Diana ARIAS, Plaintiff-Appellee, v. Joseph T. CAMERON, et al., Defendants-Appellants.
No. 13-14863.
United States Court of Appeals, Eleventh Circuit.
Jan. 20, 2015.
The district courts’ decisions holding that the federal entities are exempt from paying transfer taxes and that the federal statutes are constitutional are affirmed.
AFFIRMED.
Aaron K. Block, Alston & Bird, LLP, Atlanta, GA, for Defendants-Appellees.
Before WILSON, ROSENBAUM, and BLACK, Circuit Judges.
ROSENBAUM, Circuit Judge:
On the football field, a team with a weak defense may choose to emphasize its offense. The trouble is, in the end, it can be hard to win without a reliable defense.
That is much like the problem that Defendants-Appellants Joseph T. Cameron and The Dow Chemical Company (“Dow“) have in this case. Plaintiff-Appellee Diana Arias sued Cameron and Dow for injuries thаt Cameron allegedly inflicted on Arias while Cameron was acting within the course of his employment for Dow. When Defendants sought judgment in the case on the basis that Arias had allegedly failed to timely perfect service upon them before the statute of limitations ran, Arias moved to voluntarily dismiss the case without prejudice. By doing so, Arias hoped to take advantage of Georgia law, which allows a plaintiff who originally files a case within the statute-of-limitations period to voluntarily dismiss her case and refile it within six months, thereby triggering a new period in which to timely effect service. Defendants went on the offensive, opposing Arias‘s motion for voluntary dismissal on the basis that a voluntary dismissal without prejudice would prejudice them by depriving thеm of their statute-of-limitations defense.
The district court granted Arias‘s motion and voluntarily dismissed the case without prejudice. Defendants now appeal.
But Defendants’ statute-of-limitations defense is, by no means, a certain winner. So their offense—that they will suffer prejudice as the result of a voluntary dismissal without prejudice because they will lose their statute-of-limitations defense—necessarily falters since it depends on their unreliable defense.
And even if Defendants had a viable statute-of-limitations defense that would be destroyed by a voluntary dismissal without prejudice, all of the other equities in this case—which a district court should consider under Rule 41(a)(2) in determining whether to grant a motion for voluntary dismissal—favor Arias. For these
I.
A. The Nature of the Case
In her complaint, Arias alleged that, on March 19, 2011, she was riding her bicycle in Georgia when Defendant-Appellant Cameron, driving a rental car, failed to yield and collided with her. According to the complaint, the car that Cameron was driving was insured by Cameron‘s employer, Dow, and Cameron was operating the car within the course and scope of his employment. As a result of the incident, the complaint asserts, Arias suffered “great bodily injuries.”
When the incident occurred, Cameron produced a California driver‘s license to the Cobb County Police Department, which cited Cameron for failure to yield under Georgia statutе
On February 25, 2013, just over three weeks before the end of Georgia‘s two-year statutory period for filing such claims,1 Arias filed suit in Cobb County State Court against Cameron and Dow. She claimed that she was entitled to damages under two theories of recovery: negligence and stubborn litigiousness.
B. Arias‘s Initial Attempts at Service
Upon the filing of her complaint, Arias attempted to serve both Cameron and Dow. With regard to Cameron, Arias stated in the proceedings below that she believed him to be a California resident, based on his production of a California driver‘s license at the time of the incident and based on Georgia law that generally requires all residents of the state for more than thirty days to obtain a Georgia driver‘s license before operating a motоr vehicle in the state, see
In an effort to comply with the NRMA, on March 13, 2013, Arias mailed the summons and complaint to the Georgia Secretary of State to obtain service on Cameron. Arias also sent Cameron a copy of the summons and complaint by certified mail on the same date, which Cameron later received on March 23, 2013.
With respect to Dow, counsel for Arias attested in the district-court proceedings that, on February 6, 2013, he visited the Georgia Secretary of State‘s website to find the registered agent for Dow, but his query resulted in a showing of no agent for service of process in Georgia. According to counsel for Arias, he did not learn until “[m]uch later” that the website was “in transition and not functioning properly.”
