Benjamin v. Grosnick

• Court: Court of Appeals for the First Circuit
• Decided: July 20, 1993
• Docket: 93-1004
• Status: Published

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 93-1004

                                 EDWARD H. BENJAMIN,

                                Plaintiff, Appellant,

                                          v.

                                  ALLEN H. GROSNICK,

                                 Defendant, Appellee.

                                 ____________________

          No. 93-1005

                                  PETER J. EMBRIANO

                                Plaintiff, Appellant,

                                          v.

                                  ALLEN H. GROSNICK,

                                 Defendant, Appellee.

                                 ____________________
                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS 

                    [Hon. Frank H. Freedman, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                              Torruella, Circuit Judge,
                                         _____________

                           Feinberg,* Senior Circuit Judge,
                                      ____________________

                              and Boudin, Circuit Judge.
                                          _____________

                                _____________________

____________________

          *  Of the Second Circuit, sitting by designation.

C. Brian  McDonald, with  whom  Ronald P.  Weiss, Gerald  P.
               __________________              ________________  __________
          Ciejka  and Bulkley,  Richardson and  Gelinas, were on  brief for
          ______      _________________________________
          appellants.
               Robert Aronson, with whom Law Offices of Robert Aronson, was
               ______________            _____________________________
          on brief for appellee.

____________________

                                    July 20, 1993
                                 ____________________

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TORRUELLA,   Circuit  Judge.     In   companion  cases,
                                 ______________

          appellants, Edward Benjamin, M.D.  and Peter Embriano, M.D., sued

          appellee   Allen   Grosnick    for   deceit,   fraud,   negligent

          misrepresentation,  breach of fiduciary  duty, and  violations of

          state and federal securities law.   The district court  dismissed

          the claims on the ground that appellants failed to properly serve

          pleadings upon  appellee within  the required one  hundred twenty

          days of filing  suit.   We affirm the  district court's  judgment

          with respect to Benjamin and reverse it with respect to Embriano.

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    Appellants   filed   complaints  against   appellee  on

          September 14,  1990.   Twelve  days  later,  Deputy Sheriff  Paul

          Bianconi executed returns of  service swearing that he personally

          served appellee at 167  Dwight Street, Longmeadow,  Massachusetts

          with  both sets  of  pleadings.   After  procuring an  extension,

          appellee answered  alleging improper  service of process  in both

          cases and insufficient process  in Benjamin's case.  On  the same

          day,  appellee  also filed  a  third  party complaint  and  began

          discovery.  Six weeks  later, the court approved an  agreement by

          the parties  to stay  the proceedings  for reasons  irrelevant to

          this appeal.

                    Eventually, the stay ended, and a scheduling conference

          was  held  at  which  appellee   made  a  vague  assertion   that

          appellants' service failed to  comply with Rule 4 of  the Federal

          Rules of Civil Procedure.1   At that time, he also asserted  that
                              
          ____________________

          1  See appendix for the text of Rule 4.

                                         -3-

process was insufficient in Benjamin's case because he was served

          with the wrong complaint.2

                    On  April  30,  1992,  appellee moved  to  dismiss  the

          actions  pursuant  to Rule  4(j) of  the  Federal Rules  of Civil

          Procedure for  untimely  service.   In  support of  the  motions,

          appellee submitted an affidavit  claiming that, while the returns

          of  service  indicated  that   personal  service  took  place  in

          Massachusetts, he was not in Massachusetts on the alleged date of

          service.  At this point, it  became clear that this was the basis

          of  the insufficient  service  defenses.   In addition,  appellee

          reiterated  in the affidavit that  even if the  method of service

          sufficed,  the  process itself  did  not  because Benjamin  never

          served him with  the proper complaint.  In opposition, appellants

          submitted  affidavits by the  deputy sheriff stating  that he had

          personally served appellee on  the record date.  Appellants  then

          re-served appellee properly.

                    After an evidentiary hearing, the  district court found

          that  appellee was  in  Arizona on  the  service date,  and  that

          appellants therefore  failed to  personally serve him  within the

          120 day limit.  Then, finding that appellants failed to show good
                              
          ____________________
          cause for  the delayed service,  the court  dismissed the  action
          2   Appellee contends that  while the summons  properly cited the
          without  prejudice.3    The  district  court  denied  appellants'
          appropriate case names, the  complaint that the sheriff delivered
          for Benjamin  regarded an action  by Benjamin against  Richard K.
          Bernstein and  The  Bernstein Group,  Inc. in  the United  States
          District  Court  for the  District  of Connecticut.    While that
          lawsuit  concerned  similar  interests,  the complaint  for  that
          action did not name appellee as a defendant.

          3  Although the court dismissed the claims without prejudice, the
          statute of  limitations bars the refiling  of appellants' federal
          statutory claims.

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request for reconsideration, and appellants filed this appeal.

                                      DISCUSSION
                                      DISCUSSION
                                      __________

                    Under Fed. R.  Civ. P.  4(j), if a  plaintiff fails  to

          properly serve a named  defendant within 120 days after  filing a

          complaint, he must show "good cause why such service was not made

          within that period"  or face  dismissal.4  We  review a  district

          court's  determination of  whether a  plaintiff  established good

          cause only for  abuse of discretion.  United States  v. Ayer, 857
                                                _____________     ____

          F.2d 881, 884-85 (1st Cir. 1988).

                    With  respect  to   appellants'  alleged   insufficient

          service,  we find  the  district court's  dismissal  an abuse  of
          _______

          discretion.  Appellants did not purposely delay personal service.

