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Sellers v. Kurdilla

Supreme Court of Alaska

August 12, 2016

LINDA SELLERS, Petitioner,
v.
STEPHAN KURDILLA and DANIEL STROUD, Respondents.

         Petition for Review from the Superior Court of the State of Alaska, Fourth Judicial District, Fairbanks, Bethany Harbison, Judge, on appeal from the District Court of the State of Alaska, Fairbanks, Ben Seekins, Judge. Superior Court No. 4FA-14-01376 CI

          Sandra K. Wilson, Stepovich & Vacura Law Office, Fairbanks, for Petitioner.

          Reilly Cosgrove and Michael C. Kramer, Kramer and Associates, Fairbanks, for Respondents.

          Before: Stowers, Chief Justice, Fabe, Winfree, Maassen, and Bolger, Justices.

          OPINION

          MAASSEN, Justice.

         I. INTRODUCTION

         Several men were in a car that rear-ended the plaintiffs vehicle. The plaintiff sued the car's owner, believing he had been driving. The car's owner moved to dismiss the lawsuit on the basis of an affidavit from a second man, who claimed he was driving at the time of the accident. The plaintiff amended her complaint to name both men. The second man then moved to dismiss the claim against him, arguing that under Alaska Civil Rule 15(c) the plaintiffs amended complaint did not relate back to the date of her initial filing and the claim was therefore barred by the statute of limitations. The district court agreed and dismissed the claim. The plaintiff proceeded to trial against the car's owner, who defended on grounds that he had not been driving. The jury found against the plaintiff, who then appealed to the superior court, arguing that the district court erred when it dismissed her claim against the second man. The superior court affirmed the district court's decision.

         We granted review. We conclude that the plaintiffs amended complaint met the requirements for relation back under Rule 15(c), and we therefore reverse the superior court's decision.

         II. FACTS AND PROCEEDINGS

         A. Facts

         Linda Sellers's car was rear-ended by a Dodge Durango on January 4, 2010. The Durango carried at least three men, including the owner, Stephan Kurdilla, and Daniel Stroud. Sellers later attested by affidavit that the Durango's driver approached her vehicle, identified himself as Stephan Kurdilla, and gave her an insurance identification card with Kurdilla's name on it. She attested that she copied down the information from the card. Her passenger, Bonnie Largen, affirmed in her affidavit that she saw the Durango's driver hand Sellers an insurance identification card, heard Sellers identify the driver as Kurdilla, and saw her copy down the information from the card. The police did not respond to the scene of the accident but instead had Sellers file a crash report, in which she identified Kurdilla as the Durango's driver.

         On January 11, 2010, State Farm mailed a claim acknowledgment notice which identified "Our Insured" as Daniel Stroud. But in its seven subsequent letters spanning January to July, State Farm identified "Our Insured" as Stephan Kurdilla.

         In June 2010, attorney Michael Stepovich notified State Farm that he represented Sellers "in regard to injuries she sustained in a rear-ending by your insured"; in his letter he named Kurdilla as "Your Insured." State Farm replied on July 30, this time identifying "Our Insured" as Stroud. Its next two letters identified Kurdilla as its insured; its next two named Stroud; and the two after that again named Kurdilla. All in all, State Farm identified Kurdilla as its insured eleven times and Stroud four times in its correspondence with Stepovich.

         B. Proceedings

         On January 4, 2012, the last day before the statute of limitations expired, Sellers filed a complaint naming Kurdilla as the defendant and alleging that he had been driving the Durango at the time of the accident.[1] Sellers had difficulty locating Kurdilla for service of process, and State Farm declined to accept service on his behalf. On April 6, 2012, Sellers filed an affidavit of due diligence and a motion for leave to serve Kurdilla by publication, which the court granted on April 16. Sellers published the required notice four times in May and sent a certified copy to Fort Wainwright, where Kurdilla had been stationed. Eventually Kurdilla was served at Fort Bragg, North Carolina, on May 11, 2012.

         Michael Kramer, the attorney State Farm retained to represent Kurdilla, later attested by affidavit that Kurdilla called him on May 16, 2012, and told him that Stroud was the driver and that he (Kurdilla) had called Stepovich earlier that day with Stroud's contact information. Stepovich, however, disputes having received such a call from Kurdilla; he contends that it was not until a few months later, when Kurdilla filed a motion to dismiss the case, that Sellers first had notice that Stroud claimed to be the driver.

