Badeaux v. Hurricane Hole Management, LLC, et al
Filing
93
ORDER AND REASONS: IT IS ORDERED that defendant Grand Isle Marina Acquisitions,LLC's 74 motion to set aside entry of default is GRANTED and defendants GIMA and GIMC's 71 , 74 motions to dismiss are DISMISSED, as set forth in document. IT IS FURTHER ORDERED that plaintiff shall show cause no later than 15 days after issuance of this Order and Reasons why this Court's prior rulings granting 70 , 80 summary judgment in favor of public co-defendants and private co-defendant Hurricane Hole Management should not apply to remaining private party defendants. Signed by Judge Ivan L.R. Lemelle on 04/18/2019. (am)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
RALPH BADEAUX
CIVIL ACTION
VERSUS
NO. 17-4984
GRAND ISLE MARINA
CONSTRUCTION, LLC, ET AL.
SECTION “B”(5)
ORDER AND REASONS
Defendant Grand Isle Marina Acquisitions, LLC (“GIMA”) filed
a motion to dismiss and set aside entry of default for improper
service. Rec. Doc. 74. Plaintiff filed a response in opposition.
Rec. Doc. 82. Defendant sought, and was granted, leave to file a
reply. Rec. Doc. 89.
Defendant Grand Isle Marina Construction, LLC (“GIMC”) filed
a motion to dismiss. Rec. Doc. 71. Plaintiff filed a response in
opposition. Rec. Doc. 81. Defendant sought, and was granted, leave
to file a reply. Rec. Doc. 82.1
For the reasons discussed below,
IT IS ORDERED that defendant Grand Isle Marina Acquisitions,
LLC’s
motion
to
set
aside
entry
of
default
is
GRANTED
and defendants GIMA and GIMC’s motions to dismiss are DISMISSED.
IT IS FURTHER ORDERED that plaintiff shall show cause no later
than 15 days after issuance of this Order and Reasons why this
Defendants GIMA and GIMC filed their motions separately, but they will both
be considered in a single Order and Reasons because they both concern
plaintiff’s allegedly improper service of process and involve the same
registered agent.
1
1
Court’s prior rulings granting summary judgment in favor of public
co-defendants (Rec. Doc. 70) and private co-defendant Hurricane
Hole Management (Rec. Doc. 80), which found that plaintiff had
provided no evidence to support his claims against any defendant
or to demonstrate that he had suffered damages attributable to
defendants,
should
not
apply
to
remaining
private
party
defendants.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Plaintiff Ralph Badeaux filed his original complaint on May
17, 2017 against defendants Hurricane Hole Management, LLC, Grand
Isle Police Department, Office John Doe 1, Officer John Doe 2,
Town of Grand Isle, and Euris Dubois. Rec. Doc. 1. On January 9,
2018, plaintiff filed his First Amended Complaint, adding the
parties to the instant motions, Grand Isle Marina Acquisitions,
LLC (“GIMA”) and Grand Isle Marina Construction, LLC (“GIMC”), as
defendants. Rec. Doc. 21.
Plaintiff filed an executed summons for GIMA into the record
on February 6, 2018 showing that the summons had been left “at the
individual’s
residence
or
usual
place
of
abode
with
Melba
Hargroder” on January 30, 2018. Rec. Doc. 34 at 5-6. Plaintiff
moved for an entry of default against GIMA on November 20, 2018
because GIMA had not filed a response, and the Clerk of Court
entered default against GIMA on November 21, 2018. Rec. Doc. 67.
2
Plaintiff filed an executed summons for GIMC into the record
on December 6, 2018 showing that the summons had been served on
Don Hargroder, Sr. who plaintiff identified as designated by law
to accept service of process on behalf of GIMC, on December 1,
2018. Rec. Doc. 69.
Defendant GIMA filed the instant motion to dismiss and set
aside entry of default pursuant to Federal Rule of Civil Procedure
12(b)(5) for improper service pursuant to F.R.C.P. Rule 4(m),
alleging the summons does not list an address and Melba Hargroder
is not a member, agent, or employee of GIMA. Rec. Doc. 74.
