KEN SNOW аnd ALLENE SNOW, Plaintiffs-Appellants, v. WARREN POWER & MACHINERY, INC., d/b/a WARREN CAT, and BRININSTOOL EQUIPMENT SALES, Defendants-Appellees, and MIDWEST HOSE & SPECIALTY, INC., GANDY CORPORATION, REPCON, INC., and HOLLY CORPORATION, Defendants.
Docket No. 32,335
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Filing Date: December 17, 2013
Opinion Number: ___________
Sheri A. Raphaelson, District Judge
Fadduol, Cluff & Hardy, P.C.
Richard L. Hardy
Eileen M. Shearin
Lubbock, TX
Sanders and Westbrook, P.C.
Maureen A. Sanders
Albuquerque, NM
for Appellants
Rodey, Dickason, Sloan, Akin & Robb, P.A.
Thomas A. Outler
Albuquerque, NM
Civerolo, Gralow, Hill & Curtis, P.A.
Lawrence H. Hill
Justin L. Robbs
Albuquerque, NM
for Appellees
OPINION
GARCIA, Judge.
{1} We withdraw our opinion filed on December 12, 2013 and substitute the following in its place. Plaintiffs appeal from two orders granting summary judgment to Defendants Warren Power & Machinery, Inc., d/b/a Warren CAT and Brininstool Equipment Sales based upon the running of the statute of limitations. The question we must answer is whether the statute of limitations expired despite Plaintiffs’ motion to amend that was filed on the last day of the applicable limitation period. The motion was not addressed or granted until days after the limitation period expired. Plaintiffs raise two defenses to overcome the statute of limitations: (1) the applicability of the relation-back theory under
BACKGROUND
{2} On January 20, 2009, Plaintiff Ken Snow was injured at Navajo Refinery when a hose assembly came loose from a water pump and struck him in the leg while he was working. The hose had been manufactured by Midwest Hose & Specialty, Inc. and sold to Warren CAT. Warren CAT then rented the hose to Brininstool Equipment Sales who then supplied the hose to Navajo Refinery.
{3} On August 15, 2011, Ken Snow and his wife, Allene Snow, filed their initial complaint and sought damages for Ken Snow’s injuries. Plaintiffs’ initial сomplaint named Midwest Hose & Specialty, Inc., Gandy Corporation, Repcon, Inc., and Holly Corporation as Defendants. On September 8, 2011, Plaintiffs filed their first amended complaint, correcting a date. On January 20, 2012, at 4:23 p.m., Plaintiffs filed a motion for leave to file a second amended complaint, seeking to add Warren CAT and Brininstool as additional new defendants. It is undisputed that Plaintiffs’ motion for leave to file the second amended complaint was filed on the last day before the relevant statute of limitations would expire. See
{4} The district court entered an order, by electronic filing, granting leave to file the second amended complaint on Friday, January 27, 2012, at 4:05 p.m. Plaintiffs did not file their second amended complaint until Monday, January 30, 2012, at 10:56 a.m. Warren CAT and Brininstool were subsequently served with the second amended complaint on February 2 and 6, 2012. Warren CAT and Brininstool both moved for summary judgment, asserting that the statute of limitations had еxpired prior to the filing of the second amended complaint. The district court granted both motions, holding that the statute of limitations barred Plaintiffs’ claims against Warren CAT and Brininstool. Plaintiffs timely appealed the granting of summary judgment in favor of Warren CAT and Brininstool.
STANDARD OF REVIEW
{5} We review de novo a district court’s grant of summary judgment, construing the evidence most favorably to the non-moving party. City of Albuquerque v. BPLW Architects & Eng’rs, Inc., 2009-NMCA-081, ¶ 7, 146 N.M. 717, 213 P.3d 1146; Headley v. Morgan Mgmt. Corp., 2005-NMCA-045, ¶ 5, 137 N.M. 339, 110 P.3d 1076. “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc., 1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. “A defendant seeking summary judgment . . . bears the initial burden of negating at least one of the essential elements upon which the plaintiff‘s claims are grounded.” S. Farm Bureau Cas. Co. v. Hiner, 2005-NMCA-104, ¶ 9, 138 N.M. 154, 117 P.3d 960 (internal quotation marks and citation omitted). “Once such a showing is made, the burden shifts to the plaintiff to come forward with admissible evidence to establish each required element of the claim.” Id. “If the facts are undisputed and only a legal interpretation of the facts rеmains, summary judgment is the appropriate remedy.” Bd. of Cnty. Comm’rs v. Risk Mgmt. Div., 1995-NMSC-046, ¶ 4, 120 N.M. 178, 899 P.2d 1132. “Summary judgment should not be granted when material issues of fact remain or when the facts are insufficiently developed for determination of the central issues involved.” Vieira v. Estate of Cantu, 1997-NMCA-042, ¶ 17, 123 N.M. 342, 940 P.2d 190. “When facts relevant to a statute of limitations issue are not in dispute, the standard of review is whether the district court correctly applied the law to the undisputed facts. We review questions of law de novo.” Haas Enters., Inc. v. Davis, 2003-NMCA-143, ¶ 9, 134 N.M. 675, 82 P.3d 42. We conclude that there are no material facts in dispute and we can decide this case as a matter of law.
