Time does not heal all wounds: an analysis of the defendant disarming decision in Murray v. Mansheim.

Author:Hansman, Raleigh E.
 
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One day before the statute of limitations expired on a personal injury claim arising out of a motor vehicle accident, Chris Murray filed suit. In response, Travis Mansheim brought a compulsory counterclaim in conjunction with his answer. The trial court granted summary judgment in favor of Murray on the grounds that Mansheim's compulsory counterclaim was barred by the three-year statute of limitations. On appeal, the South Dakota Supreme Court affirmed the lower court, holding that a compulsory counterclaim, viable at the time of the original complaint, was barred by the applicable statute of limitations and did not benefit from the relation-back doctrine. The court's departure from traditional plain-meaning statutory interpretation was improper because it prevented the defendant from defending himself and condoned the plaintiff's tactical maneuvers.

  1. INTRODUCTION

    Compulsory counterclaims have long served as the mechanism that prevents duplicitous litigation by adjudicating all claims arising out of the same transaction or occurrence. (1) Since the compulsory counterclaim's creation, courts have been divided as to how or if they are subject to a statute of limitations. (2) There is no bright-line rule, and the applicability of statute of limitations to compulsory counterclaims has been individually determined across state and federal courts. (3)

    Recently, the South Dakota Supreme Court had the opportunity to determine its position on this contested issue in Murray v. Mansheim. (4) In Murray, a personal injury complaint was filed a day before the statute of limitations was set to expire. (5) Both parties had been severely injured in a motor vehicle accident and had incurred significant, and similar, medical bills. (6) When Mansheim filed his timely answer, he also included a personal injury counterclaim. (7) Murray moved for summary judgment on the basis that the statute of limitations had expired on Mansheim's claim. (8) Mansheim argued that a compulsory counterclaim, viable when the initial complaint was filed, received the benefit of relating back to the date of the complaint. (9) After summary judgment was granted in Murray's favor, Mansheim appealed to the South Dakota Supreme Court. (10) The court had previously determined that permissive counterclaims did not benefit from the relation-back doctrine, (11) but a determination on compulsory counterclaims had not been made. (12) Murray v. Mansheim was therefore a case of first impression. (13) The court affirmed summary judgment, holding that Mansheim's compulsory counterclaim was time-barred and did not benefit from the relation-back doctrine. (14) This decision, however, was premised on misconstrued precedent. (15) The court's disregard for plain meaning statutory interpretation is problematic in both Murray and in future cases. (16) To remedy this inconsistency, the court should have reversed the trial court's summary judgment ruling, allowing Mansheim's compulsory counterclaim to be pleaded on remand. (17)

    This note first explores the factual and procedural history of Murray v. Mansheim. (18) It continues with a discussion of how differences in permissive and compulsory counterclaims warrant the application of the relation-back doctrine to those counterclaims that are compulsory. (19) This note then examines the analysis of jurisdictions outside of South Dakota that allow compulsory counterclaims to relate back, simultaneously preserving the purposes of a statute of limitations. (20) Additionally, this note analyzes why Mansheim's compulsory counterclaim should have been allowed. (21) Finally, the note concludes with an explanation of the consequences and repercussions of the court's short-sighted holding. (22)

  2. FACTS AND PROCEDURE

    On September 13, 2003, Travis Mansheim and Chris Murray were involved in a nearly, head-on motor vehicle collision in rural Tripp County, South Dakota. (23) Both parties were severely injured in the crash. Aware that the statute of limitations would bar any action beyond the three-year time frame, Murray filed his personal injury claim before the September 13, 2006, deadline. (25) On September 12, 2006, Murray served Mansheim with a complaint. (26) A month later, Mansheim served his answer and a counterclaim alleging contributory negligence. (27) Although there was no dispute that Mansheim's counterclaim was compulsory, Murray moved for summary judgment on the basis of the statute of limitations. (28) Murray stated that the "well-recognized rule is that a counterclaim seeking affirmative relief for personal injuries must be filed within the applicable statute of limitations without the benefit of relating back to the original complaint." (29)

