Armas v. SuperValu Inc

Filing 39

ORDER denying 34 Motion for Summary Judgment Signed by Senior Judge Lonny R. Suko. (VR, Courtroom Deputy)

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1 2 3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6 7 8 9 10 11 12 13 14 MARY ANN ARMAS, ) ) NO. CV-13-3036-LRS Plaintiff, ) ) ) ORDER DENYING v. ) MOTION FOR SUMMARY ) JUDGMENT ) ) ) NEW ALBERTSON’S INC., ) an Ohio Corporation, ) ) Defendant. ) ______________________________ ) BEFORE THE COURT is the Defendant’s Motion For Summary 15 16 Judgment (ECF No. 34). The motion is heard without oral argument.1 17 18 I. BACKGROUND Pursuant to this court’s August 26, 2013 “Order Re Motions For 19 20 21 22 1 Plaintiff’s response to the motion was not timely filed. Responses to dispositive motions must be filed within 21 days, LR 7.1(b)(2)(B), and Plaintiff’s response was filed 27 days after the motion was filed. The court 23 cannot, however, justify granting summary judgment to Defendant on this basis 24 when there is no apparent prejudice to Defendant from the late filing of the 25 response. That said, Plaintiff should be mindful of the filing deadlines set forth 26 in the Local Rule. 27 28 ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 1 1 Summary Judgment And For Leave To Amend Complaint” (ECF No. 25), 2 Plaintiff filed an Amended Complaint naming New Albertson’s, Inc., as the 3 Defendant in lieu of Supervalu, Inc. (“Supervalu”) which was granted summary 4 judgment on the Plaintiff’s claims. Plaintiff’s Amended Complaint (ECF No. 5 26) was filed on September 3, 2013, which is the same date Defendant New 6 Albertson’s, Inc., indicates it was served with the Amended Complaint. New 7 8 9 10 11 12 13 14 15 Albertson’s Inc., filed its Answer to the Amended Complaint on September 16, 2013 (ECF No. 28). Among the affirmative defenses pled in its Answer is that Plaintiff’s claims are barred by the applicable statute of limitations. In its August 26, 2013 order, this court noted that “[a]t the appropriate juncture, New Albertson’s may tender a statute of limitations defense and the court will rule whether under Fed. R. Civ. P. 15(c) the filing of the Amended Complaint should ‘relate back’ to the filing of the original Complaint on April 1, 2013, so as to render the Amended Complaint timely under the applicable Washington statute of limitations.” As noted, New Albertson’s has tendered this defense and now moves for summary judgment based on it. 16 17 18 II. DISCUSSION Unless state law provides a more liberal standard, the requirements of 19 Fed. R. Civ. P. 15(c) apply where an amended complaint changes the name of 20 the defendant. If an amended complaint would “relate back” under the law that 21 provides the applicable statute of limitations, it “relates back” under Fed. R. 22 Civ. P. 15(c). See Fed. R. Civ. P. 15(c)(1)(A); Saxton v. ACF Industries, Inc., 23 254 F.3d 959, 962-63 (11th Cir. 2001). The effect is to defer to more liberal 24 state or federal laws on this point. “Whatever may be the controlling body of 25 limitations law, if that law affords a more forgiving principle of relation back 26 than the one provided in this rule, it should be available to save the claim.” 27 28 ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 2 1 2 Advisory Committee Note to 1991 Amendment to Fed. R. Civ. P. 15(c)(1)(A). Here, Washington law provides the applicable statute of limitations for 3 this personal injury action brought pursuant to this court’s diversity jurisdiction 4 (3 years per RCW 4.16.080). It appears, however, that Washington law does 5 not provide a more liberal standard regarding “relation back.” In addition to the 6 requirements of Washington’s Superior Court Civil Rule (CR) 15(c), an 7 8 9 10 11 12 13 14 amended complaint changing or adding a defendant will not relate back if the original omission of the defendant resulted from “inexcusable neglect.” Haberman v. Wash. Pub. Power Supply Syst., 109 Wn.2d 107, 174, 744 P.2d 1032, 750 P.2d 254 (1987). Inexcusable neglect exists where a party is ascertainable upon reasonable investigation and no reason for the initial failure to name the party appears in the record. Id. The party relying on CR 15(c) must demonstrate that any neglect was excusable. Perrin v. Stensland, 158 Wn.App. 185, 197-99, 240 P.3d 1189 (2010). Under federal law, any neglect by the party