1 of 202 DOCUMENTS

TURNER COMPANY


A. SCHONBEK & CO., INC.


NORANDA ALUMINUM, INC.


GENERAL MOTORS CORP., GM ASSEMBLY DIV.


ALLIED PLANT MAINTENANCE CO. OF OKLAHOMA, INC.


CLEMENT FOOD COMPANY


MILLCON CORPORATION


FWA DRILLING COMPANY, INC.


CCI, INC.


GENERAL ELECTRIC COMPANY


CONSOLIDATED ALUMINUM CORPORATION


THE BRONZE CRAFT CORPORATION


CARGILL, INC.


CHAPMAN CONSTRUCTION CO., INC.


GALLO MECHANICAL CONTRACTORS, INC.


SPECIAL METALS CORPORATION


WILLAMETTE IRON AND STEEL COMPANY


NASHUA CORPORATION


WESTINGHOUSE ELECTRIC CORPORATION


RESEARCH-COTTRELL, INC.


ROCKWELL INTERNATIONAL CORPORATION


NEWPORT NEWS SHIPBUILDING & DRYDOCK CO.


NEWPORT NEWS SHIPBUILDING & DRYDOCK CO.


BUNKOFF CONSTRUCTION CO., INC.


GENERAL MOTORS CORPORATION, FRIGIDAIRE DIVISION


HARRIS BROTHERS ROOFING CO.


GENERAL DIVERS COMPANY


ORMET CORPORATION


R. ZOPPO CO., INC.


COEUR D'ALENE TRIBAL FARM


L. A. DREYFUS COMPANY


CMH COMPANY, INC.

OSHRC Docket No. 78-5954

Occupational Safety and Health Review Commission

November 24, 1980

[*1]

Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

Francis V. LaRuffa, Regional Solicitor, U.S. Department of Labor

Frank P. McGarry, for the employer

OPINION:

DECISION

BY THE COMMISSION:

A decision of Administrative Law Judge David J. Knight is before the Commission for review pursuant to section 12(j) n1 of the Occupational Safety and Health Act of 1970, 29 U.S.C. 651-678 ("the Act"). Judge Knight denied a motion by the Secretary of Labor ("Secretary") to substitute Carhar Company, Inc. ("Carhar") as Respondent and dismissed citations issued to the named Respondent, CMH Company, Inc. ("CMH"). The Secretary's petition for discretionary review of the judge's decision was granted by Commissioner Cottine. Review was directed on all issues raised in the petition including the following:

Whether the Administrative Law Judge erred in denying the Secretary's motion under Fed. R. Civ. P. 15(c) to substitute Carhar Company, Inc., for the named Respondent, CMH Company, Inc., on the grounds that the Secretary inexcusably neglected to ascertain the proper Respondent, and that a new party may not be substituted after the expiration [*2] of six months following the occurrence of the alleged violation.

For the reasons that follow, we reverse the judge's decision and remand for further proceedings.

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n1 29 U.S.C. 661(i).

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I

On August 31, 1978, at a construction site in the town of Hamburg, New York, two workers, Edward Harmon and Charles Heist, were found dead at the bottom of a manhole which was part of a sewer line being installed for the Erie County Sewer Authority. From August 31 to November 15, 1978, compliance officers from the Occupational Safety and Health Administration ("OSHA") inspected the worksite. As a result of this inspection, on November 21, 1978, CMH was cited for two serious violations of section 5(a)(1) of the Act, n2 a serious violation of the standard at 29 C.F.R. 1926.21(b)(6)(i), a repeated violation of the standard at 29 C.F.R. 1926.152(g)(9), and an other-than-serious violation of the standard at 29 C.F.R. 1926.150(c)(1)(vi).

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n2 The Secretary alleged that Respondent was in serious violation of 5(a)(1), the Act's "general duty clause," for failing to monitor a manhole for toxic gas and oxygen deficiency as well as for failing to provide instruments to accomplish this monitoring.

[*3]

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CMH contested the citations. In its answer, CMH summarily denied "each and every allegation" of the Secretary's complaint. A hearing was held before Administrative Law Judge David J. Knight.

