Seavey v. Chrysler Corp.

• Decision Date: 12 June 1996
• Docket Number: No. 94 Civ. 3170 (MBM).,94 Civ. 3170 (MBM).
• Citation: 930 F. Supp. 103
• Parties: Robert W. SEAVEY and Phyllis M. Seavey, Plaintiffs, v. CHRYSLER CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

930 F. Supp. 103

Robert W. SEAVEY and Phyllis M. Seavey, Plaintiffs, v. CHRYSLER CORPORATION, Defendant.

No. 94 Civ. 3170 (MBM).

United States District Court, S.D. New York.

June 12, 1996.

Paul D. Rheingold, Thomas P. Valet, Patricia A. Houlihan, New York City, for Plaintiffs.

Nanette E. Decea, Cooper, Liebowitz, Royster & Wright, New York City, for Defendant.

OPINION AND ORDER

MUKASEY, District Judge.

Robert and Phyllis Seavey have sued the Chrysler Corporation for damages for injuries sustained in an automobile collision. Chrysler moves for summary judgment pursuant to Fed.R.Civ.P. 56. For the reasons that follow, the motion is granted and the complaint is dismissed.

I.

Plaintiffs are residents of New York City. (Compl. ¶ 1) On September 22, 1989, plaintiffs were riding in their 1985 Jeep Wagoneer in Southampton, New York when their vehicle collided with a 1968 Ford Mustang driven by Jason Korte, also a resident of New York. (Id. ¶ 5) Plaintiffs' Wagoneer was manufactured by the Jeep Corporation, a wholly owned subsidiary of American Motors Corporation. (Id. ¶ 6) In 1987, American Motors was acquired by Chrysler. (Id.)

In March 1991, plaintiffs sued Korte for negligence in Supreme Court, New York County. (Decea Aff. ¶ 4) The following year, with New York's three-year statute of limitations due to expire on September 22, 1992, plaintiffs sought to add Chrysler as a defendant. On September 2, 1992, attorneys for plaintiffs and Korte signed a stipulation permitting plaintiffs to file an amended complaint naming additional parties as defendants, but the parties did not seek leave of court for that step. (Id. Ex. A) On September 3, 1992, plaintiffs filed an amended complaint with the New York County Clerk naming Chrysler and several related entities as defendants. (Id. Ex. B) That complaint asserted claims for strict liability, negligence, and breach of warranty against the Chrysler entities. The complaint was served on Chrysler on September 10, 1992.

New York law provides that "parties may be added ... by the court, on motion of any party or on its own initiative, at any stage of the action and upon such terms as may be just." N.Y.Civ.Prac.L. & R. ("CPLR") § 1003 (McKinney 1976) (emphasis supplied). In a motion served on November 20, 1992, plaintiffs belatedly sought authorization from the Court for the joinder of Chrysler as an additional defendant. Chrysler cross-moved for summary judgment on the ground that it had been added as a defendant without leave of court, in violation of the quoted provision.

At oral argument on December 11, 1992, Justice Edward Lehner granted plaintiffs leave to re-serve Chrysler with the amended complaint "without prejudice to Chrysler's position that service at such time would be untimely by reason of the three year statute of limitations." 156 Misc.2d 984, 595 N.Y.S.2d 628, 629 (Sup.Ct.New York County 1993). Service was effected later that month.

On December 29, 1992, attorneys for plaintiffs and Chrysler signed stipulations dismissing as defendants all Chrysler-controlled entities other than Chrysler. (Decea Aff. Ex. C)

In an opinion issued February 5, 1993, the Court granted plaintiffs' request for leave to name Chrysler as a defendant and denied Chrysler's cross-motion for summary judgment. The "prime issue" addressed by the Court was "whether service of a supplemental summons and amended complaint is validly made upon an added party when served without prior court approval, but with the consent of all existing parties." 595 N.Y.S.2d at 628. The Court acknowledged "decisions of the Appellate Division for the Second Department holding that notwithstanding the consent of all of the existing parties, the joinder of a new party without court approval is a nullity," id. (citing Catanese v. Lipschitz, 44 A.D.2d 579, 580, 353 N.Y.S.2d 250, 252 (2d Dep't 1974)), but rejected that authority and followed a more recent decision from the First Department to the contrary. Id. (citing Snediker v. Rockefeller Center, Inc., 182 A.D.2d 585, 586, 583 N.Y.S.2d 364, 365 (1st Dep't 1992)). The Court ruled that Chrysler properly was added as a defendant when the company was served with the amended complaint on September 10, 1992. Id. at 630-31.

