Jack Nelson Jones Professional Association

April 25 - May 1, 2016

Union Pacific Railroad Company v. Skender, 2016 Ark. App. 206 (April 13, 2016)

This appeal comes from the Jefferson County Circuit Court, Honorable Robert H. Wyatt, Jr. presiding. This case concerns defective summons and equitable tolling in a Federal Employers’ Liability Act (FELA) action.

On July 11, 2012, Skender was injured while working at a Union Pacific Railroad Company (UPRR) repair track in Pine Bluff, Arkansas. He timely filed and served his FELA claim against UPRR on October 25, 2013. UPRR filed an answer denying Skender’s claims and pleading, among other 12(b) defenses, insufficiency of process and insufficiency of service of process. On July 25, 2014, shortly after the statute of limitations had run on Skender’s claim, UPRR filed a motion to dismiss with prejudice, alleging that it had not been served with a summons. Skender responded, asserting that summons had been served with the complaint and attaching the Sheriff’s proof of service indicating that a copy of the summons and complaint had been served on The Corporation Company, UPRR’s registered agent for service of process. UPRR then renewed its motion, contending that the summons purportedly served with the complaint was fatally defective in that it was directed to its registered agent rather than to UPRR. Skender responded denying that the summons was fatally deficient. After hearing arguments, the trial court granted UPRR’s motion to dismiss finding the summons was fatally deficient. In his cross-appeal, Skender challenged the trial court’s determination that the summons issued in this case was fatally deficient.

On appeal, the Court noted that the caption of the summons correctly designated UPRR as the defendant in the action, but then listed its registered agent as a “Claimant.” The “directed to” provision of the summons then incorrectly listed the The Corporation Company, rather than UPRR, as the defendant against whom the lawsuit was pending, the defendant who had been served, and the defendant responsible for filing an answer. The trial court found that because the summons failed to include the name “Union Pacific Railroad Company” and its address following the phrase “THE STATE OF ARKANSAS DIRECTED TO DEFENDANT,” it failed to strictly comply with Rule 4 of the Arkansas Rules of Civil Procedure.

The Court explained that the Arkansas Supreme Court has held that “statutory service requirements, being in derogation of common law rights, must be strictly construed and compliance with them must be exact.” Skender acknowledged this rule, but cited to the Arkansas Supreme Court decision in Nucor v. Kilman to support his contention that a literal application of the rule in this case would lead to an absurd consequence because UPRR never argued that they were not on notice of the suit or that they were denied an opportunity to be heard. In fact, UPRR timely answered the complaint and participated in the litigation. The Court decided, however, that Skender’s argument must fail for two reasons.

First, the Arkansas Supreme Court has clearly held that a defendant’s personal knowledge of the litigation does not cure a fatal defect in the summons. Second, the Court pointed out the Nucor case cited by Skender was distinguishable. In Nucor, the defendant was correctly named in the summons, but its codefendants were not. Thus, Nucor was clearly apprised on the face of the summons of the pendency of the suit against it. Here, the Court noted, UPRR was not correctly named in the summons. While it was listed as the sole defendant in the caption, the summons was not directed to it in the body of the document as required under Arkansas Rules of Civil Procedure.

The Court added that to make matters even more confusing, its registered agent— which was inexplicably listed as a claimant in the caption— was listed as the defendant to whom the summons was directed in the body of the summons. Thus, unlike Nucor who was correctly listed in both places in the summons, UPRR was incorrectly identified. Thus, the Court concluded that the trial court’s determination that the summons was fatally deficient was not in error.

The Court then turned to whether the dismissal should have been issued with or without prejudice. UPRR argued before the trial court that it should dismiss with prejudice due to the defective summons. While disagreeing that the summons was defective, Skender argued, in the alternative, that equitable tolling would allow a dismissal without prejudice. The court found that the refiling of Skender’s claim was not barred by the statute of limitations, citing an Arkansas savings statute case, and ordered the dismissal to be without prejudice. UPRR contended that the trial court erred in applying the Arkansas savings statute in a FELA action and that, because the statute of limitations had run on Skender’s claim, the trial court erred in dismissing the complaint without prejudice. UPRR also contended on appeal that Skender was not entitled to an equitable tolling of the limitations period under federal law.

The trial court, relying on Clouse v. Tu, an Arkansas savings statute case, ruled that because service was perfected within 120 days of the timely commencement of the FELA action, Skender was not barred by the statute of limitations from refiling his complaint. However, the Court pointed out that the United States Supreme Court has clearly stated that the savings statutes of individual states do not apply in FELA actions. Thus, the Court explained, the trial court’s reliance on the Arkansas savings statute was erroneous as a matter of law. This did not automatically conclude Skender’s case, however. Federal law also allows the statute of limitations to be tolled under certain circumstances, and Skender argued to the trial court that equitable tolling should apply in this case. Because the trial court found that the savings statute applied, it did not make any findings with respect to Skender’s equitable tolling argument. As a result, the Court remanded the case to the trial court to determine whether equitable tolling was available to suspend the statute of limitations. Reversed and remanded on direct appeal; Affirmed on cross appeal.