The Secretary's denomination of CMH as the Respondent in the citations was based upon information contained in a sworn statement of the labor foreman at the worksite, Raymond Yackle. This statement was taken by the Hamburg police department a few hours after discovery of the bodies of the two dead workers and was later made available to OSHA. In this statement, Mr. Yackle stated that he was employed by "CMH Contracting Company" as a labor foreman. According to his statement, the company was installing a sewer main in Hamburg. The statement went on to indicate that at 9:30 a.m. on August 31, 1978, Edward Harmon, a superintendent, and Charles Heist, a laborer, left the worksite to remove a plug in a manhole at another location. When Yackle later went to this other location to retrieve some equipment for another job, he found Harmon lying on top of Heist in a pool of water at the bottom of the manhole.

At the [*4] hearing it became evidence that the wrong employer had been cited for the alleged violations. Foreman Yackle testified that he and all other employees at the worksite on August 31, 1978, were employed and paid by Carhar Contracting Co., and that there were no employees of CMH on the worksite on the day of the accident. Yackle had been employed by Carhar for 15 years, although about 10 years earlier he had received one pay check that had been issued by CMH rather than by Carhar. Harmon, one of the deceased employees, was the superintendent on the job and employed by Carhar. Heist, the other deceased worker, was employed by Carhar as well. Yackle did not recall whether he told an OSHA compliance officer that he was employed by CMH. He did speculate, however, that his statement to the police - that he was employed by CMH - may have been prompted by his knowledge that Carhar was a subcontractor of CMH at the worksite.

Richard Metz, vice-president and half-owner of both CMH and Carhar at the time of the accident, testified that the Erie County Sewer Authority had engaged CMH to install the sewer line. Gene Cardarelli, now deceased, was president of both companies and owned the [*5] remaining 50 percent of the stock of each company. As vice-president, Metz was responsible for assigning work so that each company had an adequate workload. Because Carhar needed work, the Erie County Sewer Authority contract was assigned by CMH to Carhar. In awarding this contract to Carhar, CMH did not entertain bids from other companies.

According to Metz, CMH and Carhar were distinct corporate entities with separate business offices and financial records. The equipment of each company generally was stored in separate locations. On occasion, however, the companies would share equipment. Metz testified that, with the exception of one CMH high-lift operator, all of the employees on the worksite were employed by Carhar. n4 CMH and Carhar did not share employees, according to Metz. All materials used on Carhar's subcontract were purchased by CMH and transferred to Carhar.

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n4 This testimony of Metz conflicts with that of foreman Yackle who testified that there were no CMH employees on the worksite on the day of the accident.

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At the conclusion of Metz's testimony, Respondent moved to dismiss all citations issued to CMH because, in Respondent's view, the evidence demonstrated that CMH did not supervise any of the employees on the job and that the only employees on the job were those of its subcontractor, Carhar. In response to CMH's motion, the Secretary moved to substitute Carhar as the named Respondent. The judge granted CMH's motion to dismiss, noting that two separate corporations were involved and that CMH did not have supervisory personnel at the cited worksite. The Secretary again moved to conform the pleadings to the proof so that violations originally alleged against CMH would be charged against Carhar. Construing this motion as one under Rule 15(c) of the Federal Rules of Civil Procedure ("Rule 15(c)"), n5 the judge allowed the Secretary to further question Metz concerning his responsibility for the management of Carhar to determine whether Metz, in his role of vice-president of Carhar, was aware of the alleged violations. At this point in the proceeding, Respondent's counsel stipulated that Metz received the citations alleging the subject violations in his role as vice-president [*7] of CMH only. According to the stipulation, Metz did not receive the citations in his role as vice-president of Carhar. After questioning Metz further regarding his responsibilities for Carhar's operations, the judge denied the Secretary's motion to "conform the pleadings" on the ground that Carhar, the party to be substituted for the originally cited CMH, did not receive notice of the citation.

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n5 Fed. R. Civ. P. 15(c) states, in pertinent part:

Amended and Supplemental Pleadings.

* * *

Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.

