Muhammed v. Welch, 20030182.
| Citation | 675 N.W.2d 402,2004 ND 46 |
| Decision Date | 25 February 2004 |
| Docket Number | No. 20030182.,20030182. |
| Parties | Sefin MUHAMMED, Plaintiff and Appellant v. Ellen WELCH, Defendant and Appellee. |
| Court | United States State Supreme Court of North Dakota |
Duane A. Lillehaug (argued), and H. Patrick Weir, Jr. (on brief), Lee Hagen Law Office, Ltd., Fargo, N.D., for plaintiff and appellant.
Jacqueline Sue Anderson (argued), and William P. Harrie (on brief), Nilles, Hansen & Davies, Ltd., Fargo, N.D., for defendant and appellee.
[¶ 1] Sefin Muhammed appealed from a summary judgment dismissing his personal injury action against Ellen Welch arising out of an automobile accident. We conclude the district court improperly granted summary judgment because Muhammed has raised a genuine issue of material fact whether the defendant is equitably estopped from raising the statute of limitations as a bar to the action. We reverse and remand for further proceedings.
[¶ 2] On December 27, 1995, Muhammed was a passenger in a vehicle that was struck by Welch's vehicle in Fargo. The next day, Carlton Goughnour, an adjuster with Noble Adjustment Company, was assigned by Welch's insurer, Austin Mutual Insurance Company, to investigate and adjust a claim relating to the accident. After investigating the accident, Goughnour did not anticipate any personal injury claims and closed the file in August 1996. On April 30, 1998, Welch died from unrelated causes. No probate proceedings were initiated after her death and no personal representative was appointed for her estate. [¶ 3] In January 1999, an attorney contacted Goughnour and informed him he was representing Muhammed on a personal injury claim arising from the accident. Unaware that Welch had died, Goughnour reopened the file and initiated settlement discussions with Muhammed's attorney. In July 2001, Muhammed's present attorneys began representing him on the claim.
[¶ 4] On September 12, 2001, Muhammed sued "Ellen Welch" and a summons and complaint were served by certified mail, restricted delivery, addressed to "Ellen Welch, P.O. Box 751, Dalton, MN 56324." Pat Welch, Ellen Welch's widower, received and signed for the certified mail on September 13, 2001, and turned it over to his insurance agent. The insurance agent forwarded the summons and complaint to Austin Mutual and also informed the company that Ellen Welch had died. Goughnour then learned that Ellen Welch was dead.
[¶ 5] Goughnour contacted Muhammed's attorney and requested an indefinite extension of time to answer the complaint in the hope that a settlement could be reached. Muhammed's attorney granted the request. Goughnour did not tell Muhammed's attorney Ellen Welch was dead. In September 2001, Goughnour sent Muhammed's attorney a letter stating in part:
During our conversation, you granted an indefinite time to answer your Summons and Complaint. Summons and Complaint was filed as statute of limitations was about to run out December of this year. We further discussed our $10,000 offer to your client, at the time he was represented by Paul Johnson. This offer stands.
[¶ 6] Settlement discussions continued until March 13, 2002, when Muhammed's attorney withdrew the indefinite extension of time to file an answer. Ellen Welch's death was not disclosed to Muhammed's attorney during any of the settlement negotiations. On March 27, 2002, the day the statute of limitations expired, an answer was interposed on behalf of "Defendant Ellen Welch," stating in part that "Defendant Ellen Welch" demanded a trial by a jury of nine. Her death was not disclosed in the answer. On April 10, 2002, the defense served an amended answer raising insufficiency of process and service of process and lack of subject matter jurisdiction. Muhammed's attorney was not advised of Ellen Welch's death until May 23, 2002.
[¶ 7] In January 2003, the defendant moved for summary judgment, arguing the action should be dismissed for insufficient service of process and because it was barred by the statute of limitations. Muhammed argued service on Pat Welch constituted service on Ellen Welch's estate; the defendant fraudulently concealed Ellen Welch's death, allowing an additional year after learning of her death to bring the action under N.D.C.C. § 28-01-24; and the doctrine of equitable estoppel applied to prevent the bar of the statute of limitations. The district court rejected these arguments and granted the motion for summary judgment dismissing Muhammed's claim with prejudice.
