In re Ferguson, Bankruptcy No. 96 B 04422
| Decision Date | 28 January 1997 |
| Docket Number | Adversary No. 96 A 00677.,Bankruptcy No. 96 B 04422 |
| Citation | 204 BR 202 |
| Parties | In re Richard Scott FERGUSON, Debtor. Barbara KADLECEK, Plaintiff, v. Richard Scott FERGUSON, Defendant. |
| Court | U.S. Bankruptcy Court — Northern District of Illinois |
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Timothy P. Whelan, Wheaton, IL, for Plaintiff.
William Lester, Lombard, IL, for Defendant.
This Adversary proceeding relates to a bankruptcy case filed by Richard Scott Ferguson ("Debtor") under Chapter 7 of the Bankruptcy Code, 11 U.S.C. § 101 et seq. The Adversary Complaint seeks to have an asserted debt owed to Plaintiff Barbara Kadlecek declared non-dischargeable pursuant to §§ 523(a)(2)(A) and (a)(6). Defendant moved that any default order be vacated and that the Complaint be dismissed with prejudice due to improper and untimely service of process. In response to Defendant's motion, Plaintiff moved to enlarge time to serve process. For reasons stated below, Defendant's Motion to Dismiss is denied, and Plaintiff's Motion to Enlarge Time is granted. No default order has been entered, so the Motion to Vacate Default is moot.
On February 21, 1996, the Debtor filed his voluntary bankruptcy petition for relief. Prior to that filing, Debtor was the sole proprietor and general contractor of Ferguson Custom Homes, a home construction business. On May 14, 1994, Debtor and Plaintiff entered into a contract for construction of a custom home based upon specific design specifications. Debtor completed construction, and on or about December 1, 1994, Plaintiff began to occupy the property.
Shortly thereafter, Plaintiff noticed and brought to Debtor's attention a potential defect in the construction of the home. Debtor inspected the home, but denied the existence of any defect. After Plaintiff had the property inspected by a certified structural architect, who indicated that the home was not built in accordance with certain specifications, Debtor attempted to remedy the defects. However, Debtor was unable to effectively remedy the situation and subsequently filed his bankruptcy petition.
The last date for filing complaints to determine the dischargeability of a debt was May 28, 1996. On that date, Plaintiff filed this Adversary proceeding, asserting that Debtor's obligation to her is barred from dischargeability under Title 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(6). Also on May 28, 1996, the initial summons was issued and returned showing personal service on Defendant on July 2, 1996. The original return date on the initial summons was July 12, 1996. An alias summons was issued herein on July 29, 1996. The alias summons was served by mailing a copy to the Debtor on August 29, 1996. However, neither the original nor the alias summons was served on Debtor's attorney.
A motion for default was prepared by Plaintiff's counsel, who sent notice to Debtor and Debtor's counsel by mail and hand delivery on September 24, 1996. However, that motion for default was withdrawn on November 22, 1996, because Plaintiff conceded that neither the original summons nor the alias summons were properly served.
On October 4, 1996, Debtor moved to vacate any and all default judgments (of which none had been entered) and to dismiss the Complaint for want of prosecution. He argued that service was defective as it failed to comply with the requirements of Fed. R.Bankr.P. 7004(f), which requires that a summons must be delivered or deposited in the mail within 10 days following its issuance. In addition, Fed.R.Bankr.P. 7004(b)(9) provides that Defendant's attorney as well as Defendant must be served. Debtor further argued that the Adversary proceeding must be dismissed pursuant to Fed.R.Civ.P. 4(j), made applicable to adversary proceedings through Fed.R.Bankr.P. 7004(a), which requires that service of summons be made within 120 days after the filing of the complaint unless good cause is shown for the failure to serve the summons within such time.
In response, Plaintiff filed a motion to enlarge time to serve process pursuant to Fed.R.Bankr.P. 9006. She argued that her counsel was unaware that the original summons and alias were served incorrectly. Plaintiff further argued that a flood in Du-Page County which resulted in a temporary relocation of her counsel's practice and his paralegal's sudden departure caused the mailing of the alias summons to be delayed, as well as his "inadvertent" failure to mail a copy of the summons to Debtor's counsel.
