The plaintiffs, Nodira Sharifova and Fatima Vasibova, appeal an order of the trial court denying their motions to substitute defendant and granting summary judgment for the defendant, Meaghan Riley. They argue that the trial court erred in denying their motions because the proposed defendant "had actual notice of the claim, and because State Farm Insurance at all times had been aware of the claim and negotiated for settlement of the claim prior to suit." We vacate and remand.
We briefly set forth the facts in this case. The plaintiffs were injured in a motor vehicle collision while riding in a vehicle operated by plaintiff Vasibova's husband. The accident occurred on April 1, 2008. The other vehicle was operated by Katherine Riley (Katherine) and owned by her sister, Meaghan Riley (Meaghan). The accident report prepared by Manchester Police Officer Duquette indicates that Meaghan's vehicle was insured by State Farm.
In March 2011, the plaintiffs filed separate lawsuits against Meaghan, alleging that the collision was caused when Meaghan was operating her vehicle and "failed to yield the right of way at the stop sign and struck the Plaintiff vehicle in the passenger side front quarter panel." It appears that at some point, the two lawsuits were consolidated. Accordingly, we refer to the claims as a single lawsuit in our analysis.
Meaghan filed a motion for summary judgment dated April 26, 2011, in which she averred that she was not the person who drove the vehicle involved in the April 2008 collision and, therefore, "the plaintiff has absolutely no facts to support her claim against Meaghan Riley." The plaintiffs objected to the motion for summary judgment averring that they: (1) "received correspondence from State Farm insurance Company that indicated that Meaghan Riley was the insured"; (2) "forwarded a demand to State Farm Insurance for settlement in 2009 and were never advised by State Farm Insurance that we had the identity of the driver wrong"; and (3) "relied on paperwork sent to us by State Farm Insurance which provided the name of Meaghan Riley, and not Susan Riley or Katherine Riley."
RSA 514:9 (2007) authorizes a trial court to permit a substantive amendment to pleadings "in any stage of the proceedings, upon such terms as the court shall deem just and reasonable, when it shall appear to the court that it is necessary for the prevention of injustice; but the rights of third persons shall not be affected thereby." We have held that RSA 514:9 permits liberal amendment of pleadings unless the changes would surprise the opposing party, introduce an entirely new cause of action, or call for substantially different evidence. See, e.g., Coan v. N.H. Dep't of Env't Servs., 161 N.H. 1, 11 (2010). Absent an unsustainable exercise of discretion, we will affirm the trial court's decision. Id.
Our case law addressing whether a plaintiff should be permitted to amend a pleading to substitute a defendant after the applicable statute of limitations has expired is limited. In Lewis v. Hines, 81 N.H. 24, 26 (1923), we upheld the trial court's denial of the plaintiff's motion to amend which sought to join the Boston and Maine Railroad as a defendant. In doing so, we observed that the motion to amend in that case "is to so amend the proceedings that a suit against A shall be changed into one against B. Undoubtedly such an amendment may be allowed in a proper case. The real question here is not the power of the court to make the order, but what the effect of the amendment would be if allowed." Id. at 26. In reaching our conclusion, we noted that "the original writ contain[ed] no evidence of any intent to sue the railroad" and "[i]n no way, either directly or indirectly, was the railroad interested in the suit against the government." Id. at 27.
In Dupuis v. Smith Properties, Inc., 114 N.H. 625, 627 (1974), we reversed the trial court's denial of the plaintiff's motion to substitute the name of the intended defendant after the expiration of the statute of limitations. As we observed in Dupuis, in cases of this nature, both potential injustice and prejudice exist. Id. at 628. In Dupuis, we explained that, regardless of whether the plaintiff's mistake was misnomer or mistaken identity, the crucial fact is whether the intended defendant received notice before the statute of limitations expired. Id. at 629 ("The rationale for the statute of limitations, which is to insure that defendants receive timely notice of actions against them, is not applicable in a case such as this one where the defendant actually received notice within the limitation period.").
The defendant cites Perez v. Pike Industries, 153 N.H. 158 (2005), in support of her argument that the trial court's order should be affirmed because this is a case of mistaken identity and "[t]here is no evidence that potential defendant Katherine Riley had notice of a suit against her." We note, however, that the issue in Perez was not whether the trial court erred in granting the plaintiff's motion to add Pike as a party but rather whether it erred in dismissing the claim because it was time-barred. We specifically noted that Perez did not involve a case of misnomer or mistaken identity. Id. at 162.
The crucial issue in determining whether to allow the plaintiffs to amend their writ is whether Katherine had actual notice of the lawsuit. See Dupuis, 114 N.H. at 629; cf. Krupski v. Costa Crociere S. p. A., 560 U.S. __, 130 S.Ct. 2485 (2010) (under federal rules, question on whether to permit amendment to pleading that changes name of party is not whether plaintiff knew or should have known identity of correct defendant but whether defendant knew or should have known that it would have been named as defendant but for an error).
In this case, the plaintiffs allege that they relied upon information received from Meaghan's insurance company and forwarded a demand for settlement to the insurance company in 2009. Whether Katherine knew or should have known of the lawsuit and the extent of her notice thereof are questions of fact for the trial court to resolve. Given the unique facts of this case, we vacate the trial court's ruling and remand the case for further proceedings consistent with this order.
Vacated and remanded.
HICKS, CONBOY and LYNN, JJ., ...