Rennie v. Omniflight ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHN W. RENNIE, Husband; RUTH F.
RENNIE; CHARLES M. CROCKER,
Plaintiffs-Appellants,
v.
OMNIFLIGHT HELICOPTERS,
INCORPORATED,
Defendant-Appellee,
and
No. 97-1524
SCHWEIZER AIRCRAFT CORPORATION;
TEXTRON LYCOMING, a division of
AVCO Corporation; EXXON COMPANY,
USA, a division of Exxon
Corporation; QUALITRON AERO
SERVICES, INCORPORATED, d/b/a Avitat
Iah/Qualitron; OMNIFLIGHT AIRWAYS,
INCORPORATED,
Defendants.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
William M. Nickerson, District Judge.
(CA-96-450-WMN, CA-96-451-WMN)
Argued: March 4, 1998
Decided: October 23, 1998
Before LUTTIG and MICHAEL, Circuit Judges, and HILTON,
Chief United States District Judge for the
Eastern District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by unpublished opinion. Chief Judge Hilton wrote the opin-
ion, in which Judge Luttig joined. Judge Michael wrote a dissenting
opinion.
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COUNSEL
ARGUED: Noah Hy Kushlefsky, KREINDLER & KREINDLER,
New York, New York, for Appellants. David Lee Rutland, WHAR-
TON, LEVIN, EHRMANTRAUT, KLEIN & NASH, Annapolis,
Maryland, for Appellee. ON BRIEF: Marc S. Moller, David L. Fiol,
KREINDLER & KREINDLER, New York, New York; Henry L. Bel-
sky, SCHLACHMAN, BELSKY & WEINER, P.A., Baltimore,
Maryland, for Appellants. James T. Wharton, WHARTON, LEVIN,
EHRMANTRAUT, KLEIN & NASH, Annapolis, Maryland, for
Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
HILTON, Chief District Judge:
This case is before the Court on the District Court's Order dismiss-
ing the Omniflight defendants on the grounds that the Amended Com-
plaint was not timely filed. Finding no error, we affirm.
On October 18, 1992, Plaintiffs, John Rennie and Charles Crocker,
Baltimore City Police Officers acting in the line of duty, were seri-
ously injured when the engine failed in the helicopter in which they
were flying. On October 6, 1995, within three years of the crash,
Plaintiffs sued Helicopter Transport Services, Inc. ("HTS") in the Cir-
cuit Court for the City of Baltimore for negligent maintenance of the
helicopter. Plaintiffs also sued the manufacturer of the helicopter.
2
At the time of the crash, Omniflight Helicopters, Inc.
("Omniflight"), had an agreement with the Baltimore City Police
Department to maintain and service the police helicopters. Omniflight
maintained a facility at Hanger 6, Martin State Airport in Baltimore.
At the time the lawsuit was filed, HTS was operating out of that facil-
ity.
The Plaintiffs filed their Complaint in state court and identified
HTS as "Helicopter Transport Services, Inc. formerly known as
Omniflight Helicopters, Inc. and Omniflight Airways, Inc." On
November 13, 1995, process was served on HTS in Maryland, and
was served on HTS on December 4, 1995, at Omniflight's offices in
Dallas, Texas.
In response to the earlier service in Maryland, HTS filed a motion
to dismiss on the ground that it did not exist at the time of the acci-
dent. HTS argues that it could not be held liable as a successor corpo-
ration because it was a separate and distinct corporation. Omniflight
continued to exist after HTS took over some of Omniflight's con-
tracts, including the contract with the City of Baltimore. Plaintiffs
agreed to dismiss the claim against HTS.
On January 29, 1996, Plaintiffs filed amended complaints and
explicitly included Omniflight as a party to the lawsuits. The helicop-
ter manufacturers removed the cases to federal court and the cases
were consolidated. Omniflight then moved to dismiss the complaint
on the grounds that it was untimely under the Maryland three year
statute of limitations.
On April 9, 1997, the United States District Court for the District
of Maryland dismissed the Omniflight defendants from the case on
the basis that the amended complaint was barred by the statute of lim-
itations.
