INDAGRO S.A. v. NILVA et al

Filing 83

OPINION. Signed by Judge Susan D. Wigenton on 4/17/14. (gmd, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

INDAGRO, S.A.,
Plaintiff,
v.
VENIAMIN NILVA and VIVA
CHEMICAL CORP.,
Defendants.

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Civil Action No. 07-cv-03742 (SDW) (MCA)

OPINION
April 17, 2014

WIGENTON, U.S.D.J.:
This matter comes before the Court upon motion by Defendant Veniamin Nilva (“Nilva”
or “Defendant”) to dismiss the Complaint filed by Plaintiff Indagro, S.A. (“Indagro” or
“Plaintiff”) (Compl. August 8, 2007, ECF No. 1) as to Defendant for insufficient service of
process pursuant to Fed. R. Civ. P. 12(b)(5) and Fed. R. Civ. P. (4)(m). (Mot. to Dismiss, June
7, 2013, ECF No. 78).

Pursuant to Fed. R. Civ. P. 78, no oral argument was heard. Based on

the following and for the reasons expressed herein, Nilva’s motion to dismiss is denied.
I.

BACKGROUND 1
This action was filed on August 8, 2007 by Indagro against Viva Chemical Corporation

(“Viva”) and Nilva. (Compl., ECF No. 1). Indagro is a Swiss corporation with its principal
place of business in Geneva, Switzerland. (Compl. ¶ 1). According to the Complaint, Viva
is/was incorporated in New Jersey and Nilva is Viva’s major shareholder. (Compl. ¶¶ 2-3). The
Complaint list the same Fort Lee, New Jersey address for both Nilva and Viva. (Compl. ¶¶ 2-3).
Plaintiff seeks to enforce an arbitration award against Viva by the International Chamber of
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The facts set forth in this Opinion are taken from the parties’ respective moving papers and filings.

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Commerce in Paris (“ICC”). (Compl. ¶¶ 20-24). The arbitration award was based on Viva’s
alleged breach of a Joint Venture Agreement between Indagro and Viva. (Compl. ¶¶ 6-12).
Indagro also asserts a breach of contract claim against Nilva for failing to fulfill an alleged
agreement to personally guaranty the arbitration award. (Compl. ¶¶ 25-28). In addition, Indagro
seeks to pierce Viva’s corporate veil and collect the award from Nilva directly. (Compl. ¶¶ 2934). In the Complaint’s fourth and final cause of action, Plaintiff seeks specific performance of
Nilva’s alleged agreement to guaranty the award. (Compl. ¶¶ 35-39).
On November 14, 2008, an Order confirming the ICC’s final arbitration award was
issued by the Honorable Dennis M. Cavanaugh, U.S.D.J., now retired. (ECF No. 26). However,
at some point after Plaintiff filed his Complaint, Viva commenced a second arbitration arising
out of the same dispute underlying the first arbitration. Thus, the Court chose to stay the effect
of its confirmation order until the conclusion of the second arbitration proceeding. (ECF No.
26). Ultimately, on August 29, 2011, the Court lifted the stay on the arbitration award and
awarded Plaintiff $678,900.91 in damages as well as interest, legal fees, and arbitration
expenses. (ECF No. 60).
Nilva filed this motion to dismiss the Complaint against him pursuant to Fed. R. Civ. P.
12(b)(5) and Fed. R. Civ. P. 4(m) alleging that Plaintiff failed to serve him within the time
prescribed by the Federal Rules or to take any reasonable steps to extend the time for service. As
noted above, Plaintiff filed the Complaint on August 8, 2007. (ECF No. 1). According to an
affidavit of service signed by a process server on September 20, 2007, Plaintiff attempted to have
Nilva served with the Summons and Complaint on August 22, 24, and 26 of 2007, but was
unsuccessful. 2 (Ex. 9, ECF No. 69-2). According to the process server’s affidavit, the concierge

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The process server’s affidavit describes Nilva’s Fort Lee address as a multi-unit apartment building with a 24-hour
concierge where all visitors must be announced. (Ex. 9, ECF No. 69-2). The process server stated that no one in