Plaintiff filed a response in opposition, arguing that the service
on Melba Hargroder at Mr. Hargroder’s residence was effective in
providing notice and that Mr. Hargroder avoided service for months
prior. Rec. Doc. 82 at 2-3. Defendant GIMC filed the instant motion
to dismiss pursuant to F.R.C.P. 12(b)(5) for improper service
pursuant to Rule 4(m), alleging service was not made until eleven
(11) months after GIMC was named in the amended complaint and
plaintiff has not shown good cause for the failure to timely make
service. Rec. Doc. 71.
This Court previously granted summary judgment in favor of
remaining codefendants Town of Grand Isle, Grand Isle Police
Department,
Euris
Dubois,
and
Hurricane
Hole
Management
and
dismissed plaintiff’s claims against Officer John Doe 1 and Officer
John Doe 2. Rec. Docs. 70, 80.
3
LAW AND ANALYSIS
Federal Rule of Civil Procedure 12(b)(5) permits a defendant
to move to dismiss a complaint for insufficient service of process.
Federal Rule of Civil Procedure 4(h)(1) states that a corporation,
partnership, or association in the United States must be served
either by following the relevant state law for serving a summons,
or by delivering a copy of the summons and complaint to an officer
or agent of the company. Fed. R. Civ. P. 4(h)(1). Louisiana state
law provides the following options for service on a domestic
limited liability company:
A. Service of citation or other process on a domestic or
foreign limited liability company is made by personal
service on any one of its agents for service of
process.
B. If the limited liability company has failed to
designate an agent for service of process, if there
is no registered agent by reason of death,
resignation, or removal, or if the person attempting
to make service certifies that he is unable, after
due diligence, to serve the designated agent, service
of the citation or other process may be made by any
of the following methods:
(1)
Personal service on any manager if the
management of the limited liability company is
vested in one or more managers or if
management is not so vested in managers, then
on any member.
(2)
Personal service on any employee of suitable
age and discretion at any place where the
business of the limited liability company is
regularly conducted.
La. C.C.P. Art. 1266.
4
A. Insufficient service of process on GIMA
As described above, service of the summons on GIMA could
properly be effected in the following ways: 1) personal service on
Don Hargroder, as GIMA’s registered agent and manager; 2)personal
service on any employee of suitable age and discretion at any place
where GIMA regularly conducts business, if unable to serve Don
Hargroder; or 3) by delivering a copy of the summons and of the
complaint to Don Hargroder or Arlene Hargroder, as officers of
GIMA.
Plaintiff served GIMA by leaving the summons with Melba
Hargroder, who plaintiff states is Don Hargroder’s mother. Rec.
Doc. 34. Although the return of service does not state the address
where the summons was left, plaintiff avers in his response that
he served Melba Hargroder at Don Hargroder’s residence. Rec. Doc.
82 at 2. Melba Hargroder is not listed as the agent or manager of
GIMA in the filing with the Louisiana Secretary of State, nor does
plaintiff claim that she is an employee of GIMA. Rec. Doc. 74-2 at
3. Rather, she is the mother of the registered agent of GIMA, Don
Hargroder. Neither Rule 4(h) nor Louisiana state law permit a
plaintiff to effect service on a company by serving the agent’s
family members. Plaintiff did not serve GIMA in any of the ways
provided for by the Federal Rules of Civil Procedure or Louisiana
state law, and therefore service of process was insufficient.
5
Plaintiff argues that Mr. Hargroder had actual notice of the
complaint because co-defendant HHM was served at the same time as
GIMA and filed an answer into the record. Rec. Doc. 82 at 2.
However, actual notice is not a substitute for legal process and
does not satisfy Rule 4’s requirements. See Ransom v. Brennan, 437
F.2d 513, 519 (5th Cir.1971) (finding that even assuming the
defendant had “actual notice . . . it would not operate as a
substitute for process.”); Way v. Mueller Brass Co., 840 F.2d 303,
306 (5th Cir.1988) (stating that “[t]he defendant’s actual notice
of the litigation . . . is insufficient to satisfy Rule 4’s
requirements.”).
