U.S. Bank, National Association v. Collins-Fuller T. et al

Filing 186

MEMORANDUM Opinion and Order Signed by the Honorable Marvin E. Aspen on 4/29/2015: For the reasons stated in the Memorandum Opinion and Order, this case is dismissed in its entirety. Defendants' request for an extension of time to serve and proceed with a third-party complaint 182 is denied. Defendants' proposed amended third-party complaint 185 and related summons are stricken as moot. Status hearing of 5/21/2015 is stricken. Civil case terminated. Mailed notice(mad, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE RELATING TO J.P.
MORGAN MORTGAGE ACQUISITION
CORP. 2005-FRE1 ASSET BACKED
PASS-THROUGH CERTIFICATES,
SERIES 2005-FRE1,
Plaintiff,
vs.
CHERYLE A. COLLINS-FULLER T.,
HEYWOOD FULLER T., KEYBANK
NATIONAL ASSOCIATION,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC. AS
NOMINEE FOR FREMONT
INVESTMENT AND LOAN,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

12 C 5057
Hon. Marvin E. Aspen

MEMORANDUM OPINION AND ORDER
MARVIN E. ASPEN, District Court Judge:
By opinion dated March 9, 2015, (“Opinion”) we dismissed Plaintiff’s state-law
mortgage foreclosure complaint for lack of jurisdiction, without prejudice as to refiling in state
court. (3/9/15 Op. (Dkt. No. 179) at 1–9, 15.) We also informed Defendants Cheryle CollinsFuller T. and Heywood Fuller T. that the counterclaims asserted in their June 3, 2013 answer
were not counterclaims at all, but presumably represented an attempted third-party complaint
against Litton Loan Servicing LP (“Litton Loan”). (Id. at 10–12.) We explained to Defendants
that they had failed to properly serve their purported third-party complaint on Litton Loan, in
violation of Federal Rules of Civil Procedure 4 and 14.

We instructed Defendants to explain their failure to comply with these procedural rules,
(id. at 12–15), and we have reviewed their rationale, (Defs.’ Resp. (Dkt. No. 183) ¶ 6). As set
forth below, we hereby terminate this action.
ANALYSIS
As discussed in our earlier Opinion, Rule 14(a)(1) states that a third-party plaintiff
(i.e., Defendants) must provide a third-party defendant (i.e., Litton Loan) with formal service of
process. Fed. R. Civ. P. 14(a)(1) (requiring service of summons and the third-party complaint on
the non-party to be sued); Superkite PTY Ltd. v. Glickman, 12 C 7754, 2014 WL 1202577, at *5
(N.D. Ill. Mar. 21, 2014) (dismissing third-party claim that had not been served); see also
6 Wright & Miller, Fed. Prac. & Proc. § 1455 (3d ed. 2013) (“Requirements of personal
jurisdiction and service of process also must be satisfied.”). This requirement makes practical
sense because a third-party defendant is not otherwise a party to the existing action and, absent
proper service, may not be aware of the claims against it. As the Seventh Circuit generally has
described, “[t]hese service requirements provide notice to parties, . . . encourage parties and their
counsel to diligently pursue their cases, . . . and trigger a district court’s ability to exercise
jurisdiction over a defendant.” Cardenas v. City of Chi., 646 F.3d 1001, 1004 (7th Cir. 2011)
(internal citations omitted).
Rule 4 governs the manner and timing of service of the summons and complaint upon
defendants. Pursuant to Rule 4(m), service of process must be completed within 120 days from
the filing of a complaint, including a third-party complaint. Fed. R. Civ. P. 4(m); see, e.g.,
Manjarrez v. Georgia-Pac. LLC, 12 C 1257, 2012 WL 4017951, at *4 (N.D. Ill. Sept. 12, 2012);
Scherr v. Marriott Int’l, Inc., 08 C 2098, 2009 WL 4015541, at *2 (N.D. Ill. Nov. 19, 2009).

