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RATCLIFFE v. INSURANCE CO.

January 14, 1980

LOUISE C. E. RATCLIFFE, on behalf of herself and all others similarly situated
v.
INSURANCE COMPANY OF NORTH AMERICA and INA CORPORATION, including its insurance and insurance related subsidiaries



The opinion of the court was delivered by: DITTER

Plaintiff, Louise Ratcliffe, brings this action on behalf of herself and others similarly situated, against her former employers, the Insurance Company of North America (INA) and INA Corporation, including its insurance and insurance related subsidiaries, alleging unlawful discrimination against women in hiring, promotion, and employment practices in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e Et seq. In another count of the complaint, plaintiff, individually, alleges violations by the same defendants of the Equal Pay Act, 29 U.S.C. § 206(d). Plaintiff seeks declaratory and injunctive relief, back pay, and other affirmative relief. The jurisdiction of this court is invoked under, Inter alia, 28 U.S.C. §§ 1331 and 1337, 29 U.S.C. § 216(b), and 42 U.S.C. § 2000e-5(f).

The matter is presently before me for consideration of a motion of INA and the insurance and insurance related subsidiaries of INA Corporation to dismiss the amended complaint. After this motion to dismiss was filed, I granted plaintiff 60 days in which to take discovery as to certain factual matters raised by the motion. Since I have reviewed affidavits, answers to interrogatories as well as the extensive briefs of counsel, it is appropriate to treat defendants' motion to dismiss as a motion for summary judgment. See Fed.R.Civ.P. 12(b). After consideration of the exhibits before me, I conclude that INA's motion must be denied. *fn1"

 Plaintiff, Louise Ratcliffe, alleges that she was employed by defendants INA and INA Corporation from June, 1970, until her resignation in April, 1977. *fn2" In November of 1976, plaintiff filed a charge with the Equal Employment Opportunity Commission (EEOC) against INA and INA Corporation alleging that she had been denied, Inter alia, promotions and transfers on account of her sex. Plaintiff received a right to sue letter from the EEOC on November 7, 1977. On January 25, 1978, plaintiff filed her sex discrimination complaint and named the Insurance Company of North America Corporation, a nonexistent entity, as defendant. On February 28, 1978, defendant filed an amendment complaint naming as defendants INA and INA Corporation, including its insurance and insurance related subsidiaries.

 INA's motion to dismiss the amended complaint, which will be treated as one for summary judgment under Rule 56, is based on a number of grounds. The first is that the court lacks jurisdiction over the subject matter of the action. Specifically, INA argues that since plaintiff failed to institute suit against it until February 28, 1978, the action is untimely, because it was not commenced within 90 days of her receipt of a right to sue letter from the EEOC, a requirement of 42 U.S.C. § 2000e-5(f)(1). *fn3" In response, plaintiff claims that the action is timely because under the provisions of Fed.R.Civ.P. 15(c), the amended complaint should "relate back" to January 25, 1978, the date of the filing of the original complaint. *fn4" For the following reasons, I am persuaded that plaintiff's position should be sustained.

 The first sentence of Fed.R.Civ.P. 15(c) provides that "(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." There is no doubt that plaintiff has satisfied this portion of Rule 15(c). Here, the amended complaint made no change in the substance of the claim asserted in the original complaint; the same acts of discrimination were alleged in both. Since the only change effected was in the caption of the complaint and the pluralization of the word "defendant," I find that the amended pleading arose out of the "conduct, transaction, or occurrence" set forth in the original pleading. See 3 Moore's Federal Practice P 15.15(3), at 15-194 (2d ed. 1979).

 In addition, for her amended complaint to "relate back," plaintiff must also satisfy the second requirement of Rule 15(c), *fn5" I.e., "within the period provided by law for commencing the action against him" a defendant must have

 
(1) . . . received such notice of the institution of the action that he will not be prejudiced in maintaining his 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 him.

 In my view, plaintiff has shown that the requirements of this part of the rule have been met.

 INA admits that it received notice of the institution of the action on February 13, 1978. In addition, INA was served with a copy of the amended complaint on March 5, 1978. Both dates however, are beyond the 90 day limitation period established under Title VII. Thus, while not denying that it received notice of the institution of the action, INA asserts that the notice of February 13, 1978, came too late to permit relation back under Rule 15(c). In making this argument, INA is relying on the fact that while statutes of limitations are usually geared to the filing of the complaint, Rule 15(c) is geared to notice. Thus, INA argues, the party to be substituted must have received notice "within the period provided by law for commencing the action against (it)." See Simmons v. Fenton, 480 F.2d 133, 136-37 (7th Cir. 1973). I am not persuaded.

