Adding Employer As Defendant More Than One Year After Incident

When a plaintiff files a auto or other personal injury lawsuit, he may not be aware of all the potential defendants that should be named. Fairly often, a plaintiff may seek leave to amend his complaint and add a defendant even after the statute of limitations on the underlying claim has passed, usually citing the discovery rule as justification for this allowance. In a recent negligence case, the Tennessee Court of Appeals explored some of the limits on such allowances.

In Smith v. Hauck, No. M2014-01383-COA-R3-CV (Tenn. Ct. App. March 25, 2015), plaintiffs were in a car struck from behind by a vehicle driven by defendant on an interstate exit ramp. The accident occurred on June 25, 2012, and at the time there was no indication that defendant was driving in the course of his employment—i.e., neither defendant nor the police report mentioned this fact, and he was driving his personal car with no employer insignia. Plaintiffs filed a negligence suit on June 7, 2013, within the one-year statute of limitations, which defendant answered on August 26, 2013. Defendant’s answer did not state or allude to the fact that he was driving on employer business at the time of the accident. Four days later, plaintiffs served interrogatories and requests for production of documents on defendant. These discovery requests included items seeking information related to defendant’s employer and his purpose for driving at the time of the accident. When defendant’s responses were six weeks past due, plaintiffs filed a motion to compel on November 8, 2013. Defendant responded to the interrogatories on December 4, 2013, and for the first time in those responses stated that “he was traveling to St. Thomas Hospital to participate in surgery as part of his employment with St. Jude Medical.” On the same day they received these responses, plaintiffs filed a motion to add St. Jude Medical as a defendant. The motion was granted and plaintiffs filed their amended complaint on December 20, 2013. St. Jude then filed a motion to dismiss based on the one-year statute of limitations, which the trial court granted, but the Court of Appeals overturned.

In its analysis, the Court first determined that, based on prior Tennessee case law, the discovery rule does apply to defendants who are vicariously liable. Per the discovery rule, the statute of limitations does not begin to run “until the plaintiff ‘discovered, or reasonably should have discovered…the identity of the defendant who breached the duty[.]’” (Citing Grindstaff v. Bowman, No. E2007-00135-COA-R3-CV, 2008 WL 2219274 (Tenn. Ct. App. May 29, 2008)). Here, the Court focused on when plaintiffs had inquiry notice of the employer defendant, stating:

 …inquiry notice as construed in Tennessee is greater notice than constructive notice but less than actual notice. It is found when a person has notice of all the facts that, when pursued with reasonable diligence and good faith, would lead to discovery of the injury and the identity of the actor who caused it. What constitutes reasonable diligence and good faith must be determined by the entirety of the circumstances. It is a fact-driven inquiry, and summary judgment on the question is appropriate only if the inferences reasonably drawn from the uncontroverted facts could lead to only one conclusion.

(Internal citations and quotations omitted).

In the present matter, the Court found that it was undisputed that plaintiffs served their interrogatories less than one week after defendant answered the complaint; that plaintiffs filed a motion to compel less than sixty days after defendant’s discovery responses were due; that plaintiffs filed a motion seeking to add the employer defendant on the same day they received the relevant discovery responses; and that plaintiffs amended their complaint as soon as permission was granted by the court. Based on these facts, the Court held that the discovery rule could apply in this case, stating: “we cannot say that the only inference to be drawn from the undisputed facts is that Plaintiffs had inquiry notice that [defendant] was acting within the course and scope of his employment with St. Jude Medical before they received his delayed responses to their first set of interrogatories[.]” Accordingly, the Court reversed the summary judgment finding for St. Jude Medical.

Before reaching its holding, the Court contrasted this case with another car accident case in which the plaintiff was not allowed to use the discovery rule to add a defendant after the passing of the statute of limitations. In Grindstaff v. Bowman (cited above), the accident occurred in February 2003, plaintiffs filed their complaint in January 2004, and there was no further activity in this case until May 2005, at which point defense counsel told plaintiffs that defendant was driving in the course of his employment. Defendant filed his answer a few days later, not referencing his employer, and plaintiffs did not file a motion to amend their complaint to add the employer as a defendant until three weeks later. There, the trial court awarded summary judgment to the defendant employer and the Court of Appeals affirmed, stating that the record “demonstrated a lack of due diligence by the plaintiffs in investigating their case during the 28 months between the car accident with the individual defendant and the discovery that he was allegedly acting within the scope and course of his employment.”

Based on the facts of the Smith case, the Court decided this issue correctly. Although more than one-year had passed since the accident, plaintiffs here had not engaged in any lengthy or excessive delay. Once they filed their complaint, less than one year after the car accident, they kept the litigation moving. After defendant filed his answer two months later, the plaintiffs quickly served discovery requests and filed a motion to compel within a reasonable period of time after defendant was due to respond. Plaintiffs appeared to be diligent in investigating their case and moving the litigation forward, and they sought to add the employer defendant as soon as it was first mentioned by defendant. With such a record, finding that the plaintiff should have discovered the employer’s relevance and identity sooner would have set an almost impossible bar.

The record in this case allowed the Court to overturn summary judgment. This is a great reminder to plaintiff’s attorneys that a record that shows diligence may prove to be beneficial in ways you could not expect when filing a case.