Amarelis v. Notter Sch. of Culinary Arts, LLC
| Decision Date | 08 October 2014 |
| Docket Number | Case No: 6:13-cv-54-Orl-31KRS |
| Parties | APONTE AMARELIS, NICOLE COPPOLA, RUBY IGNACIO, CHESTER LOFTIS, CINNAMON MCCLOUD, JAMES TAYLOR, RHONDA WILSON, SHANAE WILSON, AIMEE NEUMANN, CATHERINE NEUMANN, LEISA ALBRITTON, LESLIE ALBRITTON, SUZY AZMIER, DAVID AZMIER, BARBARA CRUZ-SOTO, NADINE HARRIS, MABLE JONES, ILKA MARIN, JASON MCCRARY, SHARY ORTIZ, ROBERTA SERRANO, BENJAMIN ZACHRY, SHELLEY ZACHRY and KYLIE OSBORN, Plaintiffs, v. NOTTER SCHOOL OF CULINARY ARTS, LLC and BEVERLY L. KARSHNER, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause came on for consideration without oral argument on the Order to Show Cause, Doc. No. 45, and the response thereto, Doc. No. 46.
On January 9, 2013, ten named Plaintiffs filed a class action complaint on behalf of themselves and others similarly situated. Doc. No. 1. Defendants Notter School of Culinary Arts ("Notter School") and Beverley Karshner were served with the original class action complaint onJanuary 30, 2013.1 Doc. Nos. 15, 16. Although Karshner purported to file an answer or response on behalf of herself and Notter School, Doc. No. 10, the Court ordered that the answer or response be stricken because Karshner, who is not a lawyer who is a member of the bar of this Court, could not represent Notter School and because it was unclear whether Karshner intended the document to be an answer or motion to dismiss, Doc. No. 11. Neither Notter School nor Karshner thereafter appeared or responded to the complaint. On April 2, 2013, at the request of Plaintiffs, the Clerk of Court entered defaults against Notter School and Karshner. Doc. Nos. 17, 18.
After the Court denied Plaintiffs' motion for class certification, Plaintiffs requested and were granted leave to file an amended complaint that removed the class action allegations and added new parties as plaintiffs. Doc. Nos. 35, 36. The original ten named Plaintiffs and fourteen additional individuals2 filed their First Amended Complaint on December 4, 2013. Doc. No. 37. In the First Amended Complaint, Plaintiffs allege three claims against only Notter School: violation of Florida's Deceptive and Unfair Trade Practices Act; breach of the implied covenant of good faith and fair dealing3; and, breach of contract. They allege two claims against only Karshner: breach of fiduciary duty and conversion. They allege three claims against both Defendants: unjust enrichment; fraud in the inducement; and, violation of the Federal Racketeer Influenced and Corrupt Organizations Act ("RICO"). Id.
The certificate of service of the First Amended Complaint did not state that counsel for Plaintiffs served the pleading on either Defendant. No returns of service of the First Amended Complaint were filed. Accordingly, the Court ordered Plaintiffs to file proof of service. Doc. No. 43. Plaintiffs responded with a declaration stating that the First Amended Complaint was mailed to Karshner's last known address of record and that the mailing was not returned as undeliverable. Doc. No. 44-1.
On September 16, 2014, the Court issued an Order to Show Cause why this case should not be dismissed for failure to serve the First Amended Complaint in the manner required by Fed. R. Civ. P. 4. Doc. No. 45. Although Plaintiffs submitted a response to the Order to Show Cause, the response did not present any reasons why service of the First Amended Complaint by mail was appropriate. Doc. No. 46. Instead, Plaintiffs requested thirty additional days to properly effect service.
Pursuant to Rule 4(m), plaintiffs have 120 days after a complaint is filed to effect service. The Rule 4(m) time limitation applies to service of an amended complaint that contains new claims, even when service of process of the original complaint has been properly effected on the defendant. Padron Warehouse Corp. v. The Realty Assocs. Fund III, L.P., 377 F. Supp. 2d 1259, 1275 (S.D. Fla. 2005). When a plaintiff has not obtained service within 120 days of filing a complaint, the court can either dismiss the action without prejudice or extend the time for service.
The United States Court of Appeals for the Eleventh Circuit has applied a two-step analysis for determining whether an extension of time to obtain service should be granted or whether the action should be dismissed without prejudice. Lepone-Dempsey v. Carroll Cnty. Comm'rs, 476 F.3d 1277, 1281 (11th Cir. 2007). First, a court must consider whether there is good cause for thefailure to obtain service within the 120-day time period. If good cause is shown the Court must give the plaintiff a reasonable extension of time to effect service. When no good cause is shown, a court must consider whether any other circumstances warrant a discretionary extension of time. Id. at 1282.
