Siete Urban Associates, LLC v. Pitney, Hardin, Kipp & Szuch, N.J. App. Div., October 25, 2010.
Facts: Siete's claim against its' predecessor's (OWPURA) former attorneys allegedly arose from defendants' representation of OWPURA during the refinancing of a Newark property in or about August 1996.
Although one of the partners of OWPURA had commenced suit against defendants within the statute of limitations, the action was dismissed without prejudice because OWPURA was in receivership and the receiver alone had the authority to institute a legal action.
Eventually, the receiver expressed his intention to abandon the claims in favor of Mr. Geyer, who would then be free, to proceed to litigate it as successor to OWPURA. An order memorializing that abandonment was entered on May 22, 1999.
Geyer then filed a legal malpractice action in July, 1999. That action was dismissed in July, 2002 as a result of Geyer's attorney's incapacity. Defendants agreed not to raise the statute of limitations as a bar when Geyer refiled his action.
As permitted by the consent order, Geyer filed a new legal malpractice action against defendants on July 15, 2003. In again seeking dismissal based on standing grounds, defendants argued that the receiver's abandonment of the claim constituted an impermissible assignment of a tort claim and that ownership of the claim devolved to the entity that obtained OWPURA's assets. That successor was Siete. The trial court granted summary judgment, and the Appellate DIvision affirmed.
Following these decisions, Siete successfully moved to file an Amended Complaint and substituted itself as Plaintiff in place of Geyer in March, 2009. Defendants then moved to dismiss on the basis that the claim was barred by the statute of limitations. The trial Court granted defendants' motion and Siete appealed.
Issue: Is the statute of limitations tolled for a successor in interest? Under these circumstances can the successor in interest take advantage of the relation back doctrine as set out in New Jersey Court Rule 4:9-3?
Although OWPURA's malpractice claim may have been transformed — from its own hands to its receiver and, ultimately, to Siete — the limitations period did not reset with each exchange. Each new owner received the chose in action with whatever time was left in the six-year limitations period. Here, Siete assumed ownership of the claim in 1998; at that time, it had ample time to commence suit and yet deliberately delayed until Geyer's prosecution of the identical claim was precluded by his lack of standing.
We agree with the motion judge that Rule 4:9-3 does not apply in the absence of a mistake on the pleader's part in naming an adverse party or in the pleader's justifiable misunderstanding of the need for the joinder of the new party...We find no mistake of the type contemplated by the Rule to have occurred here. Indeed, it is doubtful that the Rule has application when a plaintiff misnames the entity he controls in his complaint. A plaintiff should know or be able to readily ascertain the correct name or correct entity in whose name suit should be commenced; Rule 4:9-3 presupposes that uncertainty may exist only with regard to the naming of an adverse party.
Lesson: A successor in interest must move expeditiously to discover and file a malpractice action within the original statute of limitations.