DISCUSSION
{6} Plaintiffs claim that two exceptions to the statute of limitations are applicable in this case. First, Plaintiffs contend that the second amended complaint should relate back to the date of the initial complaint under
I. Relation-Back to the Initial Complaint Under Rule 1-015(C)
{7} Were Plaintiffs to prevail under their relation-back theory, Warren CAT and Brininstool would be treated as if they were named as Defendants in the initial complaint, long before the expiration of the statute of limitations.
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. An amendment changing the party against whom a claim is asserted relates back if the fоregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment:
- has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits; and
- 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.
{8} It is undisputed in this case that the second amended complaint arisеs out of the same accident and resulting injury set forth in the initial complaint. Defendants made a prima facie case as to the expiration of the statute of limitations by demonstrating the respective dates on which the accident occurred and the second amended complaint was granted and filed. See Romero v. Ole Tires, Inc., 1984-NMCA-092, ¶ 11, 101 N.M. 759, 688 P.2d 1263. Thereafter, Plaintiffs had the burden of showing they satisfied the requirements of
{9} The dispute in this case concerns the notice requirements of
{10} At the outset, we note that the requirements of both subsections under
1. Notice Under Rule 1-015(C)(1)
{11} Plaintiffs allege that both Defendants received notice of the institution of this lawsuit when they became aware of the accident аnd its resulting injury. We disagree. It is well established that a plaintiff cannot demonstrate compliance with the requirements of
{12} The record in this case is completely void of any indication that, prior to its receipt of Plaintiffs’ second amended complaint, Brininstool was aware that Plaintiffs had instituted this lawsuit or that it might be named as a Defendant. Brininstool did not investigate the accident and injury, report the claim and potential lawsuit to risk managers or liability insurers, retain counsel, or take any other action to preserve potential evidence and testimony. See Macias, 2000-NMCA-086, ¶¶ 27-29 (finding notice where (1) the plaintiff had filed a claim against the defendant’s insurance company immediately after an accident; (2) he had corresponded with the insurance company and other defendants for several months prior to filing the original complaint; (3) the insurance company knew that the complaint had been filed; and (4) the insurance company retained counsel to defend itself and the original defendants). Based upon Plaintiffs’ lack of evidence, we conclude that it was not until service of the second amended complaint on February 6, 2012, that Brininstool received any notice of this lawsuit. Since Brininstool had no notice of the institution of the action prior to being served with the second amended complaint, we conclude that Plaintiffs failed to satisfy the requirements of
{13} The record reflects that Warren CAT similarly took no action with regard to the
2. Mistake Concerning Identity Under Rule 1-015(C)(2)
{14} Under
{15} Plaintiffs have cited only to evidence that Warren CAT possessed various facts that would еnable it to understand that Plaintiffs might potentially add it as a party to the lawsuit, at least upon further inquiry. Nevertheless, the record does not contain any evidence that Warren CAT had “reason to make further inquiry” based upon the information provided. Ole Tires, 1984-NMCA-092, ¶ 24. Warren CAT was required to have sufficient information to reasonably “know or have reason to know that it was a likely party to the [P]laintiffs’ suit.” Id. ¶ 20. The circumstances under which Warren CAT learned of the lawsuit gave no reasonable warning that Plaintiffs intended to sue Warren CAT. Based upon these facts, Warren CAT was entitled to assume that, unless it was sued within the limitations period, Plaintiffs did not have any claims that they intended to assert against Warren CAT.
