Gibbs Cattle Co. v. Bixler , 285 Neb. 952 ( 2013 )

Nebraska Advance Sheets
952 285 NEBRASKA REPORTS
Gibbs Cattle Co., a Nebraska corporation, appellee, v.
Edna F. Bixler et al., appellees, and Margaret Bixler
and Edward Stephen Cassells, appellants.
___ N.W.2d ___
Filed May 24, 2013. No. S-12-687.
1. Equity: Appeal and Error. On appeal from an equity action, an appellate court
tries factual questions de novo on the record and, as to questions of both fact and
law, is obligated to reach a conclusion indepedent of the conclusion reached by
the trial court.
2. Mines and Minerals: Decedents’ Estates: Title. The “record owner” of mineral
interests, as used in Neb. Rev. Stat. § 57-229 (Reissue 2010), may be determined
not only from the register of deeds, but also from probate records in the county
where the interests are located.
3. Statutes: Pleadings: Parties. Neb. Rev. Stat. § 25-201.02(2) (Reissue 2008)
applies only to an amendment that “changes the party or the name of the party”
and that refers to a substitution, rather than to an addition, of parties.
Appeal from the District Court for Sioux County: Travis P.
O’Gorman, Judge. Reversed.
John F. Simmons, of Simmons Olsen Law Firm, P.C., for
appellants.
Steven C. Smith and Lindsay R. Snyder, of Smith, Snyder &
Petitt, G.P., for appellee Gibbs Cattle Co.
Wright, Connolly, Stephan, Miller-Lerman, and Cassel, JJ.
Connolly, J.
SUMMARY
Gibbs Cattle Co. is the surface owner of various tracts of
land in Sioux County, Nebraska. Gibbs sued the owners of
severed mineral interests in those tracts under Nebraska’s dor-
mant mineral statutes1 to reacquire their allegedly abandoned
interests. Mineral interests are deemed abandoned unless the
“record owner” has taken certain steps to publicly exercise
his or her ownership rights during the 23 years preceding the
surface owner’s suit.2 This case primarily involves two issues:
1
See Neb. Rev. Stat. §§ 57-228 to 57-231 (Reissue 2010).
2
See § 57-229.
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GIBBS CATTLE CO. v. BIXLER 953
Cite as 285 Neb. 952(1) whether the “record owner” may be determined only from
the register of deeds in the county where the interests are
located or also from other public records, such as probate
records in the county; and (2) whether an amended complaint
adding, rather than changing (i.e., substituting), a new party
defendant may relate back to the original complaint.
In interpreting the relevant statutes, we conclude that the
“record owner” of mineral interests, as used in § 57-229,
includes an individual identified by probate records in the
county where the interests are located. We also conclude
that Neb. Rev. Stat. § 25-201.02(2) (Reissue 2008) applies
only to an amendment that “changes the party or the name
of the party” and that refers to a substitution, rather than to
an addition, of parties. We reverse the district court’s con-
trary rulings.
BACKGROUND
Although there are numerous defendants, only two are
involved in this appeal: appellant Margaret Bixler and appel-
lant Edward Stephen Cassells. The facts are undisputed and
set forth below.
Margaret
Gibbs filed its initial complaint on December 21, 2010.
Thereafter, Gibbs discovered that the register of deeds listed
John H. Bixler as an owner of mineral interests in some of
Gibbs’ land. So on March 18, 2011, Gibbs amended its com-
plaint to add John as a defendant. But John had died in 1996,
and Margaret, as John’s widow and personal representative
of his estate, had completed the probate process. Margaret
filed an answer, as John’s personal representative, request-
ing the court to order that all title to John’s mineral interests
remain in John. Margaret then filed an amended answer
stating that through John’s will she had a life estate in the
mineral interests, and she requested the court to order all title
to the mineral interests remain in her. The probate records
confirmed Margaret’s factual assertions, though none of the
records (such as the inventory sheets, deed of distribution,
or inheritance tax determinations) specifically mentioned the
mineral interests.
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Both Gibbs and Margaret moved for summary judgment.
Gibbs argued that John, the record owner, had not publicly
exercised his ownership rights in the mineral interests in the
23 years prior to Gibbs’ complaint. As such, Gibbs argued that
John had abandoned those rights and that the mineral interests
should vest with Gibbs, the surface owner. Margaret argued
that John’s conveyance of the mineral interests to her through
his will was a public exercise of ownership. Margaret also
argued that based on the probate records, she was the “record
owner” of the mineral interests, and that her 23 years had not
yet elapsed.
