Rich v. State Farm Mut. Auto. Ins. Co., 02-248.

• Decision Date: 25 March 2003
• Docket Number: No. 02-248.,02-248.
• Citation: 2003 MT 51,66 P.3d 274,2003 NT 51
• Parties: Kiersten RICH, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
• Court: Montana Supreme Court

66 P.3d 274

2003 NT 51

2003 MT 51

Kiersten RICH, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

No. 02-248.

Supreme Court of Montana.

Submitted on Briefs October 17, 2002.

Decided March 25, 2003.

Jeffrey D. Ellingson, Ellingson Law Office, Kalispell, Montana; Dale L. McGarvey, McGarvey, Heberling, Sullivan & McGarvey, Kalispell, Montana; Richard H. Friedman, Kenneth R. Friedman, Friedman, Rubin & White, Bremerton, Washington; Cynthia Ford, Golden Gate School of Law, San Francisco, California, for Plaintiff.

Bradley J. Luck, Kathleen L. DeSoto, Garlington, Lohn & Robinson, Missoula, Montana, for Defendant.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 The following certified question was presented to this Court by the United States District Court for the District of Montana, Missoula Division, on April 25, 2002, and accepted on May 7, 2002: "Whether, under [the circumstances described in the Certification Order], Rule 41(e), M.R.Civ.P., as it existed prior to January 1, 2000, precludes the maintenance of the underinsured motorist coverage damage action arising out of the 1993 accident filed by Plaintiff in Federal Court." However, as the Certification Order acknowledges, this Court may reformulate the question under Rule 44(d), M.R.App.P. We hereby reformulate the question as follows:

¶ 2 Does a plaintiff's failure to serve summons within three years as required under former Rule 41(e), M.R.Civ.P., require dismissal with prejudice of that same claim in federal court upon motion of the defendant if the plaintiff voluntarily dismissed the state court action after three years pursuant to Rule 41(a)(1), M.R.Civ.P.?

¶ 3 We answer this question in the affirmative.

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 4 The following facts were submitted by the federal district court as background for the certified question. On November 28, 1993, Plaintiff Kiersten Rich (Rich) was a passenger in a vehicle involved in an accident. At the time of the accident State Farm Mutual Automobile Insurance Company (State Farm) provided underinsured motorist coverage to her.

¶ 5 On November 22, 1996, Rich filed a complaint in state court in the Eleventh Judicial District Court, Flathead County, naming State Farm as the defendant. That same day summons was issued. However, the summons was never served. The complaint noted the November 28, 1993 accident, that Rich had settled her claim with the primary liability insurer for $45,000, and that Rich was making claim against State Farm for underinsured motorist coverage benefits for the remainder of her alleged damages.

¶ 6 On January 2, 2001, Rich filed an action against State Farm in the United States District Court of Montana, Missoula Division. In this complaint, Rich sought, among other things, damages for underinsured motorist coverage benefits arising out of the 1993 accident.

¶ 7 State Farm had no knowledge that the state action was filed until May 16, 2001, when it checked with the Eleventh Judicial District Court and was advised that the complaint was filed and summons issued, but that no return of service had been filed.

¶ 8 On June 11, 2001, Rich filed a notice of dismissal without prejudice in the state action, stating that the notice was pursuant to Rule 41(a)(1), M.R.Civ.P. State Farm did not file a motion to dismiss or any pleading in the state action, nor did State Farm otherwise appear in the state action.

¶ 9 On June 13, 2001, State Farm filed a motion for partial summary judgment in the federal action seeking dismissal of the claims for underinsured motorist coverage arising out of the 1993 accident. State Farm asserted that Rich's failure to serve the summons and file a return of service in the state action within three years of the date of filing violated Rule 41(e), M.R.Civ.P., and therefore, State Farm was entitled to dismissal of the same action in federal court.

¶ 10 Based on these facts, the federal court certified the issue to this Court.

II. STANDARD OF REVIEW

¶ 11 Under Rule 44(c), M.R.App.P., this Court may answer a question of law certified to it by another qualifying court. Therefore, our review is purely an interpretation of the law as applied to the agreed facts underlying the question. In this case, we are asked to interpret the interaction of two rules of civil procedure. Such an interpretation is subject to the same canons of construction as interpretation of a statute. AP v. Montana Senate Republican Caucus (1997), 286 Mont. 172, 178, 951 P.2d 65, 69.

