Beachside Associates, LLC v. FishmanBeachside Associates, LLC v. Fishman
OPINION OF THE COURT
(July 30, 2010)
Appellant, Beachside Associates, LLC (“Beachside”), appeals from the Superior Court’s December 17, 2008 order, which denied Beachside’s motion to reconsider the October 14, 2008 Order granting the motion to dismiss and quash service of process filed by Appellee, Yehuda Fishman (“Fishman”).
I. FACTUAL AND PROCEDURAL BACKGROUND
This appeal arises out of a civil action filed by Beachside on March 28, 2007 against Fishman and seven other defendants for injunctive relief, declaratory relief, and damages. In an Affidavit of Service filed with the Superior Court on October 16, 2007, a process server averred that he had served Fishman, a resident of New York, with a copy of Beachside’s
On December 3, 2007, Fishman — specially appearing through counsel — moved to quash service of process and dismiss Beachside’s action without prejudice on grounds that the service of process did not comport with New York law. Instead of filing an opposition to Fishman’s motion or seeking leave of court, Beachside undertook to re-serve Fishman. An Affidavit by a new process server indicates that numerous attempts to serve Fishman at his New York residence were made in February and March 2008 but that access to Fishman’s building was denied each time by a doorman. On March 14, 2008, the process server served a copy of Beachside’s complaint on a person he believed to be the doorman, and a copy was mailed to the same address on the same date.
On May 23, 2008, Fishman — again specially appearing through counsel — filed a second motion to quash service and dismiss. On My 22, 2008, the trial court ordered Beachside to submit a response to Fishman’s motion to quash service of process, and Beachside filed an opposition to Fishman’s second motion to quash service and dismiss the action on August 5, 2008. On the same date, Beachside filed its Motion for Extension of Time Nunc Pro Tunc to Serve Yehuda Fishman, wherein Beachside argued that good cause existed for an extension of time because its process server had made numerous attempts to serve Fishman at his residence and his office prior to finally completing service on Fishman’s doorman. Fishman replied to Beachside’s opposition to the motion to quash and dismiss on August 26, 2008 and, thereafter, filed an opposition to Beachside’s motion for an extension of time on September 4, 2008. On September 12, 2008, Beachside filed its reply to Fishman’s opposition to the motion for extension of time.
On October 14, 2008, the trial court entered an order which granted Fishman’s first motion to quash and dismiss, denied Beachside’s motion for extension of time, and denied as moot Fishman’s second motion to quash and dismiss. In support of its decision to dismiss without prejudice, the trial court held that the May 24, 2007 service of process did not comport with New York or Virgin Islands law and that “the [c]ourt cannot
Beachside filed a Motion for Reconsideration on October 28, 2008, arguing therein that the trial court failed to determine, as required by Federal Rule of Civil Procedure (“FRCP”) 4(m), whether a discretionary extension was appropriate despite the lack of good cause. Additionally, the motion for reconsideration argued that such a discretionary extension of time for service should have been granted because the statute of limitations may bar the refiling of Beachside’s claims. Beachside also argued that the trial court erred in finding a lack of good cause because its process servers used due diligence in trying to personally serve Fishman numerous times in April-May 2007. Fishman opposed the motion for reconsideration on November 12, 2008, arguing that the evidence of attempts to personally serve him in April-May 2007 was not newly-discovered evidence and that the trial court conducted the proper FRCP 4(m) analysis before denying the motion for extension of service. Beachside filed a reply on November 26, 2008.
On December 17, 2008, the trial court entered an order denying Beachside’s motion for reconsideration, holding that the affidavits attached to the motion showing numerous attempts to personally serve Fishman in 2007 did not constitute newly-discovered evidence. The trial court also held that the October 14,2008 order granting dismissal was not clearly erroneous or manifestly unjust because “the [cjourt found that good cause did not exist... and the [cjourt is not required to consider the statute of limitations when determining whether to grant a discretionary extension of time.” (Order, 5-6, Dec. 17, 2008.) (Emphases in original).
Beachside filed a notice of appeal on January 15, 2009.
II. DISCUSSION
A. Jurisdiction
The Superior Court had jurisdiction over this civil matter pursuant to V.I. Code Ann. tit. 4 § 76(a). This Court has “jurisdiction over all appeals arising from final judgments, final decrees [and] final orders of the Superior Court . ...” 4 V.I.C. § 32(a) (Supp. 2008). “The general rule is that a decision is considered final when it ‘ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’ ” Est. of George v. George,
[t]he final judgment rule promotes efficient judicial administration and emphasizes the deference appellate courts owe to trial court decisions on the many questions of law and fact that arise before judgment. Another purpose of the rule is to avoid the delay that inherently accompanies time-consuming interlocutory appeals. Immediate review of every trial court ruling, while permitting more prompt correction of erroneous decisions, would impose unreasonable disruption, delay, and expense. It would also undermine the ability of trial court judges to supervise litigation. The rule, therefore, is intended to delay immediate review of many interlocutory trial court decisions and avoid piecemeal appellate review of trial court decisions which do not terminate the litigation.
