Court Opinion

ID: 2763941
Source: CourtListenerOpinion
Date Created: 2014-12-23 16:06:12.856682+00
Date Added: 2024-06-11T11:07:34.905210
License: Public Domain

This opinion will be unpublished and
                       may not be cited except as provided by
                       Minn. Stat. § 480A.08, subd. 3 (2012).

                            STATE OF MINNESOTA
                            IN COURT OF APPEALS
                                  A14-0442

                             Amaal Mohammed Shire,
                                  Respondent,

                                        vs.

                       Minneapolis Public Housing Authority,
                                    Appellant,
                              Lester L. Hall, et al.,
                                   Respondents.

                             Filed December 22, 2014
                                     Reversed
                                  Stauber, Judge

                          Hennepin County District Court
                            File No. 27-CV-13-13818

P. Chinedu Nwaneri, Nwaneri Law Firm, P.L.L.C., St. Paul, Minnesota (for respondent
Amaal Shire)

Carol A. Kubic, Elizabeth K. Grossman, Minneapolis Public Housing Authority,
Minneapolis, Minnesota (for appellant)

Patrick C. Cronan, Cronan, Pearson, Quinlivan, P.A., Minneapolis, Minnesota (for
respondents Lester Hall, et al.)

       Considered and decided by Stauber, Presiding Judge; Chutich, Judge; and

Reilly, Judge.
                         UNPUBLISHED OPINION

STAUBER, Judge

       On appeal from an order denying appellant’s motion to dismiss for failure to

complete service within the statute of limitations, appellant argues the district court erred

by finding that it shared an identity of interest with the city of Minneapolis such that

service upon the city could be imputed to appellant. We agree, and, because appellant

was not properly served under the Minn. R. Civ. P. 4.03(e), we reverse.

                                          FACTS

       On July 27, 2007, respondent Amaal Mohammed Shire (Shire) claims she slipped,

fell, and was injured on a wet floor in her apartment complex which is owned by

appellant Minneapolis Public Housing Authority (MPHA).

       On July 25, 2013, two days before the applicable six-year statute of limitations

expired, see Minn. Stat. 541.05, subd. 1(5) (2012), Shire’s summons and complaint was

delivered to the sheriff with instructions to serve MPHA, in care of the Minneapolis city

clerk. The sheriff served the city clerk four days later. The next day, the city clerk’s

office emailed the complaint to MPHA. MPHA then emailed Shire’s counsel objecting

to service. On August 16, 2013, after the statute of limitations expired, Shire’s counsel

personally served MPHA’s counsel.1

1
  MPHA concedes this would have constituted proper service had it been within the
statute of limitations because MPHA’s board has authorized its general counsel to receive
service on its behalf rather than through strict compliance with Rule 4.03(e). MPHA’s
service policy is not before the court.

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       MPHA brought a motion to dismiss for lack of service and filed an answer which

raised several affirmative defenses including that: (1) the court lacked jurisdiction over

MPHA; (2) Shire’s claims were barred by invalid service of process; and (3) Shire’s

claims were barred by the statute of limitations. After a hearing, the district court denied

the motion, finding that MPHA and the City of Minneapolis shared an identity of interest

such that service on the city was imputed to MPHA. This appeal follows.

                                      DECISION

       MPHA argues that the district court lacks personal jurisdiction over it because

Shire failed to execute proper service within the statute of limitations. “Whether service

of process was effective, and personal jurisdiction therefore exists, is a question of law

that we review de novo.” Shamrock Dev., Inc. v. Smith, 754 N.W.2d 377, 382 (Minn.

2008). MPHA pleaded lack of personal jurisdiction and insufficiency of service of

process as affirmative defenses in its answer and motion to dismiss. See Rhee v. Golden

Home Builders, Inc., 617 N.W.2d 618, 621 (Minn. App. 2000) (citations omitted); Minn.

