Mil-Spec Industries, Corp. v. Precision Ammunition, LLC et al
Filing
30
MEMORANDUM & ORDER denying 16 Motion to Dismiss; denying 20 Motion for Default Judgment; granting in part and denying in part 26 Motion to Strike; For the foregoing reasons, Defendants' motion to dismiss (Docket Entry 16) and Plaintif f's motion seeking a default judgment (Docket Entry 20) are both DENIED WITHOUT PREJUDICE and Plaintiff's cross-motion to strike (Docket Entry 26) is GRANTED IN PART AND DENIED IN PART. The Court finds that Defendants Phillips and Campbell were properly served with process. In addition, Plaintiff is GRANTED an additional sixty (60) days from the date of this Memorandum & Order to serve Defendant Precision with the Summons and Complaint. So Ordered by Judge Joanna Seybert on 8/5/2016. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
MIL-SPEC INDUSTRIES CORP.,
Plaintiff,
-against-
MEMORANDUM & ORDER
14-CV-7099 (JS)(SIL)
PRECISION AMMUNITION, LLC, MATT
CAMPBELL, GARY PHILLIPS,
and JOHN DOES 1-10,
Defendants.
---------------------------------------X
APPEARANCES
For Plaintiff:
Darius A. Marzec, Esq.
Marzec Law Firm
225 Broadway, Suite 3000
New York, NY 10007
For Defendants:
Jed Matthew Weiss, Esq.
Cole Schotz
1325 Avenue of the Americas, 19th floor
New York, NY 10019
Eric Walraven, Esq.
Law Office of Eric Walraven
5956 Sherry Lane, Suite 1000
Dallas, TX 75225
SEYBERT, District Judge:
Plaintiff
Mil-Spec
Industries,
Corp.
(“Plaintiff”)
commenced this commercial contract dispute against Matt Campbell
(“Campbell”),
Gary
Phillips
(“Phillips,”
and
together
with
Campbell, the “Individual Defendants”), and Precision Ammunition,
LLC (“Precision,” and collectively, “Defendants”1) on December 4,
Plaintiffs also bring claims against several “John Doe”
Defendants.
1
2014. Pending before the Court is Defendants’ motion to dismiss
(Docket Entry 16), Plaintiff’s motion seeking a default judgment
(Docket Entry 20), and Plaintiff’s cross-motion to strike (Docket
Entry 26).
All of these motions hinge upon whether Plaintiff
properly served Defendants with the Summons and Complaint under
the Federal Rules of Civil Procedure. For the reasons that follow,
the Court finds that Defendants Campbell and Philips were properly
served with process, however, Precision was not.
In the Court’s
discretion, Plaintiff is therefore granted additional time to
attempt to serve Precision with the Summons and Complaint.
BACKGROUND2
Plaintiff employed a process server named Geoffrey Hiner
(“Hiner”) to serve Defendants with the Summons and Complaint. (See
Hiner Aff., Docket Entry 24-20, ¶¶ 1-3.)
Hiner claims he made
“several attempts” to serve Defendants with process at Precision’s
offices in Argyle, Texas. (Hiner Aff. ¶ 3.)
On his first attempt,
on December 10, 2014, Hiner learned that Defendant Philips was
“out of town,” so he left his contact information.
¶ 4.)
(Hiner Aff.
Hiner claims he later had a phone conversation with Philips
during which Hiner “informed [Phillips] that he was named in a law
The following facts are taken from the Complaint and the
various affidavits submitted connection with the parties’
motions. The facts in the Complaint are presumed to be true for
purposes of this Memorandum & Order.
2
2
suit [sic] . . . [and] Phillips stated he would contact his
attorney” to see if the attorney would accept service.
Aff. ¶ 4.)
(Hiner
Although Hiner called Phillips a second time and left
a voicemail, Hiner never spoke with Phillips again.
(Hiner Aff.
¶ 4.) Hiner also attempted to serve Defendant Campbell at a “gated
home” but was unable to gain access to the property.
