(251) 299-0101

FICTITIOUS PARTIES & RELATION BACK - EX PARTE VEL, LLC

Ex parte VEL, LLC, [Ms. 1150542, Dec. 30, 2016] __ So.3d __ (Ala. 2016). The Court grants in part and denies in part petitions for writs of mandamus directing the Montgomery Circuit Court to vacate an order denying a summary-judgment motion on the basis of the expiration of the statute of limitations in a mis-filled prescription case. The Court rejected the plaintiff's contention that he properly substituted the pharmacy's true corporate owner and its pharmacist and pharmacy technician pursuant to Rule 15(c)(3), Ala. R. Civ. P., and that failing the test for proper substitutions, the amendments should be deemed timely under principles of "equitable tolling," and "equitable estoppel."

The Court first rejected the plaintiff's contention that the substitutions were proper pursuant to Rule 15(c)(3). The Court held, on the contrary, that Rule 15(c)(3) did not apply:

Rule 15(c)(3) applies to an amendment that "changes the party or the naming of the party against whom a claim is asserted"; Rule 15(c)(3) expressly does not apply to amendments "naming a party under the party's true name after having been initially sued under a fictitious name." In the present case, Kyser did not seek to change the name of the party against whom she brought the original complaint. Kyser sued VEL in the original complaint. In the amended complaints, Kyser did not seek to change the name of VEL to MDCI, Stafford, or Greene but, instead, substituted MDCI, Stafford, and Greene for fictitiously named defendants; VEL remains a party to this action. Kyser sought to add MDCI, Stafford, and Greene as parties based on the "principles applicable to fictitious party practice." Rule 15(c)(4). Accordingly, under Rule 15(c)(4), Kyser's amendments substituting MDCI, Stafford, and Greene for fictitiously named defendants relate back to the date of the original complaint only if she satisfied the requirements of Rule 9(h), Ala. R. Civ P. See Ex parte Noland Hosp. Montgomery, LLC, 127 So. 3d 1160, 1169 (Ala. 2012)("An amendment merely substituting a named party for a fictitiously named party relates back only if the provisions of Rule 9(h) are satisfied."), and Mitchell v. Thornley, 98 So. 3d 556, 561 (Ala. Civ. App. 2012)("The Committee Comments on the 1973 Adoption of Rule 15, Ala. R. Civ. P., indicate that the provisions of Rule 15(c)(3) 'permit[] an amendment to relate back which substitutes the real party in interest for a named plaintiff.' (Emphasis added.) Such an amendment, which changes a named party, relates back only if the requirements of Rule 15(c)(3) are met. Conversely, an amendment merely substituting a real party for a fictitiously named party relates back if the provisions of Rule 9(h) are satisfied. Committee Comments on 1973 Adoption."). We will analyze whether Kyser's amendments substituting MDCI, Stafford, and Greene for fictitiously named defendants relate back to the filing of the original complaint under Rule 15(c)(4); Rule 15(c)(3) does not apply in this case.

Ms. *19-21. Having rejected the Rule 15(c)(3) argument, the Court turned to an analysis of whether the substitution was proper under Rule 15(c)(4) in light of its express requirement that the party attempting to substitute comply with the provisions of Rule 9(h). Quoting Ex parte Nicholson Mfg. Ltd., 182 So.3d 510 (Ala. 2015), the Court explained:

In Ex parte Nicholson, supra, we set forth the following applicable law:

"Rule 9(h), Ala. R. Civ. P., provides:

"'When a party is ignorant of the name of an opposing party and so alleges in the party's pleading, the opposing party may be designated by any name, and when the party's true name is discovered, the process and all pleadings and proceedings in the action may be amended by substituting the true name.'

"This rule permits a party who is 'ignorant of the name of an opposing party' to identify that party by a fictitious name. Once the true name of the opposing party is discovered, the party may amend the pleadings to substitute that true name. Rule 15(c)(4), Ala. R. Civ. P., provides that such an amendment shall 'relate[] back to the date of the original pleading when ... relation back is permitted by principles applicable to fictitious party practice pursuant to Rule 9(h).'

"'However, the relation back principle applies only when the plaintiff "is ignorant of the name of an opposing party." Rule 9(h); Harmon v. Blackwood, 623 So. 2d 726, 727 (Ala. 1993) ("In order to invoke the relation-back principles of Rule 9(h) and Rule 15(c), a plaintiff must ... be ignorant of the identity of that defendant...."); Marsh v. Wenzel, 732 So. 2d 985 (Ala. 1998).'

"Ex parte General Motors [of Canada Ltd.], 144 So. 3d [236,] 239 [(Ala. 2013)].

"'"The requirement that the plaintiff be ignorant of the identity of the fictitiously named party has been generally explained as follows: 'The correct test is whether the plaintiff knew, or should have known, or was on notice, that the substituted defendants were in fact the parties described fictitiously.' Davis v. Mims, 510 So. 2d 227, 229 (Ala. 1987)...."'

"Ex parte Mobile Infirmary[ Ass'n], 74 So. 3d [424,] 429 [(Ala. 2011)] (quoting Crawford v. Sundback, 678 So. 2d 1057, 1060 (Ala. 1996)(emphasis added)).