[*8]

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In his subsequent decision and order, the judge observed that his prior ruling denying the Secretary's motion on the ground of lack of notice under Rule 15(c) was "probably incorrect." He noted that Metz, who received the citations issued to CMH in his capacity as vice-president, was also vice-president of Carhar. The judge concluded that Metz knew of the circumstances surrounding the violations and that he knew or should have known of the mistake in identifying the proper party. He therefore found that Carhar would not have been prejudiced by an amendment.

The judge again concluded, however, that the citations against CMH should be dismissed and the Secretary's Rule 15(c) motion denied. Although acknowledging that the Secretary had satisfied the "patent requirements" of Rule 15(c), the judge found that the Secretary had "inexcusably neglected" to cite the proper Respondent and this inexcusable neglect warranted denial of the Secretary's motion. The judge further concluded that section 9(c) of the Act was a jurisdictional bar to the amendment sought by the Secretary. n6

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n6 Section 9(c) of the Act, 29 U.S.C. 658(c), states:

No citation may be issued under this section after the expiration of six months following the occurrence of any violation.

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II

On review the Secretary argues that section 9(c) of the Act does not prevent the application of Rule 15(c) to substitute a party after the expiration of the six-month limitation period of section 9(c). He notes that, contrary to the judge's conclusion, the substitution of parties does not require the issuance of a new citation, citing P & Z Co. & J.F. Shea Co., 29 OSAHRC 60/B6, 7 BNA OSHC 1589, 1979 CCH OSHD P23,777 (No. 14822, 1979). The Secretary further argues that the judge's treatment of section 9(c) as a jurisdictional bar, rather than as a simple statute of limitations, is erroneous.

The Secretary next contends that the judge erred in denying his motion under Rule 15(c) to substitute Carhar as the named respondent. According to the Secretary, the judge was correct in finding that the patent requirements of Rule 15(c) had been met, n7 but the judge [*10] erred in denying the amendment because of the Secretary's inexcusable neglect. The Secretary urges that inexcusable neglect is not a proper consideration under Rule 15(c), and even if it were a proper consideration, his reliance on the foreman's statement that CMH was his employer was reasonable.

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n7 In support of the judge's finding the Secretary cites Horwitt v. Longines Wittnauer Watch Co., 388 F. Supp. 1257 (S.D.N.Y. 1975), and Travelers Indemnity Co. v. United States, 382 F.2d 103 (10th Cir. 1967).

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On review, Respondent contends that section 9(c) of the Act is an "absolute jurisdictional bar to the issuance of a citation after six months." Respondent distinguishes the Commission's decision in Yelvington Welding Service, 78 OSAHRC 84/D6, 6 BNA OSHC 2013, 1978 CCH OSHD P23,092 (No. 15958, 1978), on the ground that the violation in that case was a "continuing violation." Respondent further submits that Yelvington was erroneously decided in that it did not find section 9(c) of the Act to be a jurisdictional [*11] bar. In the event that section 9(c) is a simple statute of limitations, Respondent submits that the requirements for tolling have not been met because the Secretary did not exercise due diligence in identifying the proper party, and Respondent did not engage in fraudulent concealment. Respondent further submits that Rule 15(c) should not be applied in Commission proceedings due to differences between civil actions initiated by complaints and OSHA proceedings initiated by citations.

Respondent further argues that the Secretary's motion to amend should be denied because the Secretary's failure to determine the proper employer during his post-accident investigation can be attributed only to inexcusable neglect. n8 Respondent stresses that a single question directed at an appropriate official would have resulted in the correct identification of the employer.

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n8 Respondent argues that inexcusable neglect is a proper consideration in Rule 15(c) determinations, citing Thibodaux v. Prudential Minerals Exploration Corp., 483 F.2d 79 (5th Cir. 1973); Slack v. Treadway, 388 F. Supp. 15 (M.D. Pa. 1974); and Jacobs v. McCloskey, 40 F.R.D. 486 (E.D. Pa. 1966).

