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Gerth v. Iowa Business Growth, Inc.

Court of Appeals of Iowa

October 24, 2018

ANDREW GERTH, Plaintiff-Appellant,
v.
IOWA BUSINESS GROWTH, INC. and DAN ROBESON, Defendants-Appellees.

          Appeal from the Iowa District Court for Polk County, Jeffrey D. Farrell, Judge.

         The plaintiff appeals from the district court's dismissal of his lawsuit for failing to serve the defendants within the ninety-day window required by Iowa Rule of Civil Procedure 1.302(5).

          Erik S. Fisk (until withdrawal) and John F. Fatino of Whitfield & Eddy, PLC, Des Moines, for appellant.

          Gary R. Fischer and Abigail L. Thiel of Simpson, Jensen, Abels, Fischer & Bouslog, PC, Des Moines, for appellees.

          Heard by Danilson, C.J., and Potterfield and Doyle, JJ.

          POTTERFIELD, JUDGE.

         Andrew Gerth appeals from the district court's dismissal of his petition at law alleging age discrimination, a hostile work environment, and retaliation against his former employer, Iowa Business Growth, Inc., and former supervisor, Dan Robeson.[1] At the defendants' request, the district court dismissed the action without prejudice for Gerth's failure to serve the defendants within ninety days of filing the petition, as required by Iowa Rule of Civil Procedure 1.302(5).

         Gerth challenges the dismissal, but he does not dispute that the defendants were served outside of the ninety-day window. Gerth raises the following claims: (1) He argues the district court had the discretion to grant an extension even without a showing of good cause and should have done so. (2) Alternatively, he claims he established good cause for the delay. As part of this argument, he claims the ninety-day window for service did not begin until the clerk's office issued the original notice, which in this case occurred two days after Gerth initially filed the petition-making service late by one day rather than three. He also claims the district court should have, as part of its good-cause analysis, considered the extent his rights would be prejudiced by the dismissal. (3) Finally, Gerth claims that even if good cause is necessary for an extension and he did not establish it, dismissal was inappropriate because service was only late by three days or less and the defendants were not prejudiced by the delay.

         I. Background Facts and Proceedings.

         Gerth worked for the defendants from August 2014 until May 2016. While still employed by the defendants, Gerth filed a complaint with the Iowa Civil Rights Commission, and the commission issued a right-to-sue letter after termination of Gerth's employment, on September 9, 2016. A copy of the letter was sent both to Gerth and the defendants.

         On September 20, before Gerth filed suit, the attorney for the defendants sent an email to Gerth's attorney informing him, "My client has authorized me to accept service of the Gerth petition when you file it."

         Gerth filed the petition at law on November 15; the clerk's office issued the original notice on November 17.

         According to an affidavit filed by Gerth's attorney, on December 1, he sent a letter to the defendants' attorney referencing the defense attorney's prior email stating he would accept service on behalf of his clients. Enclosed with the letter was a copy of the petition, original notice, and an "acknowledgement of service," which the defense attorney was asked to "execute . . . and return to [plaintiff attorney's] office for filing."

         According to an affidavit filed by the defendants' attorney, neither the letter nor any of the attachments were ever received by his office.

         Accordingly, defense counsel never responded to the December 1 letter, and no acknowledgement of service was filed.

         No action was taken until February 15, 2017. On that date, "[b]ased upon a reminder system in [his] calendar, which erroneously identified the 90-day service deadline as February 17," Gerth's counsel called defense counsel and "left a voicemail inquiring as to whether [he] had received the December 1, 2016 letter and would still agree to accept service of the lawsuit on behalf of the [d]efendants." Plaintiff's counsel maintains he spoke to defense counsel on February 15, while defense counsel swears that Gerth's counsel called at 4:57 p.m. and left a message asking for a return call, which defense counsel believes he returned "[p]romptly the next morning."

         Either on the afternoon of February 15 or the morning of February 16, when the two counsel spoke, defense counsel reported he had not received the letter. Gerth then served the defendants on the morning of February 16.

         The defendants filed a motion to dismiss, arguing the petition should be dismissed because Gerth failed to serve the defendants during the required ninety days, had not requested an extension during the allotted time, and had not shown good cause for the delay. Gerth resisted.

         Following a hearing on the motion, [2] the court issued a ruling dismissing Gerth's petition. The court determined that because Gerth had failed to timely serve the defendants, "he [could] only avoid dismissal if he can show good cause." The court found that Gerth's basis for late service did not "meet the traditional standard for good cause." In reaching this conclusion, the court noted that it "believes that [defense counsel] did not receive the letter" and "does not doubt that [Gerth's counsel] believes it was sent." However, the court found there was insufficient evidence to show the letter was sent, as "there was no evidence of mailing procedures." Still, the court ultimately found that the unresolved issue with the December 1 letter was immaterial, as "even if the letter was received, it is highly questionable whether it constitutes good cause" to "not follow up between December 1, 2016 and February 15, 2017 to determine if service had been accepted."

         Gerth appeals.

         II. Standard of Review.

         We review the district court's ruling regarding a motion to dismiss for correction of errors at law. Crall v. Davis, 714 N.W.2d 616, 619 (Iowa 2006). When the motion to dismiss is based upon delay of service, the district court may consider matters outside the pleadings, and we are bound by the court's factual findings if supported by substantial evidence. Id.

         III. Discussion.

         Gerth does not dispute that he served the defendants outside of the ninety days required by Iowa Rule of Civil Procedure 1.302(5). However, he maintains the district court should not have granted the defendant's motion to dismiss; ...


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