Based on the erroneous belief that Dow lacked a corporate presence in Georgia, Arias mailed a copy of the summons and complaint to Georgia‘s Secretary of State on February 28, 2013, to obtain service on Dow in Delaware, its place of incorporation. Arias also sent the summons and complaint to Dow‘s registered agent in Delaware via certified mail on March 13, 2013. On that same date, Arias sent the summons and complaint to the New Castle
On March 19, 2013, the day upon which Dow contends that the two-year statute of limitations expired under
Although Arias believed that she had adequately served Dow, on April 1, 2013, Georgia‘s Secretary of State sent counsel for Arias a letter stating that Dow was actually registered with the Office of the Georgia Secretary of State, so the Office returned the documents that Arias‘s counsel had sent it for service upon Dow. Alerted to the fact that Dow had a registered agent in Georgia, Arias immediately attempted to obtain personal service on Dow‘s agent. Towards this end, on April 4, 2013, Arias sent the summons and complaint to the Gwinnett County Sheriff‘s Department for service on Dow‘s Georgia agent. The Sheriff‘s Department served Dow‘s registered agent on April 9, 2013.
C. Removal of the State Court Action and the Defendants’ Motion to Dismiss
As a result of Arias‘s service efforts, both Dow and Cameron received notice of Arias‘s action, and, on April 17, 2013, Dow and Cameron removed the matter to federal court pursuant to
One week later, on April 25, 2013, Defendants filed a motion to dismiss pursuant to Rules 12(b)(2), 12(b)(5), and 12(b)(6),
More specifically, Dow contended that Arias did not make proper service upon it until April 9, 2013, after the statute of limitations expired. As to Cameron, Defendants asserted that service on him under Georgia‘s NRMA was improper because Cameron claimed to have actually been a resident of Georgia at the time of the accident.2 So Defendants argued that Arias should have served Cameron in accordance with Georgia‘s long-arm statute,
Cameron also contended that even if he were not considered to be a resident of Georgia at the time of the incident, the NRMA service was deficient because Arias had failed to comply with its strict require-
D. Arias‘s Further Attempts to Serve Cameron
The April 24, 2013, filing of the motion to dismiss put Arias on notice that Cameron contended that he was a resident of Georgia at the time of the accident. So Arias pursued personal service on Cameron in California, pursuant to Georgia‘s long-arm statute—the provision that would govern service on Cameron in California if Cameron were a resident of Georgia at the time of the incident.
On April 29, 2013, Arias sent the summons and complaint to the San Bernardino‘s Sheriff‘s Office in California to accomplish service on Cameron. According to the San Bernardino Sheriff‘s Department, it attempted to serve Cameron on four occasions between May 4, 2013, аnd May 29, 2013, but it had no success. On the second attempt, the Sheriff‘s Department left a business card with a name and contact telephone number, requesting that Cameron call the San Bernardino Sheriff‘s Department, after no one answered Cameron‘s door. Still, it was unable to serve Cameron.
So on May 16, 2013, counsel for Arias sent Cameron‘s attorney a letter stating that the San Bernardino Sheriff‘s Department had been trying to serve Cameron but was having no success. Counsel for Arias therefore asked Cameron‘s counsel whether Cameron would be willing to waive service, but Cameron refused.
As a result and after the San Bernardino Sheriff‘s Department had made four unsuccessful service attempts on Cameron, on May 29, 2013, Arias hired a process server in California and requested that the server “stake out” Cameron‘s residence until accomplishing service on Cameron. Two days later, on May 31, 2013, the process server personally served Cameron with the summons and complaint under Georgia‘s long-arm statute.
E. Cameron and Dow‘s Motion for Summary Judgment
While Arias was still attempting to serve Cameron under Georgia‘s long-arm statute, on May 8, 2013, Defendants filed their Answer to the complaint and re-filed their motion to dismiss as a motion for judgment on the pleadings, pursuant to Rule 12(c). Defendants continued to make essentially the same arguments concerning alleged failure to effect proper service.
Arias timely opposed the motion, arguing that service of process had been timely and proper on both Defendants. She also asserted that it would be inequitable to penalize her under the circumstances, since she had diligently pursued service of Defendants. Along with her opposition to Defendants’ motion for summary judgment, Arias moved for voluntary dismissal of the case without prejudice, pursuant to
Defendants opposed Arias‘s request for voluntary dismissal. Among other reasons, Defendants contended that voluntarily dismissing the case would eliminate Defendants’ statute-of-limitations defense, which was based on the claim of ineffective timely service of process, since Georgia law allows a plaintiff to revive her claims after the statute of limitations has already run and restart the service clock.