The court found for Gibbs. The court reasoned that John
was the record owner of the mineral interests because he
was the person listed in the register of deeds. And the court
determined that although John’s mineral interests transferred
through his will,3 this was not a public exercise of ownership
because that occurred by operation of law rather than by John’s
action. Margaret does not challenge this latter determination
on appeal.
Furthermore, the court concluded that Margaret was not a
“record owner” of the mineral interests and so it was immate-
rial whether she had exhausted the 23-year statutory period.
The court noted that the dormant mineral statutes did not
define the term “record owner,” but that it was defined in
Neb. Rev. Stat. § 19-4017.01 (Reissue 2012) as being “‘the
fee owner of real property as shown in the records of the reg-
ister of deeds office in the county in which the business area
is located.’” The court concluded that to satisfy the dormant
mineral statutes’ purpose, “record owner” could only mean
the person listed in the register of deeds in the county where
the property was located. The court vested title to the disputed
mineral interests in Gibbs.
Edward
Gibbs’ initial complaint also named Virginia Audrey
Cassells as one of the defendants. On January 8, 2011, Gibbs
received a letter from Edward, Virginia’s son, which impliedly
3
See, Neb. Rev. Stat. § 30-2401 (Reissue 2008); Wheelock v. Heath, 201
Neb. 835, 272 Neb. 768 (1978).
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Cite as 285 Neb. 952asserted that he and Virginia both owned the disputed min-
eral interests. On January 14, Edward filed a verified claim
of interest with the Sioux County register of deeds. And on
February 22, Edward moved to intervene, which the court
allowed. On March 18, Gibbs amended its complaint to add
Edward as a defendant. In his answer, Edward claimed that
he owned a portion of the disputed mineral interests and
requested the court to order all title to his mineral interests
remain in him.
Following Gibbs’ motion for summary judgment, Edward
likewise moved for summary judgment. There was no dis-
pute that Edward and Virginia were the record owners of
the mineral interests. Rather, the sole issue before the court
was whether Gibbs’ amended complaint adding Edward as
a defend­ nt related back to the original complaint. This was
a
because Edward had filed a verified claim of interest with the
Sioux County register of deeds in January 2011, after Gibbs’
original complaint in December 2010, but before Gibbs’
amended complaint in March 2011. And § 57-229 requires
a public exercise of ownership rights within 23 years of
the operative complaint to preserve the record owner’s min-
eral interests.
The record showed the reason for Gibbs’ failure to include
Edward in the original complaint. The deed conveying the
mineral interests listed the grantors as “Virginia Audrey
Cassells & Edward Cassells, her husband,” and the grantees
as “Virginia Audrey Cassells & Edward Stephen Cassells”
as joint tenants. The title examiner, after reviewing the deed,
concluded that the two Edwards were the same person. And
the title examiner, “knowing that Virginia’s husband, Edward
Cassells” had died, concluded that Virginia was the sole owner
of the mineral interests. So Gibbs named only Virginia as a
defendant, rather than Virginia and Edward. This was incor-
rect, as the two Edwards in the deed were distinct individuals
and Edward was still alive and a joint owner of the min-
eral interests.
The court found that under § 25-201.02(2), Gibbs’ amended
complaint related back to the original complaint’s date of fil-
ing. That section provides, in relevant part:
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If the amendment [to a pleading] changes the party or
the name of the party against whom a claim is asserted,
the amendment relates back to the date of the origi-
nal pleading if (a) the claim or defense asserted in the
amended pleading arose out of the conduct, transaction,
or occurrence set forth . . . in the original pleading,
and (b) within the period provided for commencing an
action the party against whom the claim is asserted by
the amended pleading (i) received notice of the action
such that the party will not be prejudiced in maintain-
ing a defense on the merits and (ii) 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.4
The court concluded that Gibbs had met the first requirement
because the amended complaint simply added Edward as the
other owner for property already described in the original com-
plaint. The court also found that Edward had proper notice of
the action, based on his letter to Gibbs, and that he would not
be prejudiced on the merits by having the amendment relate
back. And the court concluded that Edward “knew he should
have been included” because “his letter indicated his belief that
[Gibbs] ‘had sued us,’” meaning him and Virginia.
Edward argued that the relation-back doctrine did not apply
because Gibbs did not “change[] the party or the name of
the party”5 but instead added an entirely new party. The
court rejected that argument, and concluded that the word
“change” should be liberally construed to include adding a
new party. The court reasoned that modern pleading rules
were more relaxed and that such a construction fell squarely
within the remedial nature of the relation-back doctrine.
Moreover, the court found that Gibbs’ mistake in failing to
name Edward as a defendant was “made despite [Gibbs’] due
diligence.” Finally, the court rejected Edward’s argument that
the relation-back doctrine could not apply because the 23-year
­
period under § 57-229 was not a statute of limitations. So the
4
§ 25-201.02(2).
