William Kevin Hadley v. FedEx Ground Package System, Inc. ( 2019 )

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2018-CA-00347-COA
WILLIAM KEVIN HADLEY APPELLANT
v.
FEDEX GROUND PACKAGE SYSTEM INC. APPELLEES
AND STEVEN OTTO
DATE OF JUDGMENT: 02/15/2018
TRIAL JUDGE: HON. JAMES McCLURE III
COURT FROM WHICH APPEALED: DESOTO COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: JOE MORGAN WILSON
JERRY WESLEY HISAW
ATTORNEYS FOR APPELLEES: ROBERT A. BIGGS III
CHARLES STEPHEN STACK JR.
NATURE OF THE CASE: CIVIL - PERSONAL INJURY
DISPOSITION: AFFIRMED - 04/30/2019
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
TINDELL, J., FOR THE COURT:
¶1. On June 20, 2017, Steve Otto (“Otto”) and FedEx Ground Package System Inc.
(“FedEx”) filed a Motion to Dismiss against William Kevin Hadley (“Hadley”) in the DeSoto
County Circuit Court, arguing that Hadley had failed to properly serve Otto and FedEx before
the statute of limitations expired. The circuit court granted the motion and dismissed
Hadley’s claims for insufficient service of process. In his response to the defendants’
motions, Hadley moved to amend his complaint to add J. Delivery Services, Otto’s actual
employer, as a defendant. The circuit court denied this motion as moot. Hadley now appeals
this judgment, arguing that the circuit court erred by not granting Hadley a 120-day extension
of time to perfect service of process and by not granting Hadley leave to amend his
complaint. Finding no error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2. This case stems from a car accident that occurred on January 31, 2014, when Otto
rear-ended Hadley while driving a truck owned by FedEx. On January 31, 2017, Hadley filed
a complaint against FedEx and Otto in the circuit court exactly one day before the statute of
limitations expired.
¶3. Hadley attempted to serve FedEx on its Mississippi registered agent, CT Corporation
System, via certified mail. After much difficulty locating Otto, Hadley’s attorney filed a
motion for additional time to serve process one week before the deadline to serve Otto would
expire. The motion was never set for a hearing, and no order was entered granting the
motion. Hadley nonetheless attempted to serve Otto by publishing notice in the DeSoto
Times Tribune for three consecutive weeks beginning on June 20, 2017.
¶4. On July 20, 2017, FedEx and Otto filed motions to dismiss Hadley’s complaint,
arguing that Hadley had failed to properly serve them with process within the 120-day
deadline prior to the expiration of the statute of limitations. Hadley responded, again
requesting an extension of time to serve the parties along with a motion for leave to amend
the complaint to add J. Delivery Services, Otto’s actual employer at the time of the accident,
as a party to the action.
¶5. The circuit court granted the defendants’ motions to dismiss, finding that Hadley
failed to properly serve FedEx and Otto within the 120-day deadlines and failed to show
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good cause for invalid service. The circuit court also denied Hadley’s motion for leave to
amend his complaint. Aggrieved, Hadley now appeals.
STANDARD OF REVIEW
¶6. This Court reviews the grant or denial of a motion to dismiss de novo. Blakeney v.
Warren County, 973 So. 2d 1037, 1039 (¶11) (Miss. Ct. App. 2008). A finding of good
cause or excusable neglect is usually left to the discretion of the circuit court, unless such
discretion is abused and requires reversal. Long v. Mem’l Hosp. at Gulfport, 969 So. 2d 35,
38 (¶5) (Miss. 2007). Where a circuit court applies interpretations of law in its analysis, the
court reviews its determination de novo. Id. But, where the court applies fact-based findings
in its determination of good cause or excusable neglect, the Court defers to the discretionary
ruling of the circuit court and “whether there was substantial evidence supporting the
determination.” Rains v. Gardner, 731 So. 2d 1192, 1197 (¶18) (Miss. 1999). “Motions for
leave to amend complaint are left to the sound discretion of the trial court,” and the Court
reverses only where a determination of abuse of discretion is found. Moeller v. Am.
Guarantee & Liab. Ins. Co., 812 So. 2d 953, 961 (¶26) (Miss. 2002).
