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Graubard v. Balcor Co.3/14/2000
Defendant, The Balcor Company (Balcor), filed an application for interlocutory appeal from an order denying its motion to dismiss Plaintiff's personal injury complaint against it for improper service of process. This Court granted the appeal and proposed summary reversal and remand to the district court for reconsideration of the motion. Both parties have responded to the proposed disposition and, having considered their arguments, we reverse the order denying the motion to dismiss and remand to the district court for reconsideration in light of the standards enunciated below.
BACKGROUND
The order denying Balcor's motion determined that there were three relevant dates: (1) March 28, 1997, the date the complaint was filed in district court naming Balcor's predecessor in interest as a defendant; (2) March 31, 1997, the date the statute of limitations ran on Plaintiff's claim; and (3) June 6, 1998, the date that the summons and complaint were served on Balcor's predecessor in interest. The parties do not contest these dates or their relevance.
In its letter decision, the district court stated its opinion that the fourteen month delay was too long to wait to serve a party, particularly when there was no evidence that the party had prior notice of the suit. The district court continued:
However, the Court of Appeals in Prieto v. Home Ed. Livelihood Program, 94 N.M. 738, 616 P.2d 1123 (Ct. App. 1980) establishes that a complaint may be properly dismissed for lack of reasonable diligence upon a showing of intentional delay by the Plaintiff. There is no evidence of intentional delay in this case. The Motion to Dismiss is denied without prejudice. Should the Defendant obtain evidence of intentional delay, I will rehear the motion.
The order denying the motion and certifying the question for interlocutory appeal did not reiterate the findings or reasoning reflected in the letter decision but denied the motion as not well taken.
ANALYSIS
Balcor filed a motion to dismiss on December 4, 1998. This motion asserted as grounds for dismissal that Balcor received service of the complaint on October 26, 1998, and the complaint did not name or in any way identify it. Balcor asserted that service was improper since it was not a named party to the action and asked that the complaint be dismissed "for improper service of process and the fact that Balcor is simply not a named party to this action." In late December, Plaintiff filed a response noting that the district court had entered an order on October 2, 1998, allowing Plaintiff to amend the complaint by interlineation to substitute Balcor for its predecessor in interest. In February 1999, Balcor filed a reply to the response that explicitly asserted the statute of limitations, which had run prior to the time that Balcor was named a party to the action, and that Balcor was unaware of any claim against it when the statute ran on March 31, 1997. It argued that it was not given notice of the claim until 17 months after the statute of limitations had run.
We determine that Balcor timely asserted the defense of improper service of process including the lack of due diligence in effecting service. Cf. Rupp v. Hurley, 1999-NMCA-057, 20, 127 N.M. 222, 979 P.2d 733 (NMSA 1978 Rule 1-012(B)(5) defense of insufficiency of service of process is waived if not raised at the first opportunity, i.e., with the answer or as part of the first motion to dismiss).
Plaintiff argues that the district court correctly interpreted Prieto as requiring a showing of intentional delay before an appeal could be dismissed for delayed service of process. We disagree with Plain
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