must or should, within the period of time provided by law for commencing the action against him, have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him. Plaintiffs contend that the conditions of Rule 15(c) have been satisfied, and defendant argues that they have not. Plaintiffs argue in addition that, even if the Rule 15(c) conditions have not been met here, defendant is estopped to deny that they have been met.
Since plaintiffs seek only to change the defendant against whom their claim is asserted, the first condition of Rule 15(c) is clearly satisfied. The second condition, however, does not seem to have been met. For plaintiffs to satisfy that condition, they must make a two-fold showing: (a) that Treadway had notice of "the institution of the action" before the statute of limitations had run, and (b) that such notice was sufficient to prevent Treadway from being prejudiced in maintaining its defense on the merits. Without even reaching the question of prejudice, there is nothing in the record of this case to indicate that Treadway received notice of the institution of this lawsuit prior to plaintiffs' motion on May 22, 1973, to amend their complaint to include Treadway as a defendant, which was more than five months after the statute of limitations had run. This is not a case in which the newly named defendant, although neither named in nor served with the original complaint, nevertheless, because of his relationship with the defendant named in the original complaint, had to have known of the initial institution of the action. Cf. Swartz-welder v. Hamilton, 56 F.R.D. 606 (M.D.Pa. 1972). Nor is it a case in which the party to be brought in by the amendment was actually served with the original complaint, albeit the original complaint was defective because it had not named the proper defendant under state law. Cf. Brennan v. Estate of Smith, 301 F. Supp. 307 (M.D.Pa. 1969). Rather this is a case in which plaintiffs named and served a defendant entirely different from and independent of the defendant sought to be brought in by amendment, and the newly named defendant received no notice of the lawsuit until after the statute of limitations had run. See Munetz v. Eaton Yale and Towne, Inc., 57 F.R.D. 476 (E.D.Pa. 1973). Under such circumstances, if "notice of the institution of the action" in Rule 15(c) means notice of the institution of the lawsuit, then plaintiffs have failed to satisfy the second condition of the rule.
Plaintiffs nevertheless argue that the second condition of Rule 15(c) is satisfied in this case. Citing Meredith v. United Air Lines, 41 F.R.D. 34 (S.D. Cal. 1966), they contend that it is not necessary for the defendant to have known of the institution of the lawsuit before the statute of limitations had run, as long as, within that time, it had knowledge of the occurrence of the incident which is the basis of the lawsuit. Plaintiffs point out that the defendant had such knowledge, as the accident occurred on its premises, and, moreover, that plaintiff had to have concluded that the accident would give rise to a lawsuit, as it caused its insurance company to conduct an investigation within one week of the accident. Furthermore, plaintiffs contend, the insurance company's investigation shortly after the accident occurred will prevent the defendant from being prejudiced in maintaining its defense on the merits.
Assuming that the Meredith case stands for the proposition advanced by plaintiffs, that is, that Rule 15(c), in spite of its clear language, does not necessarily require notice of the institution of a lawsuit in order for its notice requirement to be satisfied,
it is definitely a minority view.
Furthermore, the rationale of such a holding seems to have been seriously eroded in Meredith's own circuit by the holding of the 9th Circuit Court of Appeals in Craig v. United States, 413 F.2d 854, 858 (9th Cir. 1969) that ". . . 'action,' as used in Rule 15(c), means a lawsuit, and not the incident giving rise to a lawsuit."
Moreover, even if Meredith is read as describing a viable and valid exception to the general rule, it is an exception that has been confined to the unusual facts of that case by the later Craig case, and one which would not be applicable to the facts here. The investigation conducted by Treadway's insurance company shortly after the accident at issue here appears to have been nothing more than the routine inquiry conducted by most insurers under similar circumstances. The record does not disclose that it consisted of anything more than an interview with the injured plaintiff and the taking of her statement describing her accident. Such an inquiry does not begin to compare to the thorough investigation conducted by the defendant in Meredith in preparation for a hearing before the Civil Aeronautics Board. Thus, even if the notice portion of the Rule 15(c) requirements has been satisfied here, plaintiffs have not shown that the notice received by defendant was sufficient to prevent it from being prejudiced in its defense on the merits.
