Rhonda Wisland v. Admiral Beverage ( 1997 )

United States Court of Appeals
for the Eighth Circuit
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No. 96-3916
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Rhonda R. Wisland, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of South Dakota.
Admiral Beverage Corporation; *
Paul James Mayer IV, *
*
Appellees. *
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Submitted: June 11, 1997
Filed: July 16, 1997
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Before MURPHY, HEANEY, and JOHN R. GIBSON, Circuit Judges.
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MURPHY, Circuit Judge.
This action arises out of an automobile accident in which Rhonda
Wisland sustained a personal injury. The district court1 granted summary
judgment for Admiral Beverage Corporation and Paul Mayer (collectively
referred to as Admiral) because it concluded that the South Dakota statute
of limitations had run on Wisland's tort claim because of untimely service.
Wisland argues on appeal that Wisconsin law should have
1
The Honorable John B. Jones, United States District Judge for the District of
South Dakota.
been applied, that the district court erred by allowing Admiral to amend
its answer to include the statute of limitations as an affirmative defense,
and that her process was timely served. We affirm.
On August 5, 1991 Wisland was driving her motorcycle through South
Dakota when several boxes of drinking straws fell from a truck in front of
her. She lost control of her motorcycle when it rolled over the straws and
was injured in the resulting accident. The truck was owned by Admiral
Beverage, and the driver was its employee Paul Mayer. Wisland is a
Wisconsin resident and returned to that state after the accident where she
was treated for her injuries. Mayer is a South Dakota resident, and
Admiral Beverage is incorporated in Wyoming but does business in South
Dakota.
Wisland originally filed her complaint in the United States District
Court for the Western District of Wisconsin on August 4, 1994 and mailed
copies of the summons and complaint to constables in Pennington County,
South Dakota on August 5. The copies were received by the addressees on
August 9, and Admiral Beverage and Mayer were served on August 10.
In their initial answer, defendants moved to dismiss Wisland's
complaint on the grounds that the Wisconsin district court lacked personal
jurisdiction and was not the proper venue. Defendants' motions were never
addressed by that court, however, because it transferred the case to the
District of South Dakota on September 29, 1994, pursuant to a stipulation
of the parties. Neither the Wisconsin district court nor the stipulation
specified the statutory basis for the transfer, but the stipulation
provided that the parties "do not waive any defenses or claims which may
be asserted in the United States District Court for the District of South
Dakota."
Once in South Dakota, the case began to move toward trial. In
February 1995 Judge Jones entered a Rule 16 scheduling order establishing
August 1, 1995 as the deadline for amendments to the pleadings and January
1996 as the deadline for
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discovery and any additional motions. Judge Jones twice amended this order
by extending the deadlines for discovery and for certain motions to March
1996.
Admiral filed a motion for summary judgment on March 24, 1996,
claiming that Wisland had failed to commence her action before the South
Dakota statute of limitations had run, as well as a motion to amend its
answer to include the South Dakota statute of limitations as an affirmative
defense. In June 1996 the district court granted the motion to amend, and
in September 1996 it granted summary judgment for Admiral and Mayer.
A decision to grant summary judgment is reviewed de novo. Michalski
v. Bank of Am. Ariz., 66 F.3d 993, 995 (8th Cir. 1995). The relevant facts
here are undisputed, but the parties differ over the legal issues,
including whether Wisland commenced her action within the applicable
statute of limitations.
In a diversity case state law determines when an action is commenced
for the purpose of applying the statute of limitations. See Walker v.
Armco Steel Corp., 446 U.S. 740, 753 (1980). Both Wisconsin and South
Dakota have a three year statute for personal injury actions, see S.D.
Codified Laws § 15-2-14(3) (Michie 1984); Wis. Stat. Ann. § 893.54 (West
1996), but the procedures for starting an action differ. Under South
Dakota law an action is commenced when the summons is served on the
defendants, and service on the defendants within the statutory period
prevents the limitations period from barring an action. S.D. Codified
Laws § 15-2-30. It is also sufficient, however, if the summons is
delivered within the limitations period to the sheriff or other officer of
the relevant county so long as service is affected by publication or actual
delivery to the defendants within sixty days. S.D. Codified Laws § 15-2-
31. In Wisconsin an action is commenced by filing a summons and complaint
with the court; the plaintiff then has sixty days to serve the defendants.
Wis. Ann. Stat. § 801.02.
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Because of the different procedures used to initiate an action, the
running of the statute of limitations period depends on whether Wisconsin
or South Dakota law applies. Under either state law the three year
limitations period started August 5, 1991, the day of the accident.
