Winer v. Strickland et al

Filing 39

ORDER Granting in part and Denying in part 37 Motion for Entry of Default. FURTHER ORDERED that Winer has until November 6, 2014, to either (1) file proofof service on Steven Strickland and Advantage, or (2) show good cause why his claims against Steven Strickland and Advantage should not be dismissed without prejudice under FRCP 4(m). Signed by Judge Jennifer A. Dorsey on 10/7/14. (Copies have been distributed pursuant to the NEF - MMM)

1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT

8

DISTRICT OF NEVADA

9

Leo Winer,
Case No. 2:13-cv-231-JAD-CWH

10
11
12
13

Plaintiff,
v.
Order Granting in Part and Denying in
Part Motion for Entry of Default [Doc. 37]
and Directing Entry of Default against
Paul Strickland

Steven A. Strickland, et al.,
Defendants.

14
15
16

Leo Winer, as Trustee of his own trust and Successor Trustee of his longtime friend

17

Michael Pepitone’s trust, sues Steven A. Strickland, Advantage Trading Co., Paul Strickland,

18

Jr., and others for an alleged investment scam that bilked these elderly men out of hundreds

19

of thousands of dollars of their retirement savings. Doc. 1 at 1. Winer now seeks entry of

20

default against Advantage Trading and the Stricklands under Federal Rule of Civil Procedure

21

55. Doc. 37. It appears that Paul Strickland was properly served with the summons and

22

complaint and that default may be entered against him. But I cannot reach the same

23

conclusion as to Steven Strickland and Advantage. Although Winer’s time to serve these

24

two defendants has expired, leaving his claims against them vulnerable to dismissal without

25

prejudice under Rule 4(m), I grant Winer 30 more days to either serve these defendants or

26

show good cause why the claims against Steven Strickland and Advantage should not be

27

dismissed under Rule 4(m).

28
1

Background

1
2

Winer filed this action on February 12, 2013. Doc. 1. Summonses were returned

3

executed for Advantage and both Stricklands. Docs. 18, 19, 20, 23. These docket entries

4

reflect that Winer served Paul on May 7, 2013, by personally delivering a copy of the

5

summons and complaint to his home in Tampa, Florida. Doc. 20. A week later, Winer

6

delivered a copy of the summons and complaint to Advantage’s registered agent for service

7

of process at an undisclosed address. Doc. 19. On June 24, 2013, Winer effectuated

8

“substitute service” on Steven in Florida by giving the summons to “Mr. Steven Perez who

9

offered to . . . accept service after relating Steven . . . used the address but frequently comes

10
11

and goes.” Doc. 23 at 2.1
Winer amended his complaint on July 10, 2013, and purportedly served it on all three

12

defendants by first class mail. Doc. 25-3 at 1. The addresses to which Steven and Paul’s

13

copies were mailed are identical to those appearing on their original summonses;

14

Advantage’s copy was mailed to “1821 Logan Ave., Cheyenne, Wy, 82001.” Id. Winer now

15

moves for entry of clerk’s default against all three of these defendants, indicating generally

16

that none of them has answered. Docs. 25; 37 at 2.
Discussion

17
18

Under Federal Rule of Civil Procedure 55, “When a party against whom a judgment

19

for affirmative relief is sought has failed to plead or otherwise defend, and that failure is

20

shown by affidavit or otherwise, the clerk must enter the party’s default.”2 This rule

21

presupposes that the court has personal jurisdiction over the defendant, and “service of

22

process is the means by which a court asserts jurisdiction over the person.”3 When personal

23

service is required, failure to perfect it is fatal to a lawsuit.4 Rule 4(m) requires service of the

24
1

25

The affidavit refers to “Eric Perez,” and in the “comments” section of the service form Perez is referred
to as “Steven” Perez. Doc. 23 at 1-2.

26

2

Fed. R. Civ. Proc. 55(a).

27

3

Securities and Exchange Commission v. Ross, 504 F.3d 1130, 1138 (9th Cir. 2007) (citation omitted).

28

4

Daly-Murphy v. Winston, 837 F.2d 348, 355 (9th Cir. 1987).

