Failure to Timely File Answer Results in Dismissal

• Pages: 22-22
• Date: 01 January 2024
• Author: Aubrey Eyrolles
• Subject Matter: Civil Law

federal appellate ruling reminds attorneys that mis-

understanding the Federal Rules of Civil Procedure

can devastate a client’s case. A court dismissed a lit-

igant’s complaint when his attorney misinterpreted

the rules and missed the deadline for ling an

answer. The attorney’s actions did not qualify as the “excus-

able neglect” required to grant an extension of time under the

rules, the court found. ABA Litigation Section leaders suggest

that attorneys in doubt should always consult an expert on

applicable rules of procedure, particularly when dealing with

uncommon rules or those with exacting requirements.

In L.A. Public Insurance Adjusters, Inc. v. Nelson, the

plaintiff employer hired the defendant employee as a claims

adjuster. The employer terminated the employee after a few

weeks and sued him in Texas state court for defamation and

to enforce the employee’s noncompete agreement.

The employee counterclaimed for unpaid commissions

and removed the case to federal court. The employer did not

answer the counterclaim in Texas court or in federal court

because its counsel misunderstood Federal Rule of Civil

Procedure 81(c)(2). Rule 81(c)(2) provides that a defendant

“who did not answer before removal must answer or present

other defenses or objections under these rules” either within 7

or 21 days depending on the circumstances.

Two years later, the employer retained new counsel. The

new attorneys sought leave to answer the counterclaim under

Rule 6(b)(1)(B), which allows an extension of time due to

a party’s “excusable neglect.” Signicantly, the new lawyers

asserted a new afrmative defense, arguing that the employer

should not suffer the effects of its prior counsel’s error. The

trial court allowed the employer to answer without ruling on

the “excusable neglect” issue, and ultimately granted summary

judgment in favor of the employer.

The U.S. Court of Appeals for the Fifth Circuit reversed

and remanded, holding that a party’s reliance on bad advice

from its counsel does not constitute excusable neglect. The

appellate court noted that the employer knew or should have

known that the pleadings were decient many months earlier

and that the long delay unfairly prejudiced the employee, cir-

cumstances that did not weigh in favor of nding excusable

neglect. Though it acknowledged that a misunderstanding of

the rules could potentially constitute excusable neglect, the

Fifth Circuit noted that would be a “rare case” because “one

who fails to act diligently cannot invoke equitable principles

to excuse that lack of diligence.”

Additionally, the appellate court noted that the employer

asserted a new defense that it could not plead under the rules.

It explained that under Texas Rule of Civil Procedure 92, fail-

ure to respond to a counterclaim is deemed a general denial.

However, Federal Rule of Civil Procedure 9(c) requires that

afrmative defenses asserting that a condition precedent has

not occurred or not been performed be pled with particularity.

The employer contended in its new afrmative defense that the

employee was not entitled to commissions because he did not

complete his probationary employment period—a denial that

a condition precedent had been satised. Accordingly, the Fifth

Circuit concluded that because the employer failed to plead its

afrmative defense with particularity, that precluded it from

“later rely[ing] on such a theory, including at the summary

judgment stage.”

Litigation Section leaders advise that understanding the

Federal Rules is crucial. “Make sure you know and follow

the rules. If you’re not comfortable that you know the rules,

look them up or bring in someone who can help you with it,”

advises Michael S. LeBoff, Newport Beach, CA, cochair of the

Section’s Professional Liability Litigation Committee.

Attorneys especially need to make sure they understand the

rules regarding afrmative defenses. “A lot of lawyers are not

aware of Rule 9(c). A defendant needs to recognize that a gen-

eral denial does not satisfy Rule 9(c),” states John M. Barkett,

Miami, FL, cochair of the Section’s Ethics & Professionalism

Committee. “If you do not deny ‘with particularity’ that the

condition precedent has occurred or been satised, you will

not be able to rely on that defense,” he explains.

Attorneys should not count on the court to nd excusable

neglect when they make mistakes. “It is pretty hard to show

excusable neglect, so do not ever put yourself in a situation

where you need to rely on it,” counsels Barkett. “A death in

the family, a car accident, or a natural disaster like a hurricane

or an earthquake are examples of when the court might nd

excusable neglect,” he states.

While excusable neglect is a tough standard, Section lead-

ers believe that there could be a good argument for excusable

neglect when a second attorney comes in and easily identies

the mistake. “In most instances, the client is forced to rely on

the attorney’s knowledge of the law. In this case, the new attor-

ney came in and informed the client that the previous attorney

made a mistake by not ling an answer. So it was surprising

that the court did not nd excusable neglect due to the initial

attorney’s mistake,” LeBoff concludes.

Failure to Timely File Answer Results

in Dismissal

By Aubrey Eyrolles, Litigation News Contribut ing Editor

WINTER 2024 • VO L. 49 NO. 2

22 | ABA LITIGATION SECTIO N

Published i n Litigation News Vo lume 49, Numbe r 2, Winter 2024. © 2 024 by the Americ an Bar Assoc iation. Repro duced with perm ission. All r ights reser ved. This infor mation or any por tion thereof

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