SOOY v PETROLANE STEEL GAS INC

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No. 84-555 I N THE SUPREME COURT OF THE STATE O F MONTANA 1985 ARLYN J. SOOY, P l a i n t i f f and A p p e l l a n t , PETROLANE S T E E L GAS, INC., e t al., D e f e n d a n t s and R e s p o n d e n t s , D i s t r i c t C o u r t of t h e F i f t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of B e a v e r h e a d , T h e H o n o r a b l e Frank D a v i s , Judge p r e s i d i n g . APPEAL FROM: COUNSEL OF RECORD: For Appellant: B u r g e s s , Joyce & Whelan; Butte, Montana T h o m a s F. Joyce a r g u e d , For Respondents: S m i t h , P o h l m a n & A l l e n ; L i s a S w a n argued f o r P e t r o l a n e S t e e l G a s , B u t t e , Pllontana P o o r e , R o t h & R o b i n s o n ; I . R i c h a r d O r i z o t t i argued for Exxon Corp., B u t t e , Montana H e n n i n g s o n & P u r c e l l ; J a m e s E. P u r c e l l argued f o r Shell O i l , B u t t e , Montana Corette, Submitted: Decided: Filed: q)J$f"1, f ; , jf4j$jjj Nay 30, 1 9 3 5 $ J o v e m b e r 1 2 , 1 9 35 M r . J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d t h e O p i n i o n of t h e Court. is This Court, Fifth plaintiff, amended an appeal J. complaint June Sooy's and judgment of Beaverhead motion granting for District the County, to leave respondents' denying file motions an for W e reverse. summary j u d g m e n t . O n a District, Judicial Arlyn from 19, 1980, Sooy a t t e m p t e d t o light the pilot l i g h t on t h e h o t w a t e r h e a t e r i n t h e b a s e m e n t o f h i s home i n Wisdom. An e x p l o s i o n ensued and h e w a s s e r i o u s l y i n j u r e d . O J u n e 1 7 , 1 9 8 3 , h e f i l e d a c o m p l a i n t i n S i l v e r Bow C o u n t y . n In the complaint Petrolane Steel Sooy a l l e g e d Gas, that he bought propane and P e t r o l a n e Inc. from S t e e l Gas S e r v i c e , t h a t t h e s e d e f e n d a n t s f a i l e d t o add a n o d o r i z i n g a g e n t t o t h e propane, and as a result, he could smell not t h e escaping p r o p a n e when h e l i t t h e m a t c h t h a t c a u s e d t h e e x p l o s i o n . In a d d i t i o n t o P e t r o l a n e S t e e l G a s , I n c . a n d P e t r o l a n e S t e e l Gas Service, Sooy named, by fictitious names, other defendants whose n e g l i g e n c e may h a v e c a u s e d him i n j u r y . He also alleged damages t o h i s r e a l p r o p e r t y . The t w o named d e f e n d a n t s were s e r v e d on J u n e 2 2 , 1983, and r e s p o n d e d on J u l y 1 9 , 1 9 8 3 , b y f i l i n g a m o t i o n t o d i . s m i s s and to change venue to Beaverhead County. The m o t i o n to c h a n g e v e n u e was g r a n t e d . Shortly thereafter, Sooy l e a r n e d t h a t Exxon, S h e l l O i l , P e t r o l a n e S u p p l y a n d P e r r y Gas P r o d u c t s w e r e t h e r e F i n e r s o f propane furnished responsible refinery. summons for to adding Therefore, issued, named and the on the defendants and that odorant the propane June to 11, 1 9 8 4 , summons, a copy h e had of they a t were the additional the original and n o t i c e w e r e s e r v e d on J u n e 1 4 , complaint, 1984 on G . T. Corporation, t h e designated agent f o r s e r v i c e of process of t h e f o u r newly d i s c o v e r e d d e f e n d a n t s . a s John Doe No. Exxon was made a p a r t y S h e l l O i l a s John Doe No. 3; 4; Petrolane 5 , and P e r r y Gas a s John Doe No. S u p p l y a s J o h n Doe No. 6. Each o