Cessna Finance Corporation v. VYWB, LLC et al

Filing 18

MEMORANDUM AND ORDER denying 11 Motion to Remand to State Court. Signed by U.S. District Senior Judge Sam A. Crow on 11/13/2013. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
CESSNA FINANCE CORPORATION,
Plaintiff
vs.

Case No. 13-1311-SAC

VYWB, LLC and PARMJIT S. PARMAR,
Defendants.
MEMORANDUM AND ORDER
The plaintiff Cessna Finance Corporation (“Cessna”) filed a twocount petition in the District Court of Sedgwick County, Kansas, to recover
amounts due from the defendant VYWB, LLC on two notes and amounts due
from the defendant Parmjit S. Parmar (“Parmar”) on two guaranties. The
defendant Parmar filed a notice of removal on August 22, 2013, in which he
asserts that not until July 23, 2013 did he receive notice of the state court
action or receive notice of the state court summons and petition. (Dk. 1, ¶¶
13 and 14). In his attached affidavit, Parmar avers that while Cessna’s
return on service shows delivery to his residence on June 25, 2013, he was
not at his residence on this day nor was anyone there who was authorized to
act as his agent. (Dk. 1-4, ¶¶ 3 and 6). Parmar further avers that he first
learned on July 23, 2013, of the United Parcel Service (“UPS”) package left
at his residence in his absence and immediately directed that the package be
opened. Id. at ¶ 7. At which time, he was made aware of Cessna’s

documents making legal claims against him. Id. at ¶ 8. Thus, Parmar asserts
his notice of removal was filed within the 30 day-period required in 28
U.S.C. § 1446(b). (Dk. 1, ¶ 18).
The plaintiff Cessna moves to have the action remanded arguing
that Parmar’s notice was untimely filed more than 30 days “after the initial
pleading was received through service of process.” (Dk. 12, p. 1). Cessna’s
counsel’s legal secretary avers she caused a copy of Cessna’s filed summons
and petition “to be given to the United Parcel Service for Ground Service
delivery” and “requested email notifications and delivery confirmation with
adult signature required.” (Dk. 12, p. 7, Ex. A). Cessna’s counsel signed the
“Return on Service” and attached the UPS electronic receipt showing the
petition and summons were delivered to Parmar’s residence at “19 Colts Gait
Ln, Colts Neck, New Jersey” and an adult, “PAFMAR” signed for it. (Dk. 1-2,
pp. 3-6). Thus, Cessna’s attorney certified that he had served the “Petition
and Summons upon Parmit S. Parmer, individually, and as a member of
VYWB, LLC, by United Parcel Service Ground Delivery on June 25, 2013.”
(Dk. 1-2, pp. 3).
As noted, § 1446(b) requires the notice of removal to “be filed
within 30 days after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading . . ., or within 30 days after the
service of summons upon the defendant if such initial pleading has then
been filed in court . . ., whichever period is shorter.” The Supreme Court has
2

construed § 1446(b) as requiring formal service and not “mere receipt.”
Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48
(1999). Notably, the Court looked to state law on the question of “formal
service,” but it remarked that § 1446(b) was intended to cure some
disparate state practices and “[t]o ensure that the defendant would have
access to the complaint before commencement of the removal period.” Id. at
351, 353.
Having limited jurisdiction, federal courts employ a
presumption “against removal jurisdiction.” Laughlin v. Kmart Corp., 50 F.3d
871, 873 (10th Cir.), cert. denied, 516 U.S. 863 (1995). The party seeking
removal is given the burden to show the propriety of removal and the
existence of removal jurisdiction. Ortiz v. Biscanin, 190 F. Supp. 2d 1237,
1241 (D. Kan. 2002); see McNutt v. General Motors Acceptance Corp., 298
U.S. 178, 189 (1936); Baby C v. Price, 138 Fed. Appx. 81, 83-84, 2005 WL
1377812 at *2 (10th Cir. 2005). Federal courts strictly construe removal
statutes and resolve all doubts in favor of remand. See Ortiz v. Biscanin, 190
F. Supp. 2d at 1241. The failure to file a notice of removal within the
statutory requirement of thirty days renders the removal defective and
results in remanding the case to the state court. Huffman v. Saul Holdings
Ltd. Partnership, 194 F.3d 1072, 1077 (10th Cir. 1999); First Nat. Bank &
Trust Co. in Great Bend v. Nicholas, 768 F. Supp. 788, 790 (D. Kan. 1991).
Thus, it rests with the defendant to demonstrate that his notice of removal
3

