Date: 05-24-2002

Case Style: Pacific Employers Insurance Company, et al. v. Sav-a-Lot of Winchester, et al.

Case Number: 00-6187

Judge: David A. Nelson

Court: United States Court of Appeals for the Sixth Circuit

Plaintiff's Attorney: Scott C. Wilhoit, CLARK, WARD & CAVE, Louisville, Kentucky, for Appellant.

Defendant's Attorney: Bruce D. Gehle, WILLIAM GALLION & ASSOCIATES, for Appellees.

Description: When a pleading is amended to change the party against whom a claim is asserted, as first year civil procedure students routinely learn, the amendment "relates back," under certain conditions, to the date of the original pleading. Under the Federal Rules of Civil Procedure, the conditions that must be satisfied if the relation-back doctrine is to apply are not always identical to the conditions that must be satisfied under state civil procedure rules - and the case at bar, where the applicability of Kentucky's version of the relation-back doctrine is at issue, shows that such differences can be significant.

The action now before us arises out of personal injuries suffered by a truck driver while making a delivery at a Lexington, Kentucky, warehouse owned and operated by an out-of-state corporation. On the last day of the one-year limitations period prescribed by Ky. Rev. Stat. § 413.140, an insurance company that had paid workers' compensation benefits to the injured driver filed a subrogation action in a Kentucky circuit court. The insurance company intended to sue the owner of the warehouse, but mistakenly named as defendants a defunct partnership and its members, none of whom was in the warehouse business. Apprised of its mistake when one of the former partners telephoned it after receiving the suit papers in the mail, the plaintiff company promptly amended its complaint to name the corporation that in fact owned the warehouse.

Under Rule 15.03(2) of the Kentucky Rules of Civil Procedure the amendment could not relate back unless the party to be brought in had received notice of the action within the limitations period. Under the federal rules, by contrast, the amendment could not relate back unless the party to be brought in received notice within the period provided for service of the summons and complaint. See Rule 15(c)(3), Fed. R. Civ. P. The condition established by the federal rule was met here; the condition established by the state rule was not.

Notwithstanding the plain language of Kentucky Civil Rule 15.03(2), the Kentucky circuit court repeatedly declined to dismiss the claims against the owner of the warehouse. During discovery, however, it was established that the matter in controversy exceeded $75,000. Accordingly, and because the lawsuit was between citizens of different states, the warehouse owner removed the case to federal court. After further discovery the federal court granted a motion for summary judgment on statute-of-limitations grounds. This appeal followed.

Upon consideration we conclude that the amendment naming the correct defendant did not relate back, under Kentucky law, to the date on which the original complaint was filed. We further conclude that the Kentucky Rules of Civil Procedure, not the Federal Rules of Civil Procedure, are controlling; that the district court did not abuse its discretion in declining to adhere, under the "law of the case" doctrine, to the state court's erroneous rejection of the statute of limitations defense; that neither the doctrine of res judicata nor the doctrine of collateral estoppel has any application here; and that the district court did not err in rejecting a claim that the warehouse owner was estopped to assert its statute of limitations defense. The challenged judgment will be affirmed.

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The first of the issues presented by Mr. Schneider for review is whether the district court erred in its application (or non-application) of the doctrines of res judicata, collateral estoppel, and "law of the case." This issue will not detain us long.

"Under the law of the case doctrine, a court is ordinarily precluded from reexaming an issue previously decided by the same court, or a higher court in the same case." Bowling v. Pfizer, Inc., 132 F.3d 1147, 1150 (6th Cir. 1998). The doctrine also has relevance to rulings made by state courts prior to removal. See Redfield v. Continental Casualty Corp., 818 F.2d 596, 605 (7th Cir. 1987).

Where the ruling in question was not made by a higher court, the decision to reconsider the prior determination is subject to review under an "abuse of discretion" standard. See Bowling, 132 F.3d at 1150. And it is not an abuse of discretion to revisit a prior ruling that is found to be erroneous. See Gillig v. Advanced Cardiovascular Systems, Inc., 67 F.3d 586, 590 (6th Cir. 1995) (citing Moore's Federal Practice 0.404[4.-2] (2d ed. 1994)). Cf. Remington v. Central Pacific Railroad Co., 198 U.S. 95, 99-100 (1905) ("If the [federal] court was satisfied that it, or its predecessor the state court, had made a mistake, it had power to reopen the matter").

In the case at bar the district court was satisfied - with good reason - that the state court had made a mistake. As the district court pointed out, moreover, the state court had offered no rationale for its rejection of the statute of limitations defense. In addition, post-removal discovery - particularly the deposition of Mr. Combs - had brought the factual picture into sharper focus. Clearly, under these circumstances, the district court did not abuse its discretion in declining to apply the law-of-the-case doctrine.

As to res judicata, that doctrine prohibits parties from relitigating a claim that was or could have been raised in a prior action in which there has been a final judgment on the merits. Kane v. Magna Mixer Co., 71 F.3d 555, 560 (6th Cir. 1995). Similarly, the doctrine of collateral estoppel prevents a party from relitigating factual issues resolved against it in a prior proceeding where there has been a final judgment on the merits. Rybarczyk v. TRW, Inc., 235 F.3d 975, 981-82 (6th Cir. 2000). Here there was no final judgment on the merits. The doctrines of res judicata and collateral estoppel thus have no potential application in this case.

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Click the case caption above for the full text of the Court's opinion.

Outcome: The judgment entered in favor of Moran Foods is AFFIRMED.

Plaintiff's Experts: Unavailable

Defendant's Experts: Unavailable

Comments: None