LePage v. Bay Creek Partnership, No. S1021-03 (Katz, J., Feb. 26, 2004)



[The text of this Vermont trial court opinion is unofficial. It has been
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STATE OF VERMONT
Chittenden County, ss.:

PRICILLA & GERALD LE PAGE

v.

BAY CREEK PARTNERSHIP



                                   ENTRY
        This is a motion to dismiss for plaintiffs’ failure to properly serve
defendant Carol Dousevicz within the time frame of Civil Rule 3 in
accordance with the process outlined in Rule 4(d). Plaintiffs do not deny
that service was improper but claim equitable estoppel and request an
enlargement of time under Rule 6(b) to perfect service on defendant
Dousevicz.

       The defendant parties in this case include: Dousevicz who runs an
unincorporated business, her husband’s business, and Bay Creek
Partnership. Plaintiffs attempted to serve all three parties on September 26,
2003. The deputy charged with service successfully served the husband for
his business and Bay Creek at the husband’s place of business. He also left
Dousevicz’s summons and complaint with the husband at the latter’s
request, after he promised to give them to her at home. From the evidence,
there is no question that this service did not satisfy Rule 4(d) which allows
for service on another only at the defendant’s home or if the recipient is an
authorized agent. V.R.C.P. 4(d)(1)&(8); see also 4A C. Wright & A.
Miller, Federal Practice & Procedure § 1094 (2002). Dousevicz’s husband
is not her agent, and he was not served her papers at her home. After
receiving the papers, it appears that he did not bring them home but rather
delivered them to Dousevicz’s attorney, Thomas Heilmann.

        Plaintiffs’ claim stems from an accident that occurred on September
10, 2000. Their attorney Joseph Gamache filed the complaint on August
25, 2003, which meant that the end of the 3 year statute of limitations
period was looming. 12 V.S.A. § 512(4). Since Attorney Gamache filed in
August, he also effectuated a tolling on the statute of limitations beyond
September 9, 2003. Under, Rule 3, the statute of limitations will extend to
the end of the 60 days provided in Rule 3 so long as timely service is
accomplished. Weisburgh v. McClure Newspapers, Inc., 136 Vt. 594, 595
(1979). In this case, the officer effecting service failed to serve Dousevicz
within the provisions of Rule 4(d). Thus on October 24, 2003, plaintiffs’
claims against Dousevicz expired under Rule 3 and § 512, for failure to
serve defendant in a timely manner. If there were no more facts involved in
this case, it would end here as the plaintiff has “the responsibility for any
failure to fulfill the provisions of V.R.C.P. 4(d) and (e) . . .” Brady v.
Brauer, 148 Vt. 40, 44 (1987). Furthermore, despite plaintiffs’
unawareness at the time, they did have notice of the defect from the return
of service sheet, which stated that Dousevicz’s complaint and summons
were served on her husband at his place of business, in contravention to
plaintiffs’ earlier directions and was on its face invalid. See Rule 4(i) rptr.
n. (Rule 4(i) “gives plaintiff’s attorney a final opportunity to check the
accuracy of process and return . . .”). Such an error is plaintiff’s burden.
Fercenia v. Guiduli, 2003 Vt. 50, at ¶ 12 (mem.). This is in part because
service of process has the twin functions of not only notifying the defendant
of the complaint and its terms but also to physically gain jurisdiction over
the defendant. 4A C.Wright & A.Miller, Federal Procedure & Practice §
1094, at 511 (2002). By failing to serve defendant, plaintiffs not only failed
to serve notice; they failed to effect jurisdiction.

        On October 17th while there was still time to correct the ineffective
service of process, defense attorney Heilmann and plaintiffs’ attorney
Gamache had a a telephone conversation. Heilmann asked his adversary
for a favor: Give me more time to file an answer for Carol Dousevicz, don’t
default her, I know we’re up against the twenty day deadline for answering.
V.R.C.P. 12 & 55. Gamache agreed. At that moment, Heilmann knew:

$      Dousevicz did not know about the suit, from which it could be
       readily inferred that she had not been served;
$      The complaint had been filed with the court August 25, because his
       other clients had faxed him their copy, showing those dates;
$      The accident had occurred September 10, three years earlier, hence
       there was a statute of limitation issue

       Against this background, Heilmann asked for the favor. By October
23, which would have been the 59th day after filing, still within the time for
correcting the erroneous service and saving the claim, Heilmann knew all
the pertinent facts, because he also:

$      Had received a copy of the improper return of service which,
       because it had been filed by Gamache with the court, signaled that
       Gamache did not appreciate its error;
$      Had thought through the 60 day limitation on perfecting service
       subsequent to commencing an action by filing.