was filed within the statutory thirty-day period. As summarized above in the
opening paragraph, the defendant Parmar asserts and avers that he was not
aware of and did not receive notice of the summons and petition until July
23, 2103, and that he filed his notice of removal within 30 days thereafter.
The plaintiff Cessna ‘s motion for remand does not contest the
facts stated in Parmar’s notice of removal. Namely, Cessna does not
challenge Parmar’s averments that neither he nor any authorized agent
signed for the UPS delivery on June 25, 2013. Cessna leaves uncontroverted
Parmar’s averment that he was not aware of Cessna’s lawsuit before July 23,
2103, when the UPS package was opened and its contents were identified to
him. Instead, Cessna’s position is that service under K.S.A. 60-303(c) is
“deemed perfected upon delivery of the mail, addressed to the person to be
served, regardless of whether the defendant actually signs for the package
or personally accepts deliver.” (Dk. 12, p. 5)(italics and bolding deleted).
Thus, Cessna’s motion to remand is based exclusively on the proposition
that Kansas law regards the service by return receipt delivery complete upon
the arrival of the summons and complaint at Parmar’s residence without
regard for whether the summons and complaint were received by the
addressee or an authorized agent. Cessna seeks remand arguing that
neither Parmar nor his authorized agent need to receive the return receipt
delivery to trigger the 30-day removal.

4

The defendant Parmar counters that service under K.S.A. § 60303(c) requires delivery of the summons and petition to Mr. Parmar and that
the electronic return receipt fails to identify a specific person having received
the delivery on June 25, 2013. The defendant avers that neither he nor an
authorized agent received the delivery at his residence on June 25, 2013,
and that no person named “Parmar” was at his residence on that day. (Dk.
14-2). Against his affidavit, the defendant Parmar challenges the electronic
return receipt as insufficient proof of valid service, because the receipt fails
to specify the identity of the person receiving delivery. The defendant
Parmar also contends that service of process by return receipt delivery must
be “to the party addressed.” K.S.A. § 60-303(c)(1). The authorities cited by
the plaintiff for delivery effective upon arrival at the residence are
distinguishable based on the statutory terms and on the facts involved.
The court’s analysis begins with the actual terms of the
applicable Kansas statutes. Because plaintiff was serving the defendant
Parmar at his residence in New Jersey, the first statute to consider is K.S.A.
2012 Supp. § 60-308(a)(2)(B), which provides in relevant part:
The service of process must be made: . . . (B) by a party or the party’s
attorney pursuant to subsection (c) of K.S.A. 60-303, and
amendments thereto. No order of a court is required. The server must
file an affidavit or declaration pursuant to K.S.A. 53-601, and
amendments thereto, or any other competent proof, stating the time,
manner and place of service. The court may consider the affidavit,
declaration or any other competent proof in determining whether
service has been properly made.

