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|
In re Case No. J88-00183-HAR In Chapter 7 In re WILLIAM N. HARRIS, SR., aka Bill Harris and LILLIAN A. HARRIS, Debtor(s) |
ADV PROC NO J88-00183-001-HAR (BANCAP No. N/A)
CONSOLIDATED ADVERSARY ADV PROC NO J88-00183-002-HAR MEMORANDUM DECISION REGARDING DENIAL OF DEBTORS' MOTION TO DISMISS UNDER FRCivP 4(j) |
| LOVELESS/TOLLEFSON
PROPERTIES,
Plaintiff(s) v. WILLIAM N. HARRIS, SR. and LILLIAN A. HARRIS, individually and dba the Viking Restaurant & Lounge, Defendants(s) |
WARREN WILD, Trustee,
Plaintiff(s) v. WILLIAM N. HARRIS, SR. and LILLIAN A. HARRIS, individually and dba the Viking Restaurant & Lounge, ROBERT HARRIS, PENNY GILLIARD, WILLIAM N. HARRIS, JR., RICHARD HARRIS, LARRY LEAP, THE HARRIS CLUB , a partnership and the VIKING RESTAURANT & LOUNGE, INC., Defendants(s) |
In this case, Loveless/Tollefson Properties (LTP) filed a timely complaint to deny the debtors' discharge. Within 120 days of the filing of the adversary complaint, a copy of this complaint was mailed to the debtors' attorney, William Olmstead, but not the debtors. The debtors filed an answer and motion raising a defense that there was an insufficiency of service. FRCivP 12(b)(5) and FRBP 7012(b).
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FRBP 7004(b)(9) provides for service of an adversary complaint by first class mail on the debtor and his attorney, if the debtor is represented.If a service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint and the party on whose behalf such service was required cannot show good cause why such service was not made within that period, the action shall be dismissed as to that defendant without prejudice upon the court's own initiative with notice to such party or upon motion.
Debtors allege the summons for the complaint in the LTP adversary was not served on debtors in the proper manner within 120 days and the complaint should therefore be dismissed. Though harsh, this is the result in many cases. In re Bloomingdale, 137 BR 351 (Bankr CD Cal 1991), In re Reeves, 127 BR 866 (Bankr SD Cal 1991), In re Wilson, 96 BR 301 (Bankr ED Cal 1989), and In re Terzian, 75 BR 923, 926-27 (Bankr SDNY 1987).
Among other defenses to the motion to dismiss, LTP claims that the debtors' attorney, Mr. Olmstead participated in the case so fully that service by mail on both the attorney and the debtors was waived or not required. However, the Ninth Circuit view is that, unless there is proper service, the 120 day rule set out in FRCivP 4(j) cannot lightly be brushed aside. See, Whale v US, 792 F2d 951 (9th Cir 1986) (excuse not justified where plaintiff's attorney believed it was adequate in a Federal Tort Claim Act suit to serve only Attorney General by certified mail within 120 days, but proper service was not also made as required by FRCivP 4(d)(4) on the U.S. Attorney).
Under the facts in this case, however, dismissal under FRCivP 4(j) is not required. What takes this matter out of the strict parameters of FRCivP 4(j) is that at approximately the time the adversary was filed, Mr. Pearson, LTP's attorney and Mr. Olmstead, the debtors' attorney, stipulated that a motion challenging the claim of exemption to a liquor license in the main case should be consolidated with the adversary proceeding. In essence, Mr. Olmstead for the debtors made what was analogous to a general appearance.
Where a party appears in a case, the requirements of
FRCivP 4(j) are deemed to be waived. See, Richards v. Harper, 864
F2d
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85, 87 (9th Cir 1988) and Benny v. Pipes, 799 F2d 489, 492 (9th
Cir 1986), cert den 474 US 870 (1987), modified 807 F2d 1514 (9th
Cir 1987).
Even if my analogy to a general appearance is too generous in favor of Loveless/Tollefson in this case, I believe that, under the circumstances, there is justification to avoid strict adherence to the rule in the facts of this case. Whale v US at 953 described a four-part test to determine if there is justification in not dismissing a complaint despite failure to serve the United States properly under FRCivP 4(d). The test is, quoting from Borzeka v Heckler, 739 F2d 444, 446-48 (9th Cir 1984):
In the case at bar, plaintiff complies easily with requirements (a), (b), and (d). Requirement (d) is met because, though the dismissal is without prejudice, such a dismissal would result in a dismissal with prejudice since a discharge action must be brought within 60 days of the time first set for the § 341 meeting unless extended. FRBP 4004(a). Compare, Townsel v Contra Costa County, 820 F2d 319 (9th Cir 1987) and Wei v State of Hawaii, 763 F2d 370 (9th Cir 1985).failure to comply with Rule [4(d)'s] personal service requirement does not require dismissal of the complaint if (a) the party that had to be served personally received actual notice, (b) the defendant would suffer no prejudice from the defect in service, (c) there is a justifiable excuse for the failure to serve properly, and (d) the plaintiff would be severely prejudiced if his complaint were dismissed.
Requirement (c) that there be a justifiable excuse for failure to serve properly is fulfilled by defendant debtors' counsel consenting within the 120 days to consolidate the objection to the claim of exemption to the debtors' liquor license into the two adversary proceedings which were themselves consolidated. Counsel for plaintiff's was justified in believing that the issues were joined and no further service was needed to subject debtors to the jurisdiction of this court.
Therefore, an order denying the motion to dismiss will be entered to complete the record. The court orally announced the ruling on this motion some time ago, and has recently ruled on the merits. The order will complete the record.