Opinion ID: 2610891
Heading Depth: 2
Heading Rank: 2

Heading: The Requirements

Text: Ritchie argues that the amended complaint adding GCSR as a party relates back to the original filing because, although GCSR did not know about the actual institution of the action before the statute of limitations expired, it had notice of the accident and of Ritchie's claim through its insurer. Furthermore, its insurer had investigated the incident and had negotiated with Ritchie well within the limitation period. Ritchie claims that in McKinley the court of appeals correctly interpreted our opinion in Hughes Air Corp. v. Maricopa County Superior Court, 114 Ariz. 412, 561 P.2d 736 (1977), to hold that relation back is appropriate if the defendant had informal notice of the underlying claim and would not be prejudiced if the action proceeded. See McKinley, 147 Ariz. at 74, 708 P.2d at 755. Thus, she argues, the Schiavone interpretation of the type of notice required by the rule is contrary to prior Arizona authority. In Hughes, we declined to permit relation back of an amendment because the defendant had no notice, formal or informal, of the claim within the time of the running of the statute of limitations. 114 Ariz. at 414, 561 P.2d at 738. We observed that the record was silent as to any negotiations between the plaintiff and the defendant and that the first time the defendant had any indication that a claim existed was after the statute of limitations had expired. Id. Under those facts, we held the trial court abused its discretion in failing to grant the defendant's motion to dismiss. Id. In McKinley, our court of appeals construed Hughes as permitting relation back of amendments made after the running of the statute of limitations when a defendant had notice of the claim against him whether the notice was by suit or less formal contact so that he is in a position to preserve evidence for later presentation to the trier of fact. 147 Ariz. at 74, 708 P.2d at 755 (emphasis added); see also Canteen Corp. v. Superior Court, 158 Ariz. 461, 763 P.2d 525 (Ct.App. 1988) (no relation back when defendant to be added had no notice of the occurrence giving rise to litigation). The construction of notice inferred from Hughes and adopted in McKinley would permit amendment in this case and does not appear to violate the goals of the rules of civil procedure. Nonetheless, we believe the approach is problematic for a number of reasons. First, it violates the clear language of the rule that requires notice of the institution of the action. Second, the rule arguably gives the prospective defendant no repose. It is unclear when the defendant must be served after he has informal notice of the claim: will informal notice suffice even if he is served after the statute of limitations and the period of abatement expire? No cases give clear guidance. The rule thus fails to adequately protect a defendant from either stale claims or from economic or psychological insecurity. ( See supra Section A(2) discussing policy of the statutes of limitations.) Lastly, because the term informal notice is incapable of precise definition, determining how much notice suffices will burden trial courts and may lead to inconsistent adjudications and inequitable results. Therefore we reject the Hughes language as adopted in the McKinley majority opinion. Notice of institution means notice that the action has been filed.
Ritchie urges us to adopt Judge Livermore's concurrence in McKinley, thus permitting relation back whenever a defendant receives the requisite notice within the period allowed by the applicable statute of limitations plus the time allowed for service of process. Ritchie's argument is an issue of first impression in Arizona; it has embroiled courts and commentators in a maelstrom of controversy. In his concurrence in McKinley, Judge Livermore observed that an anomaly arises when Rule 15(c) is read to require notice of an action to a misnamed party before the statute of limitations runs. McKinley, 147 Ariz. at 74, 708 P.2d at 755. Actual notice within the period of the statute of limitations to a properly named party is not required. Id. If a lawsuit is filed on the eve of the expiration of the statute of limitations, a properly named defendant who had no notice at all could not raise the bar of the statute of limitations so long as he had been served with process within a year after timely filing of the action. Id.; see Rule 6(f), which allows one year for service of process after filing of the action. The crucial question thus becomes whether the requirement of Rule 15(c) that a defendant receive notice of the action within the period provided by law for commencing the action against him  (emphasis added) is fulfilled if we consider the period to include both the statute of limitations during which the action must be commenced by filing a complaint pursuant to Rule 3 and the additional year Rule 6(f) provides to prosecute the action. Rule 6(f) was originally enacted as a statute and later adopted as a rule of procedure. In 1913, the legislature enacted 6 R.S. Civil 1913 § 434, which stated: When the complaint shall be filed with the clerk, and the other regulations prescribed by law shall be complied with, the clerk shall forthwith indorse on the complaint the day and month and year that it is filed, and at any time within one year thereafter the plaintiff may have a summons issued.... and § 460, which provided: An action shall abate if the summons be not issued and served ... within one year from the filing of the complaint. We first interpreted these statutes in Gideon v. St. Charles, 16 Ariz. 435, 439, 146 P. 925, 927 (1915). In Gideon, plaintiff filed a complaint shortly before the statute of limitations was to run, but a summons was neither issued nor served until seven months after the statute had run. Defendant claimed the action was barred by the statute, and the trial court agreed. We reversed and held that the legislature intended to toll the statute of limitations for one year when it enacted section 434 of the 1913 Civil Code. Id. We observed that the trial court had no discretion to bar the action