Court: Reply commences civil lawsuit

A breach-of-contract civil suit commenced as soon as the appellant answered the original summons, the Minnesota Court of Appeals has ruled. That’s true even though the appellant failed to return an acknowledgment-of-service form.

That finding means Brittney N. Converse won’t have to pay $7,610.87 to a Red Wing health care provider, which sued her for allegedly unpaid services that she and her minor children received. The provider also sued for unjust enrichment. Last year it was awarded summary judgment.

In its published opinion Monday, a unanimous Court of Appeals panel reverses, finding in Converse’s favor. In so doing so, it provides a new interpretation for Rule 5.04(a) of the Minnesota Court Rules of Civil Procedure.

A civil action commences, Court of Appeals Judge Carol Hooten’s written opinion says, when a plaintiff ineffectively serves a defendant and the defendant effectively serves an answer that raises no affirmative, insufficient-process-service defense—as Converse did.

“Accordingly,” Hooten writes, “because respondent failed to file the action within one year of the date on which it was served with appellant’s answer, the District Court erred in its denial of appellant’s motion to dismiss with prejudice under rule 5.04(a). We therefore reverse.”

Lower court findings

The panel’s ruling overturns a May 28, 2020, decision from Goodhue County District Court Judge Patrick M. Biren. He awarded summary judgment to Mayo Clinic Health System (MCHS) Red Wing and ordered Converse to pay the provider $7,610.87, plus interest.

Biren’s order followed a July 10, 2019, decision from Goodhue County District Court Judge Kevin F. Mark, denying Converse’s motion to dismiss the suit.

Converse’s attorneys maintained that the health care provider’s complaint was filed in court more than 12 months after it received her answer, so its case should be dismissed with prejudice.

Her lawyers further argued that the provider’s failure to prosecute its case was “unreasonable and inexcusable” under Rule 41.02. That, they argued, was further grounds for dismissal.

Mark disagreed—even though Converse’s attorneys served her reply on May 2, 2018, and the suit was not filed in court until June 18, 2019. That’s because she had failed to complete and return an acknowledgment-of-service form, which the provider sent with its original March 23, 2018, complaint and summons to Converse.

To Mark, that omission was dispositive. Another court rule (Minn. R. Civ. P. 4.05) “clearly requires” signing of the acknowledgment-of service form within 30 days to be timely waived, he found. Because Converse didn’t do that, he agreed with Mayo, ruling that “service had not been perfected” under the terms of yet another rule—Minn. R. Civ. P. 3.01.

“Given that the Rules of Civil Procedure plainly indicate that service is effective upon the signing and timely return of the waiver and not the mailing of the documents, suit in this matter was not commenced, as defendant is arguing, more than one year ago,” Mark’s order says.

“For the reasons stated herein,” he concluded, “defendant’s motion to dismiss is denied in its entirety.”

Overruled

In Monday’s ruling, the Court of Appeals overturns the District Court, while resolving what the panel sees as an ambiguity in Rule 5.04(a).

That rule states: “Any action that is not filed with the court within one year of commencement against any party is deemed dismissed with prejudice against all parties, unless the parties within that year sign a stipulation to extend the filing period.” (No such stipulation was agreed to in the Converse case.)

Rule 3.01, meanwhile, provides plaintiffs with three specific ways to commence a civil action—the plaintiff can serve a summons on the defendant; request a waiver of service; or deliver the summons for service by the local county sheriff.

But Rule 5.04(a) neither incorporates Rule 3.01 by reference, nor otherwise indicates that an action is commenced only by those three specific triggers, Hooten writes.

“It would be reasonable to conclude that a civil action is commenced only by those events, but it would also be reasonable to conclude that a civil action is commenced, for the purposes of rule 5.04(a), by some other event or events,” Hooten writes. “Rule 5.04(a) is therefore ambiguous.”

That uncertainty required Hooten’s court to determine whether any other triggers, not specifically listed in Rule 3.01, might commence an action for purposes under Rule 5.04(a). Court rules and precedent say yes, the panel found.

“By waiving the defense of insufficient service of process in this way, or by taking some action implicitly recognizing the jurisdiction of the court, an improperly served defendant submits to the personal jurisdiction of the District Court,” Hooten writes. “In such cases, litigation proceeds in spite of the insufficiency of service of process.”

In other words, the one-year, Rule 5.04(a) clock started ticking in the Converse case as soon as the provider received her answer, which included such affirmative defenses as, “charging these rates is neither customary nor reasonable.”

The finding is in keeping with the reasons that the Minnesota Supreme Court amended Rule 5.04(a) in 2013, the Court of Appeals ruled. Its amendment altered a long-standing practice known as “hip-pocket service.” That practice permitted civil actions to commence simply by serving a summons on a defendant.

Rule 5.04(a) changed that, requiring that all non-family cases must be formally filed in District Court within a year, unless there is an agreed-upon extension.

Hip-pocket service had a significant upside: It gave parties room to negotiate disputes without using up court resources. But because it could be open-ended, it was prone to abuse: Plaintiffs could use it to issue a summons and then do nothing. Meanwhile defendants, particularly poorer ones, might languish without the resources to even move to dismiss.

The Supreme Court, in adopting the 2013 amended rule, wanted to preserve the incentive for parties to negotiate while setting a date certain for courts to step in and manage the case. Interpreting the rule as commencing that countdown upon receipt of a defendant’s reply, the Court of Appeals ruled, is the best way to carry out Supreme Court intent.

“Requiring the plaintiff to file the action within one year of service of an answer establishes an end-date for any informal dispute resolution in which the parties might engage, supplying both an incentive to negotiate in good faith and a fixed date on which judicial case management may begin,” Hooten writes.

Perhaps most importantly, she continues, the court’s interpretation helps prevent the abuses the new rule was meant to avoid.

To Chistopher J. Wilcox, an attorney on Converse’ legal team, the ruling is significant because it stands for the idea that “an answer means something.”

“When a defendant waives insufficiency of service of process as an affirmative defense,” Wilcox said, “that’s an indication that they are conceding to the jurisdiction of the court—and are willing to proceed with the litigation.”

Asked if the Red Wing health provider plans to appeal, its attorney Gregory E. Hanson said he could not comment on “matters that are in litigation.”