 It is well settled that "the Federal Rules of Civil Procedure are to be liberally construed to effectuate the general purpose of seeing that cases are tried on the merits and to dispense with technical procedural problems. To this end, amendments pursuant to Rule 15(c) should be freely allowed." Staren v. American National Bank & Trust Co. of Chicago, 529 F.2d 1257, 1263 (7th Cir. 1976). And, in In re Home-Stake Production Co. Securities Litigation, 76 F.R.D. 337, 346 (N.D.Okl.1975), the court stated that "Rule 15(c) should be liberally applied, especially if no disadvantage will accrue to the opposing parties." Similarly, in Travelers Indemnity Co. v. United States, 382 F.2d 103, 106 (10th Cir. 1967), the court in discussing Rule 15, stated that the "ends of justice are not served when forfeiture of just claims because of technical rules is allowed."

 Against this background, I must examine the facts of the instant case. Admittedly, INA was not served within 90 days of plaintiff's receipt of her right to sue letter from the EEOC. But, had INA been properly named in the caption of the complaint, it could not possibly argue that the action was untimely for it is "well-settled that the statute of limitations is not a defense for a party served after the limitations period has expired so long as the action was "commenced' within the relevant period." *fn6" Mitchell v. Hendricks, 68 F.R.D. 564, 568 (E.D.Pa.1975) (citing 2 Moore's Federal Practice P 3.07(4-3-2) (2d ed. 1979)). Thus, if plaintiff's action would have been timely had her complaint correctly named INA, even though INA received notice after the 90 day period had expired, there is no logical reason why plaintiff's amended complaint should be considered untimely. As the district court stated in Mitchell v. Hendricks, supra, 68 F.R.D. at 568: "Such a ruling treats the defendant (named in the amended complaint) no differently than the defendant who knows nothing of a lawsuit, "commenced' under applicable procedural rules, until after the limitations period has run, and to whom, nonetheless, the (statute of limitations) defense is of no avail." See also Ingram v. Kumar, 585 F.2d 566, 571 (2d Cir. 1978), Cert. denied, 440 U.S. 940, 99 S. Ct. 1289, 59 L. Ed. 2d 499 (1979); 2 Moore's Federal Practice P 4.44, at 4-558-4-559 (2d ed. 1979).

 Professors Wright and Miller have characterized INA's argument here as "an overly literal reading of the rule," stating further that "it is difficult to understand how the new defendant will be prejudiced" because "(common) sense, prudence, and efficiency suggest to the reasonable man that he should pursue his initial investigation and prepare his defense . . . in such a manner as to collect and preserve evidence regarding all of the foreseeable actions arising from the event." 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1498, at 509-10 (1971). Certainly, INA has done so here. INA was named and charged by plaintiff in the proceedings before the EEOC, and therefore knew of the prior EEOC investigation. Plaintiff and plaintiff's counsel met with attorneys and representatives of both INA and INA Corporation and advised them of plaintiff's intention to institute suit against both defendants. Therefore, permitting the amendment will not prejudice INA in maintaining its defenses on the merits because there is "nothing to suggest that (it) has been hindered in its ability to obtain relevant evidence needed to mount its defense." Taliferro v. Costello, 467 F. Supp. 33, 35 (E.D.Pa.1979).

 The final requirement of Rule 15(c) is that INA "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)." This "aspect of Rule 15(c) seems designed to insure that, prior to the expiration of the limitation period, the new defendant knew (or should have known) that his joinder was a distinct possibility." Taliferro v. Costello, supra, 467 F. Supp. at 36. Professors Wright and Miller, in describing this portion of Rule 15(c), state that "the courts probably will apply something akin to a reasonable man test to determine whether the party "should have known' he was the one intended to be sued." 6 C. Wright & A. Miller, supra, at 515. Applying these criteria to the instant case, I find that plaintiff has satisfied this portion of the test.

 Surely, INA knew that its joinder was more than a "distinct possibility." Plaintiff was employed by INA for many years and subsequently named INA in her charge before the EEOC. INA was then investigated by the EEOC in regards to plaintiff's claim. Moreover, plaintiff and her counsel attempted to negotiate a settlement with INA attorneys and representatives. Under these circumstances, it was more than reasonable to conclude that INA not only should have known, but in fact ...


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