Gabriel v. United National Insurance

259 F.R.D. 242, 2009 U.S. Dist. LEXIS 68443, 2009 WL 2411883
CourtDistrict Court, E.D. Louisiana
DecidedAugust 5, 2009
DocketCivil Action No. 09-2510
StatusPublished

This text of 259 F.R.D. 242 (Gabriel v. United National Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gabriel v. United National Insurance, 259 F.R.D. 242, 2009 U.S. Dist. LEXIS 68443, 2009 WL 2411883 (E.D. La. 2009).

Opinion

ORDER AND REASONS

MARTIN L.C. FELDMAN, District Judge.

Before the Court is the defendant’s motion to dismiss for insufficiency of process. For the reasons that follow, the motion is DENIED.

Background

Plaintiffs’ counsel filed several “mass joinder insurance cases”, in which numerous policyholders sued multiple insurance companies for breach of contract and bad faith arising from Hurricane Katrina damage; some of the cases filed were consolidated in Civil Action No. 05-4182, Section K, so that issues of flood exclusion could be resolved and mass settlement efforts could be undertaken. The Gabriels were initially parties to one such multi-plaintiff, multi-defendant action filed on the second anniversary of Hurricane Katrina. United National Insurance Company was named as one of the many insurance company defendants, but was never served with the initial mass joinder complaint.

On October 25, 2007, Judge Duval administratively closed the mass joinder case, Abadie v. Aegis, Civil Action No. 07-5112 (Abadie II), which was the second mass joinder filed by plaintiffs’ counsel,1 so that legal issues concerning the wind versus water exclusion could be resolved by the appellate courts. Apparently none of the defendant insurers opposed the motion for administrative closure.

Shortly after the Louisiana Supreme Court decided Sher v. Lafayette Ins. Co., 988 So.2d 186 (La.2008), on January 12, 2009, Magistrate Judge Wilkinson issued an Order severing many of the misjoined cases from Katrina Canal Breaches Consolidated Litigation, Civil Action No. 05-4182 “K”(2); the order required that, no later than January 30, 2009, plaintiffs’ counsel must file on behalf of each plaintiff an individualized amended complaint asserting only those claims against the appropriate insurance company defendant; plaintiffs’ counsel was also ordered to provide the Clerk of Court with a prepared summons for the amended complaint.

On January 30, 2009, the Gabriels filed a Supplemental and Amending Complaint Pursuant to Order of Severance Dated January 8, 2009, naming United National Insurance Company as defendant. United National was served with the amended complaint on [244]*244June 3, 2009. United National now moves to dismiss on the ground that it was never served with a copy of the original complaint filed in the mass joinder action filed more

I.

Rule 12(b)(5) of the Federal Rules of Civil Procedure allows for dismissal of a complaint for insufficiency of service of process. Rule 4(m) allows the district court to dismiss a case without prejudice if a defendant has not been served within 120 days after a complaint is filed:

If service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint, the court, upon motion or on its own initiative after notice to the plaintiff, shall dismiss the action without prejudice as to that defendant or direct that service be effected within a specified time; provided that if the plaintiff shows good cause for the failure, the court shall extend the time for service for an appropriate period.

The Fifth Circuit has instructed that the analysis under Rule 4(m) proceeds as follows:

[Wjhen a district court entertains a motion to extend time for service, it must first determine whether good cause exists. If good cause is present, the district court must extend time for sendee. If good cause does not exist, the court may, in its discretion, decide whether to dismiss the case without prejudice or extend the time for service.

Thompson v. Brown, 91 F.3d 20, 21 (5th Cir.l996)(emphasis in original). This “good cause” under Rule 4(m) requires that the plaintiffs carry their burden to demonstrate:

at least as much as would be required to show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance of the rules usually does not suffice, and some showing of ‘good faith on the part of the party seeking an enlargement and some reasonable basis for noncompliance within the time specified’ is normally required.
Winters v. Teledyne Movible Offshore, Inc., 776 F.2d 1304, 1306 (5th Cir.1985) (quoting 4A Wright & Miller Federal Practice and Procedure: Civil § 1165 at 480) (emphasis in original). It is “irrelevant that the defendant not served within the 120-day period later finds out about the suit or is in fact later served, so long as there was not good cause for the failure to serve within the 120 days.” Id. at 1305-06.

If “good cause” is shown, the Court must extend the time for service. Fed. R.Civ.P. 4(m). On the other hand, if plaintiff fails to show “good cause”, then the Court has two choices: either dismiss the suit without prejudice, or extend the time for service. Thompson v. Brown, 91 F.3d 20, 21 (5th Cir.1996); Millan v. USAA General Indemnity Co., 546 F.3d 321, 325 (5th Cir.2008)(a discretionary extension may be warranted, “for example, if the applicable statute of limitations would bar the refiled action, or if the defendant is evading service or conceals a defect in attempted serviee”)(citing Fed. R.Civ.P. 4(m) advisory committee’s note (1993)). Where the applicable statute of limitations likely bars future litigation, the Court’s discretion to dismiss claims under Rule 4(m) is limited: the Court’s “dismissal with prejudice is warranted only where ‘a clear record of delay or contumacious conduct by the plaintiff exists and a ‘lesser sanction would not better serve the interests of justice.’” Millan v. USAA General Indemnity Co., 546 F.3d 321, 325-26 (5th Cir.2008)(noting that dismissals with prejudice are generally affirmed where at least one of three aggravating factors are present: “(1) delay caused by [the] plaintiff himself and not his attorney; (2) actual prejudice to the defendant; or (3) delay caused by intentional conduct”).

When service of process is challenged, the serving party bears the burden of proving its validity or good cause for failing to effect timely service. See Systems Signs Supplies v. U.S. Dept. of Justice, Washington D.C., 903 F.2d 1011 (5th Cir.1990); see also McGinnis v. Shalala, 2 F.3d 548, 550 (5th Cir.1993), cert. denied, 510 U.S. 1191, 114 S.Ct. 1293, 127 L.Ed.2d 647 (1994).

II.

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Related

McGinnis v. Shalala
2 F.3d 548 (Fifth Circuit, 1993)
Thompson v. Brown
91 F.3d 20 (Fifth Circuit, 1996)
Millan v. USAA General Indemnity Co.
546 F.3d 321 (Fifth Circuit, 2008)
Daryn Traina v. United States
911 F.2d 1155 (Fifth Circuit, 1990)
Sher v. Lafayette Ins. Co.
988 So. 2d 186 (Supreme Court of Louisiana, 2008)
Winters v. Teledyne Movible Offshore, Inc.
776 F.2d 1304 (Fifth Circuit, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
259 F.R.D. 242, 2009 U.S. Dist. LEXIS 68443, 2009 WL 2411883, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gabriel-v-united-national-insurance-laed-2009.