5

The plaintiff Cessna asserts it relied on the service of process available in
K.S.A. 2012 Supp. § 60-303(c), and its return receipt delivery provisions
which read:
(c) Service by return receipt delivery. (1) Service of process may be
made by return receipt delivery, which is effected by certified mail,
priority mail, commercial courier service, overnight delivery service or
other reliable personal delivery service to the party addressed, in
each instance evidenced by a written or electronic receipt showing to
whom delivered, the date of delivery, the address where delivered and
the person or entity effecting delivery.
(2) The sheriff, party or party's attorney must give to the person
or entity effecting delivery a copy of the process and petition or other
document in a sealed envelope, with postage or other delivery fees
prepaid, addressed to the person to be served in accordance with
K.S.A. 60-304, and amendments thereto.
(3) Service of process is obtained under K.S.A. 60-203, and
amendments thereto, upon the delivery of the sealed envelope.
(4) After service and return of the return receipt, the sheriff,
party or party's attorney must execute and file a return of service. The
return of service must state the nature of the process, to whom
delivered, the date of delivery, the address where delivered and the
person or entity effecting delivery. It must include a copy of the return
receipt evidencing delivery.
(5) If the sealed envelope is returned with an endorsement
showing refusal to accept delivery, the sheriff, party or the party's
attorney may send a copy of the process and petition or other
document by first-class mail, postage prepaid, addressed to the party
to be served, or may elect other methods of service. If mailed, service
is considered to be obtained three days after the mailing. Mailing must
be evidenced by a certificate filed with the clerk. If the unopened
envelope sent by first-class mail is returned as undelivered for any
reason, service is not obtained and the sheriff, party or party's
attorney must file an amended certificate with the clerk indicating
nondelivery. Mere failure to claim the sealed envelope sent by return
receipt delivery is not refusal of service within the meaning of this
subsection.
(bolding added). Because K.S.A. 2012 Supp. § 60-303(c)(2) specifies that
the sealed envelope must be “addressed to the person to be served in
6

accordance with K.S.A. 60-304,” the court also must consider this statute
that provides in relevant part:
As used in this section, “serving” means making service by any of the
methods described in K.S.A. 60-303, and amendments thereto, unless
a specific method of making service is prescribed in this section.
Except for service by publication under K.S.A. 60-307, and
amendments thereto, service of process under this article must be
made as follows:
Individual. On an individual other than a minor or a disabled
person, by serving the individual or by serving an agent
authorized by appointment or by law to receive service of process. If
the agent is one designated by statute to receive service, such further
notice as the statute requires must be given. Service by return receipt
delivery must be addressed to an individual at the individual's dwelling
or usual place of abode and to an authorized agent at the agent's
usual or designated address. If the sheriff, party or party's attorney
files a return of service stating that the return receipt delivery to the
individual at the individual's dwelling or usual place of abode was
refused or unclaimed and that a business address is known for the
individual, the sheriff, party or party's attorney may complete service
by return receipt delivery, addressed to the individual at the
individual's business address.
(bolding added).
A plain reading of these provisions offers the following. For
service on individuals outside of Kansas, § 308 authorizes the service
available under § 303(c) defined as the return receipt delivery of process
effected by one of the listed services “to the party addressed.” Paragraph
one of § 303(c) also requires the serving party to provide a written or
electronic receipt evidencing certain details about the service. Paragraph two
specifies that the process is to be packaged in a sealed envelope “addressed
to the person to be served in accordance with K.S.A. 60-304.” Knowing
what method of service is allowed and what it generally constitutes from §
7

60-303, one then goes to K.S.A. § 60-304 to confirm the person on whom
the service must be made and the location for that service. See Remmers v.
Brotherhood of Maintenance of Way Employees, 2012 WL 2449887 at *2 (D.
Kan. 2012) (“K.S.A. § 60-304 governs on whom service must be made.”).
Section 60-304(a) specifies the following. For an individual,
service of process must be on the individual party or on the party’s
authorized agent. Service by return receipt delivery “must be addressed to
an individual at the individual’s dwelling.” K.S.A. § 60-304. Finally, if the
delivery sent to the dwelling “was refused or unclaimed,” then delivery may
be made to the “individual’s business address.”
The plain terms of § 60-303(c) and § 60-304(a) do not define
return receipt delivery to include a delivery to the properly addressed
residence when that delivery was not to the addressee or to the addressee’s
authorized agent. There is no language in these provisions that defines
service as being complete upon leaving a copy and of the summons and
petition at the addressed residence without regard for its delivery to the
addressee.1 Instead, both provisions make unquestionably plain that service

