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Mears v. Economy Brake Service

Decided: February 4, 1963.

EVERETT MEARS, PLAINTIFF-APPELLANT,
v.
ECONOMY BRAKE SERVICE, INCORPORATED, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT



Price, Sullivan and Lewis. The opinion of the court was delivered by Price, S.j.a.d. Sullivan, J.A.D. (concurring).

Price

By this appeal plaintiff challenges the propriety of an order of the Superior Court, Law Division, dismissing plaintiff's suit. The dismissal followed the court's refusal to permit plaintiff, after his alleged cause of action had been barred by the applicable section of the statute of limitations (N.J.S. 2A:14-2), to amend the complaint by inserting the name of "Economy Brake Service, a partnership," in place of the name "Economy Brake Service, Incorporated, a corporation of the State of New Jersey." The corporation (the correct name of which was Economy Brake Service) had been dissolved prior to March 28, 1960, the date plaintiff instituted his suit. In fact, the corporation had been dissolved by unanimous consent of the stockholders prior to the time when plaintiff's alleged cause of action arose on April 8, 1958. Plaintiff's reason for initially denominating Economy Brake Service as a corporation is not disclosed by the record.

By said suit plaintiff sought recovery of damages for personal injuries resulting from an automobile collision occurring on said last mentioned date. Plaintiff alleged that said accident was caused by defendant's negligent inspection and repair of a motor vehicle owned by one Wasserman and operated by plaintiff at the time of the accident. The complaint charged that defendant "was engaged in the business of auto repairs and more particularly in the installation service and repair of automotive brake and braking parts and devices," and that its alleged negligent inspection and repair of the motor vehicle's braking equipment, performed a few

days prior to the date of the aforesaid accident, was the proximate cause thereof.

The dismissal of plaintiff's action was based on the trial court's conclusion that the aforesaid partnership entity had not been legally served with process; had not properly been denominated as the defendant in the complaint; and that, as the two-year statutory period within which plaintiff's action might be instituted had expired long before the application to amend the complaint had been made, the action was no longer maintainable.

The sheriff's return showed service of the summons and complaint on March 31, 1960 upon "Economy Brake Service Incorporated * * * at its usual place of business 225 Elizabeth Ave., Newark, N.J." by serving "Meyer Bromberg, partner." Although it was conceded that the corporation had been dissolved by unanimous consent of its stockholders on August 20, 1957, an answer was filed on behalf of "Economy Brake Service, Incorporated, a corporation of the State of New Jersey, of 225 Elizabeth Avenue, Newark, New Jersey." Such answer was not filed until May 20, 1960 as a result of a written stipulation dated April 19, 1960, extending the time. The stipulation was entered into between the attorneys for plaintiff and the attorneys for defendant describing themselves therein as attorneys for "Economy Brake Service." The answer denied the allegations of negligence contained in the complaint, set forth certain affirmative defenses, but made no mention of the fact that the corporation had been dissolved in 1957. That information was disclosed to plaintiff on September 28, 1961 during the course of a deposition by Mr. Bromberg. The deposition was taken pursuant to a written notice given by plaintiff requiring the attendance for that purpose of the "General manager or person in charge of the brake repair service of said corporation on April 8, 1958."

The record before us reveals that following the dissolution of the corporation by action of its stockholders the same type of business had been continued at the same address, 225 Elizabeth Avenue, Newark, New Jersey, and under the same

name "Economy Brake Service" by a partnership formed by Bromberg and one Allen Cross, two of the three former stockholders of the dissolved corporation. The third stockholder, one Frank Barton, was described in Bromberg's deposition as "Inactive at all times. Just a silent stockholder." It was conceded that the partnership was conducting a "motor vehicle brake business, with related services," at the above address at the time when the allegedly defective work was performed, as well as when the accident occurred, and also at the time of the service of the summons and complaint.

