Williams v. Advance Auto Parts, Inc. ( 2017 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA16-625
Filed: 17 January 2017
Cumberland County, No. 15-CVS-8050
HARRY WILLIAMS, Plaintiff,
v.
ADVANCE AUTO PARTS, INC., and ADVANCE STORES COMPANY,
INCORPORATED d/b/a Advance Auto Parts, Defendants.
Appeal by Plaintiff from orders entered 3 and 7 March 2016 by Judge Claire
V. Hill in Cumberland County Superior Court. Heard in the Court of Appeals 30
November 2016.
Riddle & Brantley, LLP, by Donald J. Dunn and Jonathan M. Smith for
Plaintiff-Appellant.
Millberg Gordon Stewart PLLC, by B. Tyler Brooks and John C. Millberg for
Defendant-Appellee.
HUNTER, JR., Robert N., Judge.
Harry Williams (“Plaintiff”) appeals two orders from the Cumberland County
Superior Court granting summary judgment to both Advance Stores Company, Inc.
(“Stores”) and Advance Auto Parts, Inc. (“Parts”). Plaintiff contends his failure to
name the correct plaintiff in his complaint was a mere misnomer which the trial court
should have granted him permission to amend and relate back to the original
complaint. We disagree.
WILLIAMS V. ADVANCE AUTO PARTS, INC.
Opinion of the Court
I. Facts and Background
On 30 October 2012, Plaintiff tripped and fell, injuring himself inside an
Advance Auto Parts retail store in Fayetteville, North Carolina. After the incident,
Plaintiff submitted a claim for his injuries to a third party administrator, Sedgwick
CMS (“Sedgwick”), who administered the liability policy for the store. In a 25
November 2012 letter (“Sedgwick letter”), Sedgwick named the insured as “Advance
Auto.” Sedgwick subsequently advised Plaintiff it was “the Third Party claims
Administrator (TPA) for Advance Auto Parts” and denied Plaintiff’s claim for failure
to “find negligence on the part of Advance Auto Parts for this loss.”
On 26 October 2015, Plaintiff filed a complaint in Cumberland County
Superior Court naming the defendant as “Advance Auto Parts, Inc.” Plaintiff directed
a civil summons to Parts the same day. On 21 December 2015, Plaintiff filed a notice
of amendment to complaint, adding “Advance Stores Company, Incorporated” as a
named defendant. Plaintiff also directed a civil summons to both Parts and Stores
and filed his amended complaint on 21 December 2015.
On 30 December 2015, Parts filed its answer to the original complaint, seeking
dismissal pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure for
failure to state a claim. In the alternative, Parts asked for summary judgment
pursuant to Rule 56 on the grounds it did not “own, lease, operate, control, or
maintain the premises identified in the plaintiff’s complaint.” The same day, Parts
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Opinion of the Court
filed a separate motion for summary judgment, arguing it had no duty to Plaintiff
because it did not own the store in question. Parts further argued the statute of
limitations had expired on Plaintiff’s claim, and any amendment could not be held to
relate back to the original complaint under Rule 15(c) of the North Carolina Rules of
Civil Procedure.
Parts attached as an exhibit the affidavit of Pamela R. Webster (“Ms. Webster”)
the senior claims manager for Parts. Ms. Webster stated Parts is a holding company
organized under Delaware law with a principle place of business in Virginia. Stores
is a wholly owned subsidiary of Parts, organized under Virginia law and with a
principal place of business in Virginia. Ms. Webster stated Stores, not Parts, is the
owner and operator of the Advance Auto Parts store where Plaintiff was injured.
On 3 February 2016, Parts filed its answer to the amended complaint, seeking
dismissal for failure to state a claim and requesting summary judgment in its favor
in the alternative, arguing it did not own the premises identified in Plaintiff’s
complaint. Parts attached no affidavits or exhibits to its answer.
On 3 February 2016, Stores filed its answer to the amended complaint and
moved to dismiss, arguing Stores and Parts were separate legal entities, the statute
of limitations had expired, and Plaintiff sought to “impermissibly add a new
defendant to the case after the expiration of the statute of limitations.” Stores
attached no affidavits or exhibits to its answer.
