Ray-Hayes v. Heinamann

ATTORNEY FOR APPELLANT

Thomas C. Doehrman
Indianapolis, Indiana

ATTORNEYS FOR APPELLEE

Wayne C. Kreuscher
Michael D. Moon, Jr.
Indianapolis, Indiana
__________________________________________________________________

IN THE

SUPREME COURT OF INDIANA

__________________________________________________________________

SHEILA RAY-HAYES, As Parent and )
Natural Guardian of AMANDA K. RAY,)
)
Appellant (Plaintiff Below), )
)
v. ) Indiana Supreme Court
) Cause No. 89S05-0201-CV-306
RYAN S. HEINAMANN, NISSAN )
MOTOR COMPANY, LTD., and )
NISSAN NORTH AMERICA, INC., )
)
Appellees (Defendants Below). )
__________________________________________________________________

APPEAL FROM THE WAYNE SUPERIOR COURT
The Honorable Gregory A. Horn, Judge
Cause No. 89D02-9807-CT-018
__________________________________________________________________

ON PETITION FOR REHEARING

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May 29, 2002
BOEHM, Justice.
On January 2, 2002, this Court issued a per curiam decision resolving
a conflict between the Court of Appeals’ opinions in this case, Ray-Hayes
v. Heinamann, 743 N.E.2d 777 (Ind. Ct. App. 2001) and Fort Wayne Int’l
Airport v. Wilburn, 723 N.E.2d 967 (Ind. Ct. App. 2000), trans. denied.
The two opinions disagreed over whether a civil action is timely commenced
if a plaintiff files a complaint within the applicable statute of
limitations period, but does not tender the summons to the clerk within
that period. We held that under these circumstances the action is not
timely and affirmed the trial court’s dismissal of Sheila Ray-Hayes’ claims
against Nissan Motor Company, Ltd., Nissan North America, Inc., and Nissan
Motor Corporation In U.S.A (collectively “Nissan”). Ray-Hayes v.
Heinamann, 760 N.E.2d 172, 175 (Ind. 2002). On January 31, Ray-Hayes filed
a petition for rehearing asking this Court to apply that decision only
prospectively. For the reasons that follow, we grant her petition.
Petitions for rehearing are extremely rarely granted. 24 George T.
Patton, Jr., Indiana Practice, § 12.1 at 226 (3d ed. 2001). Ray-Hayes asks
us to take another very unusual step and apply the decision in her case
only prospectively. Appellate court decisions routinely apply to the
parties involved, and everyone else, even when addressing an unresolved
point of law. In Bayh v. Sonnenburg, 573 N.E.2d 398, 406 (Ind. 1991), this
Court followed the three-prong test employed by the United States Supreme
Court to determine when to follow the unusual course of applying a decision
prospectively. First, the decision must establish a new principle of law,
either by overruling clear past precedent on which litigants may have
relied, or by deciding an issue of first impression whose resolution was
not clearly foreshadowed. Id. (quoting Chevron Oil Co. v. Huson, 404 U.S.
97, 106-07 (1971)). Second, we look at the purpose and effect of the rule,
and whether retrospective operation will further or retard its operation.
Id. Finally, we weigh the inequity imposed by retroactive application.
Id.
Ray-Hayes contends that our holding was a “radical departure from
prior appellate decisions” and that, when she filed her complaint in
September 1999, “it was generally understood among Indiana trial lawyers
that the filing of a complaint tolled the statute of limitations.” Nissan
argues, as it did in its petition for transfer, that there was no departure
from existing law, citing this Court’s opinion in Boostrom v. Bach, 622
N.E.2d 175, 177 n.2 (Ind. 1993), which referred to the summons as one of
those documents “necessary to commencement of a suit.” In support of her
petition for rehearing, Ray-Hayes calls to our attention a recent lecture
presented by Professor William F. Harvey, author of a series of Indiana
Practice treatises on the Indiana Rules of Procedure. In his prepared
remarks, Professor Harvey wrote, “No attorney in his right mind would have
superimposed Small Claims Rule 3 upon Trial Rule 3, whether after Boostrom
in 1993, or Wilburn in 2000.” Although this case and most others turn on
Trial Rule 3, not Small Claims Rule 3, we take this claim to apply to both.
We do not agree with Ray-Hayes that Professor Harvey’s remarks