III. DISCUSSION

¶ 12 Does a plaintiff's failure to serve summons within three years as required under former Rule 41(e), M.R.Civ.P., require dismissal with prejudice of that same claim in federal court upon motion of the defendant if the plaintiff voluntarily dismissed the state court action after three years pursuant to Rule 41(a)(1), M.R.Civ.P.?

¶ 13 We begin by setting out the rules of civil procedure at issue here. Rule 41 governs the "Dismissal of actions." Rule 41(a)(1), M.R.Civ.P., entitled "Voluntary dismissal—effect thereof" reads:

(1) By plaintiff—by stipulation. Subject to the provisions of Rule 23(e), of Rule 66, and of any statute of the state of Montana, an action may be dismissed by the plaintiff without order of court (i) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, which ever first occurs, or (ii) by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice.

¶ 14 Former Rule 41(e), M.R.Civ.P., entitled "Failure to serve summons" reads:

No action heretofore or hereafter commenced shall be further prosecuted as to any defendant who has not appeared in the action or been served in the action as herein provided within 3 years after the action has been commenced and no further proceedings shall be had therein, and all actions heretofore or hereafter commenced shall be dismissed by the court in which the same shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named in the complaint as a party or not, unless summons shall have been issued within 1 year, or unless summons issued within 1 year shall have been served and filed with the clerk of the court within 3 years after the commencement of said action, or unless appearance has been made by the defendant or defendants therein within said 3 years. When more than one defendant has been named in an action, the action may within the discretion of the trial court be further prosecuted against any defendant who has appeared within 3 years, or upon whom summons which had been issued within 1 year has been served and filed with the clerk within 3 years as herein required.

The parties note that former Rule 41(e), M.R.Civ.P., was repealed and replaced with Rule 4E, M.R.Civ.P., on January 1, 2000. However, the parties also agree that the actions giving rise to the certified question in this case fall under former Rule 41(e), M.R.Civ.P., and our case law as it interpreted this rule before it was repealed. Therefore, we do not consider Rule 4E, M.R.Civ.P., for purposes of this certified question.

¶ 15 As mentioned above, State Farm made a motion for partial summary judgment in the federal action asserting that Rich's federal claim regarding underinsured motorist coverage should be dismissed. State Farm asserts that Rich's failure to serve the summons and complaint within three years of filing the state court action as required by Rule 41(e) bars the same claim from proceeding in federal court. State Farm argues that our decision in First Call, Inc. v. Capital Answering Serv. (1995), 271 Mont. 425, 898 P.2d 96, is controlling in that failure to comply with Rule 41(e) requires dismissal with prejudice. State Farm also points to the plain language of Rule 41(e) that requires a case "shall" be dismissed and that "[n]o action heretofore or hereafter commenced shall be further prosecuted."

¶ 16 In contrast, Rich asserts that the plain language of Rule 41(a)(1) allows for voluntary dismissal by the plaintiff any time before the defendant appears. Therefore, she argues that her dismissal filed in the state action should be allowed without prejudice despite the fact that the dismissal was submitted after three years from the date she filed the action. Rich further asserts that because State Farm did not file a motion for dismissal in the state action, it is not entitled to the benefit of Rule 41(e).

¶ 17 The arguments of the parties boil down to Rich's position that the plain language of Rule 41(a)(1) trumps State Farm's position that the plain language of Rule 41(e) prevails. While we have previously addressed the application of both Rule 41(a)(1) and 41(e), we have never before addressed the interaction of the two rules. Therefore, we must determine which rule prevails under the facts presented here. In order make this determination, we first turn to the case law that already interprets each of these rules.

¶ 18 Regarding Rule 41(a)(1), we have held that this rule carries forward part of the common law allowing a plaintiff to end a lawsuit without prejudice to bringing a later lawsuit. We stated "[t]raditionally, a plaintiff [unable to produce sufficient evidence] has had an unqualified right, upon payment of costs, to take a nonsuit in order to file a new action after further preparation, unless the defendant would suffer some plain legal prejudice other than the mere prospect of a second lawsuit.... Rule 41(a)(1) preserves this unqualified right of the plaintiff to a dismissal without prejudice prior to the filing of defendant's answer." Jangula v. United States Rubber Co. (1966), 147 Mont. 98, 113-14, 410 P.2d 462, 470. See also Jones v. SEC (1936), 298 U.S. 1, 19, 56 S.Ct. 654, 659, 80 L.Ed. 1015 ("The general rule is settled for...