2

1

Summons and Complaint to be completed within 120 days.5 Rule 4(c) further provides that

2

“The plaintiff is responsible for having the summons and complaint served within the time

3

allowed under Rule 4(m).”6

4

A.

5

Paul and Steven Strickland
Proper service on an individual within a United States jurisdiction under Rule 4(e)

6

requires personal service: leaving a copy of the summons and complaint “at the individual’s

7

dwelling or usual place of abode with someone of suitable age and discretion who resides

8

there” or delivering a copy to an agent authorized to accept service of process.7 Paul and

9

Steven Strickland could also be served by the methods identified by the law of either the

10

state where the district court is located (i.e., Nevada) or the state where service is made (here:

11

Florida).8

12

Under these standards, there is little question that Paul was properly served. He was

13

personally served with Winer’s original complaint at his home on May 7, 2013—an

14

acceptable form of service under FRCP 4(e)(1) and NRCP 4(d)(6). Doc. 20. Paul was then

15

served with a copy of the amended complaint by first class mail on July 10, 2013. Doc. 25-3

16

at 1. Since being served, Paul has failed to respond to the complaint within the time period

17

specified by the federal rules, and a clerk’s entry of default is now warranted.

18

Steven is another matter. The record reflects that process server Darel Dougherty

19

attempted to serve Steven personally on several occasions in May and June 2013 at an

20

address that Paul Strickland (Steven’s brother) provided. Doc. 23 at 2. The “Server’s

21

Comments” to the summons reflect that an investigator named “Ms. Horn” was informed by

22

Steven’s landlord that Steven had moved out in May and the landlord did not have

23

information on his current whereabouts. Id. On June 24, 2013, Dougherty served the

24
25

5

Id.

26

6

Id.

27

7

Id.

28

8

See Fed. R. Civ. Proc. 4(e)(1).

3

1

complaint via “substitute service” by giving a copy of the summons and complaint to “Eric

2

Perez as cohabitant” at a Tampa, Florida, address. Doc. 23 at 1. The server’s notes,

3

however, reflect that “The Summons was given to Mr. Steven Perez who offered to accept

4

service after relating Steven A. Strickland used the address but frequently comes and goes.”

5

Id. at 2. The service address, “12251 Lexington Park Dr., Apt. 205, Tampa, FL 33626,” does

6

not match any of the addresses where service was previously attempted by Dougherty or

7

Horn. See id.

8
9

Based on these statements, Winer now concludes that Steven was served “at his
residence of record with the Florida registrar of voters,” and that “receipt [was]

10

acknowledged by defendant on June 24, 2013.” Doc. 37 at 2. Winer makes no colorable

11

attempt to demonstrate that this course of events constitutes legal service of process under

12

Rule 4. His service attempt is also ultimately defective under Florida law, which requires

13

“[e]ach person who effects service of process [to] note on a return-of-service form attached

14

thereto, the date and time when it comes to hand, the date and time when it is served, the

15

manner of service, the name of the person on whom it was served and, if the person is served

16

in a representative capacity, the position occupied by the person. The return-of-service form

17

must be signed by the person who effects the service of process.”9 Failing to state these

18

required facts invalidates the service.10 The burden of proving effective service rests with the

19

party asserting jurisdiction, and service is presumed valid “if the return of service is regular

20

on its face.”11 “However, if the return is defective on its face, then the return is not evidence

21

of service and the party seeking to invoke the court’s jurisdiction must present evidence to

22

show effective service of process.”12 A Florida appellate court in the second district in which

23
24

9

25

10

26

11

27
28

Fla. Stat. Ann. § 48.21(1).
Id. at § 48.21(2).

Koster v. Sullivan, 103 So.3d 882, 884 (Fla. App. 2 Dist. 2012) (citing Re-Employment Services, Ltd.
v. National Loan Acquisitions Co., 969 So.2d 467 (Fla. App. 5 Dist. 2007), review granted, 130 So.3d 692, 2013
WL 6084275 (Fla. Oct. 31, 2013).
12

Id.