5
Id.
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Cite as 285 Neb. 952court concluded that Edward’s verified claim of interest was
too late. The court then vested title to the disputed mineral
interests in Gibbs.
ASSIGNMENTS OF ERROR
Margaret alleges, consolidated and restated, that the court
erred in (1) concluding that she was not the “record owner” of
the disputed mineral interests and (2) terminating her rights to
the mineral interests and vesting them in Gibbs.
Edward alleges, consolidated and restated, that the court
erred in (1) allowing Gibbs’ amended complaint to relate back
to the filing date of the original complaint under § 25-201.02(2)
and (2) terminating his rights to the mineral interests and vest-
ing them in Gibbs.
STANDARD OF REVIEW
[1] On appeal from an equity action, an appellate court tries
factual questions de novo on the record and, as to questions of
both fact and law, is obligated to reach a conclusion indepen-
dent of the conclusion reached by the trial court.6
ANALYSIS
“R ecord Owner”
Section 57-229 sets forth various ways that the “record
owner” of mineral interests may exercise his or her ownership
rights and thereby avoid abandonment of his or her interests:
A severed mineral interest shall be abandoned unless
the record owner of such mineral interest has within the
twenty-three years immediately prior to the filing of the
action provided for in sections 57-228 to 57-231, exer-
cised publicly the right of ownership by (1) acquiring,
selling, leasing, pooling, utilizing, mortgaging, encumber-
ing, or transferring such interest or any part thereof by
an instrument which is properly recorded in the county
where the land from which such interest was severed is
located; or (2) drilling or mining for, removing, produc-
ing, or withdrawing minerals from under the lands or
6
Peterson v. Sanders, 282 Neb. 711, 806 N.W.2d 566 (2011).
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using the geological formations, or spaces or cavities
below the surface of the lands for any purpose consistent
with the rights conveyed or reserved in the deed or other
instrument which creates the severed mineral interest; or
(3) recording a verified claim of interest in the county
where the lands from which such interest is severed are
located. . . . The interest of any such owner shall be
extended for a period of twenty-three years from the date
of any such acts[.]
Gibbs argues that the “record owner” of mineral interests
may be determined only from the register of deeds in the
county where the interests are located. Margaret disagrees.
She argues that the “record owner” may also be determined
from other public records, and in this case, Sioux County’s
probate records. If Gibbs is correct, then the record owner of
the mineral interests was John, who did not publicly exercise
his ownership rights in the 23 years before Gibbs filed its
complaint. As such, the interests would be abandoned and title
to them would vest with Gibbs. But if Margaret is correct,
then she became the record owner in 1996, when John died
and his interests passed to her through his will. If that is the
case, then Margaret could not have abandoned her interests,
because 23 years had not yet passed from her acquisition of
the interests.7
The meaning of statutory language is a question of law,8
which we resolve independently from the lower court.9 The
district court noted that the dormant mineral statutes did not
define the term “record owner.” The court noted, however,
that § 19-4017.01, a part of the Business Improvement District
Act, defined “record owner” as “the fee owner of real prop-
erty as shown in the records of the register of deeds office in
the county in which the business area is located.” The court
applied that definition to § 57-229. But § 19-4017.01 is a
separate statutory section unrelated to § 57-229, and it does not
7
See § 57-229.
8
Ricks v. Vap, 280 Neb. 130, 784 N.W.2d 432 (2010).
9
Peterson, supra note 6.
Nebraska Advance Sheets
GIBBS CATTLE CO. v. BIXLER 959
Cite as 285 Neb. 952purport to define “record owner” as used in § 57-229. Instead,
§ 19-4017.01 explicitly defines the term only “[a]s used in [the
Business Improvement District Act].” That definition does not
control here.10
We give statutory language its plain and ordinary meaning.11
Black’s Law Dictionary, which we have relied on in the past
to define the term,12 defines “record owner” as “[a] property
owner in whose name the title appears in the public records.”13
That does not resolve the issue because it could be read to
support either of the parties’ positions. We must construe
the term to give effect to the Legislature’s intent.14 We have
reviewed the legislative history of the dormant mineral stat-
utes, but it is scant and of little help in resolving the issue. And
although a few courts from other jurisdictions have discussed
the meaning of “record owner” in various contexts,15 they are
not controlling.
Gibbs argues against construing the term “record owner” to
include an individual or entity identified by probate records.
Specifically, Gibbs argues that other words in § 57-229
(which follow “record owner” and seemingly refer to record-
ing instruments in the register of deeds) indicate that “record
owner” means only the individual or entity listed in the reg-
ister of deeds.
