Opinion ID: 2626344
Heading Depth: 3
Heading Rank: 2

Heading: The Amendment to Phillips's Complaint Relates Back to the Original Pleading.

Text: Alaska Rule of Civil Procedure 15(c) provides that when the basic claim arises out of the conduct set forth in the original pleading, an amendment changing the party relates back to the date of the original pleading if: within the period provided by law for commencing the action against the party to be brought in by amendment, that party (1) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party. We have also concluded that when the original complaint is timely filed, the language within the period provided by law for commencing the action encompasses the reasonable time for service of process permitted by the rule for a named defendant. [6] Because the factual allegations set forth in Phillips's amended complaint remain unchanged from the original pleading, we proceed to consider whether the requirements of notice and knowledge were met within the 120 days allowed for timely service after filing of the complaint.
We noted in Farmer v. State that the requirement that the party receive notice within the statute of limitations period has been characterized as the linchpin of Rule 15(c). [7] We recognized that [i]f the original pleading gives fair notice of the general fact situation out of which the claim arises, the defendant will not be deprived of any protection which the state statute of limitations was designed to afford him. [8] Thus, fairness is the touchstone of the relation back doctrine. [9] We must determine whether the substituted or additional party [had] fair notice of the cause of action, within the prescribed statutory period, such that the party's rights will not be prejudiced. [10] In applying this rule, we are governed by the well-established philosophy that the rules should be liberally construed to insure that no plaintiff is deprived of his day in court solely because of the intricacies and technical limitations of pleading. [11] With these principles in mind we proceed to consider whether Carl Gieringer had constructive or imputed notice [12] of the institution of Phillips's complaint within the statutory period such that his rights will not be prejudiced. We noted in Farmer v. State that a developing body of law ... allows notice under Civil Rule 15(c) to be given constructively where the additional party brought in by amendment is represented by the same attorney as the existing parties. [13] In Farmer, the plaintiff brought suit against the State of Alaska and two state troopers five days before the statute of limitations deadline, naming one of the troopers as a John Doe defendant because he did not know his proper name. [14] On appeal Farmer argued that his amended complaint substituting Mike Metrokin for the John Doe defendant should relate back to the date of the original complaint because Metrokin had constructive and imputed notice. [15] We agreed with Farmer, and adopted the identity of interest approach as to service on the state, its agencies, and officers. [16] We held in Farmer that under the identity of interests standard constructive notice could be imputed to Metrokin through his counsel, the state attorney general's office, which represented all of the defendants from the outset. We pointed out that the identity of interest standard usually requires a nexus between the new and the old parties as to the subject of the litigation and an analogous legal position within the case itself. Where the new and the old party share the same attorney, imputed notice can readily be found and the dictates of Civil Rule 15(c) are nonetheless adhered to.[ [17] ] In Farmer, we observed that imputation of notice under the identity of interest standard is particularly compelling in suits where a citizen is seeking redress from the state. [18] The question before us in this case is whether the identity of interest standard may also apply in suits against private parties. [19] In their treatise Federal Practice and Procedure, Professors Wright, Miller, and Kane explain that an identity of interest generally means that the parties are so closely related in their business operations or other activities that the institution of an action against one serves to provide notice of the litigation to the other. [20] Thus, a business operation or other private relationship may also give rise to an identity of interest. Whether in a public or private context, the objective of the theory is to avoid the application of the statute of limitations when no prejudice would result to the party sought to be added by the amendment. [21] Some courts have found that the identity of interest standard allows notice to be imputed through a shared insurance carrier when the insurer is contractually bound to protect the interests of the insured. [22] In Angel v. Ray, for example, the court held that there existed an identity of interest between an insured and the insurance company because [u]nder the terms of the insurance, [the insurance company] was obligated to protect the interests of the substituted defendant. [23] In Denver v. Forbes, the court imputed notice through a shared insurer under factual circumstances very similar to the case at hand: the plaintiff in an auto collision mistakenly named the owner of the vehicle as the defendant when in fact the driver was the owner's daughter. [24] The Denver court permitted the plaintiff to amend the complaint because the insurance company was aware of the actual facts well within the two-year period after the accident, and [because] no harm will be done if the daughter is substituted for the mother as defendant in the action. [25] But other courts have refused to impute knowledge from an insurance company to the insured on the grounds that the existence of an insured-insurer relationship does not automatically create an identity of interest. [26] In routine cases, there will be an identity of interest between the insurer and the insured because insurance companies are typically required by contract to represent the interests of the insured. We recognize, however, that in some cases the interests of the insured and insurer will not be aligned. In such cases, it would be inappropriate to impute notice from the insurance company to the insured under an identity of interests theory. We therefore hold that there is a presumption that notice may be imputed from an insurer to the insured, but that this presumption may be rebutted if the insured can show that its interests conflict with the insurance company. In the present case, Carl was insured under the same State Farm policy as his father Robert. On July 16 Phillips's attorney sent the State Farm adjuster a copy of the draft complaint along with a letter explaining that he would file the complaint if a settlement was not reached before August 15. It is undisputed that State Farm was aware of the potential suit in late July, well within the time allowed for a timely commencement of the action. [27] There is therefore a presumption that the notice to State Farm may be imputed to Carl. Nothing in the record before us indicates that Carl did not share an identity of interest with his insurance company; in fact, it became evident during the post summary judgment motion practice that State Farm's attorney met with Carl's mother to discuss the complaint and researched the statute of limitations issue on Carl's behalf. But on remand, Carl should have the opportunity to present any contrary evidence on this issue. Rule 15(c) also requires that the notice of the action, whether actual or imputed, is such that the party will not be prejudiced in maintaining his defense on the merits. It appears on the evidence presented to us that Carl has suffered no prejudice in maintaining his defense. In its denial of Phillips's motion for reconsideration the superior court explicitly found that Carl's defense would not be prejudiced by imputing notice of the action to him. Carl was covered under the same insurance policy as his father, and the evidence gathered by State Farm regarding the accident would be identical to that utilized if Carl were named a defendant. [28] The notice requirement of Rule 15(c) has therefore been met in this case.
We last consider the knowledge and mistake requirements of Rule 15(c)(2). This provision of the rule requires that a party knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against [him]. [29] As with our analysis of imputed notice, a strong case exists for imputing knowledge of the mistake to Carl. In Farmer, we noted that `[k]nowledge can be imputed to a new defendant through his attorney who also represented the party or parties originally sued.' [30] A number of courts have imputed knowledge of mistake through the insurance agent, and have held that it is necessary to judge knowledge of the mistake from the perspective of [the insurance company]. [31] And some courts have applied the identity of interests theory to the mistake requirement. [32] In the present case we judge knowledge of the mistake from the perspective of the insurance company. Because the text of the complaint directed all allegations and claims of liability against the driver of the vehicle, the State Farm adjuster knew or should have understood upon reviewing the complaint that Phillips made a mistake when she named Robert as the defendant. [33] Other courts have determined that when a clear mistake has been made and an attorney or an insurer has knowledge of the mistake, the requirements of Rule 15(c)(2) are satisfied. [34] In the same manner in which there is a presumption that Carl had imputed notice of the action through State Farm, because he and his father were insured under the same policy, there is a presumption that Carl had imputed knowledge that he was the party who should have been sued. [35] We therefore conclude that unless Carl can rebut the presumption of imputed notice and knowledge, Phillips's amended complaint substituting Carl Gieringer relates back to the original filing date. [36]