R. Civ. P. 12.02(b),(d).

       It is undisputed that MPHA is a public corporation. Service upon a municipal or

other public corporation is made by delivering a copy of the summons and complaint:

              (1)    To the chair of the county board or to the county
                     auditor of a defendant county;
              (2)    To the chief executive officer or to the clerk of a
                     defendant city, village or borough;
              (3)    To the chair of the town board or to the clerk of a
                     defendant town;
              (4)    To any member of the board or other governing body
                     of a defendant school district; or

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              (5)    To any member of the board or other governing body
                     of a defendant public board or public body not
                     hereinabove enumerated.

Minn. R. Civ. P. 4.03(e). A public housing authority is not enumerated under parts

(1)-(4) and thus falls under the “catchall” provision of (5). MPHA contends that Shire

erred by directing the sheriff to serve the city clerk instead of a “member of the board or

other governing body of a defendant public board or public body.” Id. at subd. (5).

       “Service of process in a manner not authorized by the rule is ineffective.” Tullis v.

Federated Mut. Ins. Co., 570 N.W.2d 309, 311 (Minn. 1997). To be effective, service of

process “must accord strictly with statutory requirements.” Lundgren v. Green, 592

N.W.2d 888, 890 (Minn. App. 1999) (quotation omitted), review denied (Minn. July 28,

1999). But “there are occasions when mistakes . . . happen that in fairness deserve a

relaxation of the time-bar” to allow a correction after the statute of limitations has

expired. Johnson v. Soo Line R.R. Co., 463 N.W.2d 894, 896 (Minn. 1990). One such

occasion is where “there is an ‘identity of interest’ between the parties giving the

intended defendant either actual or constructive knowledge of the mistake in pleading.”

Id. The nature of the relationship between the parties, rather than the form of entities, is

the decisive factor in an identity-of-interest relationship. Carlson v. Hennepin County,

479 N.W.2d 50, 54 (Minn. 1992). “[T]wo entities have an identity of interest when they

‘share such an intimacy in their business operations and organization that service on one

imputes notice to the other.’” Id. (quoting Johnson, 463 N.W.2d at 897). Where entities

share an identity of interest, if an action is timely commenced on one entity through

                                              4
delivery of the summons and complaint to the sheriff, the service of the action is imputed

to the proper defendant. Carlson, 479 N.W.2d at 56.2

       Johnson and Carlson provide guidance here. In Johnson, the plaintiff properly

and timely commenced his suit by delivering the summons and complaint to the sheriff

for service. 463 N.W.2d at 895. But, the day after the statute of limitations expired, the

plaintiff discovered that he had sued the wrong railroad. Id. The plaintiff prepared a new

summons and complaint and delivered it to the sheriff prior to the sheriff executing

service on the originally named defendant. Id. The court held that there was no identity

of interest between two distinct railroad companies and concluded that the amended

summons and complaint did not relate back to before the expiration of the statute of

limitations. Id. at 897.

       In Carlson, the plaintiff delivered a summons and complaint for medical

malpractice to the sheriff for service upon Hennepin County, d/b/a Hennepin County

Medical Center (HCMC). 479 N.W.2d at 52. The plaintiff later learned that HCMC does

not provide direct patient services and that Hennepin Faculty Associates (HFA) provides

all patient care. Id. By the time plaintiff learned this and served HFA, the statute of

limitations had expired. Id. at 53. It was undisputed that HFA did not have actual

knowledge of the lawsuit until it received service. Id. at 54. The court held that HFA

and HCMC had an identity-of-interest despite being separate legal identities because

2
  Shire argues that leniency in service should be granted because Minn. R. Civ. P. 15.03
allows relation-back of amendments and “the rules on amending pleadings are intended
to be liberally construed so that cases are decided on the merits.” Carlson, 479 N.W.2d
at 54 (citation omitted). This argument fails because Shire never amended her pleadings.

                                             5
HCMC had “turned over health-care procedures and decisions to HFA, lock, stock and

scalpel.” Id. at 55. HFA was the exclusive tenant and used HCMC’s name in its dealings

with the public. The touchstone in Carlson was notice: because HCMC and HFA shared

an identity-of-interest when the sheriff served HCMC, HFA was constructively served at

the same time. Id. at 56.

