Galligan v. Westfield Centre Service, Inc.

The opinion of the Court was delivered by

PASHMAN, J.

We granted plaintiff leave to appeal, 81 N.J. 334, 407 A.2d 1208 (1979), to consider whether the two-year statute of limitations for personal injury actions, N.J.S.A. 2A:14-2, may be tolled by the filing of a complaint in federal court which lacked subject matter jurisdiction. We hold that it may.

On April 14, 1977, plaintiff filed a complaint in the United States District Court for the District of New Jersey on behalf of the estate of Mary F. Galligan. The complaint asserted wrongful death and survival claims against Westfield Centre Service, Inc. and Chrysler Corporation arising from an automobile accident on April 17, 1975. Ms. Galligan died on May 19, 1975, allegedly as a result of injuries suffered in that accident.

Although plaintiff claimed diversity of citizenship as the basis for invoking federal court jurisdiction, see 28 U.S.C.A. § 1332(a), both he and defendant Westfield Centre Service, Inc., a New Jersey corporation, were citizens of New Jersey for jurisdictional purposes, see 28 U.S.C.A. § 1332(c). Because of this patent lack of diversity, see, e. g., Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806); 13 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3605 at 616-618 (1975), the federal court dismissed the complaint for want of jurisdiction on May 11, 1977.

Two days earlier, while the motion to dismiss was still pending in the federal court, plaintiff filed a substantively identical complaint in the Superior Court, Law Division. Since this latter filing occurred two years and 22 days after the accrual of plaintiff’s survival claim — the date of the accident, see Rosenau v. New Brunswick, 51 N.J. 130 (1968) — defendants moved to dismiss that cause of action as barred by the two-year statute of limitations, N.J.S.A. 2A:14-2.¹ The trial court granted the motion.² 166 N.J.Super. 392 (Law Div.1979). It found that none of several existing exceptions to strict imposition of the statutory time limitation was applicable. Id. at 398-399. Noting that “the federal court lacked both jurisdiction and the power to transfer the case to [State] court,” the court viewed as irrelevant the timely filing of a federal complaint. Id. at 397; see Nix v. Spector Freight System, Inc., 62 N.J.Super. 213 (App.Div.1960).³ Plaintiff sought leave to appeal to the Appellate Division, but that court denied his motion without addressing the merits of the trial court’s dismissal. We now reverse the trial court.

Although statutes of limitations are of legislative origin, their harshness and lack of definitional clarity have led courts to develop a common law of limitations. Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111, 121 (1973); Fernandi v. Strully, 35 N.J. 434, 439 (1961); see, e. g., Kaczmarek v. New Jersey Turnpike Auth., 77 N.J. 329 (1978); White v. Violent Crimes Compensation Bd., 76 N.J. 368 (1978); Lopez v. Swyer, 62 N.J. 267 (1973); Kyle v. Green Acres at Verona, Inc., 44 N.J. 100 (1965). The doctrines so fashioned attempt to implement fully the underlying legislative purposes to avoid the injustice which would result from a literal reading of the general statutory language.

The most important of these purposes recognizes that eventual repose creates desirable security and stability in human affairs. Thus statutes of limitations compel the exercise of a right of action within a specific, reasonable period of time. See Tevis v. Tevis, 79 N.J. 422, 430 (1979); Farrell, 62 N.J. at 115; State v. United States Steel Corp., 22 N.J. 341, 358 (1956); see also Wood v. Carpenter, 101 U.S. 135, 139, 25 L.Ed. 807, 808 (1879); Holmes, “The Path of the Law,” 10 Harv.L.Rev. 457, 477 (1897).

Separate from the opposing parties’ interest in repose is their ability to answer the allegations against them. Statutes of limitations reflect the importance of both. By penalizing unreasonable delay, such statutes induce litigants to pursue their claims diligently so that answering parties will have a fair opportunity to defend. See Kaczmarek, 77 N.J. at 337; Union City Housing Auth. v. Commonwealth Trust Co., 25 N.J. 330, 335 (1957). Another purpose of limitation periods is “to spare the courts from litigation of stale claims.” State v. Standard Oil Co., 5 N.J. 281, 295 (1950), aff’d sub nom. Standard Oil Co. v. New Jersey, 341 U.S. 428, 71 S.Ct. 239, 95 L.Ed. 1078 (1951) (quoting Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628, 1635 (1945)); see Kaczmarek, 77 N.J. at 337; Farrell, 62 N.J. at 115. Once memories fade, witnesses become unavailable, and evidence is lost, courts no longer possess the capacity to distinguish valid claims from those which are frivolous or vexatious. See Kaczmarek, 77 N.J. at 338; Lopez, 62 N.J. at 274; Union City Housing Auth., 25 N.J. at 335. Scarce judicial resources are therefore best conserved for litigation timely commenced.

