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 ...