Franklin v. Garden State Life Insurance

Filing 65

REPORT AND RECOMMENDATION of the Magistrate Judge that: (1) Plf's 57 Motion for Extension of Time be GRANTED; (2) Plf be ordered to properly effectuate service on Dft ANICO within 30 days; (3) Dft American National Insurance Company's [54 ] MOTION to Dismiss be DENIED without prejudice; (4) Dft American National Insurance Company's 62 MOTION to Dismiss Plf's Second Amended Complaint be DENIED without prejudice; (5) This case be referred back to the Magistrate Judge for additional proceedings; Objections to R&R due by 7/14/2009. Signed by Honorable Terry F. Moorer on 7/1/2009. (wcl, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION N U E CHEER FRANKLIN, P l a in tif f , v. G A R D E N STATE LIFE IN S U R A N C E , et al., D e f e n d a n ts . ) ) ) ) ) ) ) ) ) )

C A S E NO. 2:09-cv-109-MHT

R E P O R T AND RECOMMENDATION OF THE MAGISTRATE JUDGE P u r s u a n t to 28 U.S.C. § 636(b)(1) this case was referred to the undersigned United S ta te s Magistrate Judge for review and submission of a report with recommended findings o f fact and conclusions of law (Doc. 14, filed March 3, 2009). Pending before the Court are D e fe n d a n t American National Insurance Company's Motion to Dismiss (Doc. 54, filed June 1 2 , 2009), Plaintiff's Motion for Extension of Time (Doc. 57, filed June 19, 2009), and D e fe n d a n t American National Insurance Company's Motion to Dismiss Plaintiff's Second A m e n d e d Complaint (Doc. 62, filed June 29, 2009). For good cause, it is the

re c o m m e n d a tio n of the Magistrate Judge to deny the motions to dismiss and grant the motion f o r extension of time. I. PARTIES AND COMPLAINT P la in tif f , Nue Cheer Franklin ("Franklin" or "Plaintiff"), is a resident of Montgomery, A la b a m a , which is within the Middle District of Alabama. Defendants are Garden State Life Page 1 of 9

Insu ran ce ("Garden State") and American National Insurance Company ("ANICO"). A N IC O is the defendant relevant to the pending motions. On October 20, 2008, Franklin initiated this action by filing a Complaint in the D is tric t Court of Montgomery County, Alabama. See Doc. 1. The Complaint avers D e f en d a n ts failed to pay out the life insurance benefits upon the death of Elnoria Franklin. Id . Franklin is the sole beneficiary of the policy proceeds. Id. Franklin sought damages in th e amount of $10,000 plus interest and costs. Id. On January 26, 2009, Franklin filed an A m e n d e d Complaint amending the damages sought. Id. Plaintiff now seeks compensatory a n d punitive damages in the sum of $510,000.00. Id. The higher damages claim caused the c a se to exceed the monetary jurisdiction of the District Court, therefore the case was tra n s f e rr e d to the Circuit Court. Id. Defendants timely removed this action to federal court o n February 11, 2009. Id.; see also Doc. 9, "Amendment to Notice of Removal." On June 12, 2009, ANICO filed a motion to dismiss under FED. R. CIV. P. 12(b)(4) a n d 12(b)(5). See Doc. 54. Specifically ANICO asserts that Plaintiff failed to properly serve A N IC O under Fed. R. Civ. P. 4(m) within 120 days from the date of removal. Id.

S p e c if ic a lly, ANICO states the Summons accompanying the Original Complaint was only d ire c te d to Garden State. Id. ANICO further asserts it has never been properly served. Id. O n June 19, 2009, Franklin filed a motion to deny the motion to dismiss which the C o u rt construed as a response to the original motion to dismiss. See Doc. 57. She also in c lu d e d a motion for an extension of time in the event she had not properly served ANICO.

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Id . In her pleading, Franklin states she was led to believe that both defendants were served a s they responded to the action. Id. She also says ANICO waived its right to the defenses b e c a u s e they filed an answer. Id. ANICO filed its reply on June 29, 2009. See Doc. 63. In the reply, ANICO reiterates its previous assertions and also disputes that it waived its service and process defenses. Id. A N IC O also avers Franklin was put on notice of the defect in the service of process when it filed its answer and amended answer. Id. ANICO also filed a second motion to dismiss s in c e Plaintiff's Amended Complaint was docketed after the original motion to dismiss was f ile d .1 See Doc. 62. ANICO's second motion to dismiss also reiterates the original motion to dismiss and requests the amended complaint against ANICO be dismissed under Rules 1 2 (b )( 4 )- (5 ). Id. Since the motion is simply a brief restatement of the original motion, the C o u rt determined it could simply address both motions together. The motions have been f u lly briefed and are ripe for this Court's review. II. JURISDICTION T h e district court has subject matter jurisdiction over the claims in this action pursuant to 28 U.S.C. §§ 1332 (diversity). The parties do not contest personal jurisdiction or venue, a n d there are adequate allegations to support both.