if service was accomplished during that one year period. Id. In sum, the period in which this state's statute of limitations required that an action must be commenced and prosecuted includes the year after the statute of limitations had run. Id. Only if the plaintiff failed to prosecute during the year did the action abate. See 6 R.S.Civil 1913 § 460; see also Murphey v. Valenzuela, 95 Ariz. 30, 33, 386 P.2d 78, 80 (1963) (fundamental reason for requiring the plaintiff to exercise due diligence in seeking to have the defendant served with process arises out of the fact that when a suit is commenced the statute of limitations is tolled). Rule 6(f) is directly derived from 6 R.S.Civil 1913 § 460. See Rule 6(f), Historical Note. As we have already observed: It is therefore clear that the Legislature did not intend to leave the important time for summoning a defendant to court to judicial improvisation as to when a claim was lost by lapse of time and that a period was intended to be provided during which a summons must be served in order that the action not abate. Montano v. Scottsdale Baptist Hosp., Inc., 119 Ariz. 448, 451, 581 P.2d 682, 685 (1978). Given that the legislature intended that an action might be commenced by filing within the period of the statute of limitations ( see Rule 3) and prosecuted by service within the additional time of one year, allowing an amendment to add or change a party during that same time period does nothing to undermine the protection the legislature intended to provide for defendants. Nor can the added defendant show any legal prejudice; GCSR received notice within the time that would have been proper if it had been correctly named in the first place. See Ingram v. Kumar, 585 F.2d 566, 572 (2d Cir.1978), cert. denied, 440 U.S. 940, 99 S.Ct. 1289, 59 L.Ed.2d 499 (1979) (permitting relation back under these circumstances).
The Schiavone majority interpreted Rule 15(c) restrictively when it held that the period for commencement of actions equated with the statute of limitations. Justice Stevens, dissenting, argued that the period for commencement to which Rule 15(c) referred should be interpreted to include two components, the time for commencing the action by the filing of a complaint and the time in which the action `against him' must be implemented by the service of process. Schiavone, 477 U.S. at 37, 106 S.Ct. at 2388. In cases such as this, where the added defendant received all the notice required if it had been originally and properly named as a party defendant, we consider Schiavone an unfortunate interpretation of Rule 15(c). A recently proposed amendment to Federal Rule 15(c) confirms our view. See Preliminary Draft of Proposed Amendments to the Federal Rules of Appellate Procedure and the Federal Rules of Civil Procedure, Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (1989). The proposed amendment permits relation back when a party or the name of the party against whom a claim is asserted is changed within the period provided for service of process. The purpose of the federal rule revision is to change the result in Schiavone v. Fortune , ... with respect to the problem of the misnamed defendant. Advisory Committee Note, Preliminary Draft. The Committee noted that the result reached in Schiavone based on the text of the previous rule was inconsistent with the liberal pleading practices secured by Rule 8. Id. We do not know if the amendment will be adopted in its drafted form. Nonetheless, we join the drafters of the amendment in concluding that Schiavone was decided on an overly literal reading of the rule. Even if we were to focus on a literal reading of the rule, we reach the same result. First, the words of this rule (within the period provided by law for commencing the action against him) are not nearly so clear as one might imagine. Several members of the United States Supreme Court and several panels of the circuit courts of appeals have concluded that the proper interpretation of that phrase includes the total time allowed by rule or law for service of summons. See, e.g., Ingram, 585 F.2d at 572; Kirk v. Cronvich, 629 F.2d 404 (5th Cir.1980). As noted, in Arizona, where the legislature explicitly intended that commencement and prosecution of the action be permitted within the limitations period plus the additional year abatement period, such an interpretation of the words is even more compelling. Second, for those who nevertheless may find the words crystal clear, we are not constrained in this case as we are in many others by doctrines of original intent, framers' intent, and the like. We are the framers (or at least the enacters) of Rule 15(c) and are somewhat more free, therefore, to interpret its meaning in line with our intent and the intent of the bar committee that proposed it. ( See supra Section A(1); see also Bauer, supra, 63 NOTRE DAME L.REV. at 720.) The rule was intended to liberalize the relation back doctrine and allow a plaintiff to correct a misnomer problem or add a defendant that was named incorrectly or omitted. It would be foolish indeed to interpret such a rule so narrowly as to allow its use only in those cases in which it was not needed because the statute of limitations had not yet run. A defendant added by amendment is entitled to no better notice than a defendant originally and properly named. We conclude that despite the principle of uniformity, we are not compelled to follow Schiavone. It conflicts with established Arizona law and also appears to conflict with the avowed goals of the drafters of the federal rules. We hold that when a party files a claim before the expiration of the statute of limitations, an amendment adding or changing a party pursuant to Rule 15(c) will relate back if the defendant or counter-defendant is served within the time prescribed by the applicable statute of limitations plus the time allowed for service of process pursuant to Rule 6(f), and if the claim asserted arose out of the same occurrence set forth in the original pleading. Any reasoning to the contrary in Hughes Air Corp. v. Maricopa County Superior Court and Canteen Corp. v. Superior Court is disapproved.