Safeco Insurance Company, Appellant,

STATE OF MINNESOTA
IN COURT OF APPEALS
A19-1706

Safeco Insurance Company,
Appellant,

vs.

Holmgren Building Repair, Inc.,
Respondent.

Filed June 29, 2020
Affirmed
Jesson, Judge

Kandiyohi County District Court
File No. 34-CV-19-147

Daniel W. Berglund, Meghan M. Rodda, Grotefeld, Hoffman, Gordon, Ochoa &
Evinger, LLP, Minneapolis, Minnesota (for appellant)

Brian W. Varland, Valerie Sims, Heley, Duncan & Melander, PLLP, Minneapolis,
Minnesota (for respondent)

Considered and decide d by Worke, Presiding Judge; Hooten, Judge; and
Jesson, Judge.
S Y L L A B U S
I. To extend the one-year deadline to file an action with the district court, a party must
satisfy all five requirements contained in rule 5.04(a) of the Minnesota Rules of
Civil Procedure.
II. A stipulation that does not contain explicit language extending the one-year filing
deadline is inadequate under rule 5.04(a) of the Minnesota Rules of Civil Procedure.

2
O P I N I O N
JESSON, Judge
After paying over three-quarters of a millio n dollars to its insured as a result of
damage caused by a fire, appellant Safeco Insurance Company (Safeco) sought to recover
its damages from respondent Holmgren Building Repair, Inc. (Holmgren).1 But Safeco did
not file its action with the district court with in one year of servic e of the lawsuit upon
Holmgren. According to Safeco, in emails between counse l, the parties agreed to extend
the one-year filing deadline. The district court dismissed the action with prejudice and
denied Safeco relief under rule 60.02 of the Minnesota Rules of Civil Procedure. Because
we conclude that the emails did not contain explicit language extending the filing deadline
under rule 5.04(a) of the Minnesota Rules of Civil Procedure, and the district court did not
abuse its discretion by denying Safeco rule 60.02 relief, we affirm.
FACTS
In October 2013, respondent Holmgren performed demolition and renovation work
on a building formerly used as a state hospital. 2 While Holmgren employees were
removing old steam pipes to prepare the building for additional renovations, a fire occurred,
causing significant damage. Appellant Safeco insured the property. An investigator hired
by Safeco concluded that a Holmgren employee used a chop saw to cut steam pipes. The
saw “emitted hot metal embers that smoldere d on the cellulose in sulation,” eventually

1 The owner of Holmgren filed an affidavit st ating that the Minnesota Secretary of State
administratively dissolved the business in 2016.
2 These facts are taken from the district c ourt’s order dismissing Safeco’s action and
denying its motion to vacate and from Safeco’s complaint.

3
causing the wooden roof of the building to catc h on fire. The cost to repair the damage,
which Safeco paid to its insured, amounted to $771,726.42.
About four years after the fire, on October 26, 2017, Safeco served a summons and
complaint on Holmgren through the Minnesota Secretary of State. In the complaint, Safeco
alleged that Holmgren’s employees acted ne gligently, causing the fire and Safeco’s
resulting damages. Holmgren did not answer, and several months passed.
In June 2018, Safeco’s atto rney emailed the summons and complaint to Holmgren’s
counsel.3 Holmgren’s counsel responded the sa me day, noting that adjusters for both
insurers were attempting to negotiate a se ttlement. In the same email, counsel for
Holmgren also asked “whether or not you’d like to continue to allow the adjusters time to
negotiate or whether you’d like [to] move this firmly into the litigation realm.” After noting
that Holmgren’s answer had been due at the end of November, Safeco’s counsel stated:
That being said, we have no objection to granting an indefinite
extension to interpose an answer to our [c]omplaint, in order to
allow the adjusters time to cont inue to negotiate. Our rules
require that the matter be filed with the [c]ourt within one year
after service of process is co mplete, however. That deadline
would be October 26, 2018, in this case, if no settlement can
be reached.

3 The record does not contai n evidence clearly describing the role of K.H., the woman
Safeco’s counsel emailed. While Safeco refers to K.H. as counsel for Holmgren’s insurer,
Holmgren refers to her in its brief as an “adjuster for Holmgren’s insurance carrier.” K.H.’s
email signature block indicates that she is “senior counsel,” and she follows her name with
“JD,” suggesting that she is in-house counsel for Holmgren’s insurer. While we recognize
the record lacks a clear explanation of K.H.’s precise role, we refer to her as “Holmgren’s
counsel” or “counsel for Holmgren” throughout this opinion.