The rule which governs resolution of this case is Fed.R.Civ.P.
15(c) which provides the circumstances under which an amended
pleading will be found to relate back to the date of the initial pleading.
The first requirement is that the claim in the amended pleading arise
out of the same transaction or occurrence as the original claim.
Fed.R.Civ.P. 15(c)(2). As both the original and amended complaints
3
arise out of the same accident, this requirement is not in dispute in
this appeal.
In the case of an amendment which changes the party or the nam-
ing of a party, Rule 15 imposes further constraints. It requires that the
party brought in by amendment has received such notice of the claim
within 120 days of filing of the initial complaint, that the party will
not be prejudiced in maintaining a defense on the merits, and that the
party "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." Fed.R.Civ.P. 15(c)(3).
The fact that the process was addressed to HTS "formerly known
as Omniflight" was sufficient to place Omniflight on notice that it
might be named as a defendant in the lawsuit. Omniflight did not
argue that it would be prejudiced in maintaining a defense on the mer-
its. Therefore, the Rule 15 requirement that must be examined more
closely is whether Omniflight should have known that, but for a mis-
take concerning the identity of the proper party, the action would have
been brought against them. See Fed.R.Civ.P. 15(c)(3).
Plaintiffs contend that Omniflight knew that it, not HTS, was the
company with the maintenance contract with the City of Baltimore.
However, Plaintiffs knew that Omniflight was the party that con-
tracted to maintain the helicopters. The fact that Plaintiffs thought that
HTS was successor in interest to Omniflight does not satisfy the
requirements of Rule 15. Therefore, the naming of HTS in the origi-
nal complaint was a misjoinder, not merely a misnomer. See
Archuleta v. Duffy's, Inc., 471 F.2d 33, 35 (10th Cir. 1973).
This Court in Western Contracting Corp. v. Bechtel Corp., 885
F.2d 1196 (4th Cir. 1989), looked at the issue of relation back under
Rule 15 and quoted from Wood v. Worachek. 618 F.2d 1225, 1230
(7th Cir. 1980). This Court found that an amendment is permitted to
relate back only where an error was made concerning the identity of
the proper party and where that party is chargeable with knowledge
of the mistake. This Court, however, does not permit relation back
where there is a lack of knowledge of the proper party.
The Seventh Circuit in Wood found that an amendment with rela-
tion back is permitted in order to correct a misnomer of a defendant
4
if the proper defendant is already before the court and the effect is to
correct the name under which he is sued. However, a new defendant
cannot be substituted or added by amendment after the statute of limi-
tations has run. Rule 15(c)(3) permits an amendment to relate back
only where there has been an error made concerning the identity of
the proper party, and where that party is not chargeable with knowl-
edge of the mistake. Rule 15(c)(3) does not permit relation back
where there is a lack of knowledge of the proper party. In the absence
of a mistake in the identification of the proper party, it is irrelevant
for the purpose of Rule 15(c)(3) whether or not the purported substi-
tute party knew or should have known that the action would have
been brought against him.
There is relation back where a plaintiff has misnamed the party the
plaintiff actually intended to sue who is already part of the lawsuit,
but not where the plaintiff was simply wrong about who the plaintiff
wanted to sue. In this case, Plaintiffs made an actual mistake as to the
party they wanted to sue. Plaintiffs intended to sue HTS because they
believed HTS was the corporate successor to the party which was
responsible for maintenance of the Baltimore City Police helicopters
at the time of the 1992 crash. However, Plaintiffs were wrong as to
who was the proper party. The remedy provided by Rule 15 does not
cover this mistake.
The trial court was correct in ruling that Plaintiffs did not make a
mistake concerning the identity of Omniflight within the contempla-
tion of Fed.R.Civ.P. 15(c) because Plaintiffs were aware that Omni-
flight was the corporation that performed the allegedly negligent
repairs. Therefore, the district court correctly held that this was not a
case of misnomer and the case did not meet the standards for relation
back under Rule 15. Accordingly, the judgment of the district court
is
AFFIRMED.