The plaintiff’s position is akin to what would be “residence service” which is
addressed at § 60-303(d). The plaintiff, however, emphatically denies that it
relied on this provision in making service here. Dk. 12, p. 4. Frankly, this
begs the question of the logic in the plaintiff’s interpretation of these
provisions. What would be the valid reason for the Kansas legislature writing
§ 60-303(c) to allow residence service while omitting the additional
protections afforded by the requirements of § 60-303(d)(1)(B) for residence
service?
1

8

is not complete until delivered, and the delivery must be to the addressed
party, in this case, the individual party at his dwelling.
Case law applying these statutes supports this plain reading.
“[S]ection 60-303(c)(1) . . . requires personal delivery service to the party
addressed.” Brooks v. 10th Circuit Court of Appeals, 2010 WL 3878658 at *2
(D. Kan. 2010) (statutory requirements of service are not met when the
delivery is received by an individual other than the party to which the
delivery is addressed). “To effectuate service by certified mail in Kansas,
plaintiff must deliver a copy of the summons and complaint to defendant.”
Davis v. Shawnee Mission Medical Center, Inc., 2008 WL 4758591 at *9 (D.
Kan. 2008), aff’d, 353 Fed. Appx. 95 (10th Cir. 2009).
This holds true in the state courts too. In the recent case of
Fisher v. DeCarvalho, 45 Kan. App. 2d 1133, 260 P.3d 1224 (2011), rev.
granted, --- Kan. --- (May 21, 2012), the Kansas Court of Appeals applied §
60-303(c) and § 60-304 working from the premise that personal delivery to
a party was required. The plaintiff Fisher had mailed the summons and
petition to the defendant DeCarvalho’s business office by certified mail
without a request for restricted delivery and without first attempting service
at the defendant’s dwelling. The Kansas Court of Appeals held:
As the district court noted, nothing in the record indicates that Fisher
satisfied any of these prerequisites before she attempted to serve
DeCarvalho at his business address. Fisher makes no claim that she
first attempted to serve DeCarvalho by return receipt delivery at his
dwelling house or usual place of abode. Furthermore, the record does
not reflect a return on service indicating that delivery at DeCarvalho's
9

dwelling house or usual place of abode was refused or unclaimed.
Finally, Fisher's attempt to serve DeCarvalho by certified mail at his
business address was not sent by restricted delivery, which
would have ensured delivery was made to the proper party.
DeCarvalho also argues that Fisher failed to comply with the
procedure outlined in K.S.A. 60–304(a) because she failed to ensure
that either he or his authorized agent received service.
DeCarvalho is correct in this assertion, as the return receipt states that
an unknown third person named Phyllis Bieker received the petition on
December 2, 2009. As the district court noted, the return receipt did
not designate Bieker as DeCarvalho's agent and the record does not
indicate that Bieker was authorized to accept service on DeCarvalho's
behalf. Thus, Fisher did not properly serve process on DeCarvalho
when she attempted to serve him at his business address via certified
mail, as she did not comply with the procedure outlined in K.S.A. 60–
304(a).
45 Kan. App. 2d at 1140-41 (bolding added). The Fisher decision does not
accommodate Cessna’s position that it is enough to prove an unknown third
person has received the petition and summons. See also Watson v. Narine,
2006 WL 90098 at *1 (Kan. App. 2006) (Out-of-state “personal delivery
service to the party addressed” was insufficient, in part, because the record
failed to show that the person signing the receipt was an authorized agent).
Cessna’s arguments to the contrary are not persuasive. First, it
offers a strained and overbroad reading of § 60-303(c)(3), which states:
“Service of process is obtained under K.S.A. 60-203, and amendments
thereto, upon the delivery of the sealed envelope.” Presumably, Cessna is
reading “delivery” to mean no more than the physical act of bringing the
petition and summons to the residence. And in doing so, Cessna necessarily
reads out any requirement that the delivery be “to the addressed party.”
Cessna’s reading of “delivery” ignores the plain terms of § 60-303(c)(1) that
10

