Title: Caduceus Props., LLC v. William G. Graney, P.E.

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC12-1474 
____________ 
 
CADUCEUS PROPERTIES, LLC, et al.,  
Petitioners, 
 
vs. 
 
WILLIAM G. GRANEY, P.E., et al.,  
Respondents. 
 
[February 27, 2014] 
 
PARIENTE, J. 
The certified conflict between the First District Court of Appeal in Graney v. 
Caduceus Properties, LLC, 91 So. 3d 220 (Fla. 1st DCA 2012), and the Fifth 
District Court of Appeal in Gatins v. Sebastian Inlet Tax District, 453 So. 2d 871 
(Fla. 5th DCA 1984), involves the scope of Florida Rule of Civil Procedure 
1.190(c) governing the relation back of an amendment to a pleading filed by a 
party during the course of litigation.1
                                         
 
1.  We have jurisdiction.  See art. V, § 3(b)(4), Fla. Const. 
  Specifically, the conflict issue is whether an 
amended complaint, naming a third-party defendant as a party defendant, relates 
back to the filing of the third-party complaint for statute of limitations purposes.   
 
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For the reasons that follow, we conclude that an amended complaint filed 
after the statute of limitations has expired, naming a party who had previously been 
made a third-party defendant as a party defendant, relates back under rule 1.190(c) 
to the filing of the third-party complaint.  For the amended pleading to be timely in 
this situation, the third-party complaint must have been filed prior to the expiration 
of the statute of limitations and the plaintiff’s claims in the amended complaint 
must arise from the same “conduct, transaction, or occurrence” set forth in the 
third-party complaint.  Accordingly, we quash the First District’s decision in 
Graney, which limited the scope of the relation-back doctrine in a manner 
inconsistent with the meaning and intent of the applicable Florida Rules of Civil 
Procedure, and we approve the Fifth District’s decision in Gatins. 
FACTS 
 
This case arises from litigation concerning a malfunctioning heating, 
ventilation, and air conditioning (HVAC) system installed in a new ambulatory 
surgical center.  The owner of the building is the plaintiff, Petitioner Caduceus 
Properties, LLC.  Caduceus leases a portion of the building to co-Petitioner 
Tallahassee Neurological Clinic, P.A. (“TNC”).  The building architect was 
Michael Lee Gordon, who subcontracted the design of the HVAC system to 
Respondents KTD Consulting Engineers, Inc., and its principal, William G. 
Graney.  
 
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In late 2005, the HVAC system designed by KTD began to fail.  TNC 
contacted Gordon and KTD concerning the system failure, and the parties 
unsuccessfully attempted to remedy the HVAC problems over the next ten months.  
In July 2006, Caduceus initiated this litigation by suing Gordon, with whom it was 
in privity.  In March 2007, Gordon initiated a third-party action against KTD and 
Graney.  Pursuant to Florida Rule of Civil Procedure 1.180, which governs third-
party practice, Gordon alleged that KTD and Graney were liable for all or part of 
Caduceus’ claims against Gordon.  Ultimately, Gordon’s third-party claims were 
dismissed, and he declared bankruptcy during trial.2
In June 2010, after the statute of limitations governing Caduceus’ original 
action had expired, Caduceus sought to amend its complaint to add TNC as a party 
plaintiff and to name third-party defendants, KTD and Graney, as party defendants 
to the action.
  
3
                                         
2.  After KTD and Graney were named party defendants, but before trial, 
Gordon’s third-party complaint against KTD and Graney was dismissed because 
Gordon failed to comply with a court order.  Additionally, because Gordon filed 
for bankruptcy protection during the trial of this case, the litigation was 
automatically stayed, no judgment was entered against him, and he was never a 
party in the First District or in this Court. 
  The trial court granted this motion, pursuant to a joint stipulation in 
which all of the parties agreed to the addition of TNC as a party plaintiff and to 
 
3.  The case had previously been stayed for thirteen months while the parties 
attempted to correct the problems with the HVAC system.  Unsuccessful mediation 
also occurred in May 2010. 
 