Gibbs’ argument has some appeal, but we are unconvinced.
Section 57-229 sets forth various ways that the “record owner”
may publicly exercise his or her rights of ownership in certain
mineral interests. One way is by taking various actions with
10
See Lozier Corp. v. Douglas Cty. Bd. of Equal., ante p. 705, ___ N.W.2d
___ (2013).
11
See, e.g., Spady v. Spady, 284 Neb. 885, 824 N.W.2d 366 (2012).
12
See State v. $1,947, 255 Neb. 290, 583 N.W.2d 611 (1998).
13
Black’s Law Dictionary 1215 (9th ed. 2009).
14
See, e.g., Blakely v. Lancaster County, 284 Neb. 659, 825 N.W.2d 149(2012).
15
See, e.g., Bembery v. District of Columbia, 852 A.2d 935, 940 n.5 (D.C.
2004); State ex rel. Forestry, Fire v. Tooele Co., 44 P.3d 680 (Utah 2002);
Okanogan Power & Irrigation Co. v. Quackenbush, 107 Wash. 651, 182 P.
618 (1919).
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the interests through “an instrument which is properly recorded
in the county where the land from which such interest was
severed is located.” Another way is by “recording a verified
claim of interest in the county where the lands from which
such interest is severed are located.” These are certainly differ-
ent avenues of publicly exercising ownership, but as Margaret
noted in her reply brief, that “language describes what a record
owner can do to protect [his or] her interest from being deemed
abandoned. [But i]t does not purport to tell us who the record
owner is.”16
The answer is not obvious. But we conclude that “record
owner” should be construed to include an owner identified
through the probate records of the county in which the min-
eral interests are located. We reach this conclusion for several
reasons. Most notably, the Legislature narrowly defined the
term “record owner” in § 19-4017.01 as “the fee owner of
real property as shown in the records of the register of deeds
office in the county in which the business area is located.”
While that definition does not control here, it does shed light
on the issue—the intent of the Legislature may be derived from
both the words that it used in a statute and those that it did
not.17 That the Legislature narrowly defined “record owner” in
§ 19-4017.01 indicates that it is not the ordinary meaning of
the term. And because the Legislature did not similarly define
the term in the dormant mineral statutes, it seems likely that
the Legislature intended a different and broader meaning for
the term in § 57-229.
Though our case law has not specifically addressed this
issue, State v. $1,94718 provides some support for our con-
clusion. In that case, the statute included the phrase “owner
of record,” which we equated to “record owner.” Applying
Black’s Law Dictionary definition, we stated that “the second
paragraph of [the statute] would apply only to persons whose
16
Reply brief for appellant Margaret at 4 (emphasis in original).
17
See Lozier Corp., supra note 10.
18
$1,947, supra note 12.
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Margaret was identified as an owner through probate records
in the county where the interests were located. Those qualify
as public records, and so $1,947 supports the conclusion that
Margaret was a “record owner.”
Moreover, unlike the district court, we believe that this
construction is consistent with the language and purpose of
the dormant mineral statutes. It is consistent with the statutes’
language because the Legislature did not see fit to narrowly
define the term as it had in § 19-4017.01. As to being con-
sistent with the statutes’ purpose, we acknowledge that the
purpose of the dormant mineral statutes was “to address title
problems that developed after mineral estates were fractured.”20
But the text of the dormant mineral statutes also demonstrates
that the Legislature balanced this purpose with protecting own-
ers’ property rights.
This balancing is evident from the statutes themselves.
Abandonment does not automatically occur after a set time,
but only if and when a surface owner files suit; it is rela-
tively easy for a record owner to publicly exercise his or her
ownership rights; and the statutes provide for a fairly lengthy
23-year period of nonuse before a record owner’s rights may be
deemed abandoned.21 Construing “record owner” to include an
owner identified through probate records in the county where
the interests are located is consistent with the dormant mineral
statutes’ purpose—it still allows for clearing title records. But
that construction also protects identifiable property rights. In
other words, much like the statutes themselves, this construc-
tion of “record owner” balances the desire to clear title records
with protecting identifiable property rights.
Finally, we note that the parties take opposite stances on
whether we should apply a liberal or strict construction to
“record owner.” Gibbs argues that the dormant mineral statutes
19
Id. at 296, 583 N.W.2d at 616 (emphasis supplied).
20
Peterson, supra note 6, 282 Neb. at 715, 806 N.W.2d 569.
21
See §§ 57-228 to 57-231.
