Opinion
No. C3-02-1104.
Filed February 18, 2003.
Appeal from the District Court, St. Louis County, File No. C601600187.
William D. Paul, (for respondent Dwane E. Henricksen)
Brian C. Southwell, (for appellant)
Robert N. Roningen, (for respondent Laurence Brainerd)
Considered and decided by Shumaker, Presiding Judge, Lansing, Judge, and Minge, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
In a bench trial, the district court determined that Kent Henricksen wrongfully converted Dwane Henricksen's personal property and equipment and defrauded Laurence Brainerd when he sold him equipment. Kent Henricksen appeals the denial of his alternative motion for amended findings or a new trial on the grounds of res judicata, collateral estoppel, and untimely service of Brainerd's cross-claim. Because the district court did not abuse its discretion, misapply the law, or make findings unsupported by the record, we affirm.
FACTS
This appeal is part of an ongoing dispute among family members, which has generated at least eleven district court cases and four appeals. The current controversy involves personal property that was located on real property owned by Dwane Henricksen and acquired by Kent Henricksen at a sheriff's sale. After the final redemption period expired, Kent Henricksen contracted with Laurence Brainerd for sale and removal of part of the personal property. Dwane Henricksen obtained a temporary restraining order to stop the removal of the remaining personal property and filed a conversion action against Kent Henricksen.
When the case was scheduled for trial, Kent Henricksen moved to dismiss for failure of service. Following a lengthy pretrial discussion with the assigned judge, the parties agreed to a continuance to acknowledge or effect service, and the district court continued the matter for twenty days. Service was neither acknowledged nor effected within twenty days. Approximately seven months later, Dwane Henricksen served and filed a summons and complaint on Kent Henricksen and Brainerd for conversion of the personal property. Brainerd filed a cross-claim against Kent Henricksen for fraud.
Seven months after he was served with the summons and complaint in the second conversion action, Kent Henricksen moved to dismiss the first conversion action with prejudice. The district court judge who had continued the first action signed an order stating, "The original cause of action in this matter is dismissed with prejudice; if the court can, in fact, dismiss a case that never existed for want of jurisdiction."
The same day the order was signed, Kent Henricksen moved to dismiss the second action on grounds of collateral estoppel and res judicata. The district court judge who was assigned to the second action denied the motion in an order, judgment, and memorandum issued at the conclusion of the bench trial. The court denied Kent Henricksen's subsequent alternative motion for amended findings or a new trial. Kent Henricksen appeals, arguing that the district court erred in (1) failing to dismiss the second action on the grounds of collateral estoppel and res judicata and (2) failing to dismiss Brainerd's cross-claim as untimely.
DECISION I
The principle underlying the related doctrines of res judicata and collateral estoppel is that when a court of competent jurisdiction directly decides a question distinctly put in issue, that determination cannot be disputed in a subsequent suit by the same parties. Kaiser v. N. States Power Co., 353 N.W.2d 899, 902 (Minn. 1984). Although the specific elements of the two doctrines vary, both require an adjudication on the merits by a court of competent jurisdiction. Id. "The applicability of res judicata is a question of law subject to de novo review." State v. Joseph, 636 N.W.2d 322, 326 (Minn. 2001). The applicability of collateral estoppel is a mixed question of law and fact, which, on undisputed facts, is subject to de novo review. Falgren v. State Bd. of Teaching, 545 N.W.2d 901, 905 (Minn. 1996).
Kent Henricksen argues that the order dismissing the original conversion action constitutes a final judgment on the merits on the same issues raised in the second action. We disagree. The "motion to dismiss" the original conversion action was based on a failure to serve the summons and complaint. In Minnesota, service of the summons and complaint initiates the action. Minn.R.Civ.P. 3.01 (providing for commencement of civil action). A defendant is not subject to personal jurisdiction without proper service. Tullis v. Federated Mut. Ins. Co., 570 N.W.2d 309, 311 (Minn. 1997). A dismissal for lack of personal jurisdiction does not constitute a final judgment on the merits. See Sausser v. Republic Mortgage Investors, 269 N.W.2d 758, 762 (Minn. 1978) (stating dismissal for lack of personal jurisdiction is not on the merits); Minn.R.Civ.P. 41.02(c) (recognizing that involuntary dismissal for lack of jurisdiction does not constitute an adjudication on the merits).
Kent Henricksen further argues that the provision in the district court's order dismissing the original cause of action with prejudice acts as an adjudication on the merits. Again, we disagree. The order itself is inconclusive. On its face it states that the case was dismissed for lack of jurisdiction and further states that the action "is dismissed with prejudice; if the court can, in fact, dismiss a case that never existed for want of jurisdiction." The contingent nature of the court's "with prejudice" designation is justified. A district court's designation of "with prejudice" or "without prejudice" must be viewed in light of the basis for the dismissal and is not automatically dispositive of whether a second suit is barred. See Branstrom Assocs., Inc. v. Cmty. Mem'l Hosp., 296 Minn. 366, 209 N.W.2d 389 (1973) (holding that a dismissal without prejudice was, in effect, a dismissal with prejudice); see also Hulmes v. Honda Motor Co., Ltd., 924 F. Supp. 673, 683 (D.N.J. 1996) (characterization of "with prejudice" or "without prejudice" is not dispositive of whether second suit is barred); Minn. Fed'n of Teachers v. Mammenga, 485 N.W.2d 305 (Minn.App. 1992) (dismissal of federal action "with prejudice" did not constitute adjudication on the merits entitled to preclusive effect in successor suit in state court), review denied (Minn. June 30, 1992).
The dismissal of the first conversion action for lack of personal jurisdiction did not constitute an adjudication on the merits. The district court properly concluded that Dwane Henricksen's second action for conversion was not barred by the doctrines of res judicata or collateral estoppel.
II
Kent Henricksen's final argument is that the district court abused its discretion in failing to dismiss Brainerd's cross-claim because it was not timely served. Brainerd did not file a brief on appeal, and we proceed under Minn.R.Civ.App.P. 142.03. We review a district court's dismissal under an abuse-of-discretion standard. Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn. 1990).
The limited record contains a copy of Brainerd's answer and cross-claim dated June 28, 2000, which was nine days after Brainerd was served with Dwane Henricksen's summons and complaint in the second action. Apparently Kent Henricksen maintains that he was not served with a copy of the cross-claim before trial. When he raised this issue on the first day of trial, the district court permitted Brainerd to serve the cross-claim and file an affidavit of service.
Every pleading subsequent to the original complaint shall be served upon each of the parties. Minn.R.Civ.P. 5.01. The court may, however, enlarge the stated time period for service upon a motion made after the expiration of the specified period if the failure was the result of excusable neglect. Minn.R.Civ.P. 6.02. The record confirms that Brainerd requested leave of court to file his affidavit of service, which the court granted. In the order denying Kent Henricksen's posttrial motions, the district court stated it had been necessary liberally to allow "all parties to amend their pleadings [and] serve their pleadings in an untimely manner" to bring the matter to conclusion. The district court's explanation for enlarging the time period is resoundingly supported by the record.