Teran v. GB International S.P.A. et al

Filing 92

MEMORANDUM AND ORDER denying 81 Motion to Quash and to Dismiss Plaintiff's First Amended Complaint. Signed by District Judge Julie A. Robinson on 7/19/2013. (bt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

CARLOS TERAN,
Plaintiff,
vs.
GB INTERNATIONAL, S.P.A., et al.,
Defendants.
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Case No. 11-2236-JAR

MEMORANDUM AND ORDER
Plaintiff Carlos Teran originally brought this lawsuit against Defendants GB
International, S.P.A. and GB Miami, S.R.L. asserting claims for breach of fiduciary duty,
tortious interference with a business relationship, unfair competition, declaratory relief, and
breach of contract. In his First Amended Complaint filed April 26, 2012, Plaintiff added as a
defendant American Crane and Tractor Parts, Inc. (“ACTP”). On January 29, 2013, in
conjunction with its Order granting and denying in part Defendants’ Motion to Dismiss (Doc.
73), the Court issued a Notice and Order to Show Cause (Doc. 72) requiring Plaintiff to show
good cause in writing why service of the summons and First Amended Complaint had not been
made upon ACTP within the required timeframe, and why this action should not be dismissed as
to ACTP. Plaintiff served ACTP on February 4, 2013 (Doc. 76), then subsequently filed a
response to the Court’s Order to Show Cause (Doc. 75), seeking a permissive extension of time
to have served the First Amended Complaint on ACTP. ACTP responded by filing a Motion to
Quash Service of Process and to Dismiss Plaintiff’s First Amended Complaint (Doc. 81).
Under Fed. R. Civ. P. 4(m),

If a defendant is not served within 120 days after the complaint is
filed, the court—on motion or on its own after notice to the
plaintiff—must dismiss the action without prejudice against that
defendant or order that service be made within a specified time.
But if the plaintiff shows good cause for the failure, the court must
extend the time for service for an appropriate period.
It is undisputed that ACTP was not served within 120 days after the First Amended Complaint
was filed.1 A Rule 4(m) inquiry involves a two-step analysis: “[t]he preliminary inquiry to be
made under Rule 4(m) is whether the plaintiff has shown good cause for the failure to timely
effect service . . . If the plaintiff fails to show good cause, the district court must still consider
whether a permissive extension of time may be warranted.”2 That Plaintiff did, in fact, effect
service after the 120-day period does not alter the Court’s analysis.3
Plaintiff concedes that the reason service was not perfected within the 120-day deadline
was simple oversight by Florida counsel, which does not constitute “good cause.” Accordingly,
the Court must determine whether a permissive extension is warranted. In determining whether
to grant a permissive extension, several factors are appropriate to consider, including whether
defendant was on notice of the lawsuit, whether defendant has been prejudiced by delay of
service, and whether the applicable statute of limitations would bar the refiling of the action.4 In
this case, the factors favor an extension of time rather than dismissal. Although it does not

1

Plaintiff has since filed a Motion for Leave to File Second Amended Complaint (Doc. 87). The 120-day
period provided by Rule 4(m) is not restarted by the filing of an amended complaint except as to those defendants
newly added in the amended complaint. See Bolden v. City of Topeka, 441 F.3d 1129, 1148-49 (10th Cir. 2006)
(citations omitted). ACTP was added as a defendant in the First Amended Complaint.
2

Espinoza v. United States, 52 F.3d 838, 840-41 (10th Cir. 1995).

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Womble v. Salt Lake City Corp., 84 F. App’x 18, 20 (10th Cir. 2003) (holding that service attempted
outside the 120-day period is “without effect” absent a finding of good cause or a permissive extension).
4
Mehus v. Emporia State Univ., 295 F. Supp. 2d 1258, 1273-74 (D. Kan. 2004) (citing Espinoza, 52 F.3d at
842 (quoting Fed. R. Civ. P. 4(m) advisory committee’s note (1993))).

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appear the statute of limitations has run on Plaintiff’s breach of shareholder agreement claims
against ACTP, it does not appear that ACTP would be prejudiced in defending the lawsuit as it
has the benefit of the Court’s ruling on the other named Defendants’ Motion to Dismiss the First
Amended Complaint. Moreover, ACTP has been on notice of Plaintiff’s lawsuit since its
commencement, as Defendant GB International is its majority shareholder, and ACTP
participated in the personal jurisdiction discovery that took place prior to the filing of the First
Amended Complaint. Under these circumstances, the Court finds that Plaintiff’s service on
ACTP on February 4, 2013, should be recognized as sufficient. The Court therefore overrules
ACTP’s motion to quash and dismiss.
IT IS THEREFORE ORDERED BY THE COURT that Defendant ACTP’s Motion to
Quash Service of Process and to Dismiss Plaintiff’s First Amended Complaint (Doc. 81) is
DENIED.
IT IS SO ORDERED.
Dated: July 19, 2013
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE

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