Apple v. Solomon

12 Mich. App. 393 (1968) 163 N.W.2d 20

APPLE
v.
SOLOMON.

Docket No. 3,104.

Michigan Court of Appeals.

Decided July 23, 1968.

Gruenburg, Robinson & Bogus, for plaintiff.

Moll, Desenberg, Purdy, Glover & Bayer (William D. Yahne, of counsel), for defendant Straith Clinic.

J.H. GILLIS, J.

This appeal arises from an order of the trial court denying plaintiff's motion, which was filed October 19, 1966, to amend her complaint by changing the nomenclature of defendant, Straith Clinic, Inc. to Straith Memorial Hospital, Inc. So far as the record reveals, there is no such entity as "Straith Clinic, Inc." There does exist, however, a "Straith Clinic," a sole proprietorship of Dr. Richard Straith, and a "Straith Memorial Hospital, Inc.," a nonprofit Michigan corporation of which Dr. Richard Straith is a trustee and vice president. The return of service on "Straith Clinic, Inc." indicates that the service was made upon a "Mrs. Burns for Straith Clinic, Inc."

It is undisputed that Mrs. Burns was an employee of Straith Clinic and was not employed by or authorized to receive service on Straith Memorial Hospital. The clinic and hospital are both located at the same address but, as the uncontroverted evidence indicates, are separately operated. Straith Memorial Hospital, Inc., is a nonprofit, tax-exempt corporation. Straith Clinic is a taxable sole proprietorship. Aside from Dr. Straith the hospital is under wholly separate management and governed by a board of trustees. Dr. Straith is on the staff of the hospital and serves as chief plastic surgeon. He is on the staff of other hospitals as well.

Answer was filed by "Straith Clinic"^[1] on July 21, 1965 alleging, by way of affirmative defense, that "[defendant] will rely upon and insist in its defense that there is a misjoinder of parties in said suit and that said cause should be dismissed as to this defendant." As a further answer, defendant stated that it "had nothing to do with the treatment of plaintiff's decedent and that there were no negligent acts committed by any of its agents, servants or employees."

The "motion to change name of party" was apparently^[2] opposed by "Straith Clinic" on the ground that the hospital was a separate entity from the clinic, that it had never been served with process, and that this action is barred by the statute of limitations. Plaintiff's arguments supported by affidavit^[3] centered on the closely related nature and locations of the hospital and clinic, and the fact that Dr. Straith had notice of the action and should have realized that the allegations involved the hospital rather than the clinic. The trial court heard testimony on the argument on the motion, which, so far as this appeal is concerned, is uncontroverted.

The trial judge's finding of distinct legal separateness between the hospital corporation and the clinic is inescapable. There was no evidence of fraud in the labeling of the premises of the hospital and clinic nor any evidence of shared employees, equipment or the like. There is nothing from which the trial court could have found that these were not separate legal entities.^[4]

Further, we are in agreement with the trial judge's finding that the hospital was not served via the clinic or by Dr. Straith having actual notice of the pendency of the litigation. There was no service in fact on the misnamed party as there was in Wells v. The Detroit News, Inc. (1960), 360 Mich. 634, and the present case is distinguishable on that basis.

Finding then as we do, the distinguishing feature that no service had been made, we adopt the dissenting opinion of Mr. Justice BLACK in Wells, supra, p 642, as controlling in this case. Defendant is required to answer fully and honestly — and our decision is reached only after being convinced by a careful examination of the record, that there was no deception practiced upon plaintiff. On the contrary, plaintiff failed to properly name the party, apparently failed for 15 months to study the answer and failed to submit evidence countering separateness of the entities, even though the trial judge afforded 4 hearings for such purpose.

The motion was in fact one to add a new party defendant (GCR 1963, 207) rather than to amend by correcting a misnomer (GCR 1963, 118).

Affirmed. Costs to appellee Straith Clinic.

McGREGOR, P.J and A.C. MILLER, J., concurred.

NOTES

[1] The answer commences "Now comes the defendant, Straith Clinic * * *." The appearance filed indicated that counsel represented "the defendant, Straith Clinic, Inc., a Michigan corporation." The trial court treated this as a misnomer of the party served and ruled that "Straith Clinic" had waived the defect as to its nomenclature. We agree.

[2] The record does not disclose that a written answer in opposition was filed, but a notice of hearing was filed by the attorneys for the defendant Straith Clinic notifying the attorneys for the plaintiff that an order denying plaintiff's motion to change name of party would be brought on for hearing at a fixed date.

[3] "Irving D. Robinson, being duly sworn, deposes and says that he is one of the attorneys for the plaintiff in the above entitled cause and states that since filing of the complaint in which Straith Clinic, Inc., a Michigan corporation was named as a party defendant, it has been learned that the correct name of the said defendant corporation is Straith Memorial Hospital.

"Deponent further states that no one was misled by the misnomer; that the officers of said corporation were all fully aware of the mistake made in the name set forth in the complaint; that although there is a Straith Clinic it is a sole proprietorship owned by Dr. Richard Straith who is also an officer of Straith Memorial Hospital; that said Dr. Richard Straith did examine and render treatment to the plaintiff's decedent; that Straith Clinic and Straith Memorial Hospital share a working business and operational association; that both are located at the same address."

[4] The record does not disclose if the hospital corporation was represented by the same law firm which represents the sole proprietorship.