De-Gas, Inc. v. Midland Resources, DE-GA

• Decision Date: 10 May 1985
• Docket Number: S,DE-GA,IN
• Citation: 470 So.2d 1218
• Parties: tanley L. Graves, Alex F. Farris and D.O. "Red" Harden v. MIDLAND RESOURCES, a partnership, Phillip Sellers, Thomas B. Johnston, Ronald Verlander, and J. Flowers Crawford. 83-768.
• Court: Alabama Supreme Court

Page 1218

470 So.2d 1218

DE-GAS, INC, Stanley L. Graves, Alex F. Farris and D.O. "Red" Harden v. MIDLAND RESOURCES, a partnership, Phillip Sellers, Thomas B. Johnston, Ronald Verlander, and J. Flowers Crawford.

83-768.

Supreme Court of Alabama.

May 10, 1985.

Michael L. Edwards and Susan Salonimer of Berkowitz, Lefkovits, Isom, Edwards & Kushner, Birmingham, for appellants.

Mark D. McKnight of Ward & McKnight, Birmingham, for appellees.

BEATTY, Justice.

The defendants, De-Gas, Inc., Stanley L. Graves, Alex F. Farris, and D.O. Harden, bring this interlocutory appeal from the denial, in part, of their motion for summary judgment. The issue presented for our review is whether the delivery of a complaint and summonses to the circuit clerk, without payment of the filing fee required by § 12-19-70, Code of 1975, is sufficient to commence an action for statute of limitations purposes.

On June 14, 1983, plaintiffs delivered summonses and a complaint to the office of the circuit clerk of Jefferson County. The complaint alleged breach of an oral contract and fraud. No filing fee was paid at that time. The complaint and summonses were stamped "filed" on that date, but the clerk did not assign the complaint a case number, list the case in the index of pending actions, docket the case, or forward the summonses and copies of the complaint to the sheriff's office for service. The filing fees were paid by plaintiffs on August 5, 1983, and service was thereafter effected.

The statute of limitations on the fraud claim expired between the time the complaint was delivered to the clerk's office and the time the filing fee was paid. The defendants answered the complaint, asserting that the breach of oral contract claim was barred by the statute of frauds and that the fraud claim was barred by the statute of limitations. They later filed a motion for summary judgment on these grounds. The trial court granted the motion as to the contract claim, but denied the motion on the fraud claim. The court's basis for the latter action was its determination "that the [June 14, 1983] filing was proper" so that the claim was filed within the period allowed by the statute of limitations.

Rule 3, A.R.Civ.P., provides that "[a] civil action is commenced by filing a complaint with the court." Under Rule 5(e), "[t]he filing of pleadings and other papers with the court as required by these rules shall be made by filing them with the clerk or register of the court." Plaintiffs argue that delivery to and receipt by the clerk's office are the essential elements of "filing" a complaint; therefore, they say, the June 14 delivery constituted a filing and commenced the action under Rule 3, thereby avoiding the running of the statute of limitations.

Rule 3 was adopted January 3, 1973, and went into effect July 3, 1973. At that time, clerks of the circuit courts were "entitled to receive" a fee under Title 11, § 21, Code of 1940, for the filing of a suit. However, this fee was due "only at the termination of the suit." Title 11, § 4. Consequently, under these statutes, delivery to and receipt by the clerk's office of a complaint would commence the action in that the clerk's office would at that time perform the tasks necessary to set the case in motion, such as docketing the case, assigning it a case number, and forwarding the complaint and summonses to the sheriff's office for service. Under this scheme, the payment of fees was clearly not a factor in determining whether a suit was commenced under Rule 3.

The fee payment procedure was changed in 1975 when the legislature enacted what is now § 12-19-70, which provides:

"(a) There shall be a consolidated civil filing fee, known as a docket fee, collected from a plaintiff at the time a complaint is filed in circuit court or in district court.

"(b) The docket fee may be waived initially and taxed as costs at the conclusion of the case if the court finds that payment of the fee will constitute a substantial hardship. A verified statement of substantial hardship, signed by the plaintiff and approved by the court, shall be filed with the clerk of court." (Emphasis added.)

The use of the term "shall" in this provision makes the payment of the filing fee mandatory. See Prince v. Hunter, 388 So.2d 546, 547 (Ala.1980). It was the obvious intent of the legislature to require that either the payment of this fee or a court-approved verified statement of substantial hardship accompany the complaint at the time of filing. No doubt the purpose behind the passage of this provision was to discourage the filing of frivolous suits and to insure that the clerks of the circuit courts do not become "credit men." Cf. Turkett v. United States, 76 F.Supp. 769 (N.D.N.Y.1948) (holding that payment of the filing fee is a prerequisite to filing an action under Rule 3, Fed.R.Civ.P., which is identical to our Rule 3, and 28 U.S.C.A., § 549 (now 28 U.S.C.A., § 1914), which provides that the party instituting a civil action must pay a filing fee, and commenting, "Any other construction would open the door to actions without merit by irresponsible parties, and make the clerk a credit man, whose accountability might result in his personal loss," 76 F.Supp. at 770).

This Court has recognized that "a mere filing of a complaint is not commencement in all cases." Ward v. Saben Appliance Co., 391 So.2d 1030, 1032 (Ala.1980). While "[t]he filing of a complaint is ... a significant factor in commencing actions and suspending the operation of applicable statutes of limitations; ... it is not the sole factor." (Emphasis added.) Id. We must decide whether, in light of the above-noted legislative change in the fee payment procedure, the prepayment of the filing fee is now a factor to be considered in determining whether a suit has been commenced, thereby avoiding the running of the statute of limitations. We hold that it is.

In Bagby Elevator & Electric Co. v. McBride, 292 Ala. 191, 197, 291 So.2d 306, 311 (1974), this Court noted:

"Alabama cases bottom a statute of limitations on a policy of repose and they rest on the presumption that meritorious claims will not be allowed to slumber until human testimony is lost or human memory fails...."

We observed in Seybold v. Magnolia Land Co., 376 So.2d 1083, 1086 (Ala.1979):

"Statutes of limitations are founded in part at least on general experience that claims which are valid usually are not allowed to remain neglected, and that the lapse of years without any attempt to enforce a demand creates a presumption against its original validity or that it has ceased to exist. The basic principle most generally relied on by the authorities is that statutes of limitations are statutes of repose, the object of which is to prevent fraudulent and stale claims from springing up after long periods of time and surprising the parties or their representatives when evidence has become lost or the facts have become obscure from the lapse of time....

"Because the burden of avoiding the running of the statute is on the claimant, the problem of when and if a statute has run is a query properly directed to the diligence of the claimant...."

Clearly, then, "[t]he most important and essential element of interruption of [the running of the limitations period] is that defendant be judicially notified of the rights which are sought and of plaintiff's intent to proceed with the action." (Emphasis added.) 54 C.J.S. Limitations of Actions § 264 at p. 294 (1948).

The parties stipulated to the following testimony:

"I am Polly Conradi, Clerk of the Circuit Court for the Tenth...