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reported that Nilva and his wife travel frequently and told him they were going to Russia with no
return date. Id. Plaintiff also unsuccessfully attempted to have Nilva served at a Florida address
on October 3, 2007. 3 Id. Plaintiff was only able to serve Viva, the corporation, through the New
Jersey Secretary of State. (ECF No. 3). According to Plaintiff, once Howard Reiss, Esq.
(“Reiss”), Counsel for Viva and Nilva, got involved, Reiss indicated he would ask Nilva if he
could accept service on his behalf, but was not given permission. (Pl.’s Opp’n Br. 8-9).
During an evidentiary hearing in the second arbitration in Paris, France on July 7 and 8,
2009, Indagro’s counsel personally handed Nilva and his counsel a copy of the Summons and
Complaint and informed them that he was making personal service. (See Affidavit of Service,
ECF No. 62-4). Nilva asserts that Plaintiff’s attempted service in Paris is invalid under both the
Federal Rules of Civil Procedure and the Hague Convention on the Service Abroad of Judicial
Extrajudicial Documents, Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163 (“Hague Service
Convention” or “Convention”). Plaintiff also takes issue with the fact that Plaintiff waited over
two years to file an Affidavit of Service related to the attempted service in Paris. (Mar. 29, 2012,
ECF No. 62). Nilva contends that Plaintiff did nothing between August 2007 and July 2009, and
nothing thereafter, to attempt service or seek an extension of the 120-day deadline under Rule
4(m) for service of the Summons and Complaint. (Def.’s Br. 4). According to Nilva, Plaintiff
cannot demonstrate good cause for this inordinate delay in attempting service or seeking the
Court’s permission for an extension.
II.

LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(5) permits a court to dismiss a case for

Nilva’s unit responded to any of the calls from the concierge and that he even went to the door of the unit
accompanied by security and there was no answer. Id.
3
The declaration from the process server notes that he was unable to serve process because it was a high rise
building, without a directory, and he did not have the apartment number. (Ex. 9, ECF No. 69-2).

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“insufficiency of service of process.” Fed. R. Civ. P. 12(b)(5). “The party asserting the validity
of service bears the burden of proof on that issue.” Grand Entm’t Group v. Star Media Sales,
988 F.2d 476, 488 (3d Cir. 1993). District courts possess “broad discretion” when evaluating a
motion to dismiss for insufficient service of process. See Umbenhauer v. Woog, 969 F.2d 25, 30
(3d Cir. 1992). “Where a plaintiff acts in good faith, but fails to effect proper service of process,
courts are reluctant to dismiss an action.” Ramada Worldwide Inc. v. Shriji Krupa, LLC, Civ.
No. 07-2726, 2013 U.S. Dist. LEXIS 65655, at *17 (D.N.J. Apr. 17, 2013). “Rather, courts will
elect to quash service and grant plaintiff additional time to properly serve the defendant.” Id.
III.

DISCUSSION
a. Failure to serve within 120 days under Fed. R. Civ. P. 4(m)
Nilva first argues that Plaintiff’s failure to serve him within 120 days requires that the

Complaint against him be dismissed pursuant to Fed. R. Civ. P. 12(b)(5) and Fed. R. Civ. P.
4(m). Rule 4(m) provides as follows:
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. This subdivision
(m) does not apply to service in a foreign country under Rule 4(f) or 4(j)(1).
Fed. R. Civ. P. 4(m). Although Plaintiff made multiple attempts to serve Nilva within the 120day period, the only potentially valid service occurred in Paris approximately 700 days after the
Complaint was filed. The attempted service in Paris is clearly outside the 120-day time limit.
However, “if the plaintiff shows good cause for the failure, the court must extend the time for
service for an appropriate period.” Fed. R. Civ. P. 4(m) (emphasis added); see also Braxton v.
United States, 817 F.2d 238, 241 (3d Cir. 1987) (“The time limit is not absolutely inflexible.”).
“The rules do not define ‘good cause,’ but the Third Circuit equates ‘good cause’ with the
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Fed. R. Civ. P. 6(b)(2) standard of ‘excusable neglect.’” Emmanouil v. Mita Management, LLC,
Civ. No. 11-5575, 2012 WL 2277721, at *4 (D.N.J. June 15, 2012) (citing MCI Telecomms.
Corp. v. Teleconcepts, Inc., 71 F.3d 1086, 1097 (3d Cir. 1995)). There are three factors for a
court to consider when determining whether to grant an extension for good cause: (1) whether
the plaintiff undertook reasonable efforts in attempting service of process; (2) whether the
defendant will be prejudiced by the lack of timely service; and (3) whether the plaintiff moved
for an enlargement of time to serve. Emmanouil, 2012 WL 2277721, at *4-5 (citing MCI
Telecomms., 71 F.3d at 1097).
The first factor, whether the plaintiff undertook reasonable efforts in attempting service
of process, weighs in Plaintiff’s favor. Plaintiff attempted to serve Nilva on three separate
occasions at his address in New Jersey and once in Florida. At the New Jersey address, Plaintiff
learned that Nilva was in Russia with no return date, thus making further attempts at service in
New Jersey difficult, if not impossible. After serving Viva through the Secretary of State,
Plaintiff asked Counsel for both Viva and Nilva to accept service on Nilva’s behalf but Nilva
would not grant him permission. In Emmanouil, the Court found that the plaintiff’s efforts were
“not only diligent but exhaustive in their attempts at service” where they attempted service on
“five separate occasions.” 2012 WL 2277721, at *4. Here, the three attempts in New Jersey,
one in Florida, one in France and request made to Nilva’s attorney demonstrate that Plaintiff
attempted service on more than five occasions. Thus, this Court finds that Plaintiff has made
reasonable efforts to attempt to serve Nilva.
The second factor in determining good cause, whether or not Nilva is prejudiced by the
delay in service, also weighs in Plaintiff’s favor. Nilva had actual notice of this suit, which he
admits, as of December 3, 2007. (See Nilva Decl. ¶ 2, June 24, 2013, ECF No. 81-2). In

