Petition for Writ of Certiorari — Teledyne, Inc. v. Datskow

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Supreme Court, U.S,

EILUuUED

90-199 :

JUL 31 1990

F. SPANIOL, j

CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

TELEDYNE, INC.,

Petitioner,

—vV.—

MARJORIE DATSKOW, et ai.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

DISTRICT COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR WRIT OF CERTIORARI

THOMAS J. WHALEN*

ROBERT W. LUDWIG, JR.

Condon & Forsyth

1100 15th Street, N.W.

Washington, D.C. 20005

(202) 289-0500

STEPHEN R. STEGICH III

Condon & Forsyth

1251 Avenue of the Americas

New York, New York 10020

(212) 757-6870

Attorneys for Petitioner

* Counsel of Record

a ne ad =i

Questions Presented For Review

1. Whether, contrary to the decisions of the Court, a

Court of Appeals may substitute its own finding of waiver of

invalid service of process and reverse the District Court,

which determined upon the circumstances before it that a

finding of waiver was ‘‘wholly without merit’’, where there

was no determination by the Court of Appeals that the Dis-

trict Court’s finding was clearly erroneous, an abuse of dis-

cretion, Or erroneous as a matter of law?

2. Whether a defense of invalid service of process, timely

asserted in a responsive pleading pursuant to Federal Rule

12(b) and (h), was waived by the failure of defendant’s coun-

sel, at a scheduling conference three weeks after the defense

was interposed, to remind plaintiffs’ counsel of the defense

and, contrary to the Code of Professional Responsibility and

defendant’s counsel’s duty of fidelity to his client, advise his

adversary about the defect in the manner of service so as to

enable his adversary to attempt to serve properly his client

before the time for service expired and before plaintiff’s

wrongful death claims were barred by the statute of limita-

tions?

3. Whether the Court of Appeals may set aside and reverse

the order of the District Court denying plaintiffs’ motion

under Rule 15(a) and (c) to amend the complaint to add a

defendant without a determination that the District Court

abused its discretion?

4. Whether, in a diversity case, under Federal Rule 15(c) as

construed by the Court in Schiavone v. Fortune, aka Time,

Inc., 477 U.S. 21 (1986), notice to the party to be brought in,

within the period of service permitted by state law but after

the limitations period would have otherwise expired, permits

amendment to the complaint and relation back to the time of

the filing of the complaint as to the party to be brought in?

PARTIES TO THE PROCEEDING BELOW

The following persons and entities were parties before the

United States Court of Appeals for the Second Circuit: Mar-

jorie Datskow, a Pennsylvania citizen, individually and as

executrix of the estates of Robert C. Gross and Susan C.

Gross, and as administratrix of the estates of Michael and

David Gross, minors; Grossair, Inc., averred to be_a New

York corporation (appellants); and Teledyne, Inc. (appellee).

Teledyne, Inc. is a Delaware corporation. Teledyne Indus-

tries, Inc., a California corporation which did not appear in

the action below, is a wholly owned subsidiary of Teledyne,

Inc.

Teledyne, Inc. has the following nonwholJv owned subsidi-

aries: Teledyne Canada, Limited; Teledyne Exploration

Ltd.; Teledyne Gesellschaft mit beschrankter Haftung;

Powertronic Systems, Inc.; Western Mining Technology,

Inc.; Wolfram Bargbau und Huttengessellschaft m.b.H.

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW ...............

PARTIES TO THE PROCEEDING BELOW..............

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REASONS FOR GRANTING WRIT .............eceeeee

II.

Ill.

IV.

THE SECOND CIRCUIT HAS DECIDED A FED-

ERAL QUESTION INVOLVING THE APPROPRI-

ATE STANDARD OF REVIEW IN A WAY THAT

CONFLICTS WITH APPLICABLE DECISIONS OF

8 ERE a ae ee

THERE IS ALSO A CONFLICT AMONG THE

CIRCUITS ON THE APPROPRIATE STANDARD

OF REVIEW OF WAIVER OF A DEFENSE.....

THE SECOND CiRCUIT’s DE Novo FINDING

OF WAIVER OF A JURISDICTIONAL DEFENSE

TIMELY ASSERTED By ANSWER, THROUGH

ATTENDANCE AT A SCHEDULING CONFER-

ENCE THREE WEEKS LATER, IS SO FAR A

DEPARTURE FROM THE ACCEPTED AND

USUAL COURSE OF PROCEEDINGS AS TO

CALL FOR THE COURT’S REVIEW...........

THE DECISION OF THE COURT BELOW ON

RULE 15(c) IS ALSO INCONSISTENT WITH THE

APPLICABLE STANDARD OF REVIEW AND IN

CONFLICT WITH THE COURT’S DECISION IN

SCHIAVONE V. FORTUNE, AKA TIME, INC.,

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Oo NY NY WN

TABLE OF AUTHORITIES

CASES: : PAGE

Ackerberg v. Johnson, 892 F.2d 1328 (8th Cir. 1989). 16

Amadeo v. Zant, 486 U.S. 214 (1988)........... 11, 12, 14

Anderson v. Bessemer City, 470 U.S. 564 (1985) ....11, 12,

14, 15

Banner Indus., Inc. v. Central States, S.E. and S.W.

Areas Pension Fund, 875 F.2d 1285 (7th Cir.), cert.

i Be ae Es ee I Sn hccésckdedneonsess 15

Burton v. Northern Dutchess Hosp., 106 F.R.D. 477

CRs Mei sthusabesousinbeacecenceuneeande 19

Burton-Dixie Corp. v. Timothy McCarthy Constr. Co.,

GD Fae Ge Ghee Gls Bee cc cctccccecscesscoces 14

Conley v. Gibson, 355 U.S. 41 (1957) ............. 16, 17n

Cooter & Gell v. Hartmarx Corp., 110 S. Ct. 2447

Gees sacecpibiscesccnevaesdsvdsanuaunes a a

Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691 (9th

Ty) PE ahiichdedadadatinehebsdéeukinaneendues 16

Fraser v. Merriil Lynch Pierce, Fenner & Smith, Inc.,

Bee ae ee Gs BD 0 hcenenedtarsdassniee 15

Gardner v. Panama R.R., 342 U.S. 29 (1951)........ 13

Gutierrez v. Waterman S.S. Corp., 373 U.S. 206 (1963) 13

Hanna v. Plumer, 380 U.S. 460 (1965).............. 21

Hensley v. Eckerhart, 461 U.S. 424 (1983)........... 13

Jones v. Barnes, 463 U.S. 745 (1983) ............... 19

Kilkenny v. Arco Marine, Inc, 800 F.2d 853 (9th Cir.

1986), cert. denied, 480 U.S. 934 (1987)........... 20

PAGE

Midamerica Fed. Sav. and Loan Ass’n v. Shearson/

American Express, Inc., 886 F.2d 1249 (10th Cir.

Ss 5406 knw 648500666 0660b6CSR ae EE eEeteeekas 15

National Found. For Cancer Research v. A.G.

Edwards & Sons, Inc., 821 F.2d 772 (D.C. Cir. 1987) 16

National Hockey League v. Metropolitan Hockey

Ge, Be; Se Cs Ge CE ha bbe diccdantedsrs 13

Odense v. Salmonson Ventures, 108 F.R.D. 163

ae NN <an6s060s0seccksdcbseddasdesenerias 22

Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co., 484

Se Oe Ge chads iussdncdaccesenennsecussueoee 16

Page v. Moseley, Hallgarten, Estabrook & Weeden,

Ree., Gee Fuse ane Cee Ge. ED has vedncstcadecs 15

Pierce v. Underwood, 487 U.S. 552 (1988) .......... 13

Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156

ee Ge So od 00secnnesnescqnnsscdicsseateun 15

Reid Burton Constr., Inc. v. Carpenters Dist. Councii,

614 F.2d 698 (10th Cir.), cert. denied, 449 U.S. 824

GRRE 8.k460060b056000bh0040004000040340000040 15

Rush v. Oppenheimer & Co., 779 F.2d 885 (2d Cir.

Si a kdnnteb0nnnssbedessnnkecdneoonealeeee 15

Schiavone v. Fortune, aka Time, Inc., 477 U.S. 21

CR bd cadnse0eneendedauesscé6issneenseaae passim

Schiavone v. Fortune, 750 F.2d 15 (3d Cir. 1984),

ge Bk Se | yer rer ero 22

Southwest Indus. Import & Export, Inc. v. Wilmod

Co., 524 F.24 468 Gta Cis. 1975) ..cccccccccceces 14, 15

Vozeh v. Good Samaritan Hosp., 84 F.R.D. 143

CREPE Ge ees cncnkagesaccssenésekesennsrin 19

Walker v. Armco Steel Corp., 446 U.S. 740 (1980)... = 21

Way v. Mueller Brass Co., 840 F.2d 303 (Sth Cir.

POU oc ccccccedecccncccceecésdedensansuaanuannt 19, 20

Williams v. United States Postal Serv., 873 F.2d 1069

CF Gat, WR cc cccovenccccccstascdsessecscesees 20

Wilson v. Kuwahara Co., 717 F. Su9P. $25 (W.D.

SF Pere 17n, 19

Zenith Radio Corp. v. Hazeltine Research, Inc., 401

CLG. FES CIGTED cc cccccccccccccedscssensaasedsses 20

STATUTES AND RULES:

2B U.S.C. § IZS4C1) CISRE) on ccccccccccccccccccccces 2

Sup. Ct. R

DO BED cc cccccccccucsccccccccscsecscsesssecess 10

POBED cccccccdocccecccccecccccencesesesaccess 9

DODD c cc ccccccccceccscecsccdoscesesceetesetes 2n

Fed. R. Civ. P

GED eccccccccccuccosccnennssatsesecueeeunctaus 5, 16

Gi cccccucccéccccccceccsaucacnsnceceuceeud 20, 21, 22

BD cccdcccccccascccccscsvedvestesesececeaeeucs 13

BBe vcccccdroccdcccesecconsaveesesucueseceunt 5, 10, 14

FDTD a ccccccccccccccccceccscccscccoscceccess 2, 7, 16

BBD ccccoccccccccscocnecssesaseesceseesenesaee 17n

BOOS 0 kc ccccccésvccecéesncesaceuseceusseenen 2, 9, 16

SOD cc ncccecccccecceseccucteesseuussennusunes 2, 20

> PP PPPerrrrrrrrrriri yt 2, 3, 8, 20, 21, 22

Fed. R. Civ. P. 12(h) advisory committee’s note ..... 9, 16

Fed. R. Civ. P. 15(c) advisory committee’s note ..... 22

N.Y. Civ. Prac. L. & R. § 203(b)(5) (McKinney Supp.

UN ose ciuetandasacesdssnasiiccure 3n, 5, 17n, 21

OTHER AUTHORITIES:

Bauer, Schiavone: An Un-Fortune-ate Illustration of

the Supreme Court’s Role as Interpreter of the Fed-

eral Rules of Civil Procedure, 63 Notre Dame L.

es Te EE 664d bubcdGusecekddekeeeebeadustes 22n

Brussack, Outrageous Fortune: The Case for Amend-

ing Rule 15(c) Again, 61 S. Cal. L. Rev. 671 (1988) 22n

1 S. Childress & M. Davis, Standards of Review

ep Ge SD bnee cucnddadesesdsaucensceacee< 13

Ethical Opinion 88-63 of the Maryland State Bar Asso-

ciation (May 31, 1988), reprinted in 4 ABA/BNA

Lawyers’ Manual on Professional Conduct, Current

Reports (No. 13 July 20, 1988)................... 18, 19

Ethical Opinion 1215 of the Virginia State Bar (Jan.

31, 1989), reprinted in Summary in ABA/BNA Law-

yers’ Manual on Professional Conduct (June 20,

Pe dccktoce uosccécddeedsucnnncseseseesancteens is

A. Goldman, The Moral Foundations of Professional

SL Sr inb ce vesusesucckaneseususeduessetes 19

Lewis, The Excessive History of Federal Rule 15(c} and

Its Lessons for Civil Rules Revison, 85 Mich. L.

Sh, ee Ge cevacdoncenntkdsdsetsedevatseens 22n

PAGE

Model Code of Professional Responsibility (1970),

reprinted in N.Y. Jud. Law app. (McKinney (1975))

COBGR F cc cccccccccccccccccscscccecesccase 18, 19

BS Poh cccccccccccccccccccccecescescesease 18

BS Fea cccccccccccccccsccaccsessoceccecece 18

DR FeREe cccccccccccccccccccccscscccccedee 18, 19

Preliminary Draft of Proposed Amendments to the

Federal Rules of Appellate Procedure and the Fed-

eral Rules of Civil Procedure, 127 F.R.D. 237 (1989) 22n

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

No.

TELEDYNE, INC.,

Petitioner,

—Y,.—

MARJORIE DATSKOW, ef al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

DISTRICT COURT OF APPEALS FOR THE SECOND CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Opinions Below

The final (per curiam) opinion of the United States Court

of Appeals for the Second Circuit, on petition for rehearing,

appears in the appendix to this petition (App. pp. la-3a), as

well as the initial opinion of the Court of Appeals (per Jon

O. Newman, J.). (App. 4a-16a). Also appearing in the appen-

dix is the decision and order of the United States District

Court for the Western District of New York (David C. Lari-

mer, D.J.) granting petitioner’s motion to dismiss on grounds

of lack of personal jurisdiction, lack of proper service, and

the statute of limitations (App. 17a-3la), and the decision

and order of the District Court denying respondents’ motion

for reconsideration. (App. 32a-34a).

The initial opinion of the Court of Appeals is reported at

899 F.2d 1298 (2d Cir. 1990). The final opinion of the Court

of Appeals on rehearing has been unofficially reported at

1990 U.S. App. LEXIS 4535 (2d Cir. May 2, 1990). Neither

of the decisions and orders of the District Court has been

reported.

Jurisdiction

On May 2, 1990, the United States Court of Appeals for

the Second Circuit denied petitioner’s petition for rehearing

of its March 23, 1990 judgment. The jurisdiction of the

Court is invoked pursuant to 28 U.S.C. § 1254(1) (1986).

Rules Involved

The rules involved in the case, Rules 12(b), 12(h), 15(a)

and 15(c) of the Federal Rules of Civil Procedure, appear in

the appendix to this petition. (App. 59a-60a).

Statement of the Case

On November 26, 1986, a Beechcraft single-engine aircraft

crashed on approach to the airport at Winston-Salem, North

Carolina, killing respondent Datskow’s decedents, Robert

and Susan Gross and their sons. On November 22, 1988,

shortly before the expiration of the statute of limitations,

respondents Datskow and Grossair, Inc., the owner of the

aircraft, filed a summons and complaint in the United States

District Court for the Western District of New York. Juris-

diction was based upon diversity of citizenship.’ The com-

1 Plaintiff Datskow was a Pennsylvania citizen and plaintiff Grossair,

Inc. was alleged to be a citizen of New York. Defendant Teledyne, Inc.

was a Delaware corporation whose principal place of business was nei-

ther in New York nor Pennsylvania. Teledyne Industries, Inc., the

party respondents sought to bring into the action, was a California

corporation whose principal place of business was neither in New York

nor Pennsylvania. Sup. Ct. Rule 14. 1(i).

plaint sought damages for products liability in the manufac-

ture of the aircraft engine which allegedly failed.

Respondents named as the defendant ‘‘TELEDYNE, INC.,

Continental Motors Division.’’ (App 35a, 37a). Respondents

described the named defendant in the body of the Complaint

as ‘‘Teledyne, Inc.’’ and correctly identified ‘‘Teledyne,

Inc.’’ as a Delaware corporation (App. 38a), a corporation

different from Teledyne Industries, Inc., its wholly-owned

subsidiary, which is a California corporation. (App. 19a).

On December 5, 1988, after the New York statute of limi-

tations would have run on respondent Datskow’s wrongful

death claims, but within the 60-day period provided by New

York law for service of process, N.Y. Civ. Prac. L. & R.

§ 203(b)(5) (McKinney Supp. 1990) (hereinafter CPLR

§ 203(b)(5)), extraterritorial service of the summons and com-

plaint by mail was attempted upon the Teledyne Continental

Motors Aircraft Products Division of Teledyne Industries,

Inc. in Alabama, which had manufactured the engine

installed on the accident aircraft.

The named defendant, Teledyne, Inc., timely answered the

complaint on December 23, 1988 and asserted in its answer as

defenses lack of personal jurisdiction, improper service of

process and the statute of limitations. Teledyne Industries,

Inc. did not answer the complaint or otherwise appear in the

action.

At the initial magistrate’s scheduling conference held on

January 17, 1989, eight days before the 60-day period for ser-

vice under New York law would expire, respondents’ and

Teledyne, Inc.’s counsel agreed to a scheduling order which,

inter alia, established a discovery schedule and required all

Rule 12 motions to be filed by August 31, 1989. (App. 56a-

58a).

At that conference, neither respondents’ counsel nor Tele-

dyne, Inc.’s counsel said anything about the jurisdictional

defense of insufficient service of process raised in Teledyne,

Inc.’s answer, nor was there any discussion before the magis-

trate about the efficacy of the extraterritorial service by mail.

Teledyne, Inc. complied with this scheduling order by filing

its motion on April 21, 1989 to dismiss the action on grounds

of lack of personal jurisdiction and invalid service of process,

and on the ground that the statute of limitations barred the

claims for wrongful death.

In the wake of Teledyne, Inc.’s motion to dismiss, respon-

dents on May 22, 1989 moved to amend the complaint to

substitute as the defendant ‘‘Teledyne Continental Motors

Aircraft Products Division of Teledyne Industries, Inc.’’ This

was the precise name of the company contained in pleadings

in another earlier action involving respondent’s counsel, as

well as in four releases which counsel executed a few months

before filing the present action, in connection with another

legal proceeding against Teledyne Industries, Inc. and the

same division.

The District Court dismissed the action against Teledyne,

Inc. for lack of personal jurisdiction and insufficient service

of process, and held the wrongful death claims time-barred.