In resisting the cross-motion, plaintiffs had argued alternatively that Chrysler properly was served with court approval in December 1992, and that that service was timely because the filing of the amended complaint with the County Clerk on September 3, 1992 had tolled the statute of limitations. Id. at 629. Before 1992, § 203 of the CPLR provided that service, not filing, of a summons and complaint tolled the statute of limitations for claims asserted in the complaint. N.Y.Civ.Prac.L. & R. § 203(b)(1) (McKinney 1990). Section 203 also provided for a grace period for service under certain circumstances. Under the grace period provisions, service of a complaint within 60 days of the expiration of the statute of limitations would make the action timely if the complaint was filed with the County Clerk prior to expiration. Id. § 203(b)(5)(i); see, e.g., Klishwick v. Popovicki, 186 A.D.2d 173, 174, 587 N.Y.S.2d 955, 956 (2d Dep't 1992). Section 203 was amended in 1992, and now provides that filing rather than service tolls the statute of limitations in civil actions. N.Y.Civ. Prac.L. & R. § 203(c)(1) (McKinney Supp. 1996); see generally Spodek v. New York State Comm'r of Taxation & Finance, 85 N.Y.2d 760, 763, 628 N.Y.S.2d 256, 257, 651 N.E.2d 1275, 1276 (1995). Under the new commencement-by-filing regime, plaintiffs must serve the complaint within 120 days of filing. N.Y.Civ.Prac.L. & R. § 306-b(a) (McKinney Supp.1996).

The alternative argument asserted by plaintiffs before the state Court was premised on the applicability in that action of the CPLR's new commencement-by-filing rules. Under that assumption, the addition of Chrysler as a defendant would have been proper (because leave of court was obtained on December 11, 1992) and timely (because the complaint was filed on September 3, 1992 and served within 120 days of filing).

Because Justice Lehner found that the September 3 filing and September 10 service of the amended complaint were valid, he did not address plaintiffs' alternative argument and made no determination as to the validity or effect of the December 1992 service.

Two weeks after Justice Lehner issued his ruling, the New York Court of Appeals affirmed a decision of the Third Department holding that failure to obtain leave of court to add a new party under CPLR § 1003 is "a jurisdictional defect" requiring dismissal of all claims against that party. Crook v. E.I. du Pont de Nemours & Co., 81 N.Y.2d 807, 595 N.Y.S.2d 388, 611 N.E.2d 289 (1993), aff'g 181 A.D.2d 1039, 582 N.Y.S.2d 581 (4th Dep't 1992). In light of the Crook decision, Justice Lehner vacated his original judgment and issued a new opinion dismissing the claims against Chrysler on November 1, 1993. 159 Misc.2d 407, 605 N.Y.S.2d 181 (Sup.Ct.New York County 1993). First, the Court held that "jurisdiction was not obtained by reason of the service upon Chrysler in September 1992." Id. 605 N.Y.S.2d at 183. Second, the Court rejected the alternative argument described above and found that the December 1992 service was untimely. The Court determined that the commencement-by-filing rules added to the CPLR in 1992 did not apply to the action because the action had been commenced in 1991. Id. (observing that commencement-by-filing amendments apply only to actions commenced on or after July 1, 1992).

The New York County Clerk entered a judgment dismissing all claims against Chrysler on December 8, 1993. The judgment order described Chrysler's motion as a motion for summary judgment dismissing the amended complaint as "violative of CPLR 1003." (Decea Aff. Ex. F) Plaintiffs filed a notice of appeal, but did not pursue the appeal in the Appellate Division, with the result that the judgment became final. (Id. ¶ 14)

Anticipating the adverse November ruling, and seeking to preserve their claims against Chrysler, plaintiffs filed the present action in the United States District Court for the District of Minnesota on September 14, 1993. In their complaint, plaintiffs asserted claims for strict liability, negligence, and breach of warranty. (Id. Ex. H) In its answer (id. Ex I), Chrysler asserted as one of several defenses that the action was barred by New York's three-year statute of limitations. See N.Y.Civ.Prac.L. & R. § 214 (McKinney 1990).

In early 1994, plaintiffs moved for partial summary judgment on the statute of limitations defense, and Chrysler cross-moved to transfer the action to this district under 28 U.S.C. § 1404 (1994). In an opinion issued April 13, 1994, the Court granted both motions. No. Civ. 4-93-876 (D.Minn. Apr. 13, 1994).

The Court applied Minnesota choice of law rules in deciding the statute of limitations issue. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). Generally, Minnesota courts follow a five-factor test to decide choice of law questions. See Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408, 412 (1973). However, that test is applied only when there is a conflict on a matter of substantive law. Minnesota follows "the almost universal rule that matters of procedure and remedies are governed by the law of the forum state," Davis v. Furlong, 328 N.W.2d 150, 153 (Minn.1983) (citations omitted), and Minnesota courts treat statutes of limitations as procedural. Nesladek v. Ford Motor Co., 46 F.3d 734, 736-37 (8th Cir.), cert. denied, ___ U.S. ___, 116 S.Ct. 67, 133 L.Ed.2d 28 (1995); In re Estate of Daniel, 208 Minn. 420, 294 N.W. 465, 469 (1940). Accordingly, the Court applied Minnesota's four-year statute of limitations, Minn.Stat. § 541.05 (1988), and held that the action was timely filed. (Slip. Op. at 5-6)

Plaintiffs did not contest Chrysler's cross-motion to transfer the action here. The...