f t h e s e f o u r d e f e n d a n t s f i l e d a motion t o d i s m i s s and moved f o r summary judgment. them knew o f s t a t u t e of They a r g u e d t h a t none o f t h e a c t i o n u n t i l June 1 4 , 1 9 8 4 , and t h a t t h e l i m i t a t i o n s had r u n on S o o y ' s c l a i m a g a i n s t them on J u n e 1 9 , 1983. O August n 1984, a h e a r i n g was h e l d a t which Sooy 15, moved t o f i l e an amended c o m p l a i n t . The amended c o m p l a i n t changed t h e names o f t h e John Does t o t h e t r u e names o f t h e f o u r c o r p o r a t e d e f e n d a n t s , r e a l l e g e d Count One, d e l e t e d Count Two relating t o property damage, l i a b i l i t y claim a r i s i n g out of i n i t i a l complaint. On August and the 30, substituted a facts strict set f o r t h i n t h e 1984, t h e D i s t r i c t C o u r t d e n i e d t h e motion t o f i l e a n amended c o m p l a i n t and g r a n t e d d e f e n d a n t s ' m o t i o n s f o r summary judgment. Two i s s u e s a r e p r e s e n t e d f o r review: (1) Whether t h e D i s t r i c t C o u r t e r r e d i n d e n y i n g Sooy l e a v e t o f i l e an amended c o m p l a i n t . (2) the Whether t h e D i s t r i c t C o u r t e r r e d i n f i n d i n g t h a t s t a t u t e of limitations, c l a i m a g a i n s t Exxon, S 27-2-204, Shell O i l , MCA, barred Sooy's P e t r o l a n e S u p p l y , and P e r r y Gas. We find first that the District Court did d e n y i n g Sooy l e a v e t o f i l e a n amended c o m p l a i n t . M.R.Civ.P. as a err in Rule 15 ( a ) p r o v i d e s t h a t "A p a r t y may amend h i s p l e a d i n g o n c e matter of pleading i s served course at ..." any time before a responsive A t t h e t i m e Sooy moved f o r l e a v e to file an amended Petrolane Supply, pleading. complaint, and Therefore, Perry defendants Gas had Exxon, made no Shell, responsive a p p e l l a n t should have been allowed t o amend h i s c o m p l a i n t a g a i n s t t h e s e f o u r d e f e n d a n t s r e g a r d l e s s of whether the judgment. court later Defendants felt bound Petrolane to Steel grant Gas, summary Inc. , and P e t r o l a n e S t e e l Gas S e r v i c e d i d f i l e r e s p o n s i v e p l e a d i n g s a n d t h u s , a s t o t h e m , a p p e l - l a n t would n o t h a v e b e e n a b l e t o amend "as a matter of course." h i s complaint However, Rule 1 5 ( a ) f u r t h e r p r o v i d e s t h a t onc e a r e s p o n s i v e p l e a d i n g i s s e r v e d "a p a r t y may written h i s p l e a d i n g o n l y by amend consent of the adverse so s h a l l b e f r e e l y g i v e n when j u s t i c e added.) I n L i e n v . Murphy C o r p o r a t i o n 8 0 4 , 39 St.Rep. leave of c o u r t o r by and party; requires." leave (Emphasis (Mont. 1 9 8 2 ) , 6 5 6 P.2d 2 2 5 2 , t h e p l a i n t i f f moved t o amend n i n e y e a r s a f t e r t h e c o m p l a i n t was o r i g i n a l l y f i l e d . The D i s t r i c t C o u r t d e n i e d t h e m o t i o n t o amend. finding t h a t there We reversed, was n o b a d f a i t h , d i l a t o r y m o t i v e , o r u n d u e d e l a y on t h e p a r t of the movant. In complaint stemmed complaint and from t h e would we addition, cause found that the amended same o c c u r r e n c e a s t h e o r i g i n a l only minimal prejudice to the defendant. I n t h e p r e s e n t c a s e a l l o w i n g a n amended c o m p l a i n t would have not prejudiced responsive pleadings, additional theory