Wagner v. Williams, Scott & Associates, LLC. et al

Filing 46

OPINION AND ORDER DECLINING TO ADOPT RECOMMENDATION ON MOTION FOR DEFAULT JUDGMENT AND DENYING MOTION FOR ATTORNEY FEES: The Court (1) DECLINES to adopt the Recommendation 43 pending establishment of personal jurisdiction over the Defendants , (2) DENIES the Motion for Default Judgment 37 , and (3) DENIES the Supplemental Motion for Attorney Fees 44 as premature. The Court grants Ms. Wagner 30 days from the date of this order to properly serve the Defendants and file evidence of such service. If Ms. Wagner fails to file sufficient proof of service within that time, the case will be dismissed without prejudice. by Judge Marcia S. Krieger on 11/6/12. Text Only Entry(msksec, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Honorable Marcia S. Krieger
Civil Action No. 12-cv-00104-MSK-MJW
KIM WAGNER,
Plaintiff,
v.
WILLIAMS, SCOTT & ASSOCIATES, LLC; and
JOHN TODD WILLIAMS,
Defendants.

OPINION AND ORDER DECLINING TO ADOPT RECOMMENDATION ON MOTION
FOR DEFAULT JUDGMENT AND DENYING MOTION FOR ATTORNEY FEES

THIS MATTER comes before the Court on the Magistrate Judge’s Recommendation
(#43) to grant the Plaintiff’s Motion for Default Judgment (#37). Also pending before the Court
is the Plaintiff’s Supplemental Motion for Attorney Fees (#44). Having considered the
recommendation and motion for fees, the Court now FINDS and CONCLUDES as follows.
I. Jurisdiction
The Plaintiff, Kim Wagner, has invoked federal jurisdiction under 28 U.S.C. § 1331 and
28 U.S.C. § 1337. The Court will address the sufficiency of its jurisdiction as part of this
opinion. See Dennis Garberg & Assocs., Inc. v. Pack-Tech Int=l Corp., 115 F.3d 767, 773 (10th
Cir. 1997) (district court has jurisdiction to determine its jurisdiction).
II. Background
Ms. Wagner, filed this action against the Defendants, Williams, Scott & Associates, and
John Todd Williams, alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15

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U.S.C. § 1692, et seq. According to Ms. Wagner, Mr. Williams is a debt collector residing in
Georgia, and Williams, Scott & Associates (WSA) is a debt collection business and a limited
liability company registered in Georgia. Mr. Williams is registered with the Georgia Secretary
of State as an agent of WSA.
After filing her Complaint, Ms. Wagner attempted to serve the Defendants personally at
various locations in Georgia. But personal service proved unsuccessful. A business address
listed for WSA was found to be a vacant building, and a residential address listed for Mr.
Williams was found to be a rental property (the tenants told the process server that Mr. Williams
owned the property, but did not live there). A process server also attempted to serve the
Defendants at 3340 Peachtree Road in Atlanta, which was the address the Defendants had
registered with the Georgia Secretary of State. There, the process server was told that the
location was “Defendants’ virtual office,” which was run by a company called Regus PLC.
Regus PLC was not authorized to receive service on behalf of the Defendants, but it did provide
Ms. Wagner with a P.O. Box address for Mr. Williams.
Thereafter, Ms. Wagner filed a Motion for Alternate Service to Serve Defendants (#14).
Relying on Rule 4(e)(1), and Colorado Rule 4(f), Ms. Wagner requested an order allowing her to
serve the Defendants by certified mail, return receipt requested, at Mr. William’s last known
residential address.
The Magistrate Judge granted Ms. Wagner’s motion. The Judge granted her leave to
effectuate service on the Defendants by sending the Summons and Complaint via certified mail,
return receipt requested, to the all of the known addresses for WSA and Mr. Williams.
About one month later, Ms. Wagner filed a filed a Summons Return Executed (#17, 18)
as to both Defendants at 3340 Peachtree Road. After the Defendants failed to respond, Ms.

