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Party can challenge service despite request

Equitable estoppel does not bar defendants from asserting the statute of limitations as a defense, even though the defendants’ attorney told the plaintiff that he would accept service of the complaint and summons in lieu of the defendants themselves, the Wisconsin Court of Appeals held on June 17.

The court also held that the statute of limitations is not tolled by a federal court action that is voluntarily dismissed.

Anna Culbert alleges that, as a result of medical malpractice on Sept. 22, 1998, her spinal cord was injured, and she is now confined to a wheelchair.

On April 6, 2000, she filed suit in federal district court against the Mayo Foundation, claiming negligence by Dr. David Ciresi, Dr. Richard Cochrane, and the staff of Luther Hospital in Eau Claire.

Mayo moved to dismiss, arguing that it did not employ Ciresi or Cochrane, and had no responsibility for operations at Luther Hospital. Culbert then voluntarily dismissed the action on June 26, 2000.

Culbert’s attorney began preparing a new complaint to be filed in Wisconsin state court against Ciresi, Cochrane, Luther Hospital, and Eau Claire Anesthesiologists.

Before it was filed, the attorney for Ciresi and Luther Hospital contacted Culbert’s attorney, and asked that all correspondence and pleadings for the new state action be served upon her instead of serving Ciresi and the hospital directly.

Culbert’s attorney sent a copy of the as-yet-unfiled complaint and attached a cover letter stating, “If you are not willing to accept service on behalf of Luther Hospital and Dr. Ciresi please advise me immediately.” Ciresi and Luther’s attorney wrote back stating, “This letter will confirm that I accepted service of the Complaint ….”

The summons and complaint were filed on Sept. 1, 2000. On September 6, 2000, unauthenticated copies of the summons and complaint were served on Dr. Cochrane and Eau Claire Anesthesiologists. All the defendants filed answers and motions to dismiss claiming lack of personal jurisdiction based on insufficient service.

Culbert acknowledged the error, and the trial court dismissed the action without prejudice on May 28, 2002.

Culbert filed a second state court action on March 13, 2002, alleging the same facts as in the federal action and the first Wisconsin action. The defendants again moved to dismiss, this time arguing the statute of limitations had run.

Culbert argued that the federal action tolled the statute of limitations from the date she filed the federal complaint, April 6, 2000, until the time for appeal passed on July 26, 2000. Thus, she argued the statute of limitations was tolled for 111 days, plus an additional 123 days for the mandatory mediation period, pursuant to sec. 893.54.
Culbert also argued that because the defendants accepted service of the defective summons and complaint and engaged in months of discovery, they should be estopped from asserting the statute of limitations as a defense.

St. Croix County Circuit Court Judge Scott R. Needham granted the motions to dismiss with prejudice, and Culbert appealed, but the court of appeals affirmed in a decision by Judge Gregory A. Peterson.

What the court held

Case: Culbert, et al., v. Ciresi, et al., No. 02-3320.

Issue: Is the statute of limitations tolled pending a federal action based on the same facts that is ultimately dismissed voluntarily?

Is a defendant equitably estopped from asserting the statute of limitations in a subsequent case, where she had informed the plaintiff’s attorney prior to the earlier action on the same facts, that she would accept service of the summons and complaint, and then, after the statute of limitations had run, moved to dismiss the first action?

Holding: No. Unlike a state court action, the voluntary dismissal of a federal action operates to render the entire action a nullity.

No. Because acceptance of service of a defective complaint does not waive the right to challenge procedural defects, the plaintiff could not rely on the representation of the defendant’s attorney.

Counsel: Mark L. Krueger, Baraboo; Anthony F. Baer, Baraboo, for appellant; Owen Thomas Armstrong Jr., Milwaukee; Donald K. Schott, Madison; Sarah E. Coyne, Madison; Emily M. Feinstein,
Madison, for respondent.

Tolling

The court first held that the pendency of the federal action did not toll the statute of limitations.

Section 893.15 provides in relevant part: “(2) In a non-Wisconsin forum, the time of commencement or final disposition of an action is determined by the local law of the forum. (3) A Wisconsin law limiting the time for commencement of an action on a Wisconsin cause of action is tolled from the period of commencement of the action in a non-Wisconsin forum until the time of its final disposition in that forum.”

