Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-14-02579/USCOURTS-ca8-14-02579-0/pdf.json

Parties Involved:
Charlotte Barner
Appellant
Mark Barner
Appellant
John Does
Appellee
John Doe Corporations
Appellee
Thompson/Center Arms Company
Appellee
Thompson/Center Arms Company Inc.
Appellee

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 14-2579

___________________________

Mark Barner; Charlotte Barner

lllllllllllllllllllll Plaintiffs - Appellants

v.

Thompson/Center Arms Company Inc., also known as Thompson/Center Arms

Company LLC; Thompson/Center Arms Company, LLC; John Does, 1-10; John

Doe Corporations, 1-10

lllllllllllllllllllll Defendants - Appellees

____________

Appeal from United States District Court 

for the Eastern District of Arkansas - Little Rock

____________

 Submitted: April 16, 2015

 Filed: August 4, 2015

____________

Before WOLLMAN and GRUENDER, Circuit Judges, and GRITZNER, District 1

Judge.

____________

WOLLMAN, Circuit Judge.

The Honorable James E. Gritzner, United States District Judge for the

1

Southern District of Iowa, sitting by designation.

Appellate Case: 14-2579 Page: 1 Date Filed: 08/04/2015 Entry ID: 4302288 
Mark and Charlotte Barner appeal the district court’s dismissal with prejudice

of their claims against Thompson/Center Arms Co., LLC (T/C LLC) for insufficient

service of process and against Thompson/Center Arms Co., Inc. (T/C Inc.) for failure

to state a claim. The Barners argue that the Arkansas savings statute, Ark. Code Ann.

§ 16-56-126, applies to their claims against T/C LLC; that they completed timely

service in federal court against T/C LLC under 28 U.S.C. § 1448; and that T/C Inc.,

a corporation that merged with T/C LLC prior to the Barnersfiling thislawsuit, isstill

capable of being sued under New Hampshire law. We affirm the dismissal against

T/C Inc., reverse the dismissal against T/C LLC, and remand for further proceedings.

I. 

On October 11, 2013, four days before the statute of limitations on their claims

expired, the Barners filed a complaint in Arkansas state court against T/C Inc. and

T/C LLC, seeking relief for injuries allegedly sustained on October 15, 2010. T/C

Inc., a New Hampshire corporation, had merged into T/C LLC, a Delaware

corporation, on April 27, 2012, before the Barners filed suit.

Under Arkansas Rule of Civil Procedure 4(i), the Barners had 120 days from

the date they filed their complaint to serve T/C LLC and T/C Inc. with the complaint

and summons. The Barners’ attorney sent to CT Corporation, the registered agent for

T/C Inc., the complaint and summons for both parties by certified mail: one addressed

to T/C Inc. and one addressed to T/C LLC. CT Corporation returned two receipts to

the Barners’ attorney, showing thatservice had been completed for both T/C Inc. and

T/C LLC on January 24, 2014. Unbeknownst to the Barners, however, CT

Corporation was not the registered agent for T/C LLC.

On February 14, 2014, after the 120-day period for completing service under

the Arkansas procedural rules had expired, T/C LLC and T/C Inc. filed a notice of

removal. Once in federal court, T/C LLC and T/C Inc. moved to dismiss the Barners’

-2-

Appellate Case: 14-2579 Page: 2 Date Filed: 08/04/2015 Entry ID: 4302288 
complaint, arguing that the Barners had failed to complete timely service on T/C LLC

because they had not served T/C LLC’s registered agent and that the Barners could

not state a claim against T/C Inc. because it was no longer a legal entity capable of

being sued. On April 8, 2014, the Barnersserved the complaint and summons for T/C

LLC on its registered agent. 

The district court found that the Barners’ claims against T/C LLC would have

been dismissed with prejudice had the case remained in state court, because the

statute of limitations had run and the Arkansas savings statute did not apply. Thus,

the district court held that under Marshall v. Warwick, 155 F.3d 1027 (8th Cir. 1998),

the Barners could not complete service on T/C LLC post-removal under 28 U.S.C.

§ 1448. The district court also held that T/C Inc. was no longer a legal entity capable

of being sued. Accordingly, the district court granted T/C LLC and T/C Inc.’s motion

to dismiss the Barners’ complaint with prejudice. 

