Ringrose v. Engelberg Huller Co., Inc., 80-1086

CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)
Citation692 F.2d 403
Docket NumberNo. 80-1086,80-1086
PartiesCarol Anita RINGROSE and Frederick Ringrose, Plaintiffs-Appellants, v. ENGELBERG HULLER CO., INC., Defendant, Sundstrand Corporation and White Consolidated, Inc., Defendants-Appellees.
Decision Date02 November 1982

Larry A. Smith, Southfield, Mich., for plaintiffs-appellants.

Lawrence D. Connor, Dykema, Gossett, Spencer, Goodnow & Trigg, Susan Artinian, Detroit, Mich., for defendants-appellees.

Before MERRITT and JONES, Circuit Judges, CELEBREZZE, Senior Circuit Judge.

MERRITT, Circuit Judge.

Plaintiff-appellant Ringrose appeals the dismissal of her Michigan diversity personal injury action by the District Court on the ground that the Michigan three-year statute of limitations bars her claim. The District Court rejected her argument that her amended complaint naming alleged successor corporations as defendants, an amendment filed after the expiration of the limitations period, relates back to the original filing date under Rule 15(c), Fed.R.Civ.P. Rule 15(c) provides:

An amendment [to a complaint] changing the party against whom a claim is asserted relates back if ... within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.

Plaintiff alleges that she injured her left hand at work while operating a belt grinder on September 2, 1976. She filed suit within the limitations period against the manufacturer listed on the belt grinding machine, Engelberg Huller Co., Inc., on April 30, 1979, in the Wayne County Circuit Court. The process server was unable to complete service of process because, as he wrote on his return of process:

Engelberg Huller Co. out of business approximately 10 years--possibly bought out by White Sundstrand Machine Tool Inc.--If so, corporate headquarters are Rockford Illinois. Contacted Mr. Carl Newman--White Sun....

Two new parties, Sundstrand Corporation and White Consolidated Industries, were added by an amended complaint filed September 7, 1979, five days after Michigan's three year statute of limitations, M.C.L.A. Sec. 600.5805(9), expired. Plaintiff alleges that these two corporations are successor corporations of Engelberg Huller Co. These defendants removed the action to the federal district court in Detroit, which dismissed the action as barred by the statute of limitations.

When the application of state tolling and service of process provisions would affect the running of the statute of limitations and thus affect the outcome of the lawsuit in state court, a federal court in a diversity action should apply those same state rules of decision in determining whether an action is barred by the applicable state statute of limitations. Walker v. Armco Steel Corp., 446 U.S. 740, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980). In Michigan and also under the federal rules, the filing of a complaint against a party stops the running of the statute of limitations as to the claim against that party but not as to new parties. Buscaino v. Rhodes, 385 Mich. 474, 189 N.W.2d 202 (1971); Forest v. Parmalee, 60 Mich.App. 401, 231 N.W.2d 378 (1975); Krontz v. Estovez, 49 Mich.App. 30, 211 N.W.2d 213 (1973). Michigan follows the principles stated in Federal Rule 15(c) that an amendment changing the party against whom a claim is asserted relates back if the party has received sufficient notice of the action so as not to be prejudiced in defending the case. Forest v. Parmalee, supra. In Forest, the Michigan court, following the reasoning of our decision in Marlowe v. Fisher Body, 489 F.2d 1057 (6th Cir. 1973), said: "While the above federal rule would allow the correction of misnomers, it will not allow the addition or substitution of new parties after the expiration of the statute of limitations." 231 N.W.2d at 383.

Thus the Michigan rule and the federal rule are the same regarding the substitution of new parties, and we need not decide the choice of law question discussed in the concurring opinion. We are, therefore, governed by Rule 15(c), Fed.R.Civ.P. in deciding the "relation-back" issue and are required to interpret Rule 15(c) in light of the facts of this case.

The record is unclear whether the process server who made the return contacted either Sundstrand Corporation or White Consolidated Industries prior to the expiration of the statute of limitations so as to put either or both on notice that a predecessor corporation had been sued. There is some indication on the return that the process server contacted within the statutory period a "Carl Newman" as representative of one or both of the defendant corporations. We, therefore, remand the case to the District Court for a determination whether either or both of the defendants prior to the expiration of the Michigan three-year statute of limitations "received such notice of the institution of the action that [it] will not be prejudiced in maintaining [its] defense on the merits." The District Court should determine whether either or both of the defendant corporations are successor corporations of Engelberg Huller Co. and therefore "knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against [it]," or had actual notice of the action within the limitations period and would not be prejudiced in defending the case by relating the amended complaint back to the time of filing of the original complaint. 1

Accordingly, the judgment of the District Court is reversed and the case remanded for further reconsideration of the statute of limitations issue as aforesaid.