(Hiner Aff.
¶ 5.)
After two additional service attempts at Precision’s
business address, Hiner claims he effected service on all three
Defendants
on
December
16,
2104,
by
giving
the
Summons
and
Complaint to one Chris Young (“Young”) at Precision’s business
Address. Hiner claims Young “represented himself to be an employee
representative
Precision.”
. . .
of
both
(Hiner Aff. ¶ 6.)
the
Individual
Defendants
and
Hiner’s Affidavit of Service state
that Hiner delivered a copy of the Summons and Complaint to Young
and “informed [Young] of the contents therein.”
Affs., Docket Entry 24-4, at 2.)
(Hiner Serv.
After serving Young with the
documents, Hiner’s affidavits of service state that he mailed
copies of the Summons and Complaint to the three Defendants at
Precision’s business address.
(Hiner Service Affs.)
According to Plaintiff’s counsel, Defendants’ attorney
engaged
in
settlement
discussions
with
Plaintiff
from
approximately December 2014 through February 2015, but the parties
were unable to reach a settlement.
3
(Marzec Opp. Decl., Docket
Entry 24-16, ¶ 14.) The fact that the parties actively discussed
settling this case beginning in October 2014 is supported by
documentary evidence. (See Naane Aff., Docket Entry 24, Exs. EG.)
A member of Precision named Mark Turnbull submitted an
affidavit in support of Defendants’ motion to dismiss.
Aff., Docket Entry 17-1.)
(Turnbull
According to Turnbull, Defendants
Campbell and Philips were employees of Precision in 2013 and 2014,
but Defendant Young “was never an employee of Precision,” and
merely “performed work as an independent contractor . .
various
times
in
2014.”
(Turnbull
Aff.
at
1.)
.
at
Turnbull
additionally asserts that Precision’s registered agent for service
of process was never served with the Summons and Complaint in this
action.
(Turnbull Aff. at 1.)
In separate affidavits, Defendants
Campbell and Phillips both claim they never received copies of the
Summons and Complaint. (Campbell Aff., Docket Entry 17-2; Phillips
Aff., Docket Entry 17-3.)
In their pending motion to dismiss, Defendants argue
that they were not properly served with the Complaint.
generally Defs.’ Br., Docket Entry 17.)
See
Plaintiff argues, in
opposition, that service on Defendants was proper and seeks a
default judgment for Defendants’ failure to participate in this
action.
(See generally Pl.’s Opp. Br., Docket Entry 25; Marzec
Decl., Docket Entry 20-2.)
4
DISCUSSION
“Federal
Rule
Civil
Procedure
12(b)(5)
authorizes
dismissal of the complaint for insufficient service of process
upon motion by a defendant made prior to the defendant’s filing an
answer.
Forte v. Lutheran Augustana Extended Care & Rehab. Ctr.,
No. 09-CV-2358, 2009 WL 4722325, at *2 (E.D.N.Y. Dec. 9, 2009).
When, defendants move to dismiss for lack of proper service, “the
plaintiff bears the burden of proving adequate service.” Dickerson
v. Napolitano, 604 F.3d 732, 752 (2d Cir. 2010) (internal quotation
marks and citation omitted).
I.
Service on the Individual Defendants
Defendants argue that Plaintiff did not properly serve
Philips and Campbell with process because (1) Young was not an
employee of Precision and (2) Phillips and Campbell assert they
never received the Complaint.3
(Defs.’ Br. at 6.)
To serve an individual defendant with process, Federal
Rule of Civil Procedure 4(e) provides that service may be made by
Defendants also argue in their initial moving papers that Hiner
could not have effected service on any of the Defendants at
Precision’s offices because its offices were closed on
December 5, 2014. (Defs.’ Br. at 6.) Hiner’s affidavits of
service make clear, however, that Hiner served Young with
process on December 16, 2014, not on December 5, 2014. (See
Hiner Service Affs.) Recognizing their error on Reply,
Defendants withdrew their assertion that Precision’s offices
were closed on the date Hiner attempted service, explaining that
they “inadvertently misread the date set forth on Mr. Hiner’s
Affidavits of Service.” (Defs.’ Reply Br., Docket Entry 28, at
1.)