The District Court also denied respondents’ motion to amend

for failure to satisfy the criteria of Rule 15(c) for relation

back under Schiavone v. Fortune, aka Time, Inc., 477 U.S.

21 (1986), (App. 28a-30a), and denied respondents’ motion

for reconsideration. (App. 32a-35a). Respondents have since

filed a second action against both Teledyne, Inc. and Tele-

dyne Industries, Inc. on respondents’ remaining claims for

survival, strict liability, fraud and breach of warranty.

Reversing the decision of the District Court, the Second

Circuit Court of Appeals did not address Rule 15, but char-

acterized respondents’ motion to amend as a ‘‘motion to

redesignate’’. The Court of Appeals held that ‘‘plaintiffs did

not select the wrong defendant but committed the lesser sin

of misiabeling the right defendant’’, Teledyne Industries, Inc.

(App. 8a). The Second Circuit further found that Teledyne

Industries, Inc. was doing business in New York, and was

amenable to personal jurisdiction. With regard to the service

of process issue, the Court of Appeals upheld the District

Court’s ruling that respondents’ extraterritorial mail service

was ineffective, stating respondents had ‘‘no basis for believ-

ing that the adoption of mail service in 1983 was intended to

permit disregard of Rule 4(f).’’ (App. 11a).

The Court of Appeals found, however, ‘‘under all the cir-

cumstances’’, that this defective service of process was

waived for purposes of Rule 12 by Teledyne Industries, Inc.,

through Teledyne, Inc.’s appearance at the initial scheduling

conference. (App. 12a). Addressing whether the wrongful

death claims were time-barred, the Second Circuit ruled that

waiver of defective service for purposes of Rule 12 also con-

stituted waiver of the service requirement under state law for

obtaining the 60-day extension under CPLR § 203(b)(5),

(App. 15a), thereby rendering respondent’s wrongful death

claims timely for purposes of the statute of limitations. The

Second Circuit simply concluded: ‘‘The same circumstances

that sufficed to constitute a waiver of service for purposes of

personal jurisdiction also waive service for purposes of strict

compliance with section 203(b)(5).’’ (App. 15a).”

On petition for rehearing, the Second Circuit modified its

original opinion to recognize that Rule 15(c) applied to this

case even if characterized as involving a ‘mislabeled’ defen-

dant. (App. la-3a). Applying Rule 15(c), the Court of

Appeals ruled that the 60-day period for effecting service of

process under CPLR § 203(b)(5) extended the two-year

wrongful death limitation period for purposes of the Rule

15(c) notice, even though the Court in Schiavone v. Fortune,

aka Time, Inc., 477 U.S. 21 (1986) had rejected a similar

- 120-day extension for service established by federal rule.

These holdings of the Second Circuit Court of Appeals

embody several distinct and separate findings which the Sec-

2 This conclusion of the Second Circuit rests on no New York case

law. In addition, it assumes, contrary to the express language of CPLR

§ 203(b)(S), that the 60-day extension is available for effecting service

on a defendant other than the one named in the complaint which is

filed. Filing of a complaint against the party to be served is a statutory

prerequisite for obtaining the 60-day extension.

ond Circuit substituted without due regard for the contrary

findings of the District Court or the appropriate standards of

review. Principal among these is the Second Circuit’s finding

of waiver of the defective service.

The factual bases upon which the Second Circuit ‘‘found’’

a waiver ‘‘under all the circumstances’’ were that respondents

were misled by Teledyne, Inc.’s use of the name ‘‘Teledyne’”’

in a number of its subsidiary companies and that Teledyne

Inc.’s counsel participated in a scheduling conference without

orally reminding respondents about the defective service of

process. Although Teledyne, Inc. had put respondents on

notice of this defense in its answer timely filed three weeks

before, the Court of Appeals held that Teledyne Industries,

Inc. (which the Court of Appeals treated interchangeably

with Teledyne, Inc.),’ through Teledyne, Inc.’s counsel, par-

ticipated in the scheduling conference without ‘‘promptly

complain[ing]’’ about the defective service of process when,

in the Second Circuit’s opinion, respondents—had eight days

remaining in the 60-day period in which to cure the defective

service.‘

Each of these factual and legal arguments had been pre-

sented to the District Court, which found respondents’ con-

tention of waiver to be ‘‘wholly without merit’’. (App. 18a

n.1).

The District Court found that Teledyne, Inc. and Teledyne

Industries, Inc. are separate legal entities, not interchangeable

for purposes of this litigation. (App. 22a). The District Court

further found that respondents sued, and intended to sue the

3 Without any factuai predicate or due regard to the contrary findings

of the District Court (App 22a & n.4), and despite their separate legal

status as corporations, the Second Circuit treated Teledyne, Inc. and

Teledyne Industries, Inc. interchangeably, as if having an unspoken

‘‘identity of interest’’. See Schiavone, 477 U.S. at 28. The Second Cir-

cuit held that counsel who appeared for one company (Teledyne, Inc.)

by his inaction waived any defense of insufficient service that might

have been raised by another company (Teledyne Industries, Inc.),

which did not appear in the action.

4 See note 2, supra.

named defendant Teledyne, Inc., not Teledyne Industries,

Inc., (App. 20a, 33a), and rejected, as ‘‘without merit’’,

respondents’ claim that ‘‘somehow defendant Teledyne was

responsible for plaintiff’s confusion in this regard.’

(App. 20a n.3). The District Court stated:

Based on plaintiffs’ counsel’s past and ongoing litigation

against these two corporate entities, the claim of confu-

sion rings hollow. In any event, if plaintiffs were uncer-

tain about the correct corporate affiliation of TCM,

discretion dictated naming both Teledyne and Teledyne

Industries in this action.

(App. 20a n.3).

The District Court considered respondents’ argument that

counsel for Teledyne, Inc., at an initial scheduling conference

to establish a schedule for discovery and motions, failed to

remind respondents’ counsel of the defense of insufficient

process interposed in the answer and rejected as ‘‘wholly

without merit’? respondents’ claim that Teledyne, Inc.

‘‘somehow waived the defenses that form the basis of the

motions to dismiss’, or that respondents were prejudiced.

(App. 18a n.1, 30a). The District Court, reviewing the case

law, noted that the defenses were properly preserved by

answer pursuant to Fed. R. Civ. P. 12(b) and the subject of

prompt motions to dismiss, which ‘‘hardly justifies character-

izing defendant as ‘dilatory’ ’’. (App. 18a n.1).

The Second Circuit did not find any of these factual find-

ings, for which there was support in the record, clearly erro-

neous. Nor did the Second Circuit find the District Court’s

decision rejecting waiver to be an abuse of discretion, or legal

5 The Second Circuit found that because ‘‘Teledyne Industries, Inc.

has chosen to do business with a name that used the key word of its

parent’s name’’ (App. 9a), it has taken a risk and will be considered

acceptably described in the present, and presumably any future com-

plaint against ‘‘Teledyne, Inc.’’ The Second Circuit’s finding is with-

Out precedent and sweeping in its effect upon every major parent

corporation which, as the umbrella to affiliated subsidiaries, uses a

common trade name throughout its corporate hierarchy.

error. Instead the Second Circuit made its own findings

which it substituted for those of the District Court, and con-

cluded, ‘‘under all the circumstances’’, that ‘‘this defendant

[Teledyne Industries, Inc., which had not appeared at all in

the action] sufficiently participated in proceedings in the

Western District to have waived lack of personal service of

process. ...’’ (App. Sa).

Similarly, although the Second Circuit found no abuse of

discretion by the District Court in denying leave to amend

under Rule 15(c), the Second Circuit reversed the District

Court and ordered that respondents could ‘‘amend the com-

plaint to designate properly the name of the defendant, Tele-

dyne Industries, Inc.’’® (App. 16a).

6 In holding that respondents could ‘‘amend’’ the complaint to desig-

nate properly the name of the defendant, Teledyne Industries, Inc.

(App 16a), the Second Circuit necessarily held that even though Tele-

dyne, Inc. had not been properly served and was not subject to the per-

sonal jurisdication of the District Court (App. 7a, 10a, 11a), Teledynie

Industries, Inc. could properly be ‘‘substituted’’ as a party under Rule

15(c) for a company over which the Court had not obtained jurisdic-

tion (namely Teledyne, Inc.).

Reasons for Granting The Writ

On the issue whether petitioner, by its conduct ‘‘under all

the circumstances’’, waived its defense of insufficient service

of process, the Second Circuit substituted its judgment for

the findings of the District Court. In so doing, the Second

Circuit ‘‘has decided a federal question in a way in conflict

with applicable decisions of the Court’’. Sup. (Ct. R. 10.1(c).

As recently as last term, in Cooter & Gel! v. Hartmarx

Corp., 110 S. Ct. 2447 (1990), the Court held that federal

appeals courts must apply a deferential standard to rulings of

the district courts, especially rulings based on factual determi-

nations.

The drafters of Federal Rule 12 designed the rule to protect

against ‘‘unintended waiver’’ of a jurisdictional defense. Fed.

R. Civ. P. 12(h) advisory committee’s note. If the rule were

followed and a defense were timely raised, such defense

should be deemed waived only by conscious assent or by con-

duct of the defendant under the circumstances. The Second

Circuit gave no deference to the trial court’s finding, based

upon the facts and circumstances before the trial court, that

there was no waiver. The failure of the Second Circuit to

apply a deferential standard of review to rulings of the Dis-

trict Court rejecting a waiver of a valid and timely interposed

defense was in conflict with the decisions of the Court in

cases such as Cooter & Gell, supra, and several Circuit

Courts of Appeal.

In addition, the Second Circuit’s reversal of the District

Court’s decision denying respondents’ motion to amend to

name an additional party, without finding that the District

Court abused its discretion, was also contrary to the decisions

of this Court and the decisions of several circuits.

The factual basis upon which the Second Circuit found

waiver raises an equally important issue. For practicing attor-

neys before Federal and State courts, the Second Circuit

ignored the ethical obligation imposed on the profession that,

within the rules and statutes governing his conduct, an attor-

ney must zealously represent and protect his client’s interests.

The Second Circuit condemns petitioner’s attorney and

penalizes his client because the attorney, after raising the

defense of insufficient service in the answer, did not remind

or advise his adversary, at a scheduling conference, that

extraterritorial mail service is ineffective. Petitioner’s attorney

is charged with failing to tell his adversary how his client, the

defendant, could be timely sued.

This issue which petitioner brings to the Court and the

context in which it arises is both simple and fundamental:

Should an attormey be deemed to waive for his client a

defense of insufficient service, timely interposed in accord-

ance with Federal Rule 12, because the attorney did not

advise his adversary of the particular defect in sufficient time

so that the defect could be cured.

The decision of the Second Circuit strikes at the underpin-

nings of our adversarial system. Under the decision of the

Second Circuit, a counsel’s fidelity to his client’s interests

while acting in full compliance with the Federal Rules and the

Model Code of Professional Responsibility, paradoxically has

brought about a waiver of his client’s defenses.

In this decision, the Second Circuit, it may truly be said,

has so far departed from the accepted and usual course

of judicial proceedings . . . as to call for an exercise of

this Court’s power of supervision.

Sup. Ct. R. 10.1(a).

THE SECOND CIRCUIT HAS DECIDED A FEDERAL

QUESTION INVOLVING THE APPROPRIATE STAN-

DARD OF REVIEW IN A WAY THAT CONFLICTS

WITH APPLICABLE DECISIONS OF THE COURT

In the case at bar, the Court of Appeals failed to apply the

correct deferential standard of review of the District Court’s

decision on the alleged waiver of a Rule 12 defense. The

Court of Appeals’ decision, which only substitutes its find-

ings for those of the District Court, conflicts with decisions

of the Court in Anderson v. Bessemer City, 470 U.S. 564

(1985), Amadeo v. Zant, 486 U.S. 214 (1988), and Cooter &

Gell v. Hartmarx Corp., 110 S. Ct. 2447 (1990).

In this case, upon all the circumstances, the District Court

found that petitioner did not waive its defense of lack of

jurisdiction based on insufficient service of process. On

review, the Second Circuit gave no deference whatever to the

District Court’s finding that no waiver had occurred. The

Court of Appeals thereupon made findings of its own—that

petitioner’s attorney waived the defense of insufficient service

by his silence at a scheduling conference, and by his failure

to inform his adversary that respondents’ extraterritorial mail

service was ineffective.

In a recent series of decisions, culminating in Cooter &

Gell, the Court has underscored the deference which must be

given

to the determination of courts on the front lines of liti-

gation [to] enhance these courts’ ability to control the

litigants before them . . . [and] streamline the litigation

process by freeing appellate courts from the duty of

reweighing evidence and reconsidering facts already

weighed and considered by the district court... .

110 S. Ct. at 2460.

The Court’s recent decisions recognize that the principles

of appellate review embodied in Rule 52(a) apply equally to

pretrial fact finding and that District Court determinations

should be reviewed under a deference standard.

In Anderson v. Bessemer City, 470 U.S. 564 (1985), the

Court reversed the appeals court for not applying the Rule

52(a) standard, and instead “‘improperly conduct[ing] what

amounted to a de novo weighing of the evidence in the rec-

ord."’ 470 U.S. at 576. The Court emphasized:

If the district court’s account of the evidence is plausible

in light of the record reviewed in its entirety, the court

of appeals may not reverse it even though convinced

that had it been sitting as the trier of fact, it would have

weighed the evidence differently. Where there are two

permissible views of the evidence, the fact finder’s

choice between them cannot be clearly erroneous.

470 U.S. at 573-574 (citation omitted).

In Amadeo v. Zant, 486 U.S. 214 (1988), a federal habeas

corpus case, the Court reversed the appeals court which, in

violation of Rule 52(a), had ‘‘simply expressed disagreement

and substituted its own factual findings for those of the Dis-

trict Court.”’ Jd. at 223.

Most recently, in Cooter & Gell v. Hartmarx Corp., 110

S. Ct. 2447 (1990), the Court adopted a deferential standard

of review of a district court’s imposition of sanctions under

Rule 11. The Court's analysis in Cooter & Gell on whether a

mixed issue of fact and law should be decided under a factual

or legal standard is equally applicable here. Whether there

has been a waiver of a timely asserted defense is not a purely

legal question. As in Cooter & Gell, the issue is ‘‘rooted in

factual determinations.’ Jd. at 2459. The Second Circuit

itself stated, in this case, the issue of waiver involves consid-

eration of ‘‘all the circumstances’’. (App. 12a).

The circumstances trial courts consider in deciding waiver

of a timely-asserted defense include the delay in moving to

dismiss based on the defense, the extent and nature of pre-

trial participation in the litigation, and prejudice to the other

party. Thus a district court’s ruling on waiver is, like the

—————

Rule 11 determination presented in Cooter & Gell, ‘‘fact-

specific’, and sometimes involves ‘‘fact-intensive, close

calls.’’ 110 S. Ct. at 2460.

As the Court stated in Cooter & Gell, ‘‘[fjamiliar with the

issues and litigants, the district court is better situated than

the court of appeals to marshall the pertinent facts and apply

the fact-dependent legal standard mandated by"’, in this case,

the doctrine of waiver based upon pretrial participation in lit-

igation. 110 S. Ct. at 2459. This conclusion also flows from

the Court’s observation in Pierce v. Underwood, 487 U.S.

552 (1988):

It is especially common for issues involving what can

broadly be labeled ‘supervision of litigation,’ which is

the sort of issue presented here, to be given abuse-of-

discretion review. See, e.g., Hensley v. Eckerhart, 461

U.S. 424, 437 (1983) (attorney's fees); National Hockey

League v. Metropolitan Hockey Club, Inc., 427 U.S.

639, 642 (1976) (discovery sanctions); see generally | S.

Childress & M. Davis, Standards of Review §§ 4.1-4.20,

pp. 228-286 (1986).

487 U.S. at 558-559 n.1.

The Court's treatment of an analogous defense further

supports a deferential standard of review of a District

Court’s determination that no waiver was committed. The

Court long ago determined that a deferential standard of

review was proper on the issue of laches, an equitable cousin

of waiver. In Gardner v. Panama R.R., 342 U.S. 29 (1951),

the Court stated that ‘‘the existence of laches is a question

primarily addressed to the discretion of the trial court

.”” Id. at 30-31. See also Gutierrez v. Waterman S.S.

Corp... 373 U.S. 206, 215 (1963) (reversing the circuit court

where the district court ruling on laches was not plainly erro-

neous).

This deferential standard of review, it is submitted, must

apply to the issue of a waiver of a defense timely asserted, if

the Court's recent decisions are to have any practical mean-

ing and effect.

The Second Circuit in this case simply ignored the deferen-

tial standard of review established by the Court. In the lan-

guage of Amadeo v. Zant, the Second Circuit, ‘‘without

examining the record or discussing [the appropriate standard

of review,] . . . simp!'y expressed disagreement and substi-

tuted its own factual findings for those of the District

Court."’ 486 U.S. at 223.

THERE IS ALSO A CONFLICT AMONG THE CIRCUITS

ON THE APPROPRIATE STANDARD OF REVIEW OF

WAIVER OF A DEFENSE

In its opinion, the Second Circuit essentially applied a de

novo standard of review on the issue of waiver of a Rule 12

defense. This holding is illustrative of the continued practice

of some circuits, when considering such pretrial issues as

waiver, to conduct a de novo review, inconsistent with the

deferential standard established by the Court and in conflict

with other circuits.

The Fifth Circuit had held, for example, that the analo-

gous waiver of an arbitration defense to civil litigation, is a

question of fact dependent on the extent of pretrial participa-

tion, delay and prejudice to the other party. Burton-Dixie

Corp. v. Timothy McCarthy Constr. Co., 436 F.2d 405, 408

(Sth Cir. 1971) (‘The question depends upon the facts of

each case and usually must be determined by the trier of

facts’’). A few years later, the Fifth Circuit appeared to

reverse direction, stating in Southwest Indus. Import &

Export, Inc. v. Wilmod Co., 524 F.2d 468 (Sth Cir. 1975):

**‘We consider the question of waiver to be a conclusion of

law not subject to the strictures of limited review dictated by

F.R.Civ.P. 52(a) as to factual findings of the Trial Court."’

