Minnesota Civil Procedure Update: Court of Appeals Reverses Dismissal for Failure to File Within One Year of Commencing Suit.

The Minnesota Court of Appeals recently held that a plaintiff whose complaint was dismissed under Minn. R. Civ. P. 5.04(a) (2013) can move to vacate the dismissal under Minn. R. Civ. P. 60.02 for excusable neglect.  In a published opinion, Gams v. Houghton, — N.W.2d —, No. A14-1747 (Minn. App. Aug. 24, 2015), a panel of the court of appeals ruled that nothing in Rule 5.04 itself foreclosed a party’s right to seek relief from judgment under Rule 60.02.

In 2013, the Minnesota Supreme Court amended Minn. R. Civ. P. 5.04(a).  The rule required that cases initiated by service of the complaint, rather than filing the complaint, be filed with the court within one year.  Otherwise, the complaint will be “deemed dismissed with prejudice.”  The intent, ostensibly, was to speed cases along and decrease litigation costs.  Minnesota remains one of two states that permits commencing a lawsuit by service. See Minn. R. Civ. P. 3.01(a) (“civil action is commenced . . . when the summons is served . . . .”).

Gams v. Houghton arose out of a physical altercation between Ferdinand Gams and Steven Houghton in 2012.  On March 22, 2013, Gams commenced a lawsuit against Houghton by service of a summons and complaint.  On July 15, 2014, after a period of no communication between counsel, Houghton’s counsel sent a letter to Gams’ counsel advising that Gams did not appear to have filed the action in district court by July 1, 2014, and that, under the amendments to Minn. R. Civ. P. 5.04, the complaint was deemed to be dismissed with prejudice.

Gams filed the action, but the district court dismissed it because it was not filed within one year of commencement as required by Minn. R. Civ. P. 5.04(a).

Gams sought relief from the judgment, arguing the court could vacate dismissal based on Minn. R. Civ. P. 60.02(a) for “mistake, inadvertence, surprise, or excusable neglect.”  The district court denied the motion, and held that Rule 60.02 does not apply to matters dismissed under Rule 5.04.  Alternatively, the trial court held that Gams failed to prove all four “elements” of the Heins test for vacatur under Rule 60.02(a). Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 30, 53 N.W.2d 454, 456 (1952) (to determine whether the movant is entitled to vacatur under Rule 60.02(a), the court considers whether the movant has (1) a reasonable claim or defense on the merits; (2) a reasonable excuse for the neglect; (3) acted diligently after notice of entry of judgment; and (4) demonstrated that no prejudice will occur to the opposing party).

The court of appeals reversed.  The panel held the district court erred by concluding that a party may not seek relief under Rule 60.02 from a judgment entered pursuant to Rule 5.04(a), and by holding that a party must “prove all four elements” under Heins in order to obtain relief from the judgment under Rule 60.02.  Rather, Heins merely sets forth factors for a district court to consider when passing on a motion for relief from the judgment of dismissal.  As such, a party seeking relief from a judgment need not categorically establish all four of the Rule 60.02 factors.

The matter could easily wind up before the Minnesota Supreme Court.  The district courts and civil litigation bar need guidance as to what this seemingly simply rule means (does a year mean a year?), and whether parties bear the burden of their attorneys’ mistakes.

We will continue to monitor this case on appeal.  If you have any questions concerning this case or civil litigation in general, please contact one our of attorneys.