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Intrade Industries, Inc. v. Transportation Brokers

December 23, 2008

INTRADE INDUSTRIES, INC., PLAINTIFF,
v.
TRANSPORTATION BROKERS, MAC'S LOGISTICS CORP., FCM TRANSPORT, THOMAS ANDERSON, PAUL THOMPSON, AND DOES 1 THROUGH 50, DEFENDANTS.



The opinion of the court was delivered by: Anthony W. Ishii Chief United States District Judge

ORDER DENYING MOTIONS TO DISMISS

ORDER GRANTING PLAINTIFF FOREIGN CARGO MANAGEMENT SIXTY ADDITION DAYS IN WHICH CORP., PRIORITY TO SERVE DEFENDANTS

(Documents #21 & #22)

BACKGROUND

On November 9, 2008, Defendants filed two motions to dismiss pursuant to Rule 4(m) and Rule 12(h) of the Federal Rules of Civil Procedure. Defendants contend that they have either not been served or were served 186 days after the complaint was filed. Defendants also contend that in January 2008, before service of any Defendants, a third party paid Plaintiff much of the money at issue in this action. Thus, Defendants contend less than $75,000.00 is in controversy, making this court without jurisdiction.

On November 26, 2008, Plaintiff filed an opposition. Plaintiff contends that it did make diligent efforts to serve all defendants, but Defendants evaded service. Plaintiff contends that the amount in controversy is measured at the time the complaint is filed, and Defendants have failed to provide any evidence that the amount in controversy was not over $75,000.00 at the time this action was filed.

On December 15, 2008, Defendants filed reply briefs.

DISCUSSION

A. Failure to Serve Within 120 Days

Defendants contend that this action is subject to dismissal pursuant to Rule 4(m) of the Federal Rules of Civil Procedure because Defendant Foreign Cargo Management dba Priority Transportation Brokers and Defendant Mac's Logistics Corporation have not been served and Defendant Thomas Anderson and Defendant Paul Thompson were not served until July 2, 2008, more than 186 days after this matter was filed. Plaintiff contends that it made diligent efforts to serve all defendants, but Defendants evaded service. Plaintiff also argues that Defendants have not shown that they were prejudiced by late service.

Rule 4(m) of the Federal Rules of Civil Procedure provides: If a defendant is not served within 120 days after the complaint is filed, the court--on motion or on its own after notice to the plaintiff--must dismiss the is not served within 120 days after the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period. This subdivision (m) does not apply to service in a foreign country under Rule 4(f) or 4(j)(1).

Rule 4(m) permits a district court to grant an extension of time to serve the complaint after the 120-day period has expired. Mann v. American Airlines, 324 F.3d 1088, 1090 (9th Cir. 2003). In fact, the court has been accorded discretion to enlarge the 120-day period "even if there is no good cause shown." Henderson v. United States, 517 U.S. 654, 662-63 (1996).

Plaintiff contends that the late service in this action should be excused because Defendants made it difficult to serve them. Defendant's evasion of service or attempts to frustrate service have been found "good cause" for delay in effecting service See Hendry v. Schneider, 116 F.3d 446, 449 (10th Cir. 1997). Plaintiff's process server states that service was attempted many times at several addresses. Plaintiff's process server concluded Defendants were attempting to evade service because no one at the business address would acknowledge that it was a business. Plaintiff's attorney states that he believed service was proper as of April 10, 2008. When Defendants' attorney advised Plaintiff's attorney Defendants had not been properly served, Plaintiff's attorney again served documents at Defendants' place of business.

It appears that those Defendants were served pursuant to California Civil Procedure Code 415.20, which allows for service to someone else at a defendant's residence or place of business. In Defendants' reply brief, they appear to concede that the summons and complaint were accepted at Defendants' place of business and at one Defendant's residence by his wife. In their reply brief, Defendants contend that this service is still not complete because no copy was ever mailed. California Code of Civil Procedure ยง 415.20(a) provides that after service at a business or residence to someone other than the defendant, the copy of the summons and complaint must be mailed by first- class mail, postage prepaid ...


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