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Perspectives: How’s the service? Not good in these two cases

Service of process is an essential element for commencement of civil litigation in the Minnesota court system. Unlike many jurisdictions, including the federal courts, a lawsuit in Minnesota is generally commenced by properly serving pleadings, except in rare cases when another form of service may be allowed.

The essentiality of service was considered in a pair of recent rulings of the Minnesota Court of Appeals. Decided within a one-week span, the two cases shared a number of similarities. Each case was brought in Hennepin County District Court against an out-of-state insurance carrier, both lawsuits were dismissed for ineffective service, and the appellate court affirmed both of the rulings.

Compliance case

The failure to file a required affidavit of compliance after process was served doomed an automobile property damage claim in Lindwall v. Country Preferred Insurance Co., 2014 WL 4176075 (Minn. App. Aug. 25, 2014) (unpublished). The policyholder served the Commissioner of Insurance seeking $17,771 for damages to his car and related costs, as required for foreign insurers under Minn. Stat. §60A.19, subd. 3, and mailed notice to the carrier, pursuant to Minn. Stat. §45.028. But the claimant did not timely file an affidavit of compliance with the court within 20 days of service, as mandated by Minn. Stat. § 45.028, subd. 2, within the two-year time period for suit prescribed under the policy.

The trial judge dismissed the lawsuit on grounds of ineffective service, and the appellate court concurred, although on different grounds. The affidavit was not filed until eight weeks after service on the commissioner, “well outside the 20-day deadline.” The recent ruling of the appellate court in Meeker v. IDS Prop. Case. Ins. Co., 846 N.W.2d 468 (Minn. App. 2014), rev. granted, (Minn.June 25, 2014), is “dispositive,” holding that a certificate filed after the limitations period expired was ineffective.

The refusal of the trial court to extend the time for filing did not create “unfairness” due to the need for “strict compliance with statutory service requirements.” Nor was the claimed lack of prejudice on the part of the insurer “relevant to the determination” of whether service was proper.

Not Nebraska

Service of a lawsuit against an insurer located in Nebraska was dismissed due to failure to adhere to Minnesota process requirements in Lange v. State Farm Insurance, 2014 WL 4388915 (Minn. App. Sept. 8,2014) (unpublished). The claimant had process personally served on a human resource employee of the carrier at its office in Nebraska, where the policy was issued. The failure to comply with the requirements of Rule 4.03(c) of the Minnesota Rules of Civil Procedure that service be made on an officer or managing agent, or one authorized to accept service, prompted the dismissal of the lawsuit brought in District Court.

The appellate court affirmed again pointing out that service of process “must comply strictly with statutory requirements.” The claimant’s assertion that Nebraska law should apply because the case had to be filed in the jurisdiction where the policy was issued was rejected. The lawsuit was filed in Minnesota, and service of process is to be “determined by the law of the forum state.”

Service failed because the recipient of the pleading was not “one who reasonably could be expected to inform the corporation of the service,” as required by Minnesota case law. The human resource employee who was handed the pleadings did not “fit into either of [the] categories” of having substantial independent judgment and discretion” or of “sufficient rank or character” within the corporate hierarchy. Nor did she have “implied authority to accept service of process.”

Because service was improper under Minnesota procedural rules, notwithstanding Nebraska law, the court lacked jurisdiction and the case was properly dismissed.

Service of process is required to start a civil lawsuit in Minnesota. As these cases reflect, failing to do so properly can throw out a lawsuit before it begins.

Marshall H. Tanick is an attorney with the Twin Cities law firm of Hellmuth & Johnson, PLLC.

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