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Opinion of the Court
On 24 February 2016, Plaintiff filed a memorandum of law in opposition to
Parts’ motion for summary judgment. Along with its memorandum, Plaintiff
submitted an affidavit from Plaintiff’s counsel and two exhibits to the affidavit. The
affidavit described counsel’s attempts to locate the correct defendant, noting counsel’s
paralegal used the Sedgwick letter as a basis for searching the North Carolina
Secretary of State’s corporate registry for the name “Advance Auto.” The paralegal
confirmed the choice of Advance Auto Parts Inc. as the proper defendant by searching
Google for “Advance Auto” and inspecting Advance Auto Parts’ website. The
Sedgwick letter and a printout showing “Advance Auto Parts, Inc.” as one of the
results for a search for “Advance Auto” on the Secretary of State’s website were
appended as exhibits to the affidavit.
Stores filed its memorandum of law in support of its motion to dismiss the
amended complaint on 26 February 2016. Stores included several exhibits with its
memorandum, including Ms. Webster’s affidavit and a deed from the Cumberland
County Register of Deeds for the store where Plaintiff was allegedly injured, showing
the store was owned by Stores. Stores also presented the court with Parts’ application
for a North Carolina certificate of authority showing Parts is a Delaware corporation.
On 26 February 2016, Parts submitted its memorandum of law supporting its
motion for summary judgment on the original complaint. Parts appended Ms.
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Opinion of the Court
Webster’s affidavit, the copy of the store’s deed, and its application for certificate of
authority as exhibits.
On 3 March 2016, the trial court issued an order granting summary judgment
to Stores on the amended complaint. Based on the deed from the Cumberland County
Register of Deeds, the court found Stores, not Parts, “is the corporate entity that
operates and controls the Advance Auto Parts retail store where the plaintiff’s alleged
fall occurred.” The court further found the statute of limitations on plaintiff’s claim
expired on 30 October 2015.
As to the amendment, the court found Plaintiff amended his complaint after
the statute of limitations expired, seeking to “add Advance Stores Company, Inc. as
a defendant.” The court found Rule 15(c) did not allow relation back to add a party
to an existing claim, except as to correct a “misnomer or mistake in the party’s name.”
It further held:
The evidence in this case establishes that the
plaintiff filed his original complaint against Advance Auto
Parts, Inc. The statute of limitations for plaintiff's claim
expired on 30 October 2015. Approximately seven weeks
after the expiration of the statute of limitations, plaintiff
amended the complaint to name a different corporate
entity, Advance Stores Company, Inc. The amendment to
add Advance Stores Company, Inc., sought to bring in a
new defendant to the case and was not the mere correction
of a misnomer or a mistake in the name of the originally
named defendant. Accordingly, because the plaintiff's
amended complaint was filed after the expiration of the
statute of limitations and the amendment sought to add a
new defendant, it cannot relate back as a matter of law to
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Opinion of the Court
the original date of filing under Rule 15.
The court also found Plaintiff failed to prove equitable estoppel, holding the
Sedgwick letter was not evidence Sedgwick “misled or misrepresented to the plaintiff
that [its] insured was the corporation Advance Auto Parts, Inc.” As a result, the trial
court held there was “no genuine issue of material fact that plaintiff amended his
complaint to name a new defendant after the statute of limitations expired,” and
granted summary judgment to Stores.
On 7 March 2016, the trial court issued an order granting summary judgment
to Parts on the original complaint. The court found Stores was a subsidiary of Parts
and that Stores was the legal owner of the store where Plaintiff fell. It further found
Plaintiff provided no evidence to support “any contention that Advance Auto Parts
Inc., exercises the degree of control over Advance Stores Company, Inc.” necessary to
pierce the corporate veil. As such, the court held Parts was “improperly named . . .
as a defendant in this case.” Because Parts owed no legal duty with regard to a
premises it did not own, the trial court held there was no genuine issue of material
fact to justify disregarding the corporate form and granted summary judgment to
Parts.
Plaintiff entered notice of appeal to both the 3 March 2016 and 7 March 2016
orders on 20 March 2016.
II. Jurisdiction
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WILLIAMS V. ADVANCE AUTO PARTS, INC.