2

Defendants concede that they never served Litton Loan with process. (Defs.’ Resp. ¶ 6.)
Defendants filed their answer, which raised the claims against Litton Loan, on June 3, 2013.
(Answer (Dkt. No. 63) at 8–9.) Treating those allegations as a third-party complaint, the
deadline for service on Litton Loan was approximately October 2, 2013. After attempting to
plead the claims against Litton Loan in June 2013, Defendants made no efforts to pursue their
third-party claim or effectuate service until after we issued our March 9, 2015 Opinion informing
them of this deficiency. 1
A. Mandatory Extension for “Good Cause”
Under Rule 4(m), we are required to extend the time for service of process if a plaintiff
can show “good cause” for the failure to meet the deadline. Fed. R. Civ. P. 4(m); United States
v. Ligas, 549 F.3d 497, 501 (7th Cir. 2008); Panaras v. Liquid Carbonic Indus. Corp., 94 F.3d
338, 340–41 (7th Cir. 1996). “Good cause means a valid reason for delay, such as the
defendant’s evading service.” Coleman v. Milwaukee Bd. of Sch. Dirs., 290 F.3d 932, 933–34
(7th Cir. 2002). “Good cause” does not include a plaintiff’s (or, in this case, a third-party
plaintiff’s) inadvertent failure to timely serve or half-hearted efforts to do so properly. Geiger v.
Allen, 850 F.2d 330, 323 (7th Cir. 1988); see Tuke v. United States, 76 F.3d 155, 157–58 (7th
Cir. 1996) (“[A] lawyer who does not read the rules lacks good cause.”). Moreover,
“[u]nfamiliarity with the law does not constitute good cause to exempt pro se litigants from
complying with the requirements of Rule 4.” Dumas v. Decker, 556 F. App’x 514, 515 (7th Cir.
2014); Williams-Guice v. Bd. of Educ. of City of Chi., 45 F.3d 161, 164 (7th Cir. 1995) (“Even

1

Although Defendants have since attempted to file an amended third-party complaint and
effectuate service, (see Dkt. No. 185) those actions were premature. We have not granted—and
do not grant—them leave to belatedly pursue the third-party action, for the reasons discussed in
this order. As a result, the third-party complaint filed April 13, 2015 and summons issued
April 21, 2015 are stricken.
3

uncounseled litigants must act within the time provided by statutes and rules.”); see also
McCullum v. Silver Cross Hosp., 99 C 4327, 2001 WL 696076, at *3 (N.D. Ill. Aug. 21, 2001)
(noting that “a pro se litigant’s ignorance of the 120-day time limit does not establish good cause
under Rule 4”).
Here, Defendants report that, aside from their many ongoing medical problems, 2 “the
main reason [they] did not timely complete their third-party complaint and serve process was
because their former attorney herein repeatedly promised he would follow-up on that matter.”
(Defs.’ Resp. ¶ 6.) Defendants further state that their former attorney “never followed up on
[their] frequent requests for action nor did he allow [them] themselves to help him prepare, file,
and serve the third-party complaint.” (Id.) Consistent with the above authorities, we conclude
that this explanation does not constitute “good cause.” If anything, this explanation
demonstrates that both Defendants and their attorney knew about the latent third-party claim
many months ago and yet did nothing about it. Because this knowing failure does not qualify as
“good cause,” we are not obligated to grant Defendants additional time to serve Litton Loan.
B. Discretionary Extension
In the absence of good cause, we may exercise our discretion to either grant additional
time for service or dismiss the action without prejudice. Fed. R. Civ. P. 4(m); see Coleman, 290
F.3d at 933–34; McCullum, 2001 WL 696076, at *3. In determining whether an extension is
appropriate, we may consider: “(1) whether the expiration of a statute of limitations during the
pending action would prevent refiling, (2) whether the defendant evaded service, (3) whether the

2

In their response, Defendants identified a number of recent medical and other issues that
prevented them from filing their brief on time. (Defs.’ Resp. ¶¶ 1–4 & Exs.) We accept either
explanation and have reviewed their response brief. While we further acknowledge the chronic
medical problems that have affected Defendants throughout this litigation, these difficulties do
not excuse their failure to prosecute the third-party action.
4