On March 9, 2009 Franklin file da motion for leave to amend her complaint. See Doc. 19. On June 16, 2009, concurrent with the Opinion dismissing claims of Nue Cheer Franklin as administratrix of the estate, the Court granted the motion to amend the complaint. See Doc. 55. Therefore, the Amended Complaint attached to the motion for leave was not docketed until June 16, 2009. See Doc. 60. Page 3 of 9

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I I I . FAILURE TO PROPERLY SERVE R u le 4(m) of the Federal Rules of Civil Procedure requires that a plaintiff serve a s u m m o n s and complaint to all defendants within 120 days after the complaint is filed. FED. R . CIV. P. 4(m). Specifically it states: If a defendant is not served within 120 days after the complaint is filed, the c o u rt-o n motion or on its own after notice to the plaintiff-must dismiss the a c tio n without prejudice against that defendant or order that service be made w ith in a specified time. But if the plaintiff shows good cause for the failure, the c o u rt must extend the time for service for an appropriate period. Id . Thus, failure to effect service within 120 days of filing the complaint mandates dismissal o f those who have not been properly served unless an extension is given. Id.; see also H o r e n k a m p v. Van Winkle & Co., 402 F.3d 1129, 1132 (11th Cir. 2005) (When a plaintiff f a ils to perfect service of process within the 120-day period, the court may dismiss the action o r grant an extension of time to serve process for either "good cause" or another sufficient g ro u n d .). A defendant may object to service by filing a motion to dismiss pursuant to Rule 1 2 (b )(4 ) (challenging sufficiency of process) or Rule 12(b)(5) (challenging sufficiency of s e rv ic e ). IV. DISCUSSION AND ANALYSIS F r a n k lin , in her response, says she thought she had served both defendants and further a ss e rts ANICO has waived its service of process claims. However, a review of the pleadings s h o w s that ANICO pled insufficient service and insufficient service of process in its initial re s p o n s iv e pleadings. See Docs. 3, 11. Therefore, defendant has not waived its right to

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a s s e rt these defenses. See Melton v. Wiley, 262 Fed. Appx. 921, 923 n.5 (11th Cir. 2008). F r a n k lin 's failure to perfect service within 120 days after filing the complaint exposes it to dismissal without prejudice. FED. R. CIV. P. 4(m). However, "if the plaintiff shows good c a u s e for the failure, the court must extend the time for service for an appropriate period." Id . Absent good cause, the Court may, but need not, allow additional time. Horenkamp, 402 F .3 d at 1132 (Rule 4(m) "grants discretion to the district court to extend the time for service o f process even in the absence of a showing of good cause."); accord Lepone-Dempsey v. C a r r o ll County Commissioners, 476 F.3d 1277, 1281-82 (11th Cir. 2007); see also H e n d e rs o n v. United States, 517 U.S. 654, 662-63, 116 S.Ct. 1638, 1643, 134 L.Ed.2d 880 ( 1 9 9 6 ) (discussing the 1993 amendments to the Federal Rules of Civil Procedure and the ex p an sion of the Court's discretion to enlarge the 120-day period even absent good cause.).2 H e re , despite Franklin's statements to the contrary, the record shows that she did not p rop erly effectuate service on ANICO within the 120 day window provided by Rule 4(m). H o w e v e r, the Court deems it appropriate to exercise its discretion to extend Plaintiff's time f o r service. The Court cannot say that Plaintiff has shown good cause for failing to perfect s e rv ic e on ANICO within 120 days of filing the lawsuit; however, even in the absence of g o o d cause, this Court has the discretion to extend the time for service. While Franklin did not accomplish service of process on this defendant within the
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It is worth noting that prior to the 1993 amendments to Rule 4(m) the law of this Circuit, which was predicated on the prior version of the rule, was different than the rule as set forth in Horenkamp. Id. at 1131-32 & n. 2. Page 5 of 9

