Opinion ID: 4198423
Heading Depth: 1
Heading Rank: 4

Heading: analysis

Text: ¶ 9 The City argues that neither of the Marziales’ attempts at filing their complaint on August 2, 2013, was successful. The court lacked subject matter jurisdiction over the complaint in the Spanish Fork division, the City argues, because that filing did not have an undertaking, which is a requirement under the Governmental Immunity Act. And, the City contends, the complaint filed in the Provo division was not valid because it lacked proper payment at the time of filing. We hold that the credit card error for the Marziales’ filing in the Provo division did not affect the validity of their filing of the complaint. Because this means that the Marziales’ lawsuit may proceed, we decline to decide whether the filing in the Spanish Fork division was valid because the question is moot.
¶ 10 The Marziales’ complaint in the Provo court was rejected solely on the basis of a credit card error—the type of dishonored payment that both our rules of civil procedure and case law say does not affect the validity of the filing of a complaint. ¶ 11 We begin our analysis with the plain language of the rules at issue. See Aequitas Enters. v. Interstate Inv. Grp., 2011 UT 82, ¶ 17, 267 P.3d 923. Rule 3 of the Utah Rules of Civil Procedure details the commencement of an action and states in relevant part that “[d]ishonor of a check or other form of payment does not affect the validity of the filing, but may be grounds for such sanctions as the court deems appropriate,” UTAH R. CIV. P. 3(a), and that “[t]he court shall have jurisdiction from the time of filing of the complaint or service of the summons and a copy of the complaint,” UTAH R. CIV. P. 3(b). Rule 5 states that “[f]iling is complete upon the earliest of acceptance by the electronic filing system, the clerk of court or the judge.” UTAH R. CIV. P. 5(e). Neither rule by its plain language requires valid payment for a complaint to be filed or accepted. In fact, rule 3(a) explicitly states the opposite—that dishonor of payment does not affect whether the filing is valid. ¶ 12 Despite the clear language of rule 3, the City argues that we should read into our procedural rules a requirement that filing fees must be paid at the time a complaint is accepted for the filing to be valid. The City points to Utah’s court fees statute, which 4 Cite as: 2017 UT 51 Opinion of the Court requires that “all fees shall be paid at the time the clerk accepts the pleading for filing,” UTAH CODE § 78A-2-301(1)(dd), and to language added in 2008 to rule 5 tying the completion of filing to the time of “acceptance.” The City argues that the use of “acceptance” in rule 5 and “accepts” in the court fees statute means that we should read the court fees statute’s requirement of payment at the time of filing into rule 5. ¶ 13 We rejected a similar argument in Dipoma v. McPhie, holding that rule 3 does not explicitly incorporate statutes— including the precursor to the court fees statute—that require payment of fees before court employees may perform their services. 2001 UT 61, ¶¶ 10, 13 & n.5, 29 P.3d 1225 (holding that statute providing that “all fees shall be paid at the time the clerk accepts the pleading for filing” was not incorporated in rule 3 for jurisdictional purposes). We reject the City’s argument that the court fees statute is incorporated in rule 5 for similar reasons. The use of “acceptance” in rule 5 and “accepts” in the court fees statute does not mean that those provisions must be read together in the way the City urges, which is to say, in a way that directly conflicts with rule 3’s statement that dishonor of payment does not affect the validity of filing. ¶ 14 Rather than requiring payment at the time of filing as a matter of jurisdiction, rule 3 provides that dishonor of payment “may be grounds for such sanctions as the court deems appropriate, which may include dismissal of the action and the award of costs and attorney fees.” UTAH R. CIV. P. 3(a). So while a party should pay fees “at the time the clerk accepts the pleading for filing,” UTAH CODE § 78A-2-301(1)(dd), dishonor of payment results not in an invalid filing but in court-determined sanctions, which may vary from case to case, UTAH R. CIV. P. 3(a); see also Dipoma, 2001 UT 61, ¶ 19 (stating that where “a litigant receives notice that his or her original payment has been returned for insufficient funds, the litigant must pay the required filing fee within a reasonable time to avoid dismissal of