In this case, Beachside brought a civil action against Fishman and seven other defendants. However, the Superior Court’s October 14, 2008 order,
Nevertheless, Beachside contends that we have jurisdiction over this appeal either pursuant to 4 V.I.C. § 33(b) or pursuant to the collateral order doctrine. Title 4, section 33(b) confers authority upon this Court to review “[i]nterlocutory orders of the Superior Court of the Virgin Islands . . . granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions” and “[ijnterlocutory orders appointing receivers, or refusing orders to wind up receiverships or to take steps to accomplish the purposes thereof, such as directing sales or other disposals of property.” Contrary to Beachside’s argument, 4 V.I.C. § 33(b)(1) is not applicable to the case at bar. Although Beachside’s underlying action sought, as one form of relief, an injunction against Fishman, the trial court’s October 14, 2008 order merely dismissed Beachside’s claims against Fishman due to the lack of timely service of process and did not address the merits of Beachside’s request for injunctive relief. See, e.g., Commodity Futures Trading Comm’n v. Preferred Capital Inv. Co.,
Therefore, if this Court is to properly exercise jurisdiction over Beachside’s appeal, it must be pursuant to the collateral order doctrine. In Enrietto, we considered the collateral order doctrine and observed that,
[u]nder the collateral order doctrine, the [United States] Supreme Court “recognized an exception to the final judgment rule for a ‘small class’ of prejudgment orders which ‘finally determine claims of right separable from, and collateral to, rights asserted in the action, [and are] too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole caséis adjudicated.’” Richardson-Merrell,472 U.S. at 430 ,105 S. Ct. at 2761 (quoting Cohen,337 U.S. at 546 ,69 S. Ct. at 1225 ). Like the rule allowing for immediate appeal of interlocutory injunctive orders, the collateral order doctrine is a “ ‘narrow exception’ ” to the final judgment rule. Richardson-Merrell,472 U.S. at 430 ,105 S. Ct. at 2761 (quoting Firestone Tire & Rubber Co. v. Risjord,449 U.S. 368 , 374,101 S. Ct. 669 , 673,66 L. Ed. 2d 571 (1981)). “To fall within the exception, an order must at a minimum satisfy three conditions ....” Richardson-Merrell,472 U.S. at 431 ,105 S. Ct. at 2761 . First, it “ ‘must conclusively determine the disputed question’ second, it must “ ‘resolve an important issue completely separate from the merits of the action’ and third, it must “ ‘be effectively unreviewable on appeal from a final judgment.’ ” Id. (quoting Coopers & Lybrand v. Livesay,437 U.S. 463 , 468,98 S. Ct. 2454 , 2458,57 L. Ed. 2d 351 (1978)).
Enrietto,
Fishman maintains in his supplemental brief that this Court should decline to invoke the collateral order doctrine in this case because the issues raised on appeal do not involve a question of controlling law and can be adequately addressed after a final judgment is entered in the
B. Standards of Review
The standard of review for this Court’s examination of the Superior Court’s application of law is plenary, while the trial Superior Court’s findings of fact are reviewed for clear error. St. Thomas-St. John Bd. of Elections v. Daniel,
C. The Trial Court Did Not Abuse Its Discretion in Finding that Good Cause Did Not Exist for Extending the Time for Service of Process
As one issue on appeal, Beachside argues that the trial court erred in concluding that it had not established good cause for an extension of time
Pursuant to Superior Court Rule 27(b), “[t]he summons and process shall be served in the same manner as required to be served by Rule 4 of the Federal Rules of Civil Procedure . . . .” In turn, FRCP 4(m) provides that,
[i]f a defendant is not served within 120 days after the complaint is filed, the court — on motion or on its own after notice to the plaintiff —must dismiss the action withoutprejudice against that defendant or order that service he made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period. . . .
(Emphasis added).