Id. at 470 n.3.

In 1986, applying the Court's recent decision in Anderson

v. Bessemer City, the Fifth Circuit reversed course again,

holding: ‘It appears to us that a finding that a party has

waived its right to arbitration is a legal conclusion subject to

our plenary review, but that the findings upon which the con-

clusion is based are predicate questions of fact, which may

not be overturned unless clearly erroneous.’’ Price v. Drexel

Burnham Lambert, Inc., 791 F.2d 1156, 1159 (Sth Cir. 1986)

(emphasis in original).

The Seventh and Tenth Circuits independently reached sim-

ilar results in Banner Indus., Inc. v. Central States, S.E. and

S.W. Areas Pension Fund, 875 F.2d 1285, 1289 (7th Cir.),

cert. denied, 110 S. Ct. 563 (1989), Reid Burton Constr., Inc.

v. Carpenters Dist. Council, 614 F.2d 698 (10th Cir.), cert.

denied, 449 U.S. 824 (1980) and Midamerica Fed. Sav. and

Loan Ass'n v. Shearson/American Express, Inc., 886 F.2d

1249, 1259 (10th Cir. 1989).

The Second Circuit, consistent with its approach in this

case, held to the contrary in Rush v. Oppenheimer & Co.,

779 F.2d 885 (2d Cir. 1985), concluding that ‘‘the question of

waiver of arbitration is one of law . . . and is fully review-

able on appeal free from the clearly erroneous standard of

Rule 52(a). . . .”’ Jd. at 887 (citation omitted). Rush relied

on the Fifth Circuit decision in Wilmod Co. which was there-

after overruled in light of the Court's intervening decision in

Anderson v. Bessemer City. Rush also was based on the

assumption that a de novo review standard applies where the

facts are undisputed, a notion the Court rejected in Ander-

son, which likewise involved ‘‘essentially undisputed’’ facts.

470 U.S. at 576.

The First, Fourth, Eighth, Ninth and D.C. Circuits, not-

withstanding the questionable foundation on which the Sec-

ond Circuit’s Rush decision rests, nevertheless have followed

Rush, or the discredited Fifth Circuit decision in Wilmod Co.

on which Rush is based. See Page v. Moseley, Hallgarten,

Estabrook & Weeden, Inc., 806 F.2d 291, 294 n.2 (ist Cir.

1986); Fraser v. Merrill Lynch Pierce, Fenner & Smith, Inc.,

817 F.2d 250, 251-52 (4th Cir. 1987); Ackerberg v. Johnson,

892 F.2d 1328, 1332 (8th Cir. 1989); Fisher v. A.G. Becker

Paribas Inc., 791 F.2d 691, 693 (9th Cir. 1986); National

Found. For Cancer Research v. A.G. Edwards & Sons, Inc.,

821 F.2d 772, 774 (D.C. Cir. 1987).

While the particular defense at issue in those cases is dif-

ferent from the defense at issue in the case at bar, the stan-

dard of review for waiver of either of the defenses is the

same, indicating a continuing conflict among the circuits on

the standard of review of pretrial determinations of waiver.

Ill

THE SECOND CIRCUIT’S DE NOVO FINDING OF

WAIVER OF A JURISDICTIONAL DEFENSE TIMELY

ASSERTED BY ANSWER, THROUGH ATTENDANCE

AT A SCHEDULING CONFERENCE THREE WEEKS

LATER, IS SO FAR A DEPARTURE FROM THE

ACCEPTED AND USUAL COURSE OF PROCEEDINGS

AS TO CALL FOR THE COURT’S REVIEW

‘*Before a federal court may exercise personal jurisdiction

over a defendant, the procedural requirement of service of

summons must be satisfied.’’ Omni Capital Int’l, Ltd. v.

Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). In this case

both the District Court and the Second Circuit held that mail

service upon Teledyne, Inc. (or Teledyne Industries, Inc.) in

Alabama was ineffective because extraterritorial service of

summons by mail is not permitted under Federal Rule 4(f) or

under New York law.

Under the Federal Rules, an objection to service of process

may be raised in a responsive pleading or by motion pursuant

to Rule 12(b). Fed. R. Civ. P. 12(b), (h). As contemplated by

the drafters, compliance with the Rules will preclude an

‘‘unintended waiver.’’ Fed. R. Civ. P. 12(h) advisory com-

mittee’s note. Teledyne, Inc. followed the Rules precisely and

timely raised the defense of insufficient service in its answer.

As the Court recognized in Conley v. Gibson, 355 U.S. 41

(1957): ‘‘The Federal Rules of Civil Procedure do not require

a claimant to set out in detail the facts upon which he bases

his claim’’, or a defendant his defense. Jd. at 47.

To the contrary, all the Rules require is ‘a short and

plain statement of the claim’ that will give the defendant

fair notice of what the plaintiff’s claim is and the

grounds upon which it rests. ... Such _ simplified

‘notice pleading’ is made possible by the liberal opportu-

nity for discovery and the other pretrial procedures

established by the Rules to disclose more precisely the

basis of both the claim and defense. . . .

Id. at 47-48 (emphasis supplied).’

Having given ‘‘notice’’ in its ‘‘pleading’’ of its defense of

insufficient service, what rule or statute obligated Teledyne,

Inc.’s attorney to come forward and advise his adversary that

extraterritorial service by mail was ineffective? Consistent

with his ethical obligations and the duty of fidelity he owes

his client, how can an attorney advise his adversary of defec-

tive service so his adversary can perfect a lawsuit against his

client? How does an attorney zealously represent his client’s

interest if he gratuitously waives a dispositive defense?

Ignoring these ethical considerations, this is precisely what

the Second Circuit ruled that Teledyne, Inc.’s attorney should

have done at the scheduling conference: advise his adversary

with specificity of the defective service so that his adversary

7 In accordance with the principles of notice pleading enunciated in

Conley, once put on notice by answer, respondents could have brought

a Rule 12(f) motion within 20 days of the answer to test the merits of

the asserted affirmative defenses, Conley, 355 U.S. at 48 n.9, particu-

larly where respondents filed their action so close to the end of the lim-

itations period. Respondents had more than sufficient time to do so

within the 60-day period provided by CPLR § 203(b)(5), even if

§ 203(b)(5) were applicable to extend the time for service in this case.

As stated a district court in a similar case, respondents ‘‘chose not to

do so here, and cannot now escape the consequences of that choice.’’

Wilson v. Kuwahara Co., 717 F. Supp. 525, 528 (W.D. Mich. 1989).

could cure the error. Because Teledyne, Inc.’s attorney did

not do that, the Second Circuit penalized the petitioner and

found a ‘‘waiver’’ of the defense of insufficient process.

Under Canon 7 of the applicable Model Code of Profes-

sional Responsibility (1970), reprinted in N.Y. Jud. Law app.

(McKinney 1975), the duty of a lawyer, ‘‘both to his client

and to the legal system, is to represent his client zealously

within the bounds of the law. .. .’’ EC 7-1. Disciplinary

Rule 7-101(A) under this Canon provides in relevant part:

(A) A lawyer shall not intentionally:

(1) Fail to seek the lawful objectives of his client

through reasonably available means permitted by law

and the Disciplinary Rules... .

(3) Prejudice or damage his client during the course of

the professional relationship... .

DR 7-101(A). Canon-7 further provides that ‘‘in civil cases, it

is for the client to decide whether he will . . . waive his right

to plead an affirmative defense.’’ EC 7-7.

In Ethical Opinion 1215 of the Virginia State Bar (Jan. 31,

1989), reprinted in summary in ABA/BNA Lawyers’ Manual

on Professional Conduct, at 30 (June 20, 1990), the Model

Code of Professional Responsibility was applied in a case in

which a lawyer for a criminal defendant was silent when the

trial date was continued to a date one day after the time limi-

tation for prosecution of the felony. The Standing Committee

on Legal Ethics ruled that the lawyer had no legal obligation

to reveal the limitations period, and that he may not reveal it

if the disclosure will harm or prejudice his client.

Similarly, in Ethical Opinion 88-63 of the Maryland State

Bar Association (May 31, 1988), reprinted in 4 ABA/BNA

Lawyer’s Manual on Professional Conduct, Current Reports,

at 228-229 (No. 13, July 20, 1988), the equivalent Model

Rules of Professional Conduct were applied to a civil case

where a defendant’s lawyer remained silent after having the

action against his client dismissed following removal to a

court of record, when he knew that opposing counsel

believed that the original action was still pending and would

soon miss the deadline for refiling. The Committee on Ethics

ruled that, without his client’s consent, the defendant’s law-

yer ‘‘may not ethically tell opposing counsel of the statute of

limitations.’’ Jd. at 229.

At the initial status conference in this case, if petitioner’s

counsel had gratuitously advised respondents’ counsel of the

defective service of process, after putting respondents on

timely notice three weeks before by answer, petitioner’s coun-

sel would have failed to represent his client zealously and, in

effect, would have waived a jurisdictional defense already

asserted, without his client’s consent.

This ethical responsibility of an attorney to his client is

fundamental to our adversary system of justice and should

not be compromised by the de novo pronouncement of the

Second Circuit in this case that counsel’s fidelity to his cli-

ent’s interests, in full compliance with the Federal Rules, par-

adoxically constituted waiver of his client’s defenses. Cf.

Jones v. Barnes, 463 U.S. 745 (1983); see generally A. Gold-

man, The Moral Foundations of Professional Ethics, pp. 92-

98 (1982).

There is no legal basis in the decisional law to support a

finding of waiver by silence at a pretrial conference within

three weeks after the timely assertion and preservation of a

jurisdictional defense. See, e.g., Way v. Mueller Brass Co..,

840 F.2d 303, 306 (Sth Cir. 1988); Wilson v. Kuwahara Co.,

717 F. Supp. 525, 527-28 (W.D. Mich. 1989). In fact, the

Second Circuit in this case agreed with the District Court that

Burton v. Northern Dutchess Hosp., 106 F.R.D. 477

(S.D.N.Y. 1985) and Vozeh v. Good Samaritan Hosp., 84

F.R.D. 143 (S.D.N.Y. 1979), involving 2 and 3-year delays in

bringing a motion to dismiss, do not support finding waiver

in this case. (App. 12a).

The recent decision of the Fifth Circuit in Way, which con-

flicts with the decision of the Second Circuit, is closely on

point. In Way, defendant asserted the defense of invalid ser-

vice of process in its answer, and after the 120-period for ser-

vice under Rule 4(j) had passed, moved to dismiss. Plaintiff’s

counsel, admitting he did not realize he had served the wrong

person until the motion to dismiss, contended that defendant

nevertheless had waived the defect. The district court granted

the motion and the Fifth Circuit affirmed the district court.

840 F.2d at 306.

The Federal Rules, petitioner submits, were designed to

accomplish substantial justice to those parties which follow

them. The decision of the Court of Appeals in this case holds

that petitioner’s counsel should have abandoned his client’s

interests and advised his adversary of the defective service so

that his adversary could timely sue his client. This startling

holding is such a departure from the accepted and usual

course of judicial proceedings as to call for an exercise of the

Court’s power of supervision.

THE DECISION OF THE COURT BELOW ON RULE

1S(c) IS ALSO INCONSISTENT WITH THE APPLICA-

BLE STANDARD OF REVIEW AND IN CONFLICT

WITH THE COURT’S DECISION IN SCHIAVONE FV.

FORTUNE, AKA TIME, INC., 477 U.S. 21 (1986)

As with its holding with respect to Rule 12, the Second

Circuit failed to apply the correct standard of review in

reviewing the District Court’s denial of leave to amend the

complaint under Rule 15(a) and (c). Such a denial may be set

aside only for abuse of discretion, which the Court of

Appeals did not find. Zenith Radio Corp. v. Hazeltine

Research, 401 U.S. 321, 330 (1971); Kilkenny v. Arco

Marine, Inc., 800 F.2d 853, 856, 858 (9th Cir. 1986), cert.

denied, 480 U.S. 934 (1987); Williams v. United States Postal

Serv., 873 F.2d 1069, 1072-73 (7th Cir. 1989).

The Court in Schiavone v. Fortune, aka Time, Inc., 477

U.S. 21 (1986) held that a plaintiff could amend his com-

plaint to bring in the proper party defendant under Rule

15(c), provided the party to be brought in received notice of

the action within the applicable limitations period. In

Schiavone, the Court held that the limitations period contem-

plated in Rule 15(c) was the actual statute of limitations, not

the period of 120 days within which a plaintiff could timely

effect service under Rule 4(j).

In this case, Teledyne Industries, Inc., the party respon-

dents sought to bring in, received notice after the statute of

limitations period, but within the 60-day period for service

permitted under CPLR § 203(b)(5). The Second Circuit held,

in its decision on rehearing, that the 60-day service provision

of CPLR § 203(b)(5) constitutes an extension of the limita-

tions period within the meaning of Rule 15(c). In so ruling,

the Second Circuit assumed, without statutory support, that

CPLR § 203(b)(5) was available for service upon a defendant

not named in the complaint filed.®

With this assumption, the Second Circuit further ignored

the holding in Schiavone that the phrase ‘‘the applicable limi-

tations period’’ found in the Advisory Committee’s note to

Rule 15(c) means just that and may not be extended by any

service provisions, federal or state. 477 U.S. at 30-31. While

the Court in Schiavone, a diversity case involving a New Jer-

sey statute of limitations, expressly addressed only the federal

period for service allowed by Rule 4(j), the state tolling issue

was discussed by the dissenting justices. Jd. at 37 n.4

(Stevens, J. dissenting).

Although, in diversity, state procedures govern in the

absence of a controlling federal rule or statute, Walker v.

Armco Steel Corp., 446 U.S. 740 (1980), state procedure does

not govern where federal law states a conflicting rule of pro-

cedure, as in the case of the notice period allowed for rela-

tion back, which the Court held in Schiavone is provided in

Rule 15(c). Hanna v. Plumer, 380 U.S. 460, 471 (1965). The

only federal court which has squarely addressed this issue has

held, contrary to the Second Circuit herein, that state tolling

8 See note 2, supra.

provisions for effecting service are inapplicable under Rule

15(c). See Odence v. Salmonson Ventures, 108 F.R.D. 163,

169 & n.5 (D.R.I. 1985).

While the decision of the Court in Schiavone has been crit-

icized by legal writers,’ and will be overturned if amendments

to Rule 15(c) presently under consideration are put into

effect,’° the court below has clearly chosen to ignore the

teachings of Schiavone to effect a desired result.

For the same reason, the Second Circuit found waiver of

petitioner’s defense of insufficient service.

In Schiavone, the Court rejected a ‘‘choice . . . between

recognizing or ignoring what the Rule[s] provide[] in plain

language,’’ 477 U.S. at 30, and affirmed the circuit court

holding in Schiavone that ‘‘it is not this [circuit] court’s role

to amend procedural rules in accordance with our own policy

preferences.’ Schiavone v. Fortune, 750 F.2d 15, 18 (3d Cir.

1984), aff’d, 477 U.S. 21 (1986).

As the Court observed in Schiavone, on facts virtually

indistinguishable from this case, but which the Second Circuit

refused to accept,

there is an element of arbitrariness here, but that is a

characteristic of any limitations period. And it is an

arbitrariness imposed by the legislature and not by the

judicial process.

9 See Bauer, Schiavone: An Un-Fortune-ate Illustration of the

Supereme Court’s Role as Interpreter of the Federal Rules of Civil

Procedure, 63 Notre Dame L. Rev. 720 (1988); Brussack, Outrageous

Fortune: The Case for Amending Rule 15(c) Again, 61 S. Cal. L. Rev.

671 (1988); Lewis, The Excessive History of Federal Rule 15(c) and Its

Lessons for Civil Rules Revision, 85 Mich. L. Rev. 1507 (1987).

10 The Advisory Committee on the Civil Rules recently reported pro-

posed changes to Rule 15(c) which, if adopted, will overturn the result

in Schiavone by recognizing a federal 120-day service period extending

the limitations period for purposes of providing Rule 15(c) notice, and

state service provisions. See Preliminary Draft of Proposed Amend-

ments to the Federal Rules of Appellate Procedure and the Federal

Rules of Civil Procedure, Proposed Rule 15(c)(1),(3), 127 F.R.D. 237,

309-312 (1989).

<ac%

477 U.S. at 31. The District Court, following Schiavone, did

recognize this, stating, ‘‘this mischief was caused in part and

exacerbated by plaintiff’s decision to begin the lawsuit with

only four days remaining on the limitations’ clock.’’

(App. 30a).

The Court of Appeals, although conceding that respon-

dents ‘‘needlessly made several missteps in initiating their

lawsuit’’ (App. 15a), and that petitioner had not violated any

rule, nevertheless reversed the District Court, devising its own

findings and its own rule contrary to appropriate standards

of review established by the Court, Federal Rules 12 and 15,

and the Model Code of Professional Responsibility.

The decision of the Second Circuit, in conflict with the

decisions of the Court and of several circuits, should be set

aside and reversed.

CONCLUSION

For the reasons set forth above, petitioner urges that this

petition for a writ of certiorari be granted.

THOMAS J. WHALEN

Counsel for the Petitioner

Teledyne, Inc.

CONDON & FORSYTH

1100 15th Street, N.W.

Washington, D.C. 20005

(202) 289-0500

Dated: July 31, 1990

Of Counsel:

CONDON & FORSYTH

Stephen R. Stegich III

Robert W. Ludwig, Jr.

MACKEY & DIMARCO

George G. Mackey

APPENDIX

er ee ee

INDEX TO APPENDIX

Opinion of United States Court of Appeals for the Sec-

ond Circuit on Petition for Rehearing, dated May 2,

SE Babe obncensnutectedsredsatubanuhacteuseuess

Opinion of United States Court of Appeals for the Sec-

ond Circuit, dated March 23, 1990................