II.

In a case that has been removed from state court, the sufficiency of service of

process prior to removal is determined by state law, see Marshall, 155 F.3d at 1033,

and after removal, by federal law, see Fed. R. Civ. P. 81(c)(1). We review de novo

the district court’s interpretation of state law, St. Paul Fire & Marine Ins. Co. v.

Schrum, 149 F.3d 878, 880 (8th Cir. 1998), and whether service of process was

sufficient, Marshall, 155 F.3d at 1030.

A.

The Arkansas savings statute provides that “[i]f any action is commenced

within the time . . . prescribed . . . and the plaintiff therein suffers a nonsuit, . . . the

plaintiff may commence a new action within one (1) year after the nonsuit suffered.” 

Ark. Code Ann. § 16-56-126. Plaintiffs can invoke the savings statute when the

-3-

Appellate Case: 14-2579 Page: 3 Date Filed: 08/04/2015 Entry ID: 4302288 
statute of limitations would otherwise bar them from refiling their claims. Rettig v.

Ballard, 362 S.W.3d 260, 262 (Ark. 2009). For the savings statute to apply, however,

the first lawsuit must have commenced, which, under Arkansas law, occurs when the

plaintiff files the complaint and completes timely service on the defendant. Forrest

City Mach. Works, Inc. v. Lyons (Lyons II), 866 S.W.2d 372, 373 (Ark. 1993). 

To perfect service under the Arkansas rules, “compliance must be exact”

because the “service requirements are strictly construed.” Rettig, 362 S.W.3d at 262. 

If the plaintiff fails to perfect service within 120 days of filing the complaint, the

action is subject to mandatory dismissal. Lyons v. Forrest City Mach. Works, Inc.

(Lyons I), 785 S.W.2d 220, 222-23 (Ark. 1990). Completing service for purposes of

“commenc[ing]” the action and triggering the savings statute, however, does not

require perfecting service. Compare Lyons I, 785 S.W.2d at 222-23 (holding that

because the plaintiff had not perfected service within 120 days offiling the complaint,

the complaint wassubject to mandatory dismissal), with Lyons II, 866 S.W.2d at 374

(holding that in Lyons I, the plaintiff had completed service for purposes of the

savings statute). In other words, an action can be commenced for purposes of

triggering the savings statute by “defective” service, Rettig, 362 S.W.3d at 263, or

“attempted service,” McCoy v. Montgomery, 259 S.W.3d 430, 434-35 (Ark. 2007),

both of which describe the same standard—completed service, see Clouse v. Ngau

Van Tu, 274 S.W.3d 344, 347 (Ark. Ct. App. 2008). The Barners admit that they did

not perfect service on T/C LLC prior to removal. They contend, however, that they

completed service on T/C LLC such that the Arkansas savings statute applies, and

thus that the district court should not have dismissed their claims against T/C LLC

with prejudice.

In Cole v. First National Bank of Fort Smith, 800 S.W.2d 412, 413-14 (Ark.

1990), the Arkansas Supreme Court held that the plaintiff had completed service for

purposes of the savings statute when it sent the complaint and summons by certified

mail addressed to the defendant at his post office box, and the defendant’s

-4-

Appellate Case: 14-2579 Page: 4 Date Filed: 08/04/2015 Entry ID: 4302288 
stepdaughter accepted service and signed the return receipt. Although the trial court

found that service had been perfected, the Arkansas Supreme Court held that the

defendant’s stepdaughter was not his agent and thus that service had not been

perfected. Id. at 414. Nevertheless, the Arkansas Supreme Court held that the

savings statute applied. Id. Somewhat similarly, in Clouse, the Arkansas Court of

Appeals held that service had been completed for purposes of the savings statute

when a process server served the defendant’s wife and office manager at the

defendant’s office after she represented herself as her husband’s agent, but in fact was

not. 274 S.W.3d at 345-46. Here, the Barners’ attorney sent the complaint and

summons for T/C LLC by certified mail to the wrong registered agent, which

accepted service on T/C LLC’s behalf and sent a return receipt to the Barners’

attorney showing that service had been completed. This case is much closer to Cole

and Clouse than to cases in which the Arkansas courts have held that the savings

statute did not apply. See, e.g., Posey v. St. Bernard’s Healthcare, Inc., 226 S.W.3d