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are remedial statutes and that therefore, we must construe them
liberally to fulfill their intended purpose.22 Margaret, on the
other hand, notes that the dormant mineral statutes abrogate
the common law against abandonment of real property and that
such statutes must be strictly construed.23 Here, we do not find
these interpretative canons helpful. But the dormant mineral
statutes result in a forfeiture of property, and “‘equity abhors
forfeitures.’”24 As this is an equitable case,25 if any doubt
remains as to the meaning of “record owner,” it should be con-
strued against forfeiture.26
[2] We hold that the “record owner” of mineral inter-
ests, as used in § 57-229, may be determined not only from
the register of deeds, but also from probate records in the
county where the interests are located. Margaret therefore
qualified as a “record owner” within the meaning of § 57-229.
And because she acquired her interest in 1996, her 23-year
statutory period has not elapsed and her property cannot be
deemed abandoned.
R elation Back
Before addressing the relation-back issue, we first address
Gibbs’ argument that Edward did not properly verify his claim
of interest. As such, Gibbs argues that regardless whether the
amended complaint relates back, Edward never publicly exer-
cised his ownership rights within 23 years of the amended
complaint.
We will not consider an issue on appeal that was not pre-
sented to or passed upon by the trial court.27 Gibbs’ counsel
22
See, e.g., Securities Investment Corporation v. Indiana Truck Corporation,
129 Neb. 31, 260 N.W. 691 (1935).
23
See, e.g., Alisha C. v. Jeremy C., 283 Neb. 340, 808 N.W.2d 875 (2012).
24
See, e.g., Miller v. Radtke, 230 Neb. 561, 567, 432 N.W.2d 542, 547
(1988).
25
See § 57-228.
26
See 36 Am. Jur. 2d Forfeitures and Penalties § 8 (2011).
27
See, e.g., Weber v. Gas ’N Shop, Inc., 278 Neb. 49, 767 N.W.2d 746(2009).
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Cite as 285 Neb. 952acknowledged at oral argument that he did not raise this issue
before the trial court. And the trial court clearly did not pass
upon the issue because it noted in its order that the “sole issue”
before it was whether Gibbs’ amended complaint related back.
We decline to address the merits of this argument.
We turn now to the relation-back issue. The district court
allowed Gibbs’ amended complaint adding Edward as a defend­
ant to relate back to Gibbs’ original complaint. Edward argues
this was error because § 25-201.02(2), which governs whether
amendments relate back, applies only when the amendment
“changes the party or the name of the party,” rather than when
the amendment adds a new party. (Emphasis supplied.) Gibbs
argues that “change” should be construed to include adding a
new defendant.
Section 25-201.02(2) provides, in relevant part:
If the amendment [to a pleading] changes the party or the
name of the party against whom a claim is asserted, the
amendment relates back to the date of the original plead-
ing if (a) the claim or defense asserted in the amended
pleading arose out of the conduct, transaction, or occur-
rence set forth . . . in the original pleading, and (b) within
the period provided for commencing an action the party
against whom the claim is asserted by the amended plead-
ing (i) received notice of the action such that the party
will not be prejudiced in maintaining a defense on the
merits and (ii) 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.
We must determine the meaning of the phrase “changes the
party or the name of the party.” This is a question of law,28
which we resolve independently from the lower court.29
Section § 25-201.02(2) essentially codified our decision
in Zyburo v. Board of Education.30 Zyburo explicitly adopted
28
Ricks, supra note 8.
29
Peterson, supra note 6.
30
Zyburo v. Board of Education, 239 Neb. 162, 474 N.W.2d 671 (1991). See
John P. Lenich, Nebraska Civil Procedure § 15:10 (2008).
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the then-existing Fed. R. Civ. P. 15(c) regarding relation back,
as explained in Schiavone v. Fortune.31 In Zyburo, we acknowl-
edged that “[a]lthough Nebraska does not have a rule similar to
rule 15(c), this court has nevertheless acknowledged the simi-
larity between rule 15(c) and its case law, and has looked to
federal decisions for guidance.”32 Though rule 15(c) has since
been amended, the amended version contains substantially the
same requirements as § 25-201.02(2), with the primary differ-
ence being the amount of time during which the amended party
may receive notice.33 We may still look to federal decisions for
guidance regarding our interpretation of § 25-201.02(2). And
because our case law does not specifically address this issue,
we look to the federal courts for that guidance.
The federal courts are seemingly split on whether an amend-
ment adding a new defendant, rather than substituting a new
defendant, may relate back to the original pleading under rule
15(c)(1)(C). The only circuit court of appeals, that we have
found, which has squarely addressed the change/add distinction
is the Fourth Circuit in Goodman v. Praxair, Inc.34 It concluded
that changing a party should be construed to include adding
a party.35 Other circuits, though not expressly addressing the
change/add distinction, have made conflicting statements in
allowing or disallowing the addition of parties to relate back.
