Opinion
Civ. File No. 03-3502 (PAM/RLE)
April 9, 2004
MEMORANDUM AND ORDER
This matter is before the Court on Defendant Neuman Pools, Inc.'s Motion for Summary Judgment. For the reasons that follow, Defendant's Motion is denied.
BACKGROUND
Plaintiffs claim that they were injured by the release of toxic fumes at a hotel in the Wisconsin Dells. They filed the lawsuit less than a year after the injuries against the hotel and the company that operated the hotel. The initial lawsuit did not name Neuman Pools, Inc. ("Neuman") as a Defendant. Indeed, Neuman was not named as a Defendant until the filing of the Second Amended Complaint, 29 months after the injuries occurred. Neuman contends that Plaintiffs' claims against Neuman are untimely. Neuman argues that Minnesota's two-year statute of limitations should apply. Plaintiffs and Defendant Stranco, Inc., argue that Wisconsin's three-year limitations period applies.
There seems to be a dispute as to whether the name of the hotel is Great Bear Lodge or Great Wolf Lodge. Plaintiffs have not sought to correct the caption, and the Court will therefore assume that the correct name of the hotel is Great Bear Lodge.
DISCUSSION
In diversity cases, the Court should apply the choice-of-law principles of the forum state. See Independent Sch. Dist. No. 197 v. W.R. Grace Co., 752 F. Supp. 286, 298 (D. Mim. 1990). Minnesota's choice-of-law rules are well settled. The Court initially must determine whether the choice of one state's law over the other will determine the outcome of the case. See Myers v. Gov't Employees Ins. Co., 225 N.W.2d 238, 241 (Minn. 1974). In the instant case, the laws of Minnesota and Wisconsin differ to such an extent that the choice of one over the other is outcome-determinative. If Wisconsin law applies, Plaintiffs' claims against Neuman are timely. If Minnesota law applies, Plaintiffs' claims against Neuman may be untimely.
The Court sought supplemental briefing on the issue of whether the filing of the Second Amended Complaint related back to the filing of the original Complaint under Fed.R.Civ.P. 15(c) and the Supreme Court's decision in Schiavone v. Fortune, 477 U.S. 21 (1986). Neuman contends that the relation-back doctrine applies only if Plaintiffs were mistaken about Neuman's identity, not if Plaintiffs merely did not know Neuman's identity. Plaintiffs contend that further discovery is necessary to determine whether Neuman had sufficient notice of the litigation to apply the holding in Schiavone. The Court will defer a decision on the relation-back issue and will first consider this Motion as presenting a choice-of-law question as to which state's statute of limitations applies.
Neuman argues that the Court need not engage in a choice-of-law analysis because, in Minnesota, statutes of limitations are procedural, not substantive. See In re Daniel's Estate, 294 N.W. 465, 469 (Mirm. 1940). If the law at issue is procedural, the Court simply applies the forum state's law and does not proceed to the choice-of-law analysis. Davis v. Furlong, 328 N.W.2d 150, 153 (Mirm. 1983). There is no dispute that Wisconsin considers its statutes of limitations to be substantive, not procedural. Betthauser v. The Med. Protective Co., 493 N.W.2d 40, 42-43 (Wis. 1992). Because the conflict in this case is between an arguably procedural rule and an undeniably substantive rule, Plaintiffs urge the Court to engage in the choice-of-law analysis.
The Minnesota Court of Appeals has recently addressed whether a court should engage in a choice-of-law analysis when the law at issue is a statute of limitations. Danielson v. Nat'l Supply Co., 670 N.W.2d 1, 4-5 (Mim. Ct. App. 2003). The Danielson court first noted that the Minnesota Supreme Court has been inconsistent in characterizing statutes of limitations as procedural. Id. at 5. Indeed, the Minnesota Supreme Court has occasionally evaluated a choice of statutes of limitations under the five-factor choice-of-law analysis from Milkovich v. Saari, 203 N.W.2d 408, 412 (Mim. 1973), thus implying that at least for choice-of-law purposes, statutes of limitations may be substantive. Myers v. Gov't Employees Ins. Co., 225 N.W.2d 238, 241 (Minn. 1974).
In Myers, the Minnesota Supreme Court was faced with a conflict between Louisiana and Minnesota statutes of limitations. The court determined that the Louisiana statute of limitations, at least as it related to the cause of action at issue, was substantive. Id. The court therefore applied the five-factor Milkovich test in its choice-of-law analysis. Id. at 242-43. Although the court did not discuss the reason behind its decision to apply the Milkovich factors to the choice of a statute of limitations, it is clear that the determinative fact was that Louisiana characterized the law at issue as substantive. Myers thus stands for the proposition that when one state characterizes its law as procedural and another state characterizes its law as substantive, courts should engage in the Milkovich analysis when determining which law to apply.