of facts. Further, as the Sooy two defendants merely l i a b i l i t y based sought on t h e who to filed add an same o p e r a t i v e t h e r e i s no e v i d e n c e t h a t S o o y ' s m o t i o n t o amend t h e c o m p l a i n t w a s m o t i v a t e d b y b a d f a i t h o r a d e s i r e t o Under t h e s e c i r c u m s t a n c e s w e f i n d t h a t t h e D i s t r i c t delay. Court erred respect Gas, by not granting Sooy leave to t o t h e o r i g i n a l l y named d e f e n d a n t s , Inc., and Petrolane Steel Gas amend. With P ~ t r o l a n eS t e e l Service, the amended complaint relates back to the filing the of original c o m p l a i n t a s p r o v i d e d by R u l e 1 5 ( c ) , M.R.Civ.P. The s e c o n d i s s u e p r e s e n t e d by t h i s c a s e r e q u i r e s t h a t w e re-examine P.2d 1184. Vincent v. In that Edwards c a s e when ( 1 9 7 9 ) , 184 Mont. the 601 complaint original 92, was f i l e d t h e p l a i n t i f f had p o s i t i v e l y i d e n t i f i e d two d e f e n d a n t s . T h r e e o t h e r d e f e n d a n t s whom t h e p l a i n t i f f had n o t p o s i t i v e l y identified § were 25-5-103, d e s i c ~ n a t e d by When MCA. the f i c t i t i o u s names p u r s u a n t identities of these to three d e f e n d a n t s w e r e d i s c o v e r e d t h e p l a i n t i f f moved t o amend t h e o r i g i n a l c o m p l a i n t i n o r d e r t o s u b s t i t u t e t h e r e a l names f o r t h e f i c t i t i o u s names. c o m p l a i n t was f i l e d . The m o t i o n was g r a n t e d and a n amended The t h r e e f i c t i t i o u s l y named d e f e n d a n t s moved f o r summary judgment on t h e g r o u n d s t h a t t h e s t a t u t e o f l i m i t a t i o n s had r u n on p l a i n t i f f ' s c l a i m u n d e r 5 2 7 - 2 - 2 0 4 ( 1 ) , This MCA. relying on applying t o bar, Court affirmed the provisions the of summary Rule judgment 15(c), f i c t i t i o u s l y named d e f e n d a n t s . on appeal, M.R.Civ.P., as In t h e case a t t h e D i s t r i c t C o u r t r e l i e d on o u r h o l d i n g i n V i n c e n t v. Edwards, in limitations determining had run that against in this the case the plaintiff statute as to of the f i c t i t i o u s l y named d e f e n d a n t s . W e r e a l i z e now t h a t i n d e c i d i n g V i n c e n t v . did not take named as Edwards, w e i n t o a c c o u n t t h e s t a t u s o f d e f e n d a n t s who a r e parties under fictitious names when the original c o m p l a i n t h a s been f i l e d . The a p p l i c a b l e s t a t u t e i s S 25-5-103, which p r o v i d e s : S u i n g a p a r t y by a f i c t i t i o u s name. When t h e p l a i n t i f f i s i g n o r a n t o f t h e name o f t h e -defendant, s u c h d e f e n d a n t may b e designated i n any pleading or proceeding by a n y name; and when h i s t r u e name i s discovered, t h e pleadings o r proceedings may b e amended a c c o r d i n g l y . No case decided by this Court prior to v. Vincent Edwards h a d d e t e r m i n e d w h e t h e r a f i c t i t i o u s l y named d e f e n d a n t is a to complaint. the We party now ho1.d t h a t when a c o m p l a i n t s e t s f o r t h a action from t h e filing of the original c a u s e o f a c t i o n a g a i n s t a d e f e n d a n t d e s i g n a t e d by f i c t i t i o u s name and his true is name thereafter discovered and s u b s t i t u t e d by amendment, t h e f i c t i t i o u s l y named d e f e n d a n t i s considered that the a party