Decision and Order of the United States District Court

for the Western District of New York, dated August

Sy De edNbs Sue iee Wenedsersaseeetern catenin

Decision and Order of the United States District Court

for the Western District of New York, dated Septem-

BD Fi Se Ch ducuteséecsavuneccusncumednaseaaaes

Summons and Complaint, filed November 22, 1988 ..

Answer of Teledyne, Inc. to Complaint, filed Decem-

ee fs Seb ehhedeseebecneesdevuesteaassenenate

U.S. District Court for Western District of New York

Scheduling Order, dated January 18, 1989.........

i) fi sstdckelidetadtentnseaeruLewedteakbs

PAGE

17a

oe ee ee -

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 622—August Term 1989

On petition for rehearing Decided: May 2, 1990

Docket No. 89-7916

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, deceased, and Administratrix

of the Estates of Michael and David Gross, deceased, and

GROSSAIR, INC.

Plaintiffs-Appellants,

—Vv

TELEDYNE, INC., Continental Products Division,

Defendant-Appellee.

Before:

MESKILL and NEWMAN, Circuit Judges,

and POLLACK, Senior District Judge.*

PER CURIAM:

Appellee petitions for rehearing, contending that our deci-

sion of March 23, 1990, improperly permitted amendment of

the complaint contrary to the requirements of Rule 15(c) of

the Federal Rules of Civil Procedure. As appellee points out,

that Rule applies to amendments that seek not only to bring

* The Honorable Milton Pollack of the District Court for the South-

ern District of New York, sitting by designation.

in a party not previously named but also ‘‘to correct a mis-

nomer or misdescription of a defendant,’’ Fed.R.Civ.P. 15(c)

advisory committee’s note. See Ingram v. Kumar, 585 F.2d

566, 570 (2d Cir. 1978), cert. denied, 440 U.S. 940 (1979).

Rule 15(c) permits relation back where, within the limitations

period, the party sought to be brought in or the party whose

name is sought to be corrected received notice of the institu-

tion of the action and knew or should have known that it

was the party being sued.

In this case, Teledyne Industries, Inc. acknowledged receipt

of notice of the complaint no later than December 5, 1988.

Though that notice was not accomplished by proper service,

there is no requirement that the ‘‘notice’’ required by Rule

15(c) meet the formalities of service. The Advisory Commit-

tee explicitly stated that the notice required by Rule 15(c)

‘‘need not be formal.’’ And there can be no doubt that Tele-

dyne Industries, Inc. knew from the complaint that it was the

party being sued.

Nevertheless, appellee contends that the notice it received

arrived beyond the relevant two-year statute of limitations.

But New York extends its normal limitations period for 60

days under certain circumstances, see N.Y.Civ.Prac. L. & R.

§ 203(b)(S) (McKinney Supp. 1990), and we concluded in our

original decision that those circumstances applied to this case.

There is no dispute that Teledyne Industries, Inc. received

notice within the 60-day extension period.

Finally, appellee contends that reliance on the 60-day

extension period to validate the notice is precluded by

Schiavone v. Fortune, 477 U.S. 21 (1986). We disagree.

Schiavone rejected the timeliness of notice, alleged to satisfy

Rule 15(c), that was received after the expiration of a state’s

limitation period but within the 120-day time for service of

process permitted by Rule 4(j). 477 U.S. at 30. Timeliness of

such notice had previously been upheld by this Court, see

Ingram v. Kumar, 585 F.2d at 571-72, but that point was not

accepted by Schiavone, as we subsequently recognized in

Unger v. Caloric Corp. (In re All Brand Appliance & Televi-

sie

sion Co.), 875 F.2d 1021, 1024-25 (2d Cir. 1989). In the

pending case, however, plaintiffs are not seeking to use Rule

4(j)’s 120-day time period for service to validate their Rule

15(c) notice to Teledyne Industries; they are relying on the

60-day extension period that New York adds to its own limi-

tations period. In this respect, our case differs from Jngram,

where notice of the correctly identified defendant was not

given until well after the 60-day period provided by section

203(b)(5). The notice here satisfies Rule 15(c), and the

amendment will relate back to the date of the original com-

plaint.

The petition for rehearing is denied.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 622—August Term 1989

Argued: January 10, 1990 Decided: March 23, 1990

Docket No. 89-7916

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, deceased, and Administratrix

of the Estates of Michael and David Gross, deceased, and

GROSSAIR, INC.,

Plaintiffs-A ppellants,

—V),—

TELEDYNE, INC., Continental Products Division,

Defendant-Appellee.

Before:

MESKILL and NEWMAN, Circuit Judges,

and POLLACK, Senior District Judge.*

Appeal from a judgment of the District Court for the

Western District of New York (David G. Larimer, Judge) dis-

missing plaintiffs’ complaint for lack of personal jurisdiction

and insufficiency of service of process.

Reversed and remanded.

—

° The Honorable Milton Pollack of the District Court for the South-

ern District of New York, sitting by designation.

ARTHUR ALAN WOLK, Philadelphia, Pa.

(Catherine B. Slavin, Wolk, Genter & Har-

rington, Philadelphia, Pa.; Anthony J.

Adams, Jr., Michaei Townsend, Davidson,

Fink, Cook & Gates, Rochester, N.Y., on

the brief), for plaintiffs-appellants.

STEPHEN R. STEGICH III, Rochester, N.Y.

(George G. Mackey, Robert W. Ludwig,

Jr., Mackey & DiMarco, Rochester, N.Y.;

Condon & Forsyth, New York, N.Y., on

the brief), for defendant-appellee.

JON O. NEWMAN, Circuit Judge:

This appeal of a diversity case raises a host of issues con-

cerning personal jurisdiction, service of process, the statute

of limitations, and the identification of a party defendant.

The issues arise on an appeal by Marjorie Datskow, as execu-

trix and administratrix, and Grossair, Inc. from the August

9, 1989, judgment of the District Court for the Western Dis-

trict of New York (David G. Larimer, Judge) dismissing for

lack of personal jurisdiction and insufficiency of service of

process their complaint against a defendant identified as

**Teledyne, Inc., Continental Products Division.’’ The suit

sought damages for the manufacture of an aircraft engine

that allegedly failed, causing the crash of a single-engine

plane and the death of plaintiff Datskow’s decedents. We

conclude that the plaintiffs sufficiently made clear their inten-

tion to sue the manufacturer of the engine, Teledyne Indus-

tries, Inc., that this defendant is amenable to the jurisdiction

of the Western District, that this defendant sufficiently par-

ticipated in proceedings in the Western District to have

waived lack of personal service of process, and that the

action is timely as to this defendant. We therefore reverse

and remand.

aia i a

BACKGROUND

The complaint alleges that on November 26, 1986, a Beech-

craft Debonair single-engine plane crashed while approaching

the airport at Winston-Salem, North Carolina, killing ail per-

sons aboard the plane. Among the dead were Robert C.

Gross, his wife, and their two children. The plane was owned

by Grossair, Inc., a New York corporation. Suit was brought

by Marjorie Datskow, a Pennsylvania citizen, as executrix

and administratrix of the decedents’ estates, and by Grossair,

Inc. The caption identified the defendant as ‘‘Teledyne, Inc.

Continental Motors Division’’ located at ‘‘Box 90, Mobile,

Alabama 36601.’’ It is undisputed that there is located in

Mobile, Alabama, an aircraft engine manufacturing plant

operated under the name ‘‘Teledyne Continental Motors Air-

craft Products, a Division of Teledyne Industries, Inc.’’ This

division will be referred to as ‘‘TCM.’’ Teledyne Industries,

Inc., a California corporation, is a wholly-owned subsidiary

of Teledyne, Inc. The latter is a holding company with 39

subsidiaries, most of which use the name ‘‘Teledyne’’ in their

corporate names. The mailing address of TCM is Box 90,

Mobile, Alabama 36601. Appellee acknowledges that the

engine on the ill-fated plane was rebuilt by TCM.

The complaint alleged causes of action for negligence,

strict product liability, fraud, and breach of warranty. The

executrix made claims under New York’s survival and wrong-

ful death statutes. See N.Y. Est. Powers & Trusts Law

§§ 5-4.1-5-4.6, 11-3.2 (McKinney 1981 & Supp. 1989). In

New York, the limitations period for a wrongful death action

is two years, N.Y. Est. Powers & Trusts Law

§ 5-4.1(1) (McKinney Supp. 1989); for a survival action, it is

three years, N.Y. Civ. Prac. L. & R. § 214 (McKinney Supp.

1989).

The complaint was filed in the District Court on November

22, 1988, just four days short of a two-year interval from the

plane crash. On December 1, 1988, plaintiffs mailed a copy

of the complaint and summons to the defendant, as identified

in the caption, by certified mail, return receipt requested. A

receipt was returned, acknowledging receipt on December 5,

1988. On December 23, 1988, Teledyne, Inc., filed an

answer, alleging numerous affirmative defenses including lack

of personal jurisdiction, lack of proper service, and expira-

tion of applicable statutes of limitations. On January 17,

1989, counsel for plaintiffs and for Teledyne, Inc. attended a

conference with a magistrate at which scheduling of discovery

and motions was discussed. Plaintiffs contend that some set-

tlement discussions also occurred. No mention was made at

the conference that TCM was in fact a division of Teledyne

Industries, Inc. rather than Teledyne, Inc. or thai either cor-

poration had not received proper service of the complaint.

On April 21, 1989, defendant moved to dismiss on grounds

of lack of personal jurisdiction, lack of proper service, and

statute of limitations. Plaintiffs cross-moved for leave to

amend the complaint to change the identification of the

defendant to ‘‘Teledyne Continental Motors Aircraft Prod-

ucts, a Division of Teledyne Industries, Inc.’’ The District

Court granted the defendant’s motion and denied the cross-

motion. The Court essentially accepted the defendant’s con-

tention that plaintiffs had sued the wrong corporation, the

holding company, Teledyne, Inc., instead of the subsidiary,

Teledyne Industries, Inc. Based on this premise, the Court

first ruled that Teledyne, Inc. was not amenable to the per-

sonal jurisdiction of the Western District under New York’s

long-arm provisions because this corporation was not doing

business within New York, N.Y. Civ. Prac. L. & R. § 301

(McKinney 1972), and had not committed a tort outside New

York causing injury to persons or property with the State, id.

§ 302(a)(3). The Court then ruled that Teledyne, Inc. had not

been properly served because mail service is ineffective

beyond the territorial limits of the state in which the district

court sits.

The Court also upheld the statute of limitations defense as

to the wrongful death action. Judge Larimer acknowledged

that applicable New York law extends the normal statute of

limitations for 60 days under certain circumstances. See N.Y.

Civ. Prac. L. & R. § 203(b)(S) (McKinney Supp. 1990). The

literal terms of section 203(b)(5) require delivery of the sum-

mons to the sheriff of a county outside New York City in

which the defendant resides or is doing business and service

of the summons upon the defendant within 60 days after the

expiration of the normal limitations period. The District

Judge ruled that the statute was applicable to federal diver-

sity suits and that filing with the appropriate district court

clerk is equivalent to filing with the sheriff of the appropriate

county. Nevertheless, he concluded, since Teledyne, Inc. was

neither resident nor doing business in New York and since

Teledyne, Inc. had not been properly served within the 60-

day extension period, the two-year limitations period applica-

ble to the wrongful death claim had not been tolled.

Judge Larimer rejected plaintiffs’ argument that defendant

had waived its defenses. He noted that the defenses had been

asserted in the answer and presented by motion within six

months of the filing of the complaint. Finally, the Judge

denied plaintiffs’ motion to redesigaate the defendant

because neither Teledyne, Inc. nor Teledyne Industries, Inc.

had been served within the limitations period. Judgement was

entered dismissing the complaint.

DISCUSSION

Judge Larimer was not insensitive to the predicament of

the plaintiffs and the severity of the result that he reached.

But he felt obliged to reach it as a court of limited jurisdic-

tion, noting that the plaintiffs had waited until four days

before the end of the limitations period to initiate the suit

and then had not commenced it properly. We share the

Judge’s assessment of plaintiffs’ deficiencies but reach a dif-

ferent result because we believe that plaintiffs did not select

the wrong defendant but committed the lesser sin of mislabel-

ing the right defendant and that the defendant’s conduct, in

the circumstances of this case, precludes it from complaining

about the absence of personal service.

Plaintiffs identified the defendant in several ways. First,

they made clear that the entity they wished to sue was the

manufacturer of the engine in the plane that crashed. Appel-

lee acknowledges that this engine was rebuilt by TCM, a divi-

sion of Teledyne Industries, Inc. Second, they listed in the

caption of the complaint the mailing address of the entity

they wished to sue. There is no dispute that Box 90, Mobile,

Alabama 36601, is the address of TCM, a division of Tele-

dyne Industries, Inc. Third, they approximated the name of

the entity they wished to sue in the caption of the complaint.

The caption names ‘‘Teledyne, Inc. Continental Motors Divi-

sion,’’ and the correct name is ‘‘Teledyne Industries, Inc.,

Teledyne Continental Motors Aircraft Products Division.’’

All of the words in plaintiffs’ designation appear in the cor-

rect designation. The key difference, of course, is that plain-

tiffs identified the corporation entity as ‘‘Teledyne, Inc.,’’

whereas the correct name of the corporate defendant is

‘*Teledyne Industries, Inc.’’

Our first question is whether the plaintiffs named the

wrong defendant or mislabeled the right defendant. In some

circumstances, the identification of a defendant by the name

of one corporation cannot fairly be regarded as a mislabeling

of a different corporation intended to be sued. But the line

between naming the wrong defendant and mislabeling the

right one must be drawn in light of the context of the nomen-

clature created by the defendant and the labeling undertaken

by the plaintiffs assessed against that context. Teledyne

Industries, Inc. has chosen to do business with a name that

uses the key word of its parent’s name. It is part of a family

of affiliated companies, most of which use the name ‘‘Tele-

dyne’”’ in their corporate name. In New York State, it oper-

ates several divisions, all of which use the name ‘‘Teledyne’’

in their division name. In Mobile, Alabama, the location of

the plant that rebuilt the engine at issue in this case, Teledyne

Industries, Inc. creates confusion as to its correct corporate

name by maintaining a telephone listing under the designa-

tion *“Teledyne-Teledyne Continental Motors Aircraft Prod-

ucts."” At the site of its aircraft engine division, Teledyne

10a

Industries, Inc. leads the public to believe that the division’s

corporate name is just ‘‘Teledyne,’’ the designation that

plaintiffs used in their complaint.

The circumstances of this case may usefully be contrasted

with those in Schiavone v. Fortune, aka Time, Inc., 477 U.S.

21 (1986). The complaint there identified the defendant as

‘‘Fortune.’’ The intended defendant was Time, Inc. The com-

plaint alleged libel in an article in Fortune magazine, and the

issue containing the article had listed the correct corporate

name of the publisher, Time, Inc. A majority of the Court

concluded that an amendment to identify the defendant as

Time, Inc. was properly to be viewed as bringing in a new

party. Unlike Schiavone, in our case the name in the caption

approximates the correct name of the defendant, the correct

name is not readily identifiable, and the defendant has taken

the risk of incorrect identification by conducting business

under a name easily confused with those of its parent and its

affiliated companies and divisions. Even on the quite differ-

ent facts of Schiavone, it is significant that three members of

the Supreme Court thought that the right defendant had been

sued, but merely incorrectly named. Jd. at 35-36 (Stevens, J.,

with whom Burger, C.F., and White, J., join, dissenting).

We conclude that plaintiffs’ complaint sufficiently alerted

Teledyne Industries, Inc. that it was the corporation being

sued so that this case may be categorized as one of mislabel-

ing. We therefore turn to the issues of personal jurisdiction,

service of process, and statute of limitations, which Judge

Larimer decided upon a contrary premise.

Though the parties dispute whether Teledyne, Inc. does

business within New York, there appears to be no dispute

that Teledyne Industries, Inc. does business in that State,

where it operates several divisions. Teledyne Industries, Inc.

is amenable to personal jurisdiction under section 301.

Service of process is more troublesome. The parties agree

that the proper method of serving process in a diversity case

is to be determined by federal law, Hanna v. Plumer, 380

U.S. 460 (1965), but they disagree as to what federal law pro-

lla

vides. Plaintiffs contend that service of the complaint by cer-

tified mail was authorized by Rule 4(c)(2)(C)(ii) of the Fed-

eral Rules of Civil Procedure. Defendant replies that Rule

4(f) limits mail service under Rule 4(c) to the territorial limits

of the state in which the district court is located, and that

Rule 4(e), permitting out-of-state service pursuant to state

law, is unavailable because New York law did not permit

mail service on foreign corporations until January 1, 1990.

See N.Y. Civ. Prac. L. & R. § 312-a (McKinney Supp. 1990).

This Court has not previously considered whether the terri-

torial limits of Rule 4(f) apply to the mail service authorized

by Rule 4c). However, numerous district courts have ruled

that Rule 4(f) limits the scope of Rule 4(c) mail service. See

Thermo-Cell Southeast, Inc. v. Technetic Industries, Inc.,

605 F. Supp. 1122 (N.D. Ga. 1985); Olympus Corp. v.

Dealer Sales & Service, Inc., 107 F.R.D. 300 (E.D.N.Y.

1985); Reno Distributors, Inc. v. West Texas Oil Field Equip-

ment, Inc., 105 F.R.D. 511 (D. Kan. 1985); Daley v. ALIA,

105 F.R.D. 87 (E.D.N.Y. 1985); William B. May Co., Inc. v.

Hyatt, 98 F.R.D. 569 (S.D.N.Y. 1983); cf. Davis v. Musler,

713 F.2d 907 (2d Cir. 1983) (Rule 5(f) limits scope of Rule

4(d)). But see Boggs v. Darr, 103 F.R.D. 526 (D. Kan. 1984).