4
Holmgren’s counsel replied, “I’ll relay . . . that [the adjuster] can continue to negotiate for
the time being. If we hit the October deadline we’ll go from there.”
A few months later—and a few weeks before the deadline to file the action with the
district court—Holmgren’s couns el emailed Safeco’s attorney to confirm the “indefinite
extension of time in which to answer given th at our mutual claims representatives were
going to continue to work to ward settlement.” Counsel for Holmgren observed that the
filing deadline was approaching. And she pointed out that Holmgren had been waiting for
a response from Safeco’s claims department regarding a settlement offer—$245,000—for
nearly two years. Safeco’s counsel indicated that the claims handler was waiting on
settlement authority and that a response was expected in the coming weeks.
This is the last communication in the record before the one-year filing deadline.
Safeco did not file the action with the di strict court before the one-year deadline
elapsed. In November and December 2018, Holmgren’s counsel emailed Safeco’s counsel
seeking a response to the settle ment offer. In December 201 8, Safeco’s counsel replied
that she would reach out to the claims de partment. Roughly tw o months later, in
February 2019, Safeco’s counsel emailed indi cating that she hoped to have an answer on
the settlement offer by the end of the week. Holmgren’s counsel replied: “I understand we
continue to operate under an extension of ti me for the present suit, correct?” Safeco’s
counsel responded affirmatively.
A few days later, Safeco’s counsel sent an “Offer of Settlement” to counsel for
Holmgren. Holmgren’s counsel expressed frustration at the o ffer, noting that she
confirmed just a few days earlier that there was “an unrestricted extension of time in which

5
to file an [a]nswer to the current suit.” She noted that based on Safeco’s counsel’s
assurances that negotiators w ould continue to have time to attempt to resolve the matter,
she “had not retained counsel on behalf of our insured.” The next day, Holmgren’s counsel
informed Safeco’s counsel that outside counsel had been assigned to the case.
After a few weeks, outside counsel fo r Holmgren emailed Safeco’s counsel
expressing Holmgren’s position that the action was “deemed dismissed” because it was not
filed with the district court wi thin one year of service of th e complaint. Safeco filed the
summons and complaint with the district cour t on March 12, 2019. At the same time,
Safeco filed a motion arguing that the action sh ould not be dismissed because the parties
stipulated to an extension of the one-year deadline. Alternatively, Safeco requested relief
under rule 60.02 of the Minnesota Rules of Civil Procedure vacating any dismissal of the
action.
After a hearing, the district court dism issed the action as untimely because it was
filed outside the one-year deadline. In doing so, the district court concluded that the parties
did not sign a stipulation to extend the filing deadline. Pointing to the lack of clear language
expressing a willingness to extend the filing period, the district court found that the emails
between counsel did not establish a clear intent to extend the deadline. Rather, the district
court reasoned that the emails demonstrated a knowledge of the filing deadline.
The district court also denied Safeco’s motion to vacate the dismissal. Although the
district court found that Safeco satisfied thre e of four required factors to warrant relief, it
concluded that Safeco did not have a reas onable excuse for failing to timely file the
complaint. The district court found that th e untimely filing was par tially attributable to

6
Safeco—not its attorney —because of its failure to respond to settlement offers. And it
determined that Safeco’s counsel’s “apparent reliance on a claimed stipulation to extend
the filing deadline” did not excuse Safeco’s fa ilure to respond to th e settlement offers.
Accordingly, the district court dismissed the action with prejudice and denied Safeco relief
under rule 60.02. Safeco appeals.
ISSUES
I. Did the emails between counsel constitute a stipulation to extend the one-year filing
deadline?

II. Did the district court abuse its discreti on by denying Safeco’s motion to vacate the
dismissal of its action?

ANALYSIS
I. The emails between counsel did not co nstitute a stipulation to extend the
one-year filing deadline.

Safeco first argues that the district c ourt erroneously dismissed the action under
rule 5.04(a) of the Minnesota Rules of Civ il Procedure. A civil action commences when
the summons is served on a defendant. Minn. R. Civ. P. 3.01(a). And rule 5.04(a) of the
Minnesota Rules of Civil Procedure provides that any action not filed with the court within
one year of commencing the lawsuit “is deem ed dismissed with prejudice,” unless the
parties stipulate otherwise. According to Saf eco, the parties did just that: they stipulated
to an extension of the one-year filing deadline. Resolution of this question regarding the
effectiveness of that purported stipulation requires us to interpret a rule of civil procedure,
which is a question of law that we consider de novo. Gams v. Houghton, 884 N.W.2d 611,
616 (Minn. 2016).