statute t o the of action limitations i t s commencement from stops running as to so the f i c t i t i o u s p a r t y on t h e d a t e t h e o r i g i n a l c o m p l a i n t i s f i l e d . see O l d e n v . H a t c h e l Accord, 1 5 4 Cal.App.3d 1032. But (Cal. i f 1 9 8 4 ) , 201 C a l . R p t r . parties are 71.5, a d d e d b y amended c o m p l a i n t a s new p a r t i e s a n d n o t a s p r e s e n t l y i d e n t i f i e d b u t f o r m e r l y f i c t i t i o u s l y named d e f e n d a n t s , t h e amended c o m p l a i n t does not relate back to the date of filing the original c o m p l a i n t and t h e s t a t u t e o f l i m i t a t i o n s i s n o t t o l l e d a s t o s u c h new p a r t i e s . Cir.Ca1. Anderson v . 1 9 8 0 ) , 630 F.2d identified name, i s a p a r t y from t h e b e g i n n i n g . In interpretation to formerly I n s u r a n c e Co. deciding Vincent v. I n s u r a n c e Co. (applying California later Mutual Automobile party, 677 Allstate sued Edwards, the provisions of law). A a fictitious Freeman v. (Cal. under (9th S t a t e Farm 1 9 7 5 ) , 535 P.2d we Rule gave an 341. improper 1 5 ( c ) , M.R.Civ.P. That r u l e provides: R e l a t i o n b a c k o f amendments. Whenever t h e c l a i m o r d e f e n s e a s s e r t e d i n t h e amended pleading arose out of the conduct, transaction, o r occurrence set f o r t h o r attempted t o be set f o r t h i n t h e o r i g i n a l p l e a d i n g , t h e amendment r e l a t e s b a c k t o t h e d a t e of t h e o r i g i n a l p l e a d i n g . An amendment c h a n g i n g t h e p a r t y a g a i n s t whom a c l a i m i s a s s e r t e d r e l a t e s back i f t h e foregoing provision i s s a t i s f i e d and, w i t h i n t h e p e r i o d p r o v i d e d by law f o r commencing t h e a c t i o n a g a i n s t him, t h e p a r t y t o b e b r o u g h t i n by amendment ( I - ) has received such notice of the i n s t i t u t i o n of t h e a c t i o n t h a t he w i l l n o t be p r e j u d i c e d i n maintaining h i s d e f e n s e on t h e m e r i t s , and ( 2 ) knew o r s h o u l d h a v e known t h a t , b u t f o r a m i s t a k e concerning t h e i d e n t i t y o f t h e proper p a r t y , t h e a c t i o n would h a v e been b r o u g h t a g a i n s t him. .. I t w i l l b e s e e n from a r e a d i n g o f R u l e 1 5 ( c ) , t h a t a n amended c o ~ n p l a i n t r e l a t e s back t o t h e d a t e o f t h e o r i g i n a l p l e a d i n g when t h e amended p l e a d i n g d e p e n d s on t h e same s e t o f operative f a c t s a s contained i n t h e o r i g i n a l pleading. The f u r t h e r p r o v i s i o n i n R u l e 1 5 ( c ) , w i t h r e s p e c t t o amendments c h a n g i n g a p a r t y , r e l a t e s t o t h o s e s i t u a t i o n s where t h e p a r t y asserting the identity of ignorant holding of in denies t h e claim has robs a mistake concerning the t h e p r o p e r p a r t y r a t h e r t h a n when t h e p a r t y i s the true Vincent v. status of identity Edwards the a c t i o n from t h e b e g i n n i n g , bar, made the of the with proper respect party. to Rule Our 15(c) f i c t i t i o u s party a s being i n t h e and i n c a s e s s u c h a s t h e one a t f i c t i t i o u s name statute, S 25-5-103, of its efficacy. W f i n d o u r s e l v e s i n a g r e e m e n t w i t h t h e Supreme C o u r t e o f C a l i f o r n i a i n B a r r i n g t o n v . A.H. 7 0 2 P.2d Robbins Co. (Cal. 1985), 563, a t 5 6 5 , where i t s a i d : The r e l a t i o n - b a c k d o c t r i n e h a s been u s e d t o d e t e r m i n e t h e t i m e o f cornmencemont o f an a c t i o n f o r t h e p u r p o s e o f t h e s t a t u t e of limitations. Normally, t h e s t a t u t e of l i m i t a t i o n s commences t o r u n r e g a r d l e s s of t h e injured p a r t y ' s ignorance of h i s or her cause of action. (Citing authority.) In Austin v. Massachusetts Bonding & I n s u r a n c e Co. (1961) 56 C a l . 