This view is correct. There is no basis for believing that the

adoption of mail service in 1983 was intended to permit disre-

gard of Rule 4(f). The Advisory Committee on Civil Rules is

currently seeking comment on a proposal to permit nation-

wide mail service for federal question cases, but the proposal

would not permit personal jurisdiction to be obtained upon

an out-of-state defendant by mail service in a diversity case,

unless authorized by state law. Preliminary Draft of Pro-

posed Amendments to the Federal Rules of Civil Procedure,

Rule 41(2), 127 F.R.D. 266-84 (1989).

Though plaintiffs’ mailing of the summons and complaint

provided notice to defendant, it did not constitute proper ser-

vice that permits the exercise of personal jurisdiction. Plain-

tiffs contend, nevertheless, that defendant waived proper

service by participating in the litigation without questioning

personal jurisdiction during the period prior to expiration of

12a

the statute of limitations. A delay in challenging personal

jurisdiction by motion to dismiss has resulted in waiver, even

where, as here, the defense was asserted in a timely answer;

see Burton v. Northern Dutchess Hospital, 106 F.R.D. 477

(S.D.N.Y. 1985); Vozeh v. Good Samaritan Hospital, 84

F.R.D. 143 (S.D.N.Y. 1979). The delays in Burton and

Vozeh, however, were far longer than the few months in this

case.

Nevertheless, under all the circumstances, we conclude that

defendant’s conduct bars it from complaining about the

defective form of service. Defendant attended the conference

with the magistrate and participated in scheduling discovery

and motion practice. Nothing was said about defective service

of process. As we hold, infra, the limitations period on the

wrongful death claims had not yet run at the time of this

conference, and it would have been simple for plaintiffs to

make personal service on the defendant if the point had been

mentioned. In fact, since Teledyne Industries, Inc. has oper-

ating divisions in New York, it probably would have been

possible to serve the corporation by mail by sending the com-

plaint to an agent at one of these divisions. Moreover, this is

not a case where a defendant is contesting personal jurisdic-

tion on the ground that long-arm jurisdiction is not available.

We would be slower to find waiver by a defendant wishing to

contest whether it was obliged to defend in a distant court.

But here amenability of Teledyne Industries, Inc. to the juris-

diction of the Western District is clear, and defendant is com-

plaining only about a defect in the form of service, one that

could have been readily cured during the limitations period if

defendant had promptly complained.

The final issue is whether the wrongful death ciaims are

time-barred. Plaintiffs rely on the 60-day extension provision

of N.Y. Civ. Prac. L. & R. § 203(b)(5). We have previously

ruled that section 203(b)(5) is available to a plaintiff in a fed-

eral diversity suit. See Personis v. Oiler, 889 F.2d 424 (2d

Cir. 1989). That decision, however, decided only that a fed-

eral diversity plaintiff may use section 203(b)(5) by complying

literally with its terms, i.e., by delivering the summons to a

l3a

sheriff of the county in which the defendant resides or is

doing business, if outside New York City, or the clerk of the

appropriate county, if within New York City, and then mak-

ing service within 60 days of the expiration of the normal

limitations period. This case poses three further questions.

May the federal diversity plaintiff deliver the summons to the

federal counterpart of the designated state officials, i.e., the

federal marshal instead of the county sheriff, or the district

court clerk instead of the county clerk? If so, may delivery be

made to a district court clerk outside of New York City? If

so, may the required personal service of summons be waived

by the defendant under the same circumstances that waiver

occurs for purposes of personal jurisdiction?

In Personis v. Oiler, supra, the summons in that federal

suit had been delivered to a county sheriff, thereby literally

complying with the state statute. We therefore did not reach

the issue now posed as to whether delivery may be made to

federal counterparts of the designated state officials. Jd. at

427. Several district courts have stated that federal court

plaintiffs may deliver a summons to the federal counterparts

of the state officials designated in section 203(b)(5). See Levy

v. Pyramid Co. of Ithaca, 687 F. Supp. 48, 53 (N.D.N.Y.

1988), aff'd without consideration of this point, 871 F.2d 9

(2d Cir. 1989); Gold v. Jeep Corp., 579 F. Supp. 256, 258

(E.D.N.Y. 1984); Aro v. Lichtig, 537 F. Supp. 599, 600

(E.D.N.Y. 1982); Florence v. Krasucki, 533 F. Supp. 1047,

1050-51 (W.D.N.Y. 1982); Phoenix Mutual Life Insurance

Co. v. Cervera, 524 F. Supp. 70, 72-73 (E.D.N.Y. 1981);

Somas v. Great American Insurance Co., 501 F. Supp. 96, 97

(S.D.N.Y. 1980); Zarcone v. Condie, 62 F.R.D. 563, 568

(S.D.N.Y. 1974); Bratel v. Kutsher’s Country Club, 61

F.R.D. 501, 502 (S.D.N.Y. 1973); Myers v. Slotkin, 13

F.R.D. 191, 194 (E.D.N.Y. 1952); Nola Electric Co. v.

Reilly, 93 F. Supp. 164, 170 (S.D.N.Y. 1949).

We agree with the rationale of these decisions. Service of

process must be timely made when a state statute of limita-

tions specifies that service is necessary to toll a limitations

period, Walker v. Armco Steel Corp., 446 U.S. 740 (1980);

l4a

Ragan v. Merchants Transfer & Warehouse Co., 337 U.S.

530 (1949), but federal law may determine whether service

has been made, Hanna v. Plumer, 380 U.S. 460 (1965). Thus,

in Morse v. Elmira Country Club, 752 F.2d 35 (2d Cir.

1984), we recognized that service was required to toll the

State statute of limitations, but we applied the federal rules,

and did so generously, in finding that service had been made.

Section 203(b)(5) affords an extra 60 days beyond the normal

limitations period when a summons is delivered to a desig-

nated state official within the normal limitations period and

the summons is served within the 60-day period. The delivery

requirement is not precisely an aspect of the method of ser-

vice, which would be governed by federal law, nor is its pre-

cise method of accomplishment so integral a part of the

state’s tolling requirement as to require literal compliance

with state law. The statute seeks to assure that within the

normal limitations period the summons is delivered to an

official who can be relied upon to make an official record of

its receipt, thereby avoiding disputes as to timeliness of deliv-

ery. Permitting federal counterparts to serve this function

does not impair any state interest in establishing limitations

on the time for suit.

Judge Ryan made the point forcefully in the first of the

line of district court decisions cited above:

There is no requirement that a litigant in an action

pending in federal court call upon the services of a state

official to either protect, enforce or enjoy the privileges

granted to him by local law. The test to be zpplied

under the rationale of Erie R. Co. v. Tompkins, [304

U.S. 64 (1938),] is whether the litigant is receiving the

same treatment that he would have in a state court, and

this does not prevent a federal court from administering

the state system of law in its own way in connection

with ‘‘details related to its own conduct of business.’’

Nola Electric Co. v. Reilly, 93 F. Supp. at 170 (quoting

Cohen v. Beneficial Loan Corp., 337 U.S. 541, 555 (1949).

1Sa

The further question, however, is whether the federal court

clerk may serve as the counterpart, not of the relevant county

clerk, but of the relevant county sheriff. Had this suit been

filed in state court, the plaintiffs would have been obliged to

deliver the summons to the county sheriff, the designated

official when the relevant county is outside New York City.

Then-District Judge Altimari faced this problem in Gold v.

Jeep Corp., 579 F. Supp. 256 (E.D.N.Y. 1984), where the

summons was also delivered to the district court clerk and the

relevant county was outside New York City. Sensibly relying

on Judge Ryan’s rationale in Nola Electric, Judge Altimari

found the delivery to be sufficient compliance with section

203(b)(5):

What particular individual or official shall be authorized

to serve as the depository for receipt of the summons is

. . a detail [that] ‘‘does not affect substantial rights.’’

Id. at 258-59. Judge Altimari was concerned that a contrary

result would create two separate rules within the Eastern Dis-

trict, one for cases within New York City and another for

cases outside New York City. Though requiring delivery to

the United States Marshal throughout the Western District

would achieve a uniform rule, we agree with Judge Altimari

that the clerk of a district court may serve as the depository

for a summons, whether the relevant county is within or

without New York City.

The final question is whether the requirement of personal

service may be waived, once timely deposit has occurred. As

we noted with respect to appellee’s challenge to personal

jurisdiction, the appellee received notice of the lawsuit within

the 60-day period and within that period participated in the

lawsuit. The same circumstances that sufficed to constitute a

waiver of service for purposes of personal jurisdiction also

waive service for purposes of strict compliance with section

203(b)(5S).

The plaintiffs have needlessly made several missteps in ini-

tiating their lawsuit. But part of their problem was created by

the preference of the Teledyne family of companies to oper-

l6a

ate under confusingly similar names. The plaintiffs have

made it sufficiently clear that they wish to sue the company

whose division rebuilt the engine alleged to have caused the

fatal accident. They deposited the complaint with the district

court clerk within the normal limitations period and gave

notice of the complaint to the Continental Products Division,

sufficient to cause a Teledyne lawyer to participate in the liti-

gation, within the 60-day period of section 203(b)(5). Under

all the circumstances, we conclude that the plaintiffs are

timely proceeding against the right defendant.

Accordingly, the judgment is reversed and the cause

remanded for further proceedings, including allowing the

plaintiffs to amend the complaint to designate properly the

name of the defendant, Teledyne Industries, Inc.

17a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

Civ. 88-1299L

aoe

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, Deceased, and Administratrix

of the Estates of Michael and David Gross, Deceased,

4105 Fields Drive, Lafayette Hill, Pennsylvania 19444

and

GROSSAIR, INC., 840 Winona Boulevard,

Rochester, New York 14617

Plaintiffs,

—)

TELEDYNE, INC. Continental Motors Division,

Box 90 Mobile, Alabama 36601

Defendant.

DECISION AND ORDER *

This diversity case arises out of a fatal airplane crash that

occurred in North Carolina on November 26, 1986, killing

the pilot, Robert Gross, his wife, Susan Gross, and their two

sons, David and Michael. The aircraft, a Beechcraft Debo-

nair, Serial No. CD 578, Registration No. N9592Y, which

was owned by the plaintiff Grossair, Inc. a New York corpo-

ration, crashed on approach to Smith-Reynolds Airport in

Winston-Salem, North Carolina. The aircraft was equipped

with a Continental 10-470-K model engine, Serial No. 92857-

R which had been rebuilt by Teledyne Continental Motors

Aircraft Products Division of Teledyne Industries, Inc. on

April 15, 1985.

18a

The plaintiff, Marjorie Datskow, is the sister of Robert

Gross. She filed this action in the Western District of New

York on November 22, 1988 against Teledyne, Inc. as the

executrix of the estates of the decedents. The statute of limi-

tations on this action expired four days later on November

26, 1988. See N.Y.E.P.T.L. § 5.4-c. Plaintiff purportedly

served the summons and complaint on defendant by mailing

two copies thereof, one by certified mail return receipt

requested and one by first class mail, addressed to ‘‘TELE-

DYNE, INC. Continental Motors Division, Box 90, Mobile,

Alabama 36601’’. The summons and complaint were received

by Teledyne Continental Motors Division (‘‘TCM’’) on

December 5, 1988. On December 23, 1988, defendant Tele-

dyne filed its Answer in which it asserted the affirmative

defenses of lack of jurisdiction, improper service, and statute

of limitations.

This diversity-based wrongful death action is presently

before the court on defendant’s motions to dismiss and for

summary judgment and on plaintiff’s motion to amend the

complaint. For the reasons that follow, plaintiff's motion to

amend the complaint is denied and defendant’s motion to

dismiss is granted.

DISCUSSION

Defendant moves for summary judgment and to dismiss’

the complaint on the grounds that the court lacks personal

jurisdiction over the defendant Teledyne, that the action is

1 Plaintiffs’ claim that defendant somehow waived the defenses that

form the basis of the motions to dismiss is wholly without merit. By its

answer, defendant preserved its right to move to dismiss on the grounds now

set before the court. Fed.R.Civ.P. 12(b). At the time that defendant filed its

motions, this case had been filed approximately six months, a period of time

that hardly justifies characterizing defendant as ‘‘dilatory’’. Burton v. ’

Northern Dutchess Hospital, 106 F.R.D. 477 (S.D.N.Y. 1985) and Vozeh v.

Good Samaritan Hospital, 84 F.R.D. 143 (S.D.N.Y. 1979) do not compel a

contrary result. In those cases, the defendant waited 3'/2 and 2 years, respec-

tively, before moving to dismiss.

B06 se lt rable RA Atlan enact ne te Silt DY Ca AS Att ORB Beh ahaa te

19a

time barred, and that service of process was improper. At

oral argument, plaintiff moved for leave to amend the com-

plaint and subsequently filed formal motion papers.

All the motions presently before the court, in one way or

another, relate to the question of whether plaintiff has sued

the proper party, that is, Teledyne, Inc. Defendant contends

that it is not a proper party to the lawsuit and that plaintiff

should have sued Teledyne Industries, Inc. -

Teledyne, Inc. (‘‘Teledyne’’), the named defendant in this

action, is a Delaware corporation with its principal place of

business in Los Angeles, California. Teledyne is a holding

company that does not itself engage in the business of design-

ing, manufacturing, or selling aircraft engines, but which

owns 39 separately incorporated subsidiaries, including Tele-

dyne Industries, Inc. Teledyne Industries, Inc. (‘‘Teledyne

Industries’’) is a California corporation with its principal

place of business in California. It has been authorized to do

business in New York since November 24, 1966. Teledyne

Continental Motors Division (‘‘TCM”’’) is an unincorporated

division of Teledyne Industries, located in Mobile, Alabama.

It is the entity that rebuilt the engine that is the subject of

this lawsuit.

A. Defendant’s Motion to Dismiss: Lack of Personal

Jurisdiction

It is well settled that in a diversity action personal jurisdic-

tion over a defendant is determined by reference to the law

of the jurisdiction in which the court sits, United States v.

First National City Bank, 379 U.S. 378, 381-82 (1965), in this

case N.Y.C.P.L.R. §§ 302(a)(1) or 301. The burden of estab-

lishing jurisdiction over a defendant is upon the plaintiff.

Marine Midland Bank, N.A. v. Miller, 664 F.2d 899 (2d Cir.

1981). In the absence of an evidentiary hearing, which neither

party in this case seeks, the plaintiff need make only a prima

facie showing that jurisdiction exists, Beacon Enterprises,

Inc. v. Menzies, 715 F.2d 757, 768 (2d Cir. 1983), and this

remains true notwithstanding a controverting presentation by

20a

the defendant. Marine Midland, 664 F.2d at 904. Where the

court does not conduct an evidentiary hearing, all pleadings”

and affidavits are construed in the light most favorable to the

“plaintiff, and where any doubts exist, they are resolved in

plaintiff’s favor. Hoffritz for Cutlery, Inc. v. Amajac, Ltd.,

763 F.2d 55, 57 (2d Cir 1985).

Initially, plaintiffs contend that the lawsuit has been prop-

erly commenced against TCM. In what can only be read as

an implicit acknowledgement that it has sued the wrong

party’ plaintiff contends that ‘‘the mere fact that TCM is

identified as a division of ‘Teledyne, Inc.’ rather than ‘Tele-

dyne Industries, Inc.’ is insufficient to defeat jurisdiction.’’

Plaintiff's Memorandum in Opposition to Defendant’s

Motion to Dismiss, Document No. 15, p. 19. Plaintiffs, how-

ever, did not commence this action against TCM. The cap-

tion to plaintiffs’ complaint reads ‘‘TELEDYNE, INC.

Continental Motors Division’’. In the body of the complaint

the defendant is identified as ‘‘Teledyne, Inc.’’ There is no

mention of TCM. In any event, TCM is an unincorporated

division of Teledyne Industries. As such, it has no separate

2 ~=«s*@Pzlaintiffs’ complaint omits any of the usual jurisdictional allega-

tions, such as an allegation that the defendant is ‘‘doing business’’ or trans-

acts business in New York.

3 Plaintiffs claim that the precise corporate affiliation of TCM was

shrouded in mystery and that somehow defendant Teledyne was responsible

for plaintiffs’ confusion in this regard. Plaintiffs’ claims are without merit.

Plaintiffs’ counsel has indicated in his rebuttal affidavit (Wolk Affidavit,

para. 8) that as a result of prior litigation experience against both Teledyne

and Teledyne Industries he was under the mistaken impression that TCM was

a division of both Teledyne, Inc. and Teledyne Industries. Based on plain-

tiffs’ counsel’s past and ongoing litigation against these two corporate en-

tities, the claim of confusion rings hollow. In any event, if plaintiffs were

uncertain about the correct corporate affiliation of TCM, discretion dictated

naming both Teledyne and Teledyne Industries in this action.

Even if this court were to accept plaintiffs’ claim that ascertainment of the

corporate identity was difficult, see Schiavone v. Fortune, 477 U.S. 21

(1986), the defendant Teledyne was not served within the statute of limita-

tions, see § B infra, and service of process was not properly effected, see § C

infra.

OAC Rae tl a R-

tas Rl Ia Ba al RR RR i NC I

bisa Aid ater ad ni Lice

2la

legal identity or existence apart from Teledyne Industries and

is not amenable to suit in its own right.

Jurisdiction Under § 301. Contrary to plaintiffs’ argu-

ments, it is patently clear that plaintiffs have failed to make

even a prima facie showing that the defendant Teledyne is

‘‘doing business’? in New York sufficient to satisfy the

requirements of § 301.

