Stars On Tour Inc. v. Javerian et al

Filing 11

OPINION and ORDER Granting in Part and Denying in Part Defendants' 5 Motions to Dismiss, or in the Alternative to Quash Declaration of Server, for Insufficient Process and Insufficient Service of Process. Signed by District Judge Gerald E. Rosen. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PROJECT X ENTERPRISE, INC.,
dba NINA SKY PRODUCTIONS,
a Michigan corporation,
Plaintiff,

Case No. 14-cv-10761
Hon. Gerald E. Rosen

v.
FARES KARAM,
Defendant.
____________________________________________/
STARS ON TOUR, INC.,
a Pennsylvania corporation,
Plaintiff,

Case No. 14-cv-10769
Hon. Gerald E. Rosen

v.
ZAVEN JAVERIAN
and FARES KARAM,
Defendants.
____________________________________________/
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTIONS TO DISMISS, OR IN THE ALTERNATIVE TO
QUASH DECLARATION OF SERVER, FOR INSUFFICIENT PROCESS
AND INSUFFICIENT SERVICE OF PROCESS

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I. INTRODUCTION
These related actions stem from an alleged agreement between two concert
organizers, Plaintiffs Stars on Tour, Inc. and Project X Enterprise, Inc., and a
performer, Defendant Fares Karam, for Karam to tour exclusively in the United
States in 2014 with Plaintiffs. According to Plaintiffs, Karam reneged on these
agreements and entered instead into a similar agreement with Defendant Zaven
Javerian. Presently before the Court are two nearly identical motions -- one filed
in each action -- challenging the sufficiency of service. Having reviewed and
considered Defendants’ Motions and supporting briefs, Plaintiffs’ Responses, and
the entire record of these matters, the Court has determined that the relevant
allegations, facts, and legal arguments are adequately presented in these written
submissions, and that oral argument would not aid the decisional process.
Therefore, the Court will decide this matter “on the briefs.” See Eastern District of
Michigan Local Rule 7.1(f)(2).
II. FACTS RELATED TO SERVICE OF PROCESS
Plaintiffs commenced these actions on February 19, 2014. Three days later,
on February 22, 2014, Plaintiffs’ process server, William Brady, purportedly
effectuated service at the Henry Hotel in Dearborn, Michigan. (Ex. A to Defs’
Mtn., Dkt. ## 6-2 & 6-3; Ex. A to Plfs’ Resp., Dkt. # 10, at ¶¶ 5-16).1 Upon

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Except where noted, the Court’s record citations are to the Project X matter.
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entering the hotel, Brady informed the hotel’s front desk that he had legal papers
for Karam and Javerian -- guests at the hotel. (Ex. A to Plfs’ Resp., Dkt. # 10, at ¶
8; Ex. 8 to Plfs’ Resp. in Stars on Tour, Dkt. # 6, at ¶ 8). An individual at the front
desk confirmed that Defendants were guests, and a security guard then escorted
Brady to their respective rooms. (Id. at ¶¶ 9-12; Ex. 8 to Plfs’ Resp. in Stars on
Tour, Dkt. # 6, at ¶ 9-12). Once there, the security guard somehow “verified” that
the Defendants were “in the [respective] room[s.]” (Id. at ¶ 12; Ex. 8 to Plfs’ Resp.
in Stars on Tour, Dkt. # 6, at ¶ 12). Brady could also “hear other people in the
room[s].” (Id.). The security guard informed Brady that Brady could not enter
because each room had a “Do Not Disturb” sign, so Brady “slid the documents
under [each] door” and said “You have been served” “in a loud voice.” (Id. at ¶¶
13-14; Ex. 8 to Plfs’ Resp. in Stars on Tour, Dkt. # 6, at ¶¶ 13-14). The respective
Return of Service forms reflect that Brady served Defendants “personally” at the
Henry Hotel. (Dkt. #3; Dkt. # 4 in Stars on Tour). Both Defendants have filed
affidavits in support of their Motions indicating that they were “not personally
served with a copy of any lawsuit or any other documents related to this lawsuit.”
(Ex. C to Def’s Mtn., Dkt. #6-4; Ex. C to Def’s Mtn. in Stars on Tour, Dkt. # 5-4).

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III. DISCUSSION
A.