[*12]

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Respondent also urges that the judge erred in finding that the requirements of Rule 15(c) had been fulfilled. Respondent argues that the cases cited by the Secretary in support of the judge's finding are inapposite and that there was insufficient evidence to support the granting of the Secretary's motion to substitute Carhar as Respondent. n9

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n9 Respondent argues that in Travelers and Horwitt, see note 7 supra, a Rule 15(c) amendment was granted because the substituted party was a wholly owned subsidiary of and shared office space with the original defendant. Respondent distinguishes these cases on the basis that Carhar is not a subsidiary of CMH and does not share office space with CMH.

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Respondent finally argues that the judge erred in entertaining the motion to substitute parties after the judge had granted Respondent's motion to dismiss because, at that time, "[t]here was nothing left on which to premise the substitution." [*13] n10

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n10 Respondent also contends that the Secretary's petition for review and the direction for review were both untimely. These arguments are without merit. Respondent contends that the Secretary's petition for review was untimely because it was not filed before the administrative law judge submitted his report of the case, including his decision to the Commission. However, Commission Rule 91(b)(3), 29 C.F.R. 2200.91(b)(3), provides, in pertinent part: "Petitions for review of a judge's decision may be filed directly with the Executive Secretary subsequent to the filing of the judge's report." Thus, Respondent's argument that the petition for review was untimely is clearly incorrect.

As to the timeliness of the direction for review, the judge's decision was docketed with the Commission on June 4, 1979, and would have become a final order on July 4, 1979, except that July 4 was a federal holiday. Commission Rule 4, 29 C.F.R. 2200.4, provides that, in computing a time period, the last day of a period is not counted when it ends on a Saturday, Sunday, or federal holiday. Rather, the period then runs until the end of the next day which is not a Saturday, Sunday, or federal holiday. Thus, in this case the period ran until the end of July 5, 1979. Therefore, Commissioner Cottine's direction for review on that date was timely.

[*14]

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III

We agree with the Secretary that the judge erred in denying the Secretary's motion to amend and in dismissing the citations. Section 9(c) of the Act is a statute of limitations. Yelvington Welding Service, supra. Section 9(c) prohibits the issuance, not the amendment, of a citation more than six months after the occurrence of a violation. Duane Smelser Roofing Co., 76 OSAHRC 145/E3, 4 BNA OSHC 1948, 1977-78 CCH OSHD P21,387 (No. 4773, 1976), aff'd in part, rev'd in part, 617 F.2d 448 (5th Cir. 1980). Accordingly, Respondent's argument that this section presents an absolute jurisdictional bar to amendment of a citation after the expiration of the six month period must be rejected.

Additionally, Rule 15(c) is applicable to Commission proceedings. Southern Colorado Prestress Co. v. OSHRC, 586 F.2d 1342 (10th Cir. 1978); Higgins Erectors & Haulers, Inc.,    OSAHRC   , 7 BNA OSHC 1736, 1979 CCH OSHD P23,896 (No. 78-3398, 1979). In Duane Smelser Roofing Co., supra, the Commission, consistent with the rationale of National Realty & Construction [*15] Co. v. OSHRC, 489 F.2d 1257 (D.C. Cir. 1973), observed that administrative pleadings should be liberally construed and easily amended. Focusing upon the application of Rule 15(c), the Commission determined that the purpose of this rule should be "to avoid the harsh effects of a statute of limitations."

Although Rule 15(c) amendments have been endorsed by the Commission, the question remains whether application of Rule 15(c) would be appropriate in the present case. The issue of whether an employer to whom a citation has not been issued may be subjected to the Commission's jurisdiction by means of an amendment to a citation issued to another employer has not been addressed fully by the Commission.