3
5
“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.” FED. R. CIV. P. 4(e)(1).
Applicable New York law provides that personal service on an
individual may be effected using four methods: (1) delivering the
summons to the defendant; (2) delivering the summons to a person
of suitable age and discretion at the place of business, home, or
“usual place of abode” of the defendant and mailing the summons to
the defendant’s last known residence or place of business; (3)
delivering the summons to the defendant’s agent for service of
process; and (4) where service by the first two methods cannot be
made with “due diligence,” affixing the summons to the door of the
defendant’s actual place of business, home, or “usual place of
abode,” and mailing the summons to the defendant’s last known
residence or place of business.
N.Y. CPLR § 308 (1)-(4).
Here, Plaintiff’s process server submitted an affidavit
explaining that he left copies of Summons and Complaint for both
Campbell and Phillips with Young, a person of suitable age and
discretion, and placed copies of the pleadings in the mail.
The
fact that Young was an independent contractor for Precision is
irrelevant.
See Albilia v. Hillcrest Gen. Hosp., 124 A.D.2d 499,
500, 508 N.Y.S.2d 10, 10 (2d Dep’t 1986) (“service of a copy of
the summons and complaint upon . . . a receptionist” at the
defendant’s place of business “constituted delivery to a person of
6
suitable age and discretion.”); Essex Credit Corp. v. Theodore
Tarantini Associates Ltd., 179 A.D.2d 973, 973, 579 N.Y.S.2d 235,
236 (3d Dep’t 1992) (“Defendant’s allegation that [the recipient
of process] was not his employee, but was, rather, an independent
contractor, is insufficient to raise a legitimate factual issue as
to whether [he] was a person of suitable age and discretion”).
Moreover, “[a] process server’s affidavit of service constitutes
prima
facie
evidence
of
valid
service,”
and
the
“conclusory
assertion that [Defendants] did not receive the mailed papers . .
. [is] inadequate to overcome the inference of proper mailing that
arose from the affidavit.”
Washington Mut. Bank v. Huggins, ---
N.Y.S.3d ---, 140 A.D.3d 858 (2d Dep’t 2016).
Thus, Campbell and
Philip’s claim in their affidavits that they did not receive copies
of
the
Summons
and
Complaint
are
insufficient
to
rebut
the
statements in Hiner’s affidavits attesting to proper leave-andmail service under New York law.
The Court therefore finds that
Plaintiff properly served the Individual Defendants with process.
II.
Service on Precision
Similar
to
the
rule
for
service
of
process
on
individuals, Federal Rule of Civil Procedure 4(h) provides that
corporations may be served within the judicial districts of the
United States by either (1) following the relevant state law
regarding service of a summons, or (2) “by delivering a copy of
the summons and of the complaint to an officer, a managing or
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general agent, or any other agent authorized by appointment or by
law
to
receive
service
of
process
and--if
the
agent
is
one
authorized by statute and the statue so requires--by also mailing
a copy of each to the defendant[.]”
(B).
FED. R. CIV. P. 4(h)(1)(A)-
The plaintiff bears the burden of demonstrating that service
was valid.
Dickerson, 604 F.3d at 752.
In New York, under CPLR Section 311-a, service on a
limited
liability
company
(“LLC”)
can
be
made
by
personally
delivering a copy of the summons to: (1) a member of the LLC, (2)
a manager of the LLC, (3) an agent authorized by appointment to
receive process, or (4) any other individual designated by the LLC
to receive process.
N.Y. CPLR § 311-a(a).
Section 311-a further
provides that service may be made to the Secretary of State as
agent for the LLC.
N.Y. CPLR § 311-a(a); N.Y. LTD. LIAB. CO. LAW
§ 303(a).