The district court granted Arias‘s motion to voluntarily dismiss her case and denied as moot Defendants’ motion for summary judgment. But the court nonetheless directed that if Arias chose to refile her claims, she must first pay Defendants’ attorneys’ fees and costs incurred in this action, as the district court determined those costs and fees. Defendants now appeal the district court‘s voluntary dismissal оf Arias‘s claims.
II.
The decision of whether to grant a voluntary dismissal pursuant to
III.
A district court enjoys broad discretion in determining whether to allow a voluntary dismissal under
The purpose of
Here, Cameron and Dow contend that the district court erred in granting Arias‘s motion for voluntary dismissal because the dismissal resulted in clear legal prejudice to them: the loss of their statute-of-limitations defense if Arias re-files her action in Georgia state court. We disagree that the district court abused its discretion under the circumstances of this case.
A. Defendants’ Statute-of-Limitations Defense
To explain why, we first consider the strength of Defendants’ statute-of-limitations defense. If the defense lacked merit, Defendants did not even arguably suffer any cognizable prejudice as a result of the voluntary dismissal. We begin with a review of applicable Georgia law.
Although Georgia law requires a process server to effect service within five days of receipt of the complaint and summons,
When a complaint is filed within the limitations period but service is perfected after the limitations period ends, service relates back to the time of filing “so as to avoid the limitation,” as long as service is timely perfected. Giles v. State Farm Mut. Ins. Co., 765 S.E.2d 413 (Ga. Ct.App.2014) (citation and quotation marks omitted). Although
Here, Arias attempted to complete service on Dow three different ways before the statutory period ended on March 19, 2013: on February 28, 2013, she sent a copy of the process to Georgia‘s Secretary of State to make service on Dow in Dela-
Arias only learned that she did not perfect service on Dow through her February and March 2013 efforts when she received the letter dated April 1, 2013, that Georgia‘s Secretary of State sent advising that Dow was registered with the Office of the Georgia Secretary of State. Allowing for three mailing days, cf.
With regard to Cameron, Arias learned that her service on him was arguably insufficient when she received Defendants’ motion to dismiss, which they filed on April 24, 2013—a Wednesday. Allowing time for service under
The record reveals that is exactly what she did. On April 29, 2013, Arias sent the summons and complaint to the San Bernardino‘s Sheriff‘s Office for service on Cameron in California. Despite four attempts by the Sheriff‘s Office to serve Cameron between May 4, 2013, and May 29, 2013—including the Sheriff‘s Office‘s leaving of a note on Cameron‘s door instructing him to call, and Plaintiff‘s communications in May with Cameron‘s counsel about the service attempts—the Sheriff‘s Office was unable to make service on Cameron. Arias then sought to effect service on Cameron in a third way since learning that Cameron contested Arias‘s original service efforts: she hired a private process server and directed him to “stake out” Cameron‘s residence until Cameron was personally served. It still took two days to accomplish service. Under these circumstances, it appears thаt Cameron may have been trying to evade service.
A defendant‘s evasion of service bears on the determination of whether a plaintiff exercised diligence in attempting to accomplish service. In Feinour v. Ricker Co., 269 Ga.App. 508, 604 S.E.2d 588 (2004), overruled on different grounds by Giles, 765 S.E.2d 413 at n. 2, for example,
This case is substantially similar to Feinour. While the Feinour plaintiff attempted service in four different ways over a five-month period, Arias tried three different ways to obtain service on Cameron over a 27-day period. The first method—through the San Bernardino Sheriff‘s Office—involved four separate attempts, and, with respect to the third method, Arias instructed the procеss server to effectively remain at Cameron‘s house until service was accomplished. These efforts were comparably continuous and diligent to those of the Feinour plaintiff. As a result, when service was finally made on Cameron on May 31, 2013, it should have related back to the filing of the complaint before the expiration of the statute of limitations. Thus, Defendants’ statute-of-limitations defense appears to lack merit.
