In Nehls, the district court found that this factor weighed in favor of plaintiff even though an extension would deprive defendant of the statute of limitations defense.Summary of this case from Rosch v. Browning Masonic Community, Inc.
Case No. 1:03-CV-140
February 20, 2004
In accordance with the Opinion filed this date,
IT IS HEREBY ORDERED that Defendants' Motion To Dismiss (docket no. 34) is GRANTED. IT IS FURTHER ORDERED that Plaintiff's Motion For Leave to Serve A Second Amended Complaint (docket no. 17) and Plaintiffs Motion For Relief From Order Rejecting Pleading (docket no. 38) are DENIED AS MOOT.
This case is dismissed without prejudice.
OPINIONPlaintiff, Mark A. Nehls ("Nehls"), has filed suit against Defendants, Hillsdale College, The Hillsdale College Student Federation, and The Hillsdale Collegian, alleging claims for breach of contract and libel arising out of statements Defendants allegedly made or published concerning the reasons for Nehls' expulsion from Hillsdale College in 1991. Now before the Court are Defendants' motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), (4), and (5), and Nehls' motion for leave to serve a second amended complaint, which the Court takes to be a motion for leave to file a second amended complaint.
Nehls filed his complaint in this case on March 3, 2003. At that time, a case Nehls had previously filed in the Eastern District of Michigan against Hillsdale College and others (the "Eastern District Case") was on appeal to the United States Court of Appeals for the Sixth Circuit after the the district court granted summary judgment to the defendants and dismissed the case. Nehls' complaint in the Eastern District Case alleged claims of slander, libel, conspiracy to commit slander and libel, and invasion of privacy. Those claims, like the claims in this case, were based upon Nehls' 1991 expulsion from Hillsdale College.
After Nehls filed his complaint in this case, he essentially sat on the complaint and took no action to serve Defendants. On June 25, 2003, the Court issued an Order of Impending Dismissal. The Order informed Nehls that due to the lack of service on Defendants, the action would be dismissed without prejudice for failure to serve Defendants within 120 days as required by Fed.R.Civ.P. 4(m) unless Nehls filed a verified petition stating: (1) that the case should not be dismissed as to the unserved defendants; (2) that the failure to obtain service upon the defendants was not due to the fault of Nehls or his counsel; (3) the reasons why the case against the unserved defendants should not be dismissed; and (4) that service would be effected upon Defendants within 30 days of the date of the petition.
On July 2, 2003, Nehls filed a verified petition in response to the Court's June 25, 2003, Order. In his petition, Nehls advised the Court of the pending appeal of the Eastern District Case and stated that this case is based upon statements that were not at issue in the Eastern District Case. As of the date Nehls filed his verified petition, the Sixth Circuit had issued an unreported opinion affirming the district court but had not yet ruled on Nehls' motion for rehearing. Nehls also stated that the failure to serve the complaint was not due to his fault or neglect, although he admitted that his failure to serve the complaint was based upon his own determination that it would be in the interests of judicial economy not to serve the complaint until the pending appeal was finally decided. Finally, Nehls stated that he would serve the complaint within 30 days of the filing of the petition.
Contrary to his statement in his verified petition, Nehls did not serve the complaint within 30 days. Instead, on August 4, 2003, Nehls sent the complaint, an amended complaint, and requests for waiver of service to Karen L. Piper ("Piper"), an attorney who apparently represented Hillsdale College in the Eastern District Case. Nehls filed the amended complaint on August 5, 2003. Apparently some time after Nehls filed his amended complaint, Nehls noticed that the amended complaint he sent to Piper did not correspond to the amended complaint filed with the Court. According to Nehls, a woman at the Clerk's ECF "Help Desk" advised Nehls to file a corrected amended complaint. On September 26, 2003, Nehls filed a "corrected amended complaint" and sent the complaint, "corrected amended complaint," and waivers of service to Richard Pewe, on behalf of Hillsdale College; Matthew Gaetano, on behalf of the Hillsdale College Student Federation; and Daniel Silliman, on behalf of the Hillsdale Collegian. By Order dated September 30, 2003, the Court struck the corrected amended complaint from the record because Nehls had already filed his one amendment without leave of court allowed by Rule 15(a). Nehls then sought leave to file his corrected amended complaint by filing a motion for leave to serve (file) a second amended complaint on October 14, 2003. On October 22, 2001, Nehls filed a waiver of service executed by Richard Pewe on behalf of Hillsdale College. Shortly thereafter, on October 28, 2003, Defendants moved to dismiss the case for lack of service.