       If MPHA and the city share an identity of interest, under Carlson, serving the city

clerk would constitute constructive service upon MPHA because the knowledge of one

could be attributed to the other. Unlike the railroads in Johnson, MPHA has ties to the

city of Minneapolis: its full name is “Minneapolis Public Housing Authority in and for

the City of Minneapolis” and it was created by city ordinance. Minneapolis, Minn. Code

Ordinances §§ 420.10-.20 (1986). Its board of commissioners is appointed by the city

council and the mayor, and the executive director is appointed by the board and

confirmed by city council. Id. at §§ 420.40, .90(1) (2014). It is partially funded by the

city and is statutorily mandated to submit quarterly reports to the mayor and city council.

Id. at § 420.100 (2014).

       But MPHA operates independently from the city: it has its own website, location,

and letterhead; it contracts independently with vendors, hires and fires its own

employees, and sues and is sued in its own name. See, e.g., Sledge v. Minneapolis Public

Housing Authority, No. A04-2479 (Minn. App. Feb. 28, 2006). Although MPHA and the

city are not wholly separate, we conclude that MPHA operates with sufficient

independence that it does not share an identity of interest with the city.

                                              6
       Additionally, Carlson is not controlling because its facts are distinguishable: in

Carlson, the plaintiff failed to identify the correct defendant, whereas Shire identified the

correct defendant at the time of service, but contrary to rule served the city clerk instead

of a MPHA board member. Unlike HCMC and HFA, which were indistinguishable to

the plaintiff, Shire knew the apartment building was owned by MPHA and specifically

named MPHA—and not the city—as the defendant.

       Shire next argues that MPHA and the city have a parent-subsidiary relationship

and that service was proper because the “[s]ubstitution of a parent corporation for its

subsidiary has been characterized as [a] correction . . . which did not necessitate service

on the substitute party.” Buysse v. Baumann-Furre & Co., 448 N.W.2d 865, 871 (Minn.

1989). But the enumerations of Rule 4.03(e) become meaningless if service on the city is

allowed in place of service on a properly named defendant. See Tullis, 570 N.W.2d at

311 (holding that service not made in accordance with the rules of procedure is

ineffective).

       Further, substitute service is not permitted upon public corporations. Obermeyer

v. School Bd., Indep. Sch. Dist. No. 282, 312 Minn. 580, 581-82, 251 N.W.2d 707, 708

(1977) (service upon wife of the schoolboard chairman was inadequate under Minn. R.

Civ. P. 4.03(e)). “Unlike Rule 4.03(a), which specifically authorizes substitute service

upon an individual . . . [r]ule 4.03(e) is silent with regard to substitute service.” Id. And

actual notice does not subject defendants to personal jurisdiction without substantial

compliance with rule 4.03. Thiele v. Stitch, 425 N.W.2d 580, 584 (Minn. 1988). The

actual-notice exception has only been recognized in cases where substitute service is

                                              7
appropriate. Id. We have previously declined to extend actual notice to substitute-

service cases upon public corporations and decline to do so today. See, e.g., Blaine v.

Anoka-Hennepin Indep. Sch. Dist. No. 11, 498 N.W.2d 309, 314-15 (Minn. App. 1993),

review denied (Minn. June 22, 1993) (service upon superintendent was insufficient under

rule 4.03(e) even where the school board had actual notice of the lawsuit), abrogated on

other grounds by Manteuffel v. City of N. St. Paul, 533 N.W.2d 622 (Minn. 1995).

Therefore, although the city clerk emailed MPHA a copy of the complaint, this action

does not remedy the improper service.

       We recognize the harsh effect of this decision on Shire: her claim against MPHA

will be dismissed for invalid service rather than adjudicated on the merits. But Shire bore

this risk by delaying service until the eve of expiration of the statute of limitations. Rule

4.03(e) clearly dictates proper service upon public corporations. MPHA and the city of

Minneapolis do not share sufficient ties to support the expansion of the identity-of-

interest doctrine to include properly named defendants served through improper channels.

We conclude this is not a case that necessitates a relaxation of the strict statutory

requirements.

       Because MPHA and the city do not share an identity of interest and substitute

service is not allowed on public corporations, service upon the city clerk was improper

and MPHA was not served before the statute of limitations expired. Therefore, the

district court lacks personal jurisdiction over MPHA.

       Reversed.

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