tim e provided by Rule 4(m), it is clear that ANICO was aware of the lawsuit despite the fact it was not properly served and though it has not been actively participating in discovery, as th e parent company of Garden State - also represented by the same counsel - it would have re c e iv e d any discovery provided by Franklin, so it is not at a disadvantage. ANICO requests th e claims against it be dismissed with prejudice, but Eleventh Circuit precedent clearly d ic ta te s that the failure to perfect service on a defendant merits dismissal without prejudice. S e e Betty K Agencies, Ltd. v. M/V Monada, 432 F.3d 1333, 1339-41 (11th Cir. 2005) (failure to perfect service on defendant does not justify dismissal with prejudice.). "[D]ismissal with p re ju d ic e is a drastic sanction that may be imposed only upon finding a clear pattern of delay o r willful contempt and that lesser sanctions would not suffice." Id. at 1340 (citations o m itte d ); see also Francies v. Brandon, 287 Fed. Appx. 68, (11th Cir. 2008) (quoting Betty K Agencies, 432 F.3d at 1337-38 ("a dismissal with prejudice, whether on motion or sua sp o n te , is an extreme sanction that may be properly imposed only when: `(1) a party engages in a clear pattern of delay or willful contempt (contumacious conduct); and (2) the district co u rt specifically finds that lesser sanctions would not suffice.'"). There is nothing before this Court that shows Franklin's failure to perfect service is a willful contempt for court ru le s . See id. Quite to the contrary, Franklin has thus far complied with all orders as far as th is Court is aware. Franklin's negligence in service is not so egregious as to warrant d ism iss a l with prejudice. As such, any dismissal of Franklin's claims against ANICO would b e without prejudice.

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N e x t, even if the Court dismisses without prejudice the claims against ANICO, the c la im s would still remain against Garden State. Since Plaintiff's claims relating to the in s u r a n c e policy arose in February 2008, her claims would not yet be time-barred against A N IC O . Therefore, Franklin could simply re-institute her claims against ANICO either by in sti tu ti n g a separate proceeding against ANICO which would lead to two parallel suits re g a rd in g the same dispute or by amending her current complaint if the Court permitted her to do so.3 Either way, ANICO would likely be drawn back into the dispute. Therefore, the C o u r t is willing to grant her motion for extension and give Franklin another chance to p ro p e rly serve Defendant ANICO.4 V . CONCLUSION A c c o rd in g ly, it is the RECOMMENDATION of the Magistrate Judge that: (1) (2 ) P la in t if f ' s Motion for Extension of Time (Doc. 57) be GRANTED. P lain tiff be ordered to properly effectuate service on Defendant ANICO within 3 0 days. (3) D e fe n d a n t American National Insurance Company's Motion to Dismiss (Doc.

The Court notes that the deadline for Plaintiff to amend her complaint was on June 5, 2009 and therefore any request to amend the pleadings would require approval by the Court. In her response, Franklin states she has sent a "Request for Waiver of Service" to AINCO's registered agent. Given the fact, ANICO filed a motion to dismiss for service related issues, it is unlikely that ANICO will accede to the request. Therefore, should the District Court adopt this Report and Recommendation, Plaintiff will be required to properly serve ANICO under FED. R. CIV. P. 4 and the request for waiver of service will not substitute for proper service absent approval by the defendant. Page 7 of 9
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5 4 ) be DENIED without prejudice. (4) D e f e n d a n t American National Insurance Company's Motion to Dismiss P la in tiff's Second Amended Complaint (Doc. 62) be DENIED without p re ju d ic e . (5) T h i s case be referred back to the Magistrate Judge for additional proceedings.

I T IS FURTHER ORDERED that the parties file any objections to this R e c o m m e n d a tio n on or before July 14, 2009. Any objections filed must specifically identify th e findings in the Magistrate Judge's Recommendation to which the party is objecting. F r iv o lo u s , conclusive or general objections will not be considered by the District Court. The p a rtie s are advised that this Recommendation is not a final order of the court and, therefore, it is not appealable. F a ilu re to file written objections to the proposed findings and recommendations in the M a g is tra te Judge's report shall bar the party from a de novo determination by the District C o u rt of issues covered in the report and shall bar the party from attacking on appeal factual f in d in g s in the report accepted or adopted by the District Court except upon grounds of plain e rr o r or manifest injustice. Nettles v. Wainwright, 677 F.2d 404 (5th Cir. 1982); see Stein v . Reynolds Securities, Inc., 667 F.2d 33 (11th Cir. 1982); see also Bonner v. City of P r ic h a r d , 661 F.2d 1206 (11th Cir. 1981, en banc) (adopting as binding precedent all of the d e c is io n s of the former Fifth Circuit handed down prior to the close of business on S ep tem b er 30, 1981).

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D O N E this 1st of July 2009. /s / Terry F. Moorer T E R R Y F. MOORER U N IT E D STATES MAGISTRATE JUDGE

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