defines return receipt delivery as the composite act of effecting delivery “to
the party addressed.” There is no apparent logic or purpose served in having
allowing “delivery” mean anything less than what the statute otherwise
requires for delivery. If that were the proper meaning of “delivery,” then
what keeps it from also sweeping out the other principal requirement from §
60-303(c), that is, a reliable delivery service. In order for all parts of the
Kansas statutes to retain their force and effect, the court interprets
“delivery” in § 303(c)(3), as meaning the act of delivery completed in
compliance with Kansas law, including the requirement of the delivery being
“to the party addressed,” § 303(c)(1).2
For its position, Cessna offers several legal citations that are
distinguishable or dated, and the court will address them summarily
following the order by which Cessna cited them. As its first and most argued
authority, Cessna cites Beck v. Atlantic Contracting Co., Inc., 157 F.R.D. 61,
63 (D. Kan. 1994), which interprets a version of K.S.A. 60-308(e) that is no

Cessna raises in its reply brief what it terms “a policy matter” in making a
plaintiff who fully complies with the law at the mercy of the postal employee.
As Fisher points out, a plaintiff in Cessna’s position could have the added
protection of using restricted delivery. In the end, the risk of human error
will always remain where human effort is involved. Since “[s]ervice of
process, under longstanding tradition in our system of justice, is
fundamental to any procedural imposition on a named defendant,” a court
typically refrains from exercising power over a party who has not been
served. Murphy Bros. 526 U.S. at 350. Having selected and retained the
personal delivery service, Cessna offers no plausible policy argument for why
the risk should not fall on it when the service commits an error.
2

11

longer the law in Kansas.3 Specifically, Beck applied “the plain language of
K.S.A. 60-308(e), which provides that service ‘may be by certified mail,
evidenced by return receipt signed by any person’” as dictating the “result”
that delivery by certified mail to someone other than the addressed party
does not invalidate service. 157 F.R.D. at 63 n.2. The conclusion in Beck is
against restricting delivery to the party, and the court relied on the “any
person” language in § 308(e) and on a decision by the Ohio Court of Appeals
interpreting a similar statute. Id. at n.3. Not only does Cessna fail to cite any
similar term regarding “any person” in the current Kansas statutes being
applied here, but it also does not discuss how the Beck decision can be
squared with the more recent Kansas Court of Appeals decision in Fisher.
Moreover, the holding in Beck is inapplicable, as it involved service on a
business by leaving the summons and petition with the person in charge of a
business office pursuant to K.S.A. 60-304(e). See Porter v. Wells Fargo
Bank, N.A., 45 Kan. App. 2d 931, 936-37, 257 P.3d 788 (2011)
(distinguishes Beck in part on this ground also). There is nothing in the
individual service provision of K.S.A. 60-304 that speaks of “leaving” the

In 2000, the Kansas Legislature changed “Service of any out-of-state
process may be by certified mail, evidenced by return receipt signed by any
person or by restricted delivery” to “Service of any out-of-state process by
return receipt delivery shall include service effected by certified mail, priority
mail, commercial courier service, overnight delivery service, or other reliable
personal delivery service to the party addressed, in each instance evidenced
by a written or electronic receipt showing to whom delivered, date of
delivery, address where delivered, and person or entity effecting delivery.”
2000 Kan. Sess. Laws Ch. 175, § 3.
3

12

summons and petition at the residence. As for the cited decision of Fulcher
v. City of Wichita, 445 F. Supp. 2d 1271, 1274-75 (D. Kan. 2006), it too is
distinguishable, for it addresses service upon a governmental body, K.S.A.
60-304(d), which expressly allows service upon more than the properly
addressed official.
The court has read and considered the commentary cited by
Cessna which includes the statement that § 60-303(c) “does not expressly
require that the process must be delivered to a person.” 4 Kan. Law and
Practice (5th ed.) § 60-303 p. 395 (2012). The court construes this
paragraph in the commentary as speaking largely to what the statute
requires as evidence for proving the validity of service and as critiquing the
statute’s failure to require a recipient’s signature. The commentary opens
the paragraph with the above quoted statement and links it to the statute’s
omission of any proof requirement for a recipient’s signature.4 Our issue
here is not with evidentiary proof of service, as Cessna apparently concedes
that the defendant’s evidence establishes that neither he nor an authorized
agent received the summons and petition on June 25, 2013, when the
package arrived at the defendant’s residence. Instead, the issue as framed
by Cessna is whether service by return receipt delivery is obtained under