1. Motion for Extension of Time
In concluding that Beachside’s motion for extension of time did not establish good cause, the trial court considered three factors: the reasonableness of Beachside’s efforts to serve Fishman, the prejudice to Fishman due to the lack of timely service, and the timeliness of Beachside’s motion for extension of time. Specifically, the trial court found that Beachside’s arguments concerning its multiple attempts at personally serving Fishman in January-March 2008 did not establish good cause for an extension because those attempts were made long after the expiration of FRCP 4(m)’s 120-day period. Additionally, the trial court
In reviewing the trial court’s good cause determination, we are mindful that courts have “equated [FRCP 4(m)‘s] ’good cause’ with the concept of ‘excusable neglect’ of [FRCP] 6(b)(2), which requires ‘a demonstration of good faith on the part of the party seeking an enlargement and some reasonable basis for noncompliance within the time specified in the rules.’” MCI Telecomms. Corp.,
Although the trial court’s finding that Fishman was not prejudiced by the late service weighs in Beachside’s favor, Beachside’s reason for not serving Fishman within the 120-day period is of paramount importance. However, as the trial court aptly noted, Beachside’s motion for an extension of time detailed Beachside’s multiple attempts to personally serve Fishman in January — March 2008 but wholly failed to explain why Beachside had not been able to effectuate service of process prior to July 26, 2007 — the date of the expiration of FRCP 4(m)’s 120-day period. As the language of FRCP 4(m) expressly provides, it is the plaintiff’s burden to show good cause. Therefore, because Beachside failed to provide the trial court with some reasonable basis for its failure to serve Fishman within the time specified by FRCP 4(m), we hold that the trial court did not abuse its discretion in finding in its October 14, 2008 Order that Beachside had not established good cause for an extension under FRCP 4(m).
2. Motion for Reconsideration
Following the trial court’s October 14, 2008 order, which granted Fishman’s motion to quash service and dismissed the action, Beachside
In Ruiz v. Jung, this Court analyzed the legal standards applicable to motions for reconsideration:
In determining the appropriate standard that should have governed the [trial] court’s consideration of the motion to reconsider, we turn first to Superior Court Rule 50, which provides:
For good cause shown, the court, upon application and notice to the adverse party, may set aside an entry of default, judgment by default or judgment after trial or hearing. Rules 59 to 61, inclusive, of the Federal Rules of Civil Procedure shall govern such applications.
SUPER. Ct. R. 50 (emphasis added); see also Chavayez v. Buhler, Civ. No. 2007-060,2009 V.I. Supreme LEXIS 26 , *30 (June 25,2009) (unpublished). Thus, Superior Court Rule 50 explicitly incorporates Federal Rule of Civil Procedure 59(e), which governs motions to alter or amend a judgment, and Federal Rule of Civil Procedure 60(b), which governs motions for relief from a final judgment or order. If a motion for reconsideration is brought within ten days of the order to be reconsidered, the motion is to be treated as a Federal Rule 59(e) motion to alter or amend judgment. If the motion is brought after ten days, however, the trial court should consider the motion to reconsider as one brought pursuant to Federal Rule 60(b). Compare Chavayez,*715 2009 V.I. Supreme LEXIS 26 , at *4 (motion for reconsideration filed within ten days of entry of judgment considered a Rule 59(e) motion), with Lucan Corp., Inc.,2008 V.I. Supreme LEXIS 19 , *9 (because motion for reconsideration filed sixteen days after entry of judgment, trial court should have considered it a Rule 60(b) motion). Accord Ahmed v. Dragovich,297 F.3d 201 , 209 (3d Cir.2002) (“Where... the motion is filed outside of the ten days provided for under Rule 59(e) but within the year permitted under Rule 60(b), and the motion may be read to include grounds cognizable under the latter rule, we will consider it to have been filed as a Rule 60(b) motion.”).
Civ. No. 2008-035,
“A proper Rule 59(e) motion . . . must rely on one of three grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice.”
D. The Trial Court Abused Its Discretion When It Failed to Determine Whether Beachside Was Entitled to a Discretionary Extension of Time for Service of Process
In support of its motion for reconsideration of the trial court’s October 14, 2008 order, Beachside argued that the court had failed to determine whether Beachside was entitled to a discretionary extension of time despite the lack of good cause. In its December 17, 2008 order denying reconsideration, the trial court stated that it had, in its earlier order, “found good cause did not exist for an extension of time to serve [Fishman] and . . . was not required to consider the statute of limitations when determining whether to grant a discretionary extension of time.” (Emphases in original). On appeal, Beachside argues that the trial court’s failure to determine whether a discretionary extension was appropriate constitutes an abuse of discretion. In addition, Beachside contends that a discretionary extension of time for service was appropriate in this case because the statute of limitations may bar the re-filing of its claims.