I. Motion to Dismiss for Lack of Service
Rule 4(m) of the Federal Rules of Civil Procedure provides:
If service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint, the court, upon motion or on its own initiative after notice to the plaintiff, shall dismiss the action without prejudice as to that defendant or direct that service be effected within a specified time; provided that if the plaintiff shows good cause for the failure, the court shall extend the time for service for an appropriate period. This subdivision does not apply to service in a foreign country pursuant to subdivision (f) or (j)(1)
Fed.R.Civ.P. 4(m). Rule 4(m) directs a court to dismiss the plaintiff's complaint without prejudice for failure to effect service within 120 days of the filing of the complaint, unless the plaintiff can show good cause for the failure to serve, in which case the court is required to extend the time for service. See Mehus v. Emporia State Univ., 295 F. Supp.2d 1258, 1272-73 (D. Kan. 2004); Morillo v. City of New York, No. 02 Civ. 8647 (DLC), 2003 WL 22319609, at *3 (S.D.N.Y. Oct. 10, 2003). Even where a plaintiff fails to show good cause, the court retains discretion to extend the time for service.See Schnall v. Annuity Life Re (Holdings), Ltd., No. 3:02 CV 2133 (GLG), 2003 WL 23100326, at *2 (D. Conn. Dec. 13, 2003):Berg v. Roselawn Funeral Home Mem'l Park, No. TH 02-154-C T/H, 2003 WL 23220734, at *2 (S.D. Ind. Dec. 24, 2003). Defendants contend that the Court should dismiss Nehls' complaint without prejudice pursuant to Rule 4(m) because Nehls failed to serve Defendants within the 120-day time period and Nehls cannot show good cause for his failure to effect service. In addition, Defendants assert that the Court should decline to grant Nehls a discretionary extension of time.
In response to Defendants' motion, Nehls asserts that Defendants are barred from challenging service of process for two reasons. First, Nehls contends that Defendants have waived any objection to lack of service by filing a response in opposition to Nehls' motion for leave to file a second amended complaint. Second, Nehls contends that he served Defendants on August 4, 2003, when he mailed the complaint, amended complaint, and request for waiver to Defendants' counsel, Karen Piper. The Court rejects both arguments.
With regard to Nehls' waiver argument, Fed.R.Civ.P. 12(h)(1) provides in relevant part that "[a] defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived . . . (B) if it is neither made by motion under this rule nor included in a responsive pleading. . . ." Thus, a defendant waives any of the defenses set forth in Rule 12(b)(2)-(5) by either failing to include the defense in its answer or to assert it by motion. Mandeville v. Wertheimer, No. 01 CIV. 4469 JSRDF, 2002 WL 31045859, at * 1 n. 2 (S.D.N.Y. June 17, 2002). A defendant may also waive a rule 12(h)(1) defense prior to filing a motion or answer by active participation in the litigation. Schmude v. Sheahan, 214 F.R.D. 487, 491 (N.D. Ill. 2003). In this case, Defendants filed their motion to dismiss on October 28, 2003, and filed their response to Nehls' motion to file a second amended complaint the same day. Defendants therefore properly asserted and preserved their defenses based upon lack of service. Nehls fails to cite any prior participation in the case by Defendants that might constitute a pre-filing waiver. Likewise, Nehls fails to cite any authority for the proposition that Defendants waived their defense by filing a response to Nehls' motion to amend on the same day they filed their motion to dismiss. In fact, in Flory v. United States, 79 F.3d 24 (5th Cir. 1996), the court held that there was no waiver where the defendant pled a 12(b)(5) insufficiency of service of process defense in its answer but filed a motion for summary judgment prior to moving for dismissal based upon insufficiency of service of process. Id. at 25.