B. Precedent
But even if we very charitably described Defendants’ statute-of-limitations defense as potentially viable—a description that we do not endorse, the district court still did not abuse its discretion in voluntarily dismissing the case without prejudice because our precedent allowed it to do so. McCants v. Ford Motor Co., Inc., 781 F.2d 855 (11th Cir. 1986), decided nearly thirty years ago, drives the outcome of this issue.
In McCants, we held that, under the facts of the case, the loss of a statute-of-limitations defense alone did not necessarily constitute per se legal prejudice sufficient to bar a dismissal without prejudice under
Ford did not plead the statute of limitations in its answer but raised it in an amended answer about eight months after the initiation of the suit and a month before it filed its summary-judgment motion. Id. at 857. The district court denied the motion for summary judgment and, the following day, granted the plaintiff‘s mo-
On appeal, Ford argued, among other things, that it had suffered legal prеjudice when the case was dismissed without prejudice because it had lost its statute-of-limitations defense. Id. Ford further contended that the district court had abused its discretion in allowing the dismissal because it had failed to acknowledge the importance of the loss of Ford‘s limitation defense when the court balanced the equities of the case. Id.
We upheld the district court‘s granting of the plaintiff‘s motion to dismiss, stating, “[T]he likelihood that a dismissal without prejudice will deny the defendant a statute of limitations defense does not constitute plain legal prejudice and hence should not alone preclude such a dismissal.” Id. at 858. We found support for this view in our precedent—namely, Durham v. Fla. E. Coast Ry. Co., 385 F.2d 366. Id. We also noted that “no evidence in the record [suggested] that [McCants] or her counsel acted in bad faith in filing this action in Alabama or in filing it more than one year after the accident occurred.” Id. at 859. Under the circumstances, we concluded that Ford could not be said to have suffered “any plain legal prejudice other than the prospect of a second lawsuit on the same set of facts.” Id. Consequently, we determined that the district court did not abuse its discretion in allowing the dismissal without prejudice because the loss of a valid statute-of-limitations defense did not alone necessarily constitute a bar to dismissal without prejudice. Id.
McCants does not require a district court to find a lack of legal prejudice every time a defendant is potentially stripped of a statute-of-limitations defense. Rather, McCants and its progeny hold only that the loss of a statute-of-limitations defense alone does not amount to per se prejudice requiring denial of a voluntary dismissal without prejudice. A district court must look to the particular facts of the case, including, among others, whether the plaintiff‘s counsel has acted in bad faith, and “weigh the relevant equities and do justice between the parties” when evaluating a motion for a voluntary dismissal under
Here, based on our review of the underlying facts, we conclude that the district court acted well within its discretion when it granted Arias‘s motiоn for voluntary dismissal. First, the parties here do not dispute that Arias filed her lawsuit in Georgia state court before the two-year statute of limitations ran. Second, as explained above, Arias acted diligently in attempting to serve Cameron and Dow with the summons and complaint. Third, none of the facts of this case demonstrate bad faith on the part of Arias‘s counsel, a factor that should be examined when considering a motion for voluntary dismissal without prejudice. Fourth, Defendants’ claimed statute-of-limitations defense is weak, at best. And, finally, the only reason that Defendants even arguably have a statute-of-limitations defense is because they removed the case to federal court. Had the case stayed in Georgia сourt, where Arias chose to file it, there would have been no question that she would have been able to voluntarily dismiss the case and take advantage of Georgia‘s six-month refiling provision. So Defendants effectively “created” the very statute-of-limitations defense that they now complain that
Moreover, although Defendants suggest that Arias should not be able to avoid the entry of summary judgment by voluntarily dismissing her action, for the reasons that we have previously discussed, it is surely not certain that summary judgment was appropriate. And, even if summary judgment were likely, this circuit has declined to adopt a bright-line rule precluding a district court from granting a Rule 41(a)(2) voluntary dismissal without prejudice when a motion for summary judgment is pending. See Pontenberg, 252 F.3d at 1258. As we have explained, “the mere attempt to avoid an adverse summary judgment ruling in and of itself, particularly where there is no evidence of bad faith, does not constitute plain legal prejudice.” Id. The district court‘s attachment of conditions to the dismissal—requiring Arias to pay attorneys’ fees and costs incurred in this litigation if she refiles—further weighs in favor of affirming the district court‘s voluntary dismissal of the case without prejudice.