At the pretrial conference held October 4, 1961, the court granted plaintiff's application to amend his complaint "to assert the correct name of the defendant" Economy Brake Service, a partnership. The aforesaid action of the trial court was reflected in paragraph 6 of the pretrial order as follows:

"6. The plaintiff seeks to amend his complaint to assert the correct name of the defendant from Economy Brake Service Inc. to Economy Brake Service, process having been made on Economy Brake Service, Inc. ; services [ sic ] was effectuated upon one Meyer Bromberg, and the sheriff indicates that said Meyer Bromberg was a partner. The amendment is granted.

The defendant is given leave to file such appropriate motions as is felt are applicable to the Amendment for the change of name of this defendant. This also applies to Economy Brake Service, a partnership. It is also represented that the attorneys for defendant Economy Brake Service, Inc. do not appear for Economy Brake Service, a partnership, and that the ruling of the Court to amend the name of the defendant is over objection. Right is also reserved to Economy Brake Service, a partnership, to object to the Court's order."

The pretrial order also contained plaintiff's allegations as to the circumstances surrounding the happening of the aforesaid accident, and plaintiff's assertion that due to the defective work of the defendant the vehicle he was operating on the public highway "was caused to veer suddenly into the opposite lane of traffic" and the ensuing accident occurred.

The pretrial order, in addition to expressing defendant's denial of any claim of negligence and setting forth the

separate defenses to the plaintiff's complaint, specifically asserted that the defendant corporation had been dissolved as aforesaid.

Under date of November 29, 1961 defendant applied to the court for an order, returnable December 8, 1961, "to amend paragraph 6 of the Pretrial Order, heretofore entered on October 4, 1961, which paragraph substituted Economy Brake Service, a partnership, for the defendant Economy Brake Service, Incorporated, a corporation of the State of New Jersey." The trial court reserved decision on the motion and under date of January 16, 1962 rendered an opinion which, after reciting the aforesaid amendment and the action at the pretrial conference, concluded as follows:

"It further appears from the briefs, and from the arguments of counsel, that the first opportunity that the plaintiff had to discover that Economy Brake Service was not a corporation was on September 28, 1961 when depositions were taken. It appears from the pleadings and the briefs of counsel that Economy Brake Service, a Corporation, did not exist at the time of the filing of the action, or even at the time when the institution of the action commenced, to wit, April 8, 1958, and that prior to 1958, to wit, in 1957, Economy Brake Service, a Corporation, was changed to a Partnership known as Economy Brake Service.

The basic question before the Court is whether the plaintiff can at this time defeat the vested rights of the defendant in the bar of the Statute of Limitations by substituting the name of a partnership for the name of a Corporation. * * *"

The court's opinion then noted that the "present suit was instituted approximately one week before the right of the cause of action would have been barred by the Statute of Limitations" and concluded its opinion with the following finding:

"Inasmuch as the amendment would [a]ffect the substantial and vested rights of the defendant the motion to substitute Economy Brake Service, a Partnership for the named defendant, Economy Brake Service Incorporated, is denied, the court feeling that it is bound by the decisions cited in this opinion to deny the amendment since it would have the effect of bringing in a new party after the Statute of Limitations had tolled, rather than merely correcting the name of the defendant."

In accordance with the trial court's conclusions the aforesaid order dismissing plaintiff's complaint was entered on February 16, 1962. The present appeal followed. The challenged order, after reciting the appearances for the respective parties, was as follows:

"* * * and it appearing that the complaint originally filed in this action having denominated Economy Brake Service, Inc., a corporation, as the defendant, and it appearing that process in this action was served upon one Meyer Bromberg, the Sheriff's return indicating that process was served on 'Meyer Bromberg, partner,' and it appearing that on October 4, 1961, on motion of the plaintiff and over the defendant's objection, the pretrial order, in paragraph '6' thereof, amended the complaint so as 'to assert the correct name of the defendant from Economy Brake Service, Inc. to Economy Brake Service,' and the defendant having reserved the right to move for reconsideration of said amendment, and having now moved to amend said paragraph '6' of the pretrial order by deleting said amendment, and the Court having considered the pleadings, the briefs and arguments of counsel, and the Court having concluded that the defendant's motion should be granted because the statute of limitations had then run for the addition or substitution of new parties, as more fully set forth in the ...


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