Federal Deposit Insurance v. Denson

139 F.R.D. 346, 1990 WL 312656
CourtDistrict Court, S.D. Mississippi
DecidedOctober 30, 1990
DocketCiv. A. No. J87-0264(W)
StatusPublished
Cited by6 cases

This text of 139 F.R.D. 346 (Federal Deposit Insurance v. Denson) is published on Counsel Stack Legal Research, covering District Court, S.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Deposit Insurance v. Denson, 139 F.R.D. 346, 1990 WL 312656 (S.D. Miss. 1990).

Opinion

MEMORANDUM OPINION AND ORDER

WINGATE, District Judge.

Before the court is a motion to dismiss filed by the defendant, Donald E. Meiners, who claims that he was not served with process in this cause as required under Rule 4(j)1 of the Federal Rules of Civil Procedure. This lawsuit was filed on May 11, 1987, by the plaintiff, Federal Deposit Insurance Corporation [hereinafter FDIC] against Meiners and other former officers and directors of the Mississippi Bank [hereinafter Bank], charging that they permitted losses to the Bank to occur by failing to exercise due care and diligence in the performance of their duties imposed by common law, statute, and contract. Meiners calculates that 120 days elapsed by September 8, 1987, and that since he was not served with summons within this time frame,2 he should be dismissed from this action with prejudice because the applicable statute of limitations has run. This motion to dismiss was filed May 16, 1990.

The salient facts undergirding this dispute are not really in dispute. The affidavit of counsel for the FDIC, Patricia Hancock, states that the summons and the complaint were mailed to Meiners on May 18, 1987. The documents were sent to a Jackson, Mississippi, address by certified mail, return receipt requested. This mailing was returned to FDIC’s counsel marked, “Attempted-not-known.” Counsel for FDIC contacted another defendant’s attorney on May 27, 1987, one Steve Williams, and mailed Williams the summons and complaint. Williams informed FDIC’s counsel that Jay Travis, III, represented Meiners. In fact, Travis was representing Meiners in the case of International Insurance Company v. McMullan, J84-0760(W), a matter related to the instant litigation. Williams forwarded the summons and complaint to Travis. FDIC’s counsel received a letter from Travis dated June 8, 1987, which informed FDIC’s counsel of Meiners’ address in New Orleans, Louisiana. Travis also stated in the letter that he was not authorized to make an appearance in this case on Meiners’ behalf. On June 22, 1987, FDIC’s counsel mailed the summons and complaint to the address given by Travis pursuant to Rule 4(c)(5)3 of the Mississippi Rules of Civil Procedure as permitted by Rule [348]*3484(c)(2)(C)(i)4 of the Federal Rules of Civil Procedure. The envelope was marked “Restricted Delivery.” On July 1, 1987, FDIC’s counsel received a signed “green card” (return receipt) from the Post Office, indicating that the letter containing the summons and complaint had been accepted.

Meiners agrees that the summons and complaint were mailed, just as FDIC’s counsel states, and were received in an envelope marked “Restricted Delivery,” but by a company clerk named Millard Watler. Watler signed the return receipt and delivered the letter to Meiners’ offices. Meiners’ secretary was out for the afternoon. According to Meiners, Watler was not an authorized agent to accept service of process on Meiners’ behalf. Later, Mein-ers’ secretary mailed the unopened envelope containing the summons and complaint to Meiners’ attorney. Meiners says he never opened and reviewed the contents of the envelope, and, thus, he asserts that no return has been filed with the court in regard to FDIC’s purported service of summons upon him. So, under these circumstances, Meiners says that he was not properly served under Rule 4. He claims that he has preserved this objection since he asserted such in his answer to the FDIC complaint.

The FDIC vigorously opposes the plaintiff’s motion, arguing that proper service was effected upon Meiners on the theory that the company clerk, Watler, was indeed authorized to accept service of process on Meiners’ behalf. Alternatively, the FDIC contends that even if the service was improper, that on account of the peculiar circumstances here, FDIC’s oversight should not trigger the draconian consequences of a Rule 4(j) dismissal which would be one with prejudice because the applicable statute of limitations has now run. Instead, says the FDIC, the court should find under the circumstances of this case that FDIC has established good cause for relief under Rule 4(j).

Assuming5 that service here was improper, the court is convinced that FDIC has shown sufficient good cause to excuse it from the impact of Rule 4(j). FDIC’s reliance upon the mail service, after having received a signed return receipt and FDIC’s ignorance of the company clerk’s argued authority until FDIC could take the clerk’s deposition some three years later because of a stay of discovery, coupled with Meiners’ actual awareness of the particulars of the lawsuit, Meiners’ participation in phases of discovery, and Meiners’ delay in specifying the alleged defects in the service of process until after the running of the statute of limitations all combine to persuade the court that FDIC has shown good cause to excuse itself from the thrust of Rule 4(j).

Rule 4(j) of the Federal Rules of Civil Procedure requires dismissal of an action if service is not made upon the defendant within 120 days after the filing of the complaint. Traina v. United States, 911 F.2d 1155 (5th Cir.1990); Norlock v. City of Garland, 768 F.2d 654, 657 (5th Cir.1985). Adopted at the same time as was the mail provision, subsection 4(j) apparently was enacted to serve as a timing restriction, since under the new mail provision any [349]*349nonparty was authorized to resort to such service of process. Prior to the adoption of the mail provision, service was performed exclusively by the marshals. So, according to some commentators, Rule 4(j) was added to ensure timeliness of service. Norlock v. City of Garland, 768 F.2d 654, 658 (5th Cir.1985). However, even though timely service is not effected, a district court may extend the time for service if the plaintiff can show excusable neglect or good cause for the failure to execute proper service of process. Traina v. United States, supra; Winters v. Teledyne Movible Offshore, Inc., 776 F.2d 1304, 1305 (5th Cir.1985). Actions falling into the category of inadvertence and ignorance of the rules of proper service are not excusable neglect and do not establish good cause for extending the 120 day period for service. McDonald v. United States, 898 F.2d 466 (5th Cir.1990). In McDonald, in a federal torts claim against the United States, the plaintiffs were held answerable under Rule 4(j) where they had attempted service by mail upon the United States under 4(c)(2)(C)(ii), a method expressly disallowed under the rules. See Rule 4(c)(2)(C), providing that service pursuant to 4(c)(2)(C)(ii) may be made upon an individual or a corporation; see also Norlock v. City of Garland, supra. Rule 4(d)(4) provides for service of process upon the United States.

In the instant case, unlike the plaintiffs in McDonald v.

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Cite This Page — Counsel Stack

Bluebook (online)
139 F.R.D. 346, 1990 WL 312656, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-deposit-insurance-v-denson-mssd-1990.