7
The first step in interpreting court rules requires looking “to the plain language of
the rule.” Walsh v. U.S. Bank, N.A., 851 N.W.2d 598, 601 (Minn. 2014). In doing so, we
construe “the words of a court rule in the sense in which they were understood and intended
at the time the rule was promulgated.” Gams, 884 N.W.2d at 616 (quotation omitted).
When a rule’s language is plain and unam biguous, we apply the plain language. Walsh,
851 N.W.2d at 601. “A rule is ambiguous only if the language of the rule is subject to
more than one reasonable interpretation.” Gams, 884 N.W.2d at 616.
With this framework in mind , we first examine the text of rule 5.04(a). The rule
states:
Any action that is not filed with the court within one year of
commencement against any party is deemed dismissed with
prejudice against all parties unless the parties within that year
sign a stipulation to extend the filing period.

Minn. R. Civ. P. 5.04(a) (emphasis added). The plain language of the rule first establishes
that any action not filed with the court with in one year of commencing the lawsuit “is
deemed dismissed with prejudice.” Id. But it also provides an exception if “the parties
within that year sign a stipulation to extend the filing period.” Id. To properly invoke this
exception, the plain language of the rule requi res five elements: (1) the parties (2) within
that year (3) sign (4) a stipulation (5) to ex tend the filing period. Stated differently, the
plain language of the rule explains who must act (the parties), what they must do (sign a
stipulation to extend the filing period), and when they must do it (within that year). A party
must satisfy all five elements to extend the one-year filing de adline. Failure to comply
with even one requirement precludes application of the exception to the one-year deadline.

8
Here, the emails between counsel—which ar e the only evidence of a “stipulation”
to extend the filing period—do not satisfy all five requirements of the rule. Most evident
is the lack of clear language stipulating to “e xtend the filing period.” Minn. R. Civ. P.
5.04(a). In an email dated June 14, 2018, Safeco’s counsel wrote “we have no objection
to granting an indefinite extension to in terpose an answer to our [c]omplaint , in order to
allow the adjusters time to c ontinue to negotiate.” (Empha sis added.) Then, the email
stated “[o]ur rules require [that] the matter be filed with the [c]ourt within one year after
service of process is complete, however. That deadline would be October 26, 2018, in this
case, if no settlement can be reached.” And Holmgren ’s counsel responded: “I’ll
relay . . . that she can continue to negotiate for the time being. If we hit the October
deadline we’ll go from there.” Additionally, in October 2018, Holmgren’s counsel emailed
Safeco’s attorney to confirm “the indefinite extension of time in which to answer given that
our mutual claims representatives were going to continue to work toward settlement.”
(Emphasis added.)
These emails do not express a clear intent to extend the one-y ear filing deadline.
See Geiger v. Geiger, 470 N.W.2d 704, 707 (Minn. App. 1991) (noting, in the family law
context, that “stipulated language on its face must express the parties’ clear intent”), review
denied (Minn. Aug. 1, 1991). Indeed, there is no language expressing that both parties
agree to extend the one-year deadline to file the action. Rather, the emails contain a clear
intent to extend the time frame for Holmgren to answer the complaint. A stipulation that
does not contain explicit language stating the intent of both parties to extend the one-year

9
filing deadline is inadequate under the plain meaning of rule 5.04(a). As a result, the emails
between counsel did not extend the one-year deadline to file the action.4
Still, Safeco argues that emails exchanged after the one-year deadline elapsed
demonstrate the intent to extend the filing deadline. We observe that the extent to which a
court should consider communications after the one-year time window as evidence of the
intent of the parties at the time of the alleged stipulation is unclear. But we need not decide
this question. Even if we evaluated emails between counsel after the time frame elapsed,
the intent to extend the one-year filing de adline remains murky. In an email from
February 2019, Holmgren’s co unsel inquired if the partie s would “continue to operate
under an extension of time for the present suit.” But this language does not explicitly
contain an agreement to extend the one-year filing deadline. Nor does it contain a reference
more specific than the vague “extension of tim e.” As a result, co mmunications after the
deadline expired do not remedy the absence of specific language extending the one-year
filing deadline in the earlier emails.5

4 Holmgren argues that the emails constituting the purported stipulation do not satisfy the
other requirements of rule 5.04(a). For inst ance, Holmgren notes th at the emails were
exchanged between Safeco ’s counsel and senior counsel for Holmgren’s insurer. And
Holmgren contends that the “stipulation” was not signed. But because we conclude that
the emails did not contain explicit language extending the filing de adline, we need not
address the other requirements contained in the rule. Minn. R. Civ. P. 5.04(a).
5 Safeco also makes policy arguments related to rule 5.04(a). Specifically, it contends that
procedural rules are to “be construed and ad ministered to secure the just, speedy, and
inexpensive determination of every action.” Minn. R. Civ. P. 1. But because the language
of rule 5.04(a) is plain and unambiguous, we apply the plain language of the rule. Walsh,
851 N.W.2d at 601.

