KRAFT v. PHELAN HALLINAN DIAMOND & JONES, PC et al

Filing 59

OPINION filed. Signed by Judge Brian R. Martinotti on 06/29/2020. (jmh)

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NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
__________________________________________
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Plaintiff,
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v.
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PHELAN HALLINAN DIAMOND &
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JONES, PC, et al.,
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Defendants.
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__________________________________________:

WARREN R. KRAFT,

Case No. 3:17-cv-13765(BRM)(DEA)

OPINION

MARTINOTTI, DISTRICT JUDGE
Before this Court is an appeal by Plaintiff Warren R. Kraft (“Kraft”) of Magistrate Judge
Douglas E. Arpert’s January 6, 2020 Order (the “January 6, 2020 Order”) denying Kraft’s Motion
under Federal Rule of Civil Procedure 4(d)(2) requiring the Defendants Hallinan Diamond Jones,
PC, Lawrence T. Phelan, Francis Hallinan, and Rosemarie Diamond (collectively, “Defendants”)
to pay the fees associated with Kraft’s process server delivering to Defendants the Summons and
Complaint. (ECF No. 51). Having reviewed the papers submitted by Kraft and having declined to
hold oral argument pursuant to Fed. R. Civ. P. 78(b), for the reasons set forth below and for good
cause shown, Kraft’s appeal is DENIED and the January 6, 2020 Order is AFFIRMED.

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I.

BACKGROUND

On December 28, 2017, Kraft filed his complaint. (ECF No. 1.) Ninety days later, 1 Kraft
provided Defendants with notice of the lawsuit on or about March 28, 2018. (ECF No. 7.) The
record contains a copy of an email to Kraft dated March 28, 2018, from the General Counsel for
Defendants asking Kraft to “[k]indly provide the Waiver of Service forms.” (ECF No. 32-3 at 14.)
Kraft did so by email on April 21, 2018. (Id. at 16.)
On April 25, 2018, Defendants’ counsel emailed Kraft to advise him he had not complied
with Rule 4(d) concerning waivers of service but that Defendants’ counsel would extend Kraft
“the courtesy of returning executed waivers.” (Id. at 17.) Kraft responded and asked that the
waivers be returned by “overnight/express courier.” (Id.) On May 4, 2018, Defendants’ counsel
advised that he had not received prepaid return envelopes for express delivery, and that he would
return the waivers by regular mail unless he heard otherwise from Kraft. (Id. at 19.) Kraft
ultimately provided counsel with a shipping label on May 7, 2018. (Id. at 20.)
While these communications were taking place, on April 26, 2018, this Court issued a
Notice of Call for Dismissal pursuant to Rule 4(m) based on Kraft’s failure to effect timely service.
(ECF No. 4.) See note 1 supra. On May 7, 2018, having received no response to the Notice, the
Court entered an Order dismissing the Complaint. (ECF No. 5.) However, on May 23, 2018, this
Order was vacated based on Kraft’s representation that he was in the process of obtaining waivers
from Defendants, and Kraft was given an additional 45 days—until July 9, 2018—to effect service
on Defendants. (ECF No. 9.)

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Pursuant to Federal Rule of Civil Procedure 4(m), Kraft had until March 28, 2018 to effect
service. Fed R. Civ. P. 4(m) (“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.”)

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On June 20, 2018, Kraft advised Defendants’ counsel that he had still not received any
completed Waiver of Service forms and asked if Defendants would be providing the same. (ECF
No. 32-3 at 104.) Counsel answered in the negative. In an email to Kraft, counsel stated that while
the newly reopened case “affords [Kraft] a new opportunity to properly serve [Defendants] . . .
whatever [Kraft] attempted, but failed, to accomplish before the case was reopened is in all events
a nullity.” (Id. at 106.) On July 11, 2018, Kraft again provided the Summons, Complaint and
Waiver of Service forms to Defendant’s counsel. (Id. at 108-111.) Shortly thereafter, on July 13,
2018, Kraft requested new summons be issued to Defendants. (ECF No. 12.) The executed waiver
forms were never returned to Kraft.
On December 13, 2018, this Court again issued a Notice of Call for Dismissal based upon
Plaintiff's apparent failure to timely serve Defendants. (ECF No. 14.) On December 17, 2018,
Plaintiff again requested summons for Defendants (ECF No. 15) and on December 19, 2018,
Plaintiff's process server delivered the Summons and Complaint to Defendants. (ECF No. 16.)
Thereafter, on January 16, 2019, Defendants moved to dismiss the Complaint pursuant to Rule
12(b)(5) (alleging failure to timely serve), and 12(b)(6) and 12(b)(1) (alleging lack of standing
under Fair Debt Collection Practices Act). (ECF No. 23.) On July 30, 2019, this Court granted the
Motion to Dismiss on both grounds. (ECF No. 41.)
On August 12, 2019, Plaintiff filed a Motion for Reconsideration. (ECF No. 42.) On
September 3, 2019, this Court denied the Motion. (ECF No. 44.) Thereafter, on October 3, 2019,
Kraft filed a Motion for Expenses Incurred to seek reimbursement of the cost of the process server.
(ECF Nos. 45-46.) On January 6, 2020, Judge Arpert issued an Order denying Kraft’s Motion.
(ECF No. 50.) On January 21, 2020, Kraft filed this appeal of the January 6, 2020 Order. (ECF
No. 51.) On January 28, 2020, Defendants filed a Memorandum in Opposition to Kraft’s appeal.

