Opinion ID: 2459915
Heading Depth: 1
Heading Rank: 6

Heading: Relation back under NRCP 15(c)

Text: NRCP 15 sets forth the procedures under which a party may amend his or her pleadings and provides that, under certain conditions, an amendment may relate back to the date of the original pleading. [4] Specifically, NRCP 15 states in pertinent part: (a) Amendments. A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served.... Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.... .... (c) Relation Back of Amendments. Whenever 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, the amendment relates back to the date of the original pleading. An amended pleading adding a defendant that is filed after the statute of limitations has run will relate back to the date of the original pleading under NRCP 15(c) if the proper defendant (1) receives actual notice of the action; (2) knows that it is the proper party; and (3) has not been misled to its prejudice by the amendment. Echols v. Summa Corp., 95 Nev. 720, 722, 601 P.2d 716, 717 (1979). NRCP 15(c) is to be liberally construed to allow relation back of the amended pleading where the opposing party will be put to no disadvantage. See E.W. French & Sons, Inc. v. General Portland Inc., 885 F.2d 1392, 1396 (9th Cir.1989) ([C]ourts should apply the relation back doctrine of [Federal] Rule 15(c) liberally.); University & Cmty. Coll. Sys. v. Sutton, 120 Nev. 972, 988, 103 P.3d 8, 18-19 (2004) (noting the liberal policy underlying NRCP 15). Modern rules of procedure are intended to allow the court to reach the merits, as opposed to disposition on technical niceties. See Schmidt v. Sadri, 95 Nev. 702, 705, 601 P.2d 713, 715 (1979) (The [L]egislature envisioned that [the Nevada Rules of Civil Procedure] would serve to simplify existing judicial procedures and promote the speedy determination of litigation upon its merits.). A plaintiffs right to have his or her claim heard on its merits despite technical difficulties, however, must be balanced against a defendant's right to be protected from stale claims and the attendant uncertainty they cause. Pargman v. Vickers, 208 Ariz. 573, 96 P.3d 571, 576 (App.2004). Certain circumstances may give rise to the imputation of notice and knowledge, from an original defendant to a new defendant, for purposes of relation back. E.g., id. at 577. Courts are particularly amenable to imputing notice and knowledge when the new and original defendants share an identity of interest. 3 James Wm. Moore, Moore's Federal Practice § 15.19[3][c] (3d ed. 2011). Although the relationship needed to establish an identity of interest for purposes of notice and knowledge varies depending on the underlying facts, an identity of interest has been found, for example, between a parent and subsidiary corporation, and based on shared legal counsel. See id. (citing numerous cases for these propositions). Some courts have also referred to this relationship as a unity of interest or community of interest. E.g., Brink v. First Credit Resources, 57 F.Supp.2d 848, 858 (D.Ariz.1999); Perrin v. Stensland, 158 Wash.App. 185, 240 P.3d 1189, 1194 (2010). Whatever label is placed on such a relationship, the fundamental idea is that when the original and new defendant are so closely related in their business operations or other activities[,] ... the institution of an action against one serves to provide notice of the litigation to the other. Moore, supra, § 15.19[3][c]. Many courts recognize that the insurer-insured relationship rises to this level. Smith v. TW Services, Inc., 142 F.R.D. 144, 146 (M.D.Tenn.1991); Lagana v. Toyofuki Kaiun, K.K., 124 F.R.D. 555, 558 (S.D.N.Y. 1989); Phillips v. Gieringer, 108 P.3d 889, 895 (Alaska 2005); Pargman, 96 P.3d at 577-79; Indiana Farmers Mut. Ins. Co. v. Richie, 707 N.E.2d 992, 997 (Ind.1999); Red Arrow Stables, Ltd. v. Velasquez, 725 N.E.2d 110, 116 (Ind.Ct.App.2000); LaRue v. Harris, 128 Wash.App. 460, 115 P.3d 1077, 1079 (2005); see also Korn v. Royal Caribbean Cruise Line, Inc., 724 F.2d 1397, 1401 (9th Cir.1984) (timely notice to insurer of new defendant inadvertently omitted from complaint was sufficient notice to new defendant such that it would not be prejudiced in defending action on the merits). In particular, courts have held that an amended complaint adding the decedent's estate in place of the decedent will relate back when the decedent's insurer had actual knowledge of the suit within the statute of limitations. Hamilton v. Blackman, 915 P.2d 1210, 1218 (Alaska 1996); Pargman, 96 P.3d at 579; Indiana Farmers, 707 N.E.2d at 996-98; Macias v. Jaramillo, 129 N.M. 578, 11 P.3d 153, 159-60 (2000); LaRue, 115 P.3d at 1079; Schwartz v. Douglas, 98 Wash.App. 836, 991 P.2d 665, 667 (2000); Craig v. Ludy, 95 Wash.App. 715, 976 P.2d 1248, 1251 (1999). The approach taken in these cases is consistent with the liberal construction we give to relation back in Nevada, and it furthers the mandate that the rules of procedure are intended to allow cases to be decided on the merits rather than on mere technicalities. It is also in harmony with the general principle that leave to amend shall be freely given when justice so requires. NRCP 15(a). We consequently apply that approach here. Costello sued Casler, unaware that he had died. Prior to the running of the statute of limitations, American Family Insurance was aware of Costello's claim. The record demonstrates that American Family Insurance was fully aware of the accident between Costello and Casler and the injuries that Costello claimed as a result of that accident. For months, American Family Insurance and Costello exchanged correspondence and negotiated in an attempt to resolve Costello's claim. Also, it is abundantly clear that American Family Insurance had actual notice and knowledge of Costello's lawsuit. In fact, four days before the statute of limitations was due to expire, American Family Insurance's counsel wrote Costello, informing her that she had been retained to represent the interests of the insured, Casler, and requesting that she be provided with proof of service. American Family Insurance therefore had actual notice and knowledge of the lawsuit prior to the running of the statute of limitations, and, under the principles we adopt today, its notice and knowledge was imputable to Casler's estate. Allowing the amendment to relate back to the date of the original complaint will not prejudice Casler's estate or American Family Insurance. Although, in order to pursue her claim, Costello was required to name Casler's estate, the substance of the proposed amended complaint effected no real change as Costello's claim remained the same. American Family Insurance would presumably be required to defend the suit regardless of whether Casler was dead or alive. Further, there is no allegation that the amendment would cause any real prejudice to the estate or American Family Insurance. As a result, the requirements of Echols are metthrough American Family Insurance, the estate had actual notice of the action, knew it was the proper party, and will suffer no prejudice from the amended pleading. We emphasize that the approach we adopt to relation back under NRCP 15(c) does not transform an insurer into an agent for service of process. We are dealing with the notice and knowledge requirements of NRCP 15(c) and whether, on the facts before us, they were met for purposes of relation back. We hold that they were. We therefore conclude that the district court erred in denying Costello leave to amend her complaint to add Casler's estate as a defendant. Consequently, summary judgment was improper.