Graubard v. Balcor Co.

Citations: 999 P.2d 434; 128 N.M. 790; 2000 NMCA 032Docket: 20,846

Court: New Mexico Court of Appeals; March 14, 2000; New Mexico; State Appellate Court

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Defendant The Balcor Company filed for an interlocutory appeal after the district court denied its motion to dismiss a personal injury complaint due to improper service of process. The Court of Appeals of New Mexico granted the appeal, proposing a summary reversal and remand for reconsideration of the motion. The relevant dates established by the district court were: March 28, 1997 (complaint filed), March 31, 1997 (statute of limitations expired), and June 6, 1998 (service on Balcor's predecessor). The district court expressed concern over a fourteen-month delay in service without evidence of prior notice to Balcor but ultimately denied the motion to dismiss, stating that there was no evidence of intentional delay by the Plaintiff.

Balcor's motion to dismiss, filed on December 4, 1998, argued that it was not named in the complaint at the time of service and that the service was improper. The Plaintiff had been allowed to amend the complaint to substitute Balcor for its predecessor, but Balcor contended that it was not aware of the claim until after the statute of limitations had expired. The Court concluded that Balcor had timely raised the defense of improper service, noting that such a defense must be asserted at the earliest opportunity to avoid being waived.

The court disagrees with the Plaintiff's interpretation of the Prieto case, which the Plaintiff argues indicates that intentional delay must be shown for an appeal to be dismissed due to delayed service of process. The court reverses and remands the matter for the district court to reconsider the motion. In Prieto, a three-month delay in service was assessed, with no findings of lack of diligence or fault attributed to the plaintiff. The court clarified that while the statute of limitations is tolled by the timely filing of a complaint, trial courts may dismiss cases for failure to prosecute if they find a lack of due diligence. 

The Plaintiff equates lack of due diligence with intentional delay, but the Defendant correctly cites case law suggesting that dismissal for failure to prosecute is akin to dismissal for negligence in prosecution. The court distinguishes this from the Murphy case, where a deliberate delay in service was evident. It emphasizes that a significant unintentional delay could also demonstrate a lack of due diligence. 

Additionally, the court notes that the Murphy case involved a statutory presumption of intent to issue process, which was not sufficient to negate the finding of a lack of diligence by the plaintiff. The court concludes that Prieto does not necessitate a showing of intentional delay to find a lack of due diligence and is not inclined to adopt a stricter standard based on other jurisdictions' approaches.

New Mexico case law governs the appeal's outcome, with the Prieto case establishing that a district court can use its discretion to determine if a plaintiff's delay in serving process indicates a lack of due diligence, assessed through an objective reasonableness standard. There is no requirement for the plaintiff to show intentional delay. The plaintiff contends that the district court appropriately considered the absence of evidence for intentional delay when denying Balcor's motion to dismiss. However, since the district court's decision was based on a failure to demonstrate intentional delay, the appellate court reverses this decision and remands the case for the district court to reassess whether the plaintiff lacked due diligence in serving Balcor's predecessor, using the objective reasonableness standard. The appellate court orders further proceedings in light of this reassessment.