Farm Bureau Mut. Ins. Co. v. Campbell, 92-1458

• Decision Date: 15 November 1993
• Docket Number: No. 92-1458,92-1458
• Citation: 315 Ark. 136,865 S.W.2d 643
• Parties: FARM BUREAU MUTUAL INSURANCE COMPANY, Appellant, v. Winston CAMPBELL and Sharon Campbell, Appellees.
• Court: Arkansas Supreme Court

Page 643

865 S.W.2d 643

315 Ark. 136

FARM BUREAU MUTUAL INSURANCE COMPANY, Appellant, v. Winston CAMPBELL and Sharon Campbell, Appellees.

No. 92-1458.

Supreme Court of Arkansas.

Nov. 15, 1993.

David Hodges, Little Rock, for appellant.

Tom Garner, Glencoe, Larry Dean Kissee, Ash Flat, for appellees.

GLAZE, Justice.

This case on appeal largely centers upon appellant Farm Bureau Mutual Insurance Company's motion to dismiss and its Rule 12(b) defenses of insufficiency of process and lack of personal jurisdiction, and whether Farm Bureau in some manner waived these defenses below. Farm Bureau also asserted below that Rule 11 sanctions or penalty and attorneys' fees under Ark.Code Ann. § 16-22-309 (Supp.1993) should have been imposed against the Campbells.

Based upon Farm Bureau's showing that the Campbells failed to obtain service of process on it within 120 days after having filed their complaint, the trial judge dismissed the Campbells' cause without prejudice, but held their complaint was not time-barred. The judge further denied Farm Bureau's request for Rule 11 sanctions. Farm Bureau appealed the judge's adverse holding on the sanction issues, and the Campbells cross-appealed, claiming the trial judge erred in failing to find Farm Bureau had waived service of process and was estopped to object to the manner in which service was made. We affirm the trial court on all issues.

We first consider the trial court's dismissal of the Campbells' lawsuit under ARCP Rule 4(i). Rule 4(i) provides that, if service of the summons is not made upon a defendant within 120 days after the filing of the complaint, the action shall be dismissed as to that defendant without prejudice upon motion or upon the court's initiative. In deciding this issue, we must set out this case's procedural history.

On January 7, 1988, the Campbells' son was killed in an accident involving a motor vehicle insured by Farm Bureau. On January 11, 1988, Farm Bureau's representative went to the Campbells' home and obtained a signed release in exchange for giving the Campbells a check for $20,000. The Campbells filed suit on June 20, 1989, and later amended their complaint to include Farm Bureau, wherein they alleged Farm Bureau was liable for fraud, intentional misrepresentation, tort of outrage and intentional infliction of emotional distress. The Campbells took a voluntary nonsuit on September 10, 1990, but refiled their suit against Farm Bureau on September 9, 1991, and this time alleged only infliction of emotional distress and tort of outrage. In refiling their suit, the Campbells mistakenly thought Farm Bureau was a foreign corporation, and as a consequence served only the secretary of state. The Campbells mailed a courtesy copy of their complaint, without summons, to Farm Bureau's attorney. The Campbells later learned Farm Bureau was a domestic business with a designated agent, but no complaint and summons was ever served on that agent as required by ARCP Rule 4.

Following ARCP Rule 12(b), Farm Bureau's attorney filed a responsive pleading to the Campbells' complaint, wherein it denied the allegations in the Campbells' complaint, but at the same time, reserved its objections to the court's lack of jurisdiction and the Campbells' insufficient service of process. Farm Bureau propounded interrogatories to the Campbells the same day it filed its response, and the Campbells later submitted their interrogatories to Farm Bureau. Farm Bureau requested and was granted an extension to answer the Campbells' interrogatories. The parties later exchanged responses to their respective interrogatory requests. In addition, Farm Bureau filed an amended answer, acknowledging the Campbells had paid the costs incurred in their initial, nonsuited action, but maintained its position that the Campbells' second suit should still be dismissed because they failed to pay the earlier incurred court costs prior to filing this new suit.

About six months after the Campbells filed this second lawsuit, Farm Bureau filed a separate motion to dismiss, and after exchanging answers for requests for admissions, the court held a hearing on Farm Bureau's motion which the trial court eventually granted. In an excellent analysis of the pertinent facts and controlling rules of procedure, the trial court set out its reasons for granting dismissal as follows:

Farm Bureau also seeks to dismiss the Campbells' complaint for lack of jurisdiction over Farm Bureau for failure of the Campbells to serve summons on Farm Bureau within 120 days after filing of the complaint. Farm Bureau relies on Rule 4(i) of the Arkansas Rules of Civil Procedure, which provides:

(i) Time Limit for Service: If service of the summons is not made upon a defendant within 120 days after the filing of the complaint, the action shall be dismissed as to that defendant without prejudice upon motion or upon the court's initiative.

Farm Bureau has raised this ground for dismissal in paragraph 9 of its answer to complaint filed on September 26, 1991.

The Campbells admit that no service of summons was made on Don Alpe, agent for Farm Bureau. However, they claim that Farm Bureau has waived this ground for dismissal by filing an answer to the complaint and by its filing of an amendment to answer.

Rule 12 of the A.R.C.P. governs Defense and Objections--When and How Presented. Rule 12(b) provides that every defense to a claim for relief in any pleading shall be asserted in the responsive pleading thereto, except that the following defenses may, at the option of the pleader, be made by motion: (2) lack of jurisdiction over the person, and (5) insufficiency of service of process. Rule 12(h) governs Waiver or Preservation of Certain Defenses. It provides that a defense of lack of jurisdiction over the person or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in the subsection (g), or (B) if it is neither made by motion under this rule nor included in the original responsive pleading.

Farm Bureau has elected the option of asserting the defense of lack of jurisdiction of the person and insufficiency of service of process in its original responsive pleading. Under Rule 12(h), it has preserved these defenses by including them in its original responsive pleading.

The service of process on the defendant in any civil case provides jurisdiction to the court that issues the process. Jurisdiction can be obtained by the defendant entering his appearance and submitting to the jurisdiction of the court. Farm Bureau has filed an answer herein, but has specifically reserved the objection to the jurisdiction of the person and the insufficiency of service of process.

It appears that this may be a trap for the unwary and that the Campbells may have been lulled to sleep by Farm Bureau's answering the complaint and then proceeding with discovery by filing interrogatories to the Campbells on September 26, 1991, simultaneous to the filing of an answer. Be that as it may, no service was made on Farm Bureau within 120 days after the filing of the complaint. Farm Bureau has made and preserved its objection to jurisdiction of the person and insufficiency of the service of process. Rule 4(i) provides...