defendant’s ability to defend would be prejudiced by an extension, (4) whether the defendant had
actual notice of the lawsuit, and (5) whether the defendant was eventually served.” Cardenas,
646 F.3d at 1006; Dumas v. Decker, 10 C 7684, 2012 WL 1755674, at *3 (N.D. Ill. May 16,
2012); see also Scott v. Guarantee Reserve Life Ins. Co., 95 C 6622, 1998 WL 177954, at *4
(N.D. Ill. Apr. 7, 1998). We may also take into account the fact that Defendants acted pro se at
times during this litigation. Bland v. Candioto, 04 C 8361, 2006 WL 2735501, at *2 (N.D. Ill.
Sept. 21, 2006); Scott, 1998 WL 177954, at *4. None of these factors is determinative on its
own. See, e.g., Panaras, 84 F.3d at 341 (“The running of the statute of limitations does not
require that a district court extend the time for service of process.”); Scott, 1998 WL 177954,
at *4 (noting that “lack of prejudice to the defendant cannot, standing alone” warrant a
permissive extension).
In this case, there is no indication that Litton Loan evaded service, received actual notice
of the suit by some other means, or has been served to date. Defendants have not argued that
Litton Loan would suffer no prejudice from the delay, if we permitted belated service. To the
contrary, we imagine that Litton Loan would be prejudiced if forced to defend claims based on
conduct that occurred at least four year ago. Indeed, the purported third-party complaint filed in
June 2013 alleges fraudulent, deceptive, and unlawful practices by Litton Loan occurring from
April 2007 through April 2011. 3 (Answer at 6–9.) The factors addressing Litton Loan’s position
favor dismissal.
We turn then to the remaining factors, which focus on Defendants’ perspective.
Defendants initially handled this action pro se. They retained counsel a few months after first
asserting the claims against Litton Loan and within weeks of missing the Rule 4(m) deadline.
3

We reiterate that we are reviewing the claims as asserted against Litton Loan in Defendants’
June 3, 2013 answer and are not evaluating the third-party complaint proposed April 13, 2015.
5

Counsel represented them from October 25, 2013 through November 12, 2014. (See Dkt.
Nos. 104, 147.) Yet throughout that time period—and despite the fact that they were aware of
the dormant claims against Litton Loan—neither Defendants, nor their counsel, took any steps to
litigate those claims.
Defendants seek to blame counsel for this failure. Even if counsel’s failure legally could
absolve Defendants, an issue we need not address, we could not accept that excuse under the
circumstances. Defendants plainly knew about their claims and neglected to pursue them, even
during periods when they were not represented by counsel. (See Defs.’ Resp. ¶ 6.) Moreover,
Defendants were extremely proactive and diligent in defending the foreclosure lawsuit. Based
on their conduct in the foreclosure proceedings, they appear quite capable of articulating legal
theories and prosecuting an action, yet they offer no reason why they entirely ignored their thirdparty claims for the better part of two years. As a result, we find that neither their pro se status,
nor their complaints about counsel, warrant extension of the Rule 4 service deadline.
We briefly consider the final factor, concerning whether the applicable statute of
limitations would prevent Defendants from refiling an action against Litton Loan. As we
suggested in the Opinion, we suspect that Defendants’ claims against Litton Loan may suffer
from pleading deficiencies, including statute of limitations difficulties. (3/9/15 Op. at 15 n.7
(encouraging Defendants to explore such issues before proceeding).) Defendants have not
argued that we should allow them to pursue the third-party claims to insulate those claims from a
future statute of limitations problem. We decline to undertake the statute of limitations analysis
for Defendants. We therefore do not determine whether, or when, the limitations periods on the
purported claims have run. We find simply that because Defendants did not address this point,
this factor does not weigh in favor of an extension.

6

In short, we conclude that Defendants were not diligent in pursuing their third-party
claims. See, e.g., Keller v. United States, 444 F. App’x 909, 913 (7th Cir. 2011) (“A plaintiff’s
diligence is an important factor in deciding whether to grant a Rule 4(m) extension.”); Cardenas,
646 F.3d at 1006 (affirming district court’s denial of extension where the court determined that
“the fault for the profound delay rested squarely on Plaintiff’s counsel’s shoulder”). We deny
Defendants’ request for an extension of time to serve and proceed with a third-party complaint.
CONCLUSION
For the reasons set forth above, we exercise our discretion to dismiss this action, in its
entirety. Defendants’ proposed amended third-party complaint (Dkt. No. 185) and related
summons are stricken as moot. It is so ordered.

Marvin E. Aspen
United States District Judge

Dated: April 29, 2015
Chicago, Illinois

7