Winer v. Strickland et al, No. 2:2013cv00231 - Document 39 (D. Nev. 2014)

Court Description: ORDER Granting in part and Denying in part 37 Motion for Entry of Default. FURTHER ORDERED that Winer has until November 6, 2014, to either (1) file proofof service on Steven Strickland and Advantage, or (2) show good cause why his claims against Steven Strickland and Advantage should not be dismissed without prejudice under FRCP 4(m). Signed by Judge Jennifer A. Dorsey on 10/7/14. (Copies have been distributed pursuant to the NEF - MMM)
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Winer v. Strickland et al Doc. 39 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 Leo Winer, Case No. 2:13-cv-231-JAD-CWH 10 11 12 13 Plaintiff, v. Order Granting in Part and Denying in Part Motion for Entry of Default [Doc. 37] and Directing Entry of Default against Paul Strickland Steven A. Strickland, et al., Defendants. 14 15 16 Leo Winer, as Trustee of his own trust and Successor Trustee of his longtime friend 17 Michael Pepitone’s trust, sues Steven A. Strickland, Advantage Trading Co., Paul Strickland, 18 Jr., and others for an alleged investment scam that bilked these elderly men out of hundreds 19 of thousands of dollars of their retirement savings. Doc. 1 at 1. Winer now seeks entry of 20 default against Advantage Trading and the Stricklands under Federal Rule of Civil Procedure 21 55. Doc. 37. It appears that Paul Strickland was properly served with the summons and 22 complaint and that default may be entered against him. But I cannot reach the same 23 conclusion as to Steven Strickland and Advantage. Although Winer’s time to serve these 24 two defendants has expired, leaving his claims against them vulnerable to dismissal without 25 prejudice under Rule 4(m), I grant Winer 30 more days to either serve these defendants or 26 show good cause why the claims against Steven Strickland and Advantage should not be 27 dismissed under Rule 4(m). 28 1 Background 1 2 Winer filed this action on February 12, 2013. Doc. 1. Summonses were returned 3 executed for Advantage and both Stricklands. Docs. 18, 19, 20, 23. These docket entries 4 reflect that Winer served Paul on May 7, 2013, by personally delivering a copy of the 5 summons and complaint to his home in Tampa, Florida. Doc. 20. A week later, Winer 6 delivered a copy of the summons and complaint to Advantage’s registered agent for service 7 of process at an undisclosed address. Doc. 19. On June 24, 2013, Winer effectuated 8 “substitute service” on Steven in Florida by giving the summons to “Mr. Steven Perez who 9 offered to . . . accept service after relating Steven . . . used the address but frequently comes 10 11 and goes.” Doc. 23 at 2.1 Winer amended his complaint on July 10, 2013, and purportedly served it on all three 12 defendants by first class mail. Doc. 25-3 at 1. The addresses to which Steven and Paul’s 13 copies were mailed are identical to those appearing on their original summonses; 14 Advantage’s copy was mailed to “1821 Logan Ave., Cheyenne, Wy, 82001.” Id. Winer now 15 moves for entry of clerk’s default against all three of these defendants, indicating generally 16 that none of them has answered. Docs. 25; 37 at 2. Discussion 17 18 Under Federal Rule of Civil Procedure 55, “When a party against whom a judgment 19 for affirmative relief is sought has failed to plead or otherwise defend, and that failure is 20 shown by affidavit or otherwise, the clerk must enter the party’s default.”2 This rule 21 presupposes that the court has personal jurisdiction over the defendant, and “service of 22 process is the means by which a court asserts jurisdiction over the person.”3 When personal 23 service is required, failure to perfect it is fatal to a lawsuit.4 Rule 4(m) requires service of the 24 25 1 The affidavit refers to “Eric Perez,” and in the “comments” section of the service form Perez is referred to as “Steven” Perez. Doc. 23 at 1-2. 26 2 Fed. R. Civ. Proc. 55(a). 27 3 Securities and Exchange Commission v. Ross, 504 F.3d 1130, 1138 (9th Cir. 2007) (citation omitted). 28 4 Daly-Murphy v. Winston, 837 F.2d 348, 355 (9th Cir. 1987). 