For example, the Sixth Circuit recently reiterated its long-
standing rule that “‘“an amendment which adds a new party
creates a new cause of action and there is no relation back to
the original filing . . . .”’”36 And the Seventh Circuit, in a case
31
See, Schiavone v. Fortune, 477 U.S. 21, 106 S. Ct. 2379, 91 L. Ed. 2d 18(1986); Zyburo, supra note 30.
32
Zyburo, supra note 30, 239 Neb. at 169, 474 N.W.2d at 676.
33
Compare § 25-201.02(2) with 28 U.S.C. app. rule 15(c)(1)(C) (Supp. V
2011). See, also, Reid v. Evans, 273 Neb. 714, 733 N.W.2d 186 (2007)
(Miller-Lerman, J., concurring; McCormack, J., joins); Lenich, supra
note 30.
34
See Goodman v. Praxair, Inc., 494 F.3d 458 (4th Cir. 2007).
35
See id.36
Asher v. Unarco Material Handling, Inc., 596 F.3d 313, 318 (6th Cir.
2010).
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improper defendant, stated that
[t]he only two inquiries . . . in deciding whether an
amended complaint relates back . . . are, first, whether the
defendant who is sought to be added by the amendment
knew or should have known that the plaintiff, had it not
been for a mistake, would have sued him instead or in
addition to suing the named defendant[.]37
A difference of opinion also exists in other, lower federal
courts as to the scope of rule 15(c)(1)(C),38 and among state
courts with similar relation-back rules.39
Erdman Co. v. Phoenix Land & Acquisition, LLC40 is a good
example of a court’s allowing the addition of parties, rather
than just the substitution of parties, by construing “change”
to include “add.” In Erdman Co., the plaintiffs initially sued
the subcontractor of a project, Erdman Architecture and
Engineering Company, and then later amended their complaint
to also sue the general contractor, Erdman Company. The issue
was whether the amended complaint which added Erdman
Company as a defendant related back to the initial complaint.
37
Joseph v. Elan Motorsports Technologies Racing, 638 F.3d 555, 559-60
(7th Cir. 2011).
38
Compare Erdman Co. v. Phoenix Land & Acquisition, LLC, Nos.
2:10-CV-2045, 2:11-CV-2067, 2013 U.S. Dist. LEXIS 26440 (W.D. Ark.
Feb. 25, 2013) (unpublished order denying partial summary judgment),
and In re Greater Southeast Community Hosp. Corp. I, 341 B.R. 91 (D.C.
2006), with Telesaurus VPC, LLC v. Power, No. CV 07-01311-PHX-NVW,
2011 U.S. Dist. LEXIS 122623 (D. Ariz. Oct. 21, 2011) (unpublished
order granting motion to dismiss), and In re Hechinger Investment Co. of
Delaware, Inc., 297 B.R. 390 (D. Del. 2003).
39
Compare, e.g., Brooks v. Isinghood, 213 W. Va. 675, 584 S.E.2d 531(2003); Mullen v. Alarmguard of Delmarva, Inc., 625 A.2d 258 (Del.
1993); Cobb v. Stephens, 186 Ga. App. 648, 368 S.E.2d 341 (1988); and
Boudreau v. Gavel, No. CV-91-123, 1992 Me. Super. LEXIS 163 (Me.
Super. July 13, 1992) (unpublished order denying motion to amend), with
Kraly v. Vannewkirk, 69 Ohio St. 3d 627, 635 N.E.2d 323 (1994); Ray v.
Alexandria Mall, 434 So. 2d 1083 (La. 1983); Windscheffel v. Benoit, 646
S.W.2d 354 (Mo. 1983); and Gause v. Smithers, 384 S.C. 130, 681 S.E.2d
607 (S.C. App. 2009).
40
Erdman Co., supra note 38.
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966 285 NEBRASKA REPORTS
The federal district court addressed whether rule 15(c)(1)(C)
allowed adding parties or only changing (i.e., substituting)
parties. The court noted that although some courts took a nar-
row view of the rule’s language and concluded that adding
parties was not allowed, such a result was “contrary to the
general thrust of the rule: keeping parties from being drug into
suits late in the game without having had notice of the claims
against them.”41 The court relied on the Federal Practice and
Procedure treatise42 to conclude that interpretation of the rule
should be governed “by the general purpose of Rule 15(c)
notice, rather than a stilted and technical reading.”43 The
court referenced the 4th Circuit’s decision in Goodman, along
with the 11th Circuit’s decision in Makro Capital of America,
Inc. v. UBS AG,44 and Judge Becker’s partial concurrence
and partial dissent in Lundy v. Adamar of New Jersey, Inc.,45
as support for construing the rule’s language to include the
addition of parties.46 The court also emphasized that the 1991
amendments to the relation-back rule encouraged a liberal
construction.47 The court concluded that “‘[t]he lynchpin is
notice’” and that the other provisions of the rule provided the
requisite notice protection.48 The court concluded that rule
15(c)(1)(C) allowed both addition and substitution of parties
to relate back.49
41
Id. at *10.
