Opinion
Case No.: A3-00-171
June 27, 2003
MEMORANDUM AND ORDER
I. INTRODUCTION
Before the Court is a Motion for Summary Judgment submitted by the defendant, Philips Medical Systems, Nederland, B.V. ("Philips Medical"), against the plaintiff Paracelsus Healthcare Corporation("Paracelsus") (doc. #48). As set forth below, Philips Medical's motion is GRANTED.
II. FACTUAL AND PROCEDURAL HISTORY
Philips Medical, a Dutch Corporation, designed, manufactured, and marketed a cardiac imaging device. Philips Electronics North America Corporation ("Philips Electronics"), an entity related to Philips Medical, sold the imaging device to Diagnostic Medical Systems ("DMS"). On January 12, 1998, DMS sold the device to Dakota Heartland Health System, a wholly owned subsidiary of the plaintiff Paracelsus. On August 2, 1999, Paracelsus physicians were utilizing the device to perform an angioplasty operation. During the operation, a stint became loose and free-floating in the patient's heart. The physicians then used the cardiac imaging device to locate and remove the stint. While the physicians were attempting to locate and remove the stint, the device overheated and shut down. As a result, the physicians were forced to perform bypass surgery to remove the stint. The patient recovered and his injuries are not relevant to the present dispute; however, Paracelsus allegedly lost profits and incurred repair costs as a result of the shutdown.
Paracelsus brought suit against Philips Medical for claims including breach of implied warranty of merchantability. Paracelsus alleges the device is unmerchantable because it lacked a temperature control device to automatically shut down the system before it sustained damage from overheating.
Paracelsus brought suit against Philips Medical, Philips Electronics, and DMS for breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, breach of express warranty, negligence, and breach of contract. Since the inception of the case, the parties have held several settlement discussions and negotiations. As a consequence of these discussions, the claims against the defendants, DMS and Philips Electronics, have been dismissed, and all but the claim for implied warranty of merchantability against Philips Medical has been dismissed.
Initially, Paracelsus brought suit against DMS and Philips Electronics. Philips Electronics responded to Paracelsus' complaint by admitting it manufactured the device. Later Philips Electronics realized it had made a mistake in admitting that it had manufactured the device and on September 6, 2001 it amended its answer. Philips Medical, the actual manufacturer, was then added to the lawsuit.
Paracelsus attempted service of process on Philips Medical by means spelled out in the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents of 1965 ("Hague Convention"). The Hague Convention authorizes service of process through a designated central authority. The central authority then completes service by a method prescribed by a country's internal law or by a method requested by the applicant unless such method is incompatible with the law of that country.
On December 10, 2001, Legal Language Services sent a package of documents, including Paracelsus' Amended Complaint translated into Dutch, to the central authority in the Netherlands for service on Philips Medical. The central authority received the information by December 12, 2001. On February 5, 2002, the central authority effectuated service on Philips Medical. Philips Medical now brings a motion for summary judgment claiming, among other things, that Paracelsus failed to commence the action within the statute of limitations period for breach of warranty claims.
III. DISCUSSION LEGAL ANALYSIS
Rule 56 of the Federal Rules of Civil Procedure provides for the granting of summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Moreover, all evidence and inferences are to be viewed in a light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "In the context of defendant's statute of limitations defenses, the Court notes that summary judgment is appropriate if the action is clearly barred, but that if the running or tolling of the statute requires the adjudication of facts, summary judgment is inappropriate." LeCroy v. Dean Witter Reynolds, 585 F. Supp. 753, 757 (D. Ark. 1984) (citations omitted). With this standard in mind, the Court begins its analysis.
A. Commencement of the Action
When federal jurisdiction is based upon diversity, the Court applies state substantive law, including its statute of limitations. Larsen v. Mayo Medical Center, 218 F.3d 863, 866 (8th Cir. 2000). Under North Dakota law, a four-year statute of limitations period governs a claim for breach of warranty. N.D. Cent. Code § 41-02-104 (1999). It is undisputed that the statute began to run on January 12, 1998, the date of delivery of the cardiac imaging device. Therefore, the statute of limitations period expired on January 12, 2002.
The question before the Court is whether the present action commenced prior to the expiration of the statute of limitations. In answering this question, the Court again applies North Dakota law. Larsen, 218 F.3d at 867 (stating commencement rules are "part and parcel of the statute of limitations"). Under North Dakota law, an action is deemed commenced when a copy of the summons is served upon a defendant. N.D. R.Civ.P. 3 (2002). However, the service of the summons in the present case was not actually accomplished until February 5, 2002, which was approximately three weeks after the statute of limitations period expired.
Even though service of the summons was accomplished three weeks late, the question is not completely answered at this stage in the analysis. North Dakota law further states that an attempt to commence an action is equivalent to commencement of an action when the summons, with the intent that it shall be actually served, is delivered . . . (2) [t]o the sheriff or other officer, if a corporation is defendant, of the county in which was situated the principal place of business of such corporation, or in which its general business was transacted, or in which it kept an office for the transaction of business . . . [s]uch an attempt must be followed within sixty days by the first publication of the summons or the service thereof.