The Standards Governing Defendants’ Motions
Generally, a court may not exercise power over an individual named as a

defendant absent service of process. Murphy Bros., Inc. v. Michetti Pipe Stringing,
Inc., 526 U.S. 344, 350 (1999). It is Plaintiffs’ burden to demonstrate proper
service. Byrd v. Stone, 94 F.3d 217, 219 (6th Cir. 1996); see also Frederick v.
Hydro-Aluminum S.A., 153 F.R.D. 120, 123 (E.D. Mich. 1994) (Cook, J.). Courts
have broad discretion to dismiss an action that involves improper service. Sherer
v. Construcciones Aeronauticas, S.A., 987 F.2d 1246, 1247 (6th Cir. 1993).
Nevertheless, dismissal is not invariably required where service is ineffective -under such circumstances a court has discretion to either dismiss the action or
quash service but retain the case for proper service later. Frederick, 153 F.R.D. at
123.
The service of a summons and complaint in a federal suit is governed by
Federal Rule of Civil Procedure 4.

This Rule provides different ways for a

plaintiff to serve a defendant within a judicial district of the United States. The
pertinent portion provides that a party may effectuate service by:
(1)

following state law for serving a summons in an action brought
in courts of general jurisdiction in the state where the district
court is located or where service is made; or

(2)

doing any of the following:
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(A)

delivering a copy of the summons and of the
complaint to the individual personally;

(B)

leaving a copy of each at the individual's dwelling
or usual place of abode with someone of suitable
age and discretion who resides there; or

(C)

delivering a copy of each to an agent authorized by
appointment or by law to receive service of
process.

Fed. R. Civ. P. 4(e). As to Rule 4(e)(1), the relevant Michigan state law provides
that an individual may be served by:
(1)

delivering a summons and a copy of the complaint to the
defendant personally; or

(2)

sending a summons and a copy of the complaint by registered
or certified mail, return receipt requested, and delivery
restricted to the addressee. Service is made when the defendant
acknowledges receipt of the mail. A copy of the return receipt
signed by the defendant must be attached to proof showing
service under subrule (A)(2).

M.C.R. 2.105(A).
B.

Plaintiffs Failed to Properly Serve Defendants
The issues presented by Plaintiffs’ purported service are not complex:

Plaintiffs have the burden to show that Brady either: (1) personally served
Defendants in compliance with Federal Rules of Civil Procedure 4(e)(2)(A) or
4(e)(1) (incorporating Michigan’s personal service rule); or (2) served Defendants
by leaving a copy of the papers at Defendants’ “dwelling or usual place of abode

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with someone of suitable age and discretion who resides there.” Fed. R. Civ. P.
4(e)(2)(B). Plaintiffs have not satisfied this burden.2
As to Plaintiffs’ purported personal service, it is well-established that
personal service does not require “in hand” delivery and acceptance of the papers.
Ali v. Mid-Atl. Settlement Servs., Inc., 233 F.R.D. 32, 36 (D.D.C. 2006); United
States v. Miller, 2007 WL 3173362, at *2 (E.D. Mich. Oct. 29, 2007) (Cohn, J.). It
is enough that a process server leaves the summons and complaint “within the
defendant’s immediate proximity and further compliance with Rule 4(e)(2) is only
prevented by the defendant’s knowing and intentional actions to evade service.”
Travelers Cas. & Sur. Co. of Am. v. Brenneke, 551 F.3d 1132, 1136 (9th Cir.
2009). Put differently, “[w]here a defendant attempts to avoid service e.g. by
refusing to take the papers, it is sufficient if the server is in close proximity to the
defendant, clearly communicates intent to serve court documents, and makes
reasonable efforts to leave the papers with the defendant.” Id. (citation omitted);
see also 4A Wright & Miller, FEDERAL PRACTICE AND PROCEDURE § 1095 (3d ed.)
(collecting cases).

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The Court would also be remiss to not point out that Plaintiffs’ respective
Responses, while full of generalized statements of the law, do not cite a single case
in support of their position that service was proper. The Court fully expects that
this will not be the standard going forward, lest Plaintiffs’ counsel desire to tread
down the path of advocacy that is zealous, but less than effective.
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Though cognizant that the service rules must be liberally construed when a
defendant has received actual notice of a lawsuit, Rovinski v. Rowe, 131 F.2d 687
(6th Cir.1942), the Court finds that Plaintiffs have not satisfied their burden of
establishing personal service. Brady did not make visual or verbal contact with
Defendants, and instead just relied upon a security guard’s verification that
Defendants were “in the room” when he slipped the papers under the respective
room doors. There is no record evidence indicating how the guard so verified, or
alternatively, how Brady was able to distinguish Defendants’ voices from the
“other people in the room” sufficient to conclude that he properly served
Defendants. Without sight of Defendants or acknowledgement by them that they
were in their respective rooms, it is not clear that Brady was within Defendants’
“immediate proximity” or that Defendants knew they were being served. Indeed,
Defendants expressly deny that they were served. Accordingly, Plaintiffs have not
established that they personally served Defendants in accordance with Federal
Rule of Civil Procedure 4(e).
In the alternative, Plaintiffs argue that Brady complied by Federal Rule of
Civil Procedure 4(e)(2)(B). The plain language of this rule contemplates service if
papers are left: (1) at the person’s “dwelling or usual place of abode;” and (2)
“with someone of suitable age and discretion who resides there.”

