Hills Hospitals, Incorporated, and Veronica Davidson admit the corporate entity; admit that Veronica Davidson was the administrator of Homewood Hospital, Incorporated; and that:

'on or about June 11, 1948, the defendant corporation was engaged in the business of furnishing for hire special hospital services in the City of Minneapolis; that plaintiff, while hospitalized in the Homewood Hospital in said City, as a patient and in the care and under the orders and direction of her attending physician, jumped or fell from one of the windows in said hospital; that as a result thereof plaintiff suffered certain injuries to her left elbow and other parts of her body; and that defendants have not knowledge or information sufficient to form a belief as to the nature and extent of said injuries.'

Except as stated and admitted, the answer was a general denial; and there was no express or specific denial that Glenwood Hills Hospitals, Incorporated, owned and operated Homewood Hospital at 1254 Penn avenue north or any express allegation that Homewood Hospital, Incorporated, was a separate and distinct corporation.

These matters came on for trial, and, after certain testimony had been taken before the jury, and in its absence, plaintiffs moved to substitute as defendant Homewood Hospital, Incorporated, in lieu of Glenwood Hills Hospitals, Incorporated, named as one of the defendants. This was denied by the court. Defendant Glenwood Hills Hospitals, Incorporated, then moved for a dismissal as to it, and that motion was granted.

The plaintiffs then dismissed as to Veronica Davidson, the other defendant, without prejudice and moved to vacate and set aside the order of the court dismissing as to defendant Glenwood Hills Hospitals, Incorporated, for the purpose of permitting the introduction of additional evidence to explain the circumstances which caused plaintiffs to name Glenwood Hills Hospitals, Incorporated, as owner of Homewood Hospital and defendant in the actions. They also moved the court for an order directing that Homewood Hospital, Incorporated, be substituted as defendant for Glenwood Hills Hospitals, Incorporated, and that it appear and answer plaintiffs' complaints and for an order setting the cases for immediate trial. On April 4, 1952, plaintiffs filed a dismissal of the motions without prejudice.

This was followed by plaintiffs' motion in each case to vacate the order of the court dismissing the actions and to reinstate them on the calendar and for leave to amend the complaints. The court granted plaintiffs' motions for reinstatement and amendment of complaints, which orders were dated and filed May 27, 1952. Homewood Hospital, Incorporated, as defendant was given 20 days in which to answer. Homewood Hospital, Incorporated, then moved to vacate the court's orders of May 27, 1952, on the grounds (1) that the court was without jurisdiction over the defendant Homewood Hospital, Incorporated; (2) that the facts stated in the complaint do not constitute a cause of action against this defendant; and (3) that it appears from the complaints that upon the date of the court's orders of May 27, 1952, plaintiffs' alleged causes of action against the new and substituted defendant were barred by the statute of limitations. The court denied the motion in each case, and Homewood Hospital, Incorporated, as the substituted defendant, appeals from these orders.

1. Are the orders denying these motions appealable, predicated as the motions were on the claims of the substituted defendant that the court lacked jurisdiction and that on May 27, 1952, plai...