    In response, Mansheim contended that, as a compulsory counterclaim, it related back to the date Murray filed suit and tolled the statute of limitations. (30) In support of his position, Mansheim cited Jacobson v. Leisinger, (31) which held that a permissive counterclaim did not relate back to the complaint and therefore did not toll the statute of limitations. (32) In a footnote, however, the court stated that only compulsory counterclaims benefit from the relation-back doctrine. (33) Mansheim argued that the court in Jacobson had thereby extended his compulsory counterclaim the benefit of the relation-back doctrine in distinguishing permissive and compulsory counterclaims. (34)

    The trial court held a hearing on Murray's Motion for Summary Judgment on October 23, 2008. (35) In granting summary judgment, the Sixth Judicial Circuit relied on S.D.C.L. section 15-2-14.1 (36) and S.D.C.L. section 15-2-14.5, (37) which indicated legislative disapproval of tolling for affirmative compulsory counterclaims, to bar Mansheim's compulsory counterclaim because it was served after the statute of limitations had expired. (38) Mansheim appealed. (39)

    In his Appellant Brief, Mansheim argued that his counterclaim was wrongfully barred because it sought relief based on the same motor vehicle accident as Murray's complaint. (40) He asserted that the court indicated in Jacobson that compulsory counterclaims, even those for affirmative relief, relate back to the date of the original action. (41) Because of the Jacobson holding and the court's footnote stating that "only compulsory counterclaims benefit from the relation-back doctrine," (42) he again argued that his counterclaim was not barred and should have survived summary judgment. (43)

    Mansheim also relied on S.D.C.L. section 15-6-15(c). (44) This section of the South Dakota Code allows for an amendment to the pleadings to relate back to the original complaint provided the following requirements are met:

    (1) the claim asserted in the amended complaint arose out of the conduct, transaction, or occurrence set forth in the original pleading; (2) the new defendant has received such notice of the institution of the action th[at] he will not be prejudiced in maintaining his defense on the merits; and, (3) the new defendant knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him. (45)

    Mansheim argued that since the issues were the same and the evidence would be closely related Murray was provided with notice and suffered no undue prejudice. (46)

    Mansheim admitted that his counterclaim was brought after the three-year statute of limitations. (47) He explained, however, that he had chosen not to institute an original action because of "the time and expense involved." (48) He argued that his decision not to pursue his own claim initially should not prohibit him from fully defending himself. (49) Despite the expired statute of limitations, the issue was still the same: "whether the negligence of either party or both parties proximately caused the injuries sustained in the accident." (50)

    Murray's Appellee Brief supported the trial court's grant of summary judgment. (51) In analyzing the relation-back doctrine's applicability to counterclaims, Murray narrowed the issue to whether "a counterclaim for personal injuries [was] jurisdictionally barred when asserted after the applicable statute of limitations." (52) He asserted the importance of distinguishing between affirmative compulsory counterclaims, such as those for personal injuries, and defensive counterclaims, such as those for recoupment. (53) Murray also stated that the majority of state courts apply a statute of limitations to complaints and counterclaims alleging personal injuries. (54)

    Next, Murray argued that affirming summary judgment in his favor would ensure the proper functions of the statute of limitations. (55) Murray also argued that it was a fair presumption that Mansheim would not have delayed in bringing a lawsuit if he had a well-founded claim. (56) In response, Mansheim filed a Reply Brief. (57) His Reply set forth two additional propositions for the reversal of summary judgment. (58) Mansheim argued that (1) South Dakota should apply the relation-back doctrine to compulsory counterclaims for affirmative relief, and (2) a compulsory counterclaim, like Mansheim's, is not barred by the doctrine of laches. (59)

    The South Dakota Supreme Court examined two issues on appeal. (60) First, the court analyzed whether a counterclaim is commenced with the original action or "when stated in the pleadings and served on the opposing party." (61) Second, the court discussed whether an affirmative compulsory counterclaim relates back to the date of the plaintiff's original complaint or if the original complaint tolls the statute of limitations. (62)

    The court acknowledged the inherent dilemma created by the South Dakota statutes. (63) The court stated that "[o]ur statutes of limitation bar the untimely commencement of actions, [S.D.C.L. section] 15-2-1, and yet, by law, counterclaims are not technically commenced (no summons required)." (64) It would therefore seem that the South Dakota statute of limitations...

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