COURT OF APPEALS DECISION DATED AND RELEASED July 2, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2095
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
ROBIN W. HANCOCK and
KAREN HANCOCK,
Plaintiffs-Appellants,
v.
LIBERTY MUTUAL
INSURANCE COMPANY,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Milwaukee County:
FRANK T. CRIVELLO, Judge. Affirmed.
Before Wedemeyer, P.J.,
Sullivan and Schudson, JJ.
WEDEMEYER, P.J. Robin W. and Karen Hancock appeal from a
summary judgment entered in favor of Liberty Mutual Insurance Company. The Hancocks claim the trial court erred in
concluding that their amended complaint naming Liberty Mutual as the liability
insurer for alleged tort-feasor, Die Mold, did not relate back to the original
complaint and therefore was time-barred.
Because the Hancocks failed to comply with the time requirements
associated with the fictitious name statute, the relation back statute does not
save their time-barred claim against Liberty Mutual. Accordingly, we affirm.
I. BACKGROUND
This case arises from a
personal injury action stemming from Robin Hancock's work-related
injuries. On August 16, 1991, Hancock
severely injured his foot and ankle while working at Interstate Forging
Industries when a die-set exploded and a 600 pound piece of steel fell on his
foot. On August 11, 1994, Hancock filed
a products liability and negligence action against Die Mold, a fictitious
insurer of Die Mold, Interstate, Liberty Mutual as Interstate's worker's compensation
and liability insurer, and others.
The statute of
limitations expired on August 16, 1994.
Liberty Mutual was served in its capacity as Interstate's insurer on
October 5, 1994. On
October 10, 1994, the sixty-day time limit within which service must be
accomplished expired. Die Mold was not
served within the sixty-day time period.
On March 29, 1995, the Hancocks filed an amended complaint naming
Liberty Mutual as the insurer of Die Mold.
Liberty Mutual filed a
motion to dismiss the complaint against it as Die Mold's insurer on the basis
that the action was barred by the statute of limitations. The motion was treated as one for summary
judgment because affidavits were submitted in conjunction with the motion. The Hancocks argued that the amended
complaint was not time-barred because it related back to the timely filed
original complaint. The trial court
determined that the relation back statute did not apply under the facts of this
case and granted the motion. The
Hancocks now appeal.
II. DISCUSSION
The Hancocks contend
that the amended complaint relates back to the timely filed original complaint
because both requirements under the relation back statute, § 802.09(3), Stats., are satisfied.[1] The trial court determined that this case is
governed by Biggart v. Barstad, 182 Wis.2d 421, 513 N.W.2d 681
(Ct. App. 1994), and Lak v. Richardson-Merrell, Inc., 100 Wis.2d
641, 302 N.W.2d 483 (1981). It ruled in
pertinent part:
In
the original complaint filed August 11, 1994, five days before the
three-year statute of limitations period ran, the plaintiffs did name Die Mold
and ABC Insurance Company No. 1 as its insured under fictitious name statute as
party defendants. Die-Mold, however,
was dismissed by stipulation of April 10, 1995. Liberty Mutual was also named as a defendant in the original
complaint but that was as Interstate Forge's insurer, not as Die Mold's
insurer. The plaintiffs failed to
substitute Liberty Mutual for ABC Insurance Company within the sixty-day time
period. Having failed to substitute
Liberty Mutual for the fictitiously named insurer of Die Mold, they cannot
accomplish that same purpose under the relation back statute.
The
case of Biggart v. Barstad is factually similar to the facts in
this case, and I find it controls the issues here....
In
this case, as in Biggart, a party made claims against an
insurance company for one person's negligence and later, after the limitations
period ran, amended its claims to assert a direct action against the same
insurer for the negligence of a different person. In this case, the original complaint alleged Liberty Mutual was
liable for Interstate Forging's negligence.
In the amended complaint, plaintiffs allege Liberty Mutual is liable for
the negligence of Die Mold. There are
separate and distinct claims that under the holding in Biggart do
not relate back to the original complaint.
The question is whether the original pleadings
gave notice to Liberty Mutual that it may have been liable for claims against
Die Mold. They did not because the
claims against Liberty Mutual were made as to Interstate Forging's negligence
and not that of Die Mold. As in the Biggart
case, it is only a coincidence that Liberty Mutual insured both Die Mold and
Interstate Forging. Under the Court's
holding in the Lak and Biggart cases and the cases
cited therein, the plaintiffs' claims against Liberty Mutual and its insured,
Die Mold, are time barred as a matter of law.
On
the basis of these cases, the trial court granted the motion for summary
judgment.
We review grants of
summary judgment de novo. McCarty v.
Covelli, 182 Wis.2d 342, 345, 514 N.W.2d 45, 46 (Ct. App. 1994). Summary judgment methodology is well known
and we will not repeat it here. See
Grams v. Boss, 97 Wis.2d 332, 338-39, 294 N.W.2d 473, 476-77
(1980).
