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7th Circuit reverses on relation back issue

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A plaintiff attempting to sue his employer for breach of contract should have been able to file an amended complaint with relation back to the date of the original complaint in order to correct the defendant even though the statute of limitations had expired, the 7th Circuit Court of Appeals concluded today.

In Rex M. Joseph Jr., trustee of the bankruptcy estate of Timothy Wardrop v. Elan Motorsports Technologies Racing Corp., No. 10-1420, Timothy Wardrop originally sued Elan Motorsports Technology Racing Corp. alleging breach of a written employment contract. Several years later, Wardrop, who at some point during the litigation went bankrupt, discovered he named the wrong defendant and his employer was actually Elan Motorsports Technologies Inc. He sought leave to amend the complaint to change the defendant to Elan Inc. with relation back to the date of the original complaint.

The District judge ruled the proposed amended complaint didn’t relate back, relying on Hall v. Norfolk Southern Ry., 469 F.3d 590, 596 (7th Circ. 2006), saying it was Wardrop’s responsibility to determine the proper party to sue and do so before the statute of limitations expires. The District judge dismissed the suit after concluding there was no controversy between the parties.

But that was an error, the 7th Circuit ruled, citing Krupski v. Costa Crociere S.p.A., 130 S.Ct. 2485 (2010), which changed what courts had understood to be the proper standard for deciding whether an amended complaint relates back to the date of the filing of the original complaint. The only two inquires a District Court is allowed to make regarding this issue is whether the defendant who is sought to be added by the amendment knew or should have known that the plaintiff, had it not been for a mistake, would have sued him instead; and whether even if so, the delay in the plaintiff’s discovering the mistake impaired the new defendant’s ability to defend himself.

“The fact that the plaintiff was careless in failing to discover his mistake is relevant to a defendant’s claim of prejudice; the longer the delay in amending the complaint was, the likelier the new defendant is to have been placed at a disadvantage in the litigation. But carelessness is no longer a ground independent of prejudice for refusing to allow relation back,” wrote Judge Richard Posner.

Elan Inc. knew that Wardrop intended to sue it instead of Elan Racing but did nothing to clear up the confusion. It knew that Wardrop had his employment contract with Elan Inc. In addition, Elan Inc. brought on itself any harm it has suffered from the delay and can’t be allowed to gain an advantage from doing that, he continued.

The judges ordered the District Court to allow the amended complaint substituting Elan Inc. as the defendant with relation back to the original date of the complaint. Also on remand, the District judge should consider whether the differences between the amendment complaint and the original warrant rejection of the amended complaint.
 

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  1. Future generations will be amazed that we prosecuted people for possessing a harmless plant. The New York Times came out in favor of legalization in Saturday's edition of the newspaper.

  2. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  3. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  4. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  5. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

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