Milford JONES and Hazel Jones, Plaintiffs-Respondents, v. Albert WATSON and Madeline Watson, Defendants-Appellants.
No. 12176.
Supreme Court of Idaho.
Oct. 7, 1977.
570 P.2d 284
Lloyd J. Webb, Webb, Burton, Carlson & Pedersen, Twin Falls, for defendants-appellants.
Frank M. Rettig, Rettig, Fredericksen & Williams, Jerome, for plaintiffs-respondents.
McFADDEN, Chief Justice.
Milford and Hazel Jones, plaintiffs-respondents, filed suit against Albert and Madeline Watson, defendants-appellants, alleging that they are holders of a promissory note executed by the Watsons, and that the Watsons failed to make payments on the note when due. The Jones sought judgment for the amount of the note, plus interest and attorney’s fees. After trial, the court entered judgment in favor of plaintiffs. Defendants have perfected this appeal, and we affirm.
On June 21, 1973, the Jones filed this action, together with an application for a writ of attachment. An order to issue the writ of attachment was signed by the district judge on the same day. An order to show cause why a writ of attachment should not issue was entered June 21, 1973 and the writ was issued on June 22, 1973. A hearing was set for July 3, 1973, but the matter was continued because service of the Order to Show Cause had not been returned.
On June 13, 1974, defendants filed an answer, and motion to vacate the attachment. Nothing further transpired until the day set for trial, September 26, 1975. Defendants then requested leave to amend their answer to include a defense of statute of limitations and a counter-claim for wrongful attachment. The court granted leave to amend the answer to reflect a defense of statute of limitations, but refused permission to include the counter-claim. Following trial, judgment was entered in favor of the plaintiffs.
Defendants first assign as error the trial court’s ruling that plaintiff’s action is not barred by the statute of limitations. All agree that the applicable statute of limitations is
The alternative of prospective application of decisions has a sound basis in policy and legal theory. As the Washington Supreme Court noted:
“So it is that the doctrine of prospective overruling has attached in many areas: in constitutional law, contracts, torts, criminal law, taxation, and in the field of procedure, giving the doctrine both sanction and acceptance throughout our jurisprudence. Prospective overruling imparts that final degree of resilience, to the otherwise rigid concepts of stare decisis, so necessary to prevent the system from becoming brittle. It enables the law under stare decisis to grow and change to meet the ever-changing needs of an ever-changing society and yet, at once, to preserve the very society which gives it shape.” State v. Martin, 62 Wash.2d 645, 384 P.2d 833, 849 (1963).
The determination of whether an overruling decision shall be applied retroactively or prospectively, is a matter left to state courts for determination on a case-by-case basis. As the Alaska Supreme Court noted:
“A state supreme court has unfettered discretion to apply a particular ruling either purely prospectively, purely retroactively, or partially retroactively, limited only ’by the juristic philosophy of the judges * * * their conceptions of law, its origin and nature.’ The decision is not a matter of law but a determination based on weighing the merits and demerits of each case. Consideration is given to applying a ruling prospectively ’whenever injustice or hardship will thereby be averted.’” Warwick v. State ex rel. Chance, 548 P.2d 384, 393 (Alaska 1976).
See, also, Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U.S. 358, 365, 53 S.Ct. 145, 77 L.Ed. 360 (1932); Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965); Thompson v. Hagen, 96 Idaho 19, 523 P.2d 1365 (1974); Sims v. State, 94 Idaho 801, 498 P.2d 1274 (1972); Dawson v. Olson, 94 Idaho 636, 496 P.2d 97 (1972); Smith v. State, 93 Idaho 795, 473 P.2d 937 (1970); 10 A.L.R.3d 1371. As this court noted in footnote to Dawson v. Olson, supra, “those issues have subsequently become questions of ’judicial policy rather than of judicial power.’” 94 Idaho 636, 639, 496 P.2d 97, 100; see also, Annotation, Prospective or Retroactive Application of Overruling Decision, 10 A.L.R.3d 1371, 1378.
In exercising the discretion to determine the effect to be given a decision, courts have relied on a widely varying spectrum of factors. See, e. g., Li v. Yellow Cab Co. of California, 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226 (1975) (fairness and public policy); Vaughn v. Murray, 214 Kan. 456, 521 P.2d 262 (1974) (justifiable reliance on the earlier law, nature and pur
“The determination of whether a rule is to be given retroactive application is generally made pursuant to a balancing process, wherein the gain to be achieved in the administration of justice by accomplishment of the purpose of the new rule (the first criterion) is balanced against the adverse effects on the administration of justice resulting from the extent to which the courts have mistakenly but in good faith relied on the prevailing rule (the second criterion) and from an application of the new rule for the purpose of reconsidering determinations already finally made pursuant to the then prevailing rule (the third criterion).” People v. McDaniel, 16 Cal.3d 156, 127 Cal.Rptr. 467, 545 P.2d 843, 848 (1976).