Wisland filed in Wisconsin on August 4, 1994, which was in that state's
limitations period since filing commenced the action and all parties were
served within sixty days. Under South Dakota law the action is not
commenced until service is had, and Wisland did not deliver her summons and
complaint to the South Dakota process servers until August 9 and the
defendants were not served until August 10, 1994.
When a diversity case is transferred from one federal court to
another, the choice of law depends on the nature of the transfer. Transfer
is allowed under 28 U.S.C. § 1404(a)2 for the convenience of the parties
and witnesses, and the chance for unfair prejudice or forum shopping is
minimized because the district court is required to consider the interests
of all involved in deciding whether to allow a transfer. With a § 1404(a)
transfer the law of the transferor court applies, which in this case is the
law of Wisconsin. See Ferens v. John Deere Co., 494 U.S. 516, 531 (1990).
Transfer is permitted under 28 U.S.C. § 1406(a)3 when venue is not proper
so the risk of forum
2
28 U.S.C. § 1404(a) reads:
For the convenience of the parties and witnesses, in the interest of justice, a
district court may transfer any civil action to any other district or division where
it might have been brought.
The historical and statutory notes associated with this section indicate that
"[s]ubsection (a) was drafted in accordance with the doctrine of forum non conveniens,
permitting transfer to a more convenient forum, even though venue is proper."
3
28 U.S.C. § 1406(a) reads:
The district court of a district in which is filed a case laying venue in the wrong
division or district shall dismiss, or if it be in the interest of justice, transfer such
case to any district or division in which it could have been brought.
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shopping is greater because improper venue results in dismissal or transfer
without the interests of all involved being necessarily weighed. If the
law of the transferor court were applied, a plaintiff could deliberately
file in a jurisdiction with favorable law but clearly improper venue and
benefit from its choice. LaVay Corp. v. Dominion Fed. Sav. & Loan Ass'n,
830 F.2d 522, 526 (4th Cir. 1987); Nelson v. International Paint Co., 716
F.2d 640, 643 (9th Cir. 1983); Martin v. Stokes, 623 F.2d 469, 472 (6th
Cir. 1980). A § 1406(a) transfer calls for application of the law of the
transferee court however which in this case is the law of South Dakota.
See, e.g., Schaeffer v. Village of Ossining, 58 F.3d 48, 50 (2d Cir. 1995)
(quoting 15 Charles A. Wright et al., Federal Practice and Procedure §
3827, at 267 (2d ed. 1986); Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975
F.2d 1134, 1141-42 (5th Cir. 1992).
In this case neither the signed stipulation nor the district court
order indicates which type of transfer was contemplated nor specifies which
state law controls. If venue was not proper in Wisconsin, dismissal or a
§ 1406(a) transfer would have been required, and South Dakota law would
apply on transfer. The relevant statutory requirements for venue are:
(a) A civil action wherein jurisdiction is founded only on diversity
of citizenship may, except as otherwise provided by law, be brought
only in (1) a judicial district where any defendant resides, if all
defendants reside in the same State, (2) a judicial district in which
a substantial part of the events or omissions giving rise to the
claim occurred, or a substantial part of property that is the subject
of the action is situated, or (3) a judicial district in which the
defendants are subject to personal jurisdiction at the time the
action is commenced, if there is no district in which the action may
otherwise be brought.
. . . .
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(c) For purposes of venue under this chapter, a defendant that is a
corporation shall be deemed to reside in any judicial district in
which it is subject to personal jurisdiction at the time the action
is commenced. . . .
28 U.S.C. § 1391 (1995).
There is no dispute here about § 1391(a)(1) or (3). Neither
defendant resides in Wisconsin or was subject to personal jurisdiction
there (and even if they were, the action could have been brought in South
Dakota). Wisland claims that venue was proper under (a)(2), however,
because a substantial part of the events giving rise to her damage claims
occurred in Wisconsin where she received the majority of her medical
treatment. She cites no authority for this proposition, and the events
giving rise to her action involve the alleged negligence of the defendants
in South Dakota, not the nature of her medical treatment in Wisconsin.
See, e.g., Smith v. Fortenberry, 903 F.Supp. 1018, 1020 (E.D. La. 1995).
Venue therefore did not lie in Wisconsin so the transfer had to have been
under 28 U.S.C. § 1406(a), and the law of the transferee court should be
applied.
Under South Dakota law Wisland's claim is time barred. To initiate
her action in South Dakota before the statute of limitations ran, Wisland
was required either to serve defendants or deliver copies of her summons
and complaint to the proper county officials within three years. S.D.
