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HAFFERMAN v. WESTINGHOUSE ELEC. CORP.

December 23, 1986

John W. Hafferman, Phyllis A. Hafferman, and The American Insurance Company, Plaintiffs,
v.
Westinghouse Electric Corporation, and Hilton Hotels Corporation, Defendants


Flannery, J.


The opinion of the court was delivered by: FLANNERY

Flannery, J.

 This matter comes before the court upon dispositive motions by defendants. Defendant Westinghouse has filed a renewed motion to dismiss the claim against it based on the recent Supreme Court decision in Schiavone v. Fortune, 477 U.S. 21, 106 S. Ct. 2379, 91 L. Ed. 2d 18 (1986). Defendant Hilton Hotels has filed a separate motion for summary judgment. After considering these motions, the underlying papers, counsels' statements at oral argument, and the entire record in this case, this court will deny Westinghouse's motion to dismiss and grant Hilton Hotels' motion for summary judgment, for the reasons set forth below.

 I. MOTION TO DISMISS

 A. Background

 Plaintiff Hafferman, a paint foreman and independent contractor working on a job at the Capital Hilton Hotel in Washington, D.C., was injured on August 16, 1982 when he stepped from a service elevator that had not leveled properly with the floor. The District of Columbia has a three year statute of limitations for actions on negligence and the plaintiffs managed to file their action on the very last day of this limitations period - - August 16, 1985. The complaint named Hilton Hotels and Westinghouse Elevator Company as defendants. Service was made that same day by mailing copies of the summons and complaint to both defendants and Westinghouse Electric Corporation. Service was received by Westinghouse on August 20, 1985.

 Subsequently, plaintiffs were informed by Westinghouse that the Elevator Company was not a separate, suable entity but merely an operating unit of Westinghouse Electric. Plaintiffs then sought to amend the complaint to substitute Westinghouse Electric for Westinghouse Elevator. This court granted their motion on November 21, 1985. On December 2, 1985, Westinghouse filed its original motion to dismiss the complaint against it based on the statute of limitations.

 On January 27, 1986, this court denied Westinghouse Electric's motion to dismiss. At that time, however, it was recognized that the United States Supreme Court had recently granted certiorari in a case closely analogous to the instant suit and raising an issue virtually identical to that raised by Westinghouse in its motion to dismiss. Though this court concluded that the most equitable and internally consistent holding under the relation-back doctrine was to deny Westinghouse's motion, it was agreed during the hearing on that motion that denial would be without prejudice so that Westinghouse could move to set aside the order in the event the Supreme Court were to decide the issue differently.

 On June 18, 1986, the Supreme Court decided Schiavone v. Fortune, 477 U.S. 21, 106 S. Ct. 2379, 91 L. Ed. 2d 18 (1986), denying application of the relation-back doctrine to save a claim from the statute of limitations when the defendant does not receive notice of the action prior to the expiration of the limitations period. Westinghouse has thus renewed its motion to dismiss based on this decision. Before considering the applicability of Schiavone to this case, however, co-defendant Hilton Hotels' opposition must be considered.

 B. Relief From Prior Order

 Hilton does not contest the applicability of Schiavone. Instead, it argues that a change in the law does not automatically justify setting aside a prior order. In particular, it relies on the fact that Federal Rules of Civil Procedure 60(b)(5) and 60(b)(6) do not authorize relief from judgment based solely on the ground that the law originally applied by the court has been subsequently overruled in another, unrelated proceeding.

 Rule 60(b) has no bearing in this case, however, because it only deals. with final orders. Denial of a motion to dismiss without prejudice is clearly not a final order. See Watwood v. Barber, 70 F.R.D. 1, 8 (N.D. Ga. 1976). Therefore, rule 60(b) interposes no barrier to the complete power of this court to review its January 27, 1986 order. Laffey v. Northwest Airlines, Inc., 206 U.S. App. D.C. 173, 642 F.2d 578, 584 (D.C. Cir. 1980); Fed. R. Civ. P. 60(b) advisory committee's note ("Interlocutory judgments are not brought within the restrictions of the rule, but rather they are left subject to the complete power of the court rendering them").