42
6A Charles Alan Wright et al., Federal Practice and Procedure § 1498.2
(3d ed. 2010).
43
Erdman Co., supra note 38, 2013 U.S. Dist. LEXIS 26440 at *10.
44
Makro Capital of America, Inc. v. UBS AG, 543 F.3d 1254 (11th Cir.
2008).
45
Lundy v. Adamar of New Jersey, Inc., 34 F.3d 1173 (3d Cir. 1994) (Becker,
Circuit Judge, concurring in part, and in part dissenting).
46
See Erdman Co., supra note 38.
47
Id. (citing advisory committee note on 1991 amendments to federal rule
15(c)).
48
Id. at *12.
49
Id.
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GIBBS CATTLE CO. v. BIXLER 967
Cite as 285 Neb. 952Telesaurus VPC, LLC v. Power50 illustrates the reason-
ing behind construing rule 15(c)(1)(C) to allow the substi-
tution of parties, but not the addition of parties, to relate
back. Telesaurus VPC, LLC (Telesaurus), sued RadioLink
Corporation and Randy Power for alleged violations of the
Federal Communications Act. After the expiration of the stat-
ute of limitations, Telesaurus filed an amended complaint add-
ing Patricia Power, Randy’s ex-wife, as a defendant. Telesaurus
then later filed a second amended complaint and served it on
Patricia. The issue was whether Telesaurus’ second amended
complaint related back to its original complaint.
The federal district court noted that the issue turned on
whether Telesaurus’ amended pleading changed the party or
the naming of the party against whom a claim was asserted.51
The court noted that “[o]n its face, this language permits only
substitution, not addition, of parties.”52 Nevertheless, the court
recognized that courts were split over the scope of the rule
15(c)(1)(C)’s application. Finding no controlling precedent,
the court determined that Patricia’s interpretation prevailed
because hers was “the only reading supported by both the
language and the expressed purpose of the rule.”53 Regarding
the language, the court noted that rule 15(c)(1)(C)(ii) allows
relation back only where there was a “mistake concerning
the proper party’s identity,” which “necessarily implies an
‘improper party,’ [and] not simply some other party.”54 In
other words, the originally named defendant had to be an
improper party, and the new party had to be substituted in as
the proper party.
The court then undertook a lengthy analysis of rule
15(c)(1)(C)’s purpose, referencing the rules advisory commit-
tee’s commentary to the 1966 amendment. The court noted
that the main driver behind the amendment, which allowed
50
Telesaurus VPC, LLC, supra note 38.
51
See id.
52
Id. at *7.
53
Id. at *8.
54
Id. at *9.
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968 285 NEBRASKA REPORTS
amendments of parties, was lawsuits against the federal gov-
ernment where the “plaintiff mistakenly named . . . the wrong
officer or agency.”55 The amendment was meant to correct
that problem by “allowing the plaintiff to substitute the proper
party.”56 Thus, the amendment struck a “balance between let-
ting stale claims die and enforcing such claims against a
defendant whom the plaintiff failed to timely sue because the
plaintiff mistakenly believed that some other party caused the
alleged injury.”57 The court concluded that rule 15(c)(1)(C)’s
“placement of the proper defendant into the improper defend­
ant’s shoes has no relation to a scenario where the plaintiff
wants to bring in an additional party.”58
The Telesaurus VPC, LLC court recognized that other
authorities had concluded that the addition of parties was
permissible under the rule, but the court found those authori-
ties unpersuasive. For example, Moore’s Federal Practice59
(without acknowledging the split in authority) stated that the
rule “expressly allows amended pleadings that change or add
parties to relate back.”60 But the court countered that the rule
“‘expressly’” referred only to “change” and that taken in con-
text, “change” did not include “‘add.’”61 Federal Practice and
Procedure also favored relation back of an added party. But the
court noted that many of the cases cited in the treatise did “not
support its position, or [did] so only in dictum,” and that a “fair
number of [those] cases involve[d] pure substitution without
mention of addition.”62 Some of the cases, while allowing the
55
Id. (citing advisory committee note on 1966 amendments to federal rule
15(c)).
56
Id. at *10.
57
Id.
58
Id. at *11.