10
In sum, the district court correctly determined that the parties did not stipulate to an
extension of the one-year filing deadline and appropriately dismissed Safeco’s action under
rule 5.04(a).
II. The district court did not abuse its di scretion by denying Safeco’s motion to
vacate.

Alternatively, Safeco cont ends that the district c ourt abused its discretion by
denying the motion to vacate dismissal of th e action. A party may seek to vacate a
dismissal based on rule 5.04(a) under Minn esota Rule of Civil Procedure 60.02. Gams,
884 N.W.2d at 617-18. That rule permits the district court to relieve a party from a final
judgment or order for “[m]istake, inadvertence, surprise, or excusable neglect.” Minn. R.
Civ. P. 60.02(a). The district court has discretion to grant relief under rule 60.02, and the
decision is “based on all the surrounding facts of each specific case.” Gams, 884 N.W.2d
at 620. We review a district court’s decision under rule 60.02 for an abuse of discretion.
Id.
A moving party must establish four factors—known as the Finden factors—before
relief is available under rule 60.02. See Finden v. Klaas , 128 N.W.2d 748, 750
(Minn. 1964). Those four factors “are: (1) a debatably meritorious claim; (2) a reasonable
excuse for the movant’s failure or neglect to act; (3) the m ovant acted with due diligence
after learning of the error or omission; and (4) no substantia l prejudice will result to the
other party if relief is granted.” Gams, 884 N.W.2d at 620 (quotations omitted). To warrant
relief, the movant must establish all four factors. Cole v. Wutzke, 884 N.W.2d 634, 637
(Minn. 2016).

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Here, the district court concluded that Safeco satisfied three of the four factors. But
it determined that Safeco did not meet the seco nd factor. To satisfy this factor, a movant
must establish “a reasonable ex cuse for the movant’s failure or neglect to act.” Gams,
884 N.W.2d at 620 (quotation omitted). Mistakes of law or fact may provide a reasonable
excuse warranting relief. Cole, 884 N.W.2d at 638. Minnesota caselaw “generally reflects
a strong policy favoring the granting of relief when judgment is entered through no fault
of the client.” Id. (quotation omitted). For example, even in cases where a district court
concluded that counsel’s neglect was inexcusable, “if such neglect has been purely that of
counsel, ordinarily courts are loath to ‘ punish’ the innocent clie nt for the counsel’s
neglect.” Charson v. Temple Israel, 419 N.W.2d 488, 491 (Minn. 1988).
But not all mistakes warrant relief. Cole, 884 N.W.2d at 638. The district court
bears the responsibility of determining “whether the excuse offered by the movant is true
and reasonable under the circumstances.” Id. at 639. And such inquiry is “fact intensive.”
Id.
Here, the district court concluded that Sa feco did not have a reasonable excuse for
its failure to file the complain t before the one-year deadline ex pired. First, it determined
that Safeco—not its attorney—b ore some responsibility for the late filing of the action.
The district court observed that Safeco failed to respond to settlement offers for two years.
This “unexplained breakdown in communication,” according to the district court, “clearly
played a role in the delay in formal fili ng of the summons and complaint.” And in
connecting Safeco’s failure to respond to settlement negotiations with the untimely filing

12
of the complaint, the district court noted that Safeco’s attorney acknowledged in her email
that “she was required to file by the [one-year] deadline ‘if no settlement can be reached.’”
Second, the district court found that Sa feco’s attorney’s “apparent reliance on a
claimed stipulation to extend the filing deadline does not ex cuse [Safeco’s] unreasonable
failure to respond to settlement offers.” The district court characterized the alleged
stipulation as “at best, an agre ement to extend indefinitely [Holmgren’s] time to file an
answer.” Considering each of these facts, the district court concluded that Safeco did not
satisfy the reasonable-excuse factor.
The district court acted within its wide di scretion in reaching this conclusion. The
record indicates that Safeco did not respond to a settlement offer from Holmgren’s insurer
for roughly two years. And the emails betw een counsel make apparent that the ongoing
settlement negotiations at least partially cont ributed to the delay in filing the action.
Accordingly, the district court’s conclusi on that Safeco’s co nduct—separate from its
attorney’s—partially contribute d to the untimely filing of th e action is well within its
discretion.
Additionally, the district court rejected Safeco’s counsel’s assertion that she did not
file the complaint because she believed the parties stipulated to an extension of the filing
deadline. It is the district court’s responsib ility to determine “whether the excuse offered
by the movant is true and reasonable under the circumstances.” Id. The relevant
circumstances of this case include Safeco’s de lay in responding to settlement offers and
emails that do not explicitly extend the filing deadline. Considering these circumstances,

