Dep't of Taxes v. Marshall

Vermont Dept. of Taxes v. Marshall, No. S0819-04 CnC (Norton, J., Aug.
2, 2005)
[The text of this Vermont trial court opinion is unofficial. It has been
reformatted from the original. The accuracy of the text and the
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STATE OF VERMONT SUPERIOR COURT
Chittenden County, ss.: Docket No. S0819-04 CnC
VERMONT DEPARTMENT OF TAXES
v.
MARSHALL
ENTRY
Defendant Taxpayer moves the court for relief from its earlier
default judgment based, in part, on its denial of his motion to dismiss for
the State’s failure to serve him within the 60-day extension available under
V.R.C.P. 3 for the statute of limitations.
Prior to this present lawsuit, the State received a judgment in its
favor against Taxpayer on July 12, 1996. On July 9, 2004, the State filed a
complaint to renew its judgment. Under 12 V.S.A. § 506, the statute of
limitations for a renewal of judgment, the State had eight years from the
initial judgment to file its renewal. That meant that the statute of
limitations on its claim expired on or about July 12, 2004. Neither party
disputes that the present case was timely filed or that the State received
three extensions under V.R.C.P. 6(b) to serve Taxpayer for the purposes of
V.R.C.P. 3. Taxpayer was eventually served on December 9, 2004.
What the parties dispute is the effect Rule 6(b) can have on the
statute of limitations. Rule 3 explicitly extends a statute of limitations that
expires during the period of service to the end of that 60 days. Rule 6 does
not have a similar provision. Instead, Rule 6 can only extend time to
complete Rule 3's period for timely, procedural service. The difference is
subtle but important. In the days after the July 9 filing, there were two time
limits approaching. The first was the 60-day period under Rule 3 in which
the State had to serve Taxpayer to effectuate timely service. The second
was § 506's eight-year limit, which would have expired on July 12 but was
extended by Rule 3 to September 7. When the State filed for an extension
through Rule 6(b), it was asking to extend the former time limit, but there is
nothing in Rule 6(b), which suggests that it may also extend the separate
statute of limitations deadline.
While Rule 3 does permit tolling of the statute of limitation, it does
so only when timely service is accomplished. Weisburgh v. McClure
Newspapers, Inc., 136 Vt. 594, 595 (1979). In contrast, Federal Rule 6(b),
on which V.R.C.P. Rule 6(b) is taken, does not permit courts to enlarge
statutes of limitation. E.g., United States ex. rel. Tenn. Valley Auth. v.
Easement & Right-of-Way Over Certain Land in Cumberland County,
Tennessee, 386 F.2d 769, 771–72 (6th Cir. 1967) (distinguishing between a
jurisdictional condition created by statute and a procedural limitation to
which Rule 6 addresses); Hammons v. Int’l Playtex, Inc., 676 F. Supp.
1114, 1118 (D.Wyo. 1988), vacated and remanded by party stipulation, 872
F.2d 963 (10th Cir. 1989) (reasoning that the 60 days under Rule 3 was an
“integral part of the statute of limitations” and any enlargement would
frustrate its policies); 4B C.Wright & A.Miller, Federal Practice and
Procedure § 1165, at 519–20 (2002); cf. Poulos v. Wilson, 116 F.R.D. 326(D.Vt. 1987) (granting a Rule 6(b)(2) motion when defendant was served 1
day after the time for Rule 3 service lapsed but 8 days before statute of
limitations ran). In the Federal system, extensions for service of process
are explicitly given under F.R.C.P. 4(m). As the Vermont Supreme Court
has noted, this provision was not included in the Vermont version and is not
available for the State to use. Fercenia v. Guiduli, 2003 VT 50, ¶ 10, n.1
(mem.).
The State’s Rule 6(b) motions were not merely for Rule 3 purposes
but to preserve their claim beyond the statute of limitations so that they
could then effect proper service. Such a use of Rule 6(b) cannot be granted,
regardless of any excusable neglect or equitable considerations. Id. at ¶¶ 10,
12 (“That defendants had notice of plaintiff’s claim is of no moment. The
issue here is . . . whether plaintiff's failure to file defendants’ waiver of
service within the time required by the rules constituted a failure to
properly commence plaintiff’s action and toll the applicable statute of
limitations.”).
While this result may appear somewhat draconian, it is rooted in the
twin functions of Rule 3. See Powers v. Chouinard, 138 Vt. 3, 4 (1979)
(dismissing case because service was made one day late). Service of
process not only notifies the defendant of the complaint and its terms but
also exacts physical jurisdiction over the defendant. 4A C.Wright &
A.Miller, Federal Procedure & Practice § 1094, at 511 (2002). By failing
to serve Taxpayer within the time allowed under Rule 3, the State failed to
effect jurisdiction. To paraphrase the Sixth Circuit Court of Appeals, the
time limitation of § 506 is a part of a statute creating the cause of action and
establishing jurisdiction. This time limitation operates as a jurisdictional
condition as distinguished from a procedural limitation. For this reason,
Rule 6(b), relating to procedural time periods, has no application. United
States, 386 F.2d at 771. While the Rule 6(b) extensions may have cured the
first defect, they simply could not address the second. This was, moreover,
the State’s responsibility for which they bore the burden and must bear the
responsibility. Weisburgh, 136 Vt. at 497; Brady v. Brauer, 148 Vt. 40,
44 (1987) (“[Plaintiffs have] the responsibility for any failure to fulfill the
provisions of V.R.C.P. 4(d) and (e) . . .”). Therefore, notwithstanding this
court’s prior grant of a Rule 6(b) extension, the State’s service on Taxpayer
was untimely under § 506.
Based on the foregoing, Defendant’s motion for relief from this
court’s June 7, 2005 default judgment is granted. Case is dismissed.
Dated at Burlington, Vermont________________, 2005.
__________________________________
Richard W. Norton, Judge