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addition, Nilva has actively participated in the defense of this lawsuit as evidenced by the
submission of affidavits and a declaration. (See ECF Nos. 11, 23, 81-2). In Emmanouil, the
Court found that defendants were not prejudiced “because, from the outset, they had actual
notice of the proceeding.” 2012 WL 2277721, at *4 (citing Dominic v. Hess Oil V.I. Corp., 841
F.2d 513, 517 (3d Cir. 1988) (holding that a defendant with actual notice of the claims and
underlying facts and legal theories “cannot complain of undue prejudice”)). Likewise, here, this
Court finds that Nilva had actual notice of the litigation from the outset and thus cannot make a
valid argument for undue prejudice.
The third factor in the good cause analysis is whether the plaintiff moved for an
enlargement of time to serve. Here, Plaintiff claims that Jeremy Harwood, counsel for Indagro,
wrote to the Court advising that Indagro had served Viva through the Secretary of State and
requesting an additional 120 days to serve Nilva. However, Indagro did not follow up on this
request or continue to make additional requests leading up to the attempted service in Paris. This
factor, therefore, weighs in favor of Nilva. However, this factor alone is not dispositive of the
good cause analysis. As the Emmanouil Court recognized, failure to move for an enlargement of
time “is not by itself fatal to a plaintiff’s efforts to establish good cause.” 2012 WL 2277721, at
*5 (citing United States v. Nuttall, 122 F.R.D. 163, 167 (D. Del. 1988); Gordon v. Hunt, 116
F.R.D. 313, 321 (S.D.N.Y. 1987)).
Considering the three factors together, this Court finds that good cause exists to grant
Plaintiff an extension of time to serve Nilva. It is noted that “while there must be substantial
compliance with the rules of service, they are to be liberally construed where, as seems to be the
case here, defendant has sufficient notice of the complaint.” Concepcion v. VEB
Backereimaschenbau Halle, 120 F.R.D. 482, 485 (D.N.J. 1988). In addition, the Third Circuit

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has repeatedly expressed its “preference that cases be disposed of on the merits whenever
practicable.” Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984). See also United States
v. $55,518.05 in U.S. Currency, No. 82-2758, slip op. at 6 (3d Cir. Feb. 21, 1983); Gross v.
Stereo Component Systems Inc., 700 F.2d 120, 122 (3d Cir. 1983); Feliciano v. Reliant Tooling
Co., 691 F.2d 653, 656 (3d Cir. 1982); Farnese v. Bagnasco, 687 F.2d 761, 764 (3d Cir. 1982).
b. Validity of Attempted Service in Paris
Plaintiff’s counsel attempted to serve Nilva in Paris during an arbitration hearing by
handing him a copy of the Summons and Complaint. The parties dispute the validity of this
attempted service. Federal Rule of Civil Procedure 4(f) (“Rule 4(f)”) provides that an individual
may be served in a foreign country by any “internationally agreed means.” Fed. R. Civ. P.
4(f)(1). Both France and the United States are signatories to the Hague Service Convention. See
Hague Conference on Private International Law, Status Table,
http://www.hcch.net/index_en.php? act=conventions.status&cid=17 (last visited April 7, 2014).
The United States Supreme Court has held that service in accordance with the Hague Service
Convention is mandatory whenever the Convention applies. See Volkswagenwerk
Aktiengesellschaft v. Schlunk, 486 U.S. 694, 699 (1988). As a threshold matter, the Court must
determine whether or not the Hague Service Convention applies in this case.
Article One of the Hague Service Convention states that “[t]his Convention shall not
apply where the address of the person to be served with the document is not known.” 20 U.S.T.
361, Art. 1 (emphasis added). This Court must thus determine whether or not Plaintiff’s address
was “known.” Plaintiff contends that because Nilva was not a resident or domiciliary of France,
he had no address in France, and thus his address was “not known.” As Nilva’s address in
France could not be “known,” Plaintiff asserts that the Convention does not apply. Nilva,

