Andrews v. Lakeshore Rehabilitation Hospital

140 F.3d 1405, 40 Fed. R. Serv. 3d 1026, 1998 U.S. App. LEXIS 9764, 73 Empl. Prac. Dec. (CCH) 45,405, 76 Fair Empl. Prac. Cas. (BNA) 1617, 1998 WL 244248
CourtCourt of Appeals for the Eleventh Circuit
DecidedMay 15, 1998
Docket96-7080
StatusPublished
Cited by95 cases

This text of 140 F.3d 1405 (Andrews v. Lakeshore Rehabilitation Hospital) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Andrews v. Lakeshore Rehabilitation Hospital, 140 F.3d 1405, 40 Fed. R. Serv. 3d 1026, 1998 U.S. App. LEXIS 9764, 73 Empl. Prac. Dec. (CCH) 45,405, 76 Fair Empl. Prac. Cas. (BNA) 1617, 1998 WL 244248 (11th Cir. 1998).

Opinions

HULL, Circuit Judge:

Plaintiff Janice Andrews brought racial discrimination and retaliation claims against her employer under section 1981. Plaintiff appeals the district court’s sua sponte dismissal of her retaliation claim as not cognizable under section 1981. Plaintiff also appeals the district court’s subsequent order granting HealthSouth’s 12(b)(6) Motion to Dismiss her racial discrimination claim against HealthSouth and denying Plaintiffs Motion to Join LSSI as a party. After review, we reverse.

I. FACTUAL BACKGROUND

A.LSSI and HealthSouth

Plaintiff worked at Lakeshore Rehabilitation Hospital (“the Hospital”) from 1980 until her termination on February 14, 1994. During that time, Lakeshore Foundation (“the Foundation”) owned and operated the Hospital. The Foundation contracted with Lake-shore Systems Service, Inc. (“LSSI”) to provide administrative services to the Hospital.

After Plaintiffs termination, the Foundation leased the Hospital building and equipment to LSSI on October 1, 1994, and LSSI employed all Hospital employees. LSSI also operated the Hospital under the same name of “Lakeshore Rehabilitation Hospital.” LSSI’s parent company was ReLife, Inc. After LSSI began operating the Hospital, ReLife merged with HealthSouth Corporation (“HealthSouth”). Thus, HealthSouth became LSSI’s parent company.

B. Complaint Served on LSSI’s Hospital

Plaintiffs Complaint names “Lakeshore Rehabilitation Hospital” as the sole Defendant. The Complaint was filed on December 21, 1995, and delivered by certified mail on January 4, 1996, to the Hospital’s address at Lakeshore Rehabilitation Center, 3800 Ridgeway Drive, Homewood, Alabama.1 At this point, LSSI was leasing and operating the Defendant Hospital as LSSI’s business.

The Defendant Hospital’s Answer, however, states that it is filed by “Lakeshore Foundation, successor-in-interest to Jefferson Tuberculosis Sanatorium d/b/a Lake-shore Hospital.” The record does not indicate how the Complaint got from the Defendant Hospital, operated by LSSI, to the Foundation, the prior operator. In any event, the Answer admits that the Defendant Hospital was Plaintiffs employer and is an entity subject to suit. Even though Plaintiff was requesting reinstatement at the Defendant Hospital, the Answer did not assert that Plaintiff had sued the wrong entity or failed to join an indispensable party.

C. District Court Sua Sponte Dismisses Retaliation Claim

As the first affirmative defense, the Defendant Hospital’s April 26 Answer asserts that Plaintiff failed to state a claim upon which relief could be granted. No party as yet had filed a motion to dismiss. On May 6, howev[1407]*1407er, the district court sua sponte dismissed Plaintiffs retaliation claim as not cognizable under section 1981.2 The case proceeded on the racial discrimination claim alone.

D. Plaintiffs Motion to Amend Complaint to Add HealthSouth

The parties filed a “Report of Parties’ Planning Meeting,” in which the parties jointly agreed that “Plaintiff(s) should be allowed until October 1, 1996 to join additional parties and to amend the pleadings.” Adopting that agreement, the district court’s scheduling order states as follows: “Joinder of additional parties-Plaintiff(s) shall have until 10/01/96 to join additional parties. Defendants shall have until 11/01/96 to join additional parties.”

Although Plaintiffs Complaint was filed timely against the Defendant Hospital on December 21, 1995, the statute of limitations expired on February 14, 1996. On August 23, 1996, Plaintiff filed a Motion to Amend the Complaint to add HealthSouth as a defendant, which the district court immediately granted on August 29 in light of the scheduling order allowing such joinder. Defendant HealthSouth filed a verified Answer and a separate Motion to Dismiss based on, inter alia, the statute of limitations and Plaintiffs failure to join an indispensable party, namely LSSI.

E. Plaintiffs Motion to Add LSSI

As soon as HealthSouth’s September 16 verified Answer revealed that LSSI was operating the Defendant Hospital, Plaintiff filed a September 30 Motion to Join LSSI as a defendant. Because this Motion also was filed before the court’s deadline for adding parties, the district court’s order found that the Motion to Add LSSI was “timely filed.” Regarding LSSI, the district court’s order states, “[a]s an initial matter this court must determine whether the applicable statute of limitations has expired, because if the statute has not expired then the motions to add additional defendants were timely filed.”

Since HealthSouth was a party already and the court found that Plaintiffs Motion to Add LSSI was “timely filed,” the district court’s order treated both HealthSouth and LSSI as added Defendants and proceeded to examine the sole issue of whether Plaintiffs claims against them were barred by the statute of limitations. Thus, we review whether Plaintiffs claims against HealthSouth and LSSI are barred by the statute of limitations.

II. STATUTE OF LIMITATIONS

A. Applicability of the Statute of Limitations

Plaintiff asserts that the statute of limitations does not apply because her amendments against HealthSouth and LSSI fall under Rule 25, which allows substitution of parties when a transfer in interest has occurred. Fed.R.Civ.P. 25(c). However, as the district court explained, Rule 25(c) applies only to transfers of interest occurring during the pendency of litigation and not to those occurring before the litigation begins. See National Ind. Theatre Exhibitors, Inc. v. Buena Vista Distrib. Co., 748 F.2d 602, 610 (11th Cir.1984); Mizukami v. Buras, 419 F.2d 1319, 1320 (5th Cir.1969). In this case, Rule 25(c) does not apply because any transfer of interest in the Defendant Hospital to LSSI and HealthSouth occurred before the litigation began. Plaintiff cites two cases, but neither involves a transfer of interest prior to litigation. See Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1357 (11th Cir.1994) (defendant’s assets transferred during the litigation to the substituted party); In re National Airlines, Inc., 700 F.2d 695, 696 (11th Cir.1983) (enforcing a decree against a company that acquired the original defendant after the decree was entered). The district court correctly concluded that Rule 25(c) does not save Plaintiffs amendments from the statute of limitations.

[1408]*1408Plaintiff also argues that she avoids the statute of limitations because joining HealthSouth and LSSI was appropriate under Rule 19, which calls for joinder of parties needed for just adjudication, or under Rule 21, which allows the district court to order joinder “on such terms as are just.” Fed. R.Civ.P. 19, 21.

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140 F.3d 1405, 40 Fed. R. Serv. 3d 1026, 1998 U.S. App. LEXIS 9764, 73 Empl. Prac. Dec. (CCH) 45,405, 76 Fair Empl. Prac. Cas. (BNA) 1617, 1998 WL 244248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/andrews-v-lakeshore-rehabilitation-hospital-ca11-1998.