 
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naming KTD and Graney as party defendants, while reserving all defenses, so long 
as the trial was continued.  The trial court continued the trial for seven months.  
 In their answer and affirmative defenses to the amended complaint, KTD 
and Graney raised the statute of limitations as an affirmative defense and moved 
for involuntary dismissal based on this defense after presenting their case during 
trial.  The trial court denied the motion and proceeded with the trial, entering 
judgment in favor of Caduceus and TNC with respect to all of their claims against 
KTD and Graney, and awarding a total of $489,134.52 in damages.4
On appeal, the First District addressed only the statute of limitations issue 
and reversed the trial court’s judgment on that basis in a two-to-one split decision.  
Graney, 91 So. 3d at 228.  Specifically, the First District framed the issue as 
whether the amended complaint related back to the filing of the original complaint 
filed by Caduceus against Gordon.
  KTD and 
Graney appealed this decision to the First District. 
5
                                         
 
4.  The trial court awarded Caduceus $453,793.41 and awarded TNC 
$35,341.11. 
  Id. at 224.  The First District held that the 
amended complaint did not relate back and was barred by the statute of limitations 
because “[r]elation back should only be permitted where there is a mistake or 
 
5.  The First District incorrectly framed the issue in this case.  In actuality, 
the issue is whether the amended complaint relates back to the filing of the third-
party complaint filed by Gordon against KTD and Graney.  
 
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misnomer in identifying a party defendant, not a mistake in failing to add a party 
defendant.”  Id. at 228.   
Accordingly, the First District certified that its decision conflicted with the 
Fifth District’s decision in Gatins, 453 So. 2d at 875, which held that an amended 
complaint naming the third-party defendant as a party defendant to the original 
action was not barred by the statute of limitations, provided that the third-party 
defendant was impleaded prior to the expiration of the statute of limitations and 
“the plaintiff’s claim concerns the same issues as are raised in the third party 
complaint.”  Judge Van Nortwick dissented from the First District’s decision in 
Graney, stating that he would adopt the rationale of Gatins and affirm the trial 
court’s ruling because the third-party complaint filed by Gordon against KTD and 
Graney put KTD and Graney on notice “within the limitations period that they 
were being sued for defects in the HVAC system and that they could be liable for 
damages.”  Graney, 91 So. 3d at 229 (Van Nortwick, J., dissenting).   
ANALYSIS 
 
The conflict issue is whether an amended complaint, naming a third-party 
defendant as a party defendant, relates back to the filing of the third-party 
complaint for statute of limitations purposes.  This question is one of law, and our 
standard of review is de novo.  Pino v. Bank of N.Y., 121 So. 3d 23, 31 (Fla. 
2013).  
 
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Pursuant to Florida Rule of Civil Procedure 1.180, which governs third-party 
practice, a defendant may bring a third party into the suit “who is or may be liable 
to the defendant for all or part of the plaintiff’s claim against the defendant.”  Fla. 
R. Civ. P. 1.180(a).  Once the original defendant has impleaded a third party, “[t]he 
plaintiff may assert any claim against the third-party defendant arising out of the 
transaction or occurrence that is the subject matter of the plaintiff’s claim against 
the [original] defendant.”  Id.  However, the plaintiff’s claims against the third-
party defendant are still subject to any available affirmative defenses, including the 
statute of limitations.  See id.   
Therefore, in order for a plaintiff’s amended complaint filed after the 
expiration of the statute of limitations to be considered timely as to a party 
defendant who was previously a third-party defendant, the court must determine 
whether the relation-back doctrine of Florida Rule of Civil Procedure 1.190(c) 
applies.  That rule provides that an amendment relates back to the date of the 
original pleading “[w]hen 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.”  Fla. R. Civ. P. 1.190(c).   
 
In Gatins, the Fifth District held that an amended complaint naming the 
third-party defendant as a party defendant to the original action was not barred by 
the statute of limitations, as long as the third-party defendant had been brought into 
 
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the lawsuit within the limitations period, and “the plaintiff’s claim concerns the 
same issues as are raised in the third party complaint.”  453 So. 2d at 873, 875.  In 
so holding, the Fifth District reasoned that this was “consistent with the principles 
governing limitations of actions in our state and with the philosophy behind our 
rules of civil procedure.”  Id. at 875.  We agree with the Fifth District and Judge 
Van Nortwick’s dissent in Graney, which adopted the Fifth District’s rationale in 
Gatins.6
Generally, Florida has a judicial policy of freely permitting amendments to 
the pleadings so that cases may be resolved on the merits, as long as the 
amendments do not prejudice or disadvantage the opposing party.  Permitting the 
relation back of pleadings under rule 1.190(c) when the claims “arose out of the 
conduct, transaction, or occurrence set forth or attempted to be set forth” in the 
third-party complaint is consistent with this judicial policy.  Fla. R. Civ. P. 
 
