New Limits on Late Addition of At-Fault Nonparties

Adding new defendants who are alleged to be comparatively at fault in civil cases just became more limited, based on a new Tennessee Supreme Court opinion.  Under Mills v. Fulmarque, Inc., the new nonparty must be alleged by a defendant who was itself named in a complaint or amended complaint filed within the original limitations period, and late additions may be dismissed as untimely.

In Mills, plaintiff salesman fell from a chair at a packaging company and was injured. Plaintiffs initially sued the packaging company in federal court.  The packaging company alleged the chair seller’s comparative fault, and plaintiffs amended the complaint to add the seller as a defendant—after the original limitations period expired.  Seller then alleged the chair manufacturer’s fault, and plaintiffs added the manufacturer as a defendant in second amended complaint. After the federal suit was dismissed for lack of diversity jurisdiction, plaintiffs filed a state court lawsuit naming seller and manufacturer as defendants.  The Supreme Court reversed the Court of Appeals and reinstated the trial court’s judgment, granting summary judgment for the manufacturer on statute of limitations grounds.

This case revolves around Tenn. Code Ann. § 20-1-119, which provides a 90-day window for a plaintiff to add a new nonparty as a defendant when that nonparty is alleged to be comparatively at fault by “… a defendant named in an original complaint initiating a suit within the applicable statute of limitations or named in an amended complaint filed within the applicable statute of limitations.”  In a first-impression issue, the court determined that the “applicable statute of limitations” phrase in § 20-1-119 refers exclusively to the statute of limitations for a plaintiff’s cause of action.  Thus, a plaintiff can use § 20-1-119 to add a new nonparty only if the defendant alleging the new nonparty’s fault was itself sued within the original applicable limitations period.

This holding prevents a potentially endless string of 90-day windows for a plaintiff to continue adding new defendants.  The Supreme Court dismissed arguments for successive 90-day windows as inconsistent with the natural meaning of “applicable statute of limitations” and with § 20-1-119’s general purpose under the comparative fault scheme.  That statute, by its own terms, intended a limited time for a plaintiff to add new defendants, even if the original statute of limitations has already expired on the new defendants.  Also, the “applicable statute of limitations” relevant to “an original complaint initiating a suit” would never seem to include the 90-day period, since that period never becomes relevant until a defendant files a responsive pleading alleging a nonparty’s fault.  Further, courts and commentators have characterized the 90-day period as an “extension,” “window” or “grace period”—not as a statute of limitations itself.

Timely naming or adding defendants is crucial for both plaintiffs and defendants. Plaintiffs may have difficulty recovering for fault attributed to a time-barred party; likewise, defendants may not have fault assigned against a nonparty whose comparative fault was never properly alleged.  Therefore, it is important that all parties investigate early for any potentially at-fault persons or entities and timely allege those persons’ and entities’ fault.

Tags: tort & insurance