his or her action”). ¶ 15 Our holding in Dipoma squarely supports this conclusion. In that case, the plaintiff filed a complaint with a personal check for the amount due for the filing fee. 2001 UT 61, ¶ 2. The clerk of court accepted the check for the filing fee and stamped the plaintiff’s complaint “filed.” Id. But a little over a month later—after the statute of limitations had run—the check 5 MARZIALE v. SPANISH FORK CITY Opinion of the Court was returned to the clerk of court for insufficient funds. Id. ¶ 3. The plaintiff eventually paid the filing fee and served the defendant, but the defendant moved for summary judgment, arguing that the complaint was not filed until the plaintiff actually paid the filing fee and therefore was barred under the statute of limitations. Id. ¶¶ 3–4. ¶ 16 We held that “payment of filing fees is not a jurisdictional prerequisite for the commencement of an action under rule 3 of the Utah Rules of Civil Procedure,” noting that a contrary rule “could potentially lead to harsh, unintended results, especially in the case of a check returned for insufficient funds.” Id. ¶¶ 15–16. ¶ 17 The City argues that the e-filing system’s status history showing “approved” and “receipt issued” at the same time it was rejected shows that the complaint was not initially approved and stamped “filed,” as was the case in Dipoma. But Dipoma’s holding was not tied to the complaint being stamped “filed” before the payment error was noticed. In Dipoma, the payment error, noticed after filing, did not undo the validity of the filing; here, the error was noticed before (or at the same time as, according to the e-filing status history) the clerk’s rejection and cannot serve as a basis to find the filing untimely. Dipoma’s holding—that payment of filing fees is not a jurisdictional prerequisite to a valid filing— does not depend on when the error is discovered. ¶ 18 We therefore hold that the dishonor of the credit card payment did not affect the validity of the filing for the Provo complaint.2 2 We need not decide at which point in time the Marziales’ complaint was accepted by the court’s e-filing system. The e-filing system indicates that at some point—either before or contemporaneous to the e-filing system’s rejection—the Marziales’ complaint was “approved.” Given that the filing was approved at some point, a dishonor of payment cannot form the basis for a rejection of the filing. We pause to note, however, that we may have reached a different conclusion regarding whether a filing occurred if the City had established that the complaint had never been accepted. But it was the City’s burden to demonstrate (cont.) 6 Cite as: 2017 UT 51 Opinion of the Court
¶ 19 Because the Marziales’ payment also covered their undertaking, the City’s argument that the late filing deprived the district court of subject matter jurisdiction also raises the question of whether the dishonor of payment affected the validity of the undertaking. ¶ 20 We note upfront that failure to timely file an undertaking under the Governmental Immunity Act “is an affirmative defense” and not a jurisdictional issue. Hansen v. Salt Lake Cty., 794 P.2d 838, 840 (Utah 1990) (“In contrast to other procedural requirements of the Governmental Immunity Act, failure to comply with [the undertaking provision] does not bar a suit.”).3 And we hold that the principle in rule 3 of the Utah Rules of Civil Procedure—that dishonor of payment does not affect the validity of the filing—extends to the payment of an undertaking under the Governmental Immunity Act. ¶ 21 Utah Code section 63G-7-601 provides that (1) actions under the Governmental Immunity Act are “governed by the Utah Rules of Civil Procedure to the extent that they are consistent” with the Act, UTAH CODE § 63G-7-601(1); and (2) an action must include an undertaking at the time of filing, id. § 63G-7-601(2). Nothing in rule 3 is inconsistent with the Governmental Immunity Act. We therefore must determine how that no genuine issue of material fact existed as to this issue. And the City has not carried its burden. 3 Hansen v. Salt Lake County, 794 P.2d 838 (Utah 1990), addressed a previous version of the Governmental Immunity Act, which stated, “At the time of filing the action the plaintiff shall file an undertaking in a sum fixed by the court, but in no case less than the sum of $300, conditioned upon payment by the plaintiff of taxable costs incurred by the governmental entity in the action if the plaintiff fails to prosecute the action or fails to recover judgment.” UTAH CODE § 63-30-19 (1989). This law was repealed and replaced in 2004, but the current version contains no substantive differences. See UTAH CODE § 63G-7-601 (2017). Thus, Hansen’s principle that the provision is not jurisdictional still applies. 