          Indeed, they  completed  all  of the  steps  within  their  power

          necessary  to effectuate such service.   The blame  for the error

          rested  with the deputy sheriff.  Moreover, because of the deputy

          sheriff's  sworn  representations  in   the  return  of  service,

          appellants reasonably believed  that they  had personally  served

          appellees.  

                    Furthermore, although appellee's answers to appellants'

          complaints alleged  insufficient  service, appellee  waited  more

____________________

          4  Rule 4(j) provides in relevant part:

                      If a  service of the summons  is not made
                      upon  a defendant  within 120  days after
                      the filing of the complaint and the party
                      on whose behalf such service was required
                      cannot show good  cause why such  service
                      was  not  made  within that  period,  the
                      action  shall  be  dismissed  as  to that
                      defendant without prejudice . . . .

                                         -5-

than  120  days to  notify  appellants of  the  defect's specific

          nature.  Given the general  nature of appellee's asserted defense

          and  the deputy sheriff's assurance in the return of service that

          he   had  personally   served  appellee,   appellants  reasonably

          abstained from further investigation.

                    Still  further, the defective service did not prejudice

          appellee.   See Ayer, 857  F.2d at 881  (considering prejudice to
                      ___ ____

          defendant  in  Rule 4(j)  determination).    Appellee had  actual

          notice of the lawsuit  and secured through stipulation additional

          time to file an answer.  Conversely,  dismissal  will   prejudice

          appellants because the statute of  limitations has already run on

          their  federal statutory claims.  See Floyd v. United States, 900
                                            ___ _____    _____________

          F.2d  1045,  1046  (7th  Cir.  1990)  (considering  prejudice  to

          plaintiff in Rule 4(j) determination).

                    Given  all  of  the  above factors,  we  conclude  that

          appellants showed  good cause  for the delayed  personal service.

          In  its finding to  the contrary, the  district court erroneously

          relied  on Roque  v. United  States, 857  F.2d  20, 22  (1st Cir.
                     _____     ______________

          1988),5 which held that:

                      [G]iven  the  [defendant's] answer  which
                                                          _____
                      did   not  clearly   allege  insufficient
                      _________________________________________
                      service  of   process,  the  government's
                      _____________________
                      failure  plainly to  assert insufficiency
                      until  after the  120 days  had run,  the
                      confusion caused by the  district court's
                              
          ____________________

          5  Although a  district court's good cause finding is entitled to
          great deference, such a finding "'predicated upon, or induced by,
          a misapprehension of law  is robbed of its  customary vitality.'"
          Reliance  Steel Products v. National Fire Ins. Co., 880 F.2d 575,
          ________________________    ______________________
          577 (1st  Cir.  1989) (quoting  RCI  Northeast Services  Div.  v.
                                          _____________________________
          Boston Edison Co., 822 F.2d 199, 203 (1st Cir. 1987)).
          _________________

                                         -6-

initial   denial   of  the   government's
                      motion,  the simple  manner in  which the
                      service deficiency can be cured,  and the
                      absence of any  articulable prejudice  to
                      the  [defendant],  we think  the district
                      court should have found good cause.

          (emphasis added).  By implication,  the district court found that

          where a defendant clearly alleges insufficient service within the

          120  day limit, the  plaintiff is on  notice of some  defect, and

          therefore must inquire into  the nature of that defect.  We agree

          with  the district  court that  under certain  circumstances, the

          assertion  in an answer  of insufficient service  of process will

          provide  notice  that  would  induce a  reasonable  plaintiff  to

          investigate the possibility of a deficiency.   In addition, there

          is  no requirement  that a  defendant specify  the source  of the

          defect in the  service.   However, the lack  of such  specificity

          bears on the reasonableness  of the plaintiff's actions.   In the

          present case, Grosnick did  not specify the source of  the defect

          until it was  too late for appellants to cure it.  Where as here,

          appellants,  relying on an attested  to return of  service by the

          deputy sheriff, believed that they had properly effected service,

          and indeed did everything in their power to do so, Roque does not
                                                             _____

          imply that failure  to investigate after  a general assertion  of

          insufficient  service  prevents a  finding  of  good  cause.   We

          therefore   reverse  the   court's   judgment  with   respect  to

          appellants' delay of personal service.

                    On the other hand,  we cannot easily forgive Benjamin's

          alleged service  of insufficient process.   Although the district
                                           _______

          court requested  a statement  of contested facts,  Benjamin never

                                         -7-

disputed appellee's allegation that he was served with the  wrong

          complaint.    Indeed,  although appellee  mentioned  the  problem

          numerous times on the  record, and again on appeal,  Benjamin has

          yet  to acknowledge it.  Accordingly, we accept the allegation as

          true.

                    Also because of  Benjamin's failure to  acknowledge the

          allegation,  we  cannot possibly  conclude  that he  has  met his

          burden of  establishing  good cause  why  service of  the  proper

          complaint  was  delayed.   We  do not  know  with whom  the error

          originated, when  Benjamin knew  about  it, or  even whether  the

          deficiency  was intentional.  By ignoring these major gaps in the

          procedural history, and indeed  the entire issue, Benjamin failed

          to establish  good cause  for the  delayed service of  sufficient

          process.   Thus,  we affirm  the  district court's  dismissal  of

          Benjamin's case on different grounds than the court stated.

                    Affirmed in part; reversed in part.
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                    Appendix can be found attached to the slip opinion.

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