Tyson & Mendes Outmaneuvers Plaintiff Who Attempted to Extend the Statute of Limitations by Re-filing Suit Against a Foreign National in Federal Court

Author: Bryan D. Scholnick

January 7, 2019 12:12pm

Tyson & Mendes’ Seattle office obtained a dismissal with prejudice of an insured from the Federal Court by following a legal strategy set in motion when a lawsuit was first filed in state court.  Plaintiff was injured while riding a bus when a car turned left in front of the bus causing the vehicles to collide.  Plaintiff incurred substantial medical treatment following the accident.  He filed suit in Washington State Court against the car’s driver, who was a foreign national.  Plaintiff sought service of the foreign national via Washington’s statute allowing for service of a non-state-resident via the Secretary of State.  However, unbeknownst to the plaintiff’s attorney, service via the Secretary of State was not effective as the Washington Appellate Court, in Larson v. Yoon, found that service of a foreign national had to be effected via the Hague Service Convention procedure.  351 P.3d 167, 172 (Wash. Div. 1, 2015).  Given this ruling, and that the suit was filed a year before the statute of limitation expired, an Answer was timely filed asserting the affirmative defenses of lack of service and statute of limitations.

Once plaintiff’s counsel became aware of the Larson v. Yoon holding, they began the process of attempting service on the foreign national via the Hague Service Convention.  Under Washington law, the statute of limitations is tolled for ninety days to perfect service.  However, Plaintiff’s attorney failed on multiple occasions to follow the required process. As a result, the attempts were rejected by the foreign government and returned.  Faced with the potential failure to serve the foreign national before the 90-day tolling deadline, plaintiff voluntarily dismissed the state court proceeding and refiled in Federal Court before the statute of limitations expired.  The federal case law and Fed. R. Civ. P. 4(m) expressly disavows a 90-day deadline to serve a defendant where service is in a foreign country.  Plaintiff essentially had unlimited time to perfect service on the foreign national.

After analyzing the issues, the determination was made to not accept service on behalf of the foreign national.  Further, the determination was made to not file an appearance in the federal court proceeding.  Rather, a close watch on the docket would be maintained for filings related to service or default.  Plaintiff sought to serve the foreign national with the Federal Court Complaint via The Hague.  The requisite materials were sent to the foreign government after filing the Federal Complaint.  Plaintiff attempted to follow-up with the foreign government on multiple occasions to receive a status of the service attempt.

From all indications, the foreign government misplaced the filings, did not receive the correct fees, or the filings were done incorrectly.  Plaintiff asserted under Article 15 of The Hague that they should be granted a default order because the following requirements were met:

Each Contracting State shall be free to declare that the judge, notwithstanding the provisions of the first paragraph of this Article, may give judgment even if no certificate of service or delivery has been received, if all the following conditions are fulfilled –

a) the document was transmitted by one of the methods provided for in this Convention,

b) a period of time of not less than six months, considered adequate by the judge in the particular case, has elapsed since the date of the transmission of the document,

c) no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed.

Hague Service Convention, art. 15 concluded Nov. 15, 1965, 20 U.S.T. 361, 364, T.I.A.S. No. 6638.  Plaintiff filed a Motion for Default with the court consistent with this.

It appeared plaintiff could obtain a default against the foreign national.  However, in reviewing the materials submitted in support of the Default Motion it was found plaintiff waited 127 days before sending the federal pleadings to the foreign authorities for service on the insured.  Such delay showed a lack of due diligence.  And In similar circumstances, the Ninth Circuit sought guidance from the Washington Supreme Court about how service under the Hague Service Convention affected running of the state’s statute of limitations.  See Broad v. Mannesmann Anglagenbau AG, 196 F.3d 1075 (1999) (certifying question to Washington Supreme Court about effect of 90-day time limit to effect service under Hague Convention upon state’s statute of limitations), 141 Wash.2d 670 (2000) (opinion after certified question answered), and 10 Fed. Appx. 543 (9th Cir. 2001) (remanding case to district court).

The issue in Broad v. Mannesmann Anglagenbau AG was whether a 90-day time limit for service of process as required by state law (or, in absence of service, the case would be dismissed) would “toll” running of the applicable three-year statute of limitations where a foreign corporation was being served under the Hague Service Convention.  Analyzing Washington law, the Supreme Court held the state’s 90-day time limit for effecting service (including whatever additional time might be granted the trial court) would toll the applicable statute of limitations–provided the documents were transmitted to the (German) authorities “within 90 days of filing the complaint.” 141 Wash. 2d at 680-81. There, since the Broad plaintiffs had forwarded the complaint/summons to the German authorities within 90 days of filing their complaint, dismissal of the lawsuit for insufficient service was not required and the limitations threat was abated.

Here, the decision was made to have the insurer intervene by filing a Motion to Intervene to respond to the default motion so the insured did not waive the statute of limitations and lack of service defenses.  The insurer had a substantial financial stake in the outcome of determination of the plaintiff’s Motion for Default; it would be prejudiced if plaintiff proceeded to take a default judgment.  So, the Motion to Intervene outlined the basis for the intervention; more importantly, it outlined the basis for the court to dismiss the plaintiff’s suit with prejudice consistent with Broad. The federal court granted the Motion to Intervene.

The court agreed there is no time limit for serving a defendant in a foreign country. Further, the court found plaintiff met the requirements for a default under Article 15 of the Hague Service Convention. However, plaintiff delayed transmitting the pleadings to the foreign nation more than 120 days.  And since this was a Washington based negligence claim, it was subject to a three-year statute of limitations, and to dismissal if not served within ninety days of filing. RCW 4.16.080(2); RCW 4.16.170. The court found “[t]hese requirements apply when service is effected under the Hague Convention, irrespective of Rule 4(m)” citing Broad v. Mannesmann Anlagenbau AG.  The court denied the Motion for Default and dismissed the suit with prejudice because it was time barred.

Patience and solid analysis led to a favorable outcome.  We were happy to receive support from the client to implement the defense strategy.  This court decision will be useful in continuing to defend foreign national clients by ensuring that plaintiffs properly serve the client in a timely manner.  In the event that does not happen, we have strong support for seeking a dismissal with prejudice of the suit.

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