N.D. Cent. Code § 28-01-38.
Paracelsus maintains that its December 10, 2001 transmittal of the summons to the central authority results in commencement of the action per § 28-01-38. Paracelsus analogizes the role of the central authority to that of the sheriff or county officer. The Court notes that the sheriff or county officer and the central authority play a similar role in the service of a summons; however, a court when interpreting a statute must apply the plain meaning of that statute. Luallin v. Koehler, 644 N.W.2d 591, 595 (N.D. 2002) (declaring that the first step in ascertaining legislative intent is examining the words used in the statute and giving them their ordinary plain language meaning).
Here, the language of the statute in question is unambiguous and this Court refuses to create an ambiguity by implying a broad meaning to the words "sheriff" or "county officer." The duty of a federal district court is to interpret state law, not create it. Furthermore, Paracelsus provides no evidence that it published the summons within sixty days after it attempted service. The Court thus finds that § 28-01-38 does not apply and the action did not commence until February 5, 2002.
B. The Doctrine of Equitable Tolling
In the event that § 28-01-38 does not apply, which the Court finds it does not, Paracelsus contends that the doctrine of equitable tolling applies to make proper its February 5, 2002 service. First, the Court observes that North Dakota has never officially adopted the doctrine of equitable tolling. Reid v. Cuprum, 611 N.W.2d 187, 191 (N.D. 2000). Second, even if North Dakota did adopt such a doctrine, "the plaintiff must show three things before a court may equitably toll the statute limitations: (1) timely notice, (2) lack of prejudice to the defendant, and (3) reasonable and good-faith conduct on the part of the plaintiff." Reid, 611 N.W.2d at 189 (citing Addison v. State, 578 P.2d 941, 943-44 (Cal. 1978)).
In the present case, Paracelsus failed to show their conduct was reasonable. Paracelsus knew the statute of limitations period was set to expire on January 12, 2002. Paracelsus also knew at least eight months and as much as seventeen months before the limitations period expired that Philips Medical, and not Philips Electronics, manufactured the cardiac imaging device. Paracelsus should have realized the difficulties involved in serving a defendant in a foreign county and immediately used every method available to accomplish service within the limitations period.
By this statement, the Court does not question the appropriateness of international service of process by means of a central authority. See Fed.R.Civ.P. 4(f); N.D. R.Civ.P. 4(f) (allowing service to be effectuated by any internationally agreed upon means, reasonably calculated to give notice). What the Court does question is why Paracelsus failed to use the other means available to effectuate timely service. See Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, Nov. 16, 1965, art. 8, 10, 19, T.I.A.S. No. 6638, 20 U.S.T. 361. The Court finds it unreasonable to ignore the other available means and transmit a copy of the summons to the central authority only one month prior to the expiration date knowing that service could likely take months. The Court thus finds that, even if North Dakota recognized such a doctrine, equitable tolling does not apply to the present case.
C. Section 28-01-29 of the North Dakota Century Code
Section 28-01-29 of the North Dakota Century Code states that when commencement of an action is stayed by injunction or other order of a court, or by a statutory prohibition, the time of the continuance of the stay is not a part of the time limited for the commencement of the action." Paracelsus contends, citing Broad v. Mannesmann Anlagenbau, 10 P.3d 371 (Wash. 2000), that "[t]he Hague Convention stands as a positive rule of law which could prevent timely commencement of suit," in other words, a statutory prohibition on the commencement of an action.
In Broad, the Ninth Circuit certified a question to the Washington Supreme Court asking whether the statute of limitations is tolled once documents are transmitted to the central authority as directed by the Hague Convention. Id. at 377. The court answered the question in the affirmative. Id. at 378. The court reasoned that because the plaintiff lacks control over the timing of service once the documents are transmitted to the designated central authority, Washington statute 4.16.230 applies to toll the statute of limitations once the necessary documents are sent to the central authority. Id.
The Ninth Circuit was interpreting Wash. Rev. Code 4.16. 230, which is identical to N.D. Cent. Code 28-01-29.
The Court does not find Broad persuasive because, here, means other than the central authority could have been used for service. Specifically, Articles 8, 10, and 19 of the Hague Convention authorize service by methods that do not involve the central authority. Paracelsus could have used one of the methods describe in those Articles instead of attempting service through the central authority. Because service could be accomplished through means other than the central authority, this Court concludes that the Hague Convention is not a statutory prohibition that could prevent timely commencement of an action and, therefore, § 28-01-29 is not applicable.
IV. CONCLUSION
Philips Medical's Motion for Summary Judgment is GRANTED (doc. #48). Accordingly, Paracelsus' claim and cause of action are DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.