Hassebrock v. Bernhoft et al

Filing 18

ORDER GRANTING 16 Motion for Extension of Time, DENYING 7 Motion for Default Judgment, DENYING 10 Motion to Dismiss for Lack of Jurisdiction. Plaintiff has 21 DAYS to properly serve defendants. (Service due by 2/27/2012.) The Clerk's 6 entry of default is SET ASIDE. Signed by Judge William D. Stiehl on 2/6/2012. (bjw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

ORVIL DUANE HASSEBROCK,
Plaintiff,
v.
ROBERT G. BERNHOFT,
THE BERNHOFT LAW FIRM, S.C.,
Defendants.

)
)
)
)
)
)
)
)
)
)

No. 10-CV- 679-WDS

ORDER
STIEHL, District Judge:
Before the Court is plaintiff Orvil Duane Hassebrock’s motion for default judgment
against defendants Robert G. Bernhoft and the Bernoft Law Firm, S.C. (Doc. 7). Defendants
have responded (Doc. 11), and plaintiff has replied (Doc. 15). Also before the Court is
defendants’ motion to dismiss for failure to serve them with a summons (Doc. 10). Plaintiff
responds and moves for additional time to properly serve defendants (Docs. 15 & 16), which
defendants oppose (Doc. 17).

BACKGROUND
Plaintiff retained defendants in August 2005 to file his delinquent taxes with the IRS.
Bernhoft evidently is (or was) a tax protester, and the U.S. Attorney General once sued to
enjoin him from participating in the “De-Taxing America Program” and from inciting others
to violate the tax laws. See United States v. Raymond, 228 F.3d 804, 808 (7th Cir. 2000).
Plaintiff terminated defendants in December 2008. He alleges they never filed his taxes, and
he was ultimately convicted by a jury of tax evasion and failure to file a tax return. Both

convictions were recently upheld on appeal. See United States v. Hassebrock, 663 F.3d 906,
910 (7th Cir. 2011).
Plaintiff filed his complaint pro se on September 2, 2010, alleging fraud, legal
malpractice, and violations of the Racketeer Influenced and Corrupt Organizations Act, 28
U.S.C. § 1964(a) (Doc. 1). He also wants to report alleged crimes defendants committed
against him to a grand jury.
After the complaint was filed, however, nothing happened in this case until the Court
issued a notice of impending dismissal for want of prosecution, because it appeared that
plaintiff had not yet served defendants (Doc. 2). Plaintiff responded soon after with the
server’s affidavit (Doc. 3, Ex. 1). The affidavit says only a copy of the complaint and “Exhibit
A” were served. After this, however, again the case did not proceed, so the Court issued an
order to show cause directing plaintiff to file a motion for entry of default in accordance with
Local Rule 55.1 (Doc. 4). Plaintiff filed the motion, and the Clerk entered default against
defendants (Doc. 6).
Plaintiff then submitted the motion for default judgment now pending (Doc. 7). He
certifies that he sent notice of the Clerk’s entry of default by mail to defendants at their lastknown address, and he provides the return receipt of the mail. Defendants respond that
plaintiff’s motion for default judgment is premature because he did not send them the notice
of the Clerk’s entry of default, as required by the Court’s local rules. See SDIL-LR 55.1(a).
Defendants also moved to dismiss under Federal Rule of Civil Procedure 12(b)(5) for
insufficient service of process for failure to serve a summons with the complaint. Defendants
submit an affidavit from attorney Daniel J. Treuden stating that plaintiff did not serve them
with a summons. In the alternative, they move to dismiss under Rules 4(k) and 4(m) because

2

the 120-day period for service has expired. The complaint was filed on September 2, 2010
(Doc. 1), and service was due by January 3, 2011.1