 C. Applicability of Schiavone

 In the January 27, 1986 order, this court concluded that an amendment seeking to change the name of a party-defendant will relate back to the filing of the original complaint if the newly named defendant received notice of the action within the limitations period plus the time permitted for service under rule 4(j). That decision was based in part on the wording of rule 15(c) which provides for relation back. The applicable provision of that rule states that the new party must receive notice of the action "within the period provided by law for commencing the action." It does not explicitly state that notice is required within the applicable statute of limitations period.

 Furthermore, this court's original holding prevented the incongruity of allowing service of process under rule 4(j) against an accurately named defendant to be effected after the limitations period has run, but denying such service when the defendant has been misnamed. There seemed no reason for holding that a misnamed defendant is entitled to earlier notice than he would have received had the complaint named him correctly.

 The decision in Schiavone, however, is directly contrary to that holding. In Schiavone, a complaint alleging libel was filed approximately ten days before the expiration of the statute of limitations. Service was not attempted, however, until the day after expiration. Further, the complaint had misnamed the intended defendant. The libel had allegedly occurred in Fortune magazine and the complaint named Fortune as the defendant. Fortune is only a trademark, so when the complaint was received by the defendant's registered agent three days after it was mailed (i.e., four days after the expiration of the statute of limitations), the agent refused service. Approximately a month after that, plaintiff amended its complaint to properly name the defendant as the publisher of Fortune - - that is, Time, Incorporated. Service was then effected.

 Time, Inc. argued that the complaint against it was barred by the statute of limitations. The plaintiff contended that the amended complaint related back to the timely filing of the original complaint under rule 15(c). The Supreme Court rejected that argument. In a decision delivered by Justice Blackmun, the Court held that relation back is dependent on four factors: (1) the basic claim must have arisen out of the conduct set forth in the original pleading; (2) the party to be brought in must have received such notice that it will not be prejudiced in maintaining its defense; (3) that party must or should have known that, but for a mistake concerning identity, the action would have been brought against it; and (4) the second and third requirements must have been fulfilled within the prescribed limitations period. 106 S. Ct. at 2384.

 As in Schiavone, the first factor is not an issue in this case. It is the satisfaction of the remaining three that is of concern. In holding that Time, Inc. did not receive notice of the action against it prior to the expiration of the limitations period, the Court emphasized that rule 15(c) does not have engrafted upon it an extension of time for service of the complaint. Id. at 2385. The Court stated: "The linchpin is notice, and notice within the limitations period." Id. The language chosen by the Court cannot be any clearer. Though the ruling obviously has an element of arbitrariness, the Court noted that such arbitrariness is imposed by the legislature and not by the judicial process. Id. This court's earlier conclusion has therefore been effectively overturned.

 1) Notice to Westinghouse

 Plaintiffs have attempted to argue around the Schiavone decision in a variety of ways. First, plaintiffs have argued that the statute of limitations is inapplicable because Westinghouse received notice of the accident shortly after it occurred. Their position is absurd, however, and obviously demonstrates a very fundamental misunderstanding of exactly what notice rule 15(c) requires. Plaintiffs' argument about Westinghouse receiving notice of the accident occurring is irrelevant for statute of limitations purposes. Rule 15(c) speaks to notice that litigation has been instituted. If notice that an accident has occurred were all that was required, statutes of limitation would be superfluous since any defendant would have received "notice" the moment they became involved in any transaction that could result in a lawsuit.

 Nevertheless, plaintiffs recently strengthened this first argument about Westinghouse receiving notice within the limitations period. They filed a supplemental opposition on November 5, 1986 - - barely two days before the date originally scheduled for a hearing on these motions - - that presented for the first time, a letter purportedly mailed to Westinghouse Elevator Company on February 2, 1983, well within the limitations period. This letter stated it was informing the Company that counsel's law firm would be "representing Mr. John W. Hafferman in a claim arising from injuries he sustained . . . while working in the Capitol Hill [sic] Hotel."

 Plaintiffs' new argument is also untenable, however. Even assuming that a letter to the Elevator Company could be notice to Westinghouse Electric (see "identity of interest" argument discussed infra) and assuming that counsel actually did mail this letter to defendant on February 2, 1983 (an assumption hotly contested by Westinghouse in its November 26, 1986 reply to plaintiffs' supplemental opposition), plaintiffs have still failed to establish that Westinghouse received the notice required by rule 15(c). That rule states that the newly named party ...


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