794 P.2d at 840. 7 MARZIALE v. SPANISH FORK CITY Opinion of the Court rule 3, which governs commencement of actions, applies to filings under section 601. ¶ 22 Rule 3 explicitly applies only to complaints, which are a general requirement for civil actions. UTAH R. CIV. P. 3(a). But we believe that it is consistent with the Governmental Immunity Act to apply rule 3’s principle—that dishonor of payment does not affect the validity of a filing—to an undertaking as well. ¶ 23 Indeed, incorporation of rule 3 into the Governmental Immunity Act’s undertaking requirement is proper as a matter of constitutional avoidance. This canon encourages courts to “reject[] one of two plausible constructions of a statute on the ground that it would raise grave doubts as to its constitutionality,” since we presume that the legislature enacts laws “in the light of constitutional limitations.” Utah Dep’t of Transp. v. Carlson, 2014 UT 24, ¶ 23, 332 P.3d 900 (citation omitted). A holding that dishonor of payment affects the validity of the filing of an undertaking could have serious due process problems if—as is alleged here—the undertaking payment has been dishonored through no fault of the plaintiff and the plaintiff has received no notice of the dishonor of payment until after the statute of limitations has run. Timely notice of rejection is key because “[t]imely and adequate notice” is part of “the very heart of procedural fairness.” Nelson v. Jacobsen, 669 P.2d 1207, 1211 (Utah 1983); see also Dipoma v. McPhie, 2001 UT 61, ¶ 15, 29 P.3d 1225 (“[A] check may be returned for many reasons, some of which are beyond the ability of the payor to control—such as bank error— and a plaintiff should not have his or her action dismissed due to problems beyond their control.”). The City maintains that the court sent a notice of rejection after each of the Marziales’ submissions. But, as the moving party, the City bears the burden of establishing that there are no disputed facts on a material issue, and it has failed to establish undisputed facts showing that the Marziales received any such notice.4 Thus, to avoid possible 4 The City alleges that the notice of the credit card error was sent to the Marziales’ service provider on August 2, 2013, but the Marziales provided evidence, by affidavit, that they did not receive notification that their payment was rejected until September 10, 2013, when an employee of their law firm contacted (cont.) 8 Cite as: 2017 UT 51 Opinion of the Court constitutional problems stemming from a lack of notice, the better reading of section 63G-7-601 and rule 3 is that an undertaking is encompassed by the rule. ¶ 24 We emphasize that our determination today that rule 3 is not displaced by the provisions of the Governmental Immunity Act extends only to the filing of an undertaking, not to the other prerequisites to filing an action under the Governmental Immunity Act, such as a notice of claim. The Governmental Immunity Act does not generally displace all otherwise applicable law, but it is “comprehensive” and “all-encompassing” on the “matters that it regulates in comprehensive detail.” Craig v. Provo City, 2016 UT 40, ¶ 22, 389 P.3d 423 (emphasis omitted). Thus, where portions of the Act, such as the notice of claim portion, specifically regulate an area and contain no language to support the idea that they should be supplemented, we will not import other statutory language. Id. ¶¶ 26, 38–40 (holding that the Governmental Immunity Act already speaks “in elaborate detail on the precise timing of the initial notice of claim and of the subsequent action to be filed in district court” and therefore a separate statute that allowed for the extension of a statute of limitations did not apply (citing UTAH CODE §§ 63G-7-402, 403)). ¶ 25 But the Governmental Immunity Act does not regulate when an action is considered filed or how payment errors affect the filing, instead incorporating by reference—and thereby deferring to—the Utah Rules of Civil Procedure. See UTAH CODE § 63G-7-601(1). It is therefore appropriate to apply rule 3’s principle that “[d]ishonor of a check or other form of payment does not affect the validity of the filing” to the payment of an undertaking under the Governmental Immunity Act.