Finally, regardless of whether plaintiffs can surmount the second condition of Rule 15(c), they would not be able to meet the third requirement of showing that the party to be brought in by amendment must or should, within the period of time provided by law for commencing the action against him, have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him. This third requirement is analogous to an estoppel test, and is met in such situations as when the plaintiff misdescribes the defendant but actually serves the person intended to be named in the complaint. Wright & Miller, Federal Practice and Procedure: Civil § 1498. It could not be met in a case such as this, in which there is no showing that before the statute of limitations had run the defendant knew or should have known that a lawsuit had been instituted, or that within that time it knew or should have known that the plaintiffs were mistaken as to the identity of the proper party. In sum, the plaintiffs have satisfied neither the second nor the third condition of Rule 15(c).
It remains to be considered whether the defendant is estopped from asserting such failure to fulfill the requirements of Rule 15(c). The party sought to be brought in by amendment will be estopped from asserting a statute of limitations defense if he or the originally named defendant either knowingly allows the plaintiff to think he has sued the proper party or actually misleads him as to the identity of the party that should be held responsible. Wright & Miller, supra, § 1500. See, e.g., Travelers Indemnity Co. v. United States, 382 F.2d 103 (10th Cir. 1967). Plaintiffs argue that the defendant Treadway should be estopped to assert a statute of limitations defense here because it misled them as to the identity of the proper party to be sued. In support of their argument, they point out that, in its operation, advertisement and promotion of Split Rock Lodge, Treadway does not disclose that it, and not some entity with a name incorporating the name of the resort, owns the resort. In addition, they argue, the agent of defendant's insurance company identified his company as representing Split Rock Lodge when he interviewed Mrs. Slack shortly after the accident. Thus, plaintiffs conclude, Treadway's conduct actually misled them as to the true owner of Split Rock Lodge, and Treadway should be estopped from asserting a statute of limitations defense.
That the plaintiffs were mistaken as to the true owner of the resort cannot be denied. Furthermore, it is arguable that their mistake was contributed to by the actions (more correctly lack of action) of defendant, in the sense that, if Treadway had, for example, identified itself as the owner of Split Rock Lodge in its advertisements of the resort, or in the sense that, if the insurance agent who interviewed Mrs. Slack had identified the corporate name of his client, rather than his client's resort, plaintiffs would have known whom to sue without having to investigate the matter themselves. Such actions by the defendant, however, do not amount to the consciously misleading conduct that constitutes grounds for estoppel. Cf. Zielinski v. Philadelphia Piers, 139 F. Supp. 408 (E.D. Pa. 1956) (inaccurate answers to interrogatories and untruthful pretrial testimony). Furthermore, defendant had complied with state law by registering the name of the resort as a fictitious name with the Bureau of Corporations. Plaintiffs could have discovered the true owner of the lodge by inspecting the appropriate public records. Finally, no showing of intentional misleading arises out of the insurance agent's identifying his client as Split Rock Lodge instead of Treadway Inn. He did in fact represent the lodge, since he represented its owner, and, in any event, it was reasonable for him to name the lodge rather than the corporate client, since Mrs. Slack had dealt only with the former and the name Treadway would have meant nothing to her. In sum, the facts of this case do not constitute grounds for estoppel.
In accordance with the above, summary judgment will be granted to both defendants.
William J. Nealon / United States District Judge
Dated: October 9, 1974
Now, this 9th day of October, 1974, in accordance with the memorandum this day filed, summary judgment is hereby granted to the defendants Treadway Inn of Lake Harmony, Inc. d/b/a Split Rock Lodge and Split Rock Lodge, Inc.
William J. Nealon / United States District Judge