Silvious v. Pharaon

• Decision Date: 09 June 1995
• Docket Number: No. 94-8592,94-8592
• Parties: , 32 Fed.R.Serv.3d 660 Owen F. SILVIOUS, Plaintiff-Appellant, v. Ghaith R. PHARAON, Defendant-Appellee. Non-Argument Calendar. United States Court of Appeals, Eleventh Circuit
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 697

54 F.3d 697

63 USLW 2791, 32 Fed.R.Serv.3d 660

Owen F. SILVIOUS, Plaintiff-Appellant, v. Ghaith R. PHARAON, Defendant-Appellee.

No. 94-8592.

Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

June 9, 1995.

Owen F. Silvious, New Market, VA, pro se.

Appeal from the United States District Court for the Southern District of Georgia.

Before ANDERSON, BIRCH and CARNES, Circuit Judges.

PER CURIAM:

This case requires us to determine whether the 1993 revision of Federal Rule of Civil Procedure 4 eliminated the practice of allowing an agent in the United States to accept service of process for a foreign defendant. The district court concluded that service could not be effected on a foreign defendant by serving his putative agent in the United States. We REVERSE and REMAND.

I. BACKGROUND

Plaintiff-appellant Owen F. Silvious filed suit against defendant Ghaith R. Pharaon ¹ in May, 1992, and alleged a cause of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sec. 1964(c), ("RICO"). Silvious charged that Pharaon, as owner and operator of the Bank of Credit & Commerce International ("BCCI"), defrauded Silvious of money deposited with BCCI in 1985 and due to be repaid to Silvious in October, 1990. Allegedly, Pharaon has left the United States and is in Saudi Arabia. ²

In May, 1992, Silvious began his unrelenting effort to serve Pharaon in Richmond Hill, Georgia ³ and in Saudi Arabia. Despite the InterRedec attorney's notifying the United States Marshal's office that Pharaon did not reside at the Richmond Hill plantation, Silvious attempted to serve Pharaon at the Richmond Hill address several times.

In August, 1992, Silvious moved for a court order for service for the second time. He requested that the district court approve one of the following methods of service for Pharaon: (1) delivery of the complaint, summons and amended pleadings to an employee of Pharaon's, as requested in the earlier motion; (2) physical attachment of the documents to the Richmond Hill structure itself; ⁴ or (3) publication of notice in either the International Herald Tribune or the Economist, publications distributed in France and Saudi Arabia, where it was thought Pharaon might be located. The magistrate judge consequently directed that the U.S. Marshal

attempt service upon the defendant at any place that he may be found within the United States [as allowed by the RICO statute, 18 U.S.C. Sec. 1965(d) ]. Additionally, the Marshal may leave a copy of the summons and complaint at Cherry Hill Plantation ... with a person of suitable age and discretion residing therein or with an agent authorized by appointment or by law to receive service of process. Fed.R.Civ.P. 4(d)(1) [ (1992) ]. If the Marshal is unable to perfect service using these methods, the plaintiff may then urge the Court to consider other methods of service.

R1-15-1 to 2. The court, however, denied Silvious's request for service by publication and determined that Silvious had not complied with Georgia's long-arm statute for service by publication. In September, 1992, Dooley E. Culbertson, purportedly the Chairman of the Board and Chief Executive Officer of InterRedec, wrote the court a letter stating that

Pharaon is not a resident of Sterling Bluff Plantation nor has he ever been a legal resident. Furthermore, Dr. Pharaon owns no real property in Bryan County and has never been an employee, officer or director of InterRedec.

In light of the above, it is useless for the court to attempt to serve papers on Ghaith Pharaon at the InterRedec offices at Sterling Bluff Plantation. Dr. Pharaon is represented by the firm of Whitman and Ransom, 200 Park Avenue, Suite 2800, New York, New York 10166, attention Mr. Berge Setrakian. I do not know, however, whether that law firm or any of its members serve in the capacity of agent of record for Dr. Pharaon and doubt whether they can accept service for him.

R1-18-2. ⁵ The magistrate judge promptly issued another order indicating its belief that "further efforts to serve the defendant at the Cherry Hill Plantation would be futile." R1-19-1 to 2. The court instead directed that a copy of the summons and complaint be mailed to Pharaon's counsel at the address provided by Culbertson. A copy of the summons and complaint were mailed, but counsel never responded.

