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Otchy v. City of Elizabeth Board of Education

October 15, 1999

ANN ELIZABETH OTCHY AND MICHAEL OTCHY, HER HUSBAND, PLAINTIFFS-APPELLANTS,
v.
CITY OF ELIZABETH BOARD OF EDUCATION, DEFENDANT-RESPONDENT.



Before Judges Baime, Brochin and Eichen.

The opinion of the court was delivered by: Eichen, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 15, 1999

On appeal from the Superior Court of New Jersey, Law Division, Union County.

Plaintiffs Ann Elizabeth Otchy and Michael Otchy, her husband, *fn1 appeal from an order dismissing their complaint against defendant Elizabeth Board of Education (the Board) brought under the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 to -12-3 (the Act) on the ground that the statute of limitations *fn2 barred the action. The court determined that the relation-back rule, R. 4:9-3, could not save the action, and that plaintiffs' bankruptcy did not extend the statute or suspend its running. We affirm.

The facts surrounding this appeal are uncomplicated. On September 22, 1995, plaintiff allegedly fell on a sidewalk abutting the Elizabeth High School. On November 20, 1995, Otchy served a notice of claim on the Clerk of the Board pursuant to N.J.S.A. 59:8-3 and -4. Following its investigation, by letter dated September 3, 1996, the Board's insurance company advised plaintiffs' counsel it was rejecting the claim. A few months later, on November 6, 1996, plaintiffs filed a bankruptcy petition under Chapter 7 of the Bankruptcy Code.

On December 16, 1996, plaintiffs' counsel received a letter from the trustee in bankruptcy pointing out that plaintiff's personal injury claim was an asset of the estate, and requested information concerning the claim. In the letter, the trustee cautioned, among other things, that counsel could not represent plaintiff in any action brought to recover personal injury damages, or settle the claim without his consent, but that if the trustee determined the claim had no value to the estate, he would advise counsel of his intention to abandon the estate's interest in it. *fn3

On February 18, 1997, plaintiffs received a discharge of their liabilities from the bankruptcy court. Seven months later, on September 17, 1997, three days before the limitations period was to expire, plaintiffs' counsel contacted the trustee in bankruptcy concerning the status of the claim, and was allegedly advised that the bankruptcy case was "virtually closed" and that "[counsel] could proceed."

On September 19, 1997, plaintiffs' counsel filed a complaint against the City of Elizabeth (the City) and various "John Does" alleging that plaintiff fell on a sidewalk abutting the Elizabeth High School. The complaint also alleged that the property was owned, maintained, and controlled by the City, and that the City's negligence caused plaintiff to sustain serious injuries. The record reflects that the property is not owned by the City, but by the Board. Certifications filed by plaintiff and her counsel indicate that they did not specifically name the Board as a defendant in the complaint because they believed the Board was not a separate legal entity, but was part of the City, and, therefore, naming the Board was unnecessary.

By order entered on January 23, 1998, the Law Division granted the City's motion to dismiss the complaint on the ground that Otchy had failed to serve a notice of claim on the City as required by N.J.S.A. 59:8-3 and 4, but granted plaintiffs' cross-motion for leave to file an amended complaint adding the Board as a party defendant.

On April 3, 1998, the Board moved successfully to dismiss plaintiffs' complaint on the ground that the statute of limitations had run. In granting the motion, the court determined that the mistaken belief of plaintiff or plaintiff's counsel that the City was the proper legal entity to sue did not justify application of the relation-back doctrine under R. 4:9-3 to defeat the limitations bar. The court also concluded that the Bankruptcy Code, 11 U.S.C. § 108(a), did not extend the running of the statute of limitations beyond the two years provided in N.J.S.A. 2A:14-2.

Plaintiffs appeal, making numerous arguments, some of which were not presented to the Law Division Judge. We elect to address a few of the more salient ones. Plaintiffs argue that because R. 4:9-3 reflects a liberal amendment policy, and because their naming of the City as a defendant in the original complaint instead of the Board was a simple mistake, the court should have allowed the amended complaint to relate back to the original filing of the complaint. They also argue, for the first time in their reply brief, that the relation-back rule applies because, at the very least, the Board had constructive notice of the institution of their action against the City by reason of the "interdependence" of the two entities. Further, they contend that their prompt filing of the amended complaint against the Board constituted "substantial compliance" with the requirements of the Act; and that, in light of the absence of any demonstrated prejudice to the Board, equitable principles dictate that the amendment relate back to the original filing of the complaint.

Plaintiffs also assert that the Bankruptcy Code tolled the running of the statute of limitations; that they were "prohibited" from filing suit within the statute by the bankruptcy trustee; and that 11 U.S.C. ยง 108(a) extended the statute for two years from the filing of their Chapter ...


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