"In addition to being ignorant of the fictitiously named party's identity, the plaintiff has a duty to exercise 'due diligence' in identifying such a defendant. Ex parte Mobile Infirmary, 74 So. 3d at 429; Crowl v. Kayo Oil Co., 848 So. 2d 930, 940 (Ala. 2002). It is incumbent upon the plaintiff to exercise due diligence both before and after the filing of the complaint. Ex parte Ismail, 78 So. 3d 399 (Ala. 2011). Only if the plaintiff has acted with due diligence in discovering the true identity of a fictitiously named defendant will an amendment substituting such a party relate back to the filing of the original complaint. Ex parte Mobile Infirmary, 74 So. 3d at 429. Therefore, if at the time the complaint is filed, a plaintiff knows the identity of the fictitiously named party or should have discovered that party's identity, relation back is not permitted and the running of the statute of limitations is not tolled:

"'[A]n amendment substituting a new defendant in place of a fictitiously named defendant will relate back to the filing of the original complaint only if the plaintiff acted with "due diligence in identifying the fictitiously named defendant as the party the plaintiff intended to sue." Ignorance of the new defendant's identity is no excuse if the plaintiff should have known the identity of that defendant when the complaint was filed....'

"74 So. 3d at 429 (quoting Ex parte Snow, 764 So. 2d 531, 537 (Ala. 1999)(emphasis added))."

Ms. *21-23, quoting Nicholson, 182 So.3d at 513-14. The Court found significant that plaintiff's counsel had received correspondence from the pharmacy's liability insurance carrier identifying the insured as the party that owned the pharmacy. That evidence indicated plaintiff "knew, or should have known," of the identity of the pharmacy's owner at the time the original complaint was filed. Ms. *24-25, citing Davis v. Mims, 510 So.2d 227 (Ala. 1987). At a minimum, these communications indicated plaintiff was at least "on notice" of the true owner's identity. Id. Because the plaintiff was not ignorant of the party's identity before the statute of limitations expired, the circuit court had no discretion other than to grant [the true owner's] summary-judgment motion in its favor on the statute-of-limitations ground." Ms. *25.

The Court rejected the petitioner's argument that plaintiff's counsel failed to exercise due diligence in identifying the pharmacist and pharmacy tech when they waited two months after filing the complaint to submit discovery requests seeking those parties' true identities. Because petitioners failed to cite any legal authority holding that a two-month delay in serving such discovery requests constitute a failure to exercise due diligence, petitioners have not demonstrated a clear legal right as required for mandamus relief. Ms. *27-28.

The Court also rejected the plaintiff's contention that equitable-tolling principles supported the circuit court's ruling that the substitutions were timely. Quoting Weaver v. Firestone, 155 So.3d 952 (Ala. 2013), the Court holds that plaintiff failed to present any evidence indicating an "extraordinary circumstance" which kept plaintiff from learning the identity of the owner of the pharmacy before the statute of limitations expired. The requirements for equitable tolling to apply include the following:

"'[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' as to the filing of his action. Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S. Ct. 1807, 161 L. Ed. 2d 669 (2005). In Ex parte Ward, 46 So. 3d 888 (Ala. 2007), this Court '[held] that equitable tolling is available in extraordinary circumstances that are beyond the petitioner's control and that are unavoidable even with the exercise of diligence.' 46 So. 3d at 897. The Court noted that in determining whether equitable tolling is applicable, consideration must be given as '"to whether principles of 'equity would make the rigid application of a limitation period unfair' and whether the petitioner has 'exercised reasonable diligence in investigating and bringing [the] claims.'"' Id. (quoting Fahy v. Horn, 240 F.3d 239, 245 (3d Cir. 2001), quoting in turn Miller v. New Jersey Dep't of Corr., 145 F.3d 616, 618 (3d Cir. 1998)); see also Irwin v. Department of Veterans Affairs, 498 U.S. 89, 96, 111 S. Ct. 453, 112 L. Ed. 2d 435 (1990) ('We have allowed equitable tolling in situations where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass. We have generally been much less forgiving in receiving late filings where the claimant failed to exercise due diligence in preserving his legal rights.' (footnotes omitted)). This Court acknowledged in Ward that '"the threshold necessary to trigger equitable tolling is very high, lest the exceptions swallow the rule." United States v. Marcello, 212 F.3d 1005, 1010 (7th Cir. 2000).' 46 So. 3d at 897. The plaintiff "'bears the burden of demonstrating ... that there are ... extraordinary circumstances justifying the application of the doctrine of equitable tolling.

Ms. *31-32, quoting Weaver v. Firestone, 155 So.3d at 957-58.

Finally, the Court also rejected the plaintiff's contention that the doctrine of equitable estoppel should work to deem the substitution timely. Quoting McCormack v. AmSouth NA, 759 So.2d 538 (Ala. 1999), the Court rejects plaintiff's contention that the liability insurer concealed the identity of the true owner of the pharmacy. Ms. *33-35. McCormack v. AmSouth NA holds:

"In City of Birmingham v. Cochrane Roofing & Metal Co., 547 So. 2d 1159 (Ala. 1989), this Court summarized the law applicable in situations where one party asserts equitable estoppel as a bar to another party's pleading the statute of limitations as a defense:

"'In Mason v. Mobile County, 410 So. 2d 19 (Ala. 1982), this Court held that if a defendant either fraudulently or innocently represents to the plaintiff that he will remedy a problem, and relying on these representations the plaintiff is induced not to file a lawsuit or take any action, the defendant may be estopped from raising the statute of limitations as a defense. Additionally, in Arkel Land Co. v. Cagle, 445 So. 2d 858 (Ala. 1983), we held that if a defendant represents that a lawsuit is unnecessary because he intends to take care of the problem he is likewise estopped from raising the statute of limitations as a defense.'

"Cochrane Roofing, 547 So. 2d at 1167."

Ms. *33-34 (quoting McCormack v. Amsouth NA, 759 So.2d at 543).

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