Silvious then endeavored to serve Pharaon by mail in Saudi Arabia, and he again moved for a determination of sufficiency of process. In June, 1993, the magistrate judge concluded that despite Silvious's numerous attempts to effect mail service, Pharaon had not been served properly yet. By order dated November 1, 1993, the magistrate judge ruled that none of the attempts at service had been successful but that, because Silvious was attempting service in a foreign country, the 120 day time limit of Fed.R.Civ.P. 4(j) (1992) did not apply to this action. Therefore, instead of dismissing the action pursuant to Rule 4(j), the magistrate judge allowed Silvious thirty additional days to complete service. The magistrate judge stated that, if Silvious failed to effect service, the judge would recommend that the case be dismissed without prejudice.

On January 21, 1994, the Bryan County Sheriff's Department delivered the summons, complaint and amended complaint to Kethesparan Srikanthan, allegedly an agent of Pharaon, at Sterling Bluff Plantation. The affidavit and certificate of service were filed with the district court on January 24, 1994. When Pharaon failed to answer, Silvious moved for a default judgment.

On March 21, 1994, the magistrate judge entered a Report and Recommendation to the district court finding that the newly amended Rule 4 did not allow Silvious to use substituted service on Pharaon because Pharaon was physically outside of the United States. ⁶ Silvious objected to the magistrate judge's report and recommendation; he argued inter alia that Pharaon's agent authorized by law was properly served and, therefore, substituted service had occurred. ⁷ After de novo review of the magistrate judge's report and recommendation, the district court dismissed Silvious's action for failure to effect service successfully. This appeal followed.

II. DISCUSSION

"The starting point for an analysis of amenability to service of process in federal court is Federal Rule of Civil Procedure 4." Brink's Mat, Ltd. v. Diamond, 906 F.2d 1519, 1521 (11th Cir.1990). In 1993, during the pendency of Silvious's case, the Federal Rules of Civil Procedure were amended; Rule 4 was revised. Our review of this case focuses upon the district court's conclusion that revised Federal Rules of Civil Procedure 4(e) and (f) eliminated the practice of allowing an agent in the United States to receive service of process on behalf of a principal who was located in a foreign country. See Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705, 707, 108 S.Ct. 2104, 2111, 2112, 100 L.Ed.2d 722 (1988). We review the district court's interpretation of the Federal Rules of Civil Procedure de novo. Burns v. Lawther, 44 F.3d 960, 963 (11th Cir.1995) (per curiam); McBride v. Sharpe, 25 F.3d 962, 968 (11th Cir.) (en banc), cert. denied, --- U.S. ----, 115 S.Ct. 489, 130 L.Ed.2d 401 (1994).

The Supreme Court's order amending the Rules stated in pertinent part "[t]hat the foregoing amendments to the Federal Rules of Civil Procedure shall take effect on December 1, 1993, and shall govern all proceedings in civil cases thereafter commenced and, insofar as just and practicable, all proceedings in civil cases then pending." Supreme Court Order of April 22, 1993, reprinted in Federal Civil Judicial Procedure and Rules 17 (West ed. 1994). The plain language of the Supreme Court's order indicates that the district court may apply either the rule in effect when the complaint was filed and the case thereby commenced pursuant to Rule 3, or the rule in effect when service was attempted last in 1994. ⁸ See Elkay Mfg. Co. v Ebco Mfg. Co., No. 93 C 5106, 1995 U.S. Dist. LEXIS 473, at * 18 (N.D.Ill. Jan. 13, 1995); Eskofot A/S v. E.I. Du Pont De Nemours & Co., 872 F.Supp. 81, 86 (S.D.N.Y.1995); Lowe v. Hart, 157 F.R.D. 550, 551 (M.D.Fla.1994). For analysis, we assume that the district court considered application of the revised Rule 4 to Silvious's attempts at service occurring after December 1, 1993, just and practicable.

The district court held that because Pharaon personally could not be found and served within the United States, Silvious must serve Pharaon pursuant to revised Rule 4(f), which provides for service abroad. Revised Rule 4(e), however, clearly provides for substituted service. ⁹ Prior to the revisions to Rule 4, substituted service did not fail merely because the principal was outside of the United States. Volkswagenwerk Aktiengesellschaft, 486 U.S. at 705, 108 S.Ct. at 2111 ("Under [the Due Process] Clause, foreign nationals are assured of either personal service, which typically will require service abroad ... or substituted service that provides 'notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.' " (emphasis added) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950))). "Personal service has not in all circumstances been regarded as indispensable to the process due to residents, and it has more often been held unnecessary as to nonresidents." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950).

Substituted service on an agent of the party to the action is a common practice. We find no indication that the amendments to Rule 4 were intended to alter this method of service for individual foreign defendants. The committee notes indicate that the changes in the Rule were intended to widen the reach of service of process,...