Nehls' argument that he served Defendants by sending the complaint, an amended complaint, and a request for waiver to attorney Piper on August 4, 2003, fails for two reasons. First, even assuming that sending a complaint and request for waiver of service to a defendant constitutes service, the purported service was made both beyond the 120-day period and beyond the 30-day period set forth in Nehls' verified petition, and Nehls never moved for an extension of time to serve Defendants. Second, and more importantly, a request for waiver of service is not a substitute for actual service. Cross v. City of Chicago, No. 99 C 3443, 2001 WL 1654763, at *2 (N.D. Ill. Dec. 20, 2001) ("Rule 4(d) does not excuse formal service if the waiver is not returned."); Maureau v. United Techs. Carrier Corp., No. CIV. A. 97-1427, 1998 WL 12238, at *2 (E.D. La. Jan. 12, 1998) (stating that "a request for waiver of service does not constitute actual service"). Service requires that both a summons and a copy of the complaint be delivered to the defendant. Fed.R.Civ.P. 4(c)(1). Because no summonses have ever been issued in this case, Defendants have not been served. Moreover, although Nehls points to the fact that on October 22, 2003, he filed a waiver of service executed by Hillsdale College, the waiver was executed well after the 120-day period expired, does not constitute compliance with Rule 4(m), and cannot serve to extend the 120-day period. In fact, the Advisory Committee Notes to the 1993 amendment advise that "[t]he procedure of requesting waiver of service should also not be used if the time for service under subdivision (m) will expire before the date on which the waiver must be returned" because "the court could refuse a request for additional time unless the defendant appears to have evaded service pursuant to subdivision (e) or (h)." Fed.R.Civ.P. 4 advisory committee's note.
As noted above, in deciding Defendants' motion the Court must determine whether Nehls has established good cause for failing to properly serve Defendants within 120 days. Courts generally consider three factors in determining the existence of good cause: (1) the plaintiffs efforts to effectuate service; (2) prejudice to the defendant caused by lack of timely service; and (3) whether the plaintiff sought an extension of time to serve the defendant. See Ritter v. Cooper. No. Civ. A. 02-1435 GMS, 2003 WL 23112306, at *2 (D. Del. Dec. 30, 2003):Morillo v. City of New York, No. 02 Civ. 8647 (DLC), 2003 WL 22319609, at *3 (S.D.N.Y. Oct. 10, 2003): Sprader v. Goodson, No. C-2-00-946, 2001 WL 506528, at *3 (S.D. Ohio Apr. 17, 2001).