The analysis offered in that paragraph is not applicable here, and to the
extent that one wants to argue its applicability, the court is not drawn to its
logic. A receipt showing “no one” as the recipient would not appear to satisfy
the requirement for a “receipt showing to whom delivered,” because “whom”
reasonably refers to someone, as in a person who existed.

4

13

K.S.A. § 60-303(c), K.S.A. 60-304(a) and 28 U.S.C. § 1446(b) when the
package arrives at the addressed party’s residence but is not delivered to or
received by the addressed party or that party’s authorized agent. For all the
reasons stated above, the court’s ruling on this issue is that the return
receipt delivery here did not trigger the 30-day period in § 1446(b) on June
25, 2013, as argued by Cessna.
In the alternative, if the court had accepted Cessna’s proposed
reading and application of K.S.A. § 60-303(c) on these uncontroverted facts,
then the court still would have denied the motion to remand on the following
ground. Cessna’s reading essentially would allow § 60-303(c) to make
service complete in the absence of actual delivery to the defendant or
authorized agent. In that case, the court would be inclined to apply §
1446(b) consistent with holding and analysis stated here:
It [Pilot Trading Co. v. Hartford Ins. Group, 946 F. Supp. 834 (D. Nev.
1996)] noted although case law was somewhat conflicting, courts have
more recently held that even where such a mailbox rule is provided by
state statute, actual receipt of the complaint and summons is required
for purposes of calculating the federal period of removal. Id. at 837838. The Pilot court further reasoned that such an outcome was
appropriate in light of the notice rationale behind service, the
legislative history of § 1446(b), and concerns about allowing state
procedural law to control federal removal jurisdiction. Id. at 838–39.
....
The weight of the case law suggests that it is actual receipt by
the defendant that controls for purposes of § 1446(b), regardless of
when a state deems service complete. The Court agrees that a
sensible interpretation of § 1446(b) requires that the removal period
be triggered only upon receipt of the pleadings by the defendant or an
agent designated by defendant. That section was designed to provide
adequate time for defendants to exercise their rights to removal. See
S.Rep. No. 712, at * 2 (noting need to amend the removal statute
14

because the “existing 20–day period for filing a petition ... is too short
to permit the removal of many actions”). To hold that the removal
period was triggered not by receipt of the petition and summons by
CSC but rather by the mailing of those documents by the
Commissioner would undermine that goal, as it would subject
defendants to varying periods of removal based on the length of time
it took for documents to travel from the Commissioner to the party
being served. Such an outcome would clearly contravene much of the
reasoning in Murphy Bros. as well as the intent behind § 1446(b).
Conditioning the beginning of the period for removal on actual receipt
of the pleadings by the defendant or defendant's agent ensures that
federal goals of notice and consistency are not sacrificed to state rules
of procedure.
Denny v. Illinois National Insurance Co., 2010 WL 5141656 at *4-*5 (N.D.
Okla. 2010). The court is persuaded by this approach of not commencing the
removal time period in § 1446(b) until the defendant or agent actually
receives the summons and complaint. This is consistent with what the
Supreme Court in Murphy Bros said about the legislative purpose behind §
1446(b), “[t]o ensure that the defendant would have access to the complaint
before the commencement of the removal period.” Cessna is not entitled to
the relief requested in its motion.
IT IS THEREFORE ORDERED that the plaintiff’s motion to remand
(Dk. 11) is denied.
Dated this 13th day of November, 2013, Topeka, Kansas.

s/Sam A. Crow
Sam A. Crow, U.S. District Senior Judge

15