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(ECF No. 53.) On February 20, 2020, Kraft filed a Reply to Defendants’ Opposition. (ECF No.
58.)
II.

LEGAL STANDARD

With respect to a district judge’s review of a magistrate judge’s decision, Federal Rule of
Civil Procedure 72(a) states: “The district judge . . . must consider timely objections and modify
or set aside any part of the order that is clearly erroneous or is contrary to law.” Id. Similarly, this
Court’s Local Rules provide that “[a]ny party may appeal from a Magistrate Judge’s determination
of a non-dispositive matter within 14 days,” and the District Court “shall consider the appeal and/or
cross-appeal and set aside any portion of the Magistrate Judge’s order found to be clearly erroneous
or contrary to law.” L.Civ.R. 72.1(c)(1)(A).
A district judge may reverse a magistrate judge’s discovery order if the order is shown to
be “clearly erroneous or contrary to law” on the record before the magistrate judge. 28 U.S.C.
636(b)(1)(A) (“A judge of the court may reconsider any pretrial matter [properly referred to the
magistrate judge] where it has been shown that the magistrate judge’s order is clearly erroneous
or contrary to law.”); Fed. R. Civ. P. 72(a); L.Civ.R. 72.1(c)(1)(A); Haines v. Liggett Grp., Inc.,
975 F.2d 81, 93 (3d Cir. 1992) (describing the district court as having a “clearly erroneous review
function,” permitted only to review the record that was before the magistrate judge). The burden
of showing that a ruling is “clearly erroneous or contrary to law rests with the party filing the
appeal.” Marks v. Struble, 347 F. Supp. 2d 136, 149 (D.N.J. 2004). A district judge may find a
magistrate judge’s decision “clearly erroneous” when it is “left with the definite and firm
conviction that a mistake has been committed.” Dome Petroleum Ltd. v. Employers Mut. Liab. Ins.
Co., 131 F.R.D. 63, 65 (D.N.J. 1990) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364,
395 (1948)); accord Kounelis v. Sherrer, 529 F. Supp. 2d 503, 518 (D.N.J. 2008). However,

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“[w]here there are two permissible views of the evidence, the factfinder’s choice between them
cannot be clearly erroneous.” United States v. Waterman, 755 F.3d 171, 174 (3d Cir. 2014)
(quoting Anderson v. Bessemer City, 470 U.S. 564, 574 (1985)). The magistrate judge’s ruling is
“contrary to law” if it misinterpreted or misapplied applicable law. Kounelis, 529 F. Supp. 2d at
518; Gunter, 32 F. Supp. 2d at 164.
III.

DECISION

On appeal, Kraft contends his Motion requiring Defendants to pay service fees should
never have been denied because “Fed R. Civ. P. 4(d)(1) was misapplied in clear error.” (ECF No.
51 at 1.) Specifically, he argues “Defendants’ actions in violation of the [sic] Rule 4(d) causing
Plaintiff to later make service outside of the time to effect service, when waiver forms were
provided within the initial period to effect service, is contrary to Rule 4 which states this court
‘must impose’ expenses on these defendants.” (Id.) Nevertheless, Judge Arpert found Plaintiff’s
Motion for Expenses Incurred to be untimely. (ECF No. 50 at 4.)
When a request for a waiver is made, a defendant has a duty to waive service. See Fed. R.
Civ. P. 4(d). Rule 4(d) affirmatively imposes the “duty to avoid unnecessary expenses of serving
the summons” upon the defendant. Fed. R. Civ. P. 4(d)(1). If a defendant “fails, without good
cause, to sign and return [the] waiver” requested by plaintiff within a reasonable time, the court
“must impose on [defendant]”: (a) the “expenses later incurred in making service”; and (b) the
“reasonable expenses, including attorney’s fees, of any motion required to collect those service
expenses.” See Fed. R. Civ. P. 4(d). Kraft’s process server did not deliver the Summons and
Complaint until mid-December 2018, which was well past the deadline of July 9, 2018 to effect
service. (ECF No. 16.) As such, Kraft has failed to demonstrate Judge Arpert’s denial of his Motion
for Expenses Incurred was “clearly erroneous or contrary to law.” L.Civ.R. 72.1(c)(1)(A).

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Indeed, Kraft has failed to articulate any reason or demonstrate how the January 6, 2020
Order was clearly erroneous or that his decision was contrary to law. The burden of showing that
a ruling is “clearly erroneous or contrary to law rests with the party filing the appeal.” Marks, 347
F. Supp. 2d at 149. Kraft has not met this burden. Because Kraft has not established that Judge
Arpert clearly erred in denying his Motion for Expenses Incurred, Kraft’s Appeal is DENIED.
IV.

CONCLUSION

For the reasons set forth above, Kraft’s appeal is DENIED and the January 6, 2020 Order
is AFFIRMED. An appropriate order will follow.

Date: June 29, 2020

/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE

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