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however, argues that his address in France was that of the hotel where he was staying.
According to Nilva, Plaintiff’s counsel “knew” the name and address of Nilva’s hotel, or if he
did not, the information was readily available to him.
The case law on the issue of whether or not an address is “known” under Article One of
the Convention is not extensive. However, those courts who have dealt with the issue have
generally found that an address is “not known” if a plaintiff exercised reasonable diligence in
attempting to discover the address and was unsuccessful in doing so. See e.g. Opella v. Rullan,
Civ. No. 10-21134, 2011 U.S. Dist. LEXIS 69634 (S.D. Fla June 29, 2011) (noting that “an
address is not ‘known’ within Article I of the Convention only when it is unknown to the
plaintiff after the plaintiff exercised reasonable diligence in attempting to discover that address”);
Compass Bank v. Katz, 287 F.R.D. 392, 394-95 (S.D. Tex. 2012) (“In deciding whether
defendants’ addresses are ‘unknown,’ courts have repeatedly looked to the efforts plaintiffs have
put forth in attempting to discover said addresses.”); RPost Holdings, INc. v. Kagan, Civ. No.
11-238, 2012 WL 194388, at *1, *2 (E.D. Tex. Jan. 23, 2012) (determining defendant’s address
was unknown under the Hague Convention after the plaintiff attempted service on the address
associated with defendant’s online business website and requests defendant’s address from
defendant’s attorney and been refused); BP Prods. N. Am., Inc., v. Dagra, 232 F.R.D. 263, 264
(E.D.Va. 2005) (concluding that defendant’s address was “unknown” after numerous attempts to
serve defendant at his last two addresses in Pakistan failed, and after plaintiffs hired an
investigative firm who spent a month searching through various records and other identification
databases but were unable to determine defendant’s whereabouts). In these cases, both the
defendant’s address and physical location were unknown. Here, the facts are somewhat different
as Nilva’s physical whereabouts in France were known but he had no permanent address in the

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country. Thus, this Court must determine not just whether Nilva’s address in France was
“known” but whether a temporary address, such as that of a hotel during a short stay, would be
considered an “address” under the Convention.
The language of Rule 4(f) does not require that the individual being served in a foreign
country be a citizen or permanent resident of that country. See Stars’ Desert Inn Hotel &
Country Club, Inc. v. Hwang, 105 F.3d 521, 524 (9th Cir. 1997) (“[T]he plain language of Rule
4(f) indicates that application of the rule is not triggered by the citizenship of the individual
being served but rather the place in which service is effected.”); Opella, 2011 U.S. Dist. LEXIS
69634, at *11 n. 9 (where [defendant] resides is irrelevant to determining if [defendant] was
properly served, because plaintiff served [defendant] in Mexico and thus plaintiff had to comply
with the requirements of Rule 4(f)”). Thus Rule 4(f) applies even if, as here, the defendant does
not have a residence in the foreign country. All that is required under Rule 4(f) is for service to
be attempted in a foreign country. If the Court were to determine that the address of an
individual is “unknown” for purposes of Article One of the Hague Convention simply because
that person does not have a permanent address in that Country, it would greatly narrow the scope
of both the Hague Convention and Rule 4(f). Without any clear directive in the Convention,
Federal Rules or precedential case law, this Court declines to make this determination.
In addition, the Hague Service Convention requires each participating State to “designate
a Central Authority which will undertake to receive requests for service coming from other
contracting states.” 20 U.S.T. 361, Art. 2. The Central Authority is then to serve or arrange
service of the documents to the addressee. 20 U.S.T. 361, Art. 5. Thus, the purpose of the
Convention’s “known address” requirement is likely to ensure that the Central Authority has an
address where it can have the documents served. Because the Central Authority would be able to