                                         
 
6.  Although Graney argues that Gatins stands alone in this state, there have 
been no contrary cases, and it appears that the reasoning of Gatins has been 
followed by both the Third and Fourth District Courts of Appeal.  See BMAB E. 
Tower, Inc. v. Testwell Craig Labs. & Consultants, Inc., 835 So. 2d 1211, 1211 
(Fla. 3d DCA 2003) (citing Gatins and holding that “appellant’s amended 
complaint against appellees is not barred by the statute of limitations because it 
relates back to the date of filing of the fourth-party complaint”); McKee v. Fort 
Lauderdale Produce Co., 503 So. 2d 412, 412 (Fla. 4th DCA 1987) (citing Gatins 
and holding that “the amended complaint against appellees relates back to the date 
of filing of the third party complaint and is not barred by the statute of 
limitations”). 
 
 
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1.190(c).  As rule 1.190(a) sets forth, “[l]eave of court [to amend] shall be given 
freely when justice so requires.”  Fla. R. Civ. P. 1.190(a).  Further, subsection (e), 
governing “Amendments Generally,” provides that “[a]t any time in furtherance of 
justice, upon such terms as may be just, the court may permit” an amended 
pleading.  Fla. R. Civ. P. 1.190(e). 
Permitting relation back in this context is also consistent with Florida case 
law holding that rule 1.190(c) is to be liberally construed and applied.  See, e.g., 
Fabbiano v. Demings, 91 So. 3d 893, 894-95 (Fla. 5th DCA 2012) (explaining that 
the relation-back rule is to be liberally interpreted and acknowledging that the 
underlying “rationale for this rule is grounded in the notion of fair notice”); Flores 
v. Riscomp Indus., Inc., 35 So. 3d 146, 148 (Fla. 3d DCA 2010) (explaining that 
the relation-back doctrine is to be liberally applied and articulating “the test to be 
whether ‘the original pleading gives fair notice of the general fact situation out of 
which the claim or defense arises’ ” (quoting Kiehl v. Brown, 546 So. 2d 18, 19 
(Fla. 3d DCA 1989))); Bill Williams Air Conditioning & Heating, Inc. v. 
Haymarket Coop. Bank, 592 So. 2d 302, 305 (Fla. 1st DCA 1991) (explaining that 
amendments to pleadings should be permitted whenever possible, unless doing so 
would prejudice the opposing party); Adams v. Knabb Turpentine Co., 435 So. 2d 
944, 946 (Fla. 1st DCA 1983) (explaining that when determining whether an 
amendment should be permitted under rule 1.190 generally, “all doubts should be 
 
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resolved in favor of allowing amendment” and that “[i]t is the public policy of this 
state to freely allow amendments to pleadings so that cases may be resolved upon 
their merits”).  
The justice of this interpretation of rule 1.190(c) becomes even more 
apparent when considering the purpose served by statutes of limitations.  Statutes 
of limitations are designed to protect defendants from unusually long delays in the 
filing of lawsuits and to prevent prejudice to defendants from the unexpected 
enforcement of stale claims.  See Totura & Co. v. Williams, 754 So. 2d 671, 681 
(Fla. 2000) (explaining that the purpose of statutes of limitations is “to promote 
justice by preventing surprises through the revival of claims that have been 
allowed to slumber until evidence has been lost, memories have faded, and 
witnesses have disappeared” (quoting Order of R.R. Tels. v. Ry. Express Agency, 
Inc., 321 U.S. 342, 348-49 (1944))).  As Judge Van Nortwick pointed out in his 
dissent in Graney, the purpose underlying statutes of limitations—namely, 
preventing lack of notice and prejudice to the defendant—is not implicated where 
the plaintiff’s amended complaint relates back to the filing of the third-party 
complaint, as long as the third party was brought into the suit prior to the 
expiration of the statute of limitations and the plaintiff’s claims concern the same 
conduct, transaction, or occurrence at issue in the third-party complaint.  See 
Graney, 91 So. 3d at 229 (Van Nortwick, J., dissenting).   
 
