United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
case concerns a dispute over insurance coverage. Plaintiff
NCMIC Insurance Company (Plaintiff or NCMIC) asks the Court
to declare that the per claim limit of an insurance policy
issued by Plaintiff to Defendants Michael Brown (Mr. Brown)
and Bones, Inc. (Bones) applies to the claims asserted
against Mr. Brown and Bones by Defendants Charles Daily (Mr.
Daily) and Rose Elean Alvarez Martinez (Ms.
Martinez). Mr. Daily moves to dismiss the Complaint
for untimely service or, alternatively, asks the Court to
dismiss or stay this action under the Colorado River
doctrine. Mr. Brown and Bones echo Mr. Daily's
arguments and move to join his Motion, which is fully
briefed. The Court will deny the Motion in the
interest of judicial economy because no parallel state
proceeding is pending.
Brown is a chiropractor who resides in New Mexico, where his
practice is incorporated under the name Bones, Inc. In
October of 2015 Plaintiff, an Iowa insurance company, issued
Professional Liability-Chiropractic Malpractice Policy number
MP00086887 to Mr. Brown and Bones (the Policy). The Policy
was effective from October 3, 2015, to October 3, 2016.
Daily, a former patient of Mr. Brown and Bones, alleges that
he was injured as a result of his treatment by Mr. Brown,
which took place from October 2015 through at least March of
2016. Based on these alleged injuries, Mr. Daily and his
wife, Ms. Martinez, filed a lawsuit on March 10, 2017 in New
Mexico state court against Mr. Brown and Bones. See Daily
v. Brown et al., No. D-307-CV-2017-00672 (Third Judicial
District Court, Dona Ana County) (state court lawsuit). Mr.
Daily and Ms. Martinez are both residents of New Mexico.
filing the state court lawsuit, Mr. Daily and Ms. Martinez
learned of the existence of the Policy. On September 21,
2017, they moved to amend their state court complaint to add
NCMIC as a defendant and to request a declaratory judgment as
to the coverage available under the Policy should Mr. Daily
and Ms. Martinez prevail on their claims. Mr. Daily and Ms.
Martinez argue that the New Mexico Medical Malpractice Act
requires policy limits of $600, 000 plus past and future
medical expenses, while NCMIC maintains that the Policy
limits are $200, 000 per occurrence. Mr. Daily and Ms.
Martinez attached their proposed amended complaint as an
exhibit to their motion. Mr. Brown and Bones did not oppose
the motion, but they did not consent to the amendment of the
state court complaint until October 6, 2017.
October 4, 2017, while the motion to amend was still pending
in the Third Judicial District Court, Plaintiff filed this
federal declaratory judgment action. The state court then
granted the unopposed motion to amend on October 10, 2017,
and Mr. Daily and Ms. Martinez filed their amended state
court complaint on October 12, 2017. Summons issued in this
federal case on the same day. NCMIC was served with the state
court amended complaint on October 30, 2017. On November 21,
2017, it filed a motion in the Third Judicial District Court
to dismiss the state declaratory judgment action. However,
NCMIC did not serve Defendants with the Complaint in this
case until January 26, 2018. Defendants ask the Court to
dismiss this federal action based on the delay in service or
to abstain from deciding this federal court case while the
state court proceeding is ongoing. However, on March 21,
2018, the state court granted NCMIC's motion to dismiss
Defendants' state court declaratory judgment
claim. Consequently, Plaintiff is no longer a
party to Defendants' state court case, and there is no
longer a pending claim that parallels this federal
Court has jurisdiction over this matter under 28 U.S.C.
§ 1332(a) due to diversity of citizenship between the
parties and an amount in controversy greater than $75, 000.
In resolving the Motion, the Court will take the well-pleaded
allegations of the Complaint as true, and it will not
consider materials outside of the pleadings other than those
referenced in the Complaint and central to Plaintiff's
claim, those necessary to resolve jurisdictional facts, and
court documents of which the Court may take judicial notice.
See Pace v. Swerdlow, 519 F.3d 1067, 1072-73 (10th
Cir. 2008) (in resolving a motion to dismiss, district courts
may properly consider documents referred to in the complaint
and central to the plaintiff's claim, and may take
judicial notice of adjudicative facts); Holt v. United
States, 46 F.3d 1000, 1003 (10th Cir. 1995) (when
jurisdictional facts are challenged, the district court may
consider materials outside the pleadings without converting
the motion to one for summary judgment); St. Louis
Baptist Temple, Inc. v. FDIC, 605 F.2d 1169, 1172 (10th
Cir.1979) (“[F]ederal courts, in appropriate
circumstances, may take notice of proceedings in other
courts, both within and without the federal judicial system,
if those proceedings have a direct relation to matters at
issue.”). Mr. Daily has attached numerous exhibits to
his Motion. Some of these are court documents of which the
Court may take judicial notice. The Court will not consider
others, such as copies of emails and medical records, in
deciding the Motion.
first assert that Plaintiff's Complaint should be
dismissed because of insufficient service of
process. Since Plaintiff belatedly filed proof that
all Defendants were served on January 26, 2018, the Court
will consider only the claim of delay rather than failure of
service. Rule 4 of the Federal Rules of Civil Procedure
provides a time limit for service.
If a defendant is not served within 90 days after the
complaint is filed, the court--on motion or on its own after
notice to the plaintiff--must dismiss the action without
prejudice against that defendant or order that service be
made within a specified time. But if the plaintiff shows good
cause for the failure, the court must extend the time for
service for an appropriate period.
Civ. P. 4(m). Defendants were served 114 days after the
Complaint was filed, and service was therefore untimely. The
Court is not required to grant an extension because Plaintiff
has not made any attempt to demonstrate good cause for its
failure to effectuate service within the 90 days allowed.
Plaintiff asks the Court to exercise its discretion to grant
a permissive extension. “If the plaintiff fails to show
good cause, the district court must still consider whether a
permissive extension of time may be warranted. At that point
the district court may in its discretion either dismiss the
case without prejudice or extend the time for service.
Espinoza v. United States, 52 F.3d 838, 841 (10th
Cir. 1995); accord Sanders v. Sw. Bell Tel., L.P.,
544 F.3d 1101, 1111 (10th Cir. 2008). Plaintiff argues that
the delay of 24 days beyond the 90-day period provided by
Rule 4 is a “relatively short time period” that
does not warrant dismissal. Plaintiff contends that
Defendants have not demonstrated any prejudice from the
untimely service, and that under these circumstances policy
considerations favor deciding the case on its merits rather
than dismissing the case on a technicality. Plaintiff asserts
that dismissal would not be in the interests of judicial
economy because Plaintiff would simply refile its Complaint.
that the Court should consider in determining whether to
grant a permissive extension of time for service include (1)
whether the applicable statute of limitations would bar the
action if it had to be refiled, (2) whether the plaintiff has
tried, but failed, to effect service upon the United States,
especially if proceeding pro se, and (3) whether the
failure of a pro se plaintiff to effect timely
service was a consequence of confusion or delay attending the
resolution of an in forma pauperis petition.
Espinoza, 52 F.3d at 842. “More time may be
needed . . . when a request to waive service fails, a
defendant is difficult to serve, or a marshal is to make
service in an in forma pauperis action.” Fed.R.Civ.P.
4(m) Advisory Committee's note (2015). Additional factors
include whether the defendant had notice of the lawsuit or
would be prejudiced by an extension. Wilson v.
Montano, Civ. No. 11-658 KG/SCY, Civ. No. 11-951 KG/SCY,
Civ. No. 11-1021 KG/SCY (D.N.M. February 28, 2017) ...