As stated above, if a plaintiff fails to serve the defendant within 120 days, the trial court “must dismiss the action without prejudice against that defendant or order that service be made within a specified time[, b]ut if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period.” FRCP 4(m) (emphasis added). Significantly, a majority of the federal courts of appeal that have addressed this issue have held that a trial court, after finding that good cause does not exist for a mandatory extension, must consider whether any additional factors warrant granting a permissive or discretionary extension of time. See, e.g., Petrucelli,
In this case, the trial court concluded that it was not required to consider whether Beachside was entitled to a permissive extension of time. In its December 17, 2008 order denying reconsideration, the trial court cited to Petrucelli for the proposition that the court may consider, after finding that good cause does not exist, whether the running of the statute of limitations or other factors warrant an extension of time. However, Petrucelli expressly states that the trial court “must consider whether any other factors warrant extending time even though good cause was not shown.” Petrucelli,
According to the Advisory Committee Notes to FRCP 4(m), a discretionary extension of time for service of process “may be justified... if the applicable statute of limitations would bar the refiled action, or if the defendant is evading service or conceals a defect in attempted service.” As Fishman correctly notes on appeal, the trial court may still deny a discretionary extension of time even if the statute of limitations would bar a plaintiff from re-filing its claims. See, e.g., id.,
Given the circumstances of this case, had the trial court properly considered whether the statute of limitations would bar the re-filing of Beachside’s claims and whether there was evidence that Fishman may have been evading service,
III. CONCLUSION
Because Beachside’s motion for extension of time did not provide the trial court with some reasonable basis for its failure to serve Fishman within the time specified by FRCP 4(m) and because the affidavits attached to Beachside’s motion for reconsideration were not newly-discovered, we hold that the trial court did not commit an abuse of
Notes
Although this matter includes multiple defendants at the trial level, the orders appealed to this Court concern only Fishman, who is the sole party appearing as an appellee on appeal.
Beachside admits that it did not state in its notice of appeal that it was appealing from the underlying October 14,2008 order. At the time of Beachside’s appeal to this Court, “Supreme Court Rule 5(a)(4) provide[d] that, in order to toll the time to appeal from the underlying order, a party making a motion for reconsideration must file that motion within ten days after entry of the order to be reconsidered.” Bernhardt v. Bernhardt,
As neither party addressed in their briefs the apparent lack of finality in the trial court’s October 14,2008 order, this issue was not brought to this Court’s attention until it was raised by Beachside’s counsel at oral argument. As a result, we ordered both parties to submit a supplemental brief concerning this Court’s jurisdiction over this matter. Both parties submitted timely jurisdictional briefs.
Significantly, however, counsel for Fishman urged this Court at oral argument to assume jurisdiction over this appeal at this time, because Fishman would be at an unfair disadvantage if required to wait until the underlying action had concluded as to all remaining defendants and then, having received an adverse ruling on appeal, was required to litigate the action independently at a later date.
Mindful that the collateral order doctrine is to be modestly applied, we note that our application of the doctrine in this case should not be construed as a holding that this Court will invoke the doctrine in every case in which a plaintiff receives an adverse ruling under FRCP 4(m). It is only because this Court has not previously interpreted FRCP 4(m) that the first and second elements of the collateral order doctrine are satisfied in this case.
FRCP 4(e) requires that a plaintiff follow the law of service in the state where the service is made. The trial court concluded, and Beachside does not challenge on appeal, that New York law —■ particularly N.Y.C.P.L.R. 308(4) — governed the proper method of service in this case. In New York, N.Y.C.P.L.R. 308(4) — also known as the “Nail and Mail” statute— provides that a defendant may not be served in the “Nail and Mail” manner unless personal service in accordance with N.Y.C.P.L.R. 308(1) or (2) cannot be made with “due diligence.” In its October 14,2008 order quashing service of process, the trial courtheld thatBeachside’s service upon Fishman was improper because the affidavits of service failed to demonstrate that Beachside had exercised due diligence in attempting to personally serve Fishman before utilizing the “Nail and Mail” statute.
Local Rule 7.0.3 is now Local Rule 7.3.
Although the trial court improperly cited to Local Rule 7.0.3, the grounds for seeking reconsideration under the Local Rule are identical to those for seeking reconsideration under FRCP 59(e).
We note that, following dismissal by the trial court, Beachside re-filed its claims against Fishman and that a motion to dismiss on statute of limitations grounds remains pending in the Superior Court.
Although the trial court considered several factors in its October 14,2008 order, those factors were relevant only to the court’s good cause analysis.
We note that, in this case, Beachside’s affidavit avers that it made numerous attempts to personally serve Fishman both at his New York residence and at his New York law offices. Additionally, Beachside asserts that Fishman listed several incorrect addresses for his law
As its final issue on appeal, Beachside maintains that the trial court abused its discretion in failing to conduct an evidentiary hearing to resolve conflicts in certain affidavits submitted by Beachside and Fishman concerning service of process. However, because we find an abuse of discretion in the trial court’s FRCP 4(m) analysis and will vacate both of the orders appealed to this Court as a consequence thereof, it is unnecessary to address this issue at this time.
We do not decide at this time what other factors, in addition to those discussed in FRCP 4(m)’s advisory committee notes, the Superior Court may consider in its permissive extension analysis. Accord Petrucelli, 46 F.3d at 1298 n.8 (“We express no opinion as to what factors, in addition to those listed in the Advisory Committee note, a district court may consider when deciding whether to extend time for service or dismiss a case.”).