ANALYSIS
¶7. As a basic principle of pre-trial practice, plaintiffs are required to serve defendants
with a copy of the complaint and summons within 120 days of filing the complaint in order
to effectively put defendants on notice of a pending lawsuit. M.R.C.P. 4(h). Filing a
complaint marks the tolling of the statute of limitations. Watters v. Stripling, 675 So. 2d
1242, 1244 (Miss. 1996). If service of process is not perfected during that time period, the
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statute of limitations begins to run at the end of that 120 days. Owens v. Mai, 891 So. 2d
220, 223 (¶18) (Miss. 2005). Where a defendant is not properly served and the statute of
limitations expires, dismissal of the plaintiff’s case with prejudice is warranted. Stutts v.
Miller, 37 So. 3d 1, 7 (¶17) (Miss. 2010).
I. FEDEX
¶8. In this case, FedEx would be properly served with process as a corporation by delivery
of the summons and complaint to an officer, managing agent, general agent, or any other
agent authorized to receive process. M.R.C.P. 4(c)(4). But as Hadley admits in his brief, the
only attempt to serve FedEx was via certified mail on its registered agent (CT Corporation
System), located in Flowood, Mississippi. Certified mail may be used to serve process upon
persons “outside this state.” Triple C Transp. Inc. v. Dickens, 870 So. 2d 1195, 1198-99
(¶21) (Miss. 2004) (citing M.R.C.P. 4(c)(5)). The Advisory Committee Note to that rule
provides that “[c]ertified mail service is . . . limited to persons outside the state.” M.R.A.P.
4, advisory committee note. Rule 4(d)(4) makes no distinction for service between a
domestic or foreign corporation. So long as the foreign corporation does business in
Mississippi, service of process is proper by delivery to its registered agent for service of
process. Miss. Code Ann. § 13-3-57 (Rev. 2012). Therefore, Hadley did not properly serve
FedEx within the 120-day deadline.
¶9. Hadley argues that good-faith negotiations coupled with his attorney’s belief that
service of process was not an issue entitled him to a good-cause extension by the circuit
court. A plaintiff must serve defendants with process with the 120-day time frame or show
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good cause as to why service was not made. Watters, 675 So. 2d at 1243. Good cause can
be established when the plaintiff demonstrates “at least as much as would be required to
show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance
of the rules usually does not suffice.” Peters v. United States, 9 F.3d 344, 345 (5th Cir.
1993). Where failure of service is the result of a third party’s conduct, evasion of service or
misleading conduct by the defendant, or understandable mitigating circumstances, good
cause may sometimes (but not always) be found. See Bloodgood v. Leatherwood, 25 So. 3d
1047, 1051-52 (¶20) (Miss. 2010); Holmes v. Coast Transit Auth., 815 So. 2d 1183, 1186
(¶12) (Miss. 2002).
¶10. Here, there is no evidence that FedEx attempted to evade process or mislead Hadley.
The facts, as provided by both parties, reflect that Hadley waited until the day before his
statute of limitations expired to file his complaint, thereby narrowing his own window for
effective service of process. The fact that his counsel mistakenly believed that “service of
process was not an issue” is irrelevant absent some proof of improper representations by
FedEx. “A plaintiff must be diligent in serving process if he is to show good cause in failing
to serve process within 120 days.” In re Holtzman, 823 So. 2d 1180, 1184 (¶11) (Miss.
2002) (citing Bang v. Pittman, 749 So. 2d 47, 52 (¶25) (Miss. 1999)). In Holtzman, the
Mississippi Supreme Court held that a simple mistake by plaintiff’s counsel, such as
misfiling a summons, did not warrant an extension for good cause where process was not
served within 120 days. Id. In this case, the fact that plaintiff’s counsel mistakenly believed
that any service of process issues were taken care of does not waive the duty to ensure that
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all parties are served properly.
¶11. Reliance on settlement negotiations is also an insufficient basis to establish good
cause for an extension of time to serve process. Holmes, 815 So. 2d at 1186-87 (¶11). In
Holmes, the plaintiff failed to properly serve a governmental entity within the 120-day time
frame due to the mistaken belief by plaintiff’s counsel that the defendant had accepted
service. Id. at 1184 (¶4). When the circuit court dismissed the case, the plaintiff argued on
appeal that the defendant mistakenly led counsel to believe service of process was accepted
and that settlement negotiations were ongoing. Id. at 1186 (¶10). The Court rejected this
argument and found that “[r]eliance on indefinite good faith negotiations clearly subverts the
purpose of Rule 4(h), which is to bring claims to a court for judicial review in a timely
manner.” Id. at 1187 (¶14). The rationale of the Holmes Court was not to punish plaintiffs
who diligently seek to serve process but to encourage parties to engage in settlement
negotiations while properly and timely giving plaintiffs their day in court. Id. Hadley’s case,
while dealing with a corporation rather than a governmental entity, is nevertheless similar
in circumstances and warrants the same result. Neither mistake of counsel nor ongoing
settlement negotiations relieves a plaintiff from adhering to service-of-process rules.