         Kramer filed his entry of appearance on Kurdilla's behalf on June 1. On August 16 Kurdilla filed a motion to dismiss supported by a two-line affidavit from Stroud asserting that he, Stroud, had been driving at the time of the accident. Sellers opposed the motion to dismiss and filed an amended complaint that added "and/or Daniel Stroud" to the allegations of driver negligence. Sellers also moved for a continuance pursuant to Alaska Civil Rule 56(f) so that she could investigate whether Stroud was indeed the driver and whether he and Kurdilla had colluded to hide the driver's identity.

         Stroud, also represented by Kramer, then filed a motion to dismiss the new claim against him on the grounds that Kurdilla's phone call to Stepovich, together with State Farm's letters, had put Sellers on early notice that Stroud was actually the driver and that the statute of limitations on a claim against him had now expired. Stroud also directly disputed Sellers's description of the relevant events by attesting in a supporting affidavit that at the time of the collision both he and Kurdilla approached Sellers's car, that Kurdilla "gave her his insurance card and clearly identified himself as the owner of the vehicle, and [that] [Stroud] clearly identified [him]self as the driver of the vehicle."

         1. District court proceedings

         The district court denied Kurdilla's motion to dismiss, finding that there was a question of material fact as to whether he had been driving the Durango. But the court granted Stroud's motion to dismiss the claim against him, finding that State Farm's first letter to Sellers in January 2010 - one of the four that identified Stroud as the company's insured - should "have put [Sellers] on notice of a duty to investigate as to a possible second driver, and that would be sufficient for the statute of limitations argument that's being made in [this] case." The court also denied Sellers's Rule 56(f) motion seeking a continuance to conduct more discovery.

         The claim against Kurdilla proceeded to trial. Kurdilla presented testimony -his own, Stroud's, and that of another passenger in the car-that Stroud, not he, was driving at the time of the accident, and the jury returned a defense verdict. Sellers appealed to the superior court, arguing that the district court erred by dismissing her claim against Stroud and by denying her motion for a Rule 56(f) continuance.

         2. Superior court appeal

         On appeal, the superior court analyzed Rule 15 and concluded that there was no identity of interest between Kurdilla and Stroud that would allow Kurdilla's knowledge of the lawsuit to extend Sellers's time for bringing a claim against Stroud. The court noted that "Stroud and State Farm presumably have an identity of interest, " but it concluded that Sellers had abandoned any argument based on that relationship. The superior court also observed that Kurdilla had been served more than 120 days after Sellers filed her complaint and that the trial court had not found good cause for a lack of timely service, meaning that Sellers could not meet another requirement of Rule 15(c) -notice of the lawsuit within the time allowed for service. The superior court affirmed "[t]he district court's decisions regarding the relation back and identity of interests doctrines."

         The superior court declined to resolve another of Sellers's arguments - that the Servicemembers Civil Relief Act tolled the statute of limitations with respect to Stroud while Kurdilla, a member of the armed services, was deployed overseas - because the argument was raised for the first time on appeal. But the superior court did reverse and remand the district court's denial of Sellers's Rule 56(f) motion, noting that Sellers had not been dilatory in her discovery efforts and that there were adequate reasons to give her more time. Finally, the superior court reversed the district court's dismissal of Stroud from the case and remanded to the district court to determine whether there was a viable claim for fraud against the two men and, if so, when it had accrued.

         3. Supreme court petition

         Sellers filed a petition asking us to review the district and superior courts' holdings on the issues of identity of interest and relation back under Civil Rule 15(c). We granted the petition. Sellers argues: (1) that she made a mistake, not a deliberate tactical choice, when she identified Kurdilla as the defendant driver, and Rule 15(c) allows relation back in the event of a mistake; (2) that the service period Rule 15(c) refers to in which a potential defendant must receive notice of the litigation was extended beyond 120 days by the district court's order allowing service by publication; (3) that the Servicemembers Civil Relief Act tolled the statute of limitations on her claim against Stroud; and (4) that Stroud shares an identity of interest with State Farm, Kramer, and Kurdilla which means that any notice of the litigation to those parties may be imputed to him.

