On October 24, 2023, the Court of Appeals issued a decision in Matter of Nemeth v. K-Tooling, 2023 NY Slip Op. 05349, holding that relation back may apply to claims against a new party even when the plaintiff was aware of that party’s existence when the initial complaint was filed, explaining:
The relation back doctrine applies when (1) the claims arise out of the same conduct, transaction or occurrence; (2) the new party is united in interest with an original defendant and thus can be charged with such notice of the commencement of the action such that a court concludes that the party will not be prejudiced in defending against the action; and (3) the new party knew or should have known that, but for a mistaken omission, they would have been named in the initial pleading.
The doctrine focuses on the notice and prejudice to the added party. However, the doctrine does not apply when a plaintiff intentionally decides not to assert a claim against a party known to be potentially liable or when the new party was omitted to obtain a tactical advantage in the litigation. These exceptions minimize gamesmanship and manipulation of the CPLR.
Here, petitioners established that they satisfied the Buran test and that their omission of a necessary party was not a deliberate, informed litigation strategy to gain tactical advantage. The relation back doctrine applies, and petitioners’ claims against the newly added party were timely interposed under CPLR 203 (c). Therefore, respondents’ motion to dismiss the amended petition should not have been granted.
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Petitioners principally argue that, for purposes of the third prong of the relation back analysis, the addition of a mistakenly-omitted necessary party relates back whether one views the omission as a mistake of law or simply an oversight in identifying the proper party unless the omission was a deliberate choice or motivated by gamesmanship. Respondents counter that the relation back doctrine is unavailable to petitioners because they were aware of the omitted necessary party’s existence but failed to include her in the action. We now hold that the relation back doctrine is not limited to cases where the amending party’s omission results from doubts regarding the omitted party’s identity or status.
Section 203 of the CPLR codifies the relation back doctrine and provides that a claim asserted in the complaint commenced by filing is interposed against the defendant or a co-defendant united in interest with such defendant when the action is commenced. Our State’s relation-back doctrine is modeled on the federal analog in Federal Rule of Civil Procedure 15(c). In Mondello, the Court adopted the three-part test prevalent at the time in federal and state courts and articulated by the Appellate Division in Brock v Bua (83 AD2d 61 [2d Dept 1981]). Under this test, the claim against the later-added party relate back to the date of commencement, if
(1) both claims arose out of the same conduct, transaction or occurrence; the new party is united in interest with the original defendant, and by reason of that relationship can be charged with such notice of the institution of the action that they will not be prejudiced in maintaining their defense on the merits; and (3) the new party knew or should have known that, but for an excusable mistake by the plaintiff as to the identity of the proper parties, the action would have been brought against them as well.
Although Mondello had no occasion to consider the scope of the third prong of this test, the Court took up the question soon thereafter in Buran. As the Buran Court explained, Brock’s articulation of the third prong differed from its federal counterpart by requiring that the omission of the party in the original pleading be excusable. That requirement is wholly absent from Rule 15(c), which does not qualify the nature of the mistake.
Buran concluded that the excusability requirement improperly deemphasized what the United States Supreme Court has called the linchpin of the relation back doctrine—notice to the defendant within the applicable limitations period. More to the point, the excusable mistake requirement shifted the focus away from whether the new party had actual notice of the claim and from what Brock assumed to be the primary consideration of the doctrine, namely, whether the defendant could have reasonably concluded that the failure to sue within the limitations period meant that there was no intent to sue that person at all and that the matter has been laid to rest as far as they are concerned.
The Buran Court further observed that the excusability requirement had essentially rendered the relation back doctrine meaningless in all but rare circumstances, a result that was not in line with notice pleading and our customary liberal construction of the CPLR. To better reflect the primary focus of the doctrine while minimizing opportunities for manipulation of the CPLR’s saving provision, the Court discarded the excusability requirement, but reminded courts that they could decline to apply the doctrine in cases where the plaintiff omitted a defendant in order to obtain a tactical advantage in the litigation or where application of the doctrine would result in prejudice to the new party in defending on the merits. In short, Buran retained a modified third prong of the relation back test which is more forgiving of errors of omissions than its Brock predecessor and which requires only that the omission of a party be the result of a mistake and not necessarily an excusable mistake.