Under New York case law, a non-domiciliary subjects itself

to personal jurisdiction in New York with respect to any

cause of action if it is ‘‘engaged in such a continuous and

systematic course of ‘doing business’ here as to warrant a

finding of ‘presence’ in this jurisdiction.’’ Simonson v. Inter-

national Bank, 14 N.Y.2d 281, 285, 251 N.Y.S. 2d 433, 436

(1964), quoted in McGowan v. Smith, 52 N.Y.2d 268, 272,

437 N.Y.S.2d 643, 645 (1981). The non-domiciliary must be

‘‘doing business’’ in New York ‘“‘ ‘not occasionally or casu-

ally, but with a fair measure of permanence and

continuity.’ ’’ Laufer v. Ostrow, 55 N.Y.2d 305, 449

N.Y.S.2d 456, 458 (1982) (quoting Tauza v. Susquehanna

Coal Co., 220 N.Y. 259, 267 (1917)).

There is no dispute in this case that Teledyne is the parent

corporation of Teledyne Industries, and that Teledyne did

not manufacture or rebuild the airplane engine in question.

Further, there is no dispute that Teledyne is not licensed or

authorized to do business in the State of New York; that it

has no registered agent within New York authorized to accept

service of process; that it has no offices or real property in

New York; that it does-not pay taxes in New York; that it

has no agents or employees in New York; that it does not

directly engage in any distribution, solicitation, or advertising

of any products in New York.

The on/y contact that plaintiff points to in support of a

finding of personal jurisdiction under § 301 is the fact that

Teledyne is a member of the New York Stock Exchange and,

for those purposes, has a New York-based transfer agent.

This contact is insufficient to establish jurisdiction under

22a

§ 301. Cf. Nordic Bank PLC v. Trend Group Litd., 619

F.Supp 542 (S.D.N.Y. 1985) (foreign banks’ sales of com-

mercial paper through agent in New York did not constitute

‘doing business’). Furthermore, the fact that Teledyne Indus-

tries, a wholly owned subsidiary of Teledyne, is authorized to

do and does business in New York does not automatically

confer jurisdiction over the parent corporation Teledyne.

There has been no allegation much less a showing that Tele-

dyne Industries is a mere department or agency of Teledyne.

See Taca International Airlines v. Rolls Royce of England, 15

N.Y.2d 97 (1965); Nordic Bank PLC v. Trend Group, Litd.,

619 F.Supp 542, 565 (S.D.N.Y. 1985); Bialet v. Racal-Milgo,

Inc., 545 F. Supp. 25, 31-32 (S.D.N.Y. 1982); Blount v.

Peerless Chemicals (P.R.). Inc., 216 F.Supp. 612, 615

(E.D.N.Y. 1962), aff’d, 316 F.2d 695 (2d Cir.), cert. denied,

375 U.S. 831 (1963). Quite to the contrary, there is no dis-

pute that Teledyne and Teledyne Industries, although parent

and subsidiary, are separate corporate entities and that they

maintain separate operations, books, records, and bank

accounts,’ and that Teledyne does not control the marketing

and operational policies of Teledyne Industries. As such, the

fact that Teledyne Industries is ‘‘doing business’’ in New

York cannot be ascribed to Teledyne for purposes of § 301.

Jurisdiction under § 302(a)(3). Plaintiffs’ argument that

defendant is amenable to suit under the tortious act provision

of the ‘‘long arm’’ statute, N.Y.C.P.L.R. 302(a)(3), is also

without merit. Section 302(a)(3) provides in pertinent part

that

[aJs to a cause of action arising from any of the acts

enumerated in this section, a court may exercise personal

jurisdiction over any nondomiciliary . . . who in person

or through an agent:

4 The fact that during the years 1986-1988, Teledyne, and all its sub-

sidiaries and their divisions participated in a self-insurance program with

respect to aircraft product liability claims, which pro; am was administered

by Teledyne is not sufficient standing alone to establish that Teledyne and

Teledyne industries were for practical purposes the same corporate entity.

pee eve Cen Sere ne Peeoen

23a

(3) commits a tortious act without the state causing

injury to person or property within the state... .

(emphasis added)

It is settled law in New York that to suffer in New York

the residual effects of an injury sustained elsewhere is not

synonymous with suffering an injury ‘‘within the state’’ for

purposes of § 302(a)(3). This section

looks to the imparting of the original injury within the

State of New York and not resultant damage. . . . To

hold otherwise would open a veritable Pandora’s box of

litigation subjecting every conceivable prospective defen-

dant involved in an accident with a New York domicil-

iary to defend actions brought against them in the State

of New York.

Kramer v. Hotel Los Monteros S.A., 57 A.D.2d 756, 394

N.Y.S.2d 415, 416 (Ist Dept. 1977) quoting Black v. Oberle

Rentals, 55 Misc.2d 398, 400 (Sup.Ct. 1967).

See also American Eutectic Welding Alloys Sales Co. v.

Dytron Alloys Corp., 439 F.2d 428, 434 (2d Cir. 1971);

Sanders v. Wiltemp Corp., 465 F.Supp. 71, 73 (S.D.N.Y.

1979).

In this case, the injury was not suffered in New York, but

in North Carolina. Accordingly, § 302(a)(3) does not afford

this court jurisdiction over the defendant.

Based on the foregoing discussion, this court finds that

plaintiff has not sustained its burden of establishing personal

jurisdiction over the defendant Teledyne.

In the usual course of such matters, this court would allow

plaintiff an opportunity to file an amended complaint’ to

name the proper defendant, that is, Teledyne Industries.

Fed.R.Civ.P. 15(a). In this case, however, as is set forth

more fully in section D, infra, the amended complaint against

5 Atoral argument, plaintiff orally moved to amend its complaint and

subsequently filed motion papers to that effect.

24a

Teledyne Industries would be time barred. Fed.R.Civ.P.

15(c). Schiavone v. Fortune, 106 S.Ct. 2379 (1986).

B. Defendant’s Motion to Dismiss: Statute of Limitations

The airplane crash in North Carolina occurred on Novem-

ber 26, 1986. Plaintiff filed this action on November 22,

1988. Under New York law, the statute of limitations for

wrongful death actions is 2 years. N.Y.E.P.T.L. § 5.4-c. As

such, plaintiff must have commenced this action no later

than November 26, 1988.

In diversity cases, state law dictates when and how an

action is ‘‘commenced’’ for purposes of tolling the statute of

limitations. Walker v. Armco Steel Corp., 446 U.S. 740

(1980); Ragan v. Merchants Transfer & Warehouse, 337 U.S.

530 (1949). Unlike practice in federal court, where an action

is commenced upon the filing of the summons with the court,

Fed.R.Civ.P. 3, in New York, an action is not commenced

until the summons has been served upon the defendant.

N.Y.C.P.L.R. § 304.

There is no dispute that plaintiff did not serve the defen-

dant Teledyne with the summons prior to the expiration of

the 2-year statute of limitations. The action was filed in this

court on November 22, 1988. On December 1, 1988, plaintiff

purported® to serve defendant by mailing two copies of the

summons and complaint to ‘‘TELEDYNE, INC., Continental

Motors Division, Box 90, Mobile, Alabama 36601’’. Service

was purportedly effected on December 5, 1988.

On these facts, it is clear that plaintiffs did not commence

this lawsuit within the applicable statutory period. Plaintiffs

contend, however, that the filing of the complaint with the

clerk of this court triggered the provisions of N.Y.C.P.L.R.

§ 203(b)(5), which plaintiffs contend gave them an additional

60 days within which to effect service upon the defendant.

6 The issue of the propriety of service by mail upon a foreign corpora-

tion is discussed infra.

Oe aoe ee Tee Se

25a

Section 203(b)(5)’ contains an extension period that tolls

the statute of limitations for 60 days upon an appropriate fil-

ing with the county sheriff or clerk of the court if the action

is commenced in New York County. Filing with the clerk of

the federal district court has been deemed the equivalent of

filing with the sheriff and allows the plaintiff to take advan-

tage of the additional 60-day period. See Florence v. Kra-

sucki, 533 F.Supp. 1047, 1050-51 (W.D.N.Y. 1982); Somas v.

Great American Insurance Co., 501 F. Supp 96 (S.D.N.Y.

1980); Zarcone v. Condie, 62 F.R.D. 563 (S.D.N.Y. 74);

Nola Electric Co. v. Reilly, 93 F. Supp. 164 (S.D.N.Y. 1948),

cert. denied sub nom. Reilly v. Goddard, 340 U.S. 951

(1951).

In the usual course of a federal diversity action where the

court’s jurisdiction over the person of the defendant is prop-

erly based on the defendant’s doing or transacting business in

the state, this court has no doubt that § 203(b)(5) applies so

long as one of the enumerated activities (residence, doing

business, employment, etc.) occurred in one of the counties

within the district. Levy v. Pyramid Co. of Ithaca, 687 F.

Supp. 48, 50 (N.D.N.Y. 1988), aff’d, 871 F.2d 9 (2d Cir.

1989); Gold v. Jeep Corp., 579 F.Supp. 256 (E.D.N.Y.

7 ~~ The pertinent provisions of § 203 provide that

(a) The time within which an action must be commenced, except as

otherwise expressly prescribed, shall be computed from the time the

cause of action accrued to the time the claim is interposed.

(b) A claim asserted in the complaint is interposed against the defen-

dant. . . when:

5. The summons is delivered to the sheriff of that county outside

the city of New York or is filed with the clerk of that county within

the city of New York in which the defendant resides, is employed or

is doing business, or if none of the foregoing is known to the plain-

tiff after reasonable inquiry, then of the county in which the defen-

dant is known to have last resided, been employed or been engaged

in business, or in which the cause of action arose; or if the defen-

dant is a corporation, of a county in which it may be served or in

which the cause of action arose; provided that:

(i) the summons is served upon the defendant within sixty days

after the period of limitation would have expired but for this

provision... .

26a

1984); Aro v. Lichtig, 537 F.Supp. 599 (E.D.N.Y. 1982);

Florence, supra; Somas, supra.

As the court noted in Levy, however, this statute “‘has not

been interpreted to allow plaintiffs the benefits thereunder

unless the complaint is filed with the district court clerk

located in the county where the defendant resides, is

employed or is doing business, etc.’ Levy, 687 F.Supp. at

53. In this case, as in Levy and Parkhurst v. First & Mer-

chants Corp., 100 Misc.2d 69, 418 N.Y.S.2d 260 (Sup. Ct.

N.Y. Co. 1979), aff'd, 78 A.D.2d 783 (1980), the defendant

Teledyne, the only named defendant in this action, does not

reside in New York, does not conduct or transact business in

New York, and furthermore, the cause of action did not arise

in New York. As such, plaintiffs are not entitled to the bene-

fit of § 203(b)(5).

Even if this court had concluded that § 203(b)(5) applied,

plaintiffs did not properly serve the defendant during the 60-

day grace period. See § C, infra.

Accordingly, this court finds that plaintiffs did not timely

commence this action and the complaint must be dismissed as

time barred.

C. Defendant’s Motion to Dismiss: Improper Service

Defendant moves to dismiss the complaint on the ground

that service of process by mail was not proper. Although

plaintiffs at one time seemed to contend that such service was

proper, see affidavit of Arthur Wolk, filed May 17, 1989,

para. 6, it would appear that plaintiffs now concede that

such service was improper. Such a concession is proper in

light of well settled law.

Plaintiffs apparently attempted to serve defendant by mail

under the authority of Federal Rule of Civil Procedure

4(c)(2)(C\(ii). In diversity cases, the propriety of service of

process by first-class mail upon a foreign corporation is sub-

ject to the general territorial restrictions of Rules 4(e) and (f).

See Cong.Rec. H9855 (daily ed. Dec. 15, 1982), reprinted at

27a

96 F.R.D. 81, 128. See also, William B. May Co., Inc. v.

Hyatt, 98 F.R.D. 569, 570 (S.D.N.Y. 1983). Under Rules 4(e)

and (f), mail service outside of the forum state is invalid

unless out-of-state mail service is authorized by the law of the

forum state. Poulus v. Wilson, 116 F.R.D. 326, 228 n.1

(D.Vt. 1987); Grosser v. Commodity Exchange, Inc., 639

F.Supp. 1293, 1315-16 (S.D.N.Y. 1986); Catalyst Energy

Development Corp. v. Iron Mtn. Mines, Inc., 108 F.R.D.

427, 428 (S.D.N.Y. 1985); William B. May, 98 F.R.D. at

570.° It is clear that plaintiff's mail service on defendant

Teledyne was not authorized under New York law. N.Y .Bus.

Corp.Law § 306; N.Y.C.P.L.R. §§ 311, 313. The only

remaining question is, if Teledyne had actual notice of this

lawsuit, whether that knowledge would operate as a waiver of

or bar to the assertion of the defense of improper service

under Rule 12(b). On this issue, the Second Circuit has

spoken.

Absent a waiver, Rule 4 mandates that the defendant be

served with the summons and complaint personally, or

in accordance with one of the several prescribed alterna-

tives. A showing that the defendant has had actual

notice of the lawsuit is not sufficient to bar a motion to

dismiss under Rule 12(b)(2).

Martin v. N.Y. State Dept. of Mental Hygiene, 588 F.2d 371,

373 (2d Cir. 1978).

In the absence of proper service, this court has no in per-

sonam jurisdiction over the defendant to adjudicate the

claims asserted against it. This finding may appear to exalt

8 Plaintiff's reliance on Morse v. Elmire Country Club, 752 F.2d 35

(2d Cir. 1984) is misplaced. In Morse the court addressed the relationship

between mail service under Rule 4(ch2)(C)ii) and the commencement of the

action for purposes of tolling the New York statute of limitations. The court

never discussed the propriety of extraterritorial service under 4(c)2\C\ii)

where state law does not authorize the same. See Davis v. Musiler, 713 F.2d

907 (2d Cir. 1983) where the court held that Rule 4(d\(1), which prescribes

the manner in which individuals shall be served, must be read in light of Rule

4(f) and “‘applies only when a complaint is served within the territorial limits

of the state in which the district court where the action is pending sits."’

28a

form over substance, however, the Second Circuit insists that

failure to comply with the basic terms for service of process

deprives a court of jurisdiction.

The standards set in Rule 4 for service on individuals

and corporations are to be liberally construed, to further

the purpose of finding personal jurisdiction in cases in

which the party has received actual notice. But there

must be compliance with the terms of the rule, and

absent waiver, incomplete or improper service will lead

the court to dismiss the action unless it appear that

proper service may still be obtained.

Grammenos v. Lemos, 457 F.2d 1067, 1070 (2d Cir. 1972).

Based on the foregoing discussion, this court finds that

plaintiffs failed to properly serve the defendant. Accordingly,

defendant’s motion to dismiss under Rule 12(b)(2) is granted.

D. Plaintiffs’ Motion to Amend the Complaint

As previously indicated, in the normal course, this court

would freely grant plaintiff's motion to amend the complaint

to name the proper defendant. Defendant Teledyne’s opposi-

tion to this motion, based on the Supreme Court decision in

Schiavone v. Fortune, 477 U.S. 21 (1986), would be more

appropriately asserted by the newly named defendant, pre-

sumably Teledyne Industries, in a motion to dismiss. How-

ever, in light of the settled state of the law regarding the

relation back doctrine of Rule 15(c), this court concludes that

allowing plaintiff to amend its complaint only to have the

new defendant, presumably represented by the same counsel

as Teledyne, move to dismiss would be a futile gesture and a

waste of the parties’ and this court’s resources. Thus, based

on the discussion that follows, plaintiff's motion to amend is

denied.

Rule 15(c) provides that

Whenever the claim or defense asserted in the amended

pleading arose out of the conduct, transaction, or occur-

rence set forth or attempted to be set forth in the origi-

29a

nal pleading, the amendment relates back to the date of

the original pleading. An amendment changing the party

against whom a claim is asserted relates back if the fore-

going provision is satisfied and, within the period pro-

vided by law for commencing the action against the

party to be brought in by amendment that party (1) has

received such notice of the institution of the action that

the party will not be prejudiced in maintaining his

defense on the merits, and (2) knew or should have

known that, but for a mistake concerning the identity of

the proper party, the action would have been brought

against the party.

(emphasis added)

The Supreme Court decision in Schiavone, 477 U.S. 21

(1986) governs this case. See also, In re Allbrand Appliance

& Television Company, Inc., No. 88-5034, slip op. 3369

(May 17, 1989 2d Cir.). In Schiavone, the court held that the

relation back rule of Rule 15{c) may be employed only upon

satisfying four factors:

(1) the basic claim must have arisen out of the conduct

set forth in the original pleading; (2) the party to be

brought in must have received such notice that it will

not be prejudiced in maintaining its defense; (3) that

party must or should have known that, but for the mis-

take concerning identity, the action would have been

brought against it; and (4) the second and third require-

ments must have been fulfilled within the prescribed

limitations period.

Id., at 29.

In Schiavone, the Court dismissed the amended complaint

because it found that Time, Inc., the party being brought in

by amendment, received notice of the action only after the

statute of limitations had expired, although Fortune Maga-

zine, a division of Time, had been properly served prior to

the expiration of the limitations period. Referring to the

Advisory Committee’s 1966 Note regarding Rule 15(c), in

30a

which the Committee specifically stated that Rule 15(c)’s

phrase ‘‘within the period provided by law for commencing

the action’’ means ‘‘within the applicable limitations period’’,

the Court aligned itself with various commentators who had

accepted the literal meaning of the Rule and the Advisory

Note. Jd., at 31 citing 3 J. Moore, Federal Practice,

§ 15.15[4.-2], p. 15-225 (2d ed. 1985) (‘‘the Rule demands a

showing that, within the period of limitations, the new

party... .’’); 6C. Wright & A. Miller, Federal Practice and

Procedure § 1498, p. 228 (Supp. 1985) (‘‘in order for an

amendment adding a party to relate back under Rule 15(c)

the party to be added must have received notice of the action

before the statute of limitations has run’’). As the Court

stated ‘‘[t]he linchpin [of relation back] is notice, and notice

within the limitations period.’’ Id., at 31 (emphasis added).

In this case, there is no need to discuss the first three

requirements under 15(c) inasmuch as it is clear that neither

Teledyne nor Teledyne Industries, the party presumably

sought to be brought in by amendment, received notice of

this lawsuit or were properly served with process within the

applicable statute of limitations. See §§ B and C, supra.