2 d 596, 1 5 C a l . R p t r . 817, 3 6 4 P.2d 681, w e h e l d t h a t a n amended c o m p l a i n t i s n o t b a r r e d by t h e s t a t u t e of l i m i t a t i o n s , e v e n t h o u g h it s u b s t i t u t e s a named p a r t y for a fictitious defendant, if the amended complaint r e l a t e s back to a timely o r i g i n a l complaint. Reasoning t h a t t h e d e f e n d a n t was n o t p r e j u d i c e d by t h e f i l i n g o f a n amendment a f t e r t h e s t a t u t o r y p e r i o d had e l a p s e d , w e o b s e r v e d t h a t "a d e f e n d a n t unaware o f t h e s u i t a g a i n s t him b y a f i c t i t i o u s name i s i n n o worse position if, in addition to s u b s t i t u t i n g h i s t r u e name, t h e amendment makes o t h e r c h a n g e s i n t h e a l l e g a t i o n s o n t h e b a s i s o f t h e same g e n e r a 1 s e t o f facts. (Citing authority. ) C o n v e r s e l y , "a p l a i n t i f f who d i d n o t know o f t h e t r u e name a t t h e t i m e t h e o r i g i n a l c o m p l a i n t was f i l e d has a t least a s liberality of great a need for the amendment a s a p l a i n t i f f who knew t h e d e f e n d a n t ' s name t h r o u g h o u t , a n d h e should n o t b e penalized merely because he was c o m p e l l e d t o r e s o r t t o h i s s t a t u t o r y r i g h t o f u s i n g a f i c t i t i o u s name." . . ." ... ... W e t h e r e f o r e r e v e r s e o u r h o l d i n g i n V i n c e n t v. supra, a n d d e t e r m i n e t h a t when a Edwards, fictitious party is later i d e n t i f i e d , t h e amendment s e t t i n g f o r t h h i s t r u e name r e l a t e s back t o t h e d a t e o f t h e f i l i n g o f t h e o r i g i n a l pleading. t h i s case, run In i t means t h a t t h e s t a t u t e o f l i m i t a t i o n s had n o t against those fictitious defendants who where later i d e n t i f i e d b y t h e i r t r u e names. There i s p r o t e c t i o n f o r f i c t i t i o u s l y named d e f e n d a n t s i n t h e p r o v i s i o n s o f o u r R u l e 4 1 ( e ) , M.R.Civ.P. Under t h a t r u l e a n y d e f e n d a n t who h a s n o t a p p e a r e d i n t h e a c t i o n o r who has n o t been served w i t h i n t h r e e y e a r s a f t e r t h e - has C L C ~ ~ D . I *~ H 1:!+5 J b e e n commenced i s e n t i t l e d t o a d i s m i s s a l . that rule, year of M o r e o v e r , un e r u n l e s s summons s h a l l h a v e b e e n i s s u e d w i t h i n o n e the commencement entitled t o dismissal. f i l e d on J u n e 1 7 , 1983. of the action a defendant is I n t h i s c a s e , t h e o r i g i n a l a c t i o n was The a d d i t i o n a l summons a g a i n s t t h e newly identified defendants was issued on June 11, 1984, w i t h i n t h e one y e a r p e r i o d . We this t h e r e f o r e r e v e r s e t h e summary j u d g m e n t s g r a n t e d case and remand the cause accordance with t h i s opinion. FJe c o n c u r : n n :j < ' '7 for f u r t h e r proceedings in in

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