Coleman v. Apple Eight Overland Park, LLC et al
MEMORANDUM AND ORDER denying 71 Motion for Review. The Magistrate Judge's Order 59 permitting the filing of an amendment complaint and allowing substitution of parties is AFFIRMED. Signed by District Judge J. Thomas Marten on 5/8/2017. (sz)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
Case No. 6:16-cv-01343-JTM
APPLE EIGHT HOSPITALITY
MANAGEMENT, INC., et al.,
MEMORANDUM AND ORDER
On March 6, 2017, Magistrate Judge Teresa James granted plaintiff’s motion to
file a first amended complaint. The amended complaint sought to substitute True North
Hotel Group, Inc., as a defendant in place of two Marriott entities initially named by
plaintiff. Dkt. 59. Judge James allowed the amendment and ruled that it related back to
the date of the original complaint for statute of limitation purposes pursuant to Rule
15(c)(1)(C). The matter is now before the court on a Motion for Review of the order by
defendant Apple Eight Hospitality Management, Inc. (hereinafter “Apple Eight”). Dkt.
Plaintiff filed the amended complaint naming True North as a defendant on
March 9, 2017, Dkt. 58, and, according to a notice filed by plaintiff, a summons was
served on True North on March 24, 2017. Dkt. 73. Although more than 21 days have
passed, True North has not filed an answer or otherwise appeared in the action.
For reasons indicated below, the court concludes that the Magistrate Judge’s
ruling authorizing the filing of the amended complaint was a proper exercise of
discretion and was not contrary to law. The court further concludes that Apple Eight
has no standing to challenge whether the amendment asserting a claim against True
North relates back to the date of the original complaint.
Plaintiff filed a petition on July 27, 2016, in the District Court of Sedgwick
County, Kansas, alleging that she was injured in a slip and fall in a bathtub at a
particular Fairfield Inn and Suites in Overland Park, Kansas. The accident occurred on
August 19, 2014. The complaint named as defendants two Marriott entities1 and four
Apple Eight entities.2 Dkt. 1-1. Plaintiff alleged that the defendants were the owners,
occupiers, operators and entities that controlled the premises, and that various acts of
negligence by defendants, including failures to ensure that the premises were
reasonably safe, to warn plaintiff, and to maintain and clean the premises, caused
plaintiff to suffer damages. Defendants removed the action to this court on September 6,
2016. Dkt. 1.
In their answer, the defendants admitted that Apple Eight Hospitality Midwest,
LLC, was the owner of the property; admitted that Apple Eight Hospitality
Management, Inc. was the lessee of the property; denied that Apple Eight Overland
Park, LLC, or Apple Eight Services Overland Park, Inc. owned, occupied, operated or
Marriott International, Inc., and Marriott Hotel Services, Inc.
Apple Eight Overland Park, LLC; Apple Eight Services Overland Park, Inc.; Apple Eight Hospitality
Midwest, LLC; and Apple Eight Hospitality Management, Inc. The latter three defendants were
dismissed without prejudice pursuant to a stipulation on March 22, 2017. Dkt. 66.
controlled the premises; and denied that Marriott International, Inc. or Marriott Hotel
Services, Inc., owned, occupied or controlled the building. Dkt. 1-1.
On December 23, 2016, plaintiff filed a motion for leave to file a first amended
complaint or, in the alternative, to substitute a party. Dkt. 27. The motion asserted that
defendants’ Rule 26 disclosures had identified True North Hotel Group, Inc., as a party
whose fault could be compared for the accident, and plaintiff sought to amend the
complaint to include True North as a defendant or to substitute True North for the two
named Marriott entities. Plaintiff argued the amendment would “relate back” under
Rule 15(c)(1), asserting: “Given the myriad of entities who owned, leased, licensed and
apparently managed the premises where plaintiff fell, plaintiff in good faith believed
that she had the proper defendants when she filed suit and the inadvertence to name an
entity she did not know about until after this matter was removed and only after being
able to conduct additional investigation is a mistake.” Dkt. 27 at 3. The Apple Eight
entities opposed the motion, arguing in part that the proposed claims against True
North “are time-barred under Kansas’ statute of limitations and do not relate back
under Rule 15(c)(1)(C),” such that any amendment would be futile. Dkt. 31 at 2.
Judge James orally granted plaintiff’s motion at the conclusion of a hearing on
March 6, 2017, and issued a written ruling shortly thereafter. Judge James first found
the proposed amendment asserted a claim that arose out of the same transaction set out
in the original complaint. Dkt. 59 at 2. See Fed. R. Civ. P. 15(c)(1)(B). Next, she
concluded that True North received actual notice of the action within the 90-day period
for service contemplated by Rule 4(m). Additionally, the judge found True North would
not be prejudiced in defending the claim, as the case was still in the early stages of
discovery and True North’s officers had known about the suit since shortly after it was
removed. Dkt. 59 at 4. Finally, Judge James concluded that True North knew or should
have known that the action would have been brought against it but for plaintiff’s
mistake. Relying on Krupski v. Costa Crociere S.p.A., 130 S.Ct. 2485 (2010), Judge James
found plaintiff’s error amounted to a “mistake concerning the proper party’s identity”
under Rule 15(c)(1)(C)(ii), because plaintiff had misunderstood or had a mistaken belief
as to the entity or entities that managed and maintained the hotel. The judge granted
plaintiff’s alternative request to substitute True North for the two Marriott entities
named in the original complaint, and determined that the substitution would relate
back to the date of the initial petition. Dkt. 59 at 7.
