Unpublished Disposition, 909 F.2d 1489 (9th Cir. 1988)

MEMORANDUM^** 

Appellants appeal from a judgment dismissing their action for failure to complete service of process within 120 days as required by Fed. R. Civ. P. 4(j), and from an order denying their motion for reconsideration of that dismissal under Fed. R. Civ. P. 60(b) (4) and (6). Appellants also appeal from a grant of summary judgment for appellee Smith on their claim that Smith fraudulently induced them to make "good faith deposits" to John Michael Ledbetter. Although appellants brought this action against several defendants, they have limited this appeal to claims against Walden and/or Smith. We affirm the district court's judgment dismissing appellants' action on Rule 4(j) grounds. We also affirm the grant of summary judgment for Smith.

Fed. R. Civ. P. 4(j) provides that an action "shall be dismissed" without prejudice whenever a plaintiff fails to complete service within 120 days of filing the complaint absent a showing of "good cause." The district court granted appellees' motion to dismiss under Fed. R. Civ. P. 4(j) because appellees were not served with notice until over 600 days after the initial complaint was filed, and there was not "good cause" for this delay. We review a district court's dismissal of an action pursuant to Rule 4(j) for abuse of discretion. Wei v. Hawaii, 763 F.2d 370, 371 (9th Cir. 1985). We review a district court's denial of a Rule 60(b) motion for abuse of discretion. Thompson v. Housing Authority of the City of Los Angeles, 782 F.2d 829, 832 (9th Cir. 1986).

Appellants argued before the district court that good cause existed for the delay in service because their failure to serve the appellees was due to factors beyond their control. See Wei, 763 F.2d at 372. They argued that they could not serve appellees during the pendency of an F.B.I. investigation of other defendants not involved in this appeal, and that they had no control over the length of time it took to indict those defendants.

The district court did not abuse its discretion in finding that the F.B.I. investigation in no way precluded service upon the defendants. The court determined that appellants' argument that appellees had to be kept unaware of the criminal investigation " [did] not make sense," and noted that F.B.I. Agent Pickard stated in an affidavit that she never requested that the lawsuit not be filed or that it be filed under seal. Nagano v. Ledbetter, No. 85-0211 (D. Haw. Dec. 8, 1988) (order denying motion for reconsideration).

The district court also did not abuse its discretion in finding that its order sealing the complaint did not excuse appellants from the requirements of service under Rule 4. As the district court stated:

The court's order to seal the complaint was to prevent public access. The sealing was not intended to excuse service upon the defendants.... Since [appellants] chose to move for a sealing of the complaint on their own accord, it was their responsibility either to serve the defendants within 120 days or to move for an enlargement of time under Fed. R. Civ. P. 6(b).

Id. We note also that appellees were first served 123 days after the complaint was unsealed after the criminal defendants had been arrested (which was 694 days after the initial complaint had been filed).

Therefore, the district court did not abuse its discretion in dismissing appellants' action because appellants had not established "good cause" for the long delay in service.

In their motion for reconsideration, appellants argued for the first time that under Fed. R. Civ. P. 12(h) (1), appellees had waived their right to object to insufficient service of process by failing to raise this objection in a consolidated pre-answer response to the first amended complaint made pursuant to Fed. R. Civ. P. 12(g). The district court denied the motion, holding that because appellants had the opportunity to raise the Rule 12(h) (1) waiver argument at the time of appellees' motion to dismiss, but failed to do so, the court would not consider it for the first time on a motion for reconsideration.¹ 

In order to obtain relief from a judgment under Rule 60(b) (6), "extraordinary circumstances" must exist. Ackermann v. United States, 340 U.S. 193, 199 (1950); United States v. Sparks, 685 F.2d 1128, 1130 (9th Cir. 1982). Appellants' failure to raise the Rule 12(h) (1) waiver argument prior to entry of final judgment is not so extraordinary as to warrant the granting of their Rule 60(b) (6) motion. Therefore, we find no abuse of discretion in the district court's refusal to consider appellants' Rule 12(h) (1) waiver argument raised for the first time in their motion for reconsideration.

II. Summary Judgment for Smith on the Fraud Claim

We review a grant of summary judgment de novo. Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir. 1989); State Farm Fire & Casualty Co. v. Martin, 872 F.2d 319, 320 (9th Cir. 1989).

Prior to the dismissal of appellants' action, the district court granted summary judgment in favor of appellee Smith on appellants' claim that Smith fraudulently induced them to make "good faith deposits" to Ledbetter. We agree with the district court that appellants did not put forth adequate evidence that they relied on any of Smith's acts or omissions under the evidentiary requirements of common law fraud. See, e.g., Shaffer v. Earl Thacker Co., Ltd., 716 P.2d 163, 165 (Haw.App.1986). Additionally, we agree with the district court that appellants failed to identify any significant probative evidence supporting a business compulsion theory. See Penn v. Transportation Lease Hawaii, Ltd., 2 Haw.App. 272, 275 (1981). Summary judgment for Smith was therefore appropriate.

The judgment of the District Court dismissing appellants' action is AFFIRMED. The order of the District Court granting summary judgment for Smith on appellants' fraud claim is AFFIRMED.