In P & Z Co. and J.F. Shea Co., supra, the Secretary issued citations to "P & Z Co., Inc., & J.F. Shea Co., Inc." In its notice of contest the employer identified itself as "P & Z Co., Inc.-J.F. Shea Co., Inc. (A Joint Venture)." In his complaint, the Secretary alleged that the violations listed in the citations were committed by three distinct employers; P & Z Co., Inc.; J.F. Shea Co., Inc.; and P & Z Co., Inc.-J.F. Shea Co., Inc. (A Joint Venture). The Secretary then sought [*16] to amend the citation so that the three parties would be identified as respondents. The contesting party, P & Z Co., Inc.-J.F. Shea Co., Inc. (A Joint Venture), opposed the amendment and moved to vacate the citations. This motion was granted by the judge. On review, the Commission allowed the addition of the joint venture as a party by way of an amendment to the original citations issued to the employers comprising the joint venture. Crucial to this finding was the fact that the joint venture had contested the citations issued to the individual employers. The Commission concluded that the joint venture's notice of contest established that it had sufficient notice of the action and that it thus could be added as a party by way of amendment. n11 The Commission did not reach the question raised in the present proceeding, i.e., whether the individual employers who had not contested any of the citations could be added as parties by an amendment.

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n11 In contract to the amendment to issue in the present case, however, the amendment sought in P & Z Co. and J.F. Shea Co., was proposed before the limitation period of 9(c) had run. Consequently, there was no need to determine whether such an amendment would relate back to the issuance of the original citation.

[*17]

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In Bloomfield Mechanical Contracting Inc. v. OSHRC, 519 F.2d 1257 (3d Cir. 1975), the Third Circuit remanded a case to the Commission to determine whether Rule 15(c) could be applied in Commission proceedings to allow the substitution of a joint venture as a party after the expiration of the statute of limitations where the original citation had been issued to one of the members of the joint venture. On remand, the administrative law judge applied Rule 15(c) to substitute the joint venture as a party in a settlement agreement. The judge's decision was not reviewed by the Commission and, therefore, is without precedential value. See Leone Construction Co., 76 OSAHRC 12/E6, 3 BNA OSHC 1979, 1975-76 CCH OSHD P20,387 (No. 4090, 1976).

Thus, the critical issue in this case falls within the interpretive void left by the above-described decisions of the Commission and the Third Circuit. Both of these decisions left unresolved the question of whether the Secretary may substitute a new party more than six months after the occurrence of the violation by way of a Rule 15(c) amendment to a citation [*18] issued to a different employer.

Rule 15(c) expressly provides that an amendment changing the party against whom an action is instituted will relate back to the date of the original pleading if the specified conditions of the rule are satisfied. The threshold question in determining whether an amendment will relate back under Rule 15(c) is whether the amended claim arises out of the same occurrence or set of facts as the original pleading. Staren v. American National Bank and Trust Co. of Chicago, 529 F.2d 1257, 1263 (7th Cir. 1976). The proposed amendment in this case unquestionably is grounded upon the same occurrence as the original citation. Since the amendment does not raise additional facts or alter the legal theory of the original claim, Rule 15(c) is facially applicable to the Secretary's motion.

Additionally, Rule 15(c) provides that a party can be added by amendment only if the party:

(1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against [*19] him.

In determining whether these requirements have been met, courts examine the relationship between the named defendant and the party to be added to determine whether they share an identity of interests. A new party may be added or substituted in an action when the new and old parties have such an identity of interest that relation back would not be prejudical. Staren v. American National Bank and Trust Co. of Chicago, supra. Identity of interest generally means that the parties are so closely related in their business operations or other activities that the institution of an action against one serves to provide notice of the litigation to the other. The relationship needed to satisfy the identity of interest test exists between a parent and a wholly owned subsidiary or between related corporations whose officers, directors, or shareholders are substantially identical and who may have similar names or conduct their business from the same offices. Miller v. Cousins Properties, Inc., 378 F. Supp. 711, 714 (D. Vt. 1974).

CMH and Carhar clearly shared an identity of interests. Ownership of both companies was held by Mr. Cardarelli and Mr. Metz. At the time of the [*20] accident, Cardarelli and Metz served as president and vice-president, respectively, of each company. Cardarelli was the officer in charge of Carhar's operations while Metz was the officer in charge of CMH. Metz's responsibilities also included the allocation of contracts to each corporation to ensure that each company would have an adequate work load. At the worksite in question, CMH's contract with the Erie County Sewer Authority had been assigned to Carhar without the solicitation of bids from other contractors. Construction materials were purchased by CMH and subsequently turned over to Carhar for use at the worksite. Although foreman Yackle testified to the contrary, vice-president Metz testified that a CMH employee was operating a lift at the worksite on the day of the accident. While the corporate existence of each company was distinct with respect to business offices and recordkeeping, the companies occasionally shared equipment. On the basis of these facts, we find that CMH and Carhar were closely related not only in their management, but also in their business operations. See Miller v. Cousins Properties, Inc., supra.