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In other words, in determining whether a time-barred amendment to a 
pleading that names a third-party defendant as a party defendant relates back to the 
date of the third-party complaint, the key inquiry is whether the third-party 
complaint put the third-party defendant on notice of the conduct, transaction, or 
occurrence from which the plaintiff’s claims against that defendant arose.  If so, 
then the statute of limitations should not bar such claims.  Therefore, in a case in 
which the third-party complaint puts the third-party defendant on notice of the 
conduct, transaction, or occurrence from which the plaintiff’s claims arose, and the 
third-party defendant is already a party to the lawsuit when the plaintiff seeks to 
name the third-party defendant as a party defendant, the plaintiff’s amended 
complaint naming the third-party defendant as a party defendant should relate back 
to the timely filed third-party complaint.7
                                         
 
7.  The approach we adopt is consistent with the approach of other 
jurisdictions that permit amended pleadings to relate back to the timely filed third-
party complaint, despite the expiration of the statute of limitations.  See, e.g., 
Rakes v. Fairmont Mobile Homes, Inc., 358 S.E.2d 236, 239 (W. Va. 1987) (“[A] 
plaintiff may amend the original complaint to bring a direct action against a third-
party defendant who has been timely brought into the action by the defendant, if 
the amended complaint is based on the same transaction or occurrence set out in 
the original complaint, unless the third-party defendant can show some substantial 
prejudice.”); Duffy v. Horton Mem’l Hosp., 488 N.E.2d 820, 823 (N.Y. 1985) 
(explaining that the relation-back doctrine applies to an amended complaint filed 
after the expiration of the statute of limitations period as long as the claims are 
based on the same transaction, conduct, or occurrence; the third-party defendant is 
aware of the suit and has been participating; and there is no prejudice to the third-
party defendant); Lawlor v. Cloverleaf Mem’l Park, 266 A.2d 569, 577-78 (N.J. 
1970) (holding that the plaintiff’s amendment asserting claims directly against the 
 
 
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We reject the approach of the First District that would limit the relation-back 
doctrine to cases involving “mistake or misnomer,” Graney, 91 So. 3d at 228, 
because such a rule would be inconsistent with the policy that rule 1.190(c) should 
be liberally construed, as well as the policy underlying the Florida Rules of Civil 
Procedure that cases should be resolved on the merits whenever possible.  Our 
conclusion is also consistent with this Court’s long-standing precedent that an 
amended pleading does not actually introduce a new defendant when it merely 
adjusts the status of an existing party.  See I. Epstein & Bro. v. First Nat’l Bank of 
Tampa, 110 So. 354, 355-56 (Fla. 1926) (holding that an amendment filed after the 
expiration of the statute of limitations period, seeking to change the status of one 
defendant from a representative capacity to an individual capacity and dismissing 
the other defendant, was not time-barred because it was merely a change in the 
status of the parties before the court and did not introduce a new party or cause of 
action).  In this case, the amended complaint filed by Caduceus and TNC against 
KTD and Graney after the statute of limitations period had expired did not 
introduce a new party because “the real parties and interests and the essential 
                                                                                                                                   
third-party defendant related back to the filing of the third-party complaint, even 
though it was filed after the expiration of the statute of limitations period, because 
the third-party defendant was fully aware that it was being sought to be held liable 
and the plaintiff’s claims were based on the same conduct, transaction, or 
occurrence).  We are also aware of contrary holdings from other jurisdictions, but 
we conclude that those approaches are inconsistent with the policies underlying the 
Florida Rules of Civil Procedure. 
 
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elements of the controversy remain[ed] the same.”  James v. Dr. P. Phillips Co., 
155 So. 661, 663 (Fla. 1934) (citing Gibbs v. McCoy, 70 So. 86, 86 (Fla. 1915)).   
Our holding here also does not disturb the precedent that, generally, the 
relation-back doctrine does not apply when an amendment seeks to bring in an 
entirely new party defendant to the suit after the statute of limitations period has 
expired.  See, e.g., Schwartz v. Wilt Chamberlain’s of Boca Raton, Ltd., 725 So. 
2d 451, 453 (Fla. 4th DCA 1999); Kozich v. Shahady, 702 So. 2d 1289, 1291 (Fla. 
4th DCA 1997).  In this case, the plaintiffs did not seek to bring in an entirely new 
party defendant who previously had no connection to the litigation.  Rather, the 
third-party defendants were impleaded by the original defendant in 2007, well 
within the statute of limitations period, and were actively involved in the litigation 
at the time the plaintiffs sought to name them as party defendants.   
Accordingly, we conclude that an amended complaint filed after the statute 
of limitations period has expired, naming a party who was previously a third-party 
defendant as a party defendant, relates back under rule 1.190(c) to the filing of the 
third-party complaint.  For the amended pleading to be timely in this situation, the 
third-party complaint must have been filed prior to the expiration of the statute of 
limitations and the plaintiff’s claims in the amended complaint must arise from the 
same “conduct, transaction, or occurrence” set forth in the third-party complaint.  
We emphasize that this holding does not remove all discretion from the trial court, 
 