Codified Laws §§ 15-2-14(3), 15-2-30, 15-2-31; see also Fischer v. Iowa
Mold Tooling Co., 690 F.2d 155, 156 (8th Cir. 1982). The accident occurred
on August 5, 1991, but she did not deliver the summons and complaint to
officials in Pennington County until August 9, 1994, and she did not obtain
service on the defendants until August 10, 1994. Wisland maintains
nevertheless that her claim is timely because she posted her summons and
complaint in the mail to the constables in Pennington County before the
limitations period ran. Under South Dakota law, however, the summons and
complaint must be delivered into the hands of the sheriff or other county
official before the statute runs, not simply placed in the mail.
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See Meisel v. Piggly Wiggly Corp., 418 N.W.2d 321, 323 (S.D. 1988);
Fischer, 690 F.2d at 156.
Wisland also argues that Admiral waived the jurisdiction and venue
claims related to its statute of limitations defense because it did not
raise these issues in a timely fashion. The waiver case Wisland cites to
support her argument is distinguishable because it involved a party who
raised an affirmative defense in its pleadings, but failed to pursue it at
summary judgment or at trial and then attempted to assert it anew on
appeal. See Violette v. Smith & Nephew Dyonics, Inc., 62 F.3d 8 (1st Cir.
1995), cert. denied, 116 S. Ct. 1568 (1996). In contrast, Admiral raised
the defenses of venue and jurisdiction in its Wisconsin pleadings and
relied on improper venue in Wisconsin as part of its theory for summary
judgment. Admiral did not waive these issues.
Wisland also asserts Admiral waived its ability to argue the
Wisconsin venue or jurisdiction issues because it did not raise them as
independent defenses in its amended answer. See F. R. Civ. P. 12(h)
(governing waiver of defenses); F. R. Civ. P.15(c) (governing relation back
of amended pleadings). Admiral's venue and jurisdiction arguments,
however, are a part of its statute of limitations theory for summary
judgment, not independent defenses or reasons to dismiss. Admiral raised
the statute of limitations defense in its amended pleadings which was
sufficient to put Wisland on notice that related issues concerning choice
of state law, jurisdiction, and venue might be involved.4 The rules do not
require a party to plead every step of legal reasoning that may be raised
in support of its affirmative defense; they only require a defendant to
state in short and plain terms its defenses to a plaintiff's claims. See
F. R. Civ. P.
4
The phrasing of Admiral's amended answer in fact suggested that an inquiry into
choice of law issues would be required. It alleged that Wisland's claim was barred by
the "applicable statute of limitations," leaving open which statute of limitations was
meant.
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8(c). The district court allowed Admiral to plead the South Dakota statute
of limitations as an affirmative defense, and Admiral therefore had the
right to raise the preliminary choice of law arguments necessary to present
that defense. See F. R. Civ. P. 8(f).
In addition Wisland argues that Admiral should not have been allowed
to amend its answer to include the defense of the statute of limitations
after the district court's original scheduling deadline for amendments had
passed. The rules give wide authority and discretion to the district court
to manage its caseload. See, e.g., United States v. Charles George
Trucking Inc., 34 F.3d 1081, 1090 (1st Cir. 1994) (district court has
considerable discretion in case management and may modify previous Rule 16
orders at its pleasure); see also, Trierweiler v. Croxton and Trench
Holding Corp., 90 F.3d 1523, 1543 (10th Cir. 1996) (decision to modify Rule
16 order reviewed under abuse of discretion standard); Huval v. Offshore
Pipelines, Inc., 86 F.3d 454, 458 (5th Cir. 1996) (same); Rapco, Inc. v.
Commissioner, 85 F.3d 950, 953 (2d Cir. 1996) (same); Walker v. Anderson
Elec. Connectors, 944 F.2d 841, 844 (11th Cir. 1991) (same). Admiral
explained that it did not raise the limitations defense earlier because the
original returns of service were in the possession of Wisland's attorney
and were not filed with the district court in a timely fashion. Given the
procedural posture of this case, the relevance of South Dakota's method of
service may not have been immediately apparent at the outset of the
litigation. Considering the record as a whole, the district court did not
abuse its discretion by allowing Admiral to amend its pleadings to include
a meritorious affirmative defense.5
5
The district court's informal comments at the hearing about whether there had
been excusable neglect for the delay in seeking the amendment do not translate into an
abuse of discretion in later allowing Admiral to amend its answer. See, e.g., O'Neill
v. Agwi Lines, 74 F.3d 93 95 (5th Cir. 1996) (oral statements which conflict with
court's formal findings and conclusions should be disregarded).
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Finally, Wisland argues the district court erred by denying her
motion for reconsideration under F. R. Civ. P. 60. Wisland's motion simply
repeated the arguments discussed above, and no abuse of discretion has been
shown.
For these reasons, the judgment is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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