Notter School was a for-profit culinary school located in Orlando, Florida, Doc. No. 37 ¶¶ 30, 36, which was accredited by the Accrediting Council for Continuing Education and Training ("ACCET"), id. ¶ 102. Karshner was the manager and co-owner of Notter School. Id. ¶ 31. Most of the plaintiffs named in the First Amended Complaint are former Notter School students. Id. ¶¶ 4-29. The remaining plaintiffs are parents who signed loans on behalf of their children so that their children could attend Notter School. Id. ¶¶ 4, 14, 16.
Plaintiffs allege that Defendants made false and misleading representations regarding Notter School including: (1) that a student with a diploma from Notter School would earn an annual salary of at least $30,000.00 and up to $60,000.00; (2) that Notter School's job placement rate was anywhere from 80% to 98% and it would able to place students in their fields of study within six months; (3) that Notter School's faculty were qualified to teach their respective courses; and (4) that Notter School was a prestigious school that carefully selected its students for enrollment. Doc. No. 37 ¶ 48.
Plaintiffs also allege that Defendants continued to represent that pastry chef Ewald Notter was teaching at Notter School well after Notter left in July 2012. Doc. No. 37 ¶¶ 78, 183. Plaintiffs allege that a Notter School degree was effectively worthless, rendering students only able to obtain jobs that they could have obtained without a diploma from Notter School. Id. ¶ 50.
Plaintiffs allege that they relied upon the purported misrepresentations in deciding to enroll and/or incur financial debt themselves or to assist students who enrolled, id. ¶¶ 116, 190. With respect to Plaintiffs' civil RICO claim, Plaintiffs allege that Defendants collectively formed an enterprise, id. ¶ 179, and that Defendants used the U.S. mail, email, online websites and telephones to orchestrate and execute the fraud, id. ¶¶ 180, 183, 185.
Plaintiffs allege that, on August 24, 2012, ACCET issued a directive for Notter School to demonstrate good cause why its accreditation should not be withdrawn for failure to submit financial statements. Id. ¶ 110. On November 4, 2012, Notter School closed its doors. Id. ¶ 111. Plaintiffs were not notified that Notter School would be closing, and Karshner did not issue refunds to the students who could not finish their culinary programs. Id. ¶¶ 112-13.
Fed. R. Civ. P. 5(a)(2) governs the service of amended complaints on parties in default. Under this rule, a party is permitted to serve an amended complaint by mail, in accordance with Fed. R. Civ. P. 5(b), when the amended complaint does not assert new claims for relief. Allegheny Cas. Co. v. United Constr. Co. of Cent. Fla., No. 6:12-cv-1383-Orl-36KRS, 2013 U.S. Dist. LEXIS 184601, at *9 (M.D. Fla. Dec. 20, 2013), report and recommendation adopted, 2014 U.S. Dist. LEXIS 13035 (M.D. Fla. Feb. 3, 2014). If, however, the amended complaint asserts new claims for relief it must be served in the same manner as required by Rule 4. Varnes v. Local 91, Glass Bottle Blowers Ass'n, 674 F.2d 1364, 1367 (11th Cir. 1982).
Here, the First Amended Complaint asserts new claims for relief because it includes claims of new parties who were not named in the original complaint. See, e.g., Charvac v. M&T Project Managers of N.Y., Inc., No. 12-cv-05637 (CBA)(RER), 2013 WL 6711485, at *3 (E.D.N.Y.2013)(requiring filing and service of an amended complaint naming new plaintiffs before a default judgment could be entered against defendant in default). Accordingly, Plaintiffs' delivery of the First Amended Complaint to Defendants by mail was insufficient service. See Lepone-Dempsey, 476 F.3d at 1281 ().
More than 120 days have passed since the filing of the First Amended Complaint, and, as of the writing of this Report and Recommendation, Plaintiffs have not properly effectuated service. Therefore, the case is due to be dismissed unless Plaintiffs have shown good cause for failure to properly effect service or other discretionary factors warrant giving them an enlargement of time to effect service.
"Good cause exists only when some outside factor, such as reliance on faulty advice, rather than inadvertence or negligence prevented service." Lepone-Dempsey, 476 F.3d at 1282. If a plaintiff is unable to effect service within the required 120 day time period, the plaintiff bears the burden of identifying outside factors that support a finding of good cause. See Ross v. Wilkins, No. 3:12-cv-267-J-99TJC-TEM, 2012 U.S. Dist. LEXIS 158389, at *7 (M.D. Fla. Nov. 5, 2012).
Here, Plaintiffs have not presented any evidence that circumstances beyond their control prevented them from properly effecting service of the First Amended Complaint. Counsel fo...
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