The U.S. Court of Appeals for the Third Circuit limited plaintiffs' ability to add claims to a complaint under the relation back provision of Federal Rule of Civil Procedure 15(c) in Glover v. FDIC, No. 11-3382 (Sept. 5, 2012). The Third Circuit limits plaintiffs' ability to use the relation back provision of Rule 15(c) to amend complaints, by requiring that the original complaint provided fair notice to defendants of the proposed amended claims. The court's ruling affords defendants protection from new or additional claims once the statute of limitations has run.
In Glover, plaintiff Mary Glover sought to amend her complaint to allege claims against the defendant, a law firm, stemming from the firm's alleged failure to voluntarily discontinue a foreclosure complaint that was filed against her in 2006. The court held that the plaintiff's amended complaint did not relate back to her original complaint because the original complaint did not provide fair notice to the defendant of the claims the plaintiff attempted to add in her amended complaint.
The law firm filed a foreclosure complaint against Glover on behalf of its client, a bank, to which she owed money on the mortgage. The foreclosure complaint was filed on April 10, 2006. The plaintiff later entered into a loan modification agreement with a different bank on January 4, 2008, which stipulated to the unpaid principal, as well as increased the plaintiff's monthly payment, and extended the repayment period. Glover began making payments under the loan modification agreement soon after entering into the agreement; however, the foreclosure complaint was not discontinued until November 25, 2009.
Glover brought claims against several defendants under the Fair Debt Collection Practices Act (FDCPA) and Pennsylvania's Fair Credit Extension Uniformity Act (FCEUA). She filed a complaint on June 9, 2008, in the Court of Common Pleas of Allegheny County, Pa. The case was removed to the U.S. District Court for the Western District of Pennsylvania.
While the case was pending in the federal court, the FDIC was appointed as receiver for one of the defendants. The case was stayed twice upon the FDIC's motion to allow the plaintiff to submit her claims through the FDIC's mandatory claims review process. Glover filed an amended complaint on October 14, 2009, adding a claim against a law firm that represented her original bank for FDCPA violations arising out of the law firm's alleged failure to voluntarily discontinue the foreclosure complaint. The law firm moved to dismiss the amended complaint as untimely under the FDCPA's one-year statute of limitations.
Relation back to the original complaint under Federal Rule of Civil Procedure 15(c)(1)(B) occurs "where the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading." (Slip. op. at 12, internal citations omitted). A balancing occurs between resolving disputes on their merits, which is a preference expressed in the Federal Rules, and protecting the defendants' interests under the statute of limitations.
The Third Circuit found that "[t]hough not expressly stated, it is well-established that the touchstone for relation back is fair notice . . . only where the opposing party is given 'fair notice of the general fact situation and the legal theory upon which the amending party proceeds' will relation back be allowed. Conversely, amendments 'that significantly alter the nature of a proceeding by injecting new and unanticipated claims are treated far more cautiously.'" (Slip. Op. at 13, internal citations omitted).
In Glover, fair notice was "lacking." The plaintiff's original complaint gave no notice to the law firm that it was responsible for conduct which was attributed to other defendants in the original complaint. "Rule 15(c) cannot save a complaint that obscures the factual predicate and legal theory of the amended claim. . . . Pleadings are not like magic tricks, where a plaintiff can hide a claim with one hand, only to pull it from her hat with the other." (Slip. Op. at 17). Glover failed to "give[ ] some clue in her original pleading that the [law firm defendants] were complicit in failing to discontinue the Foreclosure Complaint, and therefore liable for that false representation. She did not." (Slip Op. at 19).
Glover appears to provide defendants with protection from amended complaints after the statute of limitations, where the original complaint does not give "fair notice" that the additional claim might be added. Decisions of "fair notice" will depend on the pleadings and facts of each case.
For Further Information
If you have any questions about this Alert, please contact Sharon L. Caffrey, Alyson Walker Lotman, any member of the Trial Practice Group or the attorney in the firm with whom you are regularly in contact.