Here, Plaintiff concedes that it did not serve the
Secretary of State or a member, manager, agent, or individual
designated to accept service on behalf of Precision as set forth
in Section 311-a.
Rather, Hiner merely asserts that “Mr. Young
held himself out as an employee of Precision.”
(Hiner Aff. ¶ 7.)
Under prevailing case law in New York, however, the alternative
methods of personal service discussed within CPLR 308 are not
available for effecting service on a limited liability company.
See Ciafone v. Queens Ctr. for Rehab. and Residential Healthcare,
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126 A.D.3d 662, 662, 5 N.Y.S.3d 462 (2d Dep’t 2015) (“jurisdiction
was not obtained by the alleged delivery of the summons and
complaint to an employee at the facility’s security desk because
it is a limited liability company, and its four individual members
are the only persons authorized to accept service on its behalf”);
See also Stuyvesant Fuel Serv. Corp. v. 99-105 3rd Ave. Realty
LLC, 192 Misc. 2d 104, 106, 745 N.Y.S.2d 680, 681 (N.Y.C. Civ. Ct.
2002).
Plaintiff thus failed to properly serve Precision pursuant
to Rule 4(h)(1)(B).
III. Discretionary Extension of Plaintiff’s Time to Serve
Plaintiff urges the Court to give it a second chance to
properly serve Precision with process.
(See Pl.’s Opp. Br. at 8.)
Rule 4(m), which addresses extensions of time limit to serve the
Complaint, provides in relevant part that if the “plaintiff shows
good cause” for its failure to timely serve the Complaint, “the
court must extend the time for service for an appropriate period.”
FED. R. CIV. P. 4(m).
Because Plaintiff cannot show good cause for its failure
to serve Precision with process, however, Plaintiff asks the Court
to extend its time to effect service in its discretion.
The
Advisory Committee Notes to Rule 4(m) makes clear that the Court
can give Plaintiff an additional opportunity to serve Defendants
“even if there is no good cause shown.” FED. R. CIV. P. 4(m) Advisory
Committee’s Note.
Courts consider four factors before exercising
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their discretion under Rule 4(m): “‘(1) whether the applicable
statute of limitations would bar the refiled action; (2) whether
the defendant had actual notice of the claims asserted in the
complaint; (3) whether the defendant had attempted to conceal the
defect
in
service;
and
(4)
whether
the
defendant
would
be
prejudiced by the granting of plaintiff’s request for relief from
the provision.’”
Carroll v. Certified Moving & Storage, Co., LLC,
No. 04-CV-4446, 2005 WL 1711184, at *1-3 (E.D.N.Y. July 19, 2005)
(quoting Eastern Refractories Co. v. Forty Eight Insulations,
Inc., 187 F .R.D. 503, 506 (S.D.N.Y. 1999).
In this case, all of
the factors favor allowing Plaintiff more time to effect service
upon Precision.
Specifically, the applicable six-year statute of
limitations for contracts actions has not expired and there is no
evidence Plaintiff attempted to conceal its defective service, or
that
Precision
Defendants’
would
be
allegations.
prejudiced
by
Moreover,
having
to
evidence
respond
exists
to
that
Defendants’ attorney was aware of this dispute since October 2014
and
communicated
matter.
with
Plaintiff’s
counsel
about
settling
the
Under these circumstances, the Court will allow Plaintiff
an additional sixty (60) days to attempt to serve Precision with
the Summons and Complaint.
CONCLUSION
For the foregoing reasons, Defendants’ motion to dismiss
(Docket Entry 16) and Plaintiff’s motion seeking a default judgment
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(Docket Entry 20) are both DENIED WITHOUT PREJUDICE and Plaintiff’s
cross-motion to strike (Docket Entry 26) is GRANTED IN PART AND
DENIED IN PART.
The Court finds that Defendants Phillips and
Campbell were properly served with process. In addition, Plaintiff
is GRANTED an additional sixty (60) days from the date of this
Memorandum & Order to serve Defendant Precision with the Summons
and Complaint.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:
August
5 , 2016
Central Islip, New York
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