Moreover, as the court noted in Danielson, the trend is for courts to apply the choice-of-law analysis when evaluating which state's statute of limitations should apply. Danielson, 670 N.W.2d at 5 (quoting Restatement (Second) of Conflict of Laws sec. 142 cmt. e (stating that courts "no longer characterize the issue of limitations as ipso facto procedural and hence governed by the law of the forum")). The Danielson court engaged in the choice-of-law analysis to determine that Minnesota's statute of limitations, rather than the statutes of limitations from Arizona or Texas, should apply. Id. at 6-7.
The distinction between cases in which both states' laws are procedural or both are substantive and cases in which one state's law is procedural and one state's law is substantive makes both logical and practical sense. Because Wisconsin regards its statutes of limitations as substantive, comity dictates that this Court treat the law as substantive and engage in the choice-of-law analysis to determine whether Wisconsin's substantive law should apply.
The choice-of-law analysis entails consideration of five factors.Milkovich. 203 N.W.2d at, 412. These factors are:
1. predictability of result;
2. maintenance of interstate order;
3. simplification of the judicial task;
4. advancement of the forum's governmental interests; and
5. the better rule of law.
See id. (citing Robert Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N.Y.U. L.Rev. 267 (1966)).
1. Predictability of Result
This factor usually relates to consensual transactions, not to torts.Nesladek v. Ford Motor Co., 876 F. Supp. 1061, 1068 (D. Minn. 1994). Although the Danielson court pointed out that this factor may apply to certain tort cases, such as cases that implicate a party's choice of insurance coverage, this is not such a case. Thus, this factor does not apply to this tort case.
2. Maintenance of Interstate Order
This factor requires that the state whose laws are applied have sufficient contacts with the facts in issue. Here, the events that allegedly led to Plaintiffs' injuries took place entirely in Wisconsin. The hotel is located in Wisconsin, the pool was constructed in Wisconsin, and most of the companies who built the pool are Wisconsin companies. Minnesota's only contact with this action is that Plaintiffs are residents of Minnesota. This factor weighs in favor of the application of Wisconsin law.
3. Simplification of the Judicial Task
This Court is able to apply either the law of Minnesota or the law of Wisconsin. This factor does not weigh in favor of either state's law.
4. Advancement of the Forum's Governmental Interest
This factor requires the Court to consider not only Minnesota's governmental interest in the application of Minnesota law, but also Wisconsin's public policy.See Gate City Fed. Sav. Loan Ass'n v. O'Connor, 410 N.W.2d 448, 451 (Minn.Ct.App. 1987). As Minnesota courts have recognized, this factor implicates "the relative policy interests of the two states" whose laws conflict. Lommen v. East Grand Forks, 522 N.W.2d 148, 152 (Minn.Ct.App. 1994).
"Minnesota places great value on compensating tort victims. We have even refused to apply our law when the law of another state would better serve to compensate a tort victim." Jepson v. Gen. Cas. Co. of Wis., 513 N.W.2d 467, 472-73 (Minn. 1994). Minnesota's interest is advanced if Wisconsin's law is applied, because if Minnesota's law is applied, Plaintiffs will not be compensated for their alleged injuries. Wisconsin's public policy is reflected in its three-year statute of limitations. The application of Wisconsin's statute of limitations will allow Plaintiffs' claims of negligence against Neuman to go forward, thus advancing both Minnesota's and Wisconsin's governmental interests.
This factor weighs in favor of the application of Wisconsin law.
5. The Better Rule of Law
This consideration has been given "no significant weight" by the Minnesota Supreme Court in many years. Lommen, 522 N.W.2d at 153 n. 4. This Court will not presume to determine whether a three-year or a two-year statute of limitations for negligence claims is the "better" rule of law. This factor is not relevant to the Court's consideration.
6. Conclusion
All of the five Milkovich factors are either neutral or weigh in favor of the application of Wisconsin law. Thus, Wisconsin law applies, and Plaintiffs' claims against Neuman are timely. Neuman's Motion must be denied.
CONCLUSION
For the foregoing reasons, and upon all of the files, records, and proceedings herein, the Court concludes that Wisconsin's three-year statute of limitations governs this action and that Plaintiffs' claims are therefore timely. Accordingly, IT IS HEREBY ORDERED that Defendant's Motion for Summary Judgment (Clerk Doc. No. 28) is DENIED.