B. Setting aside entry of default entered against GIMA
The decision to set aside an entry of default lies within the
sound discretion of the district court, which may do so if the
moving party shows good cause. See Fed. R. Civ. P. 55(c); U.S. v.
One Parcel of Real Prop., 763 F.2d 181, 183 (5th Cir. 1985).
Default judgments are “generally disfavored in the law” in favor
of a trial upon the merits. Lacy v. Sitel Corp., 227 F.3d 290, 292
(5th Cir.2000). The Fifth Circuit has held that “[w]hen a district
court lacks jurisdiction over a defendant because of improper
service of process, the default judgment is void and must be set
aside under Federal Rule of Civil Procedure 60(b)(4).” Rogers v.
Hartford Life and Acc. Ins. Co., 167 F.3d 933, 940 (5th Cir.1999).
This applies to motions to set aside a default judgment under Rule
6
55(c) because courts apply essentially the same standard to both
motions to set aside a default and motions to set aside a judgment
by default under Rule 60(b). In re OCA, Inc., 551 F.3d 359, 370
(5th Cir.2008). In addition, motions to set aside a default are
more readily granted than motions to set aside a default judgment.
Id.
Accordingly,
because
plaintiff
did
not
properly
serve
defendant GIMA, it is appropriate to set aside the entry of default
against it.
C. Untimely Service of Process on GIMC
Federal Rule of Civil Procedure 4(m) requires a plaintiff to
serve a defendant within 90 after the complaint is filed. Plaintiff
filed his Amended Complaint adding GIMC as a defendant on January
9, 2018, but did not serve the summons on Don Hargroder, a member
of GIMC, until December 1, 2018, nearly eleven months later. Rec.
Doc. 69. Plaintiff argues that GIMC had knowledge of the complaint
against it because Mr. Hargroder was served with the complaint
against HHM and HHM filed an answer. Rec. Doc. 81 at 2. However,
as discussed above, actual notice is not a substitute for proper
service. Therefore, service of process on GIMC was not timely.
D. Dismissal
Both defendants seek to have plaintiff’s claims against them
dismissed because they have not been properly served. Pursuant to
Rule 4(m):
7
If a defendant is not served within 90 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
“Proof of good cause requires at least as much as would be required
to show excusable neglect, as to which simple inadvertence or
mistake of counsel or ignorance of the rules usually does not
suffice.” Thrasher v. City of Amarillo, 709 F.3d 509, 511 (5th
Cir. 2013) (internal quotation marks omitted).
Plaintiff does not show good cause for his failure to properly
serve defendant GIMA or defendant GIMC. Plaintiff states that he
attempted to have Mr. Hargroder personally served for GIMA but was
unable to, and that Mr. Hargroder employed a “defensive line of
employees, security systems and locked gates.” Rec. Doc. 82 at 23. Yet, plaintiff was able to serve Mr. Hargroder, albeit untimely,
on behalf of GIMC, which indicates that he was able to reach Mr.
Hargroder. Rec. Doc. 69. The only explanation plaintiff provides
for serving GIMC nearly eleven months after the complaint was filed
is to state that he noticed a return of service had not been filed
for GIMC while requesting the entry of default against GIMA. Rec.
Doc. 81 at 1. As stated above, a simple mistake of counsel does
not constitute good cause. Therefore, plaintiff has not shown good
cause for not serving defendants GIMA and GIMC in the time frame
8
provided under Rule 4(m) and this Court is not required to extend
the time for service.
Furthermore, given this Court’s prior Order and Reasons (Rec.
Docs. 60, 70), in which the Court granted summary judgment in favor
of the public co-defendants and private co-defendant Hurricane
Hole Management because plaintiff provided no evidence to support
any of the claims asserted in his complaint or to show that he
suffered damages attributable to defendants, it would appear that
claims
against
GIMA
and
GIMC
could
also
be
dismissed.
Plaintiff shall show cause no later than 15 days after issuance
of
this
Order
and
Reasons
why
the
Court’s
prior
rulings
dismissing plaintiff’s claims against public co-defendants and
private co-defendant HHM should not apply to remaining defendants
GIMA and GIMC.
New Orleans, Louisiana, this 18th day of April, 2019.
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE
9
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