Wentz v. Alberto Culver Company

• Decision Date: 27 January 1969
• Docket Number: No. 1382.,1382.
• Citation: 294 F. Supp. 1327
• Parties: Elaine WENTZ, Plaintiff, v. ALBERTO CULVER COMPANY, a Delaware Corporation, Defendant.
• Court: U.S. District Court — District of Montana

294 F. Supp. 1327

Elaine WENTZ, Plaintiff, v. ALBERTO CULVER COMPANY, a Delaware Corporation, Defendant.

No. 1382.

United States District Court D. Montana, Helena Division.

January 27, 1969.

Thomas H. Mahan, Helena, Mont., Roland V. Colgrove, Miles City, Mont., John Marriott Kline, L. Neil Axtell, Glasgow, Mont., for plaintiff.

Keller, Magnuson & Reynolds, Drake & DeGrandpre, Helena, Mont., Jardine, Stephenson, Blewett & Weaver, Great Falls, Mont., for defendant.

RUSSELL E. SMITH, Chief Judge.

This opinion is concerned with the problem of relation back under Rule 15 (c) of the Rules of Civil Procedure as amended in 1966, and with the problem of jurisdiction arising upon the removal of a case to this court from the state court by a corporation nonexistent under the description of it used in the removal petition.

The facts are these: On January 31, 1966, plaintiff filed in the state court a complaint charging Alberto-Culver Company, an Illinois corporation (hereafter called the Illinois corporation) with negligence and breach of an implied warranty in connection with the manufacture and distribution of Alberto Culver VO-5 hair spray. At that time there was no such Illinois corporation. It had been dissolved in 1961 and its assets acquired by Alberto-Culver Company, a Delaware corporation (hereinafter called the Delaware corporation). That corporation first had notice of the action on February 15, 1966. Although service of summons was not made on anyone until May 20, 1966, the Delaware corporation did on March 5, 1966 advise Montana counsel that it was not an Illinois corporation, and directed Montana counsel to resist the jurisdiction of the Montana courts. On June 8, 1966 a petition for removal was filed in this court accompanied by a bond. The petition for removal alleged "the defendant Alberto-Culver Company, an Illinois corporation at the time this action was commenced, was and still is a citizen of the State of Illinois."¹ The petition contained no allegation as to the principal place of business of the petitioner. The bond was signed Alberto Culver Company, by its attorney, and by the United States Fidelity and Guaranty Company as surety. Thereafter a motion to quash service of summons was made in the name of the Illinois Corporation, and was granted. Another summons was served and another motion to quash made in the name of the Illinois corporation. This motion was denied. Finally on July 31, 1967, more than a year after the initial appearance, an answer was filed by the Illinois corporation, which alleged as a Third Defense that it had been dissolved in 1961 and that it "is not in existence and was not in existence at any of the times mentioned in plaintiff's Complaint." On March 5, 1968 plaintiff finally got around to filing a motion to amend the complaint to change the name of defendant from Alberto-Culver Company, an Illinois Company, to Alberto-Culver Company, a Delaware corporation. The proposed amended complaint was lodged with the clerk on March 29, 1968. Defendant resists the motion to amend the complaint on the ground that plaintiff's action is barred by Section 93-2605(3), R.C.M.1947, providing a three year limitation for tort actions. The facts relative to the accrual of the cause of action so far as they are disclosed by the proposed amended complaint are: Plaintiff purchased the hair spray February 1, 1963. She used it from February to October, 1963. At some undisclosed time she became ill.

Rule 15(c), Rules of Civil Procedure, as amended July 1, 1966, provides that an amendment changing parties may relate back to the filing of the complaint if the party to be brought in received notice of the "institution of the action" within the period provided by law for commencing the action. The Delaware corporation, although advised that plaintiff was claiming damages on account of her use of the spray, as early as 1964,² did not know of the institution of the action until February 15, 1966.

The motion to amend is granted and in any further problems relating to limitations the court will hold that January 31, 1966, the date upon which the complaint was filed in the state court, (one day less than three years after the purchase), is the crucial date. This result is not reached by an application of that portion of Rule 15(c) added by the 1966 amendment and could not be reached under that portion of the rule because notice of the existence of a claim is not "notice of the institution of the action." The court holds that there is a difference between correcting a misnomer and changing a party and that a misnomer may be corrected under the amendment power expressed in the first sentence of Rule 15(c). Prior to the amendment of Rule 15 in 1966, and when that rule contained only what is now the first sentence there was respectable authority³ which permitted an amendment to correct a misnomer and which related it back to the filing of the complaint. In this case the corporate name of the defunct Illinois corporation and of the extant Delaware corporation was Alberto-Culver Company. Words designating the state of incorporation were not a part of either name. At the time the complaint was filed there was but one Alberto-Culver Company and it was the Delaware corporation. Before the complaint was filed correspondence addressed to Alberto-Culver Company reached the Delaware corporation which, through its agents, responded in the name of Alberto-Culver Company. The process served in tihs case reached the Delaware corporation whose agents, on at least one occasion,...