13
the district court did not abuse its discre tion by concluding that Safeco failed to
demonstrate a reasonable excuse for its failure to timely file the action.
Still, Safeco contends that the district court incorrectly attributed fault for the
untimely filing to Safeco, rather than its attorney. Accord ing to Safeco, the settlement
efforts were in no way related to its attorney’s failure to file the complaint. As a result,
Safeco seeks to invoke tenets of Minnesota law generally protecting innocent clients from
mistakes solely attributable to their attorney. 6 See Nguyen v. State Farm Mut. Auto. Ins.
Co., 558 N.W.2d 487, 491 (Minn. 1997) (noti ng that “case law reflects a strong policy
favoring the granting of relief wh en judgment is entered thro ugh no fault of the client”);
see also Coller v. Guardian Angels Roman Catholic Church of Chaska , 294 N.W.2d 712,
715 (Minn. 1980) (finding the reasonable excu se prong satisfied where “the individual
defendants were not at all responsible for their failure to answer; the failure was occasioned
solely by the inadvertence of their attorney”).
We are not persuaded. We agree with Sa feco’s characterization of Minnesota law
as favoring relief for innocent clients affected by their attorney’s mistake. But, according
to the district court, that is not the case here. Safeco bears at least some responsibility for
the untimely filing of the complaint, the district court found. Even if Safeco is not entirely
at fault for the untimely filing of the complaint, the company’s less-than-prompt behavior

6 Safeco contends that it did not know the date of the one-year filing deadline. Indeed, it
notes that the claim file indicates that it s attorney “did not communicate the filing
deadline.” But it also acknowledges that these exchanges are not part of the record.

14
during ongoing settlement negotiati ons supports the district c ourt’s conclusion that some
fault is attributable to Safeco.
Second, Safeco argues that counsel did no t file the complaint because she believed
the parties stipulated to an extension of the one-year filing deadline. Safeco contends that
its counsel’s interpretation of the parties’ agreement—even if mistaken—constitutes a
reasonable excuse for the untimely filing of the complaint.7 But here, the district court, at
least implicitly, concluded that it was unreasonable for Safeco ’s attorney to believe the
parties agreed to extend the filing deadline, observing that the emails were “devoid of a
clear expression of any intention to extend the filing period.” It is within the district court’s
purview to conduct a fact-intensi ve inquiry to determine if a stated excuse for the failure
to file is reasonable. Cole, 884 N.W.2d at 639. Here, the di strict court did just that. In
doing so, it did not abuse its discretion by conc luding that this email exchange did not
suffice as a reasonable excuse for the failure to timely file the action.
D E C I S I O N
Rule 5.04(a) of the Minnesota Rules of Civil Procedure establishes two things: that
an action must be filed with the district co urt within one year of commencement and the

7 In support of this argument, Safeco cites Sand v. Sch. Serv. Em ps. Union, Local 284 ,
402 N.W.2d 183 (Minn. App. 1987), review denied (Minn. Apr. 29, 1987). In Sand, an
attorney did not file a required document with the district court to avoid dismissal because
he mistakenly believed that an order comp elling arbitration automatically stayed the
proceeding. 402 N.W.2d at 185. This cour t concluded that it was reasonable for the
attorney to believe—albeit mi stakenly—that the order for arbitration would stay the
proceeding. Id. at 186. Because there was a reasonabl e excuse for the fa ilure to file the
document, relief under rule 60.02 was warranted. Id. But here, the district court
determined that, based on the content of the emails, it was not reasonable for Safeco to
delay filing the action beyond the one-year deadline.

15
requirements for a party seeking to extend that time frame. To extend the one-year deadline
to file an action with the district court, a party must satisfy all five requirements contained
in rule 5.04(a) of the Minnesota Rules of Ci vil Procedure. A stipulation that does not
contain explicit language extending the one- year filing deadline is inadequate under
rule 5.04(a) of the Minnesota Rules of Civil Procedure.
Here, the email exchange did not contain explicit language extending the one-year
filing deadline. Accordingly, the district court appropriately dismissed Safeco’s action as
untimely under rule 5.04(a). An d because the district court ac ted within its discretion by
determining that Safeco lacked a reasonable excuse for its failure to timely file the action,
it appropriately denied Safeco’s motion to vacate.
Affirmed.