Opinion ID: 6444
Heading Depth: 3
Heading Rank: 2

Heading: Relation back of United Postal's cross-claim

Text: 17 Federal Rule of Civil Procedure 15(c) is a procedural provision to allow a party to amend an operative pleading despite an applicable statute of limitations in situations where the parties to litigation have been sufficiently put on notice of facts and claims which may give rise to future, related claims. 4 The rationale of the rule is that, once litigation involving a particular transaction has been instituted, the parties should not be protected by a statute of limitations from later asserted claims that arose out of the same conduct set forth in the original pleadings. 6A CHARLES A. WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE Sec. 1496 (1990). Rule 15(c) provides, in relevant part, that: 18 Whenever the claim or defense asserted in the amended pleading arose out of the same conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. 19 FED.R.CIV.P. 15(c). This so-called relation back doctrine does not extend the limitations period, but merely recognizes that the purposes of the statute are accomplished by the filing of the initial pleading. American Tel. & Tel. Co. v. Delta Communications Corp., 114 F.R.D. 606, 612 (S.D.Miss.1986). 20 As the district court observed, [t]he necessary implication of the rule is that in order for an amended pleading to relate back for statute of limitations purposes, there must be a previous pleading to which the amendment dates back. It concluded that no such pleading existed. United Postal argues on appeal that the cross-claim related back to either HGIC's original complaint or to its April 18, 1989, amended answer and counterclaim (the amended answer). The cross-claim filed by United Postal is, however, an original cross-claim against a co-party, not an amendment to a previously filed pleading. Accordingly, it does not appear to be within the province of Rule 15(c). Furthermore, Rule 13(g) governing cross-claims does not permit relation back of a cross-claim seeking affirmative and independent relief to the original complaint. See United States for the use of Bros. Builders Supply Co. v. Old World Artisans, Inc., 702 F.Supp. 1561, 1569 (N.D.Ga.1988) (noting that the common law rule that statutes of limitations do not run against pure defenses does not apply to setoffs, counterclaims or crossclaims that are affirmative, independent causes of action). 21 United Postal relies heavily upon an unpublished opinion from the Southern District of New York, Hemmerick v. Chrysler Corp., 1989 WL 4493 (S.D.N.Y. Jan. 13, 1989), in which the court allowed a plaintiff to amend his original complaint to assert an otherwise untimely cross-claim against his co-plaintiff. Pertinent to that case was the fact that both co-plaintiffs had been previously represented by the same counsel and that the cross-plaintiff sought to assert the cross-claim only after retaining independent counsel. In the instant case, by contrast, Stewart and United Postal have been represented by independent counsel with no potential conflict which would prevent United Postal from asserting the cross-claim. We are not persuaded that the Hemmerick result would be proper under the circumstances of this case. 22 United Postal alternatively argues that its amended answer is the relevant pleading to which we look for Rule 15(c) purposes and argues that this answer was effectively amended by the cross-claim; thus, it concludes, the cross-claim relates back to April 18, 1989. We disagree. The cross-claim does not amend the answer because it does not contain any of the allegations in either the amended answer or the counterclaim; rather, it stands alone. Moreover, the amended answer was a responsive pleading which did not assert--or even intimate--any allegations of wrongdoing against Stewart even though all the facts necessary to give rise to such allegations were present in HGIC's original complaint. In fact, the counterclaim did not even mention Stewart. Further, the counterclaim contained in the amended answer was aimed solely against HGIC and cannot be viewed as having put Stewart on notice that United Postal sought relief against Stewart. See Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n. 3, 104 S.Ct. 1723, 1724-25 n. 3, 80 L.Ed.2d 196 (1984) (holding that Rule 15(c) was designed to allow parties to present untimely claims based upon the same transaction so long as it would not work unfair surprise or prejudice). Stewart was not put on notice by the amended answer that it might have to satisfy two separate potential judgments. 5 O'Loughlin v. National R.R. Passenger Corp., 928 F.2d 24, 26-27 (1st Cir.1991) (refusing to allow an amendment to relate back to the original pleading which asserts claims not even suggested in the original). 23 The case presented is not one of joint and several liability where Stewart would at least be aware of the potential of a contribution or indemnification cross-claim by United Postal. See, e.g., B.S. Livingston Export Corp. v. M/V Ogden Fraser, 727 F.Supp. 144 (S.D.N.Y.1989) (allowing amendment to assert cross-claim for indemnification of damages plaintiff might potentially recover from cross-claiming defendant). Rather, the relief HGIC sought against United Postal was merely recissionary; there are no allegations that United Postal was an active participant in any scheme to defraud. This distinction is important because it has been carried over from the common law rule, and the federal courts still employ it. The courts are usually willing to allow a defendant to relate back a cross-claim in the nature of recoupment, indemnity, or contribution which seeks to reduce the amount a plaintiff can recover from that defendant; conversely, however, if the defendant's cross-claim is an affirmative or independent cause of action not in the nature of a defensive claim, the defendant must comply with the applicable statute of limitations. Brothers Builders, 702 F.Supp. at 1569; see also Appelbaum v. Ceres Land Co., 546 F.Supp. 17, 20 (D.Minn.1981), aff'd, 687 F.2d 261 (8th Cir.1982). 24 Acknowledging this distinction, United Postal contends that its cross-claim is a defensive, rather than affirmative, claim because it is defensively postured--similar to a claim for contribution--since if someone is required to pay for a loss incurred in connection with the Prestonwood Green condominiums, it should be Stewart.... This argument does not hold water because HGIC did not sue--and indeed could not have sued--United Postal for money damages. Consequently, United Postal had no right to seek offset damages from Stewart. Simply put, United Postal can only recover from Stewart based upon affirmative claims and must independently satisfy the relevant statutes of limitations without the benefit of relation back. 25 The district court characterized United Postal's argument as requesting that Rule 15(c) be used to ratify all pleadings which would otherwise be time barred, as long as the party who seeks to invoke the rule has an operative pleading on file. The district court properly declined to accept the invitation to adopt such an expansive interpretation of Rule 15(c), 6 and we agree with its conclusion that Rule 15(c) does not apply under the facts presented because United Postal did not have an operative pleading on file with the court below to which the October 23, 1990, cross-claim could relate back.