Dean v. KIS Corp.

121 F.R.D. 74, 1988 WL 69626
CourtDistrict Court, N.D. Illinois
DecidedJuly 8, 1988
DocketNo. 87 C 5833
StatusPublished
Cited by1 cases

This text of 121 F.R.D. 74 (Dean v. KIS Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dean v. KIS Corp., 121 F.R.D. 74, 1988 WL 69626 (N.D. Ill. 1988).

Opinion

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

Plaintiffs have filed a motion for entry of default judgment pursuant to Fed.R.Civ.P. 54(b) and 55(b)(2) against defendants KIS, S.A., Serge Crasnianski, Peter Burgess, and Phillip Frank (“the defendants”). In response, defendants have filed a motion for sanctions pursuant to Fed.R.Civ.P. 11. For the reasons set forth below, both motions are denied.

I. Plaintiffs’ Motion for Default Judgment

On June 30, 1987, plaintiffs filed a complaint against seven defendants. This motion is directed against only five of the defendants.1 The threshold question is whether plaintiffs properly served those defendants under Fed.R.Civ.P. 4(c)(2)(C)(ii). In relevant part, that rule provides:

A summons and complaint may be served upon a defendant ... by mailing a copy of the complaint (by first-class mail, postage prepaid) to the person to be served, together with two copies of a notice and acknowledgement conforming substantially to form 18-A and a return envelope, postage prepaid, addressed to the sender. If no acknowledgement of service under this subdivision of. the rule is received by the sender within 20 days after the date of mailing, service of such summons and complaint shall be made under subparagraph (A) or (B) of this paragraph in the manner prescribed by subdivision (d)(1) or (d)(3) [personal or abode service].

Fed.R.Civ.P. 4(c)(2)(C)(ii).

In this case, plaintiffs attempted to effect service upon the corporate defendants, as well as the individual defendants, by mailing copies of the appropriate documents, together with an acknowledgement form, to each defendant at KIS Corporation’s office address in Somerset, New Jersey.2 The acknowledgement forms were not returned within 20 days of the initial mailing. Nonetheless, plaintiffs did not effect personal or abode service upon the defendants as required by the second sentence of Rule 4(c)(2)(C)(ii).

Plaintiffs now argue that mere receipt of the acknowledgement, resulting in “actual notice” of the lawsuit, renders service effective under Rule 4(c)(2)(C)(ii). Specifically, plaintiffs claim that defendants’ counsel’s subsequent oral acknowledgement of receipt of summons and complaint, without [76]*76more, satisfies the requirements of the rule. We disagree.

The plain language of the rule persuades us that plaintiffs’ position is incorrect. The rule requires personal or abode service when an acknowledgement is not returned within 20 days of mailing. The acknowledgement proves actual notice, which is required before a default judgment may be entered. Thus, service under Fed.R.Civ.P. 4(c)(2)(C)(ii) is not effective without return of the acknowledgement form or another authorized method of service.

This interpretation of the rule is followed by a majority of courts. See, e.g., Stranahan Gear Co., Inc. v. NL Industries, Inc., 800 F.2d 53 (3rd Cir.1986); Norlock v. City of Garland, 768 F.2d 654 (5th Cir.1985); Armco, Inc. v. Penrod-Stauffer Bldg. Systems, Inc., 733 F.2d 1087 (4th Cir.1984). Although the Seventh Circuit has not addressed this issue, at least two lower courts within this circuit have. See Coldwell Banker & Co. v. Eyde, 661 F.Supp. 657 (N.D.Ill.1986); Zisman v. Sieger, 106 F.R.D. 194 (N.D.Ill.1985).3 At first glance, these opinions appear to be contrary.

In Coldwell Banker, the plaintiff attempted to serve the defendants by mailing the appropriate documents on September 17,1985. The documents were not actually delivered to the defendants until October 7, 1985, approximately 20 days after the initial mailing. The documents were actually received, but not timely acknowledged. On these facts, the court held that service was ineffective under Rule 4(c)(2)(C)(ii). In arriving at this conclusion, the court relied on the plain language of the rule, as well as its underlying legislative history. See Coldwell Banker, 661 F.Supp. at 658-59 n. 5. The rule itself makes proper service contingent upon the return of the acknowledgement form within 20 days of mailing and requires some alternative form of personal service if no acknowledgement form is returned within 20 days. See Fed.R.Civ. P. 4(c)(2)(C)(ii); see also Coldwell Banker, 661 F.Supp. at 658-59. Likewise, the legislative history clearly mandates that “if the proper person receives the notice and fails to return the acknowledgement form, another method of service authorized by law is required.” 128 Cong.Rec. H9850 (daily ed. Dec. 15, 1982) (statement of Rep. Edwards), reprinted in Service Under Amended Rule 4, 96 F.R.D. at 119; Coldwell Banker, 661 F.Supp. at 658-59 n. 5.

In Zisman, the third-party plaintiff attempted to serve one of the third-party defendants, a Japanese corporation, by mailing the appropriate documents to the Japanese corporation’s offices in Japan and to its wholly owned subsidiary’s offices in the United States. Although the Japanese corporation received the documents, it failed to return either acknowledgement form within 20 days of the initial mailing. As a result, the third-party plaintiff hired a special process server to personally serve the Japanese corporation by serving an agent at the offices of its wholly owned subsidiary in Illinois. Unlike the instant case, at issue in Zisman was whether the second personal service attempt on the agent of the wholly owned subsidiary complied with the second sentence of Rule 4(c)(2)(C)(ii) (which requires another authorized method of service if no acknowledgement is returned). The court in Zisman concluded that personal service on the agent of the wholly owned subsidiary satisfied the second sentence of the rule. In addition, although the issue was not before it, the court noted in dictum that a received, but unacknowledged, mail service is effective even without the second personal service called for by the rule. Thus, while the result reached in Zisman conforms to the technical requirements of the rule, the dictum in Zisman suggests that something less than technical compliance with the rule is sufficient.

Although this Court agrees with the result in Zisman, we disagree with the dic[77]*77turn suggesting that mail service is effective under Rule 4(c)(2)(C)(ii) if the appropriate documents are actually received, but not acknowledged. The authority for this dictum is Morse v. Elmira Country Club, 752 F.2d 35

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Bluebook (online)
121 F.R.D. 74, 1988 WL 69626, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dean-v-kis-corp-ilnd-1988.