Heiser v. ASSOCIATION OF APARTMENT OWNERS

• Decision Date: 20 July 1993
• Docket Number: Civ. No. 92-00331 ACK.
• Parties: Tom HEISER, et al., Plaintiffs, v. ASSOCIATION OF APARTMENT OWNERS OF POLO BEACH CLUB, et al., Defendants.
• Court: U.S. District Court — District of Hawaii

848 F. Supp. 1482

Tom HEISER, et al., Plaintiffs, v. ASSOCIATION OF APARTMENT OWNERS OF POLO BEACH CLUB, et al., Defendants.

Civ. No. 92-00331 ACK.

United States District Court, D. Hawaii.

July 20, 1993.

James Krueger and Peter T. Cahill, Krueger & Cahill, Wailuku, Maui, HI, for Tom Heiser, Nancy Heiser, Mark Daniel Heiser, and Nicholas Edward Heiser.

John T. Komeiji, Watanabe Ing & Kawashima, Honolulu, HI, for Association of Apartment Owners of the Polo Beach Club.

Shelton G.W. Jim On and Henry F. Beerman, Jim On & Beerman, Honolulu, HI, for Destination Resorts Management, Inc.

Deborah K. Wright and Keith D. Kirschbraun, Wright & Kirschbraun, Wailuku, Maui, HI, for Morris Aaron Lauterman and Judith Lee Lauterman.

ORDER DENYING DEFENDANT DESTINATION RESORTS MANAGEMENT, INC.'S MOTION TO DISMISS, DENYING DEFENDANTS MORRIS AND JUDITH LEE LAUTERMAN'S MOTION FOR SUMMARY JUDGMENT AND GRANTING PLAINTIFFS' MOTION PURSUANT TO FED.R.CIV.P. 41(a)(2) DISMISSING DEFENDANTS MORRIS AND JUDITH LEE LAUTERMAN

KAY, Chief Judge.

I. BACKGROUND

Plaintiff Dr. Tom Heiser (Heiser), while vacationing at a condominium at Wailea/Makena, Maui, was injured during a boogie-boarding accident on June 6, 1990. The injury left Heiser a quadriplegic.

Heiser initially attempted to reach a settlement with State Farm Insurance, insurer of Defendant Association of Apartment Owners of the Polo Beach Club (Association). However, on May 27, 1992, just prior to the expiration of the statute of limitations, Heiser and his family (Plaintiffs) filed a complaint alleging a negligence theory of recovery against three defendants: Defendant Association, Defendant Destination Resorts Management., Inc. (Destination), and the party thought to be the owner of the condominium in which Plaintiffs had been staying at the time of the accident. Specifically, Plaintiffs alleged that Defendants had a duty to warn Plaintiffs of dangerous wave conditions that existed on the beach adjacent to the condominium complex. Jurisdiction was based on this Court's diversity jurisdiction.

After the complaint was filed, Plaintiffs did not immediately attempt to have any of Defendants served with process. Plaintiffs, instead, pursued settlement negotiations with Defendant Association. Heiser also sought additional medical examinations during this period.

As the Fed.R.Civ.P. 4(j) time period for service advanced, Plaintiffs filed an ex parte motion seeking an additional 90 days in which to serve Defendants. The magistrate granted this ex parte motion on August 12, 1992.

Subsequent to the magistrate's order, settlement discussions continued. Plaintiffs, however, learned that they had named the wrong party as owner of the condominium. Accordingly, rather than serve the original, incorrect complaint, Plaintiffs filed an amended complaint on September 18, 1992 which named as defendants Morris and Judith Lee Lauterman (the Lautermans), the true owners of the condominium. The First Amended Complaint was served on all Defendants on or about October 30, 1992.

Defendant Destination has moved to dismiss the complaint on statute of limitations grounds; the Lautermans seek summary judgment on similar grounds. Plaintiffs have opposed Destination's motion to dismiss, but do not oppose the Lautermans' motion for summary judgment.

The nonmoving Defendants have filed position papers addressing both motions. The nonmoving Defendants do not oppose the motions as they relate to Plaintiffs, but assert that the motions should not be deemed to have any effect on the various cross-claims that exist between all Defendants. Because those cross-claims are not before the Court on motion, those issues will not be addressed.

II. DISCUSSION

A. Defendant Destination's Motion to Dismiss

In diversity actions, federal courts generally apply state statutes related to the commencement and tolling of statutes of limitations. See Walker v. Armco Steel Corp., 446 U.S. 740, 745-46, 100 S.Ct. 1978, 1982-83, 64 L.Ed.2d 659 (1980). Defendant Destination Resorts Mgmt., Inc. relies on Haw.Rev. Stat. § 657-22 (1988) to argue that Plaintiffs' complaint should be dismissed, as it pertains to Defendant Destination, for failure to comply with Hawaii's statute of limitations.