¶12. Finally, Hadley argues that FedEx potentially waived its service of process defenses
“based upon the facts of this case.” But the waiver of affirmative defenses occurs where
there is substantial and unreasonable delay plus active participation in litigation. Estate of
Puckett v. Clement, 238 So. 3d 1139, 1145 (¶10) (Miss. 2018). Here, FedEx filed its answer
less than one month after Hadley’s improper service, asserted its improper service of process
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defenses, and then filed its Motion to Dismiss based upon the failure to properly serve within
one month of filing its answer. Such conduct does not constitute a waiver under Mississippi
law.
¶13. The circuit court found that ongoing settlement negotiations and a mistaken belief that
service of process was not an issue failed to establish good cause for an extension of time to
serve FedEx. We find no abuse of discretion with the circuit court’s decision to deny
Hadley’s motion and dismiss the case.
II. OTTO
¶14. Hadley also contends that the circuit court committed error by dismissing his claims
against Otto for failure to serve process. Otto, as an individual, could best be served with
process through personal delivery of the summons and complaint. M.R.C.P. 4(d)(1)(A). If,
after reasonable diligence, the defendant cannot be served personally, a copy of the complaint
and summons can be made “at the defendant’s usual place of abode with the defendant’s
spouse or some other person of the defendant’s family above the age of sixteen years who
is willing to receive service” and by first-class mail to the same address thereafter. M.R.C.P.
4(d)(1)(B). Additionally, Otto could have been properly served by first-class mail along with
two copies of a notice and acknowledgment and return envelope. M.R.C.P. 4(c)(3). If the
defendant does not return the acknowledgment back to the sender under this rule, process
may be served using another proper method. Id. Finally, where a defendant is a nonresident
of the state or, after proof of diligent inquiry, the defendant is determined to be absent within
the state, service by publication may be proper. M.R.C.P. 4(c)(4)(A).
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¶15. In his brief, Hadley states that there were difficulties locating Otto due to address
changes and alleged domestic-violence issues. But there is no indication that Hadley
attempted personal service or service by mail to any of Otto’s listed addresses. Hadley’s
counsel then filed a motion for additional time to serve process upon Otto approximately one
week before the 120-day deadline expired. However, he did not set the motion for hearing
or obtain a ruling on the motion. Hadley uses this motion to argue that he need only show
“cause” rather than “good cause” to warrant an extension. See Cross Creek Prod. v. Scafidi,
911 So. 3d 958, 960 (¶¶5-6) (Miss. 2005). The Mississippi Supreme Court has held,
however, that “a party making a motion must ‘follow up that action by bringing it to the
attention of the judge and by requesting a hearing upon it.’ It ‘is the responsibility of the
movant to obtain a ruling from the court on motions filed by him, and failure to do so
constitutes a waiver of same.’” Billiot v. State, 454 So. 2d 445, 456 (Miss. 1984) (citing
Sharplin v. State, 357 So. 2d 940, 942 (Miss. 1978)). By failing to set his original motion
for hearing or obtain an order, Hadley waived that motion.
¶16. Following the motion, Hadley’s only attempt to serve Otto was by publication in the
DeSoto Times Tribune. Rule 4(c)(4)(A) allows for service by publication where a defendant
is “a nonresident of this state or not be found therein on diligent inquiry.” M.R.C.P.
4(c)(4)(A). Service by publication in lieu of personal service is proper only after a showing
of diligent inquiry proves that the plaintiff is unable to serve the defendant personally within
the state. Page v. Crawford, 883 So. 2d 609, 611-12 (¶¶10-11) (Miss. Ct. App. 2004),
overruled on other grounds by E. Mississippi State Hosp. v. Adams, 947 So. 2d 887, 891
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(¶12) (Miss. 2007). Further, when a plaintiff requests service by publication, the plaintiff
must file a sworn complaint, petition, or affidavit with the post office address of the
defendant unless after diligent inquiry, the post office address is unknown. M.R.C.P
4(c)(4)(A). The rules regarding service by publication must be strictly observed. Caldwell
v. Caldwell, 533 So. 2d 413, 415-16 (Miss. 1988). If the plaintiff fails to meet these “diligent
inquiry” requirements, this may result in the Court finding improper service of process. Id.Such a showing of diligent inquiry constitutes good faith to the court and the law in which
these requirements were founded. Id.