Because

Plaintiffs have clearly not established the second element, the Court need not
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determine whether the Henry Hotel was Defendants’ “dwelling or usual place of
abode” at the time of service.3 There is no indication that Brady left the papers
with someone who was both of a “suitable age and discretion” and who resided at
the Henry Hotel. Simply shoving papers under a closed room door at a hotel based
upon the representations of a security guard and hearing the unidentified voices of
others, without more, falls short of compliance with Federal Rule of Civil
Procedure 4(e)(2)(B).
The Court will not, however, grant Defendants’ request to dismiss Plaintiffs’
Complaints with prejudice. It is this Court’s general practice regarding improper
service of process motions to permit a plaintiff to cure a procedural deficiency.
Rojek v. Catholic Charities, Inc., 2009 WL 3834013, at *3 (E.D. Mich. Nov.16,
2009) (Rosen, C.J.) (“Courts have broad discretion to dismiss an action that
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For what it is worth, there is no record evidence -- and Plaintiffs advance
contradictory arguments -- on this issue. At one point, they admit that the Henry
Hotel was not Defendants’ “usual place of abode.” (Plf’s Resp., Dkt. # 10, at 4).
Elsewhere, they expressly frame one of their arguments as “whether a hotel room
rented for a weekend for an out of country artist can be deemed ‘a usual place of
abode.’” (Id. at 2). There is, to be sure, case law support for the notion that a hotel
may be considered a “dwelling or usual place of abode” “if it is shown that the
defendant is permanently residing there or it appears that the hotel is the
defendant’s primary place of residence. However, the cases make it clear that a
temporary residence at the time of service is not a person’s dwelling place or usual
place of abode when a more permanent residence is shown to exist.” 4A Wright &
Miller, FEDERAL PRACTICE AND PROCEDURE § 1096 (3d ed.) (collecting cases); see
also Zhou v. Peng, 2002 WL 1835608, at *10 (S.D.N.Y. Aug. 8, 2002) vacated in
part on other grounds, 286 F. Supp. 2d 255 (S.D.N.Y. 2003) (five day stay at hotel
bore “none of the indicia of permanence . . . [Plaintiff’s] visit to the Waldorf
Towers was not episodic; it was a unique and momentary event”).
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involves improper service.

Nevertheless, dismissal is not invariably required

where service is ineffective -- under such circumstances a court has discretion to
either dismiss the action or quash service but retain the case for proper service
later.”); see also Stern v. Beer, 200 F.2d 794, 795 (6th Cir. 1952) (“[I]f the first
service of process is ineffective, a motion to dismiss should not be granted, but the
case should be retained for proper service later.”).
Therefore, the Court will grant leave to Plaintiffs to properly serve
Defendants within 60 days. To the extent Plaintiffs argue that they “will not have
another chance to serve [Plaintiffs] . . . in Michigan or anywhere in the United
States,” (Plfs’ Resp., Dkt. # 10, at 4), Federal Rule of Civil Procedure 4 provides
several alternatives to personal service, including those alternatives set forth in the
provision governing service of an individual in a foreign country. In so holding,
the Court expresses no opinion as to whether this Court has personal jurisdiction
over Defendants -- especially in light of the Supreme Court’s two most recent
decisions on general and specific jurisdiction. See Daimler AG v. Bauman, 134
S.Ct. 746 (2014) and Walden v. Fiore, 134 S.Ct. 1115 (2014).
IV. CONCLUSION
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss, or in the
Alternative to Quash Declaration of Server, for Insufficient Process and
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Insufficient Service of Process in Project X. Enterprise, Inc. v. Fares Karam, 14cv-10761, (Dkt. #6) is GRANTED IN PART AND DENIED IN PART.
IT IS FURTHER ORDERED that Defendants’ Motion to Dismiss, or in the
Alternative to Quash Declaration of Server, for Insufficient Process and
Insufficient Service of Process in Stars on Tour, Inc. v. Zaven Javerian and Fares
Karem, 14-cv-10769 (Dkt. #5) is GRANTED IN PART AND DENIED IN PART.
IT IS FURTHER ORDERED that Plaintiffs may have leave to properly
serve Defendants Karam and Javerian with process within 60 days. If Plaintiffs do
not properly serve Defendants during that time, the Court will enter an order
dismissing Plaintiffs’ Complaints without prejudice.
IT IS SO ORDERED.

Dated: July 10, 2014

s/Gerald E. Rosen
Chief, Judge, United States District Court

I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on July 10, 2014, by electronic and/or ordinary mail.
s/Julie Owens
Case Manager, [phone]

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