Jing et al v. Angel Tips, Inc. et al
MEMORANDUM AND ORDER granting 19 Motion to Dismiss for Lack of Jurisdiction: For the reasons set forth in the attached Memorandum and Order, defendant Lees motion to dismiss is GRANTED, and all claims against defendant Lee are hereby DISMISSED. As all other parties have settled, the Clerk of Court is directed to close this case. Ordered by Judge Roslynn R. Mauskopf on 3/11/2013. (Mauskopf, Roslynn)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
YAXIN JING and RUI YIN WU, on behalf of
themselves and others similarly situated,
MEMORANDUM & ORDER
11-CV-05073 (RRM) (JMA)
- against ANGEL TIPS, INC., KIOK LEE, and BYUNG K.
ROSLYNN R. MAUSKOPF, United States District Judge.
On October 18, 2011, Yaxin Jing and Rui Yin Wu (“plaintiffs”) filed this action, on
behalf of themselves and others similarly situated, against Angel Tips, Inc. (“Angel Tips”), Kiok
Lee, and Byung K. Park (each, “defendant”), alleging that plaintiffs are entitled to unpaid
overtime compensation, among other things, under the Fair Labor Standards Act (“FLSA”), as
amended, 29 U.S.C. §§ 201 et. seq., and state law. (Compl. (Doc. No. 1).) On April 20, 2012,
defendant Lee filed a motion to dismiss for lack of jurisdiction, pursuant to Federal Rule of Civil
Procedure 12(b)(5), based on insufficient service of process. (Doc. No. 19.)
For the reasons set forth below, defendant Lee’s motion is GRANTED.
Plaintiffs are former employees of defendant Angel Tips, a nail salon operating in
Oceanside, New York. Defendant Mr. Lee is the Chief Executive, and defendant Mr. Park is a
principal, of Angel Tips. (Compl. ¶¶ 8–9.) On or about September 1, 2010, defendant Lee
received a letter from plaintiffs’ counsel alleging violations of FLSA and demanding payment.
(Lee Aff. ¶ 3 & Ex. 1.) On or about October 1, 2010, defendant Lee’s former accountant, Justin
Kang, introduced her to Yohan Choi, an attorney, with whom defendant Lee then discussed
plaintiffs’ letter. (Id. at ¶¶ 5–6.) According to defendant Lee, they did not discuss retention or a
fee for services. (Id. at ¶ 7.) According to Mr. Choi, they had an informal understanding that he
would work with plaintiffs’ counsel to seek a compromise. (Choi Aff. ¶ 4.) Affidavits signed by
defendant Lee and Mr. Choi diverge with respect to their communications after that date.
Mr. Choi claims that he spoke with defendant Lee several times between the date of their
introduction and May 2011, regarding progress toward settlement and a draft agreement. (Id. at
¶¶ 5–8.) Mr. Choi also claims that in May 2011, defendant Lee told him that the then-current
settlement offer, memorialized in a draft agreement, was unacceptable. (Id. at ¶¶ 8–9.) He
affirms that he has not spoken to defendant Lee since that time. (Id. at ¶ 9.)
Defendant Lee claims that she did not have any discussions with Mr. Choi from the date
of their introduction in October of 2010 until June 23, 2011. (Lee Aff. ¶ 8). Defendant Lee also
claims that, on that date, Mr. Kang requested that defendant Lee come to his office, at which
time he presented her with a draft settlement agreement and an invoice for services, on Mr.
Choi’s letterhead. (Id. at ¶¶ 8–10; see also Lee Aff. Ex. 2 (invoice on Choi & Park letterhead,
dated June 23, 2011).) According to defendant Lee, she informed Mr. Kang that the agreement
was unacceptable and was never authorized. (Id. at ¶ 11.) Defendant Lee then spoke to Mr.
Choi, to whom she told the same. (Id. at ¶ 12.) According to defendant Lee, she did not speak to
Mr. Choi between October 1, 2010 and June 23, 2011, nor has she spoken to Mr. Choi since June
23, 2011. (Id. at ¶¶ 8, 13.)