757, 761, 765-66 (Ark. 2006) (holding that the plaintiffs did not complete service for

purposes of the savings statute when they served the defendant with a complaint

signed by an unlicensed attorney, a nullity under Arkansas law, and made no attempt

to serve the defendant with the amended complaint); Hicks v. Clark, 870 S.W.2d 750,

752 (Ark. 1994) (holding that the plaintiff did not complete service when she made

no attempt to serve the defendant within the time required by the Arkansas procedural

rules). We believe that the Arkansas Supreme Court would hold that the Barners

completed service on T/C LLC and that their action had thus commenced for

purposes of the Arkansas savings statute. This conclusion is bolstered by the fact that

the savings statute isto be interpreted liberally, Lyons II, 866 S.W.2d at 374, and was

enacted to “protect those who, although having filed an action in good faith and in a

timely manner, would suffer a complete loss of relief on the merits because of a

procedural defect,” Rettig, 362 S.W.3d at 262 (quoting Linder ex rel. Linder v.

Howard, 757 S.W.2d 549, 551 (Ark. 1988)).

-5-

Appellate Case: 14-2579 Page: 5 Date Filed: 08/04/2015 Entry ID: 4302288 
T/C LLC relies on Brennan v. Wadlow, 270 S.W.3d 831, 835 (Ark. 2008), in

which the Arkansas Supreme Court affirmed the dismissal ofthe plaintiff’s complaint

with prejudice, even though the process server had attempted service by serving the

defendant’s father at his father’s workplace with the complaint and summons for the

defendant. In Brennan, however, there is no mention of the savings statute. Indeed,

the Arkansas Court of Appeals in Clouse notes that “commencement should have

been found” in Brennan, but that the defendants in that case had waived the savingsstatute argument by failing to mention it in their briefs. 274 S.W.3d at 348. Thus,

Brennan does not resolve the issue before us. We conclude that the Barners’ action

had commenced for purposes of the Arkansas savings statute and that, had the action

remained in state court, the Barners’ claims against T/C LLC would have been

dismissed without prejudice. Thus, at a minimum, the district court should have

dismissed the Barners’ claims against T/C LLC without prejudice, allowing them to

refile their claims against T/C LLC within a year of dismissal under the savings

statute.

B.

Title 28, section 1448 of the United States Code provides:

In all cases removed from any State court to any district court of the

United States in which any one or more of the defendants has not been

served with process or in which the service has not been perfected prior

to removal, or in which process served proves to be defective, such

process or service may be completed or new process issued in the same

manner as in cases originally filed in such district court.

The Barners argue that because they perfected service on T/C LLC within 120 days

of removal in accordance with § 1448, we should remand the case to the district court

to proceed with discovery.

-6-

Appellate Case: 14-2579 Page: 6 Date Filed: 08/04/2015 Entry ID: 4302288 
In Marshall, we held that § 1448 could not “resurrect a removed diversity case

which would have been dismissed astime-barred had it remained in state court.” 155

F.3d at 1033 (internal quotation marks omitted). We relied on Witherow v. Firestone

Tire & Rubber Co., 530 F.2d 160, 168 (3d. Cir. 1976) (superseded by statute on

unrelated grounds), which held that § 1448 could not “breathe jurisprudential life in

federal court into a case legally dead in state court.” Marshall, 155 F.3d at 1033. In

both Marshall and Witherow, the time to perfect service in state court had expired

prior to removal and the statute of limitations had run. Marshall, 155 F.3d at 1033;

Witherow, 530 F.2d at 163. Had either case remained in state court, it would have

been dismissed as time-barred. Marshall, 155 F.3d at 1033; Witherow, 530 F.2d at

163. Thus, we concluded in Marshall, as did the Third Circuit in Witherow, that the

plaintiff could not perfect service under § 1448 after the case was removed to federal

court. Marshall, 155 F.3d at 1033; Witherow, 530 F.2d at 169. 

The Barners rely on Rice v. Alpha Security, Inc., 556 F. App’x 257 (4th Cir.