2 1 Summons and Complaint to be completed within 120 days.5 Rule 4(c) further provides that 2 “The plaintiff is responsible for having the summons and complaint served within the time 3 allowed under Rule 4(m).”6 4 A. 5 Paul and Steven Strickland Proper service on an individual within a United States jurisdiction under Rule 4(e) 6 requires personal service: leaving a copy of the summons and complaint “at the individual’s 7 dwelling or usual place of abode with someone of suitable age and discretion who resides 8 there” or delivering a copy to an agent authorized to accept service of process.7 Paul and 9 Steven Strickland could also be served by the methods identified by the law of either the 10 state where the district court is located (i.e., Nevada) or the state where service is made (here: 11 Florida).8 12 Under these standards, there is little question that Paul was properly served. He was 13 personally served with Winer’s original complaint at his home on May 7, 2013—an 14 acceptable form of service under FRCP 4(e)(1) and NRCP 4(d)(6). Doc. 20. Paul was then 15 served with a copy of the amended complaint by first class mail on July 10, 2013. Doc. 25-3 16 at 1. Since being served, Paul has failed to respond to the complaint within the time period 17 specified by the federal rules, and a clerk’s entry of default is now warranted. 18 Steven is another matter. The record reflects that process server Darel Dougherty 19 attempted to serve Steven personally on several occasions in May and June 2013 at an 20 address that Paul Strickland (Steven’s brother) provided. Doc. 23 at 2. The “Server’s 21 Comments” to the summons reflect that an investigator named “Ms. Horn” was informed by 22 Steven’s landlord that Steven had moved out in May and the landlord did not have 23 information on his current whereabouts. Id. On June 24, 2013, Dougherty served the 24 25 5 Id. 26 6 Id. 27 7 Id. 28 8 See Fed. R. Civ. Proc. 4(e)(1). 3 1 complaint via “substitute service” by giving a copy of the summons and complaint to “Eric 2 Perez as cohabitant” at a Tampa, Florida, address. Doc. 23 at 1. The server’s notes, 3 however, reflect that “The Summons was given to Mr. Steven Perez who offered to accept 4 service after relating Steven A. Strickland used the address but frequently comes and goes.” 5 Id. at 2. The service address, “12251 Lexington Park Dr., Apt. 205, Tampa, FL 33626,” does 6 not match any of the addresses where service was previously attempted by Dougherty or 7 Horn. See id. 8 9 Based on these statements, Winer now concludes that Steven was served “at his residence of record with the Florida registrar of voters,” and that “receipt [was] 10 acknowledged by defendant on June 24, 2013.” Doc. 37 at 2. Winer makes no colorable 11 attempt to demonstrate that this course of events constitutes legal service of process under 12 Rule 4. His service attempt is also ultimately defective under Florida law, which requires 13 “[e]ach person who effects service of process [to] note on a return-of-service form attached 14 thereto, the date and time when it comes to hand, the date and time when it is served, the 15 manner of service, the name of the person on whom it was served and, if the person is served 16 in a representative capacity, the position occupied by the person. The return-of-service form 17 must be signed by the person who effects the service of process.”9 Failing to state these 18 required facts invalidates the service.10 The burden of proving effective service rests with the 19 party asserting jurisdiction, and service is presumed valid “if the return of service is regular 20 on its face.”11 “However, if the return is defective on its face, then the return is not evidence 21 of service and the party seeking to invoke the court’s jurisdiction must present evidence to 22 show effective service of process.”12 A Florida appellate court in the second district in which 23 24 9 25 10 26 11 27 28 Fla. Stat. Ann. § 48.21(1). Id. at § 48.21(2). Koster v. Sullivan, 103 So.3d 882, 884 (Fla. App. 2 Dist. 2012) (citing Re-Employment Services, Ltd. v. National Loan Acquisitions Co., 969 So.2d 467 (Fla. App. 5 Dist. 2007), review granted, 130 So.3d 692, 2013 WL 6084275 (Fla. Oct. 31, 2013). 