COVID-19 Update: How We Are Serving and Protecting Our Clients

Dismissal based on intentional delay of service of process affirmed.

Where a plaintiff knew how to properly serve a defendant yet chose to delay service of process until after the statute of limitations on his claims had run, summary judgment for defendant was affirmed.

In Fuller v. Allianz Life Insurance Company of North America, No. E2018-02267-COA-R3-CV (Tenn. Ct. App. Feb. 19, 2020), plaintiff filed suit against defendant and Community National Bank in 2015. In that suit, plaintiff initially sent a summons for defendant to CT Corporation System, but CT Corporation informed plaintiff by letter that it was not authorized to accept service for defendant. Plaintiff then successfully served defendant’s general counsel. This first suit was eventually nonsuited, and plaintiff filed second suits against defendant and Community National Bank separately. For the suit against defendant, which was originally filed in August 2017, plaintiff again sent a summons to CT Corporation, who responded by letter in November 2017 that it was not authorized to accept service. “Plaintiff’s counsel did not attempt to properly serve defendant until March 20, 2018, when he returned the unserved summons, and obtained and mailed a second summons to defendant’s general counsel.”

Defendant moved to dismiss based on the statute of limitations, arguing that the current complaint was filed in March 2018, which was outside the negligence statute of limitations, and that “the amended complaint does not relate back to the date of the filing of the original complaint because Plaintiff intentionally waited more than seven months to serve [defendant] with the original complaint while he pursued parallel claims against Community National Bank in this court.” Because the trial court considered the date of service of process, it converted the motion to one for summary judgment. When responding to defendant’s statement of undisputed facts, plaintiff admitted that it had been put on notice twice that CT corporation was not the registered agent for defendant, and that despite asserting “that there are reasons other than tactics for delay of service of process in this case[,] [plaintiff’s] attorney has failed however to provide this Court with any other reason for delay of service.” The trial court granted the motion, dismissing all claims against defendant, and the Court of Appeals affirmed.

Rule 4.01(3) of the Tennessee Rules of Civil Procedure states that “[i]f a plaintiff or counsel for a plaintiff…intentionally causes delay of prompt issuance or prompt service of a summons, the filing of the complaint…will not toll any applicable statutes of limitation or repose.” Here, the trial court ruled that a finding that plaintiff’s delay was intentional was supported by several facts:

(1) the fact…that despite having actual knowledge of precisely how to properly serve defendant, plaintiff waited until March 2018 to attempt proper service of the August 2017 lawsuit; (2) a perceived tactical advantage to plaintiff in delaying service of process against defendant while proceeding in the litigation against [the other bank]; and (3) plaintiff’s complete silence and declination to provide any evidence on the matter of intentional delay until after the court granted summary judgment.

 

While plaintiff cited two cases where dismissal on this basis was denied, the Court of Appeals pointed out that the plaintiff in each of those cases put forth evidence in the form of an attorney’s affidavit that the delay was not intentional. Here, no such evidence was presented.

The Court of Appeals noted that “plaintiff elected to provide absolutely no evidence pertaining to the allegation of his intentional delay,” and he offered no “argument or explanation for waiting seven months to properly serve defendant.” Accordingly, the Court affirmed the finding that defendant had made a sufficient showing of intent and upheld summary judgment.

Plaintiff also argued that the trial court wrongly denied his motion to alter or amend the judgment, but the Court quickly rejected this assertion, noting that the evidence plaintiff sought to introduce was readily available before the summary judgment motion was decided.

The Court of Appeals also affirmed summary judgment for defendant on plaintiff’s fraud claim. The facts of this matter were essentially that plaintiff alleged he was a victim of a ponzi scheme perpetuated by a former employee of defendant. Plaintiff asserted that the employee talked plaintiff into purchasing annuities from defendant, then withdrawing money, but that the employee intercepted the mailed withdrawals, forged signatures, and appropriated plaintiff’s money. Sometime after this occurred but before plaintiff discovered the wrongdoing, defendant fired the employee. Plaintiff’s complaint alleged that defendant had a duty to inform him that the employee had been terminated, but the Court of Appeals agreed with the trial court that plaintiff had not put forth facts that would support the finding of such a duty.

A duty to disclose arises when “(1) there is a fiduciary relationship between the parties; (2) one of the parties has expressly reposed trust and confidence in the other; or (2) the contract is intrinsically fiduciary and calls for perfect good faith.” (internal citation omitted). Because the facts did not support a finding that any of these situations were applicable, summary judgment was affirmed.

The Court also summarily affirmed dismissal of plaintiff’s asserted TCPA claim, noting that this suit was filed long after “the last consumer transaction giving rise to [a] claim for relief[.]”

This case shows us that purposefully sending service of process to the incorrect person is not a wise move. Further, when faced with a motion for summary judgment, a plaintiff must put forth some evidence to combat defendant’s arguments.

NOTE: To aid lawyers in giving clients guidance about how long it takes to receive an opinion after oral argument in the appellate courts, we are going to start sharing that information with readers. Please understand that the length of time that elapses between oral argument and the date the opinion is released is dependent on a multitude of factors, not the least of which is the complexity of the issues presented. In this case, the opinion was released four months after oral argument.

Contact Information