ANALYSIS
The Court will first address defendants’ motion to dismiss, since it resolves the motion
for default judgment. The burden is on the plaintiff to demonstrate that the district court has
jurisdiction over each defendant through effective service. Cardenas v. City of Chi., 646 F.3d
1001, 1005 (7th Cir. 2011). “If a defendant is not served within 120 days after the complaint
is filed, the court … must dismiss the action without prejudice against that defendant or order
that service be made within a specified time.” Fed. R. Civ. P. 4(m). “But if the plaintiff shows
good cause for the failure, the court must extend the time for service for an appropriate
period.” Id. (emphasis added); accord Cardenas, 646 F.3d at 1006; United States v. Ligas, 549
F.3d 497, 501 (7th Cir. 2008); United States v. McGlaughlin, 470 F.3d 698, 700 (7th Cir.
2006). Absent good cause, whether to dismiss or extend the period for service is “inherently
discretionary.” Cardenas, 646 F.3d at 1005; accord Ligas, 549 F.3d at 501; Coleman v.
Milwaukee Bd. of Sch. Dirs., 290 F.3d 932, 934 (7th Cir. 2002). In making that determination,
courts should consider the relative hardships of the parties. Cardenas, 646 F.3d at 1006.
First, plaintiff does not meet his burden of demonstrating that this Court has
jurisdiction over defendants through effective service. Plaintiff believes he provided the
summons with the complaint, but admits he cannot say that “with reasonable assurance.” At
the time he served defendants, he was trying to get his affairs in order before reporting to
prison. He also lost his son shortly after his criminal conviction. Defendants submit an

1

This includes a holiday and weekend. See Fed. R. Civ. P. 6(a)(1)(C).

3

affidavit stating that plaintiff did not serve them with a summons. In addition, the server’s
affidavit says that only copies of the complaint and Exhibit A were served on defendants, not
a summons. Therefore, even though plaintiff believes he served the summons, the Court
FINDS he did not.
In light of the failure to serve a summons, the Court can briefly dispose of plaintiff’s
motion for default judgment. A summons must be served with a copy of the complaint. Fed.
R. Civ. P. 4(c)(1). And “valid service of process is necessary in order to assert personal
jurisdiction over a defendant.” Mid-Continent Wood Prods., Inc. v. Harris, 936 F.2d 297, 301
(7th Cir. 1991); accord Fed. R. Civ. P. 4(k)(1); United States v. Ligas, 549 F.3d 497, 500 (7th
Cir. 2008). Moreover, a judgment rendered without jurisdiction over the person could be
attacked at any time for lack of jurisdiction. Homer v. Jones-Bey, 415 F.3d 748, 752 (7th Cir.
2005). Consequently, the Court cannot enter a valid judgment here. Plaintiff has not
established personal jurisdiction over defendants. The motion for default judgment is therefore
DENIED, and the Clerk’s entry of default is SET ASIDE.
Returning to the motion to dismiss, the Court notes that plaintiff does not argue that
good cause exists for his failure to serve defendants. The above facts about having to report
to prison are written beneath a heading that says “Good Cause,” but plaintiff does not
expressly say whether those facts constitute good cause under Rule 4(m). Defendants respond
that plaintiff has not shown good cause and, therefore, that this case must be dismissed without
prejudice. In pressing for dismissal, they rely on Geiger v. Allen, 850 F.2d 330, 331 (7th Cir.
1988). Yet Rule 4 has been amended since Geiger, giving courts discretion whether to dismiss
or allow an extension of time, even without a showing of good cause. Henderson v. United
States, 517 U.S. 654, 663 (1996); Cooper v. Harris, Nos. 98 C 1623 & 98 C 1624, 1999 WL