Unswerving, “mechanistic” application of statutes of limitations would at times inflict obvious and unnecessary harm upon individual plaintiffs without advancing these legislative purposes. See White, 76 N.J. at 378-379. On numerous occasions we have found “such particular circumstances as to dictate not the harsh approach of literally applying the statute of limitations but the application of the more equitable and countervailing considerations of individual justice.” Kyle, 44 N.J. at 109. See, e. g., Kaczmarek, 77 N.J. at 338; Fox v. Passaic Gen’l Hosp., 71 N.J. 122, 125-126 (1976); Lopez, 62 N.J. at 273-274. A “just accommodation” of individual justice and public policy requires that “in each case the equitable claims of opposing parties must be identified, evaluated and weighed.” Id. at 274. Whenever dismissal would not further the Legislature’s objectives in prescribing the limitation, the plaintiff should be given an opportunity to assert his claim. See Kaczmarek, 77 N.J. at 338; White, 76 N.J. at 379.

It has been recognized that a mistake in the selection of a court having questionable or defective jurisdiction should not defeat tolling of the statute when all other purposes of the statute of limitations have been satisfied. Cf. Burnett v. N.Y. Cent. R. Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965) (filing of FELA suit in state court which was dismissed for improper venue satisfied all of the purposes behind the statute of limitations; therefore later filing of the suit in federal court before the state action was dismissed but after the statute has run was timely); Nichols v. Canoga Industries, 83 Cal.App.3d 956, 148 Cal.Rptr. 459 (Ct.App.1978) (filing of state and federal claims in federal district court which dismissed all claims because federal statute of limitations had run on federal claims tolled state statute of limitations for state claim; equity permits tolling especially when there is no prejudice to defendant and even though state action was brought after federal suit was dismissed); Barber v. Tuothy, 33 Mich.App. 169, 189 N.W.2d 722 (Ct.App.1971) (substantial compliance with statute of limitations is enough to toll it; minor defects unimportant).

Examining the circumstances of this case, we find that giving effect to the filing of the complaint in federal court within the limitations period does no violence to the purposes underlying N.J.S.A. 2A:14-2. The federal complaint stated claims identical to those now before us. Defendants concede that the mere lapse of 22 days will not prejudice them on the merits if they are required to litigate the circumstances of the deceased’s automobile accident. Cf. R.L. Mulliken, Inc. v. Englewood, 59 N.J. 1, 4 (1974). Timely notice of plaintiff’s survival claims — albeit by the unconventional vehicle of a jurisdictionally deficient complaint — has alerted defendants to the possibility of having to defend against the allegations. Since the passage of an additional 22 days has impaired neither the defendants’ ability to litigate nor the court’s capacity to adjudicate, plaintiff’s cause of action has not become “stale.”

Defendants’ repose in reliance upon the passage of time would not be justified in this case. While the federal action against them was still pending, defendants received notice that plaintiff was seeking redress in a State forum. Once the federal complaint was filed, defendants’ sense of security could not reasonably exist before a dismissal. This is true despite the patent lack of federal jurisdiction. The principle of repose has its foundation in what Holmes called “the deepest instincts of man,” Holmes, supra, 10 Harv.L.Rev. at 477, not in abstract notions of jurisdiction. Prohibiting this plaintiff from vindicating his claims in a State forum would not advance the Legislature’s desire for “security and stability in human affairs.”

Finally, “the filing of a lawsuit itself shows the proper diligence on the part of the plaintiff which statutes of limitations were intended to insure.” Kaczmarek, 77 N.J. at 341 (quoting Goldawr, Inc. v. Heiman, 369 U.S. 463, 467, 8 L.Ed.2d 39, 42 (1962)). Since the plaintiff exhibited this very diligence before the expiration of two years from the date of the accident, he cannot be said to have “slept on his rights.” Id. The sole cause of plaintiff’s failure to commence an action properly is his former counsel’s mistaken notion of the rudiments of federal court jurisdiction. We have previously noted that “it seems inequitable that an injured person * * * should be denied his day in court solely because of his ignorance, if he is otherwise blameless.” Lopez, 62 N.J. at 274. When the ignorance is not the plaintiff’s, but that of his previous attorney, it would be even more unjust to deny him an opportunity to prosecute his cause of action. Accordingly, we find that there was at least “minimal substantial compliance,” Grubb v. J.C. Penney Co., Inc., 155 N.J.Super. 103, 106 (App.Div.1978), with the requirements of the limitations statute.

None of the purposes of N.J.S.A. 2A:14-2 would be served by dismissing plaintiff’s survival cause of action. We therefore hold that in the circumstances of this case, the filing of a complaint in federal court suspended the running of the statutory period of limitations.⁴ The present suit for the deceased’s surviving claims was thus timely commenced. The judgment of the trial court is reversed and the matter remanded for further proceedings.

1 That statute provides:

Every action at law for an injury to the person caused by the wrongful act, neglect or default of any person within this state shall be commenced within 2 years next after the cause of any such action shall have accrued.

2 Substituted counsel has represented the plaintiff from the time defendants’ motion to dismiss was argued.

3 In dismissing plaintiffs survival claim, Judge Dreier expressed the hope “that a new exception for this fact pattern will be provided by appellate or legislative authority. * * * This court, however free to criticize this state of the law, may not disobey what are apparently binding appellate precedents.” 166 N.J.Super. at 399 (citations omitted).

4 We express no opinion regarding the continuing validity of Nix v. Spector Freight System, Inc., 62 N.J.Super. 213 (App.Div.1960), in view of the peculiar statutory policies concerning litigation under the Arbitration Act, N.J.S.A. 2A:24-1 et seq.