Nor, as Defendants urge, is McCants inconsistent with controlling precedent in this Circuit.8 Defendants suggest that McCants conflicts with LeCompte v. Mr. Chip, Inc., 528 F.2d 601 (5th Cir. 1976), and Exxon Corp. v. Maryland Casualty Co., 599 F.2d 659 (5th Cir. 1979). We disagree.
Neither Exxon nor LeCompte considers or addresses the specific question of whether the potential loss of a defense upon voluntary dismissal without prejudice alone constitutes per se “prejudice” to a dеfendant, requiring denial of a motion for voluntary dismissal. Rather, these cases use the term “prejudice” in a more general sense and do not involve the potential loss of a defense upon voluntary dismissal. In fact, in Exxon, our predecessor court did not even consider a motion for permissive voluntary dismissal under Rule 41(a)(2). Instead, that case dealt with dismissal as of right under
Durham—a case that predates both Exxon and LeCompte—is entirely consistent with McCants. In Durham, the plaintiff sued his employer for failure to provide a safe workplace. Id. at 367. The defendant pled contributory negligence as an affirmative defense. Id. When the matter was called for trial, the plaintiff contended that he had discovered new evidence and moved for leave to amend the complaint to add a new claim under the Fedеral Safety Appliance Act, an act under which the plaintiff may recover without regard to any contributory negligence. Id. The district court denied the motion for leave to amend, prompting the plaintiff to move to voluntarily dismiss the suit without prejudice. Id. The trial court denied the motion and called the case for trial. Id. When counsel announced that he could not proceed with the trial of the case, the district court dismissed the action with prejudice. Id. The plaintiff then appealed.
Durham supports our subsequent decision in McCants, where we concluded that the loss of a statute-of-limitations defense alone does not constitute per se prejudice requiring denial of a motion for voluntary dismissal. Indeed, our decision in McCants cited to and relied upon Durham. In short, McCants does not violate our prior-precedent rule, and we are bound to follow it.
We also respectfully reject Defendants’ contention that McCants should be limited to its facts. Defendants suggest that McCants should apply to only those situations where a defendant delays in raising the affirmative defense that it hopes to preserve against a voluntary dismissal. Because Defendants here raised their statute-of-limitations defense in a motion to dismiss one week following their removal of the case to federal court, they assert that McCants should not apply.
But the way in which we framed the issue in McCants reveals that the timing of the defendant‘s assertion of the defense did not drive the result in the case. As we described it, the issue in McCants was simply “whether it constitutes an abuse of discretion for a district court to dismiss without prejudice an action that is time-barred as brought, where the purpose or effect of such dismissal is to allow the plaintiff to refile the action in a place or manner in which it is not similarly barred.” 781 F.2d at 858. Nor did we limit our holding that “the loss of a valid statute of limitations defense [does not] constitute a bar to a dismissal without prejudice,” id. at 859, to circumstances where defendants delay in raising their statute-of-limitations defense. And we declinе to so restrict McCants today.
We recognize, as Defendants point out, that other circuits have found clear legal prejudice to exist when a
We do not disagree with McCants, though.
The fact that McCants does not render loss of a statute-of-limitations defense per se prejudice does not mean that a party that could suffer the loss of such a defense upon a voluntary dismissal without prejudice will necessarily be at the losing end of a motion for voluntary dismissal without prejudice. Rather, McCants allows for a motion for voluntary dismissal without prejudice to be denied if a statute-of-limitations defense could be lost, provided that consideration of all of the equities in the case warrant such a conclusion. We think that this is the correct formulation of what
Finally, based on all of these considerations, we conclude that the district court did not abuse its discretion when it granted Arias‘s motion for voluntary dismissal without prejudice under
V.
In sum, we conclude that it is unlikely that Defendants had a meritorious statute-of-limitations defense in the first place. But even if they did, in view of the equities, the district court did not abuse its discretion in granting Arias‘s motion for voluntary dismissal without prejudice pursuant to
AFFIRMED.
ROBIN S. ROSENBAUM
UNITED STATES CIRCUIT JUDGE
LABMD, INC., Plaintiff-Appellant, v. FEDERAL TRADE COMMISSION, Defendant-Appellee.
No. 14-12144.
United States Court of Appeals, Eleventh Circuit.
Jan. 20, 2015.