relying on Fed. R. Civ. P. 15 15(c) is irrelevant. The U.S. Supreme Court has explained that “relation back” 16 under Rule 15(c)(1) depends on what the party to be added knew or should have 17 known, not on the amending party’s knowledge or its timeliness in seeking to 18 amend the pleadings.” Krupski v. Costa Crociere, S.p.A., 19 130 S.Ct. 2485, 2489-90 (2010). In Krupski, the Supreme Court declared it 20 immaterial that plaintiff’s counsel delayed seeking leave to amend after 21 defendant’s counsel disclosed the proper defendant was “Costa Crociere,” not 22 “Costa Cruises.” The Court held that “[p]laintiff’s dilatory conduct . . . [cannot] 23 justify denial of relation back under Rule 15(c)(1)(C).” Id. at 2496. See also 24 Joseph v. Elan Motorsports Technologies Racing Corp., 638 F.3d 555, 560 (7th 25 Cir. 2011). 26 27 28 U.S. , Under Fed. R. Civ. P. 15(c)(1), the following three requirements must be ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 3 1 satisfied: 1) the claim against the newly added defendant must have arisen out 2 of the conduct set forth in the original complaint; 2) the new defendant must 3 have received sufficient notice of the original action “within the period provided 4 by Rule 4(m) for serving the summons and complaint” (120 days) so that it will 5 not be prejudiced in defending the claim on its merits; and 3) the new defendant 6 must have known or should have known that, “but for a mistake concerning the 7 8 9 10 11 12 13 14 proper party’s identity,” it would have been named in the original complaint. The first requirement is clearly satisfied. The claim against New Albertson’s arises out of the conduct set forth in the original complaint. With regard to the second requirement, it is necessary that New Albertson’s, Inc. had notice of the pending action within the 120 day period provided by Fed. R. Civ. P. 4(m) for serving the summons and complaint. Because Plaintiff’s original Complaint was filed on April 1, 2013, that means New Albertson’s needed to have such notice no later than July 29, 2013. If there is a sufficient agency or community of interest between the person served 15 and the intended defendant, notice may be imputed to the intended defendant. 16 Schiavone v. Fortune, 477 U.S. 21, 29, 106 S.Ct. 2379 (1986). A community or 17 identity of interest “generally means that the parties are so closely related in 18 their business operations or other activities that the institution of an action 19 against one serves to provide notice of the litigation to the other.” 6A Wright, 20 Miller & Kane, Federal Practice & Procedure §1499 at 197-98 (2010). Such 21 an identity of interest has been found between a parent corporation and a 22 wholly-owned subsidiary. See Goodman v. Praxair, Inc., 494 F.3d 458, 473-75 23 (4th Cir. 2007); Bayatfshar v. Aeronautical Radio, Inc., 934 F.Supp.2d 138, 144 24 (D.D.C. 2013); E.I. duPont de Nemours & Company v. Phillips Petroleum 25 Company, 621 F.Supp. 310, 314 (D. Del. 1985); and Holden v. R.J. Reynolds 26 Industries, Inc., 82 F.R.D. 157, 161-162 (M.D. N.C. 1979). 27 28 ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 4 1 In its August 26, 2013 order, this court noted that counsel for SuperValu 2 submitted a declaration (ECF No. 9) attesting to the following: 1) in June of 3 2006, Albertson’s LLC conveyed the store and the real property upon which it is 4 situated to New Albertson’s, Inc; 2) although SuperValu owned stock in New 5 Albertson’s on June 14, 2010 (the date of the incident), SuperValu is a separate 6 and distinct corporate entity from New Albertson’s; 3) SuperValu did not own 7 8 9 10 11 12 13 14 the store in question; 4) the employees who worked at that store were not employees of SuperValu; and 5) SuperValu sold all of its stock in New Albertson’s in March 2013, just shortly before Plaintiff commenced the captioned action on April 1, 2013. Nothing in the papers submitted in conjunction with New Albertson’s motion for summary judgment controvert these facts. SuperValu, however, did not merely own stock in New Albertson’s: it owned all of the stock in New Albertson’s which was its wholly-owned subsidiary. This is a matter of public record. See 15 finance/stocks/SVU/key-developments/article/2672666; and 16 It is true that 17 Plaintiff’s action was not commenced until April 1, 2013, with the filing of its 18 original