NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY v. STAMFORD BROOK CAPITAL, LLC et al

REPLY

M.D.N.C.March 6, 2019

1 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA DURHAM DIVISION Civil Action No.: 1:16-cv-1174-LCB NORTH CAROLINA MUTUAL LIFE ) INSURANCE COMPANY, a North ) Carolina corporation, ) ) Plaintiff, ) ) v. ) ) STAMFORD BROCK CAPITAL, LLC, a ) Delaware limited liability company, et al., ) ) Defendants. ) ) and ) ) BRADLEY REIFLER, ) ) Third-Party Plaintiff, ) ) v. ) ) MICHAEL L. LAWRENCE individually ) and in his capacity of an authorized ) employee of North Carolina Mutual ) Insurance Company and JAMES H. SPEED,) JR. individually and in his capacity of an ) authorized employee of North Carolina ) Mutual Insurance Company, ) ) Third-Party Defendants. ) REPLY IN SUPPORT OF MOTION TO VACATE ENTRY OF DEFAULT AND TO DISMISS THE ACTION AS TO JAMES H. SPEED, JR. NOW COMES Third-Party Defendant James H. Speed, Jr. (“Third-Party Defendant” or “Speed”), by and through the undersigned counsel, and pursuant to Rules Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 1 of 8 2 55(c) and 4(m) of the Federal Rules of Civil Procedure (the “Rules), and hereby submits this Reply in Support of Motion to Vacate Entry of Default and to Dismiss the Action as to Speed (“Motion”). ARGUMENT The question before the Court is a simple one-whether the threshold requirement of service of summons has been satisfied. It has not. Under well settled-law, “[b]efore a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied.” Omni Capital Intern., Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S. Ct. 404, 409, 98 L. Ed. 2d 415 (1987) (citation omitted). The summons must notify the defendant of certain critical information about the suit, including the time in which the defendant must appear and the risk of default, and bear the court’s seal-all of which protect the defendant’s due process rights. Without the requisite service of summons, the action cannot proceed. Here third-party pro se plaintiff (“Reifler) does not contest that no summons has been issued, much less been served, as to Speed. Indeed, Reifler failed to identify any such summons in his response. (See ECF No. 170). Of the five exhibits he attached to his response, none is a summons, or anything resembling a summons. There is no document indicating the “time within which the defendant must appear and defend,” Fed. R. Civ. P. 4(a)(1), or providing notification that “failure to appear and defend will result in default judgment,” id., and certainly nothing “signed by the clerk,” id., and “bearing the court’s seal,” id.-all of which are necessary to effectuate service and protect the defendant’s rights. See Venable v. Haislip, 721 F.2d 297, 300 (10th Cir. 1983) (“If the underlying Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 2 of 8 3 judgment is void for lack of personal or subject matter jurisdiction or because entry of the order violated due process, the district court must grant relief.” (citations omitted)). Nor does Reifler contest that the affidavit he filed is incorrect. The affidavit in error asserted that a “Summons” was served-which cannot be true because no summons was ever issued in this case-upon which the Clerk must have relied in entering default. See Fed. R. Civ. P. 55(c) (“The court may set aside an entry of default for good cause.”); cf. United States v. Stewart, No. 3:01CR112, 2009 WL 634641, at *2 (W.D.N.C. Mar. 6, 2009) (“Defendant’s affidavit is not true and, therefore, constitutes no just cause for relief.”). The entry of default should therefore be vacated. Instead, Reifler seeks to remedy his fatal constitutional defect by detailing the efforts he made to work with his “assistant.” (ECF No. 170, ¶¶ 6-7; id., Ex. A).1 Passing the blame to his assistant, however, cannot cure Reifler’s abject failure to obtain and serve the requisite summons. E.g, Wright v. Wells Fargo Bank, No. 3:07CV286, 2007 WL 3046344, at *2 (Oct. 17, 2007) (“While ‘the court should allow a pro se litigant a certain amount of lenity that is not afforded to represented parties, [. . . the] plain requirements for the means of effecting service of process may not be ignored.” (quoting McCreary v. Vaughan-Bassett Furniture Co., 412 F. Supp. 2d 535, 537 (M.D.N.C. 2005)). Surely Reifler does not contend that the entry of default should stand based on faulty representations made to this Court. 1 However, the alleged “Affidavit of Brenda Studebaker” is not sworn and is not authenticated. (ECF No. 170, Ex. A); cf. Orsi v. Kirkwood, 999 F.2d 86, 92 (4th Cir. 1993) (“It is well established that unsworn, unauthenticated documents cannot be considered on a motion for summary judgment.” (citations omitted)). Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 3 of 8 4 Rather than addressing the merits of Third Party Defendant’s arguments, it seems Reifler is more interested in attacking the undersigned. By filing the instant motion, Reifler claims that the undersigned has “play[ed] the dirty card,” (ECF No. 170, ¶ 15), and “release[d] the bull dogs to go out for the kill,” (id. ¶ 17). Such comments are absurd and do not excuse Reifler’s failure to follow constitutional process. Though he asserts that the undersigned “has chosen to simply waste this Court’s time with an unnecessary motion,” (id. ¶ 3)-the instant motion was rightfully filed to protect Speed’s due process rights and to vacate the entry of default based on an incorrect affidavit. See Lostutter v. Cook, No. 1:17CV801, 2018 WL 6002472, at *3 (M.D.N.C. Nov. 15, 2018) (Entry of default is vacated “for failure of service of process.” (quoting U.S. ex rel. Combustion Sys. Sales, Inc. v. E. Metal Prods. & Fabricators, Inc., 112 F.R.D. 685, 690 (M.D.N.C. 1986)). Given Reifler has provided no evidence that a summons was issued, much less served, and his pleading was filed well over ninety (90) days ago, entry of default should be vacated and the Third Party Complaint dismissed. CONCLUSION Accordingly, pursuant to Rules 55(c) and 4(m), and for the reasons stated herein, Speed respectfully requests that this Court vacate the entry of default and dismiss the action as related to him. Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 4 of 8 5 Respectfully submitted this the 6th day of March, 2019. SHANAHAN McDOUGAL, PLLC By: /s/ Kieran J. Shanahan Kieran J. Shanahan, NCSB # 13329 H. Denton Worrell, NCSB # 49750 128 E. Hargett Street, Third Floor Raleigh, North Carolina 27601 Telephone: (919) 856-9494 Facsimile: (919) 856-9499 kieran@shanahanmcdougal.com dworrell@shanahanmcdougal.com Attorneys for Third-Party Defendant James H. Speed, Jr. Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 5 of 8 6 CERTIFICATE OF SERVICE I hereby certify that I have this 6th day of March, 2019 electronically filed the foregoing Reply in Support of Motion to Vacate Entry of Default and to Dismiss the Action as to James H. Speed, Jr. with the Clerk of the Court using the CM/ECF system which will send notification of such filing to all CM/ECF participants and that I have mailed, via First Class Mail, postage prepaid, to the non-CM/ECF participants as follows: Stamford Brook Capital, LLC c/o The Company Corporation, Registered Agent 251 Little Falls Drive Wilmington, DE 19808 Forefront Capital Services, LLC c/o Corporation Service Company, Registered Agent 251 Little Falls Drive Wilmington , DE 19808 Forefront Capital Holdings, LLC c/o Corporation Service Company, Registered Agent 251 Little Falls Drive Wilmington, DE 19808 Bradley Cole Reifler 123 Fraleigh Hill Road Millbrook, NY 12545 Michael Flatley 2347 28th Street, Apt. 2FLF Long Island City, NY 11105 Summit Trust Company c/o Summit Trust Company, Registered Agent 8861 W. Sahara Ave., Suite 215 Las Vegas, NV 8917 Forefront Partners Short Term Notes, LLC c/o Bradley Reifler 123 Fraleigh Hill Road Millbrook, NY 12545-4951 Forefront Partners Short Term Notes, LLC c/o Michael Flatley 2347 28th Street, Apt. 2FLF Long Island City, NY 11105 Forefront Partners Short Term Notes, LLC c/o Bradley C. Reifler 116 W. 14th Street New York, NY 10011 David Wasitowki 39 Fairmount Road West Califon, NJ 07830 FF Sully Partners, LP c/o The Company Corporation 251 Little Falls Drive Wilmington, DE 19808 Michael Flatly 50 Sherman Street Lynbrook, NY 11105 David Wasitowski 5 Laga Court Ringoes, NJ 08551 David Wasitowski Union Capital Group 275 Madison Avenue, 38th Floor New York, NY 10016 Gregory L. Smith The Law Office of Gregory L. Smith Lauren E. Fussell Michael Keith Kapp Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 6 of 8 7 147 Prince Street, Fl. 2 Brooklyn, NY 121201 Williams Mullen P.O. Drawer 1000 Raleigh, NC 27602 Andrew O. Mathews Turner A. Broughton Williams Mullen 200 S. 10th Street, Suite 1600 Richmond, VA 23219 SHANAHAN McDOUGAL, PLLC By: /s/ Kieran J. Shanahan Kieran J. Shanahan, NCSB # 13329 H. Denton Worrell, NCSB # 49750 128 E. Hargett Street, Third Floor Raleigh, North Carolina 27601 Telephone: (919) 856-9494 Facsimile: (919) 856-9499 kieran@shanahanmcdougal.com dworrell@shanahanmcdougal.com Attorneys for Third-Party Defendant James H. Speed, Jr. Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 7 of 8 8 CERTIFICATE OF WORD COUNT Pursuant to LR 7.3(d) of the United States District Court for the Middle District of North Carolina, the undersigned counsel hereby certifies that the foregoing Reply in Support of Motion to Vacate Entry of Default and Dismiss the Action as to James H. Speed, Jr. complies with the limitations of length as a reply brief in support of a motion and does not exceed 3,125 words. This the 6th day of March, 2019. SHANAHAN McDOUGAL, PLLC By: /s/ Kieran J. Shanahan Kieran J. Shanahan, NCSB # 13329 H. Denton Worrell, NCSB # 49750 128 E. Hargett Street, Third Floor Raleigh, North Carolina 27601 Telephone: (919) 856-9494 Facsimile: (919) 856-9499 kieran@shanahanmcdougal.com dworrell@shanahanmcdougal.com Attorneys for Third-Party Defendant James H. Speed, Jr. Case 1:16-cv-01174-LCB-JEP Document 172 Filed 03/06/19 Page 8 of 8