We are unpersuaded by Respondent's [*21] attempt to distinguish the cases cited by the Secretary in support of the judge's finding that Rule 15(c) was satisfied. In both Horwitt v. Longines Wittnauer Watch Co., 388 F. Supp. 1257 (S.D.N.Y. 1975), and Travelers Indemnity Co. v. United States, 382 F.2d 103 (10th Cir. 1967), the substituted party and the originally named party shares corporate directors and officers. Such is the case for CMH and Carhar. Although Carhar is not a wholly-owned subsidiary of CMH, it is nonetheless clear that CMH and Carhar are closely related in that both companies were owned entirely by corporate officers Carderelli and Metz. The fact that Carhar did not share office space with CMH in no way compels the conclusion that the requirements of Rule 15(c) were not satisfied or that the cases cited by the Secretary are inapposite.

We attach further significance to the fact that the citation naming CMH as Respondent was served on Metz within the limitation period of section 9(c) of the Act. When a party to be substituted as defendant is served with the original complaint naming an incorrect defendant, that party may be held to have knowledge of the plaintiff's mistake. Horwitt v. Longines [*22] Wittnauer Watch Co., supra; Infotronics Corp. v. Varian Associates Corp., 45 F.R.D. 91 (S.D. Tex. 1968). In determining whether a party should have known that it was the one intended to be sued, the courts have applied a reasonable person test. King & King Enterprises v. Champlin Petroleum Co., 446 F. Supp. 906, 910 (E.D. Okla. 1978) (dicta).

One of Metz's responsibilities as vice-president of CMH and Carhar was allocating work to each company to ensure that each business had an adequate workload. At the worksite in question, Carhar was performing as a subcontractor on a contract that had originally been awarded to CMH. Metz acknowledged that he had assigned this contract to Carhar to provide that company with work. n12 In light of Metz's involvement in this assignment and the overlapping and integrated management of the companies, we find it reasonable to conclude that, upon receipt of the citation naming CMH as Respondent, Metz knew or should have known that a mistake had been made and that Carhar was the proper party to be cited. We reject Respondent's argument that Metz was issued the original citation in his role as vice-president of CMH only. Metz was vice-president [*23] of both CMH and Carhar and was entrusted with responsibility to each company by virtue of this dual officership. Knowledge gained by Metz in his capacity as an officer of CMH cannot be artificially separated from knowledge available to him in his role as an officer of Carhar.

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n12 Respondent argues that Metz's testimony should not be considered since the Secretary did not indicate in his witness list that he intended to call Metz. However, Respondent did not object to the Secretary's examination of Metz. Indeed, Metz's testimony was elicited pursuant to an agreement with Respondent's counsel. By failing to object at trial, Respondent waived any objection to the Secretary's calling Metz as a witness and cannot assert this argument for the first time on review. Fed. R. Evid. 103(a)(1); J.L. Foti Construction Co.,    OSAHRC   , 8 BNA OSHC 1281, 1285, 1980 CCH OSHD P24,421 at 29,783 (Nos. 76-4429 & 76-5049, 1980); A. Mazzetti & Sons, Inc., 77 OSAHRC 170/D8, 5 BNA OSHC 1826, 1828 n.2, 1977-78 CCH OSHD P22,125 at 26,656 n.2 (No. 15780, 1977).

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Based upon the identity of interest existing between CMH and Carhar and Metz's receipt of the original citation, we affirm the judge's finding that Carhar had notice of the institution of this action within the limitation period of section 9(c) of the Act and that Carhar knew or should have known that, but for the Secretary's mistake, the action would have been brought against it.