[¶ 8] In Weiss v. Collection Ctr., Inc., 2003 ND 128, ¶ 8, 667 N.W.2d 567 (citations omitted), we summarized our standard of review for an appeal from a summary judgment:
Summary judgment is a procedural device which promptly resolves an action on the merits without a trial if the evidence shows either party is entitled to judgment as a matter of law and no dispute exists as to either the material facts or the reasonable inferences to be drawn from undisputed facts, or if resolving the factual disputes will not change the result. If reasonable persons could reach only one conclusion from the facts, issues of fact may become issues of law. "Even undisputed facts do not justify summary judgment if reasonable differences of opinion exist as to the inferences to be drawn from those facts." When reviewing a summary judgment, this Court views the evidence in the light most favorable to the non-moving party and gives that party the benefit of all favorable inferences which reasonably can be drawn from the evidence. We review de novo the question of law whether the trial court properly granted summary judgment.
[¶ 9] The district court dismissed Muhammed's claim because "service was never made on a personal representative" of Ellen Welch's estate and because "the statute of limitations has now run."
[¶ 10] Muhammed argues the district court erred in ruling service of process on Pat Welch did not constitute proper service on Ellen Welch's estate.
[¶ 11] Absent valid service of process, even actual knowledge of the existence of a lawsuit is insufficient to effectuate personal jurisdiction over a defendant. Kimball v. Landeis, 2002 ND 162, ¶ 20, 652 N.W.2d 330. Muhammed relies on Code v. Gaunce, 315 N.W.2d 304, 306 (N.D.1982), in which this Court held service of process was sufficient where the defendant's daughter signed for the certified mail instead of the defendant, because "the summons and complaint were sent by mail addressed to the person to be served, Gaunce, a return receipt was requested, and there is no question that delivery resulted." Here, Muhammed attempted service under N.D.R.Civ.P. 4(d)(2)(A)(v), which permits service by "any form of mail... addressed to the individual to be served and requiring a signed receipt and resulting in delivery to that individual." Unlike the situation in Gaunce, Pat Welch's signing of the certified mail did not result in delivery to Ellen Welch, nor could it have resulted in delivery, because Ellen Welch was deceased at that time. No probate proceedings were initiated after her death, and neither Pat Welch nor anyone else was appointed personal representative of her estate. Under these circumstances, the proper procedure is for a claimant to initiate probate proceedings in order to present a claim against the estate. See N.D.C.C. § 30.1-14-01; Matter of Estate of Stirling, 537 N.W.2d 554, 558-59 (N.D.1995).
[¶ 12] Service on the decedent's widower did not constitute service on the decedent's estate under these circumstances. We conclude the district court did not err in ruling service was insufficient for purposes of commencing an action against Ellen Welch's nonexistent estate.
[¶ 13] Muhammed argues, because his claim against Ellen Welch's estate was fraudulently concealed, the district court erred in not allowing him an additional year after learning of her death to file the lawsuit under N.D.C.C. § 28-01-24.
[¶ 14] Section 28-01-24, N.D.C.C., provides that "[w]hen, by fraud or fraudulent concealment, a party against whom a claim for relief exists prevents the person in whose favor such claim for relief exists from obtaining knowledge thereof, the latter may commence an action within one year from the time the claim for relief is discovered by him or might have been discovered by him in the exercise of diligence." The statute "is designed to extend the period of time within which an action, otherwise barred by the passage of time because of a statute of limitation, may be brought when one, by fraud or fraudulent concealment, has prevented another from obtaining knowledge of the existence of a cause of action." Phoenix Assurance Co. of Canada v. Runck, 366 N.W.2d 788, 791 (N.D.1985).
[¶ 15] Here, Muhammed alleges deception in not disclosing the death of a party, not deception in the existence of the cause of action. Muhammed was aware of the cause of action, but filed the action against a nonexistent party. We conclude the district court did not err in ruling N.D.C.C. § 28-01-24 was inapplicable under the circumstances.
[¶ 16] Muhammed argues the district court erred in ruling the defendant was not equitably estopped from relying on the statute of limitations as a bar to the action.
[¶ 17] The court held estoppel did not apply in this case as a matter of law, because N.D.C.C. § 31-11-06 refers to a "party's own" declaration, act or omission, and "the party against whom [Muhammed] is claiming estoppel is deceased and cannot be held to have intentionally or deliberately misled [Muhammed] into believing she was not deceased in order to avoid this lawsuit." The court alternately held, even if estoppel did apply, Muhammed "would still need to serve Defendant's estate with process," and because "the statute of limitations has run on this claim, serving Defendant's estate would be to no avail because the Complaint would not relate back to anything since the first service was a nullity."
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