The court looked to the law of the federal courts to determine when the federal case was commenced, and concluded that under federal law, the entire lawsuit was a nullity, and therefore, was never commenced.

The court acknowledged that Federal Rules of Civil Procedure 3 states that a civil action is commenced by filing a complaint with the court. However, Culbert’s federal action was voluntarily dismissed, and in federal courts, a voluntary dismissal means an action is a nullity, pursuant to FRCP 41(a)(1).

The court also cited Robinson v. Willow Glen Acad., 895 Fed.2d 1168 (7th Cir. 1990), in which the Seventh Circuit held that a voluntarily dismissed federal action does not toll the Wisconsin statute of limitations.

The court distinguished Johnson v. County of Crawford, 195 Wis. 2d 374, 381, 536 N.W.2d 167 (Ct.App.1995), in which the court of appeals stated, “We see nothing … that exempts certain causes of action [from tolling] because the first action to enforce that cause of action was voluntarily dismissed.”

The court noted that, in Johnson, the original action was filed in state court, rather than federal court. Accordingly, the court held that Johnson does not apply, and the pendency of the federal court case did not toll the statute of limitations.

Estoppel

The court then held that the defendants were not equitably estopped from asserting the statute of limitations as a defense, applying the six factor test of Hester v. Williams, 1m17 Wis.2d 634, 345 N.W.2d 426 (1984).

The trial court had determined that the “defendants here did not lie in the weeds, waiting until the last moment to strike, and are not responsible for the jurisdictional defects associated with this action and the earlier case.” In addition, the court noted the “Catch-22” situation the defendants were in — the defendants’ attorneys needed to conduct discovery until the statute of limitations ran in the event Culbert corrected the procedural error, but they also could not alert Culbert to her noncompliance because they could have been accused of not zealously representing their clients’ best interests.

The court concluded that this was a reasonable exercise of the trial court’s discretion, rejecting Culbert’s assertion that the defendants engaged in “game playing” or “lie[d] in the weeds until the statute of limitations [runs],” as was decried by the Wisconsin Supreme Court in Ocasio v. Froedtert Mem’l. Luth. Hosp., 2002 WI 89, Pars. 22, 24, 254 Wis. 2d 367, 646 N.W.2d 381.

The court stated, “We reject Culbert’s attempt to compare this case with the circumstances in Ocasio. To begin with, Culbert had adequate notice that there were procedural defects. Each defendant raised the affirmative defenses of insufficient process and lack of personal jurisdiction in their answers to the complaint. As a result, Culbert knew the defendants were claiming a procedural defect, yet she never attempted to determine what that defect was. While the defendants were required to plead their affirmative defenses, they were not required to do more. A defendant need not alert and spell out a defect in a case, especially when the defect is dispositive. In fact, to do so would conflict with the defense attorney’s duty to zealously represent the client. Hester, 117 Wis. 2d at 643-44. This is the ‘Catch-22’ situation that the trial court referred to in its written order.”

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Wisconsin Court of Appeals

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Case Analysis

The court further held that the defendants’ attorneys did not waive the defense by accepting service of the defective complaint, citing Falkner v. Guild, 10 Wis. 563, 575 (1860). Consequently, the court concluded that Culbert could not rely on the communication from Ciresi and Luther’s attorney to cure defective service.

Finally, the court held that the fact the defendants engaged in discovery until the statute of limitations ran does not estop them from using the statute of limitations as a defense, stating, “Moving forward with discovery is not equivalent to representation that a party is not going to pursue the defenses it asserted in its answer,” and citing Lord v. Hubbell, Inc., 210 Wis. 2d 150, 161, 563 N.W.2d 913 (Ct.App. 1997).

The court concluded, “The first thing that must be shown under the Hester factors is that the defendants are guilty of fraudulent or inequitable conduct. The record shows, and the trial court reasonably concluded, that the defendants did not engage in any fraudulent or inequitable conduct. Thus, the trial court correctly determined that estoppel does not apply. (cite omitted).”

Accordingly, the court affirmed.

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David Ziemer can be reached by email.

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