Alvarez v. Meadow Lane Mall Ltd. Partnership

• Citation: 560 N.W.2d 588
• Decision Date: 26 March 1997
• Docket Number: No. 95-2210,95-2210
• Parties: Alicia ALVAREZ and Gabriel Alvarez, Individually and as the Next Friend of Gabriel Alvarez, Jr., Alma Alvarez, Adriana Alvarez, and Diana Alvarez, Their Minor Children, Appellants, v. MEADOW LANE MALL LIMITED PARTNERSHIP, Spatz Partners, and William Spatz and David Spatz, Individually and as Partners, Appellees.
• Court: Iowa Supreme Court

Page 588

560 N.W.2d 588

Alicia ALVAREZ and Gabriel Alvarez, Individually and as the Next Friend of Gabriel Alvarez, Jr., Alma Alvarez, Adriana Alvarez, and Diana Alvarez, Their Minor Children, Appellants, v. MEADOW LANE MALL LIMITED PARTNERSHIP, Spatz Partners, and William Spatz and David Spatz, Individually and as Partners, Appellees.

No. 95-2210.

Supreme Court of Iowa.

March 26, 1997.

Raymond L. Reel of Fairall, Fairall, Kaplan, Hoglan, Condon & Klaessy, Marshalltown, for Appellants.

Glenn Goodwin of Finley, Alt, Smith, Scharnberg, May & Craig, P.C., Des Moines, for Appellees.

Considered by HARRIS, P.J., and CARTER, SNELL, ANDREASEN, and TERNUS, JJ.

HARRIS, Justice.

This appeal challenges a trial court order dismissing a tort suit. It was dismissed as to one defendant because of the failure to provide a timely service of original notice. It was dismissed as to other defendants because it was not brought within the statute of limitations. We affirm.

Plaintiff Alicia Alvarez ¹ claims to have been injured April 10, 1993, when she fell in a retail parking lot in Marshalltown, Iowa. The property was owned by Spatz Partnership and Meadow Lane Mall Limited Partnership, both of which were owned by individual defendants William and David Spatz.

In May 1993 Alvarez informed Spatz Partnership of the incident and was referred to its insurer, Aetna Insurance Company. In December 1993 Aetna paid Alvarez and her family approximately $5000 under Spatz Partnership's medical payment coverage, but denied any claim for liability damages.

Brian L. Sylvester was Alvarez's original attorney. In February 1995 he wrote Aetna, enclosing a copy of the lawsuit he intended to file, and inquired whether Aetna would accept service of original notice. ² On April 6 Sylvester filed a petition against Spatz Partnership, but did not arrange for service of original notice as required by Iowa rule of civil procedure 49(a). ³ Sylvester later claimed the insurer's claims representative, Kathy Flynn, indicated during a telephone conversation on April 19 that she thought the company would accept service on behalf of the defendants. Flynn denied making such a representation.

The district court found that the following occurred during the April 19 phone conversation:

A preponderance of the evidence shows that Mr. Sylvester asked whether Ms. Flynn and Aetna would accept service of the original notice on behalf of their insureds. Ms. Flynn, at the most, replied that she would have to check with her superiors. She did not state that Aetna would definitely accept service.

Later the same day, following the phone conversation, Sylvester wrote to Flynn at Aetna stating:

Thank you for the opportunity to speak with you this morning. This letter is to confirm several aspects of our conversation regarding the above matter.

First, enclosed is an Original Notice, Petition at Law, and Acceptance of Service form for your signature. As I understand it you either already have, by virtue of your company's prior directive, or will have, by virtue of contact with your insured, authorization to execute the Acceptance of Service to avoid the need for personal service on your insured which would be inconvenient for everyone involved. If this is incorrect, you need to notify me immediately so that I can take other steps to secure service on Spatz Partners.

Neither Flynn nor anyone else at Aetna ever responded to this letter.

Sylvester testified he wrote to Flynn again on July 11 asking her to respond to his request for a settlement offer. This letter stated:

If you are not [willing to settle this case], I must insist that according to the terms of our prior agreement that you file an answer so we can proceed with this lawsuit.

Flynn testified she did not receive the July 11 letter from Sylvester and indeed had never heard from him again.

In early August, when Sylvester's license to practice law in Iowa was suspended, ⁴ Alvarez retained her present counsel. On August 29 Alvarez sought and was granted permission to amend her petition to add Meadow Lane Mall Limited Partnership, William Spatz, and David Spatz as defendants. On September 5 the amended petition was filed. On August 31 Meadow Lane Mall Limited Partnership had accepted service of the original notice and amended petition. On September 11 William Spatz was served with the original notice both individually, and on behalf of the partnership. There is no record indicating that David Spatz has ever been served with an original notice.

