Delaying Service of Process May Be Your Next Big Headache - A Plaintiff Lawyer's Nightmare
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After filing the Petition, don't fall for the insurance adjuster's claim to not serve the Defendant while settlement negotiations progress. After Henry v. Shober and Antolik v. McMahon there is no reason to intentionally delay service of process.
Know your rights and protect your clients.
In this case, Antolik v. McMahon, 112/06-0918 (Iowa 2007) the plaintiff's case was dismissed by the Iowa District Court for untimely service. I.R.C.P. 1.302(5) requires suits to be served within 90 days following filing. The Plaintiff had sought, ex parte, and received an order granting additional time to complete service of process due to ongoing settlement negotiations. The Court citing Henry v. Shober, 566 N.W.2d 190, 193 (Iowa 1997) held that ongoing settlement negotiations are insufficient "as a matter of law" to delay service of process. The suit was filed on July 29, 2005 but not served until December 29, 2005; a period of 153 days. The Antolik decision doesn't say if the Defendant or their insurance company had been provided with a copy of the filed Petition or suit papers. The decision makes no mention of any prejudice to Defendant. The decision makes no mention of any reason for finding the Defendant had not consented to the delay pending negotiations. The only reason given was that this is the rule and the Court seems to be more concerned with it's scheduling calendar than the substance of the underlying claim. In this instance the Plaintiff's attorney applied for and received a Court order granting additional time, then after Defendant filed an Answer they then raised the delay in filing as a defense. No prejudice just a rule that they thought should be strictly interpreted. It seems odd how literally the Court read and then applied the rule.
The Henry lawsuit was filed 169 days after service of process and is heavily relied upon by the Antolik Court. I've been in this situation with the insurance company in a recent case where the adjuster proposed being allowed additional time to file an Answer. I turned her down flat. What this ruling will do is encourage insurance companies to set up unsuspecting Plaintiff's attorney for a later defense, that has in no way prejudiced the insured or if there is prejudice, that their own insurance company created. This is a very harsh interpretation of the rule.
In Henry the Court stated:
A civil action is commenced by filing a petition with the district court. Iowa R. Civ. P. 48. Generally, the filing of a petition also tolls the statute of limitations. Iowa R. Civ. P. 55. However, if there is an intentional delay in service, the filing of the petition alone is not enough to toll the statute of limitations. In re Estate of Steinberg, 443 N.W.2d 711, 713 (Iowa 1989); Scieszinski v. City of Wilton, 270 N.W.2d 450, 453 (Iowa 1978). The petition, original notice, and directions for service must be promptly delivered for service on the defendant. Iowa R. Civ. P. 49(b); Alvarez, 560 N.W.2d at 590-91. Even though the Iowa rules of civil procedure do not specify when service must be made, (FN1) our cases require dismissal of an action if there is an unjustified, abusive delay in completing service. Alvarez, 560 N.W.2d at 591.In the recent Alvarez case, we clarified the analysis to be applied when there is a delay in service after the filing of a petition: The court must first determine if the delay was presumptively abusive. If the delay was presumptively abusive, the court must then determine if the plaintiff has carried the burden of proving the delay was justified. If it was not justified, the case must be dismissed. If the delay was justified, dismissal by reason of abusive delay is inappropriate. Even if the delay was not presumptively abusive, an intentional delay can still require dismissal. Id.
As the above analysis suggests, if a delay in service is presumptively abusive, it does not matter whether the delay is intentional. Here, the Henrys' 169-day delay in serving Shober was both intentional and presumptively abusive. It is undisputed that Henrys never attempted to serve Shober for more than five months after the filing of the petition. Further, in Alvarez, we noted that, in accordance with Federal Rule of Civil Procedure 4(m), any delay beyond 120 days "indicates the plaintiff filed the petition, not to seriously institute litigation, but rather to 'ice' the statute of limitations for a later determination on whether to proceed with suit." Id
Henry v. Shober, 566 N.W.2d 190, 192 (Iowa 1997)
The Court finds notice to the defendant's insurance carrier is insufficient.
The Plaintiff must take some affirmative action to effectuate service of process upon Defendant or have been prohibited, through no fault of his [or her] own, from taking such an affirmative action. Inadvertence, neglect, misunderstanding, ignorance of the rule ... Settlement negotiations, even if done in good faith, do not constitute adequate justification or good cause for delaying service. Scheduling orders should not be delayed due to a delay in service that is preventable. If we were to allow delays in service for ongoing settlement negotiations, plaintiffs would have no incentive to serve the defendant within a reasonable time. Further, we do not see how service of the original notice and petition is a hindrance to the settlement process. Prompt service allows a defendant to investigate the claims and prepare its defense, thus contributing to its evaluation of a case. If the parties wish to continue settlement discussions beyond the limitations period, the plaintiff should secure a statute of limitations extension, in writing, from the defendant and the defendant's insurer. We conclude that the 169-day delay in service was presumptively abusive and that the Henrys did not carry their burden in proving the delay was justified. Therefore, the district court was correct in dismissing the action against Shober. Henry v. Shober, 566 N.W.2d 190, 193 (Iowa 1997)
If, after filing of a Petition, 90 days has passed the Court on its own motion may dismiss the Petition without prejudice.
BEST PRACTICES:
1. Secure from the Defendant an extension to the statute of limitations if delay in filing and service is expected pending settlement negotiations.
2. Do some groundwork to determine how service will be accomplished before filing the Petition.
3. Don't take cases where the statute of limitations is approaching and service of process may be delayed. After all if the Court's schedule is going to trump taking time to possibly settle the case, why risk a malpractice claim; or even an argument about whether it was or was not the lawyers fault for the delay.
4. Don't listen to the insurance companies when they try to bait you into a service of process delay.
5. As a general rule the Plaintiff's attorney should never intentionally delay service of process.
6. Make notes of what you've done to effectuate service of process. Ask process servers for affidavits as to what they've done to effectuate service on defendant.
Know your rights and protect your clients.