Applying these principles, this court concludes that the trial court ruled correctly in applying the decision in Lipe v. Javelin prospectively. By not tolling the statute of limitations as to an out-of-state defendant subject to the long-arm statute, the Lipe decision works to encourage potential plaintiffs to diligently utilize long-arm provisions, and prevents claims from becoming more stale than necessary by penalizing plaintiffs who do not invoke long-arm procedures. No enhancement of this purpose is served by retroactive application, as the incentive of the Lipe v. Javelin holding cannot work after the fact. We are convinced that minimal number of cases will proceed to trial solely because of a prospective application of the Lipe doctrine, and thus the impact on the administration of justice will be slight. Of critical importance, we believe, is the reliance element. Prior to Lipe, the case of Staten v. Weiss, 78 Idaho 616, 308 P.2d 1021 (1957) strongly intimated, although did not expressly dictate, that the statute of limitations would be tolled as to an out-of-state defendant, even if that defendant was susceptible to service of process under the long-arm statute.1 If Lipe is applied retroactively, plaintiffs who relied on the assumption that the statute of limitations defense could not be interposed against them, would lose their day in court because they relied on a reasonable interpretation of a pronouncement of this court. In the instant case, the plaintiffs contend they believed that the law did not require them to file suit within the time specified by the statute of limitations because of the dictates of Staten. We conclude that reliance on the prior holding was justified, and that retroactive application of the Lipe v. Javelin holding would work an injustice for those who so relied on the prior
case.2 In weighing the three relevant considerations, we conclude that the holding in Lipe v. Javelin should be applied prospectively only.
Appellants also assign as error the trial court’s refusal to allow an amendment to the answer to reflect a counter-claim for wrongful attachment. Amendments to the pleadings are governed by
“Rule 15(a). Amended and supplemental pleadings—Amendments—A party may amend his pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, he may so amend it at any time within twenty (20) days after it is served. Otherwise a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires, and the court may make such order for the payment of costs as it deems proper. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within ten (10) days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders.”
As this case had been set for trial at the time of defendant’s attempt to amend the answer, leave of the court was prerequisite to amendment. Although leave to amend is to be freely given,
Affirmed. Costs to respondents.
DONALDSON and SHEPARD, JJ., and DUNLAP, District Judge, Retired, concur.
BISTLINE, Justice, dissenting.
Defendants’ primary contention is that this Court’s holding in Lipe v. Javelin Tire Company, Inc., 96 Idaho 723, 536 P.2d 291 (1975), was neither a judicial repeal of nor an amendment to Idaho’s tolling statute,
I. The statutes which are relevant to this case are:
Prior to the adoption of the long-arm statute, in personam jurisdiction of the Idaho courts in civil matters began and ended at the State’s boundaries. In 1933 the legislature enacted an out-of-state motorist statute which created a narrow exception to the general rule of civil in personam jurisdiction. This statute, as amended, is now
The passage of the long-arm statute changed the whole ball game. Personal jurisdiction no longer depends on service being made within Idaho’s boundaries. The statute provides that an individual may be subjected to the jurisdiction of Idaho courts for a number of reasons including the commission of any tortious act within this state or the transaction of business in Idaho.
Staten v. Weiss, 78 Idaho 616, 308 P.2d 1021 (1957), involved the out-of-state motorist statute and the tolling statute. Staten was gratuitously overruled in Lipe, which was not a motor vehicle accident case and did not involve
“. . . is by this statute made as amenable to service of process as he would be if residing in this state. It follows that [the tolling statute provisions] relating to absence from and non-residence in this state now have no application to cases such as the one at bar.” 51 A.2d at 191.
All that this Court did in Lipe was to carry out the will of the legislature as evidenced by it in enacting the long-arm statute. Where the statute applies, the state boundaries cease to exist for the purposes of in personam jurisdiction. The Court did nothing more than declare the obvious. The Court made no law in the field. The change in law was made by the legislature in 1961.5 It would have been incorrect for the Court in its 1975 Lipe decision to have concerned itself with the prospectivity or retroactivity of that decision and it is equally incorrect for it to do so now.