{16} The substantive issue in this instance was the exercise of due diligence by Plaintiffs to identify and add Warren CAT as an additional defendant before the statute of limitations expired. Id. ¶ 17 (refusing to hold that the mistaken identity requirement under
II. Equitable Tolling
{17} Plaintiffs assert that a motion to amend their complaint, with the amended complaint attached to the motion, tolls the statute of limitation when the motion is filed prior to the running of the limitations period. Given that the amended complaint could have been filed on the day the order granting Plaintiffs’ motion to amend was filed, filing the following Monday unequivocally missed the recognized deadline. Plaintiffs cite various federal cases in support of their position and ask this Court to follow federal precedent in this state court proceeding. See Ocana v. Am. Furniture Co., 2004-NMSC-018, ¶¶ 15-18, 135 N.M. 539, 91 P.3d 58 (applying federal рrecedent to the doctrine of equitable tolling where a Title VII claim involved a federal statute). By their argument, Plaintiffs ask this Court to adopt a bright-line rule whereby the statute of limitations is tolled for the period of time between the filing of a motion to amend the complaint until the subsequent ruling is entered on the motion. See Moore v. State of Ind., 999 F.2d 1125, 1131 (7th Cir. 1993) (“As a party has no control over when a court renders its decision regarding the proposed amended complaint, the submission of a motion for leave to amend, properly accompanied by the proposed amended complaint that provides notice of the substance of those amendments, tolls the statute of limitations, even though technically the amended complaint will not be filed until the court rules on the motion.“). New Mexico has never recognized such an exception, and this Court is asked to address this issue as a matter of first impression.
{18} Although we have not yet addressed the exact question raised by this appeal, “New Mexico directly recognizes the distinct legal theory of equitable tolling.” Slusser v. Vantage Builders, Inc., 2013-NMCA-073, ¶ 13, 306 P.3d 524. As such, we shall address the federal precedent cited by Plaintiffs, but we ultimately rely on New Mexico precedent to deny Plaintiffs’ claim for equitable tolling.
1. Application of Equitable Tolling Under Federal Law
{19} Plaintiffs argue that “[t]his Court should allow tolling of the statute of limitations for the period of time between the filing of a motion to amend and a court’s ruling on that motion, because during that passage of time Plaintiffs are unable to file an amended complaint adding a party.” See Mayes v. AT & T Info. Sys, Inc., 867 F.2d 1172, 1173 (8th Cir. 1989) (per curiam); Rademaker v. E.D. Flynn Exp. Co., 17 F.2d 15, 17 (5th Cir. 1927); Longo v. Pa. Elec. Co., 618 F.Supp. 87, 89 (W.D. Pa. 1985), aff’d, 856 F.2d 183 (3d Cir.1988); Eaton Corp. v. Appliance Valves Co., 634 F.Supp. 974, 982-83 (N.D. Ind. 1984), aff’d on other grounds, 790 F.2d 874 (Fed. Cir. 1986); Gloster v. Pa. R.R. Co., 214 F.Supp. 207, 208 (W.D. Pa. 1963). Plaintiffs argue that they “should not be penalized for their inability to file a motion to amend adding a party within the statute of limitations period absent court permission.”
{20} We agree with Plaintiffs that “[a]ny number of factors could delay the [district c]ourt’s approval” of a motion, and that equitable tolling should apply under certain circumstances. However, the factors for delay cited by Plaintiffs, including “scheduling a hearing, a [j]udge being reassigned, retiring[,] or absent for an extended period of time for medical reasons,” are absent in the present case. More significantly, Plaintiffs have overlooked the dispositive factual distinguishment present in almost every case they have cited in support of their argument. The plaintiffs in each of those cases filed their amended complaints on the day the motion to amend was granted. See Mayes, 867 F.2d at 1173 (“On October 20, 1987, the distriсt court granted [the appellant’s] motion to amend, whereupon [the appellant] filed her amended complaint.“); Longo, 618 F.Supp. at 88 (“[The district c]ourt signed an order permitting such amendment on November 2, 1983; and on this same day, the amended complaint was filed by [the p]laintiff[.]“); Gloster, 214 F.Supp. at 208 (relying on a case where the amended complaint was filed before the motion to amend was heard or entered). Even in the few cases where the plaintiffs filed their amended complaints aftеr their motions to amend were granted, those plaintiffs had diligently provided notice of their complaints to the defendants they were seeking to add. See Rademaker, 17 F.2d at 16 (tolling the statute of limitations where process was issued and served on the newly added defendant within the applicable statute of limitations, but the amended complaint was not filed until after the statute had expired); Eaton Corp., 634 F.Supp. at 982 (relying on the reasoning in Rademaker); see also Nett v. Bellucci, 774 N.E.2d 130, 138 (Mass. 2002) (applying equitable tolling where the newly added defendant “was served with the motion to amend аnd notified of the fact that the motion had been filed, all prior to the expiration of the seven-year repose period“). Thus, application of the federal equitable tolling doctrine will toll the statute of limitations from the date of tolling until the date a plaintiff’s motion to amend the original complaint is granted. See Perez v. Paramount Commc’ns, Inc., 709 N.E.2d 83, 87 (N.Y. 1999) (“Thus, from the date the toll began until it ended on November 3, 1993—the date of entry of the order granting [the] plaintiff permission to add MSG as a defendаnt—the [s]tatute of [l]imitations was tolled[.]“).