2014) (per curiam), in which the Fourth Circuit distinguished Marshall and

Witherow. In Rice, the defendants removed the case to federal court after it was too

late to perfect service under state law, which subjected the case to dismissal with

prejudice in state court. Id. at 258-59. A dismissal with prejudice in state court could

have been avoided, however, had the plaintiff exercised her right to take a nonsuit,

in which case the complaint would have been dismissed without prejudice and the

plaintiff would have been allowed to refile the complaint within six months of the

dismissal. Id. at 258, 261. Because of the plaintiff’s right to take a nonsuit in state

court, the Fourth Circuit concluded, the case was not “legally dead” in state court

prior to removal and the plaintiff could complete service in federal court after

removal under § 1448. Id. at 260-61.

Here, had the Barners’ case remained in state court, it would have been

dismissed for insufficient service. As discussed above, however, the dismissal would

have been without prejudice and the Barners would have had a year from dismissal

-7-

Appellate Case: 14-2579 Page: 7 Date Filed: 08/04/2015 Entry ID: 4302288 
to refile their claims under the savings statute. Thus, Marshall and Witherow are

distinguishable, because in those casesthe plaintiff’s claims were forever time-barred

and could not be refiled after dismissal. Indeed, in Witherow, the Third Circuit

reasoned that “federal courts [should] not entertain, on removal, actions which the

state courts could not entertain in the first instance.” 530 F.2d at 168. Here, because

of the savings statute, the state court could entertain the Barners’ claims, albeit in a

new action. We agree with the Fourth Circuit’s reasoning that because the Barners

“still had options left in state court to pursue [their] cause of action,” the case was not

legally dead. Rice, 556 F. App’x at 261. Thus, the Barners completed service on T/C

LLC under § 1448 after removal.

III.

The Barners argue that the district court should not have dismissed their claims

against T/C Inc. for failure to state a claim because T/C Inc. is still capable of being

sued, despite the fact that it merged with T/C LLC on April 27, 2012. We review de

novo the district court’s dismissal of the complaint for failure to state a claim under

Federal Rule of Civil Procedure 12(b)(6). Plymouth Cnty., Iowa v. Merscorp, Inc.,

774 F.3d 1155, 1158 (8th Cir. 2014).

Under Federal Rule of Civil Procedure 17(b)(2), a corporation’s capacity to be

sued is determined “by the law under which it was organized.” Thus, since T/C Inc.

was a New Hampshire corporation, we will apply New Hampshire law to determine

whether T/C Inc. can be sued. Under New Hampshire law, once a merger becomes

effective, “the separate existence of every corporation . . . that is merged into the

survivor ceases” and “all liabilities of each corporation . . . that is merged into the

survivor are vested in the survivor.” N.H. Rev. Stat. Ann. § 293-A:11.07(a). The

Barners argue that even though T/C Inc. was no longer a legal entity after merger, it

should still be subject to suit because dissolved corporations can still be sued under

New Hampshire law. See id. § 293-A:14.05(c)(5) (“Dissolution of a corporation does

-8-

Appellate Case: 14-2579 Page: 8 Date Filed: 08/04/2015 Entry ID: 4302288 
not . . . [p]revent commencement of a proceeding by or against the corporation in its

corporate name . . . .”). We are not persuaded that the capacity of a dissolved

corporation to be sued equates that of a merged corporation. One critical difference

is that a dissolved corporation “continues its corporate existence” under New

Hampshire law, id. § 293-A:14.05(a), while a corporation that merges into another

ceases to exist, id. § 293-A:11.07(a)(2). Furthermore, if a dissolved corporation

could not be sued, a potential claimant would be deprived of relief. By contrast,

when one corporation merges into another, a potential claimant of the merged

corporation may seek relief from the survivor corporation. Id. § 293-A:11.07(4). 

Because T/C Inc. had merged into T/C LLC, it lacked the legal capacity to be sued

at the time the Barners initiated this lawsuit, and thus the district court properly

dismissed with prejudice the Barners’ claims against it.

IV. Conclusion

The district court’s judgment with respect to the claims against T/C Inc. is

affirmed. The judgment with respect to the claims against T/C LLC is reversed, and

the case is remanded for further proceedings.

______________________________

-9-

Appellate Case: 14-2579 Page: 9 Date Filed: 08/04/2015 Entry ID: 4302288