No. 13884
I N THE S P E E COUKI' O THE STATE O MOJlTANA
UR M F F
1978
JOSEPH LaFOREST,
P l a i n t i f f and Appellant,
-VS-
TEXACO, INC., A CORPORATION,
Defendant and Respondent.
A
pm frm: D i s t r i c t Court of t h e Second J u d i c i a l D i s t r i c t ,
Honorable J m s Freebourn, Judge presiding.
a e
Counsel of Record:
For Appellant:
Greg J. Skakles argued, Anaconda, Montana
Leonard m y , Butte, Wntana
For Respondent :
Corette, %th and Dean, Butte, Wntana
Kent W i l l i s argued and R. D. Corette, Jr. appeared, Butte,
Wntana
Paul E. Fgan, I;os Angeles, California
Satted: September 18, 1978
Decided:
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Filed: - . $ 2g
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.
M r . Chief Justice Frank I. Haswell delivered the Opinion of the
Court.
In an action for damages for tortious interference
with plaintiff's business relationship with a third party, the
District Court of Silver Bow County granted defendant summary
judgment on the basis that his action was barred by the statute
of limitations. Plaintiff appeals.
Plaintiff claims that the alleged tortious conduct occurred
on February 1, 1973. He claims that Texaco instructed the successor
lessee of the service station in Butte, Montana, which plaintiff
operated, not to purchase any items of inventory and equipment
from him.
On January 23, 1976, plaintiff filed a complaint in the
District Court of Silver Bow County. The complaint names "Ronald
Leland and Company and E. K. Williams Company" as the defendants
rather than Texaco although it refers to the lease agreement
entered into by plaintiff for the operation of the Texaco Service
Station. The named defendants had no connection with the trans-
action forming the basis of plaintiff's complaint. Texaco was
never served with a copy of this complaint.
The body of the complaint clearly implies some kind of
error had occurred in the caption and that Texaco was the intended
defendant although its name does not appear therein. The complaint
alleged defendant intentionally and maliciously interfered with
negotiations appellant had undertaken for the sale of his equip-
ment, fixtures and inventory and stated that the actions of de-
fendant were in violation of a provision of the Federal Anti-Trust
Laws, Title 15, 514 of the United States Code. On March 12, 1976,
an amended complaint was filed realleging verbatim the original
complaint but substituting Texaco, Inc. as the party defendant.
Service was made and returned on March 29, 1976.
On April 7, 1976, Texaco filed consolidated motions to
dismiss, one of the grounds being that suits for violation of
the Anti-Trust Laws must be brought in ~ederalCourt.
On June 16, 1976, the District Court entered an order
dismissing the action without prejudice, for the reason the
Court did not have jurisdiction over the subject matter.
On September 24, 1976, appellant filed a second amended
complaint deleting reference to the Federal Statutes and basing
the claim on two provisions of the Montana Unfair Practices Act,
Sections 51-101 and 51-103, R.C.M. 1947. The District Court
denied the objections of Texaco to the second amended complaint.
On October 29, 1976, Texaco filed its answer raising
the bar of the three-year statute of limitations. The answer
claimed that since no complaint naming Texaco, Inc. as a defen-
dant had been filed until after the three-year statute of limita-
tions had expired, plaintiff was barred from recovering.
Plaintiff claimed that his amended complaints naming Texaco
as the party defendant related back to the time of the filing of
the original complaint; he also contended that Texaco was estopped
from raising the statute of limitations as a defense because an
exchange of letters dating back to 1975 had allegedly misled
plaintiff into delaying the filing of his action.
After discovery proceedings Texaco moved for summary
judgment on April 21, 1977. Following hearing and argument, the
District Court granted Texaco's motion for summary judgment on
the grounds that plaintiff's action was barred by the statute of
limitations. This appeal followed.
Appellant raises two issues upon appeal:
1) Do the amended complaints relate back to the date of
filing of the original complaint?
2) Is Texaco estopped from relying on the statute of lim-
itations as its defense?
Plaintiff argues that the tortious conduct complained of
occurred on February 1, 1973, giving him until February 1, 1976,
to file his action. The original complaint in which Texaco is
not named as defendant was filed before February 1, 1976. The
amended complaint substituting Texaco as party-defendant was
filed after February 1, 1976. These facts are not disputed.
Rule 15(c), M.R.Civ.P., amended in 1967, provides in
pertinent part:
"Relation Back of Amendments, 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 orig-
inal pleading, the amendment relates back to the
date of the original pleading. An amendment chang-
ing the party against whom a claim is asserted
relates back if the foregoing provision is satisfied
and, within the period provided by law for commenc-
ing the action against him, the party to be brought
in by amendment (1) has received such notice of the
institution of the action that he will not be preju-
diced 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."
The Advisory Committee's note to this rule explains the
change made by the 1967 amendment, which added the second sentence:
"This amendment is designed to avoid problems which
have arisen in instances in which the complaint named
the wrong defendant and the statute of limitations
expired prior to an amendment correcting the error.
