Amending Complaints, And The Relation Back Doctrine In Business Law Cases
In a typical business law case, there can be a lot of causes of action for one set of circumstances. For example, if an officer of a company were to steal from a company, you could have claims for things like conversion, breach of fiduciary duty, and fraud.
This is common in law—there are often multiple legal theories to sue under for one particular event or set of facts. But do you have to know all of them when the case starts? Or can you add causes of action—things to sue for—after you have filed the initial complaint?
You Can Amend Within Reason
As a general rule, of course, you should sue for everything that you can sue for from the beginning. But often, as you collect evidence or take depositions, you learn that there may be additional causes of action that you didn’t know existed when you started the case.
Normally, you can amend a complaint. This is when you ask a court to allow you to file a new complaint, which replaces the old one, and which adds the new causes of action that you just recently discovered. This is usually easy to get from a court, as the court understands that often, parties don’t have all the information they need from early on in the case.
Statute of Limitations Problems
But a special problem happens when the statute of limitations has expired on a claim. For example, the statute of limitations on most contract actions is five years. Let’s imagine you file your complaint for breach of contract after four years. Two years into the suit—now six years after the damages—you want to add a claim for breach of fiduciary duty.
The problem is that the statute of limitations for that claim has expired. Yes, your original complaint was filed timely, but that did not have the claim for breach of fiduciary duty.
Can you amend your complaint to add breach of fiduciary duty? The answer to that used to be no, because the time limit for that cause of action had expired. But courts nowadays have gotten a little more lenient.
Today, the rule is that if the new cause of action still relates back to, or stems from, the same set of facts that are stated in the original complaint, that the new cause of action can be added, even though the statute of limitations on that new cause of action has expired.
Of course, whether the new cause of action really does relate to the original set of facts, will largely depend on the judge. It’s always best not to take any chances, and to state all the facts as you know them in the original complaint, and name all the causes of action that you can, from the beginning.
Call the West Palm Beach business litigation attorneys at Pike & Lustig today to help you in your business or commercial litigation lawsuit.