Accordingly, plaintiffs’ motion to amend the complaint is

denied.

This case is the stuff of nightmares. At every turn, plain-

tiffs are caught in a procedural Catch-22. But this mischief

was caused in part and exacerbated by plaintiff’s decision to

begin the lawsuit with only four days remaining on the limi-

tations ‘‘clock.’’ Although the severity of the result would

appear to exalt form over substance, this is a court of limited

jurisdiction, which can exercise its power only if the plaintiff,

in the first instance, invokes that power by properly com-

mencing an action.

3la

CONCLUSION

Based on the foregoing discussion it is hereby ORDERED

It is further ORDERED that plaintiffs’ complaint be dis-

missed in its entirety.

IT IS SO ORDERED.

Dated: Rochester, New York

August 8, 1989.

(1) Defendant’s motion to dismiss under Rule 12(b)(2)

for lack of personal jurisdiction is hereby granted;

(2) Defendant’s motion to dismiss under Rule 12(b)(6)

for insufficiency of service of process is hereby granted;

(3) Defendant’s motion to dismiss the complaint as

time barred is hereby granted;

(4) Defendant’s motion for summary judgment is

denied as moot; and

(5) Plaintiffs’ motion to amend the complaint is

denied.

/s/

DAVID G. LARIMER

United States District Judge

32a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

Civ. 88-1299L

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, Deceased, and Administratrix

of the Estates of Michael and David Gross, Deceased,

4105 Fields Drive, Lafayette Hill, Pennsylvania 19444,

and

GROSSAIR, INC., 840 Winona Boulevard,

Rochester, New York 14617,

Plaintiffs,

—Y,.—

TELEDYNE, INC., Continental Motors Division,

Box 90, Mobile, Alabama 36601

Defendant.

DECISION AND ORDER

On August 9, 1989, this Court entered a decision and order

dismissing plaintiffs’ complaint in its entirety based on this

Court’s lack of jurisdiction over the person of the named

defendant, insufficiency of service of process, and on the

basis of the statute of limitations.’

On August 18, 1989, the plaintiffs filed a motion for

reconsideration and reargument. Plaintiffs raised three argu-

1 To the extent that the decretal paragraph of the decision suggests

that the entire complaint be dismissed as time-barred, it is incorrect. The

Court’s discussion of the statute of limitations and its conclusion in the body

of the decision reflect that plaintiff Datskow’s wrongful death cause of

action was time-barred, not the other causes of action.

33a

ments in support of their application for reconsideration and

reargument. One, that plaintiff Datskow’s survival cause of

action and Grossair’s property damage claim should not have

been dismissed as time-barred. Two, that a review of the rec-

ord reveals that the action was properly instituted against the

correct defendant, albeit under the incorrect name, within the

applicable time period. Three, that in any event, Teledyne

Industries, Inc. does business in New York and is subject to

jurisdiction under N.Y.C.P.L.R. § 301. Defendant has filed a

memorandum of law in opposition to plaintiffs’ motion. For

the reasons that follow, plaintiffs’ motion for reconsideration

and reargument of this Court’s decision and order dated

August 8, 1989 is denied.

Plaintiffs in essence argue that this Court erred in dismiss-

ing the entire complaint as time-barred. As previously noted,

supra, the decretal paragraph of the decision inadvertently

dismissed the entire complaint as time-barred. It is clear from

the Court’s discussion within the body of the decision, that

only the wrongful death action brought by plaintiff Datskow

is time-barred. To that extent, the prior order is modified.

However, this oversight does not save plaintiffs. In the

August 9th decision, this Court found that it lacked personal

jurisdiction over the named defendant. This finding relates to

the entire complaint, not merely the wrongful death action,

and as such, the entire complaint was properly dismissed.

Plaintiffs would have this Court allow it to amend the com-

plaint with respect to the survival 1nd property claims so as

to name the proper defendant. Ho.vever, this Court lacks any

jurisdiction over this case as it stands now. Furthermore,

plaintiffs have yet to properly effect service on either the

named defendant, Teledyne, Inc., or the party it seeks to

add, Teledyne Industries, Inc.

Plaintiffs’ only recourse at this point is to commence a new

action against Teledyne Industries, Inc. based on the survival

and property claims set forth in the complaint of this action.

Neither of these claims is time-barred at this point, and,

34a

assuming proper service upon the proper defendant, plain-

tiffs’ cause of action may proceed in this court.

CONCLUSION

Accordingly, plaintiffs’ motion for reconsideration and

reargument is denied. The decretal paragraph in the Decision

of August 9, 1989 is modified and the reference to the entire

complaint being dismissed as time-barred is stricken.

IT IS SO ORDERED.

/s/

DAVID G. LARIMER

United States District Judge

Dated: Rochester, New York

September 7, 1989.

35a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

~ CASE NUMBER: Civ-88-1299

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, Deceased, and Administratrix

of the Estates of Michael and David Gross, Deceased,

and GROSSAIR, INC.

—_Y

TELEDYNE, INC.

SUMMONS IN A CIVIL ACTION

TO: TELEDYNE, INC.

Continental Motors Division

Box 90

Mobile, Alabama 36601

YOU ARE HEREBY SUMMONED and required to file with

the Clerk of this Court and serve upon

PLAINTIFF’S ATTORNEY:

Of Counsel

Wolk and Genter DAVIDSON, FINK, COOK

1710-12 Locust St. & GATES

Philadelphia, PA 19103 900 First Federal Plaza

Rochester, NY 14614

36a

an answer to the complaint which is herewith served upon

you, within 20 days after service of this summons upon you,

exclusive of the day of service. If you fail to do so, judgment

by default will be taken against you for the relief demanded

in the complaint.

CLERK: DATE:

Michael J. Kaplan November 22, 1988

By DEPUTY CLERK:

Margaret Ghysel

eee Tete

37a

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NEW YORK

CIVIL ACTION CIV-88-1299

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, Deceased, and Administratrix

of the Estates of Michael and David Gross, Deceased,

4105 Fields Drive, Lafayette Hill, Pennsylvania 19444,

and

GROSSAIR, INC., 840 Winona Boulevard,

Rochester, New York 14617,

VS.

TELEDYNE, INC., Continental Motors Division,

Box 90, Mobile, Alabama 36601

JURY TRIAL DEMANDED

1. Plaintiff, Marjorie Datskow, is an individual residing in

Lafayette Hill, Pennsylvania, a citizen of the Commonwealth

of Pennsylvania, and is the Executrix of the Estates of

Robert C. and Susan C. Gross, deceased, having been

appointed by the State of New York Surrogate’s Court,

County of Monroe on December 17, 1986, and the Adminis-

tratrix of the Estates of Michael and David Gross, having

been appointed so by the State of New York Surrogate’s

Court, County of Monroe on January 6, 1987.

2. Plaintiff, Grossair, Inc., is a corporation duly organized

and existing under the laws of the State of New York, with

its principal place of business at 840 Winona Boulevard,

Rochester, New York, and at all times material hereto was

38a

the owner of a Beechcraft Debonair single engine aircraft

Registration No. N9592Y.

3. Defendant, Teledyne, Inc., is a corporation believed to

be organized and existing under the laws of the State of Dela-

war its principal place of business at Box 90, Mobile,

id at all times material hereto is in the business

C . «uring aircraft powerplants.

4. Jurisdiction of the within Court is invoked pursuant to

28 U.S.C. § 1332, diversity of citizenship between the parties

and the amount in controversy is claimed in excess of Ten

Thousand Dollars ($10,000.00), exclusive of interest of costs.

5. On November 26, 1986, the Plaintiff’s decedent Robert

C. Gross and his wife Susan C. Gross, with their children

David and Michael Gross as passengers, were in a Beechcraft

Debonair single engine aircraft on approach to the Winston-

Salem, North Carolina airport.

6. As the aircraft neared the airport, the engine, manufac-

tured by the Defendant, failed, causing the airplane to crash

into hostile terrain, resulting in the loss of life of all aboard.

7. The cause of the accident was solely as a result of defec-

tive and dangerous manufacture of the aircraft engine and its

accessories by the Defendant as more particularly hereinafter

set forth.

8. This action is brought under the Wrongful Death and

Survival Statutes of the State of New York in behalf of the

following beneficiaries:

Marjorie Datskow—sister of Robert C. Gross

Juletta Mabelle Cook—mother of Susan C. Gross

9. Plaintiff’s claims under the aforesaid include, but are

not necessarily limited to, the severe personal, physical and

emotional injuries, both internally and externally, suffered as

the decedents, resulting in their death on November 26, 1986,

severe pain, shock, terror and the acknowledged and con-

scious awareness of impending certain death by mutilation,

39a .

which caused them to undergo great mental anguish prior to

their deaths, various losses suffered by the beneficiaries under

the aforesaid Acts, including but without limitation to,

funeral expenses, loss of care, comfort, services, earnings,

assistance, aid, counseling, advise, guidance, love and affec-

tion, and all claims cognizable for the deaths of the dece-

dents, together with such administration, medical,

hospitalization and other expenses suffered as a result of the

deaths of the decedents.

Background

10. In May, 1985, the aircraft owned by Grossair, Inc., of

which the Plaintiff’s decedent Robert C. Gross was sole

owner, had its engine replaced with one manufactured by the

Defendant.

11. At all times subsequent to the installation of that

engine, it proved to be unreasonably dangerous and defective

in that following its installation, its fuel pump failed and oil

analysis demonstrated that the engine was not breaking in

and deteriorating.

12. At all times material hereto, the Plaintiff’s decedent

Robert C. Gross did bring to the attention of the Defendant

the ongoing problems with the new engine, and notwithstand-

ing those notifications the Defendant did constantly reassure

the Plaintiff's decedent that the engine was safe and satisfac-

tory for flight.

13. Relying on the representations of the Defendant, the

Plaintiff’s decedent did continue to operate the aircraft with

the new engine until November 26, 1986, when as the aircraft

being operated by the Plaintiff's decedent Robert C. Gross

and which his wife Susan C. Gross and their two young chil-

dren, Michael Gross and David Gross were passengers

approached the Winston-Salem, North Carolina airport, the

engine failed or lost power in such a manner so as to cause

the aircraft to crash into hazardous and hostile terrain,

resulting in the aircraft catching fire and all those aboard

40a

being burned alive, as well as suffering horrendous, painful

and otherwise fatal injuries.

14. Long prior to November 26, 1986, the Defendant knew

of the unreasonably dangerous engine problem with the

engine sold to the Plaintiff's decedent, installed in the air-

craft owned by Grossair, Inc., and knew that unless immedi-

ate corrections were made in the engine, it would or could

fail resulting in serious injury or death.

15. Notwithstanding the foregoing information and actual

notice that the engine was exhibiting signs of failure, the

Defendant failed to replace the engine so as to prevent the

inevitable loss of life.

Theories of Liability

COUNT I—NEGLIGENCE

16. Plaintiff incorporates by reference paragraphs |

through 15.

17. Defendant, knowing the ultimate usage of the aircraft

and engine being used by the Plaintiff's decedents, knowing

that the said engine would become inherently dangerous if

negligently or improperly designed, manufactured, inspected,

tested or supported subsequent to its initial delivery, had a

duty to the Plaintiff's decedents to design, manufacture,

assemble, inspect, test and support the engine in order to ren-

der the aircraft in which it would be installed suitable for the

ordinary purposes of that use.

18. This Defendant, knowing the ultimate usage o/ the air-

craft and engine, and knowing that said aircraft and engine

was or would become inherently dangerous if negligently or

improperly designed, manufactured, tested, inspected and

supported, had a duty to author, publish, instruct and edu-

cate owners, operators, mechanics, inspection personnel and

others who would be performing maintenance on the aircraft

as to the proper inspections, procedures and tests that should

be followed for purposes of ascertaining the existence of dan-

4la

: gerous defects that would result in the extreme likelihood of

| serious personal injury and death.

19. This Defendant had a further duty to warn owners,

operators and mechanics associated with the aircraft and

engine of any defect, service problem or malfunction which

had occurred or would likely occur in the normal life of the

product so as to prevent unjustified reliance on the reliability

and safety of the product.

20. The accident subject to this Complaint was due to the

negligence of this Defendant, both generally and in the fol-

lowing respects:

a. Failing to properly design, manufacture, inspect,

test and support the aircraft engine involved in this acci-

dent;

b. Failing to properly design, manufacture, inspect

and test the fuel system, fuel pumps, fuel injectors, fuel

injector servo and other accessories of the engine;

c. Failing to properly author, publish, instruct, edu-

cate and otherwise warn the Plaintiff's decedent Robert

C. Gross or anyone else associated with this engine of:

(1) The proper procedures to be used in the per-

formance of maintenance on the engine;

(2) The proper diagnostic procedures to be used in

ascertaining problems with the engine;

(3) The proper procedures to be used for testing the

said aircraft;

(4) The proper procedures to be used to avoid inad-

vertent, umexpected and unanticipatable engine fail-

ure, partial engine failure or loss of power;

(5) The proper procedures to be used upon experi-

encing unexpected, inadvertent and unanticipatable

complete or partial engine failure;

————

42a

e. Failing to properly provide quality control and/or

supervision during design and manufacture of the air-

craft engine;

f. Failing to review available government and private

publications reporting defects in the systems above

described and prescribing changes or means by which

accidents could be avoided as a result of these failures;

g. Violating or failing to comply with applicable Fed-

eral Aviation Administration Regulations pertaining to

design, manufacture, maintenance and recall of aircraft

engines which have been subject to such fe:‘iures;

h. Negligence at law;

i. Other acts or omissions constituting negligence, as

may be ascertained upon completion of discovery.

WHEREFORE, Plaintiff prays for judgment against the

Defendant in an amount in excess of Ten Thousand Dollars

($10,000.00).

COUNT II—STRICT LIABILITY IN TORT

21. Plaintiff incorporates by reference paragraphs 1

through 20.

22. Defendant is engaged in the design, manufacture, test-

ing, inspection and sale of general aviation aircraft engines,

including the 10-470K subject matter of ‘is accident.

23. The engine subject of this lawsuit was in substantially

the same condition at the time of the accident as when it left

the control of the Defendant.

24. This aircraft had been maintained in strict accordance

with the instructions of the Defendant in connection with the

maintenance of the aircraft.

43a

25. This aircraft was flown in strict accordance with the

instructions of the Defendant in connection with its opera-

tion.

26. The accident resulted from defects in the aircraft and

engine to include the fuel system, fuel control, fuel injector,

fuel distribution system and fuel pump.

27. The Plaintiff's decedent had no knowledge of any

defects or reason to suspect a defective condition in the air-

craft, which would result in an engine failure or partial

engine failure.

28. The Pla.ntiff’s decedent relied on the representations

made by the Defendant in connection with the suitability and

continued suitability of the engine for use as an aircraft

powerplant.

29. As a result of these defects, which were the cause of

the deaths of the Plaintiff's decedents, the Defendant is

strictly liable under the theory and law of the Restatement of

Torts (Second) § 402A.

WHEREFORE, Plaintiff prays for judgment against the

Defendant in an amount in excess of Ten Thousand Dollars

($10,000.00).

COUNT III—BREACH OF WARRANTY

30. Plaintiff incorporates by reference paragraphs 1

through 29.

31. There arose from the sale of the Plaintiff's decedent’s

aircraft engine certain express and implied warranties that the

aircraft engine was safe for use by the Plaintiff's decedent

and other users and operators of the aircraft.

32. These implied warranties were of fitness for a particu-

lar purpose and merchantability regarding the use of said air-

craft engine by the Plaintiff's decedent and other users or

operators of the aircraft.

_——EE

44a

33. The Plaintiff’s decedent Robert C. Gross relied upon

such warranties in operating the aircraft on the day of the

accident, as well as such warranties that were made from

time to time by the Defendant following the installation of

the said aircraft engine.

34. The said warranties of merchantability and fitness for

a particular purpose were breached by the Defendant in that:

a. Defendant, a merchant in the goods of the type

purchased by Plaintiff, did not have the same ade-

quately designed and manufactured;

b. Said goods were not of fair an average quality in

the trade in which the Defendant is engaged;

c. Said goods were not fit for the ordinary purposes

for which the goods are used;

d. Said goods are not in conformity with, insofar as

safety is concerned, those generally used in the trade or

business in which Defendant is engaged;

e. Defendant knew, or should have known, that the

engine and engine system was not adequate; and

f. Defendant knew, or should have known, that the

engine and engine system were inadequate for the pur-

poses intended and were dangerous for use.

35. The said warranties were breached by the Defendant,

causing the Plaintiff’s decedent to experience loss of power in

the aircraft and crash, causing the Plaintiff’s decedents’ sub-

sequent demise.

WHEREFORE, Plaintiff prays for judgment against the

Defendant in an amount in excess of Ten Thousand Dollars

($10,000.00).

45a

COUNT IV—WILLFUL OR WANTON GROSS

NEGLIGENCE AND FRAUD

36. Plaintiff incorporates by reference paragraphs 1

through 35.

37. At all times material hereto and long prior to Novem-

ber 26, 1986, this Defendant knew that the Plaintiff’s dece-

dent Robert C. Gross was experiencing and reporting to this

Defendant problems in the newly installed aircraft engine.

These problems which were made known to the Defendant

included oil consumption and oil analysis that demonstrated

the engine was not breaking in properly.

38. In addition to the aforesaid information provided to

the Defendant, the Defendant knew that it was experiencing

product difficulties with engine driven fuel pumps such that

accurate, reliable, properly metered and consistent fuel flows

could not under all conditions of engine operation be counted

upon.

39. The Defendant knew at all times material hereto and

prior to November 26, 1986 that others had experienced fail-

ures of engine driven fuel pumps and fuel system failures in

this model engine such that it was a possibility that the Plain-

tiffs decedent could likewise experience sudden engine failure

or loss of power as a result of the same defects.