Complaint against SuperValu as the named defendant. This was just a 19 matter of days after SuperValu sold its interest in New Albertson’s on March 20 21. The record establishes, however, that during the time New Albertson’s was 21 still wholly-owned by SuperValu, Plaintiff, through her counsel, had already 22 made a formal claim with SuperValu regarding the incident of June 14, 2010. A 23 September 25, 2012 letter to Plaintiff’s counsel at the time (David B. Huss, 24 Esq.) from Sedgwick Claims Management Services, Inc., specifically a Bill 25 Talmadge who was the “Claims Examiner III- Liability SuperValu Incident 26 Services Unit,” acknowledged the claim. (Ex. A to ECF No. 14). And, in a 27 28 ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 5 1 letter dated February 2, 2013, Plaintiff’s current counsel of record advised Mr. 2 Talmadge that he had been associated with Mr. Huss on the claim and that “this 3 was done in anticipation of the need to institute a lawsuit for Ms. Armas, since 4 there’s never been a settlement offer extended, and the statute is going to run in 5 a few months.” Counsel also advised that “[i]f your company/your principal has 6 an interest in mediation of this claim, we still have time to do that.” (Ex. B to 7 8 9 10 11 12 13 14 ECF No. 14). In sum then, SuperValu’s knowledge that an action would soon be filed was imputed to its wholly-owned subsidiary, New Albertson’s. Therefore, New Albertson’s had the requisite notice that an imminent action was contemplated, providing it with adequate opportunity to prepare a defense. As noted, that action was then filed within a matter of days after SuperValu sold its interest in New Albertson’s and within a few weeks after SuperValu was served with the original Complaint on April 12, 2013. (ECF No. 2). Under these circumstances, the court finds the second requirement of Rule 15(c)(1)(C)- 15 “notice of the action” to the new defendant, New Albertson’s- is satisfied, 16 notwithstanding that the action against SuperValu was not yet technically 17 pending at the time SuperValu sold its interest in New Albertson’s. 18 The third requirement for “relation back” is closely related to the second 19 and ensures the defendant to be added knew or should have known all along that 20 its joinder was a possibility. E. I. duPont, 621 F.Supp. At 314. If New 21 Albertson’s did not actually know that it would have been named in the original 22 Complaint filed against SuperValu but for a mistake concerning the proper 23 party’s identity, it certainly should have known the same considering: 1) New 24 Albertson’s was the wholly-owned subsidiary of SuperValu at the time of the 25 incident; 2) per the declaration of SuperValu’s counsel, New Albertson’s owned 26 and operated the store in question and employed the individuals who worked 27 28 ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 6 1 there; and 3) New Albertson’s remained SuperValu’s wholly-owned subsidiary 2 through the time when Plaintiff presented a formal claim to SuperValu and up 3 until just days before the original Complaint against SuperValu was filed. 4 5 6 7 8 9 10 11 12 13 14 III. CONCLUSION Fed. R. Civ. P. 15(c)(3) is intended to protect a plaintiff who mistakenly targets the wrong defendant, and then discovers, after the relevant statute of limitations has run, the identity of the proper party. The purpose is to “balance the interest of the defendant protected by the statute of limitations with the preference expressed in the Federal Rules of Civil Procedure in general, and Rule 15 in particular, for resolving disputes on their merits.” Krupski, 130 S.Ct. at 2494. For the reasons set forth herein, Plaintiff’s September 3, 2013 Amended Complaint “relates back” to the filing of her original Complaint on April 1, 2013. Accordingly, the Amended Complaint is not barred by the applicable 15 statute of limitations and Defendant New Albertson’s, Inc.’s, Motion For 16 Summary Judgment (ECF No. 34) is DENIED. 17 18 19 IT IS SO ORDERED. The District Court Executive is directed to enter this order and to provide copies to counsel of record. DATED this 11th day of December, 2013. 20 21 22 s/Lonny R. Suko _______________________________ LONNY R. SUKO Senior United States District Judge 23 24 25 26 27 28 ORDER DENYING MOTION FOR SUMMARY JUDGMENT - 7

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