The Appellate Division decision below is the latest in a line of cases interpreting Buran as limiting the relation back doctrine to mistakes regarding the identity or status of a proper party. However, as we now make clear, the relation back doctrine is not so limited. Rather, the doctrine applies when the party knew or should have known that, but for the mistake—be it a simple oversight or a mistake of law (i.e., that the amending party failed to recognize the other party as a legally necessary party)—the non-amending party would have been named initially.
Indeed, in Buran itself, there was no mistake regarding identity. Buran involved husband-and-wife plaintiffs with property on Lake Champlain—the Burans—who sued their husband-and-wife neighbors—the Coupals—for trespass after the Coupals erected a seawall across a portion of the Burans’ property. The Court noted that “John and Janet Coupal obtained [the] property” and that, while the initial suit against the husband (John) was pending, “the Coupal[s] transferred ownership of their lot”. Hence, when the Burans first sued the Coupals, the Burans had reason to know the Coupals were tenants by the entirety and, thus, both necessary parties—as the Coupals later acknowledged in an amended answer. Despite this, the Court did not inquire into whether the mistake in omitting Janet was one of fact or law or otherwise suggest that the Burans’ knowledge of Janet’s identity was dispositive of the doctrine’s applicability. Rather, the Court still held that the Burans’ delayed addition of Janet Coupal related back to the original date of filing because Janet was united in interest with John, undisputedly had notice of the action, there was no delay or prejudice, and whether the Burans’ mistake in failing to name her initially was excusable’ was immaterial so long as the Coupals should have realized that her omission was, in fact, a mistake.
Applying the correct standard here, we conclude that the petitioners established that the relation back doctrine applies to their claims against newly added respondent, Rosa Kuehn. As the Appellate Division recognized, there is no dispute that the newly-added claims arose out of the same conduct, transaction, or occurrence. The controversy lies as to whether Rosa was on notice and thus will not be prejudiced by her addition to the proceeding, and that she is united in interest with another respondent.
Turning to the issue that divided the Appellate Division, we conclude that petitioners established the third prong—that Rosa knew or should have known that, but for a mistake, she would have been named as a respondent in the underlying article 78. She was named in the first article 78 proceeding challenging the earlier variance, which of course is at the heart of the controversy between petitioners and respondents.
Then, when the ZBA granted a second request for a variance—a request Rosa signed on behalf of Kuehn Manufacturing—petitioners again sought to have the variance annulled. Under these circumstances, as the owner of the land benefitted by the variance and as a signatory of the variance application on behalf of a company whose use of the property depends on the variance, Rosa could not have understood her omission to be anything other than an oversight. Indeed, respondents effectively concede Rosa’s omission from the proceeding here was a mistake.
Nor is this a case where application of the doctrine rewards the amending party’s strategic delay in naming an opposing party—a machination the Court has expressly disapproved. Nothing in the record before us even suggests that petitioners initially omitted Rosa in order to obtain a tactical advantage in the litigation. Although omission of a necessary party does not automatically establish a mistake, here there is no evidence of an attempt to game the system.
Rather, the record confirms that petitioners’ omission of Rosa was a mistake. Petitioners named Rosa in their first Article 78 petition, which successfully challenged the first variance. Then, when the ZBA granted a second request for a variance—a request Rosa signed on behalf of Kuehn Manufacturing—petitioners had every reason to name her as respondent within the statutory limitations period but did not do so. Thus, the only logical conclusion is that her omission from the second petition was a mere oversight. That error does not foreclose application of the relation back doctrine. Indeed, that is the type of party conduct that the Buran Court had in mind when it eliminated the excusability requirement.
Thus, the Appellate Division erroneously concluded that petitioners’ knowledge of Rosa’s identity prevented application of the relation back doctrine and rendered their claims against her time-barred.
(Internal quotations and citations omitted).