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which must first make a determination that the plaintiff’s claims in the amended 
complaint arise from the same “conduct, transaction, or occurrence” as the third-
party complaint.  Further, the trial court retains the discretion to deny the 
amendment if it is so late in the proceedings that the opposing party would be 
unfairly prejudiced and other options, such as a continuance, would be unfair to 
either party. 
As applied to the facts before us, in this case, “[t]here is no dispute . . . that 
the claims [set forth by the plaintiffs in their amended complaint] . . .‘arose out of 
the conduct, transaction or occurrence set forth or attempted to be set forth in the 
original pleading.’ ”  Graney, 91 So. 3d at 224 (quoting Fla. R. Civ. P. 1.190(c)).  
The third-party defendants were timely brought into the suit in 2007 and put on 
notice, prior to the expiration of the statute of limitations, of the facts from which 
the plaintiff’s claims arose.  Moreover, in allowing the amendment, the trial court 
continued the trial for seven months after the amended complaint was filed so that 
any prejudice arising from the change of status from third-party defendants to party 
defendants was eliminated.   
In considering the delay in naming the third-party defendants as party 
defendants in this case, the First District observed that “Caduceus and TNC made 
an intentional or tactical decision not to timely bring claims against parties they 
knew to be potentially liable,” apparently to bolster the First District’s position that 
 
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it was error for the trial court to allow the amendment.  Graney, 91 So. 3d at 228.  
While Caduceus and TNC candidly admitted that their decision to name KTD and 
Graney as party defendants when they had previously been third-party defendants 
did, in fact, relate to Gordon’s financial difficulties that ultimately led to his 
bankruptcy and a stay of the action against him, the actions of the plaintiffs in not 
initially naming KTD and Graney as party defendants is not the type of tactical 
decision that should be considered gamesmanship.  We discern no bad faith in the 
reasons for the delay that would mandate that the plaintiffs be precluded from 
proceeding directly against the engineers who were allegedly at fault for the 
malfunctioning HVAC system, especially where they had been actively involved in 
the litigation for several years.8
   
 
 
 
CONCLUSION 
   
Based on the foregoing, we hold that an amended complaint filed after the 
statute of limitations period has expired, naming a party who had previously been 
made a third-party defendant as a party defendant, relates back under rule 1.190(c) 
to the filing of the third-party complaint.  For the amended complaint to be timely 
                                         
8.  Additionally, because Gordon eventually filed for bankruptcy and his 
third-party complaint against KTD and Graney was ultimately dismissed due to 
Gordon’s failure to comply with a court order, the trial court’s failure to allow this 
amended complaint would have effectively rendered the plaintiffs without a 
remedy and the ability to recover damages for the faulty design of their HVAC 
system. 
 
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in this situation, the third-party complaint must have been filed prior to the 
expiration of the statute of limitations and the plaintiff’s claims in the amended 
complaint must arise from the same “conduct, transaction, or occurrence” set forth 
in the third-party complaint.  
Accordingly, we approve the Fifth District’s decision in Gatins, quash the 
First District’s decision in Graney, and remand this case for further proceedings 
consistent with this opinion.   
It is so ordered.  
 
QUINCE, CANADY, LABARGA, and PERRY, JJ., concur. 
LEWIS, J., concurs in result. 
POLSTON, C.J., is recused. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
Application for Review of the Decision of the District Court of Appeal - Certified 
Direct Conflict of Decisions  
 
First District - Case No. 1D11-2700  
 
(Leon County)  
 
Major B. Harding, Robert N. Clarke, Jr., and Martin B. Sipple of Ausley & 
McMullen, P.A., Tallahassee, Florida,  
 
for Petitioners  
 
Lilburn R. Railey, Patrick R. Delaney, and Rouselle A. Sutton, III of Railey, 
Harding, Allen & Delaney, P.A., Orlando, Florida,  
 
for Respondents