{21} Even under the federal authority provided by Plaintiffs, the statute of limitations would only have been tolled until January 27, the date the district court granted Plaintiffs’ motion to amend. However, Plaintiffs did not actually file their amended complaint until January 30. Plaintiffs filed their amended complaint three days after the extended period expired. Accordingly, it was still three days late. This technical failure may have been excusable had Plaintiffs diligently served Defendants with notice of the amended complaint within the original statutory limitations period, but the record reflects that Warren CAT and Brininstool were not notified or otherwise served with the second amended complaint until February—nearly two weeks later. The federal authority cited by Plaintiffs is therefore
2. Application of Equitable Tolling in New Mexico
{22} “Equitable tolling is a nonstatutory tolling theory which suspends a limitations period.” Slusser, 2013-NMCA-073, ¶ 13 (internal quotation marks and citation omitted). “We determine the applicability of equitable tolling on a case-by-case basis, with an eye toward cases where a litigant was prevented from filing suit because of an extraordinary event beyond his or her control.” Id. (internal quotation marks and citation omitted). “Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way.” Id. ¶ 16 (internal quotation marks and citation omitted). “The purpose of equitable tolling is to give the plaintiff extra time if he needs it. If he doesn’t need[,] it there is no basis for depriving the defendant of the protection of the statute of limitations.” Id. ¶ 14 (internal quotation marks and citation omitted).
{23} We conclude that equitable tolling does not apply under the particular facts of this case becаuse Plaintiffs failed to present the district court with evidence that they have diligently pursued their rights or that extraordinary circumstances stood in their way. See Stringer v. Dudoich, 1978-NMSC-071, ¶ 3, 92 N.M. 98, 583 P.2d 462 (stating that the party asserting equitable tolling bears the burden of providing sufficient facts that if proven would toll the statute). Plaintiffs here failed to factually establish that they were reasonably diligent in their efforts to identify Warren CAT and Brininstool as potential Defendants and that extraordinary circumstances stood in their way. Instead, Plaintiffs’ briefing on appeal produced facts indicating that the evidence known to exist well within the statute of limitation would support their claim against Warren CAT and Brininstool. Despite this evidence, Plaintiffs have not explained the due diligence of their discovery efforts and why they did not proceed to use the evidence obtained to achieve a timely amendment to their complaint within the statutory limitation period. Effectively, Plaintiffs failed to produce factual evidence regarding the efforts they undertook, if any, to diligently pursue their rights. Instead, Plaintiffs merely assert that equitable tolling “seems reasonable” where the motion to amend was timely filed, but the district court ruled on the motion after the limitation period expired. Finally, Plaintiffs offered no evidence to establish the existence of an extraordinary circumstance that was claimed to be standing in their way and preventing the diligent pursuit of their rights.
{24} “[T]he purposе of a statute of limitations is to put defendants on notice of adverse claims and to prevent plaintiffs from sleeping on their rights.” Butler v. Deutsche Morgan Grenfell, Inc., 2006-NMCA-084, ¶ 23, 140 N.M. 111, 140 P.3d 532 (internal quotation marks and citation omitted). Summary judgment is appropriate where Plaintiffs have offered no facts to explain why they did not earlier attempt to add Defendants. See Slusser, 2013-NMCA-073, ¶ 20 (“To provide the district court with a basis to apply equitable tolling in this
CONCLUSION
{25} The statute of limitations expired prior to the filing of Plaintiffs’ second amended complaint against Warren CAT and Brininstool. Neither the relation-back theory under
{26} IT IS SO ORDERED.
TIMOTHY L. GARCIA, Judge
WE CONCUR:
RODERICK T. KENNEDY, Chief Judge
J. MILES HANISEE, Judge