Where the newly named defendant received notice of
the action and knew or should have known that he was
the intended defendant, it seems unjust to prohibit
relation back."
Appellant argues that the District Court improperly applied
Rule 15(c) by denying relation back in this case. A summary of
the reasoning and applicable law on the question of relation back
has been stated in this language:
"If plaintiff had in mind initially the proper
entity or person and actually had served that
intended person or entity, then it is clear that
the amendment would be permitted even though the
statute of limitations had run as to the person
so misnamed in the process and complaint, because
the person or entity would already be in court,
would have had adequate notice of the pendency of
the action, and, therefore, there would be no
prejudice to the person or entity by allowing the
amendment. However, when the effect of the amend-
ment is to bring before the Court for the first
time a completely different person or entity which
had not previously had notice of the suit and such
amendment, assuming it would relate back, occurs
after the applicable statute of limitations has run,
then the new person or entity would be prejudiced
and the amendment is not allowed . ..
he addition or substitution of parties who had no
notice of the original action is not allowed.
Substitution of a completely new defendant creates
a new cause of action. Permitting such procedure
would undermine the policy upon which the statute of
limitations is based." (Citations omitted.) Munetz
v. Eaton Yale & Towne, Inc. (E.D.Pa. 1973), 5 7 F.R.D.
476, 480-481.
The first sentence of this citation from Munetz refers
----
to what is commonly called the ''misnomer" rule. We hold the
"misnomer" rule is inapplicable to this case.
"The 'misnomer1 rule affording relief from the
statute of limitations applies to situations in
which the plaintiff has actually sued and served
the correct party, the party he intends to sue,
but merely mistakenly used the wrong name of the
defendant." People of the Living God v. Star Tow-
ing Co. (E.D.La. 1968), 289 F.Supp. 635, 641.
"Misnomer" cases are myriad, and usually involve the
misspelling of a party's name or an error in naming a corporate
defendant, for example, by suing a subsidiary corporation
rather than the parent corporation. See Wentz v. Alberto Culver
Company (D.Mont. 1969),294 F.Supp. 1327.
Contrasted to this type of case is the case where a
completely new party is named as defendant in which case the
doctrine of relation back does not apply. In Baker v. Ferguson
Research, Inc. (D.Mont. 1974), 61 F.R.D. 637, plaintiff initially
sued Western Land Roller Company, whom he thought to be the man-
ufacturer of a snow scraper that caused plaintiff's injury. The
machine was actually a product of Ferguson Research, Inc. The
doctrine of relation back was held not to apply and the statute
of limitations was held to have barred the action. This case is
a Baker type case rather than a Wentz type case. Plaintiff did
not sue and serve the correct party before the statutory time
limit had run, so the "misnomer" rule does not apply.
The second sentence of Rule 15(c) requires that for
"relation back" to occur under these circumstances, the party
sought to be sued must have had notice of the institution of
the action. Such is not the case here. Notice of existence of
a claim is not "notice of the institution of the action", Wentz,
supra, at 1328. " [A]ction, as used in Rule 15 (c), means a lawsuit
and not the incident giving rise to a lawsuit. The relevant words
are 'notice of the institution of the action'. A lawsuit is
instituted; an incident is not." Craig v. United States (9th Cir.
1969), 413 F.2d 854, 858. For the foregoing reasons we hold the
doctrine of "relation back" does not apply to this case and that
plaintiff's action is barred by the three-year statute of limita-
tions.
Plaintiff next argues that Texaco is estopped from raising
the statute of limitations as a defense because Texaco led him to
believe that a settlement might be possible to lull him into a
sense of inaction.
The general rules covering estoppel to plead limitations
appear in 53 C.J.S. Limitations of Actions 825. Six essential
elements giving rise to equitable estoppel have been most recently
set forth in Keneco v. Cantrell (1977), Mont. , 568 P.2d
34 St.Rep. 1063.
1225,/ Here, two of those necessary elements to invoke equitable
estoppel are not present: (1) Conduct amounting to a misrepresen-
tation or concealment of material facts and (2) reliance thereon
by the complaining party. Here there was no representation or
concealment of material facts by Texaco and plaintiff did not rely
upon such to his detriment. Plaintiff, in fact, filed his original
complaint before the statute of limitations was expired.
Finally, Texaco seeks an award of costs and attorney's
fees for a frivolous appeal under Rule 32, M.R.App,Civ.P. While
we have found that the arguments advanced by plaintiff in regard
to this appeal not controlling, his contentions are certainly
arguable. Consequently, we deny Texaco's request for costs and
attorney's fees.
The order of the District Court granting summary judgment
in favor of Texaco, Inc. is affirmed.
Chief Justice
Hon. Peter G.
Judge, sitting-ace of Mr.
Justice Daniel J. Shea.