¶17. Hadley acknowledged “difficulties” in locating Otto in his brief, including potential
address changes and domestic violence issues. But Hadley never indicated that he made
diligent efforts to personally serve Otto or use other means of service. Further, Hadley did
not file a sworn complaint, affidavit, or petition including Otto’s post office address or proof
that, after diligent inquiry, Otto could not be located. Again, the rules require such proof by
documentation in order to properly serve Otto by publication. See Townsend v. What a
Combo Inc., No. 2017-CA-01168-COA, 2019 WL 125878, at *2 (¶10) (Miss. Ct. App. Jan.
8, 2019) (finding insufficient service by publication where an affidavit was filed but did not
comply with Rule 4 (c)(4)(A)). Because Hadley only attempted to serve Otto by publication
and failed to do so in compliance with Rule 4(c)(4)(A), the Court finds that Otto was never
properly served.
¶18. Hadley filed his second motion for an extension along with his response to Otto’s
motion to dismiss, arguing, as he does in his brief, that good cause existed to warrant an
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extension. Where a plaintiff has not proven diligence in attempting to serve the defendant,
the Court will not find good cause for extension. Estate of Puckett, 238 So. 3d at 1148 (¶25).
Based upon the facts before this Court, we disagree with Hadley that good cause was shown
in his efforts to serve Otto. Because the statute of limitations ran before Otto was properly
served, the circuit court acted within its discretion to dismiss the case.
III. J. DELIVERY SERVICES
¶19. Finally, Hadley contends that the circuit court erred when it denied his motion to
amend the complaint to add J. Delivery Services, an independent contractor for FedEx that
was Otto’s actual employer. “A party may amend a pleading as a matter of course at any
time before a responsive pleading is served, . . . [o]therwise a party may amend a pleading
only by leave of court or upon written consent of the adverse party. . . .” M.R.C.P. 15(a).
Amendments should be freely given unless the proposed amendment would still render the
claim futile. Jones v. Lovett, 755 So. 2d 1243, 1247 (¶8) (Miss. Ct. App. 2000).
¶20. Here, Hadley filed his original complaint one day before the statute of limitations ran.1
Thus, the filing of the complaint tolled that one-day limitations period for 120 days for
service of process. The circuit found that Hadley failed to properly serve both Otto and
FedEx within the 120-day deadline, allowing the one-day statute of limitations time period
to run, and the court dismissed the original complaint as time-barred. Rule 15 allows for the
amendment of a complaint either during the limitations time period or after the statute of
limitations has run, so long as that amended complaint relates back to the original complaint.
1
The three-year statute of limitations is applicable in this case. See Miss. Code Ann.
§ 15-1-49 (1990).
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M.R.C.P. 15. The requirements of Rule 15(c) “must be fulfilled before the statute of
limitations has run or within 120 days of the filing of the original complaint.” Brown v.
Winn-Dixie Montgomery Inc., 669 So. 2d 92, 94 (Miss. 1996) (citing Schiavone v. Fortune,
477 U.S. 21 (1986)). Because Hadley failed to properly serve Otto and FedEx, thereby
dismissing the original complaint as time-barred, this Court agrees with the circuit court that
the motion for leave to amend the complaint was moot. As such, the circuit court was within
its discretion to deny Hadley’s motion for leave to amend the complaint.
CONCLUSION
¶21. Hadley filed this lawsuit one day before the statute of limitations expired. As such,
the statute of limitations period was only tolled for 120 days unless an extension was properly
granted. Hadley failed to obtain a ruling on his prior motion for extension and failed to
demonstrate good cause for extension before the circuit court on his second untimely motion.
Neither FedEx nor Otto were effectively served with process before the statute of limitations
expired, and therefore the claims against them were properly dismissed. Furthermore, the
circuit court was within its discretion to deny Hadley’s motion for leave to amend the
complaint because the dismissal of the original complaint rendered the amendment futile.
For the foregoing reasons, we affirm the circuit court’s judgment.
¶22. AFFIRMED.
BARNES, C.J., CARLTON AND J. WILSON, P.JJ., GREENLEE,
WESTBROOKS, McDONALD, LAWRENCE, McCARTY AND C. WILSON, JJ.,
CONCUR.
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