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serve documents at a temporary address, such as that of a hotel, it follows that a temporary hotel
address could be considered an “address” under Article One of the Convention. Thus, this Court
finds that Nilva’s temporary hotel address in France is the address at issue.
To determine whether or not this address is “known,” this Court looks to whether
Plaintiff exercised reasonable diligence in attempting to discover Nilva’s address in France.
Although Plaintiff was diligent in attempting to determine Nilva’s address and whereabouts in
the United States, as demonstrated by multiple attempts to serve Nilva at addresses in two
different states and through correspondence with Nilva’s counsel, this same diligence is not
evident in Plaintiff’s attempt to serve Nilva in France. Plaintiff does not argue that he attempted
to find Nilva’s hotel address while in Paris. According to Nilva, Plaintiff’s counsel knew which
hotel Nilva was staying in. (Nilva Decl., ¶ 16, ECF No. 81-2). Even if this is not true, Plaintiff
could likely have discovered the name of the hotel by asking Nilva or Nilva’s attorney. As
Plaintiff has not exercised reasonable diligence in attempting to discover Nilva’s hotel address in
France, this Court cannot hold that Nilva’s address was “not known.” Thus, this Court finds that
the Hague Service Convention applies.
Under the Convention, service is accomplished by submitting a request to the Central
Authority designated by the State in which service is to be effected. 20 U.S.T. 361, Art. 3. Here,
Plaintiff did not submit a request to serve Nilva to France’s Central Authority. In addition,
Article Ten of the Convention states, in pertinent part:
Provided the State of destination does not object, the present Convention shall not
interfere with –
(b) the freedom of judicial officers, officials or other competent persons of
the State of origin to effect service of judicial documents directly through
the judicial officers, officials or other competent persons of the State of
destination,

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(c) the freedom of any person interested in a judicial proceeding to effect
service of judicial documents directly through the judicial officers,
officials or other competent persons of the State of destination.
20 U.S.T. 361, Art. 10. Article Ten, to which France has not objected, essentially allows direct
service “through the judicial officers, officials or other competent persons of the State of
destination.” 20 U.S.T. 361, Art. 10. Here, Plaintiff makes no argument that the attempted
service was made in accordance with Article Ten or that Plaintiff’s counsel, the individual who
attempted to serve Nilva in France, was a “judicial officer, official or other competent person” of
France, “the State of destination.” It is Plaintiff’s burden to prove the validity of service. Grand
Entm 't Group, 988 F.2d at 488. Here, because Plaintiff has not shown that he submitted a
request to France’s Central Authority or effected service properly under Article Ten of the
Convention, this Court finds that Plaintiff’s attempt to serve Nilva in France was invalid.
c. Extension of Time to Complete Service
Although Plaintiff’s attempt to serve Nilva in Paris was invalid, Plaintiff’s good cause
arguments are sufficient to permit a further extension of time within which to serve Nilva. As
noted above, Plaintiff took reasonable efforts to attempt to serve Nilva and Nilva has had actual
notice of the litigation from the outset. The rules of service “are to be liberally construed”
where, as here, “defendant has sufficient notice of the complaint.” Concepcion, 120 F.R.D. at
485. This Court will therefore grant Plaintiff thirty (30) days from the date of issuance of this
Opinion and Order to serve Nilva. If Plaintiff is unable to effect service of process upon Nilva
despite a diligent effort to do so during the 30-day extension, Plaintiff is granted leave to file a
motion for alternative service pursuant to Fed. R. Civ. P. 4(e)(1) (an individual may be served
“following state law for serving a summons . . . in the state where the district court is located”)
and N.J. Ct. R. 4:4-4(b)(3) (“If service cannot be made by any of the modes provided by this

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rule, any defendant may be served as provided by court order, consistent with due process of
law.”). This Court’s decision follows the Third Circuit’s expressed preference for resolving
cases on the merits. See e.g. Hritz, 732 F.2d at 1181; Gross, 700 F.2d at 122; Feliciano, 691 F.2d
at 656.
IV.

CONCLUSION
For the foregoing reasons, Defendant’s motion to dismiss is denied. Plaintiff is granted

an additional 30 days to complete service. If Plaintiff is unable to effect service of process upon
Nilva despite a diligent effort to do so during the 30-day extension, Plaintiff is granted leave to
file a motion for alternative service pursuant to Fed. R. Civ. P. 4(e)(1) and N.J. Ct. R. 4:44(b)(3). An appropriate Order accompanies this Opinion.

s/Susan D. Wigenton
Susan D. Wigenton, U.S.D.J.

Date:
Original:
cc:

April 17, 2014
Clerk’s Office
Hon. Madeline C. Arleo, U.S.M.J.
All Counsel of Record
File

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