Smith v. Baule

• Decision Date: 21 December 1977
• Docket Number: No. 59673,59673
• Citation: 260 N.W.2d 850
• Parties: Cyril SMITH and Clara J. Smith, Adminstrators of the Estate of Dennis E. Smith, Deceased, Cyril Smith and Clara J. Smith, Appellants, v. Charles L. BAULE, Louis C. Barrett, Dallas L. Murphy, Raymond J. Scherrman, Dubuque County, Iowa, a Municipal Corporation, Illinois Central Gulf Railroad, a Delaware Corporation, Flynn Ready-Mix Concrete Co., an Iowa Corporation, and Flynn Ready-Mix, Inc., an Iowa Corporation, Appellees.
• Court: Iowa Supreme Court

Page 850

260 N.W.2d 850

Cyril SMITH and Clara J. Smith, Adminstrators of the Estate of Dennis E. Smith, Deceased, Cyril Smith and Clara J. Smith, Appellants, v. Charles L. BAULE, Louis C. Barrett, Dallas L. Murphy, Raymond J. Scherrman, Dubuque County, Iowa, a Municipal Corporation, Illinois Central Gulf Railroad, a Delaware Corporation, Flynn Ready-Mix Concrete Co., an Iowa Corporation, and Flynn Ready-Mix, Inc., an Iowa Corporation, Appellees.

No. 59673.

Supreme Court of Iowa.

Dec. 21, 1977.

Steven L. Nelson of Thoma, Schoenthal, Davis, Hockenberg & Wine, Des Moines, for appellants.

Robert Bertsch and Brendan T. Quann of O'Connor, Thomas, Wright, Hammer, Bertsch & Norby, Dubuque, for appellee, Illinois Central Gulf Railroad.

Considered en banc.

MOORE, Chief Justice.

Plaintiffs appealed trial court's dismissal of their wrongful death action as to defendant Illinois Central Gulf Railroad, a Delaware corporation. They contend their amendment making said corporation a defendant should have related back to the date the original petition was filed. Trial court disagreed and held the action against the corporation was barred by Code section 614.1(2), the two-year statute of limitations. We agree and affirm.

On February 11, 1976, plaintiffs filed a petition alleging in pertinent part that plaintiffs' decedent was killed February 19, 1974 in an automobile accident caused by the negligence of multiple named defendants. Plaintiffs alleged defendant "Illinois Central Railroad, an Illinois Corporation" was negligent in dumping slush and water upon a highway without warning to travelers.

The sheriff's return of service of original notice on defendants included, "I further certify that on the same day (February 13, 1976) I served the same on Illinois Central R. R. Co., and Illinois Corporation, by delivering a copy thereof to Thomas Flynn, Agent for said defendant, in the City of Dubuque, Julien Township, Dubuque County, State of Iowa."

On March 4, 1976 Illinois Central Railroad filed a special appearance asserting the district court lacked jurisdiction because this corporate entity had been dissolved pursuant to law and did not exist either at the time of the accident or subsequently thereto. The trial court sustained the special appearance on March 30. No appeal has been taken from that order.

On March 18, plaintiffs amended their petition providing in relevant part:

"1. The Caption should be amended as follows:

"a. Illinois Central Industries, a Delaware Corporation and Illinois Central R. R. Co., an Illinois Corporation shall be deleted as Defendants.

"b. Illinois Central Gulf Railroad, A Delaware Corporation should be added as a Defendant."

Additionally the amendment substituted as a new defendant, Illinois Central Gulf Railroad for defendants Illinois Central Industries, Inc., and Illinois Central R. R. Co., throughout the petition. For example, plaintiffs in paragraph 8 of their amendment stated:

"In Paragraph 16 of Counts I and II substitute Defendant, Illinois Central Gulf Railroad for Defendants, Illinois Central Industries, Inc., and Illinois Central R. R. Co."

On May 7, 1976 plaintiffs served notice, with petition and amendment attached, of their action against Illinois Central Gulf Railroad. Service was made on J. W. Dodge, division superintendent, at Waterloo, Iowa.

On May 27, 1976 Illinois Central Gulf Railroad filed a motion to dismiss plaintiffs' petition on the ground:

"1. That the Petition as amended fails to state a claim upon which the relief sought can be granted for the reason that no action was commenced against this defendant within the applicable period of limitations as provided in 1975 Code of Iowa, Section 614.1(2) in that on the face of the pleadings filed in this cause it affirmatively shows that this defendant was not so named as a defendant until the filing of plaintiffs' 'First Amendment to Petition' on March 18, 1976."

