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Quinn v. Cornerstone Strategic Advisors

August 27, 2007

BRIAN C. QUINN, AN INDIVIDUAL, PLAINTIFF,
v.
CORNERSTONE STRATEGIC ADVISORS, LLC., CORNERSTONE STRATEGIC ROGER K. FULLER, AND ADVISORS, LLC, A UTAH LIMITED D. MICHAEL BISHOP'S MOTION LIABILITY COMPANY; DOING BUSINESS AS CSA STRATEGIC ADVISORS, LLC; DEFENDANTS.



The opinion of the court was delivered by: Hon. John A. Houston United States District Judge

ORDER GRANTING DEFENDANTS TO DISMISS PURSUANT TO FED.R.CIV.P. 4(m) [DOC. # 77]

INTRODUCTION

Pending before this Court is the motion filed by defendants Cornerstone Strategic Advisors, LLC, aka CSA Strategic Advisors, LLC, Roger K. Fuller, and D. Michael Bishop ("the Cornerstone defendants") to dismiss plaintiff's first amended complaint for failure to serve the complaint timely pursuant to Federal Rule of Civil Procedure 4(m). The motion has been fully briefed by the parties. After a careful consideration of the pleadings and relevant pleadings presented, and for the reasons set forth below, this Court GRANTS defendants' motion and dismisses the Cornerstone defendants without prejudice.

BACKGROUND

The instant case, alleging fraud and malpractice based on an Internal Revenue Service ("IRS") rejection of a tax deduction involving investment of foreign currencies, was filed on December 3, 2004. Shortly thereafter, various motions to dismiss were filed and some defendants were dismissed.*fn1 On October 13, 2005, an order was issued requiring plaintiff to show cause ("OSC") why the defendants that remained after motion practice should not be dismissed for failure to prosecute. Specifically, the OSC sought plaintiff's explanation why he had failed to serve to defendants Cornerstone Strategic Advisors, Roger K. Fuller, Michael D. Bishop ("the Cornerstone defendants"), Meisha E. Kresser and Gordon Brown*fn2 pursuant to Federal Rule of Civil Procedure 4(m).*fn3

An OSC hearing was held on November 17, 2005, and, upon the representation of attorney Christopher Villaseñor, appearing specially, that prior counsel's serious illness delayed the prosecution of this case, the OSC hearing was continued to January 26, 2006. The January 26, 2006 OSC hearing was again continued to February 16, 2006, based on the representations of attorney Villaseñor that the case would proceed apace. Counsel indicated that a first amended complaint and a motion for default judgment as to the Groh defendants would be filed by February 15, 2006. The February 16, 2006 hearing was apparently vacated and continued to March 2, 2006.

A first amended complaint ("FAC") was filed on February 28, 2006.*fn4 Plaintiff effected service of the FAC upon defendants Cornerstone and Fuller on October 11, 2006 and defendant Bishop on January 10, 2007.

The instant motion to dismiss was filed on February 1, 2007, but the motion did not specify a hearing date. Therefore, the Court issued an order directing the filing of the parties' responsive briefing and setting a hearing date for March 22, 2007. Plaintiff filed an opposition to the motion on March 2, 2007 and the Cornerstone defendants filed a reply brief on March 9, 2007. The motion was taken under submission without oral argument on March 16, 2007 and the hearing date was vacated. On March 20, 2007, this Court directed the parties to submit further briefing on certain issues presented by the parties which were not fully developed in the pleadings presented. Plaintiff's supplemental pleading was filed on April 13, 2007 and the Cornerstone defendants' pleading was filed on April 27, 2007.

DISCUSSION

The Cornerstone defendants move for an order dismissing the claims against them in the FAC pursuant to Federal Rule of Civil Procedure 4(m).

Legal Standard

Rule 4(m) of the Federal Rules of Civil Procedure provides that: 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.

Fed.R.Civ.P. 4(m). The Ninth Circuit recently explained that "Rule 4(m) ... requires a district court to grant an extension of time when the plaintiff shows good cause for the delay. Additionally the rule permits the district court to grant an extension even in the absence of good cause." Efaw v. Williams, 473 F.3d 1038, 1040 (9th Cir. 2007) (internal citations omitted)(emphasis in original).

Good cause, at a minimum, means excusable neglect. Boudette v. Barnette, 923 F.2d 754, 756 (9th Cir. 1991).*fn5 A plaintiff may also show good cause if he establishes that: "(a) the party to be served received actual notice of the lawsuit; (b) the defendant would suffer no prejudice; and (c) plaintiff would be severely prejudiced if his complaint were dismissed." Id. (citing Hart v. United States, 817 F.2d 79, 80-81 (9th Cir. 1987). Even in the absence of good cause, this Court has broad discretion to grant an extension. In re Sheehan, 253 F.3d 507, 513 (9th Cir. 2001). The Ninth ...


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