Nehls argues that he had good cause for failing to serve Defendants because the Eastern District Case appeal had not been resolved and waiting until the Sixth Circuit finally decided the appeal before serving the complaint would promote judicial economy. That is, Nehls asserts, he decided not to serve the complaint because the Sixth Circuit's decision might have impacted some of his claims in this case. Even if that were true, Nehls' own concerns for judicial economy do not provide an excuse for failing to timely serve Defendants. Moreover, even if the Sixth Circuit's decision in the Eastern District Case might have some impact upon this case, there were several appropriate alternative means of addressing the situation. For example, the parties could have stipulated to stay this case until the appeal was concluded or they could have requested the Court to remove the case from its active docket and place it on its administrative docket pending the final resolution of the appeal. Although Nehls has not cited any authority for his argument, courts have rejected analogous arguments regarding the existence of settlement negotiations. See Sprader, 2001 WL 506528, at *3 (noting that "the existence of settlement negotiations alone is an insufficient basis for finding good cause"). It is undisputed that after filing his complaint on March 3, 2003, Nehls did nothing until prompted by the Court's June 25, 2003, Order to take some action. Nehls' attempt to characterize his verified petition in response to the Court's June 25, 2003, Order as a motion for an extension of time must be rejected, because Nehls took no action on his own to effect service. See Ritter, 2003 WL 23112306, at *3 ("Ritter did not move the court for an enlargement of time to serve before expiration of the 120 days. It was only after the court brought the matter to Ritter's attention that he properly served the Complaint on Mr. Cooper."). Furthermore, after stating in his verified petition that he would effect service within 30 days, Nehls failed to serve the complaint and instead elected to send a waiver request form, in spite of the fact that the 30-day period had expired or was about to do so. Given Nehls' complete failure to take any proper steps to serve Defendants within the 120-day period or within the 30-day period set forth in Nehls' verified petition, Nehls cannot show good cause. See Stewart v. Tenn. Valley Auth., No. 99-5723, 2000 WL 1785749 (6th Cir. Nov. 21, 2000) (affirming district court's finding of no good cause even though the defendant was aware of the lawsuit, where the plaintiff's lawyer was admitted to the hospital during the last week of the 120-day period and had made no attempts to serve the complaint prior to that time).
The Court finds Nehls' judicial economy argument puzzling, to say the least, in light of the fact that Nehls filed his clearly-related second action in this district rather than seeking to have this case heard by the same district judge who presided over the Eastern District Case, who would be more familiar with the facts of the case.
Because Nehls cannot show good cause, the Court must decide whether to exercise its discretion to extend the time for service. Various factors have been cited as guiding a court's determination whether to grant an extension of time. In Panaras v. Liquid Carbonic Industries Corp., 94 F.3d 338 (7th Cir. 1996), the court cited the Advisory Committee Note for a non-exhaustive list of factors, including whether the refiled action would be barred by the statute of limitations and whether the defendant is evading service or conceals a defect in attempted service. Id. at 341. In Ritter, the court cited the following factors: "`(1) [sic] frivolousness [of the plaintiff's complaint]; (ii) [the plaintiffs] motivation in pursuing its claims; (iii); objective unreasonableness (both in the factual and legal components of the case) and (iv) the need in particular circumstances to advance considerations of compensation and deterrence.'"Ritter, 2003 WL 23112306, at *3 (quoting E.I. DuPont De Nemours Co. v. The New Press. Inc., No. Civ. A. 97-6267, 1998 WL 355522, at *4 (E.D. Pa. June 29, 1998)) (alterations in original). The court inLopez v. Donaldson (In re Lopez), 292 B.R. 570 (E.D. Mich. 2003), set forth a different formulation of factors, including whether:
"(1) a significant extension of time was required; (2) an extension of time would prejudice the defendant other than the inherent "prejudice" in having to defend the suit; (3) the defendant had actual notice of the lawsuit; (4) a dismissal without prejudice would substantially prejudice the plaintiff; i.e., would his lawsuit be time-barred; and (5) the plaintiff had made any good faith efforts at effecting proper service of process." It is also appropriate to consider the effect an extension would have on the administration of justice, and whether an extension of time would undermine any policy considerations explicitly or implicitly contained in the procedural rules urging the prompt disposition of the particular type of matter.Id. at 576 (quoting Slenzka v. Landstar Ranger, Inc., 204 F.R.D. 322, 326 (E.D. Mich. 2001)). In Wise v. Department of Defense. 196 F.R.D. 52 (S.D. Ohio 1999), from which the Lopez factors were distilled, the court concluded that an extension of time was appropriate because: (1) the plaintiff did not significantly delay effecting proper service (the plaintiff obtained summonses from the clerk less than one month after the 120-day period expired and effected service by the end of that month); (2) the defendants would not be prejudiced by an extension of time; (3) the defendants had actual notice of the complaint from the tune of its filing; (4)-a dismissal would prejudice the plaintiff because he would have been unable to refile his discrimination claims; and (5) the plaintiff's counsel and her assistant made some effort to effect service.Wise. 196 F.R.D, at 56-57.
