The New Mexico Supreme Court recently issued a new, and unusual decision in New Mexico on the application of the New Mexico State of Limitations for personal injury cases. This decision is likely to be of particular interest to insurers, their insureds, and individuals and companies that do business in New Mexico. In Snow v. Warren Power & Machinery, Inc., et al., (August 10, 2015), the Court addressed the effect of the statute of limitations in cases in which a new defendant is brought into a pending case when a motion to amend the complaint to add the new defendant has been filed prior to the statute of limitations has running, but an order granting the motion is not issued until after the statue has run.
Mr. Snow worked for the Navajo Refinery as an equipment operator. He alleged that an accident occurred on January 20, 2009, in which a hose assembly came loose and struck him, causing him serious, life-changing injuries. Mr. Snow and his wife filed a complaint on August 14, 2011 for personal injury, loss of consortium, and punitive damages. In their original complaint, they named three corporations as defendants. Through discovery, the Snows learned the names of the entities responsible for manufacturing, providing, and installing the equipment at issue. The Snows thereafter sought to amend their complaint to add two additional companies as defendants.
Under New Mexico law, action for personal injury must be filed within three years of the date of injury. See NMSA 1978 – 37-1-8 (1976.) In this case, the statue would require a complaint to be filed by January 20, 2012. The New Mexico Rules of Civil Procedure allow a party to amend their complaint, but require leave of court or the consent of adverse parties if more than 20 days have elapsed since the original complaint was served, or if an answer has been filed. See Rule 1-015(A).
In this case, the existing adverse parties had answered the complaint, so leave of court was required for the Snows to file an amended complaint. They filed their unopposed motion seeking leave of court to file an amended complaint naming the two new defendants at 4:23 p.m. on January 20, 2012, the day before the period allowed under the statute of limitations would expire.
One week after the Snows filed their motion to amend the complaint to name new defendants, and one week after the statute of limitations period had expired, the district court issued an order granting leave for the Snows to file their amended complaint. The Snows received notice of the order on January 30, 2012, and filed their amended complaint the same day. The new defendants were served with the amended complaint shortly thereafter, and each asserted the statute of limitations as an affirmative defense when they filed their answers to the amended complaint.
The two new defendants later filed motions for summary judgment, arguing that the statute of limitations barred the Snows’ claims against them. In response, the Snows argued that the delay inherent in the rule requiring leave of court to file an amended complaint ‘unfairly truncated’ the limitations period, and precluded them from lawfully filing their amended complaint until after the limitations period had passed. To cure this ‘unfairness,’ the Snows argued that the new complaint should be ‘deemed’ filed as a matter of law when the motion for leave to amend is filed. They also argued, alternatively, that the original complaint should ‘relate back’ to the original filing under Rule 1-015(C).
Despite the Snows argument that the court rules had the effect of treating them unfairly, the district court granted the new defendants’ motions for summary judgment, because the amended complaint was filed after the statute of limitations had run. The New Mexico Court of Appeals affirmed the district court and held that neither argument raised by the Snows’ relation back under Rule 1-015 (C) or the doctrine of equitable tolling, applies to save the late filing of the amended complaint. The Court of Appeals also noted the plaintiffs’ lack of reasonable diligence in pursuing their claims against the new defendants
The Snows then filed a petition for writ of certiorari requesting the New Mexico Supreme Court, asking the Court to review the Court of Appeals’ application of the doctrine of equitable tolling. Shortly thereafter, the parties reached a full settlement agreement. The Snows filed a notice withdrawing their petition for a writ of certiorari, stating that the settlement and subsequent dismissal of all claims against the new defendants left no active controversy.
Finding that the case presented an issue of substantial public interest, that is likely to arise in future lawsuits, the Supreme Court declined to accept the notice of withdrawal and granted certiorari to review the Court of Appeals’ decision. The New Mexico Trial Lawyers Association and the New Mexico Defense Lawyers Association were invited to intervene and submit briefs on the issue before the Court.
In the decision issued by the Supreme Court, the Court reversed the opinion of the Court of Appeals. The bases for its decision include the following:
In light of the above factors, and issuing a new rule for the situation found in this case, the Supreme Court ruled that the subsequently filed amended complaint, filed after the statute of limitations had run, is deemed filed as of the date of the original motion for leave to file and accordingly, the statute of limitations is not a bar.