Appeal from a Final Order in the United States District Court for the Northern District of Illinois, Eastern Division - No. 73 C 2781 James B. Parsons, Judge.
Pell and Tone, Circuit Judges, and Jameson, Senior District Judge.*fn*
This case presents the question of whether the relation-back provisions of Rules 15(c) and 17(a), FED. R. CIV. P., apply in a tort action against the United States when the government invokes the time bar of 28 U.S.C. § 2401(b).
A United States Postal Service truck collided with a vehicle owned by plaintiff Wadsworth and caused damages totaling $736.50. Wadsworth's automobile collision insurer, plaintiff Farmers Insurance Exchange, paid him $676.50 for the loss, that being the amount due after subtracting the $60 which was deductible under the policy.
Wadsworth and the insurer filed separate timely administrative claims against the government under the Federal Tort Claims Act, 28 U.S.C. § 2675, he for $60 and the insurer, as subrogee, for $676.50. Both administrative claims were denied.
Wadsworth then filed this suit within six months after the denial of the administrative claims, asking damages in the amount of $1,000. Following the Illinois practice, which permits bringing the action solely in the name of the insured when he still retains an interest in the claim because of the deductibility clause (Brosam v. Employer's Mutual Casualty Co., 61 Ill. App.2d 183, 209 N.E.2d 350, 352 (4th Dist. 1965)), the attorney who filed the action failed to include the insurer as a party plaintiff. In so doing the attorney overlooked the federal real party-in-interest rule, Rule 17(a), FED. R. CIV. P., under which the insurer who has paid part of the loss is required to be joined as a plaintiff. United States v. Aetna Casualty & Surety Co., 338 U.S. 366, 381, 94 L. Ed. 171, 70 S. Ct. 207 (1949). An exhibit attached to the complaint showed the interest of the insurer in the claim.
The government moved to reduce the ad damnum to $60, the amount of Wadsworth's administrative claim. When the District Court granted this motion, Wadsworth's attorney moved to amend the complaint to add the insurer subrogee as a plaintiff. More than six months having by this time expired since the rejection of the administrative claims, the District Court held that the insurer's portion of the claim was time barred under 28 U.S.C. § 2401(b) and refused to allow the amendment.
The District Court held and the government contends that because the time bar of 28 U.S.C. § 2401(b) is jurisdictional and timely filing of the action "is an indispensable condition of the liability and of the action which it [the statute] permits" (Simon v. United States, 244 F.2d 703, 704-705 (5th Cir. 1957)), an amendment filed after the time period allowed by the statute does not relate back under Rules 15(c) and 17(a). We disagree. Nothing in the statute or those rules suggests that those rules do not apply to actions under the statute. The time bar is jurisdictional, but the jurisdictional requirement was satisfied by the timely filing of suit for the full amount of the claim, and jurisdiction is not disturbed by an amendment correcting parties.
Wadsworth, the subrogor, sought to assert the entire claim on behalf of both himself and the insurer. In so doing he failed to comply with the requirement of the real-party-in-interest rule, Rule 17(a), FED. R. CIV. P. The last sentence of that rule, however, provides as follows:
"No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest."
That sentence was added to the rule in 1966 "to prevent forfeiture when determination of the proper party to sue is difficult or when an understandable mistake has been made. . . . Its main thrust is to allow a correction in parties after the statute of limitations has run, despite the valid objection that the original action was not brought by the real party in interest." 3A J. Moore, Federal Practice para. 17.15-1, at pp. 602-603 (2d ed. 1974) (footnotes omitted).
Moreover, Rule 15(c) provides that a claim asserted in an amendment relates back to the filing of the original pleading when it arises out of the occurrence set forth in that pleading. The strength of the rule's policy is evidenced by the extension of the relation-back effect even against a defendant who was not named within the period provided by law for the commencement of the action against him if he
"(1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the ...