Plaintiffs filed this action on October 18, 2011. (Compl. (Doc. No. 1).) On the same day,
plaintiffs’ counsel, C.K. Lee (“plaintiffs’ counsel”), contacted Mr. Choi via email, saying:
“Yohan, I just filed the Complaint in the EDNY under 11-5073. Please let me know if you
would be willing to accept service.” (Ramo Aff. Ex. 5; Choi Aff. at ¶ 10.) On October 21, 2011,
Mr. Choi replied: “I will accept the service. However, I will be away for two weeks. So I will
follow up after November 7, 2011.” (Ramo Aff. Ex. 5; Choi Aff. at ¶ 11.)
On April 20, 2012, defendant Lee filed a motion to dismiss for lack of jurisdiction,
pursuant to Federal Rule of Civil Procedure 12(b)(5), based on insufficient service of process.
(Doc. No. 19.) On April 25, 2012, Magistrate Judge Joan M. Azrack stayed discovery pending
determination of the instant motion to dismiss brought by defendant Lee. (See Minute Entry for
proceedings dated Apr. 25, 2012 (Doc. No. 22).) On July 2, 2012, plaintiffs’ counsel filed a
stipulation of dismissal as to defendants Park and Angel Tips, as well as a status report indicating
defendants Angel Tips and Park’s intentions to voluntarily dismiss their crossclaims against
defendant Lee. (Joint Status Report (Doc. No. 25).) To date, no voluntary dismissal of the
crossclaims has been filed.
“Before a federal court may exercise personal jurisdiction over a defendant, the
procedural requirement of service of summons must be satisfied.” Dynegy Midstream Servs. v.
Trammochem, 451 F.3d 89, 94 (2d Cir. 2006) (internal quotation marks and citation omitted).
Rule 4(c)(1) of the Federal Rules of Civil Procedure requires that a “summons be served with a
copy of the complaint.” Service must be made within 120 days of the filing of the complaint.
Fed. R. Civ. P. 4(m).
“[T]he plaintiff bears the burden of proving adequate service.” Burda Media, Inc. v.
Viertel, 417 F.3d 292, 298 (2d Cir. 2005) (citation omitted). The plaintiff must, “through
specific factual allegations and any supporting materials, make a prima facie showing that
service was proper.” Kwon v. Yun, No. 05–CV–1142 (GEL), 2006 WL 416375, at *2 (S.D.N.Y.
Feb. 21, 2006) (collecting cases). “Conclusory statements are insufficient to overcome a
defendant’s sworn affidavit that he was not served.” Darden v. DaimlerChrysler N. Am. Holding
Corp., 191 F. Supp. 2d 382, 387 (S.D.N.Y. 2002) (citation omitted). The court may “look to
matters outside the complaint to determine whether it has jurisdiction.” Id. at 387.
If a defendant is not served within 120 days after the complaint is filed, the court “must
dismiss the action without prejudice against that defendant or order that service be made within a
specified time.” Fed. R. Civ. P. 4(m). The Court thus has discretion to extend the time for
service. However, if plaintiff shows good cause for the failure, “the court must extend the time
for service for an appropriate period.” Id. (emphasis added).
Neither party alleges, nor has any evidence been submitted suggesting, that copies of the
complaint and summons in this action were ever delivered to defendant Lee, to Mr. Choi, or to
anyone representing defendant. Plaintiffs say, without any argument or support, that service was
proper in this case, pointing solely to the email from plaintiffs’ counsel to Mr. Choi, wherein the
former asks if Mr. Choi will accept service, and Mr. Choi replies that he will. However, no
complaint or summons was attached to the email, and neither party alleges that such documents
were ever delivered to Mr. Choi (or defendant Lee) by any other means. Furthermore, as
defendant Lee properly suggests, the email communication did not meet the requirements for
waiver of service under Federal Rule of Civil Procedure 4(d)(1). See Fed. R. Civ. P. 4(d)(1)(A)–
(G) (in writing, to individual defendant, with complaint, by first-class mail or other reliable
means, etc.). Therefore, plaintiffs have failed to meet their burden of proving adequate service.1
Plaintiffs make several references to their belief that Mr. Choi was authorized to accept service.