II. If this Court had once made a decision holding that the statutes of limitation were inapplicable to cases in which jurisdiction was obtained under the long-arm statute, and if Lipe, in turn, had overruled such a decision then, the Court in Lipe would necessarily have had to be concerned with the retroactivity or prospectivity of an overruling decision. Understandably, reliance would be very much in issue. However, such is not the case. Until Lipe there was not an Idaho decision one way or the other as to whether the tolling statute would apply to actions in Idaho where jurisdiction was based on the long-arm statute. Hence, what both I and the majority say about reliance is purely an academic discussion.
It may be true, as plaintiffs urge, that many attorneys (including defense counsel in this case) in Idaho have believed that this Court, when called up to do so, might likely apply the Staten v. Weiss rationale to the later-enacted long-arm statute. This, however, was pure supposition, and there was ample evidence to suggest that it might not come to pass. Initially there is simply the great dissimilarity between the long-arm statute and the motor vehicle substituted service statute. In addition, Staten v. Weiss was largely predicated on Anthes v. Anthes, 21 Idaho 305, 121 P. 553 (1912), the authority of which was highly questioned by the codifiers to the 1947 Idaho Code.6
Furthermore, I see nothing in the appeal record to justify the majority’s assertion that the plaintiffs in this case relied on Staten v. Weiss as justification for their delay in bringing suit. Plaintiffs in their brief argued the reliance element. More than argument should be required.
“A point is made that the revision of the immunity rule should be prospective in its application. Such a contention would seem to be based on a concept of reliance. We find the suggestion without merit in the present case. It is doubtful that any defendant could justifiably rely on the rule after the expressions of dissatisfaction with the immunity concepts which appear in Korff [Korff v. G. & G. Corp., 21 N.J. 558, 122 A.2d 889] and Grober [Grober v. Kahn, 76 N.J.Super. 252, 184 A.2d 161], supra. In any event there is nothing in the record to indicate that the defendant did place any actual reliance on the doctrine. Under such circumstances there is no reason for declining to apply the usual rule under which the overruling of a decision has retrospective effect. See Dalton v. St. Luke’s Catholic Church, 27 N.J. 22, 26, 141 A.2d 273 (1958); Arrow, Builders Supply Corp., v. Hudson Terrace Apts., 16 N.J. 47, 49, 106 A.2d 271 (1954).” Wangler v. Harvey, 41 N.J. 277, 196 A.2d 513, 518 (1963).
Reliance is better referred to as justifiable reliance, and is akin to the acquisition of vested rights. This brings me to my final point which is that neither plaintiff nor defendant is entitled to rely on the specific provisions of a statute of limitations or a tolling statute.
While the majority opinion cites various general authorities on the doctrine of retroactivity and prospectivity and implies that there are overtones of impairment of contract in a case such as this, it ignores the proposition of law that statutes of limitation are purely remedial and do not affect the creation or destruction of substantive rights.
“Statutes of limitations find their justification in necessity and convenience rather than in logic. They represent expedients, rather than principles. They are practical and pragmatic devices to spare the courts from litigation of stale claims, and the citizen from being put to his defense after memories have faded, witnesses have died or disappeared, and evidence has been lost. [Citation omitted.] They are by definition arbitrary, and their operation does not discriminate between the just and the unjust claim, or the voidable and unavoidable delay. They have come into the law not through the judicial process but through legislation. They represent a public policy about the privilege to litigate. Their shelter has never been regarded as what now is called a ’fundamental’ right or what used to be called a ’natural’ right of the individual. He may, of course, have the protection of the policy while it exists, but the history of pleas of limitation shows them to be good only by legislative grace and to be subject to a relatively large degree of legislative control. “This Court, in Campbell v. Holt [115 U.S. 620, 6 S.Ct. 209, 29 L.Ed.2d 483], adopted as a working hypothesis, as a matter of constitutional law, the view that statutes of limitation go to matters of remedy, not to destruction of fundamental rights.” (Emphasis added.) Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628 (1945).
I disagree with the majority’s suggestion that the statute of limitation, the long-arm statute, and the tolling statute are elements of the contract. Each of these has to do
Staten was decided before the passage of the long-arm statute. It dealt with a very narrow fact situation and with only the non-resident motorist statute. It should be obvious that the decision in Staten could in no way be construed as a controlling interpretation of a subsequently passed statute, especially where that statute constituted a revolutionary reform in the law of personal jurisdiction. That Staten needed to be overruled has no bearing on the problem of applying the correct interpretation of the long-arm statute, the statute of limitations, and the tolling statute to the parties in a suit in which the precise question arises.
JOSEPH J. McFADDEN
CHIEF JUSTICE