In resistance plaintiffs asserted their amendment was filed to correct a misnomer in the original petition and relates back to the date of filing, February 11, 1976. They pointed out a merger of Illinois Central Railroad with Illinois Central Gulf Railroad took place on August 10, 1972. The record reveals no evidence or contention that Thomas Flynn was ever an agent or employee of Illinois Central Gulf Railroad, the Delaware corporation.

On June 21, 1976 the trial court sustained the motion to dismiss, stating, "It appears to be the better rule that the amendment does not relate back * * * ."

Plaintiffs have appealed from this ruling. As in the trial court they argue "the plaintiffs' amendment to petition filed after the statute of limitations had run, served only to correct a misnomer in the original petition and relates back to the date of the filing of the original petition."

Illinois Central Gulf Corporation, the Delaware corporation, maintains it was not named a defendant until plaintiffs amended their petition after the running of the statute of limitations and therefore said amendment should not be construed as relating back to the date the original petition was filed.

I. Plaintiffs-appellants cite and rely on three cases: Hickman v. Hygrade Packing Company, Iowa, 185 N.W.2d 801; Thune v. Hokah Cheese Company, 260 Iowa 347, 149 N.W.2d 176 and Grooms v. Greyhound Corporation, 6 Cir., 287 F.2d 95.

In Hickman, where we reversed the trial court, we held that misnomer in notice of action naming "Hygrade Packing Company, Postville, Iowa" as defendant did not bring "Hygrade Food Products Corporation" into court, and that the notice was void and could not be made valid by amendment.

In Hickman we point out Thune dealt with a different kind of situation. In Thune defendant was sued and served under its trade name rather than in the name of the individual owner, Willard Potter. Potter operated his business and his vehicle referred to in plaintiffs' petition was registered in his trade name, Hokah Cheese Company. We held the real defendant was actually before the court at all times under his assumed fictitious name and approved amendment correcting the misnomer. We there noted the case did not involve substitution of one party for another after the statute of limitations had run.

The holding in Grooms v. Greyhound Corporation, 6 Cir., 287 F.2d 95, is premised upon a specific and unique provision of the Ohio Rules of Civil Procedure which provide that when an attempt to commence an action is followed by good service within 60 days, the action is deemed to have been timely commenced even though the statute of limitations has run between the date of the summons and the date of actual service. We have no such rule, statute or holding. Here actual service was made almost three months after filing of plaintiffs' petition.

II. In addition to arguing this is not a case involving correction of a misnomer, defendant, Illinois Central Gulf Railroad, the Delaware corporation, asserts the amendment substitutes one corporation for another after running of the statute of limitations and therefore the trial court was correct in sustaining its motion to dismiss. Much has been written in this area of the law.

After citing and quoting 8 A.L.R.2d, section 81, page 166 and a rather thorough analysis of the prime authorities we state in Shellhorn v. Williams, 244 Iowa 908, 918, 58 N.W.2d 361, 367:

"In the case before us for review entirely new parties were substituted. There was no misnomer or defect in the description or characterization of the defendant but an entire change of parties. We hold this is not proper, particularly after the statute of limitations has run."

The annotation in 8 A.L.R.2d, section 81, page 166 states:

" ' * * * whether an amendment of process or pleading, or both will be allowed which changes the description or characterization of a party after the statute of limitations has run, from a corporation to an individual, copartnership, or other association * * * seems to depend upon whether the misdescription or mischaracterization is interpreted as merely a misnomer or defect in the description or characterization, or whether it is deemed a substitution or entire change of parties; in the former case an amendment will be held to relate back to the commencement of the action, while in the latter the amendment will be held to amount to institution of a new action.

" ' * * * where an action is brought against a corporation whereas it should have been brought against a partnership, or vice versa, an amendment substituting the proper party defendant after the statute of limitations has run is generally held to be vulnerable to a plea of the statute. And the same rule applies in the case of the substitution of individuals as defendants for the partnership or corporation, or vice versa.' "

In 51 Am.Jur.2d, Limitation of Actions, section 294, page 805, the editor writes:

"If the substitution of a corporation as party defendant for another corporation, after the statute of limitations has run, amounts to no more than the rectification of a misnomer, the statute of limitations is not a bar; where, however, the plaintiff sued the wrong party, the mistake cannot be remedied after the period of limitations has elapsed any more than in the case where a wrong individual has been sued. Thus, there are many cases in which it has been held that where an action is brought against a corporation, its commencement within the limitation period is ineffective to stop the running of the statute of limitations against another corporation substituted for it after the statute has run. * * * ."

The general applicable principles are thus stated in 54 C.J.S. Limitation of Actions, section 277b, page 317:

"For limitation purposes, an amendment substituting a new defendant is regarded as the commencement of a new action or proceeding against such defendant, and does not relate back to the commencement of the original action, where a new cause of action is set up by the...