Happy Anniversary to Minnesota Rule 5.04!
For about six years, we’ve raised the alarm about Rule 5.4 of the Minnesota Rules of Civil Procedure and, specifically, an amendment made effective on July 1, 2015, that requires that lawsuits be filed in court within one year of service.
In our opinion, the rule change was unnecessary and counter-productive. But the rule is the rule and we all need to be aware of it and act accordingly.
In Safeco Insurance Company v. Holmgren Building Repair, the plaintiff-insurer’s lawyers thought they had secured an agreement that they did not have to adhere to Rule 5.04’s “file-within-one-year” rule. They were wrong.
On 10/26/2017, Safeco served a complaint on Holmgren for allegedly starting a fire that resulted in $771,726.42 worth of damages.
Safeco was clearly aware of Rule 5.04, its lawyers telling a lawyer for Holgren:
Our rules require that the matter be filed with the [c]ourt within one year after service of process is complete, however. That deadlinehttps://bit.ly/2Zn1uJh
would be October 26, 2018, in this case, if no settlement can be reached.
In the months that followed, the parties engaged in slow-rolling settlement discussions, blowing right past the deadline, presumably relying on the fact that the two sides had clearly agreed to an “indefinite extension” in answering the complaint and in filing the lawsuit.
Of course, once the deadline past, Holmgren turned on Safeco, saying Safeco’s lawsuit was “deemed dismissed” under Rule 5.04.
The Minnesota Court of Appeals held that Safeco screwed up, in essence.
Practice pointer: if you want an extension past the deadline for filing a lawsuit after having “commenced” the lawsuit by service, you must reach an agreement, a stipulation, with the other side. Under the plain language of the rule it must be signed.
And Safeco was unable to avoid the dire consequences of the lapse by blaming its lawyers. “We agree with Safeco’s characterization of Minnesota law as favoring relief for innocent clients affected by their attorney’s mistake. But, according to the district court, …Safeco bears at least some responsibility for the untimely filing of the complaint….”