4

89654, at *2 n.4 (N.D. Ill. Feb. 12, 1999). The Court discussed this discretion above. See
Cardenas, 646 F.3d at 1005.
The Court does, however, agree with defendants that good cause has not been shown.
“Good cause means a valid reason for the delay, such as the defendant’s evading service.”
Coleman, 290 F.3d at 934. It does not include inadvertence or “half-hearted efforts,” Geiger,
850 F.2d at 333, which is not to say inadvertence cannot play some part, Floyd v. United
States, 900 F.2d 1045, 1047 (7th Cir. 1990) (An attorney’s inadvertence combined with
“substantial extenuating factors such as sudden illness or natural disaster” could constitute
good cause.). In light of plaintiff’s pro se status, his looming prison date, and the tragedy
involving his son, it would seem that mere inadvertence was the primary cause here. Pro se
status does not excuse plaintiff from following the rules of procedure. McNeil v. United States,
508 U.S. 106, 113 (1993); Pearle Vision, Inc. v. Romm, 541 F.3d 751, 758 (7th Cir. 2008).
And, though reporting to prison must cause considerable anxiety, it is ironic to suggest it is
good cause. Therefore, the only legitimate reason here is the death of plaintiff’s son. Yet the
Court does not find this constitutes good cause such that the Court must allow additional time
under Rule 4(m), which already allows 120 days.
So, the question remains whether the Court, in its discretion, should dismiss the case
without prejudice or order that service be made within a specified time. Somewhat to the
Court’s disappointment, neither party discusses the relative hardships of the parties here. Rule
4(m) itself does not specify any factors to evaluate the relative hardships, but courts in this
circuit have considered whether:
(1) a new suit would be barred by statute of limitations,
(2) the defendant will be prejudiced by the delay in service,
(3) the defendant had actual notice of a lawsuit within a short
time after the attempted service,
5

(4) the defendant evaded service,
(5) the defendant was eventually served,
(6) the plaintiff ever requested an extension of time due to
difficulties perfecting service, and
(7) the plaintiff diligently pursued service.
Cardenas, 646 F.3d at 1006–07 (citing Coleman, 290 F.3d at 934; McGlaughlin, 470 F.3d at
701; Troxell v. Fedders of N. Am., Inc., 160 F.3d 381, 383 (7th Cir. 1998)).
The most important factors seem to be whether a new suit would be barred by statute
of limitations, see Cardenas, 646 F.3d at 1007 (“a critical factor”), and whether the defendants
will be prejudiced by the delay in service. Dismissal after a statute of limitations has expired
is effectively dismissal with prejudice. Id. at 1008. Plaintiff here alleges fraud, legal
malpractice, and violations of the Racketeer Influenced and Corrupt Organizations Act, 28
U.S.C. § 1964(a). The statute of limitations for fraud in Illinois is five years. 735 ILCS 5/13205; Rozny v. Marnul, 250 N.E.2d 656, 664 (Ill. 1969). Plaintiff hired Bernhoft in August
2005 and fired him in December 2008, so the cause of action for fraud could have accrued
anytime between the hiring and firing. If it accrued in 2006, the statute of limitations would
have expired in 2011—while this action was pending. That claim would be barred. The statute
of limitations for legal malpractice in Illinois is even shorter (two years). 735 ILCS 5/13214.3(b); Preferred Personnel Servs., Inc. v. Meltzer, Purtill and Stelle, LLC, 902 N.E.2d 146,
152 (Ill. App. Ct. 2009). Consequently, it is possible that one or more claims will be barred
if this action is dismissed now. This factor weighs slightly in favor of granting plaintiff an
extension of time.
Granting an extension will not likely prejudice defendants because they actually
received the complaint and knew the claims being made against them. Defendants point out
that service has not been made nearly ten months after the complaint was filed. But they could
6

have moved to dismiss, or notified plaintiff about the missing summons, at any time. They
chose not to. Any prejudice caused by a delay in service is at least partly due to their own
inaction. Moreover, they had actual notice of this lawsuit within a short time after the
attempted service. This is not a case of service on the wrong party. They knew the nature of
the causes of action and knew (from the caption on the complaint) that the action was pending
in this Court. The prejudice and notice factors therefore favor granting plaintiff an extension
of time. The remaining factors do not seem relevant to the facts here.

CONCLUSION
The Court FINDS that plaintiff should be permitted additional time. Plaintiff’s motion
for additional time to properly serve defendants (Docs. 15 & 16) is therefore GRANTED.
Plaintiff has 21 DAYS to properly serve defendants. Defendants will have the usual 21 days
after that to serve their answer or file a motion. Fed. R. Civ. P. 12(a)(1), (b). Plaintiff’s motion
for default judgment (Doc. 7) is DENIED and the Clerk’s entry of default (Doc. 6) is SET
ASIDE. Defendants’ motion to dismiss for failure to effect service (Doc. 10) is DENIED.
IT IS SO ORDERED.
DATED: February 6, 2012
/s/ WILLIAM D. STIEHL
DISTRICT JUDGE

7