II. Motion for Review.
Apple Eight contends the failure to name True North in the initial complaint was
not a mistake covered by Rule 15 because “a plaintiff’s lack of knowledge of the
intended defendant’s identity is not a mistake concerning the identity of the proper
party” within the meaning of Rule 15(c)(1)(C). Dkt. 71 at 1-2 (citing Bell v. City of Topeka,
279 F.App’x 689, 692 (10th Cir. 2008) and Garrett v. Fleming, 362 F.3d 692, 696 (10th Cir.
2004)). It argues there was no evidence that plaintiff’s counsel even knew of True
North’s existence when the original petition was filed, so counsel could not have
“misunderstood” True North’s role in the accident.
Apple Eight also contends that allowing substitution was clearly erroneous
because evidence showed the request for substitution “was made merely to create the
illusion of correcting a genuine mistake in the event the Court interpreted Rule
15(c)(1)(C) as allowing only substitutions of defendants.” Dkt. 71 at 2.
Apple Eight also challenges the finding that True North knew or should have
known it would have been sued originally but for a mistake concerning the identity of
the proper party. It says that finding is clearly erroneous because it is based on an
inference that True North management discussed the allegations in plaintiff’s
complaint, but “there is no evidence that any such discussions actually occurred,” and
the emails cited by the judge “make no mention of any of the allegations in Plaintiff’s
original petition.” Id. at 3. It also complains that the judge overlooked evidence showing
that True North had no reason to believe that it would have been timely sued but for a
mistake concerning its identity.
On a non-dispositive order by a Magistrate Judge, the district court must
consider all timely objections to the Magistrate’s order and “modify or set aside any
part of the order that it clearly erroneous or is contrary to law.” Fed. R. Civ. 72(a).3
The order entered by the Magistrate Judge allowed the filing of an amended
complaint that added True North as a party and dropped the two Marriott entities.
Under Rule 15(a)(2), leave to amend should be freely given when justice so requires. See
also Fed. R. Civ. P. 21 (the court may at any time, on just terms, add or drop a party).
The grant or denial of leave to amend under Rule 15 is a discretionary matter that
Apple Eight concedes in its brief that the clearly erroneous standard applies to the Magistrate Judge’s
factual findings in this matter.
considers a wide range of factors, including undue delay, dilatory motive, undue
prejudice, and futility. Griffeth v. United States, ___F.App’x ___, 2016 WL 6994207, *4
(10th Cir. Nov. 30, 2016). Apple Eight makes no showing with respect to the first three
factors – undue delay, dilatory motive, or undue prejudice – to demonstrate an abuse of
discretion on the Magistrate’s part. Apple Eight claims futility essentially by asserting a
statute of limitations defense on behalf of True North. Apple Eight may share some
contractual relationship with True North, but the two entities are not legally affiliated
and Apple Eight’s counsel does not represent True North. The court concludes that
Apple Eight has no standing in these circumstances to assert, on True North’s behalf,
that True North lacked the requisite knowledge to permit relation back of the
amendment under Rule 15(c)(1)(C).
Current parties unaffected by a proposed amendment do not have standing to
assert claims of futility on behalf of proposed defendants. Bailey v. B. Braun Med. Inc.,
NO. 16-cv-1544-WSD, 2017 WL 1547163, *2 (N. D. Ga. May 1, 2017) (citing Custom Pak
Brokerage, LLC v. Dandrea Produce, Inc., No. 13-5592 NLH/AMD, 2014 WL 988829, at *2
(D. N.J. Feb. 27, 2014) and Clark v. Hamilton Mtg. Co., No. 07-252, 2008 WL 919612, at *2
(W.D. Mich. Apr. 2, 2008)). “Rather, current parties only possess standing to challenge
an amended pleading directed to proposed new parties on the basis of undue delay
and/or prejudice.” Bailey, 2017 WL 1547163, at *2. See also Hines v. Cal. Pub. Utilities
Comm’n, 201 WL 4919234, *3 (N.D. Cal. Nov. 24, 2010) (government utility lacked
standing to challenge amendment of individual capacity claims on the basis of futility).
The claim against True North may or may not be subject to a statute of
limitations defense, but that is a defense for True North to assert, if at all, rather than
Apple Eight. The amendment allowing the substitution here was well within the
Magistrate’s discretion and has not been shown to be contrary to law.
IT IS THEREFORE ORDERED this 8th day of May, 2017, that the Motion for
Review (Dkt. 71) of Apple Eight Hospitality Management, Inc., is DENIED. The
Magistrate Judge’s order (Dkt. 59) permitting the filing of an amendment complaint and
allowing substitution of parties is AFFIRMED.
___s/ J. Thomas Marten_________
J. THOMAS MARTEN, JUDGE
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