conclusively evidence a “common understanding” among Indiana attorneys that
filing the summons was not necessary to toll the statute of limitations.
Nor, in our experience, was there such a common understanding.
Nevertheless, it is significant that Professor Harvey held this view and
stated as much in his widely used treatise. See 1 William F. Harvey,
Indiana Practice, § 3.3 at 74 (3d ed. 1999). Although Trial Rule 4(B)
states that “[c]ontemporaneously with the filing of the complaint or
equivalent pleading, the person seeking service or his attorney shall
furnish to the clerk as many copies of the complaint and summons as are
necessary,” the treatise tracked the following language of former Trial
Rule 3 without qualification or reference to Rule 4: “When the plaintiff
files the complaint with the clerk of the court, the action is commenced.”
Harvey, supra, § 3.3. Several judges on the Court of Appeals shared the
view that service of the summons was not needed to toll the statute of
limitations, and it is regrettable that former Trial Rule 3 did not
explicitly refer to the summons. Finally, this Court’s mention of the
summons in Boostrom came in a footnote. Under these circumstances, we
think the resolution of this issue was arguably a surprise, at least to
some. It was not “clearly foreshadowed.”
The second Sonnenburg factor seems marginally relevant. As explained
above, the issue of whether filing the summons is required to toll the
statute of limitations was arguably unresolved when Ray-Hayes filed her
complaint against Nissan. The recent amendments to Trial Rule 3,[1]
effective April 1, 2002, essentially do what Ray-Hayes contends was not
done until our January 2 holding, and for the future this problem is
resolved.
The third factor, however, warrants giving relief to Ray-Hayes.
Dismissal of her complaint as a result of her understanding of the rule,
which was shared by some respected authorities on Indiana law, is a
particularly harsh result. Cf. McCullough v. Archbold Ladder Co., 605
N.E.2d 175, 180-81 (Ind. 1993) (where rule concerning disclosure of
rebuttal witnesses was not clearly established, exclusion of expert
testimony too harsh a result). The offsetting unfairness is minimal unless
a defendant can show detrimental reliance on the passage of time between
filing the complaint and the service of summons. The rule of law we
announced in this case did not create new substantive rights. Parties are
entitled to rely on procedural rules, but in this case it appears there may
have been no reliance. If so, the balance of inequity is tipped heavily in
favor of prospective application.
We do not suggest that appellate court opinions concerning the proper
operation of a trial rule are to be prospective frequently or even
occasionally. Prospective application in this case is a product of its
very specific circumstances: the diversity of opinion among legal experts
as to the proper application of Trial Rule 3 when Ray-Hayes’ complaint was
filed, that retrospective application of our decision to Ray-Hayes’ case
will not further that holding’s operation, the harsh result of dismissal,
and the apparent lack of prejudice to the opposing parties from delay in
the service of summonses.
We grant Ray-Hayes’ petition for rehearing, vacate the trial court’s
dismissal of her action against Nissan for failure to tender summonses
before the statute of limitations expired, and remand for further
proceedings, including an opportunity for the defendants to renew their
motions to dismiss if they can establish a material detriment in the
presentation of their case or otherwise occurring as a result of the delay
in issuance of summons and notification to them that a claim had been
asserted.

DICKSON and RUCKER, JJ., concur.
SHEPARD, C.J., and SULLIVAN, J., dissenting, would deny rehearing.
-----------------------
[1] Trial Rule 3 now states:
A civil action is commenced by filing with the court a complaint or
such equivalent pleading or document as may be specified by statute,
by payment of the prescribed filing fee or filing an order waiving the
filing fee, and, where service of process is required, by furnishing
to the clerk as many copies of the complaint and summons as are
necessary.