Service of an adversary complaint and summons must be made pursuant to Fed. R.Bankr.P. 7004, which sets out certain requirements and makes several parts of Fed. R.Civ.P. 4 applicable in Adversary proceedings.1 Fed.R.Civ.P. 4 provides:
Upon or after filing the complaint, the plaintiff may present a summons to the clerk for signature and seal. If the summons is in proper form, the clerk shall sign, seal, and issue it to the plaintiff for service on the defendant. A summons, or a copy of the summons if addressed to multiple defendants, shall be issued for each defendant to be served.
Fed.R.Civ.P. 4(a).2 Pursuant to Rule 4, service may be made by several methods, including personal service. Fed.R.Civ.P. 4(d)(1).3 In addition, Fed.R.Bankr.P. 7004(b)(9) provides that service upon the debtor during the pendency of the bankruptcy proceeding may also be made by mailing copies of the summons and complaint to the debtor and the debtor's attorney. Fed. R.Bankr.P. 7004(f)4 adds an additional requirement that service shall be made either by delivery of mailing of the summons and complaint within 10-days following issuance of the summons. Fed.R.Bankr.P. 7004(f) also provides that "if a summons is not timely delivered or mailed, another summons shall be issued and served."
As stated, the original summons was issued on May 28, 1996. Personal service was not made until 35 days later. Thus, service of the original complaint and summons was defective under Fed.R.Bankr.P. 7004(f) because the Summons and Complaint were served outside the 10-day period. Service upon Debtor's attorney was not required for the original summons as personal service was made pursuant to Fed.R.Civ.P. 4(d)(1). The alias summons issued on July 29, 1996, was not sent by mail to Debtor until August 20, 1996,5 a difference of 22 days. Therefore, such service also violated Rule 7004(f).
Moreover, copies of the alias summons and Complaint were never sent to Debtor's counsel, thus rendering service defective under 7004(b)(9). See In re Cappuccilli, 193 B.R. 483, 486 (Bankr.N.D.Ill.1996). Thus, as with the original summons, service of the alias summons was insufficient.
In order for a federal court to exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied. "Service 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." Omni Capital Intern. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 409, 98 L.Ed.2d 415 (1987) (citing Mississippi Pub. Corp. v. Murphree, 326 U.S. 438, 444-45, 66 S.Ct. 242, 245-46, 90 L.Ed. 185 (1946)). Thus, defective service efforts to date have been insufficient to bestow jurisdiction over the Defendant in this Adversary.
However, Fed.R.Bankr.P. 7004(f) provides that where service of a summons is not made within 10 days of its issuance, another copy shall be issued and served. Thus, where a plaintiff's failure to comply with the 10-day service requirement results in defective service, that may not be fatal to the complaint. See In re Betts, 142 B.R. 819, 825 (Bankr.N.D.Ill.1992) ().
However, Fed.R.Civ.P. 4(j) provides that:
If 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 for 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.
(Emphasis added.)
It has been held in this Circuit that "if a defendant is not served with the summons and complaint within 120 days after the complaint was filed, the district court must dismiss the action unless the plaintiff demonstrates good cause for the delay." Floyd v. United States, 900 F.2d 1045, 1046 (7th Cir. 1990). As stated, the Complaint was filed on May 28, 1996. The 120-day window closed in late September 1996. Plaintiff argues that the issuance of the alias summons on July 29, 1996, effectively extended the 120-day period for service. However, no express order extending service was ever entered. In addition, the case that Plaintiff cites for this proposition is inapplicable. She cites In re Peacock, 125 B.R. 526 (N.D.Ill.1991), for the proposition that issuance of an alias summons extends the service deadline. However, the alias summons in Peacock was issued well after the expiration of the 120-day period. 125 B.R. at 527. Thus, the issuance of alias summons in that case was apparently found to have effectively extended the service period. However, in this case, the alias summons was issued within the 120-day period, and no order was entered to extend the 120-day deadline.
Thus, under Fed.R.Civ.P. 4(j), regardless of the ability to issue new summonses under Fed.R.Bankr.P. 7004(f), unless Plaintiff can demonstrate good cause for his failure to effect proper service of the complaint and summons within 120 days of filing the Adversary Complaint, the Complaint must be dismissed. However, it must be noted that dismissal pursuant to ...
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