The Court concludes that the factors set forth in Lopez reflect the proper considerations in determining whether a discretionary extension should be granted. Applying those factors here, the Court concludes that an extension is not warranted. Only two factors can be said to weigh in favor of granting an extension. First, a dismissal would prejudice Nehls because at least the portion of his claim set forth in Count II would be time-barred. There is no indication that any other portion of his claim would be time barred. However, "[t]he running of the statute of limitations [alone] does not require that a district court extend the time for service of process." Panaras, 94 F.3d at 341 (citing Petrucelli v. Bohringer Ratzingen, GMBH, 46 F.3d 1298, 1306 (3d Cir. 1995)). Second, although Defendants assert that they would be prejudiced by an extension because Nehls' failure to serve them within the 120-day period deprived them of the opportunity to raise and preserve the statute of limitations defense, it is questionable whether there would be any actual prejudice and the Court determines, for purpose of its analysis, that Defendants would not be prejudiced. However, a number of factors weigh against granting an extension. First, Nehls has never taken any steps to effect service on Defendants. As noted above, Nehls did nothing even after this Court required him to verify in his petition that service would be effected within 30 days of the date of the petition. Nehls filed his verified petition on July 2, 2003, and stated that he intended to serve the complaint within 30 days. Nehls failed to serve the complaint and never sought to have summonses issued by the Clerk of the Court. Instead, Nehls attempted to obtain a waiver of service even though the 120-day period and 30-day period set forth in the verified petition had expired. As discussed above, a request for waiver of service is not a substitute for service. Second, although Nehls asserts that Defendants had knowledge of his claims in this case, the only evidence before the Court shows that Defendants could not have been aware of the filing of the complaint any earlier than August 5 or 6, 2003, when Nehls sent the requests for waiver to Piper. Third, granting even a 30-day extension for service would result in a significant delay, as the 120-day period expired over six months ago. Further delay would only serve to undermine the "just, speedy, and inexpensive determination of [this] action." Fed.R.Civ.P. 1. Finally, although Nehls points the finger at others in attempting to drum up an excuse for failing to serve Defendants, Nehls' failure to effect service is the sole result of Nehls' counsel's decision to withhold service and to seek waivers of service (which Defendants were not obligated to sign). Therefore, the Court will grant Defendants' motion and dismiss the case without prejudice.
Defendants' argument is based upon the Michigan Supreme Court's decision in Gladych v. New Family Homes. Inc., 468 Mien. 594, 664 N.W.2d 705 (2003), which held that the filing of a complaint alone does not toll the statute of limitations under Michigan law. BecauseGladych overruled Buscaino v. Rhodes, 384 Mich. 474, 189 N.W.2d 202 (1971), which held that the mere filing of a complaint tolls the statute of limitations, the court gave its decision — issued July 1, 2003 — limited retroactive effect by limiting its application only to those cases in which the issue had been raised and preserved. Gladych. 468 Mich. at 607-08, 664 N.W.2d at 712-13. Defendants' argument requires the Court to assume not only that Nehls would have served Defendants with sufficient time remaining before July 1, 2003, to allow Defendants to review the complaint and prepare and file an answer, but also that Defendants would have anticipated the court's holding and retroactive application in Gladych. At best, Defendants have demonstrated speculative prejudice.
II. Motion for Leave to Serve (File) A Second Amended Complaint
In light of the Court's decision to grant Defendants' motion to dismiss, the Court will deny as moot Nehls' motion to file a second amended complaint. For the same reasons, the Court will deny as moot Nehls' motion for relief from the Court's order rejecting Nehls' "corrected amended complaint."
For the foregoing reasons, the Court will grant Defendants' motion to dismiss and deny Nehls' motions for leave to file a second amended complaint and for relief from the Court's order rejecting Nehls' "corrected amended complaint."
An Order consistent with this Opinion will be entered.