Opinion ID: 772562
Heading Depth: 2
Heading Rank: 2

Heading: Whether TJI was a Properly Added Party

Text: 46 While we thus agree that the action against the NFL defendants was properly dismissed, we conclude that the district court erred in granting summary judgment to TJI and TJL. 47
48 The district court decided that VKK's amended complaint, which added TJI as a defendant, did not relate back to the filing of the initial complaint and that the claims against TJI were thus time-barred. VKK Corp. v. Nat'l Football League, 187 F.R.D. 498 (S.D.N.Y. 1999). We review for abuse of discretion a district court's determination that an amended complaint does not relate back to the original complaint. See Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir. 1989); Wilson v. Fairchild Republic Co., 143 F.3d 733, 738 (2d Cir. 1988). 49 If a complaint is amended to include an additional defendant after the statute of limitations has run, the amended complaint is not time barred if it relates back to a timely filed complaint. See Fed. R. Civ. P. 15(c). The goal of relation-back principles is to prevent parties against whom claims are made from taking unjust advantage of otherwise inconsequential pleading errors to sustain a limitations defense. Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 19 (2d Cir. 1997) (quoting Fed. R. Civ. P. 15 Advisory Committee Note (1991)) (internal quotation marks omitted). Rule 15(c) of the Federal Rules of Civil Procedure describes the requirements necessary for an amended complaint to relate back to an original complaint: 50 An amendment of a pleading relates back to the date of the original pleading when 51 .... 52 (2) 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, or 53 (3) the amendment changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within [120 days of filing the complaint], the party to be brought in by amendment (A) 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 (B) 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. 54 There are thus three requirements that must be met before an amended complaint that names a new party can be deemed to relate back to the original timely complaint. First, both complaints must arise out of the same conduct, transaction, or occurrence. Second, the additional defendant must have been omitted from the original complaint by mistake. Third, the additional defendant must not be prejudiced by the delay. See Soto v. Brooklyn Corr. Facility, 80 F.3d 34, 35-36 (2d Cir. 1996). VKK's amended complaint meets all three requirements. 55 First, both the original and the amended complaints arise out of the same conduct: the alleged agreement between TJI and the NFL defendants pursuant to which TJI discontinued negotiations with VKK for relocation of the Patriots to Jacksonville. 56 Second, TJI was omitted from the original complaint because of a mistake concerning the identity of the proper party. Fed. R. Civ. P. 15(c)(3)(B). The district court concluded that TJI was strategically omitted and TJL was sued because it was the recipient of the payback franchise. VKK Corp., 187 F.R.D. at 499. But in its original complaint, VKK describes its interactions in the spring of 1991 with an entity that it calls Touchdown Jacksonville, Ltd. At that time, however, TJI was the only Touchdown Jacksonville entity extant, and TJI was concededly the entity whose actions are described in the complaint. TJL was not created until the fall of 1991. We see no plausible reason for VKK purposefully to claim negotiations with and ascribe actions to a company that did not exist. We have found nothing in the extensive record on appeal to support the district court's theory as to VKK's strategy. 57 Third, the amended complaint also meets the no prejudice requirement. TJI knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against it. Fed. R. Civ. P. 15(c)(3)(B). TJI and TJL had an ongoing relationship. Both were created to accomplish the same goal bringing an NFL football franchise to Jacksonville, Florida and in October 1991, TJI transferred some its assets to TJL in order to help accomplish that goal. The president of TJI, David Seldin, was also the president of TJL's corporate general partner. Seldin admitted that he read the original complaint when it was first filed in November 1994 and thus should have known that some of the allegations therein were meant to be directed at TJI. See Advanced Magnetics Inc., 106 F.3d at 19 (holding that '[t]he substitution of... parties after the applicable statute of limitations may have run is not significant when the change is merely formal and in no way alters the known facts and issues on which the action is based.') (quoting Staren v. American Nat'l Bank & Trust Co., 529 F.2d 1257, 1263 (7th Cir. 1976)); Peterson v. Sealed Air Corp., 902 F.2d 1232, 1237 (7th Cir. 1990) (finding that a corporation might receive notice within the meaning of Rule 15(c) if its president reads about the suit in The Wall Street Journal and recognizes that his firm is the right defendant and that [a] complaint naming GM that went on and on about the plaintiff's Thunderbird would alert Ford's agent that Ford was the right party.); William H. McGee & Co. v. M/V Ming Plenty, 164 F.R.D. 601, 606 (S.D.N.Y. 1995) (holding that [t]he misidentification of similarly named or related companies is the classic case for application of Rule 15(c) relation back.). Seldin must have recognized that paragraphs 60 and 61 of the complaint did not mean to refer to TJL because, as he testified, TJL did not even exist in April 1991. 58 Because the amended complaint squarely meets all three requirements of Rule 15(c), we hold that the district court abused its discretion in deciding that it did not relate back to the original complaint, and that the claims against TJI were therefore time-barred. 59