Despite the fact that the requirements of Rule 15(c) were met, the judge found the Secretary's failure to cite the proper employer constituted inexcusable neglect, meriting denial of the Secretary's motion to amend. Inexcusable neglect, however, is not a factor to be considered under Rule 15(c).

The cases cited by Respondent provide little support for its argument that inexcusable neglect is a proper consideration in Rule 15(c) determinations. In Slack v. Treadway, 388 F. Supp. 15 (M.D.Pa. 1974), the denial of plaintiffs' motion to amend was based on the court's finding that the express requirements of Rule 15(c) had not been met. The court addressed the issue of the plaintiffs' diligence in ascertaining the proper defendant only in the context of considering whether [*25] the defendant should be estopped from asserting the deficiency of plaintiff's Rule 15(c) motion on the basis that defendant attempted to conceal the identity of the proper party to be sued. In Thibodaux v. Prudential Minerals Exploration Corp., 483 F.2d 79 (5th Cir. 1973), the plaintiff was allowed four months to conduct discovery of evidence to meet the express provisions of Rule 15(c). The subsequent denial of plaintiff's motion was based on plaintiff's failure to pursue discovery and obtain such evidence. The Thibodaux court did not discuss the merits of plaintiff's Rule 15(c) motion, nor did it conclude that inexcusable neglect was a factor to be considered under this rule. In Jacobs v. McCloskey and Co., 40 F.R.D. 486 (E.D. Pa. 1966), the court denied plaintiff's motion to substitute a wholly-owned subsidiary for its parent. The court, without discussion, treated plaintiff's motion to substitute as a motion to amend under Rule 15(a). Rule 15(c) was not applied. Thus, we hold that the judge erred in finding the Secretary's alleged inexcusable neglect to be a relevant consideration in deciding a Rule 15(c) motion. n13

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n13 Even if inexcusable neglect were a relevant consideration in passing on a Rule 15(c) motion, we would find the Secretary's failure to ascertain the name of the correct Respondent did not constitute inexcusable neglect. It is not unwarranted for the Secretary to assume that an employee would correctly identify his employer when giving a statement to a police officer who was investigating a fatal accident at the employee's workplace. Moreover, the relationship of the two companies is so close that it is understandable that the Secretary, as well as the employee, could easily confuse the two.

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Respondent contends that Carhar would be prejudiced by the Secretary's motion to amend because it was never accorded an opportunity to negotiate with the Secretary prior to the issuance of the citation. Respondent also contends that the death of Mr. Cardarelli, the president and officer-in-charge of Carhar would present "real and significant prejudice to the attorney who must defend Carhar." With respect to Respondent's first contention, deprivation of an opportunity to [*27] negotiate is not prejudice in the legal sense. See Craig D. Lawrenz & Associates, Inc., 77 OSAHRC 60/D8, 4 BNA OSHC 1464, 1976-77 CCH OSHD P20,910 (No. 5540, 1976). Moreover, on remand Carhar still will have an opportunity to negotiate a settlement with the Secretary prior to a hearing on the merits. See generally Commission Rule 100(a), 29 C.F.R. 2200.100(a). With respect to Respondent's second contention, the record indicates that Cardarelli was not at the worksite at the time of the accident. The evidence further establishes that Carhar was the responsible employer at the time of the accident. Thus it would not appear that Cardarelli's testimony would have had any bearing upon determining the conditions existing on the day of the accident or Carhar's potential liability if the alleged violations were found to exist. We find no evidence suggesting that Carhar would otherwise be prejudiced in a defense on the merits. n14

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n14 We also reject Respondent's argument that the judge committed reversible error by first granting the Respondent's motion to dismiss and thereafter entertaining the Secretary's motion to conform the pleadings to the evidence. Since these motions were addressed within the course of a few minutes of each other in a hearing before the judge, the sequence has no effect on the substantive rights of the parties.

[*28]

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Based upon the foregoing, we find that the judge erred in denying the Secretary's motion to amend. Accordingly, we reverse the judge's denial of the Secretary's motion, allow the substitution of Carhar as Respondent, and remand this case to Judge Knight for further proceedings. SO ORDERED.