59
3 James Wm. Moore, Moore’s Federal Practice (3d ed. 2009).
60
Id., § 15.19[3][a] at 15-103.
61
Telesaurus VPC, LLC, supra note 38, 2011 U.S. Dist. LEXIS 122623 at
*12 n.2.
62
Id. at *14 (citing Joseph, supra note 37; Marks v. Prattco, Inc., 607 F.2d
1153 (5th Cir. 1979); and Bush v. Sumitomo Bank and Trust Co., Ltd., 513
F. Supp. 1051 (E.D. Tex. 1981)).
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GIBBS CATTLE CO. v. BIXLER 969
Cite as 285 Neb. 952addition of parties, took that position without addressing the
change/add distinction,63 and one case simply disposed of the
issue summarily by referring to Federal Practice and Procedure
in a footnote.64
The Telesaurus VPC, LLC court acknowledged that the
Fourth Circuit’s decision in Goodman was consistent with
Federal Practice and Procedure’s position. But the court noted
that Goodman’s resolution of the issue was unnecessary to
the case and disagreed with the Fourth Circuit’s reasoning.
The court reasoned that rule 15(c)(1)(C) “is not a set of fac-
tors to balance, with the most weight placed on the notice
requirement,”65 but instead “establishes elements which are
either satisfied or not.”66 The court reasoned that the liberal
policy in favor of amendments could not trump the language
of the rule.
Finally, the court took issue with those authorities which
had concluded that adding a party was “‘essentially no differ-
ent from changing a party.’”67 While the court recognized that
might be true in a vacuum, the change required by the rule “is
a change that takes an already ‘asserted’ claim and reassigns it
to a party that ‘knew or should have known’ it was ‘the proper
party.’”68 As such, the court concluded that the rule referred to
a substitution, rather than an addition.
We find the reasoning of Telesaurus VPC, LLC per-
suasive. The court’s analysis of the federal commentators
(and the decisions cited in support of their position) is on
point. Most important, the language of the rule controls, and
63
See Telesaurus VPC, LLC, supra note 38 (citing Abdell v. City of New
York, 759 F. Supp. 2d 450 (S.D.N.Y. 2010); Colombo v. S.C. Dept. of
Social Services, 221 F.R.D. 374 (E.D.N.Y. 2004); and Gabriel v. Kent
General Hosp. Inc., 95 F.R.D 391 (D. Del. 1982)).
64
See id. (citing Advanced Power Systems v. Hi-Tech Systems, 801 F. Supp.
1450 (E.D. Pa. 1992)).
65
Id. at *17.
66
Id. at *17-18.
67
Id. at *18 (quoting Lundy, supra note 45 (Becker, Circuit Judge, concurring
in part, and in part dissenting)).
68
Id. at *18.
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970 285 NEBRASKA REPORTS
§ 25-201.02(2) expressly applies only to amendments which
“change[] the party or the name of the party against whom
a claim is asserted.” The meaning of “change[]” is not inter-
preted in a vacuum, but in relation to the words around it.
Reading the language as a whole indicates that it refers to the
substitution of parties, rather than the wholesale addition of
parties. Though certain courts and commentators advocate for
a different approach—premised on the overriding importance
of notice—that approach ignores that the relation-back rule
“plainly sets forth an exclusive list of requirements,”69 rather
than factors to be weighed.
[3] Moreover, we do not read the U.S. Supreme Court’s
recent decision in Krupski v. Costa Crociere S. p. A.,70 a case
Gibbs relies on in its brief, as requiring a different conclusion.
The Krupski decision focused on the nature of “mistake” as
used in rule 15(c)(1)(C)(ii), and not the nature of “change” in
rule 15(c)(1)(C).71 And importantly, Krupski did not address
a situation where the plaintiff was attempting to add a party;
rather, the plaintiff was attempting to substitute the proper
party (Costa Crociere) for an improper party (Costa Cruise).72
That is not the case here. We hold that § 25-201.02(2) applies
only to an amendment that “changes the party or the name of
the party” and that refers to a substitution, rather than to an
addition, of parties.
CONCLUSION
For the foregoing reasons, we reverse the decision of the
district court.
R eversed.
McCormack, J., participating on briefs.
Heavican, C.J., not participating.
69
Krupski v. Costa Crociere S. p. A., ___ U.S. ___, 130 S. Ct. 2485, 2496,
177 L. Ed. 2d 48 (2010) (emphasis supplied).
70
Krupski, supra note 69.
71
See, id.; DeBois v. Pickoff, No. 3:09cv230, 2011 U.S. Dist. LEXIS 39041(S.D. Ohio Mar. 28, 2011) (unpublished decision).
72
See, Krupski, supra note 69; DeBois, supra note 71.