NATHANIEL R. JONES, Circuit Judge, concurring.

Appellees White Consolidated Industries (White) and Sundstrand Corporation (Sundstrand) were added to this action and served with process some two and one-half weeks after the statute of limitations would have run had no complaint been filed. The district court dismissed the complaint for failure to file within the applicable limitations period. 1 I agree with the majority that we vacate and remand for application of Rule 15(c), Federal Rules of Civil Procedure, but I rest my conclusion on an additional ground not reached by the majority. This step appears advisable given the recent decisions under Rule 15(c).

I. Rule 15(c) and Diversity Cases

Both the state courts of Michigan, by General Court Rule 118.4, and the federal system, by Federal Rule of Civil Procedure 15(c), have rules to determine whether an amendment to a complaint relates back to the date of original filing. If no conflict resulted from the application of the state or federal rules to these facts, it would be unnecessary to resolve which one to apply. However, I believe that Michigan law does not unambiguously resolve whether circumstances similar to those present here will allow relation back. 2 Rather than wrestle further over the determination under the Michigan law, I would first resolve whether Michigan or federal law applies, presuming that the result under each would differ. Thus confronted with a possibly conflicting state rule of procedure and a federal rule which both set forth rules pertaining to relation back of amendments that add or substitute parties once a suit has begun, I first take up the sometimes difficult question of which law to apply.

After the Supreme Court decision in Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), federal courts have, with marked consistency, determined that federal rules on relation back of amendments apply in diversity cases. See, e.g., Davis v. Piper Aircraft Corp., 615 F.2d 606, 611-12 (4th Cir.), cert. dismissed, 448 U.S. 911, 101 S.Ct. 25, 65 L.Ed.2d 1141 (1980); Royal Indemnity v. Petrozzino, 598 F.2d 816 (3rd Cir. 1979); Ingram v. Kumar, 585 F.2d 566, 570 (2d Cir. 1978), cert. denied, 440 U.S. 940, 99 S.Ct. 1289, 59 L.Ed.2d 499 (1979); Skidmore v. Syntex Laboratories, Inc., 529 F.2d 1244, 1249 (5th Cir. 1976); Simmons v. Fenton, 480 F.2d 133 (7th Cir. 1973); Welch v. Louisiana Power & Light Co., 466 F.2d 1344, 1346 (5th Cir. 1972); Crowder v. Gordons Transports, Inc., 387 F.2d 413, 416-19 (8th Cir. 1967). But see Marshall v. Mulrenin, 508 F.2d 39 (1st Cir. 1974) (Massachusetts state law governs relation back questions in diversity cases since the Massachusetts relation back doctrine is part and parcel of its substantive state tolling provisions); Covel v. Safetech, Inc., 90 F.R.D. 427 (D.Mass.1981) (same).

The analysis of the choice of law question encompasses the scope and plain meaning of the federal rule. Walker v. Armco Steel Corp., 446 U.S. 740 at 748, 750, 100 S.Ct. 1978 at 1984, 1985, 64 L.Ed.2d 659 (1980). If the terms of the federal rule plainly address the contested aspect of the litigation then an analysis under the Rules Enabling Act 3 and the Constitution is all that is necessary. Hanna v. Plumer, 380 U.S. at 470-71, 85 S.Ct. at 1143-44; see Walker v. Armco Steel Corp., 446 U.S. at 747-48, 749-50 & n. 9, 100 S.Ct. at 1983-84 (1980); see generally Ely, The Irrepressible Myth of Erie, 87 Harv.L.Rev. 693, 718-24 (1974). The test under the Rules Enabling Act examines whether the rule is truly procedural. The constitutional test is satisfied if the rule is within the ambit of a constitutional grant such as the necessary and Proper Clause of Article I. E.g., Walker v. Armco Steel Corp., 446 U.S. at 748, 100 S.Ct. at 748. On the other hand, if the plain meaning of the federal rule does not cover the point in dispute, then the principles drawn from Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), i.e., a bar against encouraging forum shopping or the inequitable...

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