4

1

Tampa, Florida, is located recently held that a return of service need only “identify[] the

2

manner of service as substitute and otherwise fully comply[] with the express requirements

3

of section 48.21” in order to establish the presumption of valid service.13
But even assuming arguendo that portions of Winer’s service affidavit satisfy the

4
5

“presumption” of valid service under section 48.21’s limited requirements, other statements

6

in the service return undermine it. The unsworn note that Steven Strickland was “substitute

7

served” on “Mr. Steven Perez” at an address that Steven “used . . . but frequently comes and

8

goes” is inconsistent with the sworn statement on the Proof of Service that the summons was

9

left at Steven’s “residence or usual place of abode with Eric Perez.” Compare Doc. 23 at 2,

10

with id. at 1. And there is no indication how the process server learned or believed that

11

Steven Strickland would be at Perez’s address. In light of these unresolved ambiguities, I

12

cannot conclude that plaintiff has demonstrated that Steven Strickland was properly served

13

with legal process of the summons and complaint such that this court obtained jurisdiction

14

over him and can now enter default against him. Winer’s motion for clerk’s entry of default

15

against Steven Strickland must be denied.

16

B.

17

Advantage
Service upon Advantage is also defective. Rule 4(h) governs service upon

18

corporations; it provides that service in a judicial district of the United States may be made

19

“in the manner prescribed by Rule 4(e)(1) for serving an individual” or “by delivering a copy

20

of the summons and of the complaint to . . . an agent authorized by appointment or by law to

21

receive service of process.”14 The proof of service on Advantage states that the summons

22

was delivered to Julie Leandes, who is designated by law to accept service of process on

23

behalf of Advantage Trading Co., et al.” Doc. 19. Where—even the state in which—this

24

service was effectuated is anyone’s guess. Without this information, I cannot even ascertain

25
13

26

Id at 886. Florida’s appellate courts disagree on the scope of statutory compliance required to create
a presumption of regular service when an individual is served through a cohabitant. But this disagreement has

27

no impact on this decision because the record evidence that the recipient of this “substituted service”
was, in fact, a cohabitant is unreliable.

28

14

Fed. R. Civ. Proc. 4(h)(1).

5

1

whether the summons was properly delivered under the laws of the state of service. Winer

2

has not sufficiently demonstrated that Advantage failed to plead or otherwise defend as Rule

3

55(a) requires, and the request for a clerk’s entry of default against Advantage must be

4

denied.

5

C.

6

30 Days to Complete Service or Show Cause Why the Court Should Not Dismiss
Rule 4(m) states that “If a defendant is not served within 120 days after the complaint

7

is filed, the court—on motion or on its own after notice to the plaintiff—must dismiss the

8

action without prejudice against that defendant or order that service be made within a

9

specified time. But if the plaintiff shows good cause for the failure, the court must extend the

10

time for service for an appropriate period.”15 This case is now 20-months old, and almost 15

11

months have passed since Winer filed his First Amended Complaint. Docs. 1, 25. The

12

evidence in the record fails to demonstrate that a summons and complaint were properly

13

served on Steven Strickland or Advantage. Winer shall have until November 6, 2014, to

14

either (1) file proof of proper service on Steven Strickland and Advantage; or (2) show good

15

cause why his claims against Steven Strickland and Advantage should not be dismissed

16

without prejudice under FRCP 4(m). If plaintiff fails to satisfy either of these options by

17

November 6, 2014, his claims against Steven Strickland and Advantage will be dismissed

18

without further prior notice.
Conclusion

19
20
21
22

Accordingly, it is HEREBY ORDERED that Winer’s Motion for Entry of Default
[Doc. 37] is GRANTED in part and DENIED in part:
C

instructed to enter default against Paul Strickland;

23
24

C

It is DENIED as to defendants Steven Strickland and Advantage Trading Co.,
LLC.

25
26

It is GRANTED as to defendant Paul Strickland. The clerk of court is

It is FURTHER ORDERED that Winer has until November 6, 2014, to either (1) file

27
28

15

Id. at 4(m).

6

1

proof of service on Steven Strickland and Advantage, or (2) show good cause why his claims

2

against Steven Strickland and Advantage should not be dismissed without prejudice under

3

FRCP 4(m). If plaintiff fails to satisfy either of these options by November 6, 2014, his

4

claims against Steven Strickland and Advantage will be dismissed without further prior

5

notice.

6
7
8

DATED: October 7, 2014.
_________________________________
Jennifer A. Dorsey
United States District Judge

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7