However, they do not argue that service on Mr. Choi would have been sufficient, no doubt
because no such service on Mr. Choi was ever actually made, regardless of whether it would
have been sufficient. Even if service had been attempted on Mr. Choi, plaintiffs have not
submitted any evidence demonstrating that defendant had appointed Mr. Choi as her agent for
If plaintiffs show good cause for the failure, a court must extend the time for service for
an appropriate period. Fed. R. Civ. P. 4(m). Here, there has been no reasonable effort to effect
service on defendant. There is no evidence of any attempt to serve her personally or at her home
or business. Nor does the email to Mr. Choi constitute a reasonable effort to effect service. A
mistaken belief that service was proper is not good cause under Rule 4(m). Obot v. Citibank
South Dakota, N.A., 2006 U.S. Dist. LEXIS 75260, at *6 (W.D.N.Y. Oct. 17, 2006), aff’d 347
Fed. App’x 658 (2d Cir. 2009). Even if plaintiffs’ counsel reason to believe Mr. Choi was
authorized to accept service, no complaint or summons was ever delivered to Mr. Choi by any
means. Neither did plaintiffs’ seek an enlargement of time in which to effect service. In short,
no true effort was ever made to properly serve defendant Lee, either personally, or even through
a purported agent.
Plaintiffs argue that settlement negotiations provide good cause for the failure, and
plaintiffs’ counsel was only trying to avoid further litigation costs and fees. However, the only
evidence of settlement negotiations provided to the Court occurred several months prior to the
filing of the complaint, and allegedly involved an attorney with arguable authority to negotiate
on the defendant’s behalf. Most important, the defendant conclusively rejected the settlement
offer several months prior to the filing of this action. These negotiations hardly serve as good
the receipt of process. While such an agency relationship may be implied from surrounding
circumstances indicating the intent of the principal, “in New York, courts are reluctant to lightly
imply such an agency.” Olympus Corp. v. Dealer Sales & Serv., Inc., 107 F.R.D. 300, 305
(citing cases). Furthermore, “an attorney’s claim that he is authorized to receive process is not
by itself sufficient; there must be some evidence that the client intended to grant such authority.”
Id. Moreover, simply serving in the capacity of attorney, or representing the client previously,
does not render the attorney an agent for service of process. Obot v. Citibank South Dakota,
N.A., 2006 U.S. Dist. LEXIS 75260, at *6 (W.D.N.Y. Oct. 17, 2006), aff’d 347 Fed. App’x 658
(2d Cir. 2009). “Since service of process on an attorney not authorized to accept service for his
client is ineffective . . . delivery was not sufficient to effect service . . . .” Santos v. State Farm
Fire & Casualty Co., 902 F.2d 1092, 1094 (2d Cir. 1990).
cause for failure to serve within 120 days after the complaint was filed. Indeed, as discussed
more fully below, even after the complaint was filed, and new counsel for defendant Lee raised
lack of service, plaintiffs still failed to perfect service, even with time remaining to so do. Thus,
plaintiffs have not established good cause for their failure to serve.
District courts also have discretion to grant extensions in the absence of “good cause.”
See Zapata v. City of New York, 502 F.3d 192, 196 (2d Cir. 2007). Here, the parties do not
dispute that the statute of limitations on plaintiffs’ claims have run, at least in part. (See Pls.’ Br.
at 5; Def. Lee’s Br. at 2.) Where, as here, dismissal without prejudice would constitute a de
facto dismissal with prejudice, “the court must carefully consider the impact such an action will
have on the parties.” Phillip v. City of New York, No. 09-CV-442, 2012 WL 1598082, at *3
(E.D.N.Y. May 7, 2012); Harper v. City of New York, No. 09-CV-5571 (JG)(SMG), 2010 WL
4788016, at *9 (E.D.N.Y. Nov. 17, 2010). However, the Court need not grant an extension
simply because plaintiffs will otherwise be barred from bringing their claims. Id. (citing Zapata,
502 F.3d at 197 (“Where, as here, good cause is lacking, but the dismissal without prejudice in
combination with the statute of limitations would result in a dismissal with prejudice, we will not
find an abuse of discretion . . . so long as there are sufficient indications on the record that the
district court weighed the impact that a dismissal or extension would have on the parties.”