Opinion of the Court
Plaintiff appeals the trial court’s 3 and 7 March 2016 orders granting summary
judgment in favor of Stores and Parts, respectively. Because these orders are the
final judgments of the superior court in a civil action, jurisdiction is proper in this
court pursuant to N.C. Gen. Stat. § 7A-27(b)(1) (2015).
III. Standard of Review
Although both Parts and Stores moved to dismiss the respective claims against
them, “[a] Rule 12(b)(6) motion to dismiss for failure to state a claim is indeed
converted to a Rule 56 motion for summary judgment when matters outside the
pleadings are presented to and not excluded by the court.” Stanback v. Stanback, 297
N.C. 181, 205, 254 S.E.2d 611, 627 (1979). Here, both Parts and Stores asked for
summary judgment in the alternative to dismissal. Moreover, Parts, Stores, and
Plaintiff each submitted memoranda of law and documentary evidence to the trial
court, which the court used to render its rulings. As a result, we review the orders as
grants of summary judgment.
Summary judgment is proper “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that any party is entitled to a
judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2015).
A defendant may show he is entitled to summary judgment by “(1) proving that
an essential element of the plaintiff’s case is nonexistent, or (2) showing through
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Opinion of the Court
discovery that the plaintiff cannot produce evidence to support an essential element
of his or her claim, or (3) showing the plaintiff cannot surmount an affirmative
defense which would bar the claim.” Frank v. Funkhouser, 169 N.C. App. 108, 113,
609 S.E.2d 788, 793 (2005) (internal quotation marks and citation omitted).
The court must review the record in the light most favorable to the non-movant
and draw all inferences in the non-movant’s favor. Dobson v. Harris, 352 N.C. 77, 83,
530 S.E.2d 829, 835 (2000). See also Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d
379, 381 (1975); Norfolk & W. Ry. Co. v. Werner Indus., 286 N.C. 89, 98, 209 S.E.2d
734, 739 (1974).
This Court reviews the trial court’s grant of summary judgment de novo. In re
Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008).
IV. Analysis
A. Amendment and Relation Back of the Complaint
Plaintiff contends the trial court improperly granted summary judgment to
both Parts and Stores because its amended complaint should have related back to the
date of the original filing under Rule 15(c) of the North Carolina Rules of Civil
Procedure. We disagree.
Plaintiff does not dispute the statute of limitations expired on his personal
injury claim prior to the filing of the amended complaint. The statute of limitations
is three years for personal injury cases. N.C. Gen. Stat. § 1-52(16) (2015). Because
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WILLIAMS V. ADVANCE AUTO PARTS, INC.
Opinion of the Court
Plaintiff was under no disability when the action accrued and no other exception
applies, the statute of limitations was not tolled. Accord N.C. Gen. Stat. § 1-17 (2015).
As a result, the statute of limitations on Plaintiff’s claim expired on 30 October 2015,
seven weeks before the amended complaint was filed.
Under the North Carolina Rules of Civil Procedure, a party may amend a
pleading “once as a matter of course at any time before a responsive pleading is
served[.]” N.C. Gen. Stat. § 1A-1, Rule 15(a) (2015). Amendment to substitute a party
is within the scope of the rule, although doing so represents the creation of “a new
and independent [cause] of action and cannot be permitted when the statute of
limitations has run.” Callicut v. American Honda Motor Co., 37 N.C. App. 210, 212,
245 S.E.2d 558, 560 (1978) (quoting Kerner v. Rockmill, 111 F. Supp. 150, 151 (M.D.
Pa. 1953)).
If the statute of limitations has expired in the interim between the filing and
the amendment, a plaintiff may preserve his claim only if the amendment can be said
to relate back to the date of the original claim under Rule 15(c):
A claim asserted in an amended pleading is deemed to have
been interposed at the time the claim in the original
pleading was interposed, unless the original pleading does
not give notice of the transactions, occurrences, or series of
transactions or occurrences, to be proved pursuant to the
amended pleading.
N.C. Gen. Stat. § 1A-1, Rule 15(c) (2015); Franklin v. Winn Dixie Raleigh, 117 N.C.