MICHAEL, Circuit Judge, dissenting:
I dissent. The allegations of the complaints are directed at the com-
pany that was responsible for the maintenance of the helicopter at the
time of the crash, and, on their face, they unmistakably reveal that the
5
plaintiffs believed that this company had simply changed its name
from Omniflight to HTS. Omniflight received notice of the com-
plaints within the 120-day period allotted by Rule 4(m); indeed, it
received actual service of process. Moreover, it could not have helped
but know that HTS's naming was a mistake, that the mistake resulted
from the plaintiffs' belief that Omniflight had renamed itself, and that
the plaintiffs would surely have brought the case against Omniflight
had they not been mistaken. Under these circumstances, Rule 15(c)(3)
commands that the amendment of the complaints relate back to the
date the suit was originally filed.
I.
The Federal Rules reject the approach that pleading is a
game of skill in which one misstep by counsel may be deci-
sive to the outcome and accept the principle that the purpose
of pleading is to facilitate a proper decision on the merits.
Conley v. Gibson, 355 U.S. 41, 48 (1957). To this end, Rule 8(f) com-
mands that "[a]ll pleadings shall be so construed as to do substantial
justice."
We need not even resort to Rule 8(f) here, inasmuch as the cause
for and character of the plaintiffs' mistake is plain for all to see. The
majority quotes from the caption of the complaints, which defined the
defendant as HTS, "formerly known as" Omniflight. In my view, this
caption alone reveals a belief that HTS was simply a renamed Omni-
flight. But there is much more in the body of the complaints to the
same effect. I quote from the Rennie complaint (emphasis added):
2. Helicopter Transport Services, Inc., and its predeces-
sor companies Omniflight Helicopters, Inc. and Omniflight
Airways, Inc., is a Delaware corporation which has offices
and does business in the State of Maryland ....
* * *
8. Helicopter Transport Services, Inc., and/or its pre-
decessor companies Omniflight Airways, Inc. and Omni-
6
flight Helicopters, Inc., ... negligently [serviced the
helicopter]; and Omniflight Helicopters, Inc. was otherwise
negligent.
* * *
33. The subject engine and subject helicopter were
being maintained and serviced by defendant Helicopter
Transport Services, Inc., when it was known as Omniflight
Helicopters, Inc. and Omniflight Airways, Inc. under a ser-
vice contract between Helicopter Transport Services and
Baltimore Police Department ....
The Crocker complaint contains identical assertions. Any reason-
able reader of the complaints would understand that the plaintiffs did
not choose to sue HTS instead of Omniflight on account of some legal
judgment about their relative liability. Had they, I would agree that
Rule 15(c)(3) would not permit relation back. See Rendall-Speranza
v. Nassim, 107 F.3d 913, 918 (D.C. Cir. 1997) ("Nothing in the Rule
or in the Notes indicates that the provision applies to a plaintiff who
was fully aware of a potential defendant's identity but not of its
responsibility for the harm alleged."). Instead, the plaintiffs believed
that by suing HTS they were suing the same entity that had once been
Omniflight. They were wrong, of course, and the nature of their mis-
take is the key to this case. To my mind, the mistake can only be one
of identity. "Identity" is, among other things, "[t]he quality or condi-
tion of being the same as something else."1 The plaintiffs thought that
HTS was the same as Omniflight, but it was not; they therefore made
a mistake about "identity."
II.
The majority asserts that "[t]here is relation back where a plaintiff
has misnamed the party the plaintiff actually intended to sue who is
already part of the lawsuit, but not where the plaintiff was simply
wrong about who the plaintiff wanted to sue." Ante at 5. The first half
of the sentence is an understatement that is true as far as it goes. The
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1 Webster's II New Riverside University Dictionary 607 (1988).
7
second half is an overstatement that may or may not be true depend-
ing on the result of the analysis actually called for by the Rule.
Rule 15(c)(3) will never come into play unless the plaintiff was
"simply wrong" about the party or the name of the party it wished to
sue. The issue is not whether the plaintiff was "simply wrong," but
why. If the error was one of the defendant's identity, the Rule may
permit relation back. Otherwise, it does not.