(footnote omitted))). “The factors bearing on whether to extend time to complete service of
process include: (1) whether statutes of limitations would bar the refiling of this action; (2)
whether the defendant had actual notice of the claims asserted in the complaint: (3) whether the
defendant attempted to conceal the defect in service; and (4) whether the defendant would be
prejudiced by extending the time for service.” DeMott v. Bacilious, No. 11-CV 6966 (PAE),
2012 WL 601074, at *8 (S.D.N.Y. Feb. 24, 2012).
The statute of limitations may bar refilling in this action. Ordinarily, this weighs heavily
in plaintiffs’ favor. However here, this factor is tempered by the fact that plaintiffs filed this
action after the statute of limitations had run on some if not all of plaintiffs’ claims. As alleged
in the complaint, plaintiffs intend to rely on their claimed assertion that Mr. Choi not only
waived service on behalf of defendant Lee, but also waived the statute of limitations. (Comp. ¶
13.) And again, defendant Lee denies that Mr. Choi was authorized to waive the statute of
limitations. (See Doc. No. 4 at 2 n.1.) Thus, even with proper service, the statute of limitations
poses a hurdle to plaintiffs’ ability to press their claims.
It appears that defendant Lee did in fact gain actual notice of the claims in the complaint
after her attorney noticed an appearance, albeit one limited for the purposes of challenging
service. On the other hand, plaintiffs had ample time to effect service, yet failed to do so. Upon
the filing of the complaint, plaintiffs could easily have served defendant Lee, or complied with
Rule 4(d)’s requirements to obtain a proper waiver of service from an agent properly authorized
to accept service on defendant’s behalf. They did not do so. Even more troubling, plaintiffs
failed to effect proper service even after defendant Lee’s counsel filed a request for pre-motion
conference, putting plaintiffs on notice of defendant’s intention to move for dismissal based on
insufficient service—approximately 35 days prior to the end of plaintiffs’ 120-day period in
which to serve process. (See Doc. No. 6.) Plaintiffs’ counsel was obviously aware that he never
arranged for service on anyone with the purpose of satisfying service obligations with respect to
defendant Lee, and, upon the filing of the pre-motion conference letter, plaintiffs’ counsel was
plainly on notice of defendant Lee’s specific arguments as to service. Yet, plaintiffs did not even
attempt to serve defendant Lee during this time.
As to prejudice, the Court notes that this action was filed many years after the alleged
wrongful conduct began and ended, and even after the statute of limitations had run on some or
all of plaintiffs’ claims. Witnesses and evidence were already potentially weakened by the delay
in filing, and the failure to serve only exacerbated matters. In addition, plaintiffs’ brief indicates
that plaintiffs’ counsel and Mr. Choi regularly negotiated around the rules regarding service of
process on defendants under Federal Rule of Civil Procedure 4 in other cases in which they
represented opposing sides. (See Pls.’ Br. at 5.) While the Rules themselves make some
accommodation for litigants to economize resources, see, e.g., Fed. R. Civ. P. 4(d) (waiver of
service), where, as here, the relationship between plaintiffs’ counsel and Mr. Choi, and the
informality of their joint practice, presents the risk that an unauthorized representative might
bind or prejudice a defendant without his or her permission or knowledge, or worse, in direct
contravention of his or her wishes. The unequivocal requirement of service of process is
designed to obviate that concern; and here, plaintiffs’ failure to serve directly flouted the rule,
and undermined its purpose. To allow plaintiffs to try their luck by negotiating with a
representative—without ever attempting actual service, even in the face of a challenge to
service—and simply fall back on a belated request for a discretionary extension of time is not an
acceptable course. Such an exception would swallow the rule.
“Even assuming the prejudice” to defendant Lee “was slight,” plaintiffs “made no effort
to effect service within the service period, neglected to ask for an extension within a reasonable
period of time, and ha[ve] advanced no cognizable excuse for the delay.” Zapata, 502 F.3d at
199. For these reasons, the Court grants defendant Lee’s motion to dismiss for lack of personal
jurisdiction due to plaintiffs’ failure to effect service.
For the reasons set forth above, defendant Lee’s motion to dismiss is GRANTED, and all
claims against defendant Lee are hereby DISMISSED. As all other parties have settled, the
Clerk of Court is directed to close this case.
Roslynn R. Mauskopf
Dated: Brooklyn, New York
March 11, 2013
ROSLYNN R. MAUSKOPF
United States District Judge
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