Hence, within the 60 day period, Heilmann knew all the facts, knew that
Gamache was permitting him additional time to reply, which would extend
beyond the critical 60 day period, and therefore knew that he was in fact
pushing Gamache beyond the statute. Yet he did not notify Gamache but
instead filed a motion to dismiss based on ineffective service of process on
October 28, 2003. As well, Dousevicz’s husband claims that he informed
Ms. Dousevicz of the lawsuit on that day for the first time. Plaintiffs argue
that this knowledge and promise on their part to forebear should either
estop Dousevicz from raising the statute of limitations defense or justify a
Rule 6(b) extension of time to serve.

        Plaintiffs’ motion for an extension of service under Rule 6(b) is
inappropriate in the present situation. Federal Rule 6(b), on which
V.R.C.P. 6(b) is taken, does not permit courts to enlarge statutes of
limitation. Hammons v. Int’l Playtex, Inc., 676 F. Supp. 1114, 1118
(D.Wyo. 1988), vacated and remanded by party stipulation, 872 F.2d 963
(10th Cir. 1989) (noting that the 60 days under Rule 3 was an “integral part
of the statute of limitations” and any enlargement would frustrate its
policies); 4B C.Wright & A.Miller, Federal Practice and Procedure § 1165,
at 519–20 (2002); cf. Poulos v. Wilson, 116 F.R.D. 326 (D.Vt. 1987)
(granting a Rule 6(b)(2) motion when defendant was served 1 day after the
time for Rule 3 service lapsed but 8 days before statute of limitations ran).
Since plaintiffs’ Rule 6(b) motion is not merely for Rule 3 purposes but to
preserve their claim beyond the statute of limitations so that they can then
effect proper service, it cannot be granted, regardless of any excusable
neglect or equitable considerations.

        A defendant may be estopped from raising the statute of limitations
in certain circumstances by either equitable tolling or equitable estoppel.
Fercinia, 2003 Vt. 50, at ¶ 12. Equitable tolling in this case does not apply
to plaintiffs. Beecher v. Stratton Corp., 170 Vt. 137, 142–43 (1999)
(requiring the defendant to mislead or prevent plaintiff in an extraordinary
way from filing or for plaintiff to file timely in wrong forum). For
equitable estoppel to apply, plaintiffs must demonstrate that:

       (1) the party to be estopped must know the facts; (2) the party
       being estopped must intend that its conduct be acted upon; (3)
       the party asserting estoppel must be ignorant of the true facts;
       and (4) the party asserting the estoppel must rely on the
       conduct of the party to be estopped to its detriment.

Town of Victory v. State, 174 Vt. 539, 540 (2002) (mem.); Fisher v. Poole,
142 Vt. 162, 168 (1982).

        In this case the question appears to revolve around ignorance. While
on its face the return of process was defective, Attorney Gamache had
received it from an experienced deputy with many years experience in
serving process who gave no indication of any problems. This was
followed by Attorney Heilmann’s request for an extension for Dousevicz to
respond. The fact that Attorney Heilmann expressed concern about default
judgment against his client implies that she had been properly served.
Otherwise, Rule 12(a) would not have been activated and the twenty days
would not have run. Attorney Heilmann knew that his client had not been
served. Attorney Gamache, who should have been aware of the defect, was
not aware of it. Heilmann obtained a promise from Gamache not to file for
default judgment, thereby relieving Heilmann from promptly asserting his
client’s Rule 12(b)(5) motion, which would in turn have given Gamache an
opportunity to correct. But it was not until October 23d, that Attorney
Gamache demonstrated that he was completely unaware of the flaw by
filing the return of service with the improper service on Dousevicz. At that
point, Heilmann working under the benefit of the promise not to file a
default, waited until plaintiffs’ clock ran out.

        There is nothing to suggest that Heilmann initially intended his
actions to lull Gamache into complacency. Heilmann’s conversation, while
he was aware of most of the relevant facts, did cause Gamache to change
his position in reliance on Heilmann’s implication—that service had been
effective. Beecher v. Stratton Corp., 170 Vt. 137, 139 (1999). Gamache’s
promise effectively stripped him of the extra time he had left to correct the
improper service of process. Yet, this is ultimately not enough to support
estoppel. Id. (“All of the circumstances of the case must be evaluated in
determining whether the doctrine applies, but generally it ‘will not be
invoked in favor of one whose own omissions or inadvertences contributed
to the problem.’”) (quoting Fisher, 142 Vt. at 169). Plaintiffs’ entire
situation stems from their failure to properly serve Dousevicz or recognize
that the deputy had failed to do so. Despite plaintiff’s reliance, Heilmann’s
promise was only collaterally related to the service of process. Given the
strong burden on the plaintiffs’ shoulders to properly serve all defendants, it
is difficult to imagine then what duty shifted to Heilmann on October 23d
when he had pieced the mistake together. Despite the murky circumstances
between the two lawyers and the unfortunate results for the plaintiffs, it
remains their burden to effectuate service and their responsibility should it
fail. Equity will only intervene where the plaintiffs’ situation permits it.
       Defendant Carol Dousevicz’s motion to dismiss claims against her is
therefore granted.

      Dated at Burlington, Vermont________________, 2004.




                                                                    Judge