I labeled the first half of the majority's proposition of law an
understatement because it implies that Rule 15(c)(3) corrects only
classic misnomers, e.g., if the plaintiffs here had sued Omniflight only
to find that it had indeed changed its name to HTS. The Rule is far
broader than that. If its notice requirements are satisfied, it permits
relation back where "the amendment changes the party or the naming
of the party against whom a claim is asserted[.]" (emphasis added).
Of course, where the mistake is simply a misnomer, the notice
requirements will usually be satisfied. However, for more substantial
misidentifications, notice may be problematic. Nevertheless, the issue
is always notice to the party intended to be sued, Schiavone v.
Fortune, 477 U.S. 21, 31 (1986), and not whether the amendment
adds the party or simply corrects its name.
III.
Omniflight also asserts that the plaintiffs' investigation of the
proper entity to sue was unduly cursory, and any reasonable investi-
gation would have revealed that it continued to exist and had not
changed its name to HTS. Rule 15(c)(3) could well have been written
to permit amendments to relate back or not depending on the plain-
tiff's diligence or negligence. It was not so written. "The linchpin [of
the Rule] is notice," Schiavone at 31, and the adequacy of notice is
defined from the defendant's perspective. The defendant must know,
within the time allotted for service of process, enough about the case
so as not to be prejudiced in its defense, and it must or should know
that "but for a mistake concerning the identity of the proper party, the
action would have been brought against [it]." Fed. R. Civ. P. 15(c)(3).
Omniflight surely knew that much here, however avoidable might
have been the mistake concerning its identity. It should therefore be
required to defend the suit on the merits, not because the plaintiffs'
8
mistake was excusable, but rather because the mistake was of no
consequence given the function of the pleading. The complaint
apprised Omniflight that it was the intended defendant; the complaint
thus served its purpose.
A suit at law is not a children's game, but a serious effort
on the part of adult human beings to administer justice; and
the purpose of process is to bring parties into court. If it
names them in such terms that every intelligent person
understands what is meant, as is the case here, it has ful-
filled its purpose; and courts should not put themselves in
the position of failing to recognize what is apparent to
everyone else.
United States v. A. H. Fischer Lumber Co., 162 F.2d 872, 873 (4th
Cir. 1947).
We should be especially mindful of avoiding the"``sporting theory
of justice'"2 we criticized in the above passage where Rule 15(c)(3)
is applied to corporations. The corporate form is easy to use and easy
to abuse. Like natural persons, corporations come into and go out of
existence. Unlike natural persons, corporations can also merge and
split. They can buy, sell, own, and even consume one another. They
can be renamed or reincarnated. A given business may consist of one
or dozens of individual corporations depending on its owners' strate-
gies and whims, and its structure may not be readily apparent to the
public or even to its own employees.
Here, the record reveals that HTS's current Chief Operating Officer
and Executive Vice-President, Michael Aslaksen, was in charge of the
Aviation Services Division of Omniflight when it operated out of the
Baltimore hangar and was also the person to whom notices were sent
on behalf of a partnership that briefly held title to Omniflight's Mary-
land assets. My point is not to suggest anything improper about
HTS's acquisition of those assets, but rather to illustrate that even
after the most complex metamorphoses of those legal abstractions we
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2 Schiavone, 477 U.S. 32-33 (Stevens, J. dissenting) (quoting Roscoe
Pound, The Causes of Popular Dissatisfaction with the Administration of
Justice, 29 A.B.A. Rep. 395, 404-405 (1906)).
9
call corporations, the human faces one encounters at a place of busi-
ness can remain very much the same. There may be no remarkable
difference between today and 1992 at the Baltimore hangar except the
name on the wall.
IV.
Omniflight has dodged this lawsuit for no just reason. It was fully
and timely apprised of the plaintiffs' claims and of its alleged liability
for them. It surely knew that HTS had been sued because of confusion
with, rather than in distinction to, Omniflight. It surely knew that,
absent the plaintiffs' confusion, it, and not HTS, would have been
named the defendant.
The purpose of the Federal Rules of Civil Procedure is to make
procedure the servant of justice. This purpose is not served by today's
decision.
I would reverse the judgment of the district court.
10