After an independent
review of the record, we conclude that the trial court properly granted summary
judgment. Our conclusion is based on
two factors. First, the Hancocks cannot
use the relation back statute to remedy the fact that they failed to comply
with the time requirements associated with the fictitious name statute. See Lak, 100 Wis.2d at
644, 302 N.W.2d at 485; see also Lavine v. Hartford Accident
& Indem. Co., 140 Wis.2d 434, 443, 410 N.W.2d 623, 627 (Ct. App.
1987) (applying Lak's analysis that “the relation back statute
[does] not apply to an amendment that simply identified a fictitious
defendant”). The fictitious name
statute allows a party to file a complaint against a defendant using a
fictitious name. See
§ 807.12(1), Stats. In order to timely substitute the actual
name of the party, however, the plaintiffs need to amend their complaint and
serve the correct party within sixty days of the expiration of the statute of
limitations. Lak, 100
Wis.2d at 649, 302 N.W.2d at 487. The
Hancocks failed to do so. They did not
file their amended complaint until seven months after the expiration of the
statute of limitations.[2]
Second, Biggart
addressed the issue of whether an amended complaint that is filed after the
statute of limitations, alleging a direct action against an insurer for the
negligence of an insured covered under a different and separate policy from
that alleged in the original complaint, relates back to the original
complaint. Biggart, 182
Wis.2d at 431, 513 N.W.2d at 684. In Biggart,
this court concluded that the relation back statute does not save an untimely
claim under this factual scenario. Id. The instant case presents a similar factual
scenario. The original complaint named
Liberty Mutual in its capacity as insurer for Interstate. The amended complaint named Liberty Mutual
in its capacity as insurer for another insured, Die Hard, who is covered under
a different and separate policy.
According to Biggart, this amendment does not relate
back. We are bound by Biggart.
For the foregoing
reasons, we affirm the judgment of the trial court.
By the Court.—Judgment
affirmed.
Not recommended for
publication in the official reports.
No. 95-2095 (D)
SCHUDSON, J. (dissenting). It is undisputed that Die Mold was not
served within the statute of limitations.
The Hancocks argue, however, that because Interstate was served within
the statute of limitations, and because Liberty also was the insurer for
Interstate, Liberty had constructive notice as insurer for Die Mold. For a number of reasons, I agree.
A chronological summary
will assist the analysis:
08/16/91While working at
Interstate Forging Industries, Robin Hancock allegedly was injured when a
die-set exploded causing a 600 lb. piece of steel to fall on his foot.
08/11/94Robin and Karen
Hancock file a complaint naming Interstate, Liberty (insurer for Interstate),
Die Mold (manufacturer of the die-set), and a fictitious insurer of Die Mold.
08/16/94The statute of
limitations expires.
10/05/94Liberty, as insurer
for Interstate, is served.
10/10/94The sixty day time
period for service expires.
10/11/94Die Mold is served.
03/09/95The trial court
enters an order dismissing Interstate from the case, and allowing Liberty to
remain in the case as Interstate's subrogated party.
03/29/95The Hancocks file an
amended complaint against Liberty, as insurer for Die Mold.
04/10/95The parties stipulate
to dismissal of Die Mold.
06/19/95The
trial court enters the judgment dismissing the case.
The majority correctly
identifies the influential authority of Biggart v. Barstad, 182
Wis.2d 421, 513 N.W.2d 681 (Ct. App. 1994), in which this court stated:
We
reject the argument that anytime an insurer receives a complaint alleging that
it is liable for the negligence of one insured it is, as a matter of law, put
on notice of separate claims against it for the negligence of other insureds
covered under different policies who happen to also have been involved in the
same accident.
Id., 182
Wis.2d at 431, 513 N.W.2d at 684. Biggart,
however, may be read to support the arguments of both parties in this
appeal and, when carefully studied, it appears to provide greater support for
the Hancocks.
Although Biggart explains that
an insurer will not be deemed to have received notice for one insured “anytime”
it has received notice for another insured, id., it also explains
that an insurer will be deemed to have received such notice sometimes. In Biggart, the plaintiffs had
failed to name two insured parties as defendants in their original
complaint. Then, after the statute of
limitations deadline, they added those two parties in their amended complaint. One insurance company was the insurer for
the original defendant as well as the two additional defendants. This court concluded that the amended action
must be dismissed against one of the newly added defendants, but not against
the other. Id., 182
Wis.2d at 430-431, 513 N.W.2d at 684.
In Biggart,
despite the fact that the plaintiffs originally had named neither of the added
defendants, this court concluded that one of those two new defendants still was
within the reach of the amended action.
Id. Here, by
contrast, both Die Mold and Liberty were named in the original complaint, thus
leaving the Hancocks in a stronger position than that of the plaintiffs in Biggart,
even with respect to the defendant against which the plaintiffs' argument in
Biggart prevailed.
