Opinion ID: 1121421
Heading Depth: 1
Heading Rank: 3

Heading: relation back of amendments

Text: On cross-appeal in the Court of Appeals, Bank argued that the trial court erred in failing to grant its motion to dismiss the tort claims as time-barred, because they did not relate back to the original complaint. ORCP 23 C provides in part: 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. Plaintiffs argue that the tort claims involve the same conduct, transaction, or occurrence as the original contract claims and are not barred under that rule. This court has made the following statement regarding the relation-back doctrine under ORCP 23 C: The apparent rationale for allowing a post-limitation amendment to relate back to the pre-limitation pleading, and thereby defeat the statute of limitations, is that a party who is notified of litigation concerning certain conduct    or a given transaction or occurrence through the original complaint, has been given the notice that the statute of limitations was intended to assure. Welch v. Bancorp Management Services, 296 Or. 208, 221, 675 P.2d 172 (1983) (citations omitted), modified 296 Or. 713, 679 P.2d 866 (1984). In Welch v. Bancorp Management Services, supra , this court held that an amendment related back, because it alleged other conduct interfering with the same contract substantially at the same time, albeit interference with the other party to the contract. Thus, the claimed misrepresentation to plaintiff unites with the originally pleaded misrepresentation to the Trust to cause the single injury alleged in the original complaint. We conclude that the additional misrepresentation arose out of the same transaction pleaded in the original complaint and relates back. Id. 296 Or. at 222, 675 P.2d 172. In the present case, plaintiffs argue that, because the new claims arose out of the same conduct alleged in the original pleading, the addition of tort theories is analogous to the addition of the misrepresentation claim in Welch. We do not find Welch to be analogous, however. In Welch, only an additional misrepresentation claim was added where the defendant already was on notice of a misrepresentation claim, the conduct occurred at about the same time, and it resulted in a single injury. We turn now to each of the tort claims set forth in the third amended complaint, to determine whether they arose out of the conduct, transaction, or occurrence originally pleaded and, if so, whether the original pleading sufficiently apprised Bank of litigation concerning such conduct, transactions, or occurrences so as to serve as the notice that the statute of limitations was intended to assure. Id. at 221, 675 P.2d 172. The first tort claim added by plaintiffs alleged that Bank breached its duty of good faith and fair dealing by requiring plaintiffs' customers to provide additional security, by seizing funds from plaintiffs' accounts, by refusing to give plaintiffs the chance to obtain alternative financing, by preventing plaintiffs from selling their trucking division, and by forcing plaintiffs to liquidate assets. Those events relate to dealings between the parties after the loan was denied. Although plaintiffs assert that the later events arose out of the denial of the loan, it is more accurate to say that Bank's alleged later actions arose out of Bank's efforts to keep secured the debt that plaintiffs admittedly owed to Bank. Therefore, the claim for breach of duty of good faith and fair dealing does not relate back. Plaintiffs' next tort claim alleged intentional interference with contract, claiming that Bank interfered with a contract for the sale of lumber by requiring the customer to provide additional security. It is neither alleged, nor can it reasonably be inferred, that those allegations refer to the underlying transaction for which the loan at issue in the original complaint was to be made. For the reasons stated above, that claim does not relate back. Plaintiffs next alleged intentional interference with business relations, based on events beginning in March 1985 and continuing until plaintiffs' assets were liquidated. Those allegations involve over-collateralization, but clearly involve dealings after the denial of the original loan. Those allegations also refer to Bank's actions in scaring away a potential buyer of the trucking component of the partnership. Clearly, that event occurred after the original denial of the loan; that event allegedly precipitated the conversion of the Chapter 11 reorganization into a Chapter 7 liquidation. Those factual allegations did not arise out of the same conduct, transaction, or occurrence as pleaded in the original complaint and, therefore, that the claim based on those allegations does not relate back to the original complaint. The next tort claim is for intentional infliction of severe emotional distress. The facts alleged involve the original denial of the loan, the attempted over-collateralization, threats of default and liquidation made to plaintiffs' customers and the prospective buyer of the trucking business, and threats to plaintiffs. It is clear that the alleged threats occurred after the original denial of the loan and, therefore, that the claim based on those facts does not relate back. The remaining allegations are insufficient to establish a right to recover damages for intentional infliction of severe emotional distress. See Lewis v. Oregon Beauty Supply Co., 302 Or. 616, 626, 733 P.2d 430 (1987) (stating elements). Therefore, the trial court did not err in dismissing this claim. Plaintiffs' next tort claim alleges that Bank was negligent in allowing its agents to make the oral commitment to plaintiffs without review by higher management, in allowing the agents to advance the initial portion of the loan, and in allowing its agents to over-promote Bank's willingness to make the loan. All of those events appear to have occurred at the time of, and directly involve, the denial of the loan at issue in the original pleading. Because it involved essentially the same conduct as alleged for the promise and breach elements of the contract claim, the negligence claim, as based on those factual allegations, relates back to the original complaint. Plaintiffs, however, also make additional allegations involving attempts by Bank in June 1985 to require over-collateralization and to force plaintiffs to liquidate their assets. Because these additional allegations involve a different time period and appear to arise out of subsequent dealings between the parties, rather than the denial of the loan, a negligence claim based on those allegations does not relate back. Plaintiffs' final tort claim alleges breach of fiduciary duty. Some of the factual allegations involve conduct before the events involved in the original pleading: that, in 1983, Bank began discouraging plaintiffs from banking with other institutions, gave plaintiffs advice on expansion of its business, and encouraged plaintiffs in various ways to expand their business. A claim based on those factual allegations does relate to the original complaint, because although the alleged events occurred before the events involved in the original pleading, the facts pertain to the allegation in the original complaint that a fiduciary relationship and duty existed, and the allegations relate to the ultimate contention that Bank breached its fiduciary duty by denying a promised loan. On the other hand, some of the factual allegations involve conduct after the events involved in the original pleading, and a claim of breach of fiduciary duty based on those allegations is time-barred. To the extent described, plaintiffs' claim of breach of fiduciary duty pertaining to the loan promises and loan denial at issue in the original pleading does relate back. We express no opinion as to whether those surviving factual allegations suffice to state tort claims. [19] In summary, we conclude that the individual plaintiffs did not suffer damages separate from those of the partnership and, therefore, that they have not stated individual claims against Bank; the partnership Caplener Brothers is the proper party to this action; and, because of its under-disclosure of this claim in the bankruptcy proceeding, Caplener Brothers is judicially estopped from asserting damages in excess of $451,000. We conclude further that Caplener Brothers was not estopped from adding new theories of liability in tort, but only to the extent that the factual allegations relating to those new claims arose out of the same conduct, transaction, or occurrence alleged in the original pleading. The decision of the Court of Appeals is affirmed in part and reversed in part. The judgment of the circuit court is affirmed in part; reversed in part; and the case is remanded to the circuit court for further proceedings consistent with this opinion.