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United States District Court, S.D. New York

August 15, 2005.

OSRECOVERY, INC., et al., Plaintiffs,
ONE GROUP INTERNATIONAL, INC., et al., Defendants.

The opinion of the court was delivered by: LEWIS KAPLAN, District Judge


On July 26, the Court denied plaintiffs' motion for the entry of default judgments against six defendants on the ground that no evidence of record indicated that a copy of the summons had been served on them. The Court ordered plaintiffs to show cause why the action should not be dismissed for failure to serve a summons. In their response, which was untimely, plaintiffs consent to dismissal of the complaint as against two of the defendants, Frank Zuchristian and Pecunix, Inc. They argue that service on the other four defendants — One Groupe International, Inc.,,, and David C. Reed (collectively "Core defendants") — was effective or, in the alternative, that they should be afforded an opportunity to cure the defects in service.

Rule 4

  Service of process in the federal system requires service of a summons, in the manner prescribed in Rule 4, together with a copy of the complaint.*fn1 "[S]ervice of summons is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served."*fn2 The rule sets forth in detail the form a summons must take and the process by which a summons must be served. Although minor or technical defects in a summons in certain circumstances do not render service invalid,*fn3 defects that are prejudicial to the defendant or show a flagrant disregard for the rule do.*fn4 Moreover, actual notice alone will not sustain personal jurisdiction over a defendant.*fn5

  Here, the deficiency in service did not involve a minor or technical failure, such as misspelling a defendant's name or referring to the complaint for the proper caption,*fn6 but a complete disregard for the requirement that a summons be served. Plaintiffs do not dispute that they failed to serve a summons, nor do they indicate that they ever attempted to do so. Instead, they argue that their failure to serve a summons was technical because they served a copy of the Court's November 12, 2002 order to show cause along with the original complaint. The order did not, however, meet the requirements of Rule 4. It was not signed or sealed by the clerk and failed to notify the parties that a failure to appear would result in a default judgment.*fn7 As plaintiffs' failure to serve a summons constituted a flagrant disregard of Rule 4, service of process was ineffective.*fn8

  Extension for Good Cause

  Plaintiffs further argue that they are entitled to an extension for good cause under Rule 4(m), which provides "that if the plaintiff shows good cause for the failure [to the serve the summons and complaint], the court shall extend the time for service for an appropriate period." In determining whether good cause exists, courts consider plaintiffs' due diligence in attempting to make service and any prejudice that defendants would suffer from the delay.*fn9 Thus, good cause is "generally found only in exceptional circumstances where the plaintiff's failure to serve process in a timely manner was the result of circumstances beyond its control."*fn10 "Attorney error or inadvertence does not constitute good cause."*fn11

  Here, plaintiffs have not offered a reason for their failure to serve the summons, nor do they suggest that they ever attempted to serve it. Instead, they argue that their service of the original Complaint, the November 12 order to show cause, and related documentation shows that they "made reasonable efforts" to effect proper service. But this argument does not explain the reason for their failure to serve the summons. The most the Court can assume is that their failure was due to counsel's inadvertence or mistake, neither of which constitutes good cause. In addition, plaintiffs waited nearly three years since filing the original complaint to request an extension of time. Their failure to do so earlier evidences a considerable lack of due diligence. Accordingly, they have failed to establish good cause.

  Court's Discretion to Grant an Extension

  Even absent a showing of good cause, a court has discretion to grant an extension in appropriate circumstances.*fn12 In making this decision, "[c]ourts will consider whether (1) the defendant had actual notice that the plaintiff had filed a claim; (2) the defendant concealed a defect in attempted service; (3) the defendant suffered prejudice as a result of plaintiff's delay; and (4) if the statute of limitations would bar the refiled action."*fn13 Courts consider also plaintiffs' diligence in attempting to effect service.*fn14

  Here, plaintiffs have not proven that defendants had actual notice or concealed a defect in service. Moreover, their failure to effect serve appears to have been the result of inadvertence or mistake on the part of counsel. "[I]f the Rules are to mean anything, parties must diligently try to follow them and courts must enforce them, even if that means that cases must sometimes be finally determined on procedural grounds rather than on their substantive merits."*fn15 The requirement under Rule 4 that "a summons shall be served together with a copy of the complaint" is unambiguous. Based upon their own inadvertence or mistake, plaintiffs failed to do so. Conclusion

  For the foregoing reasons, the action is dismissed as against defendants One Groupe International, Inc.,,, and David C. Reed, for failure to make service, and as against defendants Frank Zuchristian and Pecunix, Inc. by consent.


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