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Newsom v. Bankers Alliance Inc.

United States District Court, N.D. California, Eureka Division

February 20, 2014

PETER NEWSOM, et al., Plaintiffs,
BANKERS ALLIANCE INC., et al., Defendants.


NANDOR J. VADAS, Magistrate Judge.

At issue before the court today is (1) whether the district court "should reconsider its prior decisions discharging the order to show cause and finding good cause' to grant Plaintiffs an extension of time under Rule 4(m) to serve defendant Whiteside; and (2) whether the Court should now dismiss the action as to Whiteside under Rule 4(m), her motion to dismiss, or [on] any other basis." Doc. No. 189. The undersigned ordered the parties to submit declarations addressing a number of relevant issues (Doc. No. 190) and held an evidentiary hearing on January 7, 2014, at which both parties appeared. Both parties submitted additional documents, as ordered by the court. See Doc. Nos. 194, 197, 198.

For the reasons stated below, the undersigned recommends that the district court reconsider its decision discharging the order to show cause and dismiss the action as to Whiteside under Rule 4(m).


The factual background of this case has been extensively described elsewhere ( see, e.g., Doc. Nos. 103, 148), but the procedural background is relevant here:

In my initial report and recommendation on Plaintiffs' first motion for default judgment, I found that Plaintiffs had failed to serve defendant Julie Whiteside with a copy of the summons and complaint within the 120 days required by Federal Rule of Civil Procedure 4(m). See Doc. No. 103 (Plaintiff had not attempted any manner of service upon Whiteside for more than a year after she was named in the action, and had never accomplished effective service upon her). I thus recommended that the district court deny the motion for default judgment and issue an order to show cause why the claims against Whiteside should not be dismissed without prejudice. Id. The district court adopted the report and recommendation and ordered Plaintiff to show cause why the action should not be dismissed without prejudice under Rule 4(m). See Doc. No. 105. Plaintiffs responded, representing that Whiteside "could not be found for the majority of this case, despite all good faith efforts by counsel to do so. Julie Whiteside has moved several times.... Defendant[] [has] spoken with me, [is] not concerned with the summons, the case, or a defense thereto." Doc. No. 106. The district court discharged the order to show cause and ordered Plaintiffs to serve Whiteside within 30 days. Doc. No. 109.

After obtaining an additional extension of time from the district court, Plaintiffs obtained a new summons and attempted to serve Whiteside by leaving copies of the operative complaint with her brother in law in San Francisco. See Doc. No. 148 at 2. When Whiteside again failed to respond, Plaintiffs filed a second motion for default judgment, which the district court again referred to me for a report and recommendation. Doc. Nos. 121 & 122. At this time, Whiteside appeared to oppose the motion for default judgment and filed a motion for relief from entry of default. See Doc. Nos. 123, 136, 137. I ordered the parties to file declarations addressing salient facts and to appear for a hearing on the motion for default judgment. See Doc. No. 134. I asked Plaintiffs to explain why they had taken so long to serve Whiteside, and the basis for their representations that Whiteside had no intention to defend the lawsuit. Id. Plaintiffs' counsel argued that Whiteside had "evaded" service, but did not explain why Plaintiffs had failed to obtain any summons for Whiteside for 11 months after naming her in the action, or the basis for his statement that Whiteside had moved several times since the beginning of the action - an assertion Whiteside strenuously denied. See Doc. Nos. 137 (Whiteside Decl.) & 141 (Rooney Decl.). Because I found that Plaintiffs still had failed to effectuate service upon Whiteside on January 20, 2011, I once more recommended denying the motion for default judgment, and recommended that the district court order Plaintiffs to serve Whiteside within 10 days of its order adopting the report and recommendation. Doc. No. 148. I also recommended that Whiteside's default should be set aside for good cause. Id.

Plaintiffs finally served Whiteside in person with a copy of the operative complaint and summons in March 2013. Doc. No. 151. When she failed to respond to the complaint, Plaintiffs requested entry of default. Whiteside moved to set aside the entry of default. Doc. No. 159. Whiteside, who is appearing in this matter pro se, represented to the court that she did not understand the deadline for responding. I found there was good cause to set aside entry of default and recommended the district court grant Whiteside's motion to do so. Doc. No. 163. When the district court did so, Whiteside filed a motion to dismiss. Doc. No. 168. Whiteside argued that the complaint against her should be dismissed based on Plaintiffs' failure to serve her within the time required by Rule 4(m). The district court referred the motion to dismiss to me. Doc. No. 172. I recommended denying the motion to dismiss because Plaintiffs had accomplished service within the extension of time ordered by the district court. See Doc. No. 182 at 3 ("Plaintiffs are correct that the district court already found good cause existed for the delay, and that Plaintiffs served Whiteside within the time allowed by the district court. Under these circumstances, the F[ourth]AC cannot be dismissed under Rule 4(m)"). I also expressed concern that Plaintiffs' counsel had misrepresented certain facts to the court, namely, that "Whiteside could not be found despite counsel's good faith efforts to do so because Whiteside had moved several times" and that counsel had "spoken with Whiteside and that she did not have the slightest inclination to defend' the lawsuit." Doc. No. 182 at 2.

The district court then re-referred Defendant's motion to dismiss to me with the directions described above. Doc. No. 189. Both parties filed the declarations the undersigned had requested. See Doc. Nos. 191 (Rooney Decl.) & 193 (Whiteside Decl.).


A. Facts in evidence

The following facts are derived from the parties' declarations and/or adduced from the evidentiary hearing.

Whiteside has resided on Stearns Drive in Los Angeles since December 2006.[1]

Plaintiffs were originally represented by another attorney, Tiffany Norman. On January 11, 2010, Norman filed a second amended complaint ("SAC") on behalf of Plaintiffs, for the first time naming Whiteside as a defendant in this action. Doc. No. 13. Norman did not serve Whiteside within 120 days of the filing of the SAC, as required by Rule 4(m). Norman withdrew from representing Plaintiffs and was replaced by Michael Rooney. Rooney first appeared in this action on October 15, 2010, but only acted in a consulting capacity on certain substantive issues; he was substituted into the case in May 2011. See Doc. Nos. 64, 85. He obtained a summons for Whiteside on December 8, 2010. Doc. No. 67. Diane Kromer, an assistant to Plaintiffs' counsel, declares that she first attempted to have Whiteside served on December 15, 2010, more than eleven months after Whiteside was named in the action. Kromer initially attempted to serve Whiteside at an address where she had never resided. After discovering that Whiteside lived at Stearns Drive, a process server delivered the SAC (which had twice been superseded) to Whiteside in person at the Stearns Drive address. The process ...

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