         III. STANDARDS OF REVIEW

         "We exercise our 'independent judgment when interpreting the Alaska Rules of Civil Procedure.' "[2]

         As for the applicable standard of review for decisions whether amendments relate back under Alaska Civil Rule 15(c), Stroud notes that we review "a trial court's denial of a motion to amend a complaint under an abuse of discretion standard."[3] This describes the standard of review for Rule 15(a), which gives trial courts discretion, while Rule 15(c) does not.[4]

         In Phillips v. Gieringer the trial court permitted an amendment under Rule 15(a) but denied relation back under Rule 15(c).[5] We did not articulate a standard of review for applications of Rule 15(c), but we reviewed the issue de novo.[6] We now hold that we review de novo whether an amendment satisfies Rule 15(c)'s requirements for relation back.[7]

         We review factual findings for clear error.[8]

         IV. DISCUSSION

         The full text of Alaska Civil Rule 15(c) is important to the discussion that follows. It states:

Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by Rule 4(j) for service of the summons and complaint, that party (1) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party.

         In this opinion we must decide whether the rule (1) permits the relation back of an amendment that adds - rather than merely substitutes - a defendant; (2) allows a plaintiff with a mistaken belief about the defendant's identity to amend her complaint regardless of whether she was on "inquiry notice" that her initial choice of whom to sue might be mistaken; (3) allows the period provided "for service of the summons and complaint" to be expanded by an order allowing service by publication; and (4) allows "notice of the institution of the action" to be imputed from an insurer to a permissive driver who is an insured by definition. We also address whether our interpretation of the rule comports with due process.

         A. Alaska Civil Rule 15(c) Permits Relation Back Of An Amendment Adding A Defendant.

         The second sentence of Civil Rule 15(c) provides that "[a]n amendment changing the party against whom a claim is asserted relates back" under stated conditions. (Emphasis added.) Stroud argues that Sellers cannot take advantage of this provision because she did not seek to "change" a party when she revised her complaint to name "Steph[a]n Kurdilla and/or Daniel Stroud" as the defendants; he argues that "change" can mean only "substitute, " not "add." Stroud argues that the provision is intended only as a "name-correcting device" and cannot be used to add a new party once the statute of limitations has run.[9]

         The focus of our past decisions regarding whether an amendment relates back under Rule 15(c) has been notice and mistake, not whether the plaintiff sought to add or substitute a defendant.[10] But regardless of context, we liberally construe the rules of pleading "to [e]nsure that no plaintiff is deprived of his day in court solely because of the intricacies and technical limitations of pleading."[11] We now hold that "changing the party against whom a claim is asserted" for purposes of relation back under Rule 15(c) includes both "adding" and "substituting" defendants.

         An important purpose of Rule 15(c) is to ensure that a new party has fair notice of a cause of action within the time provided by the statute of limitations, "such that the party's rights will not be prejudiced."[12] The rule balances the party's interest in the protection of the statute of limitations against the idea that a party who was timely notified of litigation "is entitled to no more protection from [the] statutes of limitations than" a party who was timely served.[13] The additional requirement that the plaintiff have made a genuine mistake about the proper party's identity prevents use of the relation-back doctrine for tactical advantage or to circumvent the rules governing joinder.[14]

         Requiring a plaintiff to "substitute" rather than "add" a defendant gives the new party no additional protections;[15] it conceivably only benefits the timely-served defendant, who under Stroud's interpretation must be dismissed in order for a new defendant to be named. But Rule 15(c) is not intended to benefit an already-identified defendant who was timely served. And limiting the rule to substitution could - as in this case - harm the plaintiff who made an honest mistake. Professors Wright and Miller write that "there is no justification for a restrictive interpretation of the word 'changing' that would require a plaintiff to choose among defendants. Too narrow a reading of the rule might result in the release of a party who ultimately might have proven to be liable . . ., "[16] Here, Stroud's assertion that he was the driver directly contradicted Sellers's evidence that it was Kurdilla. Sellers could not safely substitute one name for the other in the face of the conflicting evidence. Pending further discovery, her only immediate option was to name both men, as she did in her amended complaint, alleging that either Kurdilla or Stroud was liable as the driver.[17]

         Considering the policies underlying Rule 15(c), we conclude that adding a defendant is "changing the party against whom a claim is asserted" and that Sellers's claim against Stroud satisfied this aspect of the rule.

         B. A Plaintiff On "Inquiry Notice" May Still Make A True Mistake About The Identity Of The Proper Party.

         The district court dismissed Sellers's claim against Stroud as time-barred after finding that the letters in which State Farm identified Stroud as "Our Insured" "would have put [Sellers] on notice of a duty to investigate as to a possible second driver." The superior court did not address the issue of mistake, resolving Sellers's appeal on notice grounds instead; but Stroud argues in his response to Sellers's petition for review that Sellers made a conscious choice to ...


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