12 Id. 4 1 Tampa, Florida, is located recently held that a return of service need only “identify[] the 2 manner of service as substitute and otherwise fully comply[] with the express requirements 3 of section 48.21” in order to establish the presumption of valid service.13 But even assuming arguendo that portions of Winer’s service affidavit satisfy the 4 5 “presumption” of valid service under section 48.21’s limited requirements, other statements 6 in the service return undermine it. The unsworn note that Steven Strickland was “substitute 7 served” on “Mr. Steven Perez” at an address that Steven “used . . . but frequently comes and 8 goes” is inconsistent with the sworn statement on the Proof of Service that the summons was 9 left at Steven’s “residence or usual place of abode with Eric Perez.” Compare Doc. 23 at 2, 10 with id. at 1. And there is no indication how the process server learned or believed that 11 Steven Strickland would be at Perez’s address. In light of these unresolved ambiguities, I 12 cannot conclude that plaintiff has demonstrated that Steven Strickland was properly served 13 with legal process of the summons and complaint such that this court obtained jurisdiction 14 over him and can now enter default against him. Winer’s motion for clerk’s entry of default 15 against Steven Strickland must be denied. 16 B. 17 Advantage Service upon Advantage is also defective. Rule 4(h) governs service upon 18 corporations; it provides that service in a judicial district of the United States may be made 19 “in the manner prescribed by Rule 4(e)(1) for serving an individual” or “by delivering a copy 20 of the summons and of the complaint to . . . an agent authorized by appointment or by law to 21 receive service of process.”14 The proof of service on Advantage states that the summons 22 was delivered to Julie Leandes, who is designated by law to accept service of process on 23 behalf of Advantage Trading Co., et al.” Doc. 19. Where—even the state in which—this 24 service was effectuated is anyone’s guess. Without this information, I cannot even ascertain 25 13 26 Id at 886. Florida’s appellate courts disagree on the scope of statutory compliance required to create a presumption of regular service when an individual is served through a cohabitant. But this disagreement has 27 no impact on this decision because the record evidence that the recipient of this “substituted service” was, in fact, a cohabitant is unreliable. 28 14 Fed. R. Civ. Proc. 4(h)(1). 5 1 whether the summons was properly delivered under the laws of the state of service. Winer 2 has not sufficiently demonstrated that Advantage failed to plead or otherwise defend as Rule 3 55(a) requires, and the request for a clerk’s entry of default against Advantage must be 4 denied. 5 C. 6 30 Days to Complete Service or Show Cause Why the Court Should Not Dismiss Rule 4(m) states that “If a defendant is not served within 120 days after the complaint 7 is filed, the court—on motion or on its own after notice to the plaintiff—must dismiss the 8 action without prejudice against that defendant or order that service be made within a 9 specified time. But if the plaintiff shows good cause for the failure, the court must extend the 10 time for service for an appropriate period.”15 This case is now 20-months old, and almost 15 11 months have passed since Winer filed his First Amended Complaint. Docs. 1, 25. The 12 evidence in the record fails to demonstrate that a summons and complaint were properly 13 served on Steven Strickland or Advantage. Winer shall have until November 6, 2014, to 14 either (1) file proof of proper service on Steven Strickland and Advantage; or (2) show good 15 cause why his claims against Steven Strickland and Advantage should not be dismissed 16 without prejudice under FRCP 4(m). If plaintiff fails to satisfy either of these options by 17 November 6, 2014, his claims against Steven Strickland and Advantage will be dismissed 18 without further prior notice. Conclusion 19 20 21 22 Accordingly, it is HEREBY ORDERED that Winer’s Motion for Entry of Default [Doc. 37] is GRANTED in part and DENIED in part: C instructed to enter default against Paul Strickland; 23 24 C It is DENIED as to defendants Steven Strickland and Advantage Trading Co., LLC. 25 26 It is GRANTED as to defendant Paul Strickland. The clerk of court is It is FURTHER ORDERED that Winer has until November 6, 2014, to either (1) file 27 28 15 Id. at 4(m). 6 1 proof of service on Steven Strickland and Advantage, or (2) show good cause why his claims 2 against Steven Strickland and Advantage should not be dismissed without prejudice under 3 FRCP 4(m). If plaintiff fails to satisfy either of these options by November 6, 2014, his 4 claims against Steven Strickland and Advantage will be dismissed without further prior 5 notice. 6 7 8 DATED: October 7, 2014. _________________________________ Jennifer A. Dorsey United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7