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Wagner moved for entry of default judgment. The Magistrate Judge reviewed the motion and
recommended that default judgment be entered in favor of Ms. Wagner.
III. Standard of Review and Issue Presented
When a magistrate judge issues a recommendation on a dispositive motion, the parties
may file specific, written objections within fourteen days after being served with a copy of the
recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). The district court shall make a
de novo determination of those portions of the recommendation to which timely and specific
objection is made. U.S. v. One Parcel of Real Prop. Known as 2121 E. 30th St., 73 F.3d 1057,
1060 (10th Cir. 1996). When no party files objections to a recommendation, the court has
discretion to review the recommendation under whichever standard of review it deems
appropriate. Summers v. State of Utah, 927 F.2d 1165, 1167 (10th Cir. 1991).
Here, no party objected to the Recommendation, but the Court will review it under the
otherwise applicable de novo standard of review. Thus, the issue to be decided is whether Ms.
Wagner’s motion for default judgment should be granted under Fed. R. Civ. P. 55.
IV. Analysis
When a plaintiff seeks default judgment against a defendant who fails to plead or
otherwise defend, a court has an affirmative duty to determine whether jurisdiction exists over
both the subject matter and the parties. Dennis Garberg, 115 F.3d at 771; see also Williams v.
Life Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir. 1986) (a judgment is void if the court that
enters it lacks jurisdiction over either the subject matter of the parties). Service of process under
Rule 4 provides the mechanism by which a court having venue and jurisdiction over the subject
matter of an action asserts jurisdiction over the party served. Oklahoma Radio Assocs. V. FDIC,
969 F.2d 940, 943 (10th Cir. 1992).

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Rule 4 permits service of a summons and complaint upon an individual by “following
state law for serving a summons in an action brought in courts of general jurisdiction in the state
where the district court is located or where service is made.” Fed. R. Civ. P. 4(e)(1). The same
method may be used to serve an association. Fed. R. Civ. P. 4(h)(1)(A).
Colorado Rule 4(e) describes how a party may accomplish personal service in a state
action. The Colorado Rules also provide a means for substituted service:
In the event that a party attempting service of process by personal
service under section (e) is unable to accomplish service, and
service by publication or mail is not otherwise permitted under
section (g), the party may file a motion, supported by an affidavit
of the person attempting service, for an order for substituted
service. . . . If the court is satisfied that due diligence has been used
to attempt personal service under section (e), that further attempts
to obtain service under section (e) would be to no avail, and that
the person to whom delivery of the process is appropriate under the
circumstance and reasonable calculated to give actual notice to the
party upon whom service is to be effective it shall:
(1) authorize delivery to be made to the person deemed appropriate
for service, and
(2) order the process to be mailed to the address(es) of the party to
be served by substituted service, as set forth in the motion, on or
before the date of delivery. Service shall be complete on the date
of delivery to the person deemed appropriate for service.
Colo. R. Civ. P. 4(f).
Colorado Rule 4(g) states that “[e]xcept as otherwise provided by law, service by mail or
publication shall be allowed only in actions affecting specific property status or other
proceedings in rem.”
Here, after numerous attempts to serve the Defendants personally, Ms. Wagner sought to
serve the Defendants by certified mail under Colorado’s “substituted service” provision. The
plain language of that rule, however, states that it applies when a party seeks to serve a
substituted person on behalf of the opposing party. See Willhite v. Rodriguez-Cera, 274 P.3d
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1233, 1240 (Colo. 2012). The rule does not provide authority for alternative methods of service
when a party simply cannot effectuate personal service under Rule 4(e). The language of
Colorado Rule 4(g) supports this conclusion where it states that service by mail shall be allowed
only in specific proceedings. The Court therefore concludes that it lacked authority to allow Ms.
Wagner to serve the Defendants by certified mail. As a result, the Court concludes that service
was insufficient and personal jurisdiction over the Defendants has not been established. Thus,
default judgment cannot be entered at this time.
V. Conclusion
For the forgoing reasons, the Court (1) DECLINES to adopt the Recommendation (#43)
pending establishment of personal jurisdiction over the Defendants, (2) DENIES the Motion for
Default Judgment (#37), and (3) DENIES the Supplemental Motion for Attorney Fees (#44) as
premature. The Court grants Ms. Wagner 30 days from the date of this order to properly serve
the Defendants and file evidence of such service. If Ms. Wagner fails to file sufficient proof of
service within that time, the case will be dismissed without prejudice.
Dated this 6th day of November, 2012.

BY THE COURT:

Marcia S. Krieger
United States District Judge

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