Timely Payment of Filing Fee Required to Commence Action
By John W. Joyce, Litigation News Associate Editor – January 8, 2014

A complaint submitted without the correct filing fee does not commence a civil action and, therefore, does not toll the statute of limitations. Hortenberry v. Palmer. The court’s decision that the case was time-barred serves as a cautionary tale for lawyers to pay close attention to court rules, filing fees, and deadlines.

Failure to Pay Filing Fee on Time
In Hortenberry, Thomas Palmer and Natasha Hortenberry were in a car accident. Before the two-year statute of limitations had run, Palmer mailed a complaint, appearance, summons, and check for $137 to the clerk of court. The required filing fee, however, was $139. The clerk’s office notified Palmer of the shortfall one day before the statute of limitations expired. Palmer mailed a check for $2 to the clerk of court the following day. The complaint, however, was not stamped as filed until after the statute of limitations expired.

Palmer filed a motion to treat the complaint as filed prior to August 22, 2012, and the trial court granted the motion. Hortenberry filed a motion to set that order aside, and the trial court denied the motion. Hortenberry filed an interlocutory appeal.

Appellate Court Follows Bright-Line Rule
The Indiana Court of Appeals considered whether the filing of the complaint commences a civil action under Rule 3 of the Indiana Rules of Trial Procedure. The rule provides, in relevant part, that “[a] civil action is commenced by filing with the court a complaint or such equivalent pleading or document as may be specified by statute, by payment of the prescribed filing fee.”

The appellate court observed that the rule was based on an Indiana Supreme Court case, Boostrom v. Bach. Boostrom held that payment of the filing fee was a prerequisite to commencing a civil action. The appellate court acknowledged that although “following Boostrom produces a harsh result in this case, Boostrom thoroughly considered the competing policy arguments.” The appellate court also noted that following Boostrom “does not displace the legislative policy which undergirds the statute of limitations, that is, to spare courts from stale claims and insure that parties are given seasonable notice that a claim is being asserted against them.”

Palmer’s counsel argued that payment of the $137 constituted “substantial compliance” with the filing rule and that substantial compliance should be determined on a case-by-case basis. The appellate court indicated that there is no guidance or standard for “clerks or courts to determine what constitutes substantial compliance.” Moreover, the appellate court reasoned that “our supreme court intended to create a bright-line rule for determining when an action has been commenced and has left us with no discretion in the matter.”

The appellate court also distinguished the Indiana Supreme Court’s decision in Miller v. Dobbs, which held that a medical malpractice action was timely filed even though the filing fee was paid after the limitations period expired. The appellate court reasoned that Miller was distinguishable because commencement of medical malpractice actions is regulated by statutes unique to that area. Specifically, the court noted that “[t]he statute at issue in Miller, unlike Trial Rule 3, does not specify that payment of the applicable fees is required for the commencement of the action.”

The appellate court stated that “Indiana Trial Rule 3 and Indiana Supreme Court precedent clearly indicate that paying the filing fee is required for the commencement of an action.” The appellate court concluded that the trial court erred by denying Hortenberry’s motion.

Payment of Fee Requirement Similar to Other States
The ruling in Hortenberry is consistent with other state courts holding that payment of the proper filing fee is a jurisdictional prerequisite to commencing the action. Courts in New York, Colorado, and Alabama have held that a complaint accompanied by no filing fee, or insufficient filing fees, is not filed for purposes of the applicable statute of limitations. The rule is not unanimous though, as a court in Utah has held otherwise, so long as the deficiency is paid within a reasonable amount of time.

“A bright line rule may be more appropriate in cases where no filing fee at all is paid. When the rule bars access to justice over $2, as happened in this case, the bright-line rule is overly harsh,” suggests Paul E. Lehner, Chicago, IL, former cochair of the ABA Section of Litigation’s Solo and Small Firm Committee.

Guidance for Satisfying Rule
Section leaders recommend certain safeguards to avoid such difficult situations. “Don’t wait until the last day to file your complaint,” advises Elizabeth S. Fenton, Philadelphia, PA, cochair of the Section of Litigation’s Business Torts and Unfair Competition Committee. The ruling, while based on the application of bright-line rules, should remind attorneys that “you have to sweat the details, right down to the amount of the filing fee,” cautions Fenton.

“If at all possible, physically go to the courthouse to file your complaint so you know everything is properly filed that same day. If you need to reach into your pocket for $2 more, it’s not a problem,” recommends Lehner.

Keywords: filing fee, tolling, statute of limitations, commencement of action

 
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