Minnesota Court of Appeals: Judgment Dismissing a Civil Case for Failing to Comply with the New One-Year Filing Deadline can be Vacated after the Fact.

By Troy A. Poetz, Partner, and Matthew W. Moehrle, Senior Associate

The Minnesota Court of Appeals on August 24, 2015 tackled one of the several questions sure to arise from Minn. R. Civ. P. 5.04(a), which was revised in 2013 to require civil cases to be filed with the court within one year after commencement. In the recent case, Gams vs. Houghton, No. A14-1747 (Minn. Ct. App. 2015), the trial court entered judgment dismissing a plaintiff's personal injury case for failing to file the case with the court as required in Rule 5.04(a). Additionally, the trial court refused to allow the plaintiffs to vacate the judgment pursuant to Minn. R. Civ. P. 60.02, which allows correction of a judgment due to -- among other things -- mistake, inadvertence, and excusable neglect.

The court of appeals reversed and remanded the case to the trial court for a final determination on the issues. First, the court of appeals said it was wrong for the trial court to say that Rule 60.02 relief is never available for Rule 5.04(a) case dismissals. The court of appeals very clearly said that a judgment vacated pursuant to Rule 60.02 is relief that can be available in these cases.

The court of appeals then defined the parameters of vacating such a judgment. First, it pointed to the four-factor test usually used for Rule 60.02 analyses, which considers whether a party had: 1) a reasonable claim or defense on the merits; 2) a reasonable excuse for the neglect; 3) acted diligently after notice of entry of judgment; and 4) demonstrated that no prejudice will occur to the opposing party.

The court of appeals held it was wrong for the trial court to say that a judgment cannot be vacated unless all four of the above factors are met. Instead, said the court of appeals, a court must use its discretion and balance the factors - but they are not elements which must all be proved. The only factor that is required to be proven is the first (having a reasonable claim/defense on the merits). As a specific example, the court said that a relative weakness of one factor should be balanced against a strong showing on the three remaining factors.

As mentioned above, this is only the first case of what will likely be many relating to Rule 5.04(a) dismissals. A potential next question will be: what constitutes 'excusable neglect?' At the time this article was drafted, it was not yet known whether the Gams case will go up on appeal to the Minnesota Supreme Court.