The State of Hawaii has legislated that actions in tort "shall be instituted within two years after the cause of action accrued...." Haw.Rev.Stat. § 657-7 (1988). A civil action is commenced or instituted by filing a complaint with the court. Haw.R.Civ.P. 3. However, in some circumstances the mere filing of a complaint will not toll the statute of limitations:

Upon any such matter being established, or upon its appearance in any other way that any process was issued without any intent that it should be served, the process shall not be deemed the commencement of an action within the meaning of this part or section 663-3.

Haw.Rev.Stat. § 657-22 (1988). In other words, the statute of limitations will not be tolled merely by filing a complaint if the plaintiff has no intent to serve process.

Defendant Destination maintains that Haw.Rev.Stat. § 657-22 mandates that Plaintiffs' First Amended Complaint be dismissed on the grounds that Plaintiffs did not commence the action within the limitations period because Plaintiffs did not have the intent to serve the original complaint. Defendant Destination points to the fact that Plaintiffs never had the original complaint, the only complaint filed within the limitations period, served on Destination. Plaintiffs had only the First Amended Complaint served. Destination contends that the failure to serve the original complaint evidences that Plaintiffs had no intent to serve the complaint.

No Hawaii court has interpreted Haw.Rev. Stat. § 657-22. It was enacted in 1850. Additionally, Destination concedes that no other state has a statute that is similar to § 657-22.

Instead, Destination relies on analogous case law from other states. In Texas, for instance, courts have held that a plaintiff must not only file suit but also use due diligence in procuring service on the defendant in order to toll the statute of limitations. See, e.g., Gant v. DeLeon, 786 S.W.2d 259, 260 (Tex.1990); Rigo Manuf. Co. v. Thomas, 458 S.W.2d 180, 182 (Tex.1970); Saenz v. Keller Indus. of Texas, Inc., 951 F.2d 665, 667 (5th Cir.1992).

Similarly, the courts of other states have held that an action is not commenced, and, thus, the statute of limitations is not tolled, until the summons is in the hands of a sheriff or other person authorized to serve it. See, e.g., DeBoer v. Fattor, 72 Nev. 316, 304 P.2d 958, 959-60 (1956). Yet other states have statutorily provided that an action is not "commenced" until the complaint is both filed with the court and served on the defendants. See, e.g., Walker, 446 U.S. at 742-43, 100 S.Ct. at 1981 (interpreting Okla.Stat. tit. 12, § 97 (1971)). Defendant Destination would extend some form of any of these interpretations to Haw.Rev.Stat. § 657-22.

The difficulty with Destination's argument is that in all of the above cited cases, the courts were merely applying some longstanding policy or statute which governed the tolling of the statute of limitations. Defendant would have this Court import any of those other rulings into an interpretation of the Hawaii statute of limitations, something that Hawaii courts have not done. There are two reasons why this is questionable.

First, Plaintiffs have complied with the literal requirements of the Hawaii statute of limitations and rules of procedure. Plaintiffs filed a complaint with this Court within two years after their tort action accrued. This complies with Haw.Rev.Stat. § 657-7 and Haw.R.Civ.P. 3.

Second, § 657-22 does not require a plaintiff to actually serve the defendant or to exercise due diligence. Instead, the threshold inquiry is a determination of the plaintiff's intent at the time "any process was issued." The legislature, by limiting the inquiry to the time of issuance of process, apparently recognized the possibility that the intent of a plaintiff to serve process may change after process is issued but that under some circumstances there may still be justification for tolling the statute of limitations.

While a due diligence requirement might be logical and even desirable, one has not been divined from the statute; no court has even interpreted the statute and the legislative history of the statute provides nothing of value. Accordingly, there is no state authority which would allow this Court to import such an interpretation into Hawaii limitations law.

Destination relies on a number of the cases cited above, as well as Louisville & N.R. Co. v. Little, 264 Ky. 579, 95 S.W.2d 253 (1936). In Little, the plaintiff's attorney filed a complaint a few days prior to the expiration of the statute of limitations. The plaintiff's attorney received process from the clerk of the court, which he proceeded to place in his filing cabinet. It was nearly two months before the attorney took the process papers to the sheriff in order to have the papers served. The defendant challenged the action on statute of limitations grounds.

The Little court found that despite the existence of a statute which stated that a case was commenced by filing a petition, there existed a requirement of good faith intent to have the petition served. The court held that while the "taking out of summons is presumptive evidence of an intention to have it served in due course," the presumption could be rebutted. 95 S.W.2d at 255. The court looked at the actions (or inaction) of the plaintiff's attorney and determined that there was no evidence of good faith intent. It dismissed the complaint.

The Little case is most closely analogous to Haw.Rev.Stat. § 657-22. However, the case is yet another example of a state court applying a longstanding interpretation of that state's courts. No such longstanding interpretation exists in Hawaii.

Furthermore, Little is distinguishable on the...