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16. Is the court likely to allow the car manufacturer to add the contribution claim?
The car manufacturer first learned of the faulty bolts on August 1, 2009. Six months after filing its lawsuit, the car manufacturer decided to amend with a contribution claim against the bolt manufacturer as a result of the faulty bolts.
State A law provides a five-year statute of limitations for contract claims and a three-year statute of limitations for tort claims. Under State A law, the statute of limitations for contractual indemnification and tortious contribution lawsuits start to run when the car manufacturer first learns of the faulty bolts.
On June 1, 2012, a car manufacturer properly sued a bolt manufacturer in federal court in State A based on diversity. The car manufacturer uses the bolt manufacturer's bolts to secure the wheels on the cars that it makes. The car manufacturer is seeking contractual indemnification for losses it sustained from lawsuits concerning cars whose wheels detached during transit due to faulty bolts.
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Sometimes, the statute of limitations runs out between the filing of the original complaint and the amendment. To avoid a time bar, a litigant may argue that their amended pleading «relates back» to the date of the original pleading. An amendment relates back to the date of the original pleading when the claim or defenses asserted in the amended pleading arose out of the conduct, transaction, or occurrence set out in the original pleading.
C is correct. The issue here is whether the car manufacturer should be permitted to add the contribution claim, and if so, on which basis. FRCP 15 allows a plaintiff to amend a pleading after 21 days have passed if the amendment «relates back» to the date of the original pleading because it arose out of the conduct, transaction, or occurrence set out in the original complaint.
Here, the court should allow the car manufacturer to amend with a contribution claim against the bolt manufacturer because it arose out of the same conduct, transaction, or occurrence as the properly-filed indemnification claim in the complaint. FRCP supports an extremely liberal policy on the amendment of pleadings, and the court will grant leave to amend when justice so requires unless actual prejudice will result to the other party.
A is incorrect. The «know or should have known» rule applies to changing parties, not amending an existing complaint with a related claim, which is subject to the «relation back» rules, as stated above.
B is incorrect. Although the car manufacturer did not file its contribution claim within three years of learning of the faulty bolts, the court will likely find that it relates back to the date of filing the original indemnification claim and no statute of limitations analysis is required.
D is incorrect. This answer choice states the correct conclusion with the incorrect legal reasoning. The court should allow the car manufacturer to amend the complaint with the contribution claim, not because of the statute of limitations, but because of the «relation back» doctrine. The five-year statute of limitations applies to State A contract claims, but this contribution claim should not be considered a separate lawsuit, but an additional claim arising out of the existing complaint.