App. 28, 38, 450 S.E.2d 24, 30 (1994), aff’d per curiam, 342 N.C. 404, 464 S.E.2d 46
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(1995). However, the plain language of Rule 15(c) makes clear the rule applies only
to amendments to add claims, not parties. Our courts have repeatedly held that Rule
15(c) is “not authority for the relation back of a claim against a new party.” Crossman
v. Moore, 341 N.C. 185, 187, 459 S.E.2d 715, 716 (1995). See also Brown v. Kindred
Nursing Ctrs. East, LLC., 364 N.C. 76, 81, 692 S.E.2d 87, 91 (2010).
Nevertheless, the trial court possesses discretion to amend “any process or
proof of service thereof ‘unless it clearly appears that material prejudice would result
to substantial rights of the party against whom the process issued.’” Harris v.
Maready, 311 N.C. 536, 545-46, 319 S.E.2d 912, 918 (1984) (quoting N.C. Gen. Stat.
§ 1A-1, Rule 4(i) (2015). Thus, although time barred claims may not be amended
under Rule 15(c) to add new parties, they may be amended in order to correct a
misnomer in the “description of the party or parties actually served [with process].”
Maready, 311 N.C. at 546-547, 319 S.E.2d at 919. See also Pierce v. Johnson, 154
N.C. App. 34, 39, 571 S.E.2d 661, 664-65 (2002); Liss v. Seamark Foods, 147 N.C.
App. 281, 283-84, 555 S.E.2d 365, 367 (2001); Piland v. Hertford County Bd. of
Comm’rs, 141 N.C. App. 293, 299, 539 S.E.2d 669, 673 (2000). A misnomer is a
“mistake in name; giving an incorrect name to the person in accusation, indictment,
pleading, deed, or other instrument.” Pierce, 154 N.C. App. at 39, 571 S.E.2d at 665
(internal alterations omitted) (quoting BLACK’S LAW DICTIONARY 1000 (6th ed. 1990)).
It is “technical in nature[.]” Liss, 147 N.C. App. at 285, 555 S.E.2d at 368.
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WILLIAMS V. ADVANCE AUTO PARTS, INC.
Opinion of the Court
This Court has generally distinguished between situations in which the
plaintiff has used the wrong name of “one legal entity which uses two names,” and
situations in which the plaintiff attempts to “substitute one legal entity for another
as defendant.” Liss, 147 N.C. at 286, 555 S.E.2d at 369 (quoting Tyson v. L’Eggs
Products Inc., 84 N.C. App. 1, 6, 351 S.E.2d 834, 837 (1987)). The former may be
corrected as a misnomer provided there is evidence the intended defendant was
properly served and would not be prejudiced by the amendment. Pierce, 154 N.C.
App. at 39, 571 S.E.2d at 665. The latter are barred even where the correct defendant
may have received notice of the impending suit. Piland, 141 N.C. App. at 299-300,
539 S.E.2d at 673 (whether the new defendant received notice “is irrelevant under
Crossman’s analysis of the limited reach of Rule 15(c). [The plaintiff] sought to add a
party, and such action is not authorized by the rule”). See also Treadway v. Diez, 209
N.C. App. 152, 157, 703 S.E.2d 832, 835 (Jackson, J., dissenting) (“[N]otice is
immaterial with respect to the operation of amendments to pleadings pursuant to
Rule 15(c).”), rev’d per curiam per the dissent, 365 N.C. 289, 715 S.E.2d 852 (2011).
In the instant case, the record establishes Plaintiff’s amendment was an
attempt to substitute one legal entity for another. The evidence before the trial court,
even when construed in the light most favorable to Plaintiff, establishes Parts and
Stores are separate corporations. Parts and Stores presented the court with the same
three pieces of evidence: (1) Ms. Webster’s affidavit stating Stores is a wholly owned
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Opinion of the Court
subsidiary of Parts; (2) the Cumberland County deed establishing Stores as the owner
of the store where Plaintiff was injured; and (3) the application for a certificate of
authority showing Parts is a Delaware corporation. Plaintiff’s evidence, consisting of
his attorney’s affidavit, the printout of results from the Secretary of State’s website,
and the Sedgwick letter, does not dispute the ownership of the store or the nature of
the corporate relationship between Parts and Stores. It is probative only of the
process by which Plaintiff came to name the wrong defendant in his original
complaint.