Moreover, as Biggart
states:
When
unfairness, prejudice or injustice is asserted [by the party objecting to the
amended complaint], the question for the trial court is whether the party
opposing the amendment has been given such notice of the operative facts
forming the basis for the claim so that the party may adequately prepare a
defense or response.
Id. at
434, 513 N.W.2d at 686. Here, although
Liberty claims unfairness, it does not assert that it was ignorant “of the
operative facts forming the basis for the claim” thus preventing adequate
preparation of a defense or response.
Section 102.29, Stats., provides additional support for
the Hancock's argument.[3] In relevant part it provides:
(4) If the employer [Interstate Forging]
and the 3rd party [Die Mold] are insured by the same insurer [Liberty], ... the
employer's insurer [Liberty] shall promptly notify the parties in interest ....
(5)
An insurer subject to sub. (4) which fails to comply with the notice provision
of that subsection and which fails to commence a 3rd party action, within the 3
years allowed by s. 893.54, may not plead that s. 893.54 is a bar in
any action commenced by the injured employe under this section against any such
3rd party subsequent to 3 years from the date of injury, but prior to 6 years
from such date of injury....
(Bracketed
portions added.) Therefore, on October
5, 1994, when Liberty was served in its capacity as insurer for Interstate, the
requirements of § 102.29 applied.
Liberty necessarily knew that Die Mold was a named defendant in the
original and, of course, Liberty was in a position to know that it was Die
Mold's insurer.[4] Under the statute, Liberty was required to
“promptly notify” regardless of whether the third party had been served. Clearly, Liberty had constructive notice
with respect to Die Mold. Accordingly,
the three year statute of limitation extension under § 102.29(5) applied and,
therefore, the October 11, 1994 service of Die Mold was timely.[5]
Section 802.09(3), Stats., allows an amended pleading
changing the party against which a claim is asserted to relate back to the
original pleading if: (1) “the
amended pleading arose out of the transaction, occurrence, or event set forth
or attempted to be set forth in the original pleading;” and (2) within the
statute of limitations, the added party “has received such notice of the
institution of the action that he or she will not be prejudiced in maintaining
a 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 such party.” Both criteria were
satisfied. As the supreme court has
declared, “Constructive notice is neither notice nor knowledge but is a policy
determination that under certain circumstances a person should be treated as if
he had actual notice.” Thompson
v. Dairyland Mutual Ins. Co., 30 Wis.2d 187, 192, 140 N.W.2d 200, 202-203
(1966). Under the unusual circumstances
of this case, I conclude that Liberty clearly had constructive notice. Accordingly, I respectfully dissent.
[1] The Hancocks raise additional arguments for the first time on appeal: (1) Liberty Mutual should have known about its potential liability as an insurer for Die Mold because it investigated the accident; (2) Liberty Mutual should have known about its potential liability as an insurer for Die Mold because the Hancocks' counsel informed Liberty Mutual of his intent to pursue third-party liability against Die Mold; and (3) that Liberty Mutual had a statutory obligation pursuant to § 102.29(4), Stats., to inform the Hancocks that it also insured Die Mold. We decline to address these newly raised arguments. See Wirth v. Ehly, 93 Wis.2d 433, 443-44, 287 N.W.2d 140, 145-46 (1980).
[2] The analysis contained in the dissent would be more persuasive if this case did not also involve the interplay of the fictitious name statute, which was pivotal in the majority's decision. The dissent, however, entirely overlooks the fact that the Hancocks failed to comply with the fictitious name statute.
[3]
The majority declines to address the Hancocks's argument under § 102.29,
Stats., because they did not
invoke that statute in the trial court.
Majority slip op. at 3 n.1. I,
however, agree with the Hancocks's argument to this court:
[R]eference to that statute does not create a new argument. It merely adds force to a prior argument. Section 102.29(4) is nothing less than legislative confirmation of what appellants specifically argued in the court below: that under these circumstances it is fair to impute notice to Liberty.
[4] As the Hancocks note, Liberty was in a position to know that it was the insurer for Die Mold for several reasons, including that it was the worker's compensation insurance carrier for Interstate and, therefore, certainly would have had an obvious incentive to determine the insurer for Die Mold.
[5]
If this statute were the only basis on which to conclude that Liberty
had notice, then remand would be required for a factual determination of
whether Liberty complied with § 102.29, Stats. If Liberty complied, then the statute of
limitations did not extend three years and, therefore, service of Die Mold was
not timely. If, however, Liberty did
not comply, the statute of limitations extended for three years and service of
Die Mold was timely.
Because I have concluded that, even exclusive of § 102.29, Stats., Liberty had constructive notice, I do not believe that a further factual determination by the trial court is needed. If, however, § 102.29 would prove dispositive of the issue in this appeal, Liberty's compliance would have to be determined.