40. Notwithstanding the actual knowledge and the circum-

stances given rise to the risk of partial or complete engine

failure reported privately in the government press and directly

to the Defendant in this instance in an effort to cause the

Defendant to make such changes or issue such warnings as

were necessary to prevent such events from occurring in the

future, the Defendant encouraged, recommended, suggested,

and urged continued use of and reliance on its defective

engine, and indeed provided no warnings to the Plaintiff's

decedent Robert C. Gross with respect to the extreme likeli-

46a

hood of serious bodily injury or death as a result of the

Defendant failing to take such steps as were reasonably nec-

essary to render the product non-defective.

41. Notwithstanding the actual knowledge of this Defen-

dant that certain incidents, accidents or circumstances that

would give rise to same had occurred, would occur and were

likely to occur resulting in serious personal injury or death,

the Defendant failed to take those steps that any manufac-

turer should take in an effort to reduce or eliminate the risk

associated with the facts and circumstances about which it

became aware, such failure constituting wanton, willful and

utter and reckless disregard for the great likelihood of serious

personal injury and death.

42. As a result of this conduct on the part of this Defen-

dant, the Plaintiff prays for punitive damages.

WHEREFORE, Plaintiff prays for judgment against the

Defendant in an amount in excess of Ten Thousand Dollars

($10,000.00), and for punitive damages in an amount to be

determined at trial.

COUNT V

GROSSAIR, INC. v. DEFENDANT

43. Plaintiffs incorporate by reference paragraphs 1

through 42.

44. At all times material hereto, Plaintiff Grossair was the

owner of the aircraft involved in the accident referred in this

Complaint and, as a result of that accident, its aircraft was

totally destroyed.

45. The total loss of Plaintiff’s aircraft was as a result of

Defendant’s negligence, breach of warranty and conduct giv-

ing rise to strict liability as more particularly described above

and incorporated herein, as a result of which Plaintiff Gros-

sair seeks reimbursement and damages.

47a

WHEREFORE, Plaintiff prays for judgment against the

Defendant in an amount in excess of Ten Thousand Dollars

($10,000.00).

Arthur Alan Wolk, Esquire

WOLK AND GENTER

1712 Locust Street

Philadelphia, PA 19103

(215) 545-4220

Attorney for Plaintiff

LOCAL COUNSEL:

Michael Townsend, Esquire

DAVIDSON, FINK, COOK & GATES

900 First Federal Plaza

Rochester, NY 14618

(716) 546-6448 .

48a

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NEW YORK

Civil Action No. Civ-88-1299

MARJORIE DATSKOW, Executrix of the Estates of Robert C.

Gross and Susan C. Gross, Deceased, and Administratrix

of the Estates of Michael and David Gross, Deceased,

4105 Fields Drive, Lafayette Hill Pennsylvania 19444

—and—

GROSSAIR, INC., 840 Winona Blvd.,

Rochester, NY 14617

Vs.

TELEDYNE, INC., Continental Motors Division,

Box 90, Mobile, Alabama 36601

ANSWER OF TELEDYNE, INC. TO COMPLAINT

Defendant TELEDYNE, INC. (‘‘TELEDYNE’’), by its attor-

neys Condon & Forsyth and Mackey & DiMarco, answers the

Complaint of plaintiffs MARJORIE DATSKOW, Executrix of

the Estates of Robert C. Gross and Susan C. Gross and

Administratrix of the Estates of Michael and David Gross,

and GROSSAIR, INC. as follows: :

1. Denies knowledge or information sufficient to form a

belief as to the truth of the allegations contained in Para-

graphs 1 and 2 of the Complaint.

2. Denies each and every allegation contained in Paragraph

3 of the complaint, except admits that defendant TELEDYNE

is a corporation organized pursuant to the laws of the State

49a

of Delaware with its principal place of business in the State

of California.

3. Denies knowledge or information sufficient to form a

belief as to the truth of the allegations contained in Para-

graphs 4 and 5 of the Complaint.

4. Denies each and every allegation contained in Para-

graphs 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Complaint.

AS TO THE FIRST ALLEGED COUNT 1—NEGLIGENCE

5. Answering Paragraph 16 of Count I of the Complaint,

Defendant TELEDYNE repeats, reiterates and realleged each

and every admission and denial contained in its answers to

Paragraphs 1 through 15 of the Complaint with the same

force and effect as if herein set forth in full.

6. Denies each and every allegation contained in Para-

graphs 17, 18, 19 and 20, including subparagraphs (a)

through (i), inclusive, of Count I of the Complaint.

AS TO THE ALLEGED COUNT II—STRICT

LIABILITY IN TORT

7. Answering Paragraph 21 of Count II of the Complaint,

Defendant TELEDYNE repeats, reiterates and realleged each

and every admission and denial contained in its answers to

Paragraphs 1 through 20 with the same force and effect as if

herein set forth in full.

8. Denies each and every allegation contained in Para-

graphs 22, 23, 24, 25, 26, 27, 28 and 29 of Count II of the

complaint.

AS TO THE ALLEGED COUNT III—

BREACH OF WARRANTY

9. Answering Paragraph 30 of Count III of Complaint,

Defendant TELEDYNE repeats, reiterates and realleges each

50a

and every admission and denial contained in its answers to

Paragraphs 1 through 29 with the same force and effect as if

herein set forth in full.

10. Denies each and every allegation contained in Para-

graphs 31, 32, 33, 34, including subparagraphs (a) through

(f), inclusive, and Paragraph 35 of Count III of the Com-

plaint.

AS TO THE ALLEGED COUNT IV—WILLFUL OR

WANTON GROSS NEGLIGENCE AND FRAUD

11. Answering Paragraph 36 of Count IV of the Com-

plaint, Defendant TELEDYNE repeats, reiterates and realleges

each and every admission and denial contained in its answers

to Paragraphs 1 through 35 of the Complaint with the same

force and effect as if herein set forth in full.

12. Denies each and every allegation contained in Para-

graphs 37, 38, 39, 40, 41 and 42 of Count IV of the Com-

plaint.

AS TO THE ALLEGED COUNT V

13. Answering Paragraph 43 of Count V of the Com-

plaint, Defendant TELEDYNE repeats, reiterates and realleges

each and every admission and denial contained in its answers

to Paragraphs 1 through 42 with the same force and effect as

if herein set forth in full.

14. Denies knowledge or information sufficient to form a

belief as to the truth of the allegations contained in Para-

graph 44 of Count V of the Complaint.

15. Denies each and every allegation contained in Para-

graph 45 of Count V of the Complaint.

Sla

FIRST AFFIRMATIVE DEFENSE

16. The Complaint fails to state a claim against defendant

TELEDYNE upon which relief can be granted.

SECOND AFFIRMATIVE DEFENSE

17. The accident referred to in the Complaint resulted

from the fault, negligence, want of care, defect, gross negli-

gence, misuse, breach of warranty or other acts or omission

of persons other than TELEDYNE and outside the control of

TELEDYNE, for whose acts or omissions TELEDYNE is not

responsible, and not as a result of any fault, negligence, want

of care, defects, gross negligence, misuse, breach of warranty

r other acts or omissions on the part of TELEDYNE.

THIRD AFFIRMATIVE DEFENSE

18. The engine on the subject aircraft was not used by

Robert C. Gross and Susan C. Gross and/or other persons or

entities other than TELEDYNE and outside the control of

TELEDYNE in accordance with instructions, was altered,

changed or modified from the condition in which it was orig-

inally delivered prior to November 26, 1986 or was subjected

to abuse, misuse, improper repair, or was otherwise damaged

or abused by persons other than TELEDYNE or by persons

outside the control of TELEDYNE, for whose acts or omis-

sions TELEDYNE is not responsible, and not as a result of any

breach of warranty, manufacturing or design defect, negli-

gence, gross negligence, fault or want of care on the part of

TELEDYNE.

FOURTH AFFIRMATIVE DEFENSE

19. No act or omission on the part of TELEDYNE was a

proximate cause of the injuries and damages alleged in the

Complaint resulting from the accident of November 26, 1986.

52a

FIFTH AFFIRMATIVE DEFENSE

20. TELEDYNE specifically denies that any negligence on

its part contributed to or was a proximate cause of any in-

juries or damages sustained by the plaintiffs, but, in the

event it is found that TELEDYNE was negligent in any manner

or to any degree, TELEDYNE alleges, upon information and

belief that other parties hereto and persons or entities not

named in this action were negligent to a certain degree for

the injuries or damages sustained by plaintiffs and therefore

TELEDYNE contends that in the event there is found to be

fault on the part of TELEDYNE which in any manner or

degree contributed to the injuries of the plaintiffs, that a

finding should be made apportioning and fixing the compara-

tive fault of any or all parties or persons whether named to

this action or otherwise.

SIXTH AFFIRMATIVE DEFENSE

21. At the time that the engine for the subject aircraft was

sold, the engine was properly certified by the Federal Avia-

tion Administration, met and exceeded all applicable Federal

Aviation Regulations, incorporated state of the art technol-

ogy and practices and met all warranties, if any, with respect

to the engine.

SEVENTH AFFIRMATIVE DEFENSE

22. If any damages, judgment or other awards are recov-

ered by plaintiffs against TELEDYNE for the accident, in-

juries, damages and losses alleged in plaintiffs’ Complaint,

such accident, injuries, damages and losses were directly and

proximately contributed to and caused by persons or entities

other than TELEDYNE and it is entitled to indemnity and con-

tribution, or both, from each of said other persons or entities

in an amount in direct proportion to the culpable conduct of

said other persons or entities.

53a

EIGHTH AFFIRMATIVE DEFENSE

23. Plaintiffs failed to give notice of the alleged defects in

the subject engine to defendant TELEDYNE within a reason-

able time after said alleged defects were discovered or should

have been discovered.

NINTH AFFIRMATIVE DEFENSE

24. Plaintiffs’ alleged injuries or damages, if any, were

proximately caused by the sole negligence, assumption of risk

or other culpable conduct on the part of Robert C. Gross

and Susan C. Gross whose sole negligence, assumption of

risk or other culpable conduct bars plaintiffs’ recovery.

TENTH AFFIRMATIVE DEFENSE

25. Plaintiffs’ causes of action are barred by the applicable

statutes of limitation.

ELEVENTH AFFIRMATIVE DEFENSE

26. TELEDYNE had not been properly served with process

in the within action.

TWELFTH AFFIRMATIVE DEFENSE

27. The written contract for sale of the subject engine,

limits, disclaims and waives all claims and damages arising

from alleged defects in the engine.

THIRTEENTH AFFIRMATIVE DEFENSE

28. Plaintiffs are barred from maintaining an action for

breach of warranty because there is no privity of contract

between TELEDYNE and plaintiffs.

S4a

FOURTEENTH AFFIRMATIVE DEFENSE

29. Plaintiff MARJORIE DATSKOW lacks the capacity to

bring this action.

FIFTEENTH AFFIRMATIVE DEFENSE

30. The Court lacks jurisdiction over the person of defen-

dant TELEDYNE.

WHEREFORE, defendant TELEDYNE, INC. respectfully

requests that the Court dismiss the Complaint of plaintiffs

MARJORIE DATSKOW and GROSSAIR, INC. with prejudice,

together with costs, disbursements and other further relief as

to which the Court deems proper in the premises.

Dated: New York, New York

December 22, 1988

Respectfully submitted,

CONDON & FORSYTH

Stephen R. Stegich III

1251 Avenue of the Americas

New York, New York 10020

(212) 757-6870

—~@nd—

MACKEY & DIMARCO

George G. Mackey

2 State Street

Suite 400

Rochester, New York 14614

(716) 454-1990

Attorneys for Defendant

TELEDYNE, INC.

55a

To: DAVIDSON FINK COOK

& GATES

900 First Federal Plaza

Rochester, New York 14618

(716) 546-6448

WOLK AND GENTER

1712 Locust Street

Philadelphia, PA 19103

(215) 545-4220

Attorneys for Plaintiffs

56a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

Civ. 88-1299L

—+

MARJORIE DATSKOW,

Plaintiff,

—V.—

TELEDYNE, INC.,

Defendant.

SCHEDULING ORDER

By order of Judge Larimer, dated December 27, 1988 this

matter has been referred to the Magistrate for pre-trial pro-

ceedings pursuant to 28 U.S.C. § 636(b)(1) and Local Rule

16(a).

Fed. R. Civ. P. 16(b) provides that in entering a scheduling

order, the Court shall consult with attorneys for the parties

and with any unrepresenied parties by conference, telephone,

mail, or other suitable means. In accordance with Fed. R.

Civ. P. 16(b) and Local Rule 16(b), a preliminary pre-trial

conference was held before the Magistrate on January 17,

1989 at which time the parties were represented and agreed

upon the following discovery schedule. In accordance with

Local Rule 16(b) this scheduling order is hereby issued. As

set forth in Local Rule 16(b), ‘‘[n]o further or additional dis-

covery, or joinder or third party practice shall be permitted

thereafter except by leave of the Magistrate or the Court for

good cause shown.’’ This document shall govern all further

proceedings in this matter.

Subject Matter Jurisdiction: Diversity/Wrongful Death

Jury Trial: Demanded

57a

Deadline for Joinder of Other Parties and Amendment of

the Pleadings: 30 days from the date of this Order

Deadline to Complete Discovery: July 14, 1989

Deadline for Expert Discovery: The plaintiff shall identify

experts and provide Rule 26(b)(4)(A)(i) information by June

1, 1989. The defendant shall identify experts and provide

Rule 26(b)(4)(A)(i) information by June 1, 1989. Rule

26(b)(4)(A)(i) materials shali comply with Williams v. Mc-

Namara, 118 F.R.D. 294, 296-97 (D. Mass. 1988), and shall

fully alert opposing counsel to the substance of the expected

testimony. See Guilds v. A.R. Garza, M.D., F. Supp.

(slip opn. at 3-10) (Civ. 86-329T, October 25, 1988)

(reprinted in The Daily Record, No. 212, November 3, 1988,

second section, p.l) (admission of previously undisclosed

opinion required granting a new trial). Additional discovery

of experts has been agreed to by the parties and shall be com-

pleted by August 1, 1989.

Deadline for Filing of All Motions Including Those Pursu-

ant to Fed. R. Civ. P. 12 and 56, with Supporting Memo-

randa: August 31, 1989

Trial Date Status Conference before Judge Larimer:

August 17, 1989 at 4:00 p.m.

Trial Date: The matter shall be ready for trial as soon

after August 1, 1989 as the Court’s calendar permits.

The parties’ attention is invited to Local Rule 17 which

encourages the cooperation of counsel. It provides that ‘‘no

motion for discovery and production of documents under

Rules 26 through 37 of the Federal Rules of Civil Procedure

shall be heard unless moving counsel notifies the court by

written affidavit that sincere attempts to résolve the discovery

dispute have been made[,] . .. detailf[ing] the times and

places of the parties’ meetings, correspondence or discussions

concerning the discovery dispute, and the names of gll parties

participating therein.’’ As a general matter, an exchange of

correspondence is not sufficient without an earnest effort at

resolution by personai or electronic contact between counsel.

58a

Informal resolution of discovery disputes by conference call

to the Magistrate is encouraged to avoid a waste of judicial

resources and attorney time.

So ORDERED.

KENNETH R. FISHER

United States Magistrate

Dated: Rochester, New York

January 18, 1989

59a

FEDERAL RULES OF CIVIL PROCEDURE

Rule 12 of the Federal Rules of Civil Procedure provides in

pertinent part as follows:

(b) How Presented. Every defense, in law or fact, to a

claim for relief in any pleading, whether a claim, coun-

terclaim, cross-claim, or third-party claim, shall be

asserted in the responsive pleading thereto if one is

required, except that the following defenses may at the

option of the pleader be made by motion: (1) lack of

jurisdiction over the subject matter, (2) lack of jurisdic-

tion over the person, (3) improper venue, (4) insuffi-

cicncy of process, (5) insufficiency of service of process,

(6) failure to state a claim upon which relief can be

granted, (7) failure to join a party under Rule 19. A

motion making any of these defenses shall be made

before pleading if a further pleading is permitted. No

defense or objection is waived by being joined with one

or more defenses or objections in a responsive pleading

or motion.

(h) Waiver or Prevention of Certain Defenses.

(1) A defense of lack of jurisdiction over a person,

improper venue, insufficiency of process, or insuffi-

ciency of service of process is waived (A) if omitted

from a motion in the circumstances described in subdivi-

sion (g), or (B) if it is neither made by motion under this

rule nor included in a responsive pleading or an amend-

ment thereof permitted by Rule 15(a) to be made as a

matter of course.

Fed. R. Civ. P. 12(b), (h).

60a

Rule 15 of the Federal Rules of Civil Procedure provides in

pertinent part:

(a) Amendments. A party may amend the party’s plead-

ing once as a matter of course at any time before a

responsive pleading is served or, if the pleading is one to

which no responsive pleading is permitted and the action

as not been placed upon the trial calendar, the party

may so amend it at any time within 20 days after it is

served. Otherwise a party may amend the party’s plead-

ing only by leave of court or by written consent of the

adverse party; and leave shall be freely given when jus-

tice so requires. A party shall plead in response to an

amended pleading within the time remaining for

response to the original pleading or within 10 days after

service of the amended pleading, whichever period may

be the longer. unless the court otherwise orders.

or defense asserted in the amended pleading arose out of

the conduct, transaction, or occurrence set forth or

attempted to be set forth in the original pleading, the

amendment relates back to the date of the original

pleading. An amendment changing the party against

whom a claim is asserted relates back if the foregoing

provision is satisfied and, within the period provided by

law for commencing the action against the party to be

brought in by amendment that party (1) has received

such notice of the institution of the action that the party

will not be prejudiced in maintaining his defense on the

merits, and (2) knew or should have known that, but for

a mistake concerning the identity of the proper party,

the action would have been brought against the party.

Fed. R. Civ. P. 15(a), (c).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.