would constitute notice to 818 E. 47th St. William Goodall, however, did not receive notice on behalf of Enterprises prior to the running of the limitations period. Although the plaintiffs mailed the complaint on January 9, 1988, Goodall did not receive it until January 12, 1988 -- one day after the two-year statute of limitations expired on January 11, 1988. Therefore, even if there was an identity of interests between the defendants, since Enterprises did not receive notice of the filing until after the expiration of the limitations period, there was no proper notice that could be imputed to 818 E. 47th St. See Schiavone, 477 U.S. at 29.
The plaintiffs claim that Schiavone is inapplicable to the present case, asserting that defendant Enterprises received notice within the limitations period because under Rule 5(b)
service is complete upon mailing, and the plaintiffs mailed service to Enterprises two days before the statute of limitations had expired -- January 9, 1988.
The plaintiffs, however, essentially ignore the plain language of Rule 15(c) and the Supreme Court's interpretation of it in Schiavone, since " Schiavone speaks to when notice is received -- not to when service is attempted." Hafferman, 653 F. Supp. at 428; see also Armendariz, No. 87 C 2849, slip op. at 1 (language speaks of "receipt," not of "mailing"); cf. Simmons v. Fenton, 480 F.2d 133, 136-37 (7th Cir. 1973) (In a pre-Schiavone case the court held that Rule 15(c) was not satisfied because "actual service" was not effected within the limitations period; the defendant "could not have had notice that a suit had been filed against her until she heard about it."). Therefore, Rule 5(b), which deals with service of process, is not relevant to determining when a defendant receives the notice required by Rule 15(c). Cf. Schiavone, 477 U.S. at 30-31 (refusing to allow Rule 4(j) to temper plain meaning of Rule 15(c)).
The plaintiffs further argue that even if Schiavone does apply, the defendant 818 E. 47th St. received constructive notice of the institution of the original action; under the "identity of interests" principle, the plaintiffs apparently urge,
notice to Thomas Lysaught, Travelers' representative, can be imputed to the defendant 818 E. 47th St. Although it is unknown whether Lysaught received his copy of the original complaint before the statute of limitations ran, that fact is irrelevant to this decision, for even if Lysaught received notice within the statute of limitations, that notice cannot be imputed to either defendant.
Under the "identity of interests" principle, a court may impute notice of the institution of an action against the original defendant to a subsequently named and sufficiently related defendant. See id. at 29; see also 6 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1499 (Supp. 1988). So long as the original defendant has notice of the institution of the action with the limitations period, an amendment that substitutes the related party after the limitations period may relate back under Rule 15(c) to the date of the filing of the original complaint. See Schiavone, 477 U.S. at 28. This principle, however, is often applied when "'the original and added parties are a parent corporation and its wholly owned subsidiary, two related corporation whose officers, directors, or shareholders are substantially identical and who have similar names or sharer office space, past and present forms of the same enterprise, or co-executors of an estate.'" Norton v. International Harvester Co., 627 F.2d 18, 21 (7th Cir. 1980) (quoting Hernandez Jimenez v. Calero Toledo, 604 F.2d 99, 102-03 (1st Cir. 1979)).
In this case, the court cannot impute notice because Travelers and the defendant are not "substantially identical" parties. See id. Lysaught is an employee of Travelers, the defendants' insurer, and not of the defendant. Far from being identical, the interests between an insurer and an insured are sometimes antagonistic. Rogatz v. Hospital Gen. San Carlos, 89 F.R.D. 298, 300 (D.P.R. 1980). Moreover, under the identity-of-interests principle, notice normally is imputed from one party to a subsequently named one. Travelers is not even a named defendant in this action.
Finally, the plaintiffs contend that the defendants are estopped from asserting the statute of limitations because the defendants and their insurer hid the fact that 818 E. 47th St. was an appropriate defendant until after the statute of limitations had expired by referring to the insured as "Peter Carlton Enterprises, Ltd." in settlement correspondence. Estoppel principles ordinarily apply in cases in which a defendant knowingly allows or actually misleads a plaintiff into thinking it has sued the proper entity and the defendant appears ready to defend itself, but after the statute of limitations runs the defendant suddenly claims it is not the party to be sued. See 6 C. Wright & A. Miller, Federal Practice and Procedure § 1500, at 522 (1971). Representative of these cases is Travelers Indemnity Co. v. United States ex rel. Construction Specialties Co., 382 F.2d 103 (10th Cir. 1967), on which the plaintiffs rely. In Travelers Indemnity, the original defendant went so far as filing a bill of particulars and an answer to the initial complaint, only later asserting the statute of limitations when the plaintiff sought to add the proper party, the defendant's wholly-owned subsidiary, to the action. Id. at 106.
Sometimes, however, a defendant's prefiling activities may estop it from raising the statute of limitations as a defense. In Hafferman, for example, the court held that the defendant was estopped from asserting the statute of limitations when the defendant "rebuffed and misled" the plaintiffs' counsel, who, prior to filing the complaint, contacted three separate locations of the defendant by phone to determine the identity of the proper defendant. 653 F. Supp. at 429. One of the defendant's offices refused to cooperate and disconnected the call, while another office stated that Westinghouse Elevator was a subsidiary of Westinghouse Electric. Id.
In the present case, however, Enterprises did not mislead the plaintiffs such that 818 E. 47th St. would be estopped from asserting the statute of limitations. First, unlike the defendant in Travelers, Enterprises never had the opportunity to lull the plaintiffs into assuming they had sued the proper entity because Enterprises did not receive notice of this action until after the statute of limitations had lapsed. Moreover, the conduct that allegedly misled the plaintiffs was due to the activities of Lysaught, not to the activities of Enterprises, since the correspondence was between Lysaught and the plaintiffs' counsel; and this allegedly deceitful conduct stopped, by the plaintiffs' own admission, with the last of the correspondence on October 5, 1987 -- four months before the plaintiffs filed their original complaint.
Finally, unlike the plaintiffs' counsel in Hafferman, the plaintiffs' counsel in this case did not take any affirmative acts to determine the identity of the second (and possibly the only appropriate) defendant. See id. ("Plaintiffs' counsel was under an affirmative duty to ascertain the defendant's proper name.").
The plaintiffs could have determined with minimal investigation that 818 E. 47th St. was an appropriate party. Cf. Schiavone, 477 U.S. at 28;
Peterson v. Instapak Corp., 1987 U.S. Dist. LEXIS 3986, No. 86 C 3498, slip op. at 2 (N.D. Ill. May 6, 1987). The Illinois Corporate Index reveals that each of defendant Enterprises' Popeye's Fried Chicken locations is a separate legal entity. See Reply in Support of Defendant, Peter Carlton at 818 E. 47th Street, Inc.'s Rule 12(b) (6) Motion to Dismiss, Exh. 1. This court "know[s] of no equitable doctrine which rewards those who failed to do their homework." Peterson, slip op. at 2.
By waiting until three days before the limitations period expired, the plaintiffs took the risk that they might not later be allowed to add a party to the complaint. Because the second amended complaint, adding 818 E. 47th St. as a defendant, does not relate back to the filing of the original complaint, the court dismisses the defendant Peter Carlton at 818 East 47th Street, Inc. with prejudice.
DATED: July 17, 1989