60 The claims against TJI and TJL cannot be dismissed based on the Release because the Release does not cover TJI or TJL. The district court concluded that the Release unambiguously included TJL and therefore granted TJL summary judgment. VKK, 55 F. Supp. 2d at 209-10. We disagree. 61 Under New York law, 10 the initial interpretation of a contract 'is a matter of law for the court to decide.' K. Bell & Assocs., Inc. v. Lloyd's Underwriters, 97 F.3d 632, 637 (2d Cir. 1996) (quoting Readco, Inc. v. Marine Midland Bank, 81 F.3d 295, 299 (2d Cir. 1996)). Included in this initial interpretation is the threshold question of whether the terms of the contract are ambiguous. See Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 (2d Cir. 1990); Garza v. Marine Trans. Lines, Inc., 861 F.2d 23, 27 (2d Cir. 1988). [I]f the contract is capable of only one reasonable interpretation, i.e., is unambiguous, we are required to give effect to the contract as written. K. Bell & Assoc., 97 F.3d at 637 (internal quotation marks omitted); see also Fulton Cogeneration Assocs. v. Niagara Mohawk Power Corp., 84 F.3d 91, 98 (2d Cir. 1996); United Nat'l Ins. Co. v. Waterfront N.Y. Realty Corp., 994 F.2d 105, 107 (2d Cir. 1993). 62 The district court concluded that the plain, unambiguous language of the Release confirms that... [TJL] is within its scope because TJL is a member club of the NFL and a successor to the NFL and/or to the 28 predecessor member clubs. VKK, 55 F. Supp. 2d at 209-10. The district court also found that the Release was intended to cover all member clubs of the NFL, including member clubs at the time any 'future... claims' might be brought by the plaintiffs. VKK, 55 F. Supp. 2d at 209. We disagree. 63 The Release states that Kiam and the two VKK corporations: 64 hereby release and forever discharge the National Football League, its officers, directors,... employees, subsidiaries, affiliates, partners, predecessors, principals, heirs, executors, administrators, trustees, beneficiaries, agents, successors, and assigns, and each Member Club of the National Football League... their officers, directors... subsidiaries, affiliates, partners, predecessors, principals, heirs, executors, administrators, trustees, beneficiaries, agents, successors, and assigns... of and from any and all past or present or, if based, in whole or in part, on facts, actions, claims or matters existing or occurring from the beginning of the world to the date of this Release, future claims. 65 The Release does not say that Kiam and the two VKK corporations release clubs that are not members at the time the Release is signed but become members at the time future claims are brought. There are two words that might be interpreted to include future member clubs: successor and affiliate. A successor is generally defined as one that succeeds or follows; one who takes the place that another has left and sustains the like part or character. Black's Law Dictionary, 1446 (7th ed. 1999). TJL is neither a successor of the NFL nor a successor of a member club. It did not take the place of any entity that existed at the time of the signing of the Release. Rather, it is a completely new member club added to the NFL in 1994. 11 An affiliate is defined as being close in connection, allied, associated, or attached as a member or branch. Id. at 59. The Release's reference to affiliates and the definition of the word are stated in the present tense. Nothing in this definition indicates the inclusion of future rather than present members. 66 Our conclusion that the Release does not cover future member clubs such as TJL is supported by the principle of expressio unius est exclusio alterius. 12 The NFL and its member clubs are sophisticated commercial actors who could have specifically referred to future member clubs had they intended to include them in the Release. The Release refers to past, present, and future... Releasors but makes no mention of future Releasees, leading us to conclude that the parties to the Release did not intend to include future member clubs. See Cornell Univ. v. UAW Local 2300, 942 F.2d 138, 139 (2d Cir. 1991) (holding that under the theory of expressio unius est exclusio alterius, a collective bargaining agreement that enumerates those matters subject to arbitration excludes those matters not enumerated); Israel Discount Bank, Ltd. v. Gottesman, 544 F.2d 80, 82 (2d Cir. 1976) (applying the maxim expressio unius est exclusio alterius to find that the failure of Israel Discount, a sophisticated commercial lender, to include... specific reference to tort claims precludes our divining or implying such a right on the basis of the general language of the agreement.) The Release therefore does not cover TJL, and the district court improperly granted summary judgment on that basis. 67 Finally, TJI has never been a member or affiliate of the NFL or a successor or affiliate of a member club. Whether or not future members are included within the Release, TJI is not covered.