Osorio v. StepStone Hospitality, Inc.

Background

Jorge Osorio alleged that he was terminated from his employment at The Northland Inn on June 6, 2012, after suffering a workplace injury and filing a workers’ compensation claim. He alleged that supervisors treated him unfairly after the claim, including by berating him publicly and refusing to accommodate his medical restrictions. The workers’ compensation claim was settled on April 18, 2012.

Osorio began the lawsuit in state court in April 2018 by serving Minneapolis Hotel Acquisition Group, LLC (MHAG). The original complaint alleged that MHAG was the successor to StepStone Hospitality, Inc. After learning that StepStone allegedly retained liabilities from before MHAG’s acquisition, Osorio amended the complaint and served StepStone on June 8, 2018. The defendants then removed the case to federal court.

Motion and arguments

StepStone moved to dismiss the amended complaint as untimely. The parties agreed that Minnesota’s six-year limitations period applied and began on the date of Osorio’s termination. The court determined that the period expired on June 6, 2018, making service on StepStone two days late.

Osorio argued that the amended complaint related back to the original complaint under Federal Rule of Civil Procedure 15(c)(1)(C). That rule allows an amendment changing the defendant to relate back when the claim arises from the same events, the added party received timely notice, the party would not be prejudiced in defending the case, and the plaintiff made a mistake about the proper party’s identity.

StepStone argued that Osorio had not shown the required mistake. It did not dispute that it learned of the potential action within the required service period or argue that it would be prejudiced in defending the case.

Court’s analysis

The court relied on the Supreme Court’s decision in Krupski v. Costa Crociere S.p.A. Under that decision, a plaintiff can make a qualifying mistake by knowing that two entities exist but misunderstanding their factual and legal relationship. The court found that Osorio initially sued MHAG while apparently believing that MHAG had acquired The Northland Inn’s liabilities from StepStone. The original complaint also identified MHAG as StepStone’s successor.

The court concluded that Osorio did not deliberately choose MHAG instead of StepStone; rather, he misunderstood the relationship between the companies and therefore made a mistake concerning the proper party. The court also concluded that StepStone knew of the mistake within the ninety-day service period under Federal Rule of Civil Procedure 4(m). The court stated that Osorio’s delay in serving the amended complaint did not prevent relation back because the requirements of Rule 15(c) were otherwise satisfied.

Disposition

The court held that Osorio met all the requirements of Rule 15(c)(1)(C), that the amended complaint related back to the original complaint, and that the claim against StepStone could proceed as timely. Judge David S. Doty ordered that StepStone’s motion to dismiss the amended complaint was denied.