While Plaintiff argues Stores was properly served and would suffer no
prejudice from allowing the amendment to relate back, this analysis applies only
when the evidence shows the complaint was amended to substitute the proper legal
name of a single legal entity with multiple names. Piland, 141 N.C. App. at 300, 539
S.E.2d at 673. Here the record is clear; “[q]uite simply, plaintiff[] sued the wrong
corporation.” Franklin, 117 N.C. App. at 35, 450 S.E.2d at 28. Consequently, we hold
the trial court properly concluded Plaintiff’s amendment was not the correction of a
mere misnomer, but an impermissible attempt to add a new defendant after the
statute of limitations had expired.
B. Equitable Estoppel
Plaintiff argues Stores should be estopped from invoking the statute of
limitations defense because it negligently allowed Sedgwick to make an affirmative
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Opinion of the Court
representation that Parts was legally responsible for the store in which Plaintiff was
injured. We disagree.
Generally, equitable estoppel may be invoked to prevent a defendant from
relying upon the statute of limitations as an affirmative defense. Nowell v. Great
Atlantic & Pacific Tea Co., 250 N.C. 575, 579, 18 S.E.2d 889, 891 (1959). The party
seeking to invoke the doctrine must satisfy several essential elements:
(1) conduct on the part of the party sought to be estopped
which amounts to a false representation or concealment of
material facts; (2) the intention that such conduct will be
acted on by the other party; and (3) knowledge, actual or
constructive, of the real facts. The party asserting the
defense must have (1) a lack of knowledge and the means
of knowledge as to the real facts in question; and (2) relied
upon the conduct of the party sought to be estopped to his
prejudice.
Parker v. Thompson-Arthur Paving Co., 100 N.C. App. 367, 370, 396 S.E.2d 626, 628-
29 (1990). In satisfying these elements, the party asserting estoppel need not show
the other party acted with bad faith, fraud, or intent to deceive. Friedland v. Gales,
131 N.C. App. 802, 807, 509 S.E.2d 793, 797 (1998). However, even where the other
party has engaged in misrepresentation, the proponent must have exercised due
diligence in attempting to discover the relevant facts or omissions. Bailey v. Handee
Hugo’s, Inc., 173 N.C. App. 723, 727, 620 S.E.2d 312, 315 (2005).
Plaintiff cannot invoke equitable estoppel in this case. Plaintiff’s lone piece of
evidence supporting his claim, the Sedgwick letter, states only that Sedgwick is the
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Opinion of the Court
third party claims administrator for “Advance Auto” or “Advance Auto Parts.”
Plaintiff brings no evidence to suggest that Sedgwick’s intent was to cause Plaintiff
to act on its representation. Nor does he show that Sedgwick had actual or
constructive knowledge that the owner of the retail store in question was Stores.
Furthermore, Plaintiff cannot show he exercised due diligence in discovering
the legal owner of the retail store where he was injured. The record shows Sedgwick
sent its letter to Plaintiff on 25 November 2012, almost three years before Plaintiff
filed his original complaint on 26 October 2015. In the interim, a deed was on file
with the Cumberland County Register of Deeds identifying Stores as the true owner
of the store where Plaintiff was injured. Although Plaintiff’s examination of Advance
Auto Parts’ website and the Secretary of State’s database proved insufficient to
discover the legal owner of the store, “it is not an onerous burden for this Court to
impose the task of a title search upon one filing suit.” Bailey, 173 N.C. App. at 727,
620 S.E.2d at 316. Consequently, Plaintiff may not use equitable estoppel to prevent
Stores from invoking the statute of limitations defense.
Plaintiff also argues he is entitled to relief because Stores failed to file a
certificate of assumed name and because Stores is merely Parts’ alter ego. The record
shows Plaintiff brought neither of these theories before the trial court. Because a
party “cannot swap horses between courts in order to obtain a better mount on
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Opinion of the Court
appeal,” we decline to consider these arguments. Bailey, 173 N.C. App. at 727, 620
S.E.2d at 316.
As a result, we hold there was no genuine issue of material fact before the trial
court and both Parts and Stores were entitled to judgment as a matter of law. The
orders of the trial court are:
AFFIRMED.
Judges STROUD and DAVIS concur.
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