The court sustained a defense motion to dismiss the suit against Spatz Partnership because of Sylvester's failure to serve a timely original notice, grounded on the failure to file directions for service pursuant to Iowa rule of civil procedure 49(a). The court found the long delay was presumptively abusive to Spatz Partnership. The court also dismissed the claims against William and David Spatz and Meadow Lane Mall Limited Partnership, finding the amendment adding them as defendants did not, under Iowa rule of civil procedure 89, relate back to the date the original petition was filed. Hence those claims were barred by the statute of limitations.

The matter is before us on Alvarez's appeal from the dismissals. The challenged dismissals rested on legal grounds and hence are reviewable on error. Iowa R.App. P. 4. The district court's factual findings are binding on appeal if supported by substantial evidence. Dennis v. Christianson, 482 N.W.2d 448, 450 (Iowa 1992).

I. Under Iowa rule of civil procedure 48 a civil action is commenced by filing a petition with the court. ⁵ The petition, original notice, and directions for service must then be promptly delivered by the clerk to the sheriff, or to another "appropriate person" for service on the defendant. Iowa R. Civ. P. 49(b). Service can also be made by anyone who is neither a party nor the attorney for a party to the action. See Iowa R. Civ. P. 52. Although the Iowa rules of civil procedure do not specify when service must be made, our cases require dismissal of an action if there is an "abusive delay" in completing service. See Dennis, 482 N.W.2d at 450-51.

Our cases on delay in completing service provide that at some point a presumption of abuse arises. At that point the defendant's burden to show prejudice (in order to justify dismissal) shifts. It then becomes the plaintiff's burden (in order to avoid dismissal) to establish justification for delay. If plaintiff fails in this burden, the action must be dismissed. This was our holding in Scieszinski v. City of Wilton, 270 N.W.2d 450, 453 (Iowa 1978) (three-month delay). We took the same view in Bean v. Midwest Battery & Metal, Inc., 449 N.W.2d 353, 355-56 (Iowa 1989) (eight-month delay), and again in Dennis, 482 N.W.2d at 451 (two-year delay). Accord Turnbull v. Horan, 522 N.W.2d 860, 861 (Iowa App.1994) (four-month delay). A thirty-seven day delay was deemed too short a period to invoke the presumption under the facts in In re Estate of Steinberg, 443 N.W.2d 711, 714 (Iowa 1989).

The foregoing cases call for the following determinations when there has been a delay in service after filing of the petition. The court must first determine if the delay was presumptively abusive. If the delay was presumptively abusive the court must then determine if the plaintiff has carried the burden of proving the delay was justified. If it was not justified, the case must be dismissed. If the delay was justified, dismissal by reason of abusive delay is inappropriate. Even if the delay was not presumptively abusive, an intentional delay can still require dismissal. See Scieszinski, 270 N.W.2d at 452-53.

We think the 159-day delay in the present case was presumptively abusive. In Turnbull, 522 N.W.2d at 861, the court of appeals relied in part on the rationale underlying federal rule of civil procedure 4(j) (now renumbered federal rule of civil procedure 4(m)) under which service is prompt if it is made within 120 days of filing the complaint. Iowa procedural rules provide no such bright line. We nevertheless agree with the court of appeals that any delay beyond 120 days indicates the plaintiff filed the petition, not to seriously institute litigation, but rather to "ice" the statute of limitations for a later determination on whether to proceed with suit. We recognize that it is sometimes both appropriate and prudent to maintain options on whether to sue or not sue. But when it comes to courthouse filings, it is necessary to draw a line between bringing a suit and merely filing a petition in order to delay deciding whether to do so. It is not appropriate to expect judicial process to wait 159 days while a plaintiff decides.

The next question is whether Alvarez showed the delay was justified. She argues justification in the claimed actions of Kathy Flynn, the Aetna agent. Alvarez points to the fact that Flynn never responded to Sylvester's April 19 letter requesting that she indicate whether he was mistaken in believing she would file an acceptance of service. This lack of response, it is argued, vindicated Sylvester's assumption that there